Trade Dress and the Functionality Doctrine: At the Intersection of Trademark and Patent Law

Earlier this week, the Fourth Circuit reversed the dismissal of a Lanham Act claim for trade dress infringement involving a pixel pattern embossed on an absorbent textile-like product used in medical supplies, hygiene products and food packages.  Judge Wilson (Roanoke Division of the Western District of Virginia) had dismissed the trade dress claim because he found the dot pattern to be functional and thus not protectable as trade dress.

Trade dress -- the visual appearance of a product or its packaging that signifies the source of the product to consumers -- is protected under trademark law.  However, if a product feature is determined to be functional, then that feature is not protected by trademark law.  The only way to protect a functional feature of a product's design is under patent law.  A product feature is functional if it is essential to the use or purpose of the product or affects the cost or quality of the product.  To put it simply, a feature is functional if it is the reason the device works as opposed to being merely ornamental.  Sometimes the distinction is difficult to determine.

One of the issues on appeal was the effect of the utility patents that plaintiff had obtained on the same product.  The Supreme Court has held that a utility patent is strong evidence that the features claimed therein are functional, and thus not protectable trade dress.  The plaintiff argued, however, that its utility patents covered the manufacturing process and materials, but did not pertain to a particular embossing pattern, which was the aspect of the product that plaintiff argued was protected as trade dress.  The Fourth Circuit noted that the diagrams on the utility patents show hexagonal shapes, rather than the circular dots or pixels depicted in the trademark. 

Patent

Trademark

The Fourth Circuit found that while the utility patents were evidence of the dots' functionality, they were not dispositive.  The court should look at other factors, such as the availability of functionally equivalent designs.  In light of these factual questions, the Fourth Circuit determined that there was a genuine issue of material fact regarding "whether a specific embossing pattern is the reason the device works or merely an ornamental, incidental, or arbitrary aspect of the device."  Therefore the dismissal was reversed and the case remanded for further proceedings.

The case demonstrates an interesting area of intellectual property law that is at the crossroads of trademarks and patents.

The case is McAirlaids, Inc. v. Kimberly-Clark Corporation, --- F.3d --- (4th Cir. June 25, 2014).

Virginia Senators Recommend New Judges For WDVa

Virginia's United States Senators have recommended Martinsville attorney Ward Armstrong and Salem attorney Elizabeth Dillon to be appointed as the new judge in the Western District of Virginia.  The nomination will be for seat that will be vacated when Judge Samuel Wilson retires this summer.  Armstrong is a former member of the Virginia House of Delegates and Ward is a private attorney who defends local governments and school boards in federal and state cases.  Both candidates were screened by the Virginia State Bar and rated highly qualified.  The Virginia State Bar also identified other qualified and highly qualified candidates, including Magistrate Judge Robert Ballou, Roanoke federal court clerk Julia C. Dudley, UVa law professor Rachel A. Harmon and Magistrate Judge Pamela Sargent.  Other bar groups, such as the Virginia Trial Lawyers Association and Virginia Bar Association recommended some of the same individuals as well as Roanoke attorney John Fishwick.

US Attorney Investigating Puckett Resignation

The Richmond Times Dispatch is reporting that the United States Attorney's Office for the Western District of Virginia is investigating the recent and surprising resignation of state Senator Phillip Puckett.  There is a report of a grand jury convening in Abington to hear testimony on the matter.

Puckett's resignation gave the balance of power in the Virginia Senate to the Republicans who now hold a 20-19 advantage.  Prior to Puckett's resignation, the Senate was deadlocked, with the Lieutenant Governor, a Democrat, providing the tie breaking vote. 

Puckett stated that his decision to resign was motivated, in part, by Republican opposition to his daughter receiving a full-time appointment as a Juvenile and Domestic Relations judge.  She was not considered for that position, prior to Puckett's resignation, because of a belief that the Senate should not appoint judges who are family members of a sitting senator.

The Times Dispatch reports that Puckett's resignation may also have been tied to his appointment to the state tobacco commission.  Delegate Terry Kilgore, a Republican from Southwest Virginia and brother of former gubernatorial candidate Jerry Kilgore, stated that he had spoken with Puckett before his resignation about taking a job with the commission.  Puckett says that he was never officially offered a job by the tobacco commission.

The Washington Post reports that Puckett has hired Thomas J. Bondurant Jr. to represent him.  Bondurant is a former federal prosecutor in WDVa.  I saw him in action many days when I was a law clerk for Judge Wilson.  He was always one of my favorite attorneys to watch.

More Sports and Antitrust

My colleague Amanda Ames has written an interesting article about the O'Bannon v. NCAA case, which is all over the news these days.  Additionally, Law360 published an article that I wrote about LCA v. Virginia High School League.  This is the antitrust case in the Western District of Virginia, previously discussed on this blog, in which a private school is seeking to force its admission into a public school sports league.  A description of my article is available here, and you can read the whole thing with a Law360 subscription here.

Defendant Who Defeated Preliminary Injunction And Obtained Dismissal For Failure To Prosecute Is Not A "Prevailing Party" In Patent Case

The "prevailing party" in a patent case is entitled to attorney fees from the losing side under 35 U.S.C. 285.  However what constitutes a "prevailing party" sometimes can be difficult to determine.  Judge Moon recently held that a defendant who defeated a motion for preliminary injunction and obtained a dismissal of all claims for failure to prosecute was not a "prevailing party" despite the defendant's success.  The lawsuit, filed in the Charlottesville Division of the Western District of Virginia, involved patent infringement of a pocketed bra design.  The court's rational for denying the motion for fees was based upon existing precedent regarding similar circumstances.  A plaintiff who obtains a preliminary injunction is not a "prevailing party" because preliminary injunction proceedings are a necessarily abbreviated inquiry into the merits of a case.  Therefore, the court concluded that if a plaintiff who obtains a preliminary injunction is not a "prevailing party" then it logically follows that a defendant who defeats a preliminary injunction is similarly not a "prevailing party."  Also, the court's subsequent dismissal, without prejudice, of plaintiff's claims for failure to prosecute was not an adjudication on the merits and therefore did not confer "prevailing party" status.  The case is styled Robinson v. Bartlow, No. 3:12cv024 (W.D.Va. 2014).

UVa Student's Lawsuit Against ABC to Continue

Looks like Bud Light to me!

Part of a UVa student's $40 million lawsuit against ABC agents has survived the defendants' motion to dismiss.  The well publicized case arose out of an incident in the parking lot of the Harris Teeter in Barrack's Road Shopping Center in Charlottesville.  Undercover ABC agents attempted to arrest the UVa student when they mistook her sparkling water for beer.  Frightened and confused by the ABC agents, the UVa student drove off in her car as the ABC agents banged on the window and drew a firearm.  After calling 911 to report the incident, the UVa student was arrested for assaulting the agents and spent a night in jail before prosecutors quickly dismissed all charges.  The UVa student is now suing the ABC agents and the State for a variety of claims, many of which were dismissed by Judge Hudson's ruling on the motion to dismiss.  However, Judge Hudson allowed the claims for false arrest, malicious prosecution and assault against three of the seven ABC agents to continue.  Judge Hudson also directed her attorneys to merge those claims into a claim that the plaintiff's constitutional rights had been violated.  The claims against the State and claim for conspiracy to commit false prosecution were dismissed.  Although the case arose in Charlottesville, the case is pending in the Richmond Division of the Eastern District of Virginia.  More information can be found in the Richmond Times Dispatch article about Judge Hudson's ruling.

Novel Copyright Action Involving Webcasting and Geofencing to be Decided in Harrisonburg

Radio stations that stream over the Internet typically have to pay performance royalties to the copyright owners of the songs that are being broadcast over the Internet.  Last month, a group of radio broadcasters in Virginia brought a copyright lawsuit challenging whether they had to pay royalties for streaming Internet if their audience was restricted to a 150-mile radius from the station's transmitter. 

Technological advances, such as geo-fencing, allows websites to restrict access to those within a certain geographic area.  If the audience of a streaming radio station is limited to a 150-mile radius, then the web-based audience is arguably the same as the AM/FM broadcast audience. 

More importantly for purposes of this case, there is a specific provision of the Copyright Act that exempts broadcasters from having to pay performance royalties for digital retransmissions of their broadcasts provided the retransmissions do not go "more than a radius of 150 miles from the site of the radio broadcast transmitter."  17 U.S.C. 114(d)(1)(B)(i).

When that provision of the Copyright Act was adopted more than a decade ago, it was not technologically possible to restrict the audience of an Internet broadcast.  Therefore, radio stations that live-stream their content have been paying performance royalties under the Copyright Act.  The technological development of geo-fencing, however, makes it possible to restrict the geographic scope of the audience and raises this novel issue of copyright law.  This is the first time that a court has been asked to consider this issue.

Digital retransmission is a major issue in all media.  A case involving the delivery of television signals over the Internet--involving very different issues of what constitutes public verses private performance under a separate provision of the Copyright Act--is currently pending before the Supreme Court and is one of the blockbuster cases that the Supreme Court has yet to decide this term.

The radio broadcast case is styled WTGD 105.1 FM v. Soundexchange, Inc. and is going to be heard by Judge Urbanski in the Harrisonburg Division of the Western District of Virginia.  The defendant was granted an extension of time in which to respond and will file an answer or motion to dismiss on June 23.

Do Public School Athletic Leagues Have To Admit Private Schools?

Liberty Christian Academy (LCA), a private high school in Lynchburg, Virginia, has filed an antitrust action against the Virginia High School League (VHSL), a non-profit organization of public high schools in Virginia.  The lawsuit was filed June 2, 2014 in the Charlottesville Division of the Western District of Virginia.

The VHSL organizes public schools into districts and regions for purposes of conducting athletic competitions and statewide playoffs.  LCA filed its lawsuit because, as a private school, LCA is barred from membership in the VHSL and claims to be unable, with limited exceptions, to schedule athletic games with the nearby public schools.  LCA complains that it has to travel far distances to play games against inferior opponents.  LCA argues that the VHSL's rules are akin to a group boycott and constitute an unreasonable restraint of trade in violation of federal and state antitrust laws.  The relevant markets alleged in the Complaint are the markets for commercial exhibition of high school football contests and basketball contests in Virginia.

Although some states allow private high schools to join their public high school athletic leagues, other states have separate private and public leagues, such as Virginia, Maryland and Texas.  In the lawsuit, LCA argues that the prohibition on non-public high school membership in the VHSL has no pro-competitive purpose and cannot be justified on any claimed basis that it is necessary to promote fair on-field competition.  I suspect that the ability of private schools to recruit and give scholarships to football and basketball players from a wide geographic area (unlike public schools who have to find players within their own geographic district) would be one of the reasons for the VHSL's rule.

The Complaint's reference to the "integration of public and private schools into one athletic association" appears to suggest a strained analogy to civil rights and the racial integration of public schools in Virginia.  LCA should be very careful in suggesting any such analogy, given that LCA was specifically founded in 1967 as a segregation academy in response to the integration of public schools in Virginia.  There is no small amount of irony in LCA's complaint that it is being excluded and segregated from public school athletic competition.

Several public high school athletic programs are described in the Complaint.  These schools are very familiar to my ears: T.C. Williams in Alexandria, famous from the movie Remember the Titans; football powerhouse Oscar Smith High School in Chesapeake; and Brookville High School outside Lynchburg, my fathers' almar mater and the arch rival of my high school, Jefferson Forest.

More about the lawsuit can be found here and here.

Out of Trial

I just finished a very interesting, week-long trial in Albemarle County regarding stormwater management and streams within a new shopping center.  It was fascinating to learn about how much engineering and construction goes into dealing with water issues -- most of which is all underground!  Now that I am out of trial, I hope to be able to post about some of the interesting WDVa cases and developments of the past month.