Apple v. Samsung-Part I, Trade Dress & FunctionalityMay 21, 2015

Trade dress is a form of intellectual property related to trademarks, which deals with characteristics of visual appearance, usually of a product or its packaging, but also potentially of a commercial space such as a store or restaurant. Like trademarks, trade dress signifies to consumers the source of a product or service.Also, like trademarks, trade dress is protected by both common law and federal statutory law. Importantly, both trademarks and trade dress are not protectable if they are functional—i.e. where a feature is essential to the use or purpose of the product, affects the cost or quality of the product, or where recognizing exclusive rights in the feature would put competitors at a significant non-reputation related disadvantage. However, trade dress is a less commonly utilized form of intellectual property compared to trademarks.The Federal Circuit’s recent decision in the Apple v. Samsung case on May 18, 2015 provided an interesting example of a lawsuit involving trade dress protection.

Apple sued Samsung, alleging that Samsung had infringed Apple’s design and utility patents as well as diluted their trade dress. Following trial at the district court, the jury found for Apple, finding in part that the asserted trade dress was non-functional and protectable, and awarding nearly $1 billion in damages. Samsung appealed the jury verdict, and the Federal Circuit affirmed the verdict regarding the design and utility patents, but reversed the findings that the asserted trade dress was protectable. The court’s findings regarding design and utility patents will be discussed in a subsequent blog post, while this post will focus on the trade dress claims.

Two items of trade dress were at issue. First, the unregistered trade dress claimed elements of the rectangular product (i.e. the iPhone) with four evenly rounded corners, a flat clear surface covering the front of the product and its display underneath, and substantial black borders above and below the screen and borders on the side of the screen, and when the device is on, a row of small dots on the screen and colorful square icons. The registered trade dress claims design details in each of the sixteen icons on the iPhone’s home screen framed by the iPhone’s rounded-rectangular shape with silver edges and a black background. Applying the Ninth Circuit’s trade dress law, the Federal Circuit concluded that the jury’s findings of non-functionality were not supported by substantial evidence.

The Ninth Circuit defines trade dress as “the totality of elements in which a product or service is packaged or presented” and trade dress exists to identify the source of the product. However, this source identification function must be balanced against the right to compete in an industry. Essentially, functional features are not allowed to be used as trademarks or trade dress in order to prevent development of a monopoly that would undercut these principles and would extend into perpetuity. Therefore, the court sought to determine if the elements of the asserted trade dress are nonfunctional in order to determine if they are truly protectable.

The Federal Circuit applied the Ninth Circuit’s Disc Golf test, determining (1) whether the design yields a utilitarian advantage, (2) whether alternative designs are available, (3) whether advertising touts the utilitarian advantages of the design, and (4) whether the particular design results from a comparatively simple of inexpensive method of manufacture.In making these determinations, the court recognized as axiomatic that a product feature need only have some utilitarian advantage to be considered functional, and that a trade dress, taken as a whole, is functional if it is in its particular shape because it works better in that particular shape.These two tenets of trade dress law have resulted in it being more difficult to claim product configuration trade dress than other forms of trade dress.

The court applied these factors to the unregistered trade dress and found that Apple failed on all four factors. With regard to the registered trade dress, there was no dispute among the parties that the claimed details (such as the map icon) were functional. Apple’s expert agreed that “the whole point of an icon on a smartphone is to communicate to the consumer using that product, that if they hit that icon, certain functionality will occur on the phone.” Further, the icons were described “visual shorthand” and the rectangular shape allowed more icons to be accommodated. Apple could rebut none of this evidence. The court also held that federal registrations are typically not enough to save a product configuration from being non-functional. Based on the totality of these determinations, the Federal Circuit concluded that the jury’s findings of non-functionality were not based on substantial evidence, and reversed.

The full opinion can be found here:

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