Section 43(a) of the federal Lanham Act protects unregistered trademarks from unfair competition.¹ The U.S. Supreme Court recognized in 2000 that this section of the Lanham Act protects not only names and symbols such as “Nike” and the Nike “swoosh,” but also “trade dress,” a category that once included only the packaging, or “dressing,” of a product but has been expanded to encompass the design or appearance of the product itself.² The Lanham Act may thus protect the owners of unregistered designs from the sale of look-alike products, sometimes known as “knockoffs.”

A plaintiff who alleges that a competitor is engaging in unfair competition under the Lanham Act for selling a look-alike product, that is, a trade dress/product design claim, must establish 1) that the accused product is likely to cause confusion with the plaintiff’s product, 2) that the plaintiff’s design possessed “acquired distinctiveness,” sometimes referred to as “secondary meaning,” when the accused product came on the market, and 3) that the plaintiff’s design is not “functional.”

The question of likelihood of confusion is straightforward: whether an ordinary consumer would be likely to confuse the two products. The question of “acquired distinctiveness” or “secondary meaning” is a little more complicated but essentially amounts to the idea that the appearance of the original product was distinctive enough, and had enough market presence, to be recognized as that of the plaintiff at the time the accused product came on the market. The question of functionality is whether the appearance or design of the product is essential to the use or purpose of the product. If the design is functional, it might be protected by patent law, but not by trademark law. It is this question of functionality that has caused courts the most problems, with a multiplicity of inconsistent decisions by the courts of appeal and an inscrutable decision by the U.S. Supreme Court at the center, all written about at length by numerous commentators.

The 6th Circuit has long been at the epicenter of the question of functionality, with its first decision on the subject in this millenium being reversed by the U.S. Supreme Court in the inscrutable 2001 decision mentioned above, TrafFix Devices Inc. v. Mktg. Displays Inc.,³ and some seven additional decisions in the meantime, including two in 2023 alone, with one of those 2023 decisions, DayCab Co. v. Prairie Technology LLC,⁴ being the primary focus of this article. In DayCab Co., the U.S. District Court for the Eastern District of Tennessee dismissed the action on summary judgment, holding that no reasonable jury could determine that the design of the product in question, a “day cab conversion kit,” was nonfunctional. In a day cab conversion, the sleeper unit of an aging over-the-road tractor is removed and replaced with a fiberglass panel to convert the sleeper into a “day cab,” that is, a tractor that, although no longer suitable for long-distance trips, is very satisfactory for use on day trips or on farms. The conversion kit consists of a fiberglass panel and the hardware that is used to attach it to the cab of the tractor. In DayCab Co., the defendant, Prairie Technology LLC, began marketing a kit that was virtually identical to the original DayCab Company kit, so similar that a third competitor in the field testified that he could not tell the respective products apart as they were going down the road.

The defendants (of course) did not admit to copying the plaintiff’s product, but the principal defense was the claim that the design in question was functional and therefore not protectable under the Lanham Act, with the argument being that the general size and shape of the fiberglass panel was dictated by the size and shape of the opening left when the sleeper unit was removed. The defendants also argued that the slant-back feature of the panel was necessary to allow space for the heads of the shock absorbers used for the air-ride system to be bolted on. The shock absorbers and the slant-back are seen in the image below:

View of shock absorbers and the slant-back panel

On the other hand, DayCab Company presented evidence that although it was necessary to leave room at the bottom of the panel for the installation of the air-ride system, it was not necessary to do so by means of a slant-back design, and that in particular it was not necessary to do so by means of DayCab Company’s 144-degree slant-back. DayCab Company’s founder and CEO testified that he ended up with the 144-degree angle, not because it worked better than any other angle, but because he liked the way that it looked. DayCab Company also presented evidence of alternative design: that two other competitors manufactured conversion kits that did not utilize a 144-degree slant-back, with this being evidence that it was not necessary to copy DayCab Company’s design in order to have a fully functional conversion kit.

Daycab, left, Prairie Technologies, right

But the defendant argued, based on the U.S. Supreme Court’s TrafFix decision, that this proof of alternative design should not be considered. In TrafFix, the Supreme Court had indeed ruled that the evidence of alternative design in that case was inadmissible but in vastly different circumstances. The question then before the Supreme Court was whether the dual-spring design of certain road signs was functional. The 6th Circuit said that it was not, but the Supreme Court disagreed, holding that the dual-spring design was functional, not so much because of how it actually worked, but because the manufacturer was the holder of an expired utility patent on the dual-spring design. The difficulty was that utility patents are issued for products that are functional; if a utility patent had been granted, and you are the holder of the patent, how could you plausibly argue that the product was not functional? The various Courts of Appeals were split on the question, with some holding that the existence of an expired utility patent precluded the possibility of claiming trade dress protection, with others holding that it did not. The Supreme Court granted certiorari to resolve this split. As noted, the resolution was that the existence of the expired patent did indeed, at least in the case of the dual-spring sign, preclude the claim, although it was less than a sweeping “always” conclusion: the Supreme Court merely held that “[a] utility patent is strong evidence that the features therein claimed are functional.” (Emphasis added.) This did not seem to completely resolve the circuit split, but at least in the TrafFix case it was enough, with the Supreme Court holding that the 6th Circuit’s “speculation” about other design possibilities, such as using three or four springs which might serve the same purpose “need not [be] explore[d].” In this “speculation,” the 6th Circuit had noted that it took “little imagination to conceive of a hidden dual-spring mechanism or a tri or quad-spring mechanism that might avoid infringing [the] trade dress.”

Even though the Supreme Court in TrafFix did not say that proof of alternative design could never be used to prove that a product was nonfunctional, the decision has led some district courts, including the district court in DayCab Co., to disregard evidence of alternative design in deciding the question of functionality. The leading treatise on trademark law notes that the significance of the Supreme Court’s “Delphic pronouncement” is unclear, commenting that one district court judge has stated that the meaning of the decision was “highly elusive” and that in the years since the court handed down the decision, other courts have “struggled to define a coherent analysis as to when alternative design can be used to analyze the functionality issue.”⁵ For example, the treatise noted that the 5th Circuit initially interpreted the TrafFix decision as meaning that the availability of alternative designs was irrelevant before it “backtracked.” The treatise further notes that the Federal Circuit has held that nothing in the TrafFix decision would prevent a court from looking to alternative designs in the process of considering whether a design is functional. The author of the treatise then stated his own view that the Supreme Court’s observations in TrafFix do not mean that evidence of alternative design is totally irrelevant, pointing to what he called “decades of precedent” which has used alternative design as a “source of evidence to resolve the difficult puzzle of functionality.”

In DayCab Co., the district court dismissed the case on summary judgment, holding that the design of the day cab conversion kit was functional for two reasons. First, the court held that the slant-back on the conversion kit panel was necessary to allow for the installation of the shock absorbers. And second, the court ruled that DayCab Company’s evidence that other alternative designs were available, and actually in use by its competitors, was not to be considered, holding that “once a product is deemed functional, the Court need not engage . . . in speculation about other design possibilities,” paraphrasing TrafFix. The disappointed plaintiff appealed to the 6th Circuit.

On appeal, the 6th Circuit acknowledged that the conversion kit panel itself was functional because it covered the opening left when the sleeper unit was removed, but the court further observed that just because a product may serve a function that does not mean that its specific features are necessarily functional. The court explained that while day cab conversion kits serve the general purpose of covering the opening in a truck cab, there remained a genuine dispute of fact as to whether DayCab Company’s design constituted protectable trade dress because other designs were available. The court pointed to numerous alternative designs, two of which were actually in use by competitors and two of which were put forward as hypotheticals by DayCab Company. The defendants argued that the court need not and should not consider this evidence of alternative design based on the legal principle expressed by the U.S. Supreme Court in TrafFix that once a trade dress is found to be functional “there is no need to engage in speculation about other design possibilities which might serve the same purpose.” But the 6th Circuit noted that in contrast to cases where the design had been deemed functional, DayCab Company had presented evidence that its design, the 144-degree slant-back in particular, served no purpose whatsoever, pointing to the testimony of DayCab Company’s principal that it is not necessary to have a slant-back of exactly 144 degrees in order to install an air-ride system. Furthermore, the court held that the fact that alternative designs were in use and on the market was relevant to the functionality determination because the existence of these alternative designs supported DayCab’s contention that the panel was designed for aesthetic purposes rather than for functionality. In other words, the evidence that other designs were possible and actually in use was admissible to establish that it was not necessary to copy the plaintiff’s product in order to manufacture an equally functional day cab conversion kit.

And where does that leave us? How do we solve the “difficult puzzle of functionality” in the 6th Circuit? We might begin by recognizing the source of the difficulty: the Supreme Court’s TrafFix decision that set the whole course of events in motion. As noted above, the foundation of the TrafFix decision was the fact that the plaintiff was the holder of a utility patent for the dual-spring design. Because utility patents are issued for products that are useful, that is to say functional, the plaintiff in TrafFix had no reasonable argument that the dual-spring design was anything but functional. But the Supreme Court put it not as a rule but as a matter of “strong evidence” that the design of the sign was functional. If the court had just left it at that, it would have been an easy enough precedent to follow, something along the lines of an estoppel, the idea that “you once say that something is functional and you will not be allowed to claim otherwise.”

But to complicate things, the Supreme Court went on to state that the dual-spring design would have been considered functional even if there had been no previous utility patent because the dual-spring design was “the reason the device works.” Accordingly, said the court, “other designs need not be attempted.” This addition is not a matter of estoppel but is a straight-ahead consideration of functionality on the merits. It is this latter aspect of the TrafFix decision that has caused all of the problems. While the estoppel aspect of the decision seems to make sense, the latter aspect of the argument, even if came from the U.S. Supreme Court, would seem to be a perfectly circular argument, a classic example of begging the question, because it assumes the truth of the conclusion. Evidence that alternative designs are available is one of the factors that courts are supposed to consider in determining whether a design is functional, but the court seems to be saying that the evidence of alternative design is not to be considered if the design is functional. So the court is refusing to consider evidence of alernative design — a key element of functionality — for the reason that the product is functional! This is something like saying that the fact that a particular animal has wings cannot be considered in determining what type of animal it is if you somehow already know that the animal is a horse. The obvious problem with this type of reasoning is that you could end up with a horse with wings. With this perplexing foundation, it does not appear that the “difficult puzzle of functionality” under the Lanham Act will be solved in the 6th Circuit or anywhere else any time soon. |||

DONALD K. VOWELL received his law degree from the University of Tennessee College of Law in 1978 and has been in practice in Knoxville since that time, now focusing on appellate practice. He has been certified as a civil trial specialist by the National Board of Trial Advocacy since 1997. Visit www.vowell-law.com to learn more.

NOTES

1. 15 U.S.C § 1125(a).
2. Wal-Mart Stores Inc. v. Samara Bros., 529 U.S. 205 (2000).
3. TrafFix Devices Inc. v. Mktg. Displays Inc., 532 U.S. 23 (2001).
4. DayCab Co. Inc. v. Prairie Tech. LLC, 67 F.4th 837 (6th Cir. 2023). Author was counsel for DayCab Co. in this case.
5. 1 McCarthy on Trademarks and Unfair Competition § 7:75 (5th ed.)