Course No. 9200-704 (& 804)-801
ID No. 85737 & 85736
Time: W 6:30 - 9:30 p.m.
Room Across from 231D (IP Alcove)
|Copyright © 2000, 2002, 2003, 2006, 2008, 2010 Jay Dratler, Jr. For permission, see CMI.|
Questions and Notes on Sears and Compco
1. Both Sears and Compco address a single issue: whether state law can protect the physical configuration of an unpatented product from unauthorized copying. The legal theory under which the district court in each case had provided protection (in each case under Illinois law) was "unfair competition." What does that term mean? Can you articulate the legal and policy basis on which state law purported to provide this protection?
2. Although the term "unfair competition" is still in use, modern terminology has a more specific term for this class of cases. Today both Sears and Compco would be called "trade dress" cases.
"Trade dress' involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques" John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980, 219 U.S.P.Q. (BNA) 515 (11th Cir. 1983). Broadly speaking, a trade-dress plaintiff asserts that the defendant, by copying a product's packaging or features, is likely to confuse the public as to the source of the defendant's product, the plaintiff's sponsorship or approval of that product, or the plaintiff's affiliation with the defendant. See Jay Dratler, Jr., Intellectual Property Law: Commercial, Creative, and Industrial Property § 10.01 (Law Journal Press, 1991).
3. As in Sears and Compco, modern trade-dress cases involve three elements. First, the trade dress must be distinctive. That is, it must identify a unique source for the product or service; i.e., it must serve as a brand. Second, the trade dress must not be "functional;" i.e., it must not perform a function that ought to be protected, if at all, by patent law. Third, the defendant's use of the trade dress must cause a likelihood of confusion among the purchasing public. Only if all three conditions are met does the defendant's unauthorized use of the plaintiff's trade dress constitute "unfair competition." See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). See also, Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 164-165, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995) (discussing nonfunctionality requirement).
Did the Illinois law of unfair competition address all of these three elements in Sears? in Compco? Did the Supreme Court recognize all three elements in each case?
4. Patent law requires a patentable invention to be new and useful, 35 U.S.C. §§ 101, 102, and not to be "obvious at the time the invention was made to a person having ordinary skill in the art[.]" 35 U.S.C. § 103(a). In order to determine whether an invention is new and nonobvious, the Patent and Trademark Office or the courts must compare it to all the "prior art"i.e., to all the patented inventions and known technology that came before it. See Jay Dratler, Jr., Intellectual Property Law: Commercial, Creative, and Industrial Property §§ 1.06, 2.03,  (Law Journal Press, 1991). Which is the more stringent standard: (1) that trade dress be "distinctive," or (2) that inventions be "new" and "nonobvious"?
5. At the time that Sears and Compco were decided, patents lasted for seventeen years and then expired. See 35 U.S.C. § 154 (1966). Today, a patent lasts for twenty years after the relevant application date. See 35 U.S.C. § 154(a)(2). These relatively short terms are consistent with the command of the Constitution's Patent and Copyright Clause, which gives Congress the power "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries[.]" U.S. Const. Art. I, § 8, Cl. 8. (Emphasis added.)
Protection under the law of trademarks and unfair competition, however, has no specific time limit. At the federal level, this is possible because these forms of protection derive their authority from the Interstate Commerce Clause, not the Patent and Copyright Clause. See Trade-Mark Cases, 100 U.S. (10 Otto) 82, 93-95, 25 L. Ed. 550 (1879) (invalidating first federal trademark statute for inconsistency with Patent and Copyright Clause).
6. Based on the foregoing, can you now articulate in detail why the Supreme Court was concerned about states protecting the physical configurations of products under unfair competition law? What would have been the consequences if Sears and Compco had come out the other way, i.e., if the Supreme Court had upheld permanent, perpetual injunctive relief against the copying of unpatented products? Would manufacturers who wished to protect the physical design of their products have continued to seek patent protection? Why or why not?
7. Justice Black wrote the opinions for the Court in both Sears and Compco. He was generally known not for his finesse, but for his love of clear rules. Try to identify the single sentence or paragraph that constitutes the "holding" in each case. Is the rule he established clear? Does it provide any leeway for protection under state law? If so, what specific words in the "holding" in each case provide that leeway, and how much leeway do they provide? Could a state court grant any remedy against a copyist's blatant duplication of unpatented products?
8. Some view Sears and Compco as establishing a broad right to copy and use unpatented products. That right, it is said, arises by negative implication from the patent laws and the Constitution's Patent and Copyright Clause.
Does such a right exist? If so, how broad is it? Could a copyist get away with duplicating the exact configuration of the product, the packaging and the labeling, including the plaintiff's trademarks, company name, and address? Wouldn't that constitute unlawful passing off? If that sort of blatant counterfeiting would still be actionable under state law, where do you draw the line of protection? How much and precisely what do Sears and Compco permit a copyist to duplicate without liability under state law? What remedies against blatant passing off could a state court provide?
9. For a long time, the sweeping language in these two opinions left the bench and the bar confused at to how much, if anything, remained of state unfair competition law, as applied to what we now would call "trade dress." See, e.g., Pattishall, "The Lanham Trademark ActIts Impact over Four Decades," 76 Trademark Rep. 193, 205-206 (1986); Dannay, "The Sears-Compco Doctrine Today: Trademarks and Unfair Competition," 67 Trademark Rep. 132, 137 (1977).
How much do you think was left? Under what circumstances could the originator of an unpatented product get relief under state law against a copyist's duplicating the product? its packaging? its labeling and manner of sale?
10. Similar cases today arise under federal trademark law, specifically Section 43(a) of the Lanham Act, or the Trademark Act of 1946, as amended, 15 U.S.C. § 1125(a). It is now well established that Section 43(a) incorporates the principles of "unfair competition" into federal trademark law. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 773-774, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992).
It is also well established that general federal principles of unfair competition, as incorporated into Section 43(a) of the Lanham Act, protect trade dress against unauthorized copying in a way that causes a likelihood of confusion. See, e.g., TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28, 121 S.Ct. 1255, 149 L.Ed.2d 164 2001, 58 U.S.P.Q.2d (BNA) 1001 (2001) ("It is well established that trade dress can be protected under federal law"); Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 162-163, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995) (color of pads used in commercial dry-cleaning presses may be protected as trade dress); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 764-765, 775-776, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (trade dress of restaurantits decor, signage, layout and general appearancemay be protected if inherently distinctive).
Moreover, the federal law of trademarks and unfair competition is not generally pre-emptive of state laws in the same field. Rather, federal trademark law pre-empts state unfair competition law only in the rare, specific cases in which the two directly conflict. See Jay Dratler, Jr., Intellectual Property Law: Commercial, Creative, and Industrial Property § 11.03[d] (Law Journal Press, 1991). Since state and federal law of unfair competition both derive from the same historical traditions, and since both obey much the same general principles, they normally co-exist, although state law may differ in detail and in remedies. See id., §11.02. But cf. id., 10.03 (describing pre-emption of state trademark dilution law where defendant's mark is federally registered).
11. Now that trade dress can be protected under federal law, are the issues raised in Sears/Compco dead? Are those cases irrelevant to federal unfair-competition law because they invalidated only state law under the Supremacy Clause?
Or is there still a potential for conflict between federal patent law and federal unfair-competition law as applied to trade dress? Won't broad protection for trade dress have the same consequences for patent protection, regardless of whether trade-dress protection arises under state or federal law? Is it a complete answer to simply to say "federal law can't be pre-empted"? See Jay Dratler, Jr., Trademark Protection for Product Configurations: Is There a Conflict with Patent Policy?, 24 AIPLA Q. J. 427, 456-469 (1996).
12. One feature of trade-dress law, both state and federal, that helps avoid conflict with patent law is the requirement that trade dress not be functional. See TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32-33, 121 S.Ct. 1255, 149 L.Ed.2d 164 2001, 58 U.S.P.Q.2d (BNA) 1001 (2001); Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 164-165, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995). Is the doctrine of functionality enough to avoid conflict between federal trade-dress protection for product features and the federal patent system? Is it enough to deny trade-dress protection to product features that perform a useful function? See TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 29-30, 32, 121 S.Ct. 1255, 149 L.Ed.2d 164 2001, 58 U.S.P.Q.2d (BNA) 1001 (2001) (statements in expired patent, as well as applicant's statements made in it, were "strong evidence" of functionality of product features claims as trade dress).
13. Utility patentspatents on useful inventionsare not the only kinds of patents that United States law provides. There are also design patents, see 35 U.S.C. § 171-173, and plant patents, see 35 U.S.C. § 161-174. A design patent may cover "any new, original and ornamental design for an article of manufacture" that also meets the requirements of novelty and nonobviousness. 35 U.S.C. § 171. If the doctrine of functionality avoids a conflict with utility patents by precluding trade-dress protection for useful and functional product features, what avoids conflict with design patents?
To draw a line between design-patent and trade-dress protection, the courts have developed a second branch of the doctrine of functionality. This branch goes by the oxymoronic name of "aesthetic functionality." See TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32-33, 121 S.Ct. 1255, 149 L.Ed.2d 164 2001, 58 U.S.P.Q.2d (BNA) 1001 (2001) (distinguishing instant case from Qualitex, which involved aesthetic functionality). But how does this doctrine work? It is easy in concept (although often not in practice) to distinguish between product features that do something useful and those that are source identifiers, in order to apply the doctrine of useful functionality vis-a-vis utility patents. But how does one draw a line between ornamental designs that ought to be protected, if at all, by design patents and those that can serve as legitimate source identifiers or brands? See TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32-33, 121 S.Ct. 1255, 149 L.Ed.2d 164 2001, 58 U.S.P.Q.2d (BNA) 1001 (2001); Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 164-165, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995) (discussing nonfunctionality requirement). See also, Jay Dratler, Jr., Trademark Protection for Industrial Designs, 1988 U. Ill. L. Rev. 887, 938-949.
14. There is one other important nuance to modern protection of trade dress under federal unfair-competition law. The Supreme Court has made a distinction between trade dress consisting of a product's design or configuration, on the one hand, and, on the other, trade dress consisting of product packing or a service establishment's decor. Product-design trade dress, ruled the Court, can never be inherently distinctive, but always requires a showing of "secondary meaning," i.e., consumer brand identification, usually by means of consumer surveys. See Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 216, 120 S.Ct. 1339, 146 L.Ed.2d 182, 54 U.S.P.Q.2d (BNA) 1065 (2000). In contrast, other kinds of trade dress can be inherently distinctive and protected without a showing of secondary meaning. See id., 529 U.S. at 214-215; Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 776, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). This rule requires a showing of acquired, not inherent distinctiveness for product-design trade dress. Does it also help avoid a conflict between trade-dress protection for product features and federal patent law? If so, how?