tive advantage through exclusive use of a design that gives a product more utility, or reduces its cost of manufacture. However, there is also a countervailing public interest in encouraging the development of new designs. This interest is promoted by protecting the innovator from those who would copy his innovation.

Patent law incorporates both of these interests. For a limited time. it protects certain designs from being copied. It thereby promotes invention by protecting the inventor, while reserving the eventual rights of the community. Trademark law protection, on the other hand, in this context furthers only the interest of the innovator. It would permit a perpetual monopoly for all designs that indicate origin, and therefore could prevent others from competing effectively in the sale of products incorporating such designs.

The doctrine of "functionality has been developed to avoid that conflict. This doctrine permits trademark law protection only of nonfunctional designs. and thereby allows effective competition to continue unhindered.

1. The Definition Of “Functional”

The definition of functionality has varied widely. Some courts have focused on whether the product itself is functional, while others have inquired into whether the design is functional. For example, in In re Business Forms Finishing Services. Inc.. the opinion states that "notwithstanding the purpose in adopting a rounded tab, a record locator tab is inherently functional or utilitarian in character and the shape thereof, whether square, round, or rectangular, does not, in any way. detract from this merely utilitarian function. In contrast, other cases have confined their inquiry into the utility of the design itself. For example, when determining functionality, some have focused on the configuration and suction cups of a soap holder," the elliptical shape of a coin holder," the shape and openings of a saw horse bracket," and the design of a wood-burning stove.

Some courts base their decision on the design's degree of functionality. The Court of Customs and Patent Appeals has allowed registration of a candy bar wrapping, stating, "although the package design sought to be registered may have utilitarian function, we do not regard it as primarily functional."" In another case, the court denied registration for the configuration of a mechanical shaking table. stating that the shape is clearly, primarily and essentially dictated by functional or utilitarian considerations", since it was "shaped as it is only for reasons of engineering efficiency."

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Yet other cases find the effect on competition to be crucial. These decisions properly recognize that the underlying purpose of the functionality doctrine is to avoid granting a perpetual competitive advantage to any one producer. Therefore, they hold that if there are numerous, equally effective alternatives available to competitors, a design that indicates origin should be protected. In In re Ovation Instruments, Inc., for example, the Board concluded that a bowl configuration of a guitar was registrable even though it possessed some functional characteristics since an important consideration had been 'to create a different design that would differentiate applicant's guitars from those already on the market and to identify these guitars as products of applicant company alone—namely, as a source-indicating device. The Board added that "no public interest is served by permitting others to copy this particular bowl configuration because there are a number of rounded bowl designs or configurations for guitars other than applicant's which assertedly have the same advantages over flat-backed guitars.*** Judge Rich similarly focused on the effect on competition in his recent opinion for the court in In re Morton-Norwich Products, Inc. Moreover, in this decision he set forth a helpful in-depth analysis of the doctrine of functionality. He began by explaining that functionality means "utility" and that a discussion of functionality should always be "'in reference to the design of the thing under consideration (in the sense of its appearance) and not the thing itself. Next, he noted with approval those cases which had discussed functionality in light of competition.“ He concluded that functionality' is determined in light of 'utility', which is determined in light of 'superiority of design', and rests upon the foundation 'essential to effective competition. Since he found that plaintiff's bottle and spray top configurations were in no way superior to innumerable alternative configurations, he held that the designs were not functional. He stated, "we do not see that allowing appellant to exclude others (upon proof of distinctiveness) from using this trade dress will hinder competition or impinge upon the rights of others to compete effectively. . . ."

The doctrine of functionality has played an important part in two recent developments in the area of trademark law protection of product designs: aesthetic functionality and the generic drug cases.

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2. Aesthetic Functionality

The theory of aesthetic functionality was announced in the comparatively early case of Pagliero v. Wallace China Co.." where a manufacturer of hotel china sued to enjoin a competitor from copying the patterns appearing on its china. The plaintiff argued that its designs indicated to purchasers that they were buying a Wallace product.“

The Ninth Circuit denied relief because it found the designs to be functional. It defined functional" broadly to include anything other than a trade-mark purpose." reasoning that if the particular feature is an important ingredient in the commercial success of the product, the interest in tree competition permits its imitation in the absence of a patent or copyright. Since the designs satisfied purchasers aesthetic demands in addition to indicating source. the court held that they fell within this definition.

The court recognized that the defendant could have continued to compete even if the use of plaintiff's designs had been foreclosed. It apparently considered this factor unimportant, however, stating only that "the possibility that an alternative product might be developed has never been considered a barrier to permitting imitation competition in other types of cases.

In developing a theory of "aesthetic functionality." the Pagliero court significantly extended the traditional functionality doctrine. Its definition of "functionality" was extremely broad. In addition. its rejection of harm to competition as a prerequisite to a finding of functionality meant that an increased number of designs could be labeled functional, and thus denied protection. To me. Pagliero always has been an illustration of the motto: "Hard cases make bad law."

In a much more recent case, Vuitton et Fils S.A. v. J. Young Enterprises, Inc.. the Ninth Circuit once again interpreted the aesthetic functionality doctrine. Vuitton, the plaintiff, was engaged in the sale and distribution of luggage bearing an arrangement of repeated "LV" initials. It sued to prevent the defendant from copying this design on its luggage.

The Court of Appeals reversed the lower court's grant of summary judgment for the defendant, and remanded the case for trial on the issue of functionality. In so doing, it distinguished Pagliero by stating that the china designs in Pagliero "were originally intended primarily to beautify the china and not to identify the manufacturer."'" whereas this plaintiff's luggage design "has been and is intended, at least in part, to indicate the origin of the products."

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The court quoted the broad Pagliero definition of functionality, but narrowed its application. It rejected the lower court's holding “insofar as it found that any feature of a product which contributes to a consumer appeal and saleability of the product is, as a matter of law, a functional element of that product. "'" Instead, it distinguished between two types of consumer appeal. It stated that if the Vuitton mark encouraged consumers to buy because of the quality or prestige associated with Vuitton, the mark would be serving a legitimate function, and would be protected. If, on the other hand, the mark induced consumers to buy because of "utilitarian reasons' 7-if they bought because the design was aesthetically pleasing the design would be labeled "functional. 58

The court noted that protection of Vuitton's design would not harm competition. It recognized that **[n]othing prevents Young from constructing or manufac turing its own similar line of luggage with its own unique trademark.... The amount of influence that this factor had on the court's decision is unclear, however, 60

The Third Circuit's opinion in Keene Corporation v. Paraflex Industries, Inc. contains still another interpretation of the doctrine of aesthetic functionality. The plaintiff in that case, Keene Corporation, manufactured and marketed an outdoor wall-mounted luminaire known as the "Wall Cube." The defendant, Parafiex. copied the exterior design of that product.

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The court affirmed judgment for the defendant after finding that the design was functional. However, it expressed disagreement with Pagliero's broad definition of functionality, stating, "[t]he difficulty with accepting such a broad view of aesthetic functionality, which relates the doctrine to the commercial desirability of the feature at issue without consideration of its utilitarian function, is that it provides a disincentive for development of imaginative and attractive design. ̈* The court proposed an alternative definition. It suggested that the inquiry into functionality should focus on the extent to which the design feature is related to the utilitarian function of the product or feature. Applying this principle to the case before it, the court found the design to be functional. One of the functions of the Wail Cube was its compatibility with the structure on which it was mounted. The design contributed to this compatibility. Indeed, as the defendant pointed out. the plaintiff's advertising stated that the Wall Cube's "crisp clean lines match contemporary architectural styling."

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The court also focused on whether competition would be harmed by trademark law protection of the Wall Cube design. It found that competition would be harmed by protection because there were "only a limited number of configurations or designs for a luminaire which are architecturally compatible with the type of structures on which they are placed.

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These cases demonstrate that judicial interpretation of the doctrine of aesthetic functionality has by no means been uniform. Of the three cases. Keene is most compatible with the public interest rationale underlying the doctrine. As discussed above. the purpose of the functionality doctrine is to prevent anyone from gaining a competitive advantage through exclusive use of a design that gives a product more utility, or reduces its cost of manufacture. If there are unlimited equally effective alternatives to a design. then. no competitive advantage is gained because of its protection. If, on the other hand, there are only a limited number of alternatives, or if the design is somehow superior to others, competition would be harmed by its protection.

Keene's denial of protection is consistent with these principles. since there were only a limited number of alternatives available to plaintiff's design of a wall luminaire. Pagliero, however, is not consistent. The court denied protection without finding either that the china design was superior to available alternatives. or that the number of alternatives was limited.

3. Generic Drug Cases

The doctrine of functionality has played an important role in the recent outbreak of litigation over "look-alike" generic drugs. Some of these cases involve the imitation of the color and shape of tablets, while others deal with capsule colors and color combinations. Arguably, a capsule is only a container, and thus distinguishable from the product imitation cases. In use, however, the entire capsule is consumed by the patient, and therefore is the product.

In Ives Laboratories, Inc. v. Darby Drug Co.", the plaintiff, manufacturer of the prescription drug Cyclospasmol, sued under state law and Sections 32 and 43(a) of the Lanham Act to prevent the defendants from using the same shape, size, and colors on their generic equivalent drugs. Ives contended that the defendants' "use of look-alike capsules and of catalog entries comparing prices and revealing the colors of generic capsules induced pharmacists illegally to substitute a generic drug for Cyclospasmol and to mislabel the substitute drug Cyclospasmol. The Second Circuit eventually granted judgment for the plaintiff for contributory infringement under Section 32, but the Supreme Court reversed and remanded.

The petitions for certiorari before the Supreme Court raised two functionality issues. First, the Court was asked to decide whether colors can ever be protected as trademarks." Second, it was asked to decide whether the colors' "therapeutic functions" or their contribution to the "commercial success" of the product rendered the colors functional.70

In the past, it has been assumed that "color, per se, is not capable of appropriation as a trademark." because of the limited number of colors available." The Court of Appeals in Ives properly recognized, however, that there were an "endless number of color combinations" available to the defendant, and accordingly rejected defendants' argument that the capsule colors should not be protected "because of the risk of creating monopolies through tying up all available colors."74

The defendants also argued that the colors served utilitarian purposes, including "reduc[ing] patient confusion or anxiety in taking medication, enabi[ing] doctors to communicate with patients more easily concerning their medication, and aid[ing] in their identification of the drug in an emergency situation."75 This argument gains some support from earlier decisions recognizing that color can have a functional effect. For example, blue for steel, pastel shades for facial tissues, dark reddish brown for colas, and pink for stomach medicines all have been at least suggested to be functional because of their psychological effect. Nevertheless, the Court of Appeals rejected this argument. It stated that although the defendants had presented some testimony from doctors who were of the view that patients receiving capsules of a different size, shape, or color could at first believe they had the wrong drug, "there was no evidence of any instances of such confusion, much less that it was widespread, or that it could not easily be cured by explaining the change to the patient......

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The Supreme Court failed to address either of these functionality issues. Instead, its decision rested on its determination that the Court of Appeals failed to apply the clearly erroneous" standard in setting aside the District Court's findings of fact. Accordingly, it reversed the Court of Appeals' holding as to Section 32 of the Lanham Act, and remanded the Section 43(a) and state law claims for further consideration.

The Court makes scant mention of the functionality doctrine. In the opinion for the Court", Justice O'Connor merely observed that the Court of Appeals had concluded that defendants had not offered any persuasive evidence of a legitimate reason unrelated to Cyclospasmol' for producing an imitative product... despite the District Court's express finding that, for purposes of §43(a),

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the capsule colors were functional.

a finding of

Holding that the Court of Appeals was not entitled to disregard the District Court's finding of functionality, the Court stated. "[while the doctrine of functionality is most directly related to the question of whether a defendant has violated $43(a) of the Lanham Act. functionality may also be relevant to an action involving $32.40 Moreover, the Court noted, the Court of Appeals could not determine that the District Court's finding was not "persuasive" unless it identified a legal error or a clearly erroneous factual finding."

Justice White's concurring opinion also largely ignores the functionality doctrine. It focuses instead on the standard to be used for finding contributory infringement. Justice White disapproved of the Court of Appeals inquiry into whether defendants could reasonably anticipate illegal substitution. He thought that "a finding of contributory infringement requires proof of either an intent to induce illegal substitution or continued sales to particular customers whom the manufacturer knows or should know are engaged in improper palming off.42

Justice White briefly brought up the functionality doctrine as he set forth an explanation of the "relationship of functionality in a §32 case. He stated. ``[ijt is my view that a finding of functionality offers a complete affirmative defense to a contributory infringement claim predicated solely on the reproduction of a functional attribute of the product. He added that the defense also applied to suits brought under 343(a).

At first glance, then, the Supreme Court's opinion appears to offer no guidance whatsoever to future resolution of the functionality issues of protectability of color and the role of the psychological effects of colors. However, upon further examination, it appears that the decision implicitly recognizes that the psychological effect of drug capsule colors may be functional, since it disapproved of the Court of Appeals' reversal of the District Court's finding of functionality. Guidance as to the issue of protectability of colors is less clear, but it could be argued that the lack of any statement in the opinion suggesting that colors are unprotectable, together with the remand for further consideration, indicate the Court's decision to allow protection of drug capsule colors, provided they are found to be nonfunctional. In any event, further explication of the functionality issues not explicitly addressed by the Court is certain to evolve as lower courts continue to face these issues. It should be noted again that the §43(a) issue was not reached by the Second Circuit in Ives and therefore that the Supreme Court obviously did not deal with that issue.

B. Preemption

1. Sears-Compco

The Supreme Court's 1964 decisions in Sears and Compco further limit the trademark protection available to useful article designs. In the Sears case. Stiffel Co. sought to prevent Sears from copying the design of its "pole lamp." Stiffe! had obtained design and mechanical patents, but the district court found them invalid for want of invention. The Supreme Court held that Stiffel could not be protected under state unfair competition law, since state law could not prohibit the copying of an article not protected by a federal patent or copyright.

In the Compco case, the Day-Brite Lighting Co. sought to prevent Compco from copying its fluorescent light fixture reflector. Day-Brite had obtained a design patent for its product, but, as in the Sears case, the district court found the patent invalid. The Supreme Court again ruled that state unfair competition law could not protect the plaintiff since "to forbid copying would interfere with the federal policy... of the Constitution and in the implementing statutes, of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain.""

Sears and Compco dealt only with preemption of state law. As subsequently confirmed by lower court construction, Sears and Compco do not affect the protection afforded useful article designs under federal trademark law, including Section 43(a) of the Lanham Act. Moreover, they do not apply to protection of trade dress," since the dispute before the Supreme Court involved only a useful article design. Finally, Sears and Compco dealt only with federal statutory preemption, not preemption under the U.S. Constitution, so product design protection under the Lanham Act is not affected.

Sears and Compco may continue to prevent some forms of state law protection of useful article designs." However, even this restricted view of the cases is subject to challenge. For example, in Dallas Cowboys Cheerleaders v. Pussycat Cinema, Lid., the court broadly stated that the consideration underlying Sears and Compco "does not apply in a trademark infringement action where the plaintiff does not assert exclusive rights to the sale of a product but merely to a mark indicating its origin or sponsorship." It continued. "[t]he question presented therefore is one of trademark law, and it is clear that Sears-Compco did

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not redefine the permissible scope of the law of trademark insofar as it applies to origin and sponsorship. Further. in SK&F Co. v. Premo Pharmaceutical Laboratories, Inc.. the Third Circuit found that the state law tort of unprivileged imitation survives Sears and Compco" since in these decisions "the Court was careful to leave undisturbed state laws protecting against passing off and unprivileged copying of nonfunctional elements of trade dress."

Therefore, the barrier to protection of useful article designs presented by Sears and Compco is limited. Their effect on state law protection is minor, although the boundaries are disputed. Lanham Act claims for product design protection are unaffected.

2. Patent Law

Closely related to the issue addressed in Sears and Compco is the problem of whether a useful article design can be protected as a trademark during the life of its design patent. The Court of Customs and Patent Appeals resolved this issue in Application of Mogen David Wine Corp." In that case, the Trademark Trial and Appeal Board had held that Principal Registration of the configuration of a decanter bottle was "precluded as a matter of law during the life of the design patent. The court reversed and remanded. It recognized that patent and trademark law protection were designed to serve different interests. Further, it rejected the argument that trademark protection would improperly "extend", the patent monopoly, stating, "[p]atent expiration is nothing more than the cessation of the patentee's right to exclude held under the patent law. Conversely. trademarks conceivably could end through non use during the life of a patent. We doubt it would be argued that the patent rights should also expire so as not to extend them.

The court further explained its reasoning in a later case. Application of Honeywell, Inc. It perceived a "clear distinction between the underlying bases of the federal trademark and design patent laws."101 Federal design patent laws, it stated, "were created to encourage the invention of ornamental designs.**102 Federal trademark laws, on the other hand, "seek to prevent the public from encountering confusion, mistake, and deception in the purchase of goods and services and to protect the integrity of the trademark owner's product idenuity. For these reasons, the court held that the Board had erred in relying on the existence of a design patent to refuse registration of the configuration of a portion of a thermostat. From these cases, it appears certain that existence of a design patent will not preclude concurrent trademark law protection of a useful article design.

3. Copyright Law

The Copyright Act of 1976 is the source of another potential restriction on trademark law protection of useful article designs. It clearly has no effect on Lanham Act protection, since it explicitly provides: "Nothing in this title annuls or limits any rights or remedies under any other Federal statute. Accordingly, actions for infringement of a registered mark, or for violations of Section 43(a), are not barred.

The Copyright Act's effect on state law is not so clear-cut. Section 301(a) provides that all legal or equitable rights equivalent to any of the exclusive rights within the general scope of copyright are governed entirely by the Act. Section 301(b), however, states expressly that state law rights are preserved for subject matter outside the scope of copyrightable works and with respect to activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright. 10

The meaning of these sections, particularly the phrase "not equivalent to any of the exclusive rights within the general scope of copyright." is troublesome. 10% One suggested test of compliance is an inquiry into whether "other elements are required, in addition to or instead of, the acts of reproduction, performance, distribution or display, in order to constitute a state-created cause of action." If such other elements are required, the state-created right is not "equivalent to any of the exclusive nights within the general scope of copyright", and there would be no preemption. 107

Under this test, a state trademark statute or unfair competition rule which requires likelihood of confusion or deception in addition to "reproduction" will not be preempted. 10 The continued validity of other state laws, however, may be in doubt. This doubt is likely to continue until the copyright statute receives some much-needed clarification.

V. CONCLUSION

Clarification of the boundaries of protection of useful article designs under trademark law is sorely needed. Virtually all aspects of protection of product designs are now uncertain. Courts often have been mistaken in their application of traditional trademark principles, such as secondary meaning, to protection of useful article designs. Moreover, they have been inconsistent in their development of the doctrine of functionality, and often seem to ignore the reasons underlying that doctrine. Finally, they have failed to articulate a cogent explanation of the relationship between federal and state laws, and the roles to be filled by each. The proposed federal design registration statute would be helpful in providing a substantial amount of clarification' in th@field.

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