Apple Inc. v. Samsung Electronics Co., Ltd.
2015 U.S. App. LEXIS 8096, 114 U.S.P.Q. 2d (BNA) 1953, 786 F.3d 983 (2015)
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Rule of Law:
A product's configuration is not protectable as trade dress under the Lanham Act if its features are functional. A feature is functional if it is essential to the use or purpose of the article, affects its cost or quality, or provides any utilitarian advantage beyond merely identifying the source of the product.
Facts:
- Apple Inc. designed the iPhone with a specific set of visual features.
- These features included a rectangular product with four evenly rounded corners, a flat clear surface on the front, and a display screen underneath.
- The user interface, when the device was on, displayed a matrix of colorful square icons with evenly rounded corners.
- Apple claimed an unregistered trade dress for the overall appearance of its iPhone 3G and 3GS models.
- Apple also obtained a registered trade dress ('983 trade dress) for the specific layout and design of 16 icons on the iPhone's home screen.
- Samsung Electronics Co., Ltd. began manufacturing and selling smartphones.
- Several of Samsung's smartphones incorporated a similar rectangular shape, rounded corners, a flat front face, and a grid-based icon user interface that Apple alleged copied its trade dress.
Procedural Posture:
- Apple Inc. sued Samsung Electronics Co., Ltd. in the U.S. District Court for the Northern District of California, alleging design patent infringement, utility patent infringement, and trade dress dilution.
- A jury in the court of first instance found Samsung liable on all counts and awarded Apple over $1 billion in damages.
- Samsung filed a post-trial motion for judgment as a matter of law, which the district court denied.
- The district court upheld approximately $639 million in damages but ordered a partial retrial for the remainder, concerning a period when Samsung lacked notice of some patents.
- After the retrial, a second jury awarded Apple an additional $290 million.
- The district court entered a final judgment in favor of Apple.
- Samsung (appellant) appealed the final judgment to the U.S. Court of Appeals for the Federal Circuit, with Apple (appellee) as the respondent.
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Issue:
Is a product's configuration, such as the shape and user interface of a smartphone, protectable as trade dress under the Lanham Act if its constituent elements are found to serve a utilitarian purpose that improves the product's usability?
Opinions:
Majority - Prost, Chief Judge.
No. A product configuration is not protectable trade dress if its elements are functional. Trade dress protection for product design must be limited to features that are nonfunctional to avoid granting a perpetual monopoly on utilitarian product features, which is the province of patent law. A feature is functional if it is essential to the use or purpose of the article, affects its cost or quality, or has any utilitarian advantage. Here, the court found that every element of Apple's asserted unregistered trade dress was functional: rounded corners improve 'pocketability' and durability, a rectangular shape maximizes screen space, a flat surface facilitates touch operation, and icons allow for intuitive use of applications. Likewise, the registered '983 trade dress, which covers a grid of icons, is functional because the icons serve as a 'visual shorthand' to improve the device's usability. Because Apple failed to prove its asserted trade dresses were non-functional, they are not protectable under the Lanham Act, and the jury's finding of dilution is reversed.
Analysis:
This decision significantly reinforces the high bar for obtaining trade dress protection for product configurations, particularly in the tech industry. It clarifies that features providing any utilitarian advantage, even if also aesthetic, are deemed functional and thus ineligible for the potentially perpetual protection of trademark law. This holding channels protection for useful designs toward the time-limited framework of patent law, thereby promoting competition by preventing companies from using trade dress to monopolize functional product features indefinitely. The case serves as a strong reminder that the 'look and feel' of a product is difficult to protect under trademark law when that look and feel also contributes to how the product works.
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