Sulzer Mixpac AG v. A&N Trading Co.
988 F.3d 174 (2d Cir. 2021) (2021)
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Rule of Law:
A product’s trade dress cannot receive trademark protection if the design feature is functional, meaning it is essential to the use or purpose of the article, or it affects the cost or quality of the article.
Facts:
- Sulzer Mixpac AG (Mixpac) manufactures a system for mixing dental adhesives, consisting of a dispenser, a two-cylinder cartridge, and mixing tips, and is a leading supplier of these mixing tips.
- Mixpac's mixing tips vary in diameter, helix length, and cap size to accommodate different dental procedures.
- Mixpac obtained multiple U.S. trademark registrations between 2010 and 2017 for its use of seven specific colors ('Candy Colors') on mixing tip caps, cylinders, and helixes.
- Mixpac's own employees, in 2008 declarations, stated that Mixpac chose a 'unique and arbitrary color coding system' to help users identify products and quickly select a mixing tip that matches the proper cartridge, indicating proper size and mixing ratio.
- Mixpac's advertising materials asserted that it uses 'color-coded mixers and outlet caps' where 'The color of the outlet cap used for a certain dental product identifies the mixer best suited for th[e] product.'
- Mixpac's catalog and other advertising show that specific 'Candy Colors' correspond to specific mixing tip diameters (e.g., yellow for 4.2mm, teal for 6.5mm, pink for 5.4mm, blue for 3.2mm, brown for 2.5mm).
- A&N Trading Company (A&N) distributes mixing tips manufactured by Seil Global Co., Ltd., a company whose principals include the mother and father of Sung Bin An, A&N's president and sole owner.
- A&N displayed and advertised mixing tips with clear caps and colored helixes, using colors identical or nearly identical to Mixpac's 'Candy Colors,' at the 2016 Greater New York Dental Meeting.
Procedural Posture:
- In 2008, Mixpac sued Seil Global Co., Ltd., and other dental products manufacturers/distributors in the U.S. District Court for the Southern District of New York (the '2008 Litigation') alleging trademark and trade dress infringement.
- Seil Global defaulted in the 2008 Litigation.
- In 2009, the district court entered a default judgment and a permanent injunction against Seil Global.
- On May 28, 2013, the district court entered an order for civil contempt and sanctions against Seil Global for failing to respond to multiple orders to show cause.
- On November 28, 2016, Mixpac filed suit against A&N Trading Company, A&N Trading Co., Ltd., and Sung Bin An (collectively 'A&N') in the U.S. District Court for the Southern District of New York, alleging unfair competition, common law trademark infringement, and Lanham Act claims for trademark infringement, counterfeiting, and false designation of origin, and also seeking to hold A&N in civil contempt of the 2008 injunction.
- A&N counterclaimed, alleging that Mixpac’s use of colors on mixing tips was functional and seeking cancellation of Mixpac’s trademark registrations.
- Mixpac filed a Supplemental Complaint on February 12, 2019, to plead new U.S. trademark registrations.
- After a one-day bench trial on May 9, 2019, the district court issued findings of fact and conclusions of law on August 14, 2019, granting final judgment and a permanent injunction for Mixpac on its claims (unfair competition, false designation of origin, infringement, and counterfeiting) and awarded Mixpac $2 million in statutory damages.
- The district court concluded that Mixpac’s 'Candy Colors' were non-functional because they added to Mixpac’s manufacturing costs and other companies used different or no colors, applying the functionality standard from Fabrication Enterprises, Inc. v. Hygenic Corp.
- The district court did not reach Mixpac’s civil contempt claim.
- A&N appealed the district court's final judgment to the U.S. Court of Appeals for the Second Circuit.
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Issue:
Is a product's trade dress functional, and thus unprotectable under the Lanham Act, if the design feature (such as a color-coding scheme) affects the quality or operation of the product by signifying useful characteristics like diameter?
Opinions:
Majority - Circuit Judge Pooler
Yes, a product's trade dress is functional and thus unprotectable under the Lanham Act if the design feature affects the quality or operation of the product by signifying useful product characteristics, such as diameter for mixing tips. The court reversed the district court's finding of non-functionality, holding that Mixpac’s use of specific colors on its mixing tips is functional. The court found that the district court erred by not applying the correct functionality test, specifically the two-prong utilitarian functionality test from Inwood Lab’ys, Inc. v. Ives Lab’ys, Inc., as articulated in Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc. This test states that a product feature is functional if it is 'essential to the use or purpose of the article' or 'affects the cost or quality of the article.' While the district court correctly noted that the colors added to manufacturing costs and that competitors used different or no colors, it failed to consider whether the colors affected the 'quality' or 'operation' of the product. The evidence, including Mixpac's own employee declarations, advertising, and catalog, clearly established that the 'Candy Colors' signify specific mixing tip diameters, which enables users to quickly match cartridges to the appropriate mixing tips. This capability 'improves the operation of the goods,' thereby affecting their quality. Therefore, the colors are functional, rendering Mixpac’s trade dress unprotectable under the Lanham Act. The court declined to address A&N's counterclaims or Mixpac's civil contempt claim, as a finding of functionality ends the inquiry into trade dress protection.
Analysis:
This case clarifies the application of the functionality doctrine in the Second Circuit, emphasizing that a design feature is functional if it affects the 'quality' or 'operation' of a product by conveying useful information to the user. By reversing the district court, the appellate court reinforced that the existence of alternative designs or increased manufacturing costs for a functional feature does not negate its functionality if it provides a utilitarian benefit. This decision limits the scope of trade dress protection, preventing companies from monopolizing product features that offer a competitive advantage due to their utility rather than merely their source-identifying capacity, thereby promoting fair competition in the marketplace. Future cases involving product design elements that convey information or enhance usability will be scrutinized under this interpretation of functionality.
