Caseflicks

Court of Appeals for the Seventh Circuit • 2010

Jay Franco & Sons, Inc. v. Franek

615 F.3d 855 | 2010 U.S. App. LEXIS 17019

Full access

Unlock the video and quiz

The written brief is free to read below. Subscribe to watch the video explainer and take the quiz.

Takeaway

In short, an incontestable trademark cannot monopolize a useful or competitively important product shape.

Background

Clemens Franek’s company registered the configuration of a round beach towel as a trademark in 1988. Franek later acquired the mark and continued selling round towels. His advertisements promoted both the towel’s distinctive look and its usefulness to sunbathers, who could turn with the sun without moving the towel.

When Franek sued two retailers for selling round towels supplied by Jay Franco & Sons, Jay Franco sought to invalidate the mark. The district court granted summary judgment to Jay Franco, holding that the round design was functional. Franek appealed.

Issues

Issue #1

Whether the round shape of a beach towel can remain a protected trademark when it offers practical or aesthetic benefits apart from identifying its maker.

Holding

No. The circular design is functional and cannot be protected as a trademark, even though the registered mark is incontestable.

Reasoning

Incontestability prevents a challenge based on lack of distinctiveness, but the Lanham Act still permits a functionality defense. Under the governing test, a design is functional if it is essential to the product’s use or affects its cost or quality. Benefits that come from identifying a product’s source do not count.

A utility patent describing a circular towel identified a benefit that Franek’s own advertising also promoted: sunbathers can turn toward the sun while the towel stays put. The patent was strong evidence of usefulness even if Franek’s towel would not infringe its claims and even though the patent application came after Franek began selling round towels. Functionality turns on the feature’s usefulness, not patent infringement or priority.

The circle also makes efficient use of space for a turning sunbather. Compared with other shapes that allow a full rotation, it needs less material and is easier to fold and carry. That affects the towel’s quality, whether or not it is cheaper to make.

Even assuming the practical advantage is too small to matter, the mark remains functional for an aesthetic reason. Franek advertised the round shape as fashion, and some buyers want a round towel for its shape rather than its maker. Giving one seller exclusive rights to this basic design would put competitors at a significant disadvantage unrelated to Franek’s reputation.

Trademark law can protect a distinctive word or image placed on Franek’s towels, but it cannot give him indefinite control over the circular towel itself.