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Jay Franco & Sons, Inc. v. Franek - 615 F.3d 855 (7th Cir. 2010)

Rule:

Where a mark is incontestable under 15 U.S.C.S. § 1065, it eliminates the need for a mark's owner in an infringement suit to show that his mark is distinctive. But incontestable marks are not invincible. The Lanham Act lists a number of affirmative defenses an alleged infringer can parry with; one is a showing that the mark is "functional." 11 U.S.C.S. § 1115(b)(8). Patent law alone protects useful designs from mimicry; the functionality doctrine polices the division of responsibilities between patent and trademark law by invalidating marks on useful designs.

Facts:

Defendant trademarked a circular beach towel. His company pitched the towel as a fashion statement and also targeted lazy sunbathers on the basis that the round shape eliminated the need to constantly get up and move the towel as the sun moved across the sky; instead, a sunbather could merely reposition himself or herself. Plaintiff began to sell round beach towels. Defendant sued two of plaintiff's customers and plaintiff indemnified and defended the customers. Plaintiff countersued defendant to invalidate the mark. The district court granted summary judgment to plaintiff.

Issue:

Could trademark protect defendant’s circular beach towel from the alleged infringement of the plaintiff?

Answer:

No.

Conclusion:

The Court of Appeals for the Seventh Circuit noted that defendant has continuously used the round-towel mark since its 1988 registration – this made the mark "incontestable." However, under the Lanham Act, an alleged infringer of an incontestable mark can show that the mark was “functional” in order to avoid liabilities for infringement. The Court averred that only patent law alone protected useful designs from mimicry; the functionality doctrine polices the division of responsibilities between patent and trademark law by invalidating marks on useful designs. In the case at bar, the Court held that the design was presumed functional, within the meaning of 11 U.S.C.S. § 1115(b)(8), and that defendant had failed to rebut the presumption. The Court held that a design was functional when it was essential to the use or purpose of the device or when it affected the cost or quality of the device. The Court held that the towel's circularity affected the quality of the device because, compared to other shapes that permitted full rotations, the round towel required less material, which made it easier to fold and carry. Since defendant chose to pursue a trademark, not a design patent, to protect the stylish circularity of his beach towel, he cannot be permitted to keep the to protect the stylish circularity of his beach towel.

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