Summer 2012 Issue
Acacia Inc. v. NeoMed Inc.,
2012 WL 3019948 (C.D. Cal. July 23, 2012)
Litigants Acacia Inc. (“Acacia”) and NeoMed Inc. (“NeoMed”) are medical-device companies that both produce neonatal feeding systems, including tubes, connectors, and syringes. In January 2007, NeoMed’s predecessor, Specialty Medical Products, applied to register the trade dress “for oral syringes consisting of the color orange for gradation markings and text or text box on a clear barrel.” The trade dress was ultimately allowed on the Supplemental Register.
In June 2011, NeoMed sent Acacia a cease-and-desist letter demanding that Acacia stop using the color orange on its GRAVIFEED line of syringes, including the use of orange applied to gradation markings and the text on the barrel of the syringe. Acacia responded with a declaratory judgment action seeking cancellation of NeoMed’s trademark registration. NeoMed responded with a counterclaim for trademark infringement, false designation of origin, false advertising, and violation of California’s unfair-competition law. Acacia followed with a motion for partial summary judgment on the basis that the use of orange for gradation markings, text, and text boxes is functional, and therefore not protectable as trade dress.
In reaching its decision, the court emphasized that functional product features do not enjoy protection under trademark law and that a color can be an “essential” product feature where it “serves a significant nontrademark function,” citing the Supreme Court’s decision in Qualitex. Noting that the Ninth Circuit’s functionality test has evolved over time, the court referenced the four-factor functionality test defined in the 1998 decision in Disc Golf Association as (1) whether the design yields a utilitarian advantage; (2) whether alternative designs are available; (3) whether advertising touts the utilitarian advantages of the design; and (4) whether the particular design results from a comparatively simple or inexpensive method of manufacture. The court noted the Supreme Court’s guidance in the TrafFix decision that if a feature is held to be functional, there is no need to consider if there is a competitive necessity for that feature.
The court cited NeoMed’s own advertising touting the functional nature of the color orange (“Orange signals enteral safety,” “NeoMed Oral Dispensers feature orange lettering and precise gradient marking that signify ‘enteral or oral’ designed to connect with other compliant devices,” and “[o]range lettering and graduation marking identify as enteral only”), as well as NeoMed’s public efforts to “create a coalition of manufacturers of enteral products to establish orange as the color representing enteral safety” as support for its decision that the color orange is used in the medical industry to signify oral use and is therefore functional. In reaching its decision, the court also relied on evidence presented by Acacia from executives of other device manufacturers, medical-device sales representatives, and a nurse that the color orange is used to signal to hospital staff that a particular device is for enteral use, and to coordinate different enteral-only devices.The Court rejected NeoMed’s counterargument that, even if the color orange is used functionally by some manufacturers, NeoMed’s use of the color was not functional. Noting that while trade dress as a whole may be protectable where “some of the claimed elements are functional” and others are not, in this case, the court held, none of the elements were nonfunctional, thus rendering the trade dress unsuitable for protection. Nor, the court found, could the presumption of functionality be overcome because NeoMed’s product had some features making it visually distinguishable from competing products, finding that those features were insufficient to qualify for trade-dress protection. Finally, the court rejected NeoMed’s contention that its efforts to create a coalition of manufacturers to promote the use of orange as the official color to signal enteral use was unsuccessful and therefore should not be held against it. The court noted that the fact that color selection was not universal in the industry did not transform it into a nonfunctional feature. In finding in Acacia’s favor on the summary judgment motion, the court directed the PTO to cancel NeoMed’s trademark registration.
This case demonstrates the significant role that a trademark owner’s own advertising and marketing efforts can play in a court’s evaluation of functionality and the critical need for a company’s legal and marketing departments to work together to secure and protect product trade dress.