The U.S. Court of Appeals for the Sixth Circuit affirmed the district court’s finding that an asserted trademarked product configurations, which were the subject of design and utility patents, were functional and therefore could not be protected. Fuji Kogyo Co., Ltd. v. Pacific Bay International, Inc., Case No. 05-5854 (6th Cir., Aug. 23, 2006) (Boggs, J.).
Fuji Kogyo, a family-run company, manufactures fishing line guides. With regard to the products at issue, Fuji Kogyo had been granted three trademark registrations, four utility patents and seven design patents. Fuji distributes its products exclusively through Anglers Resource in the United States. The three defendants, Pacific Bay, Batson Enterprises and Amtak Ltd. all compete against Anglers Resource through the importation and reselling of allegedly infringing line guides. Fuji filed suit alleging infringement of three registered trademarks and one unregistered trademark, counterfeiting of goods and similar state law claims under Tennessee law. After a bench trial the district court dismissed Fuji Kogyo’s trademark claims and canceling its asserted trademark registrations, concluding that the "trademarked product configurations were functional and therefore could not be protected." The district court relied mainly upon Fuji Kogyo’s own statements in its expired utility patents but also considered expert testimony. Fuji Kogyo appealed.
The Sixth Circuit concluded that the district court’s determination was not clearly erroneous as its "investigation was properly illuminated by the language of the patents, consideration of the doctrine of equivalents, and witness testimony." As the court explained, a "product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article." Fuji Kogyo argued that by virtue of its registrations it enjoyed a presumption of nonfunctionality, claiming that the district court "misplaced" the burden of proof. The Sixth Circuit rejected this argument, finding that the defendants had overcome the presumption and Fuji Kogyo was unable to rebut the showing of functionality by demonstrating that the configuration was not functional.
Fuji further argued that the district court erred by considering the utility patents as evidence of design functionality without first determining whether the product configuration was claimed in any of the patents. The Court rejected this argument as well, noting that the district court need not analyze what had been claimed in the utility patents. Rather, it was only necessary to determine whether the product configurations were disclosed as functional.
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