IP: Intellectual Property Interplay

While most readers will know the difference between a patent, a trademark and a copyright, the proper interplay between the law in these three disciplines is not always easy to decipher. At least that is what the 9th Circuit is finding out as its decision in Fleischer Studio, Inc. v. A.V.E.L.A., Inc. et al., is being roundly criticized by a high powered group including the NFL, Major League Baseball and the Motion Picture Association of America.

Patents and Copyrights

The U.S.Constitution authorizes Congress "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. Pursuant to this grant, Congress set up the copyright system, to protect works of authorship, and the patent system, to protect inventions. Per the Constitution, copyrights and patents must be of "limited duration." This means that all copyrights and patents eventually expire, leaving the copyrighted works and patented inventions in the public domain. Generally, patent terms run twenty years from the date of a patent application. Copyright terms have been adjusted a number of times over the years, but an author creating a work today will have exclusive rights to the work for his or her lifetime, plus 70 years.

Trademarks

Exclusive trademark rights are not designed to reward creators. To the contrary, trademark rights exist to protect consumers, who might otherwise be confused about the source of goods and services. While we often think of a trademark as a brand name (e.g., "Quaker" oatmeal), a trademark can take a myriad of other forms (e.g., the Golden Arches, Ronald McDonald or the "I'm lovin' it" catchphrase). A trademark holder can maintain a trademark indefinitely, as long as the trademark continues to fulfill its function as a source identifier.

Interplay Between Patents, Copyrights and Trademarks

Due to the limited duration of patent rights and the indefinite duration of trademarks, there has been some concern that individuals or companies may claim trademark rights in an effort to extend their patent monopoly. In response to this concern, the Supreme Court adopted the utilitarian functionality defense, which held that utilitarian aspects of a product (e.g., hinges) could not be used as trademarks.

In the 1950s, the 9th Circuit sought to extend the utilitarian defense with the "aesthetic" functionality defense. Under this doctrine, aesthetic features of a product which drove consumer demand were also ineligible for trademark protection. The aesthetic functionality doctrine, however, was routinely criticized by courts around the country, including subsequent decisions of the 9th Circuit. As one later 9th Circuit Panel held in Au-Tomotive Gold, Inc, v. Volkswagen of America, Inc.:

[the aesthetic functionality defense] would be the death knell for trademark protection. It would mean that simply because a consumer likes a trademark, or finds it aesthetically pleasing, a competitor could adopt and use the mark on its own products. Thus, a competitor could adopt the distinctive Mercedes circle and tri-point star or the well-known golden arches of McDonalds, all under the rubric of aesthetic functionality.

In light of Au-Tomotive Gold and similar decisions, most practitioners believed that the aesthetic functionality doctrine was dead.

Fleischer Studios Decision

Fleischer Studios involved the unlicensed use of the Betty Boop character on dolls and handbags. In denying Fleischer's trademark claims, the district court held Fleischer failed to timely introduce evidence that it owned the trademark rights to Betty Boop. In affirming the district court, the 9th Circuit, however, ignored the proceedings below and ruled against Fleischer based on the aesthetic functionality doctrine.

The 9th Circuit's inexplicable revival of the long dead aesthetic functionality doctrine sent a shiver through the IP community. If the doctrine continues to live, countless valuable trademarks will be at risk. Fleischer Studios filed a petition for rehearing en banc and a number of prominent IP holders filed amicus briefs. While the IP community expects that the full 9th Circuit will reverse the panel's decision, many of us will be interested to see if a viable argument will be made for the restoration of the doctrine.

Mark Scarsi is a partner in the Intellectual Property Group of Milbank, Tweed, Hadley & McCloy, LLP, resident in the Los Angeles office.

Read Mark Scarsi's previous column. Read Mark Scarsi's next column.

Join the Conversation

Advertisement. Closing in 15 seconds.