Millennium Laboratories, Inc. v. Ameritox, Ltd.
817 F.3d 1123
| 9th Cir. | 2016Background
- Millennium Laboratories and Ameritox compete in urine drug-testing services; Millennium uses the R.A.D.A.R.® Report layout and Ameritox introduced a similar RX Guardian™ Report layout.
- Millennium sued Ameritox (April 2012) for trade dress infringement under the Lanham Act and unfair competition under Cal. Bus. & Prof. Code § 17200, alleging Ameritox copied Millennium’s report design.
- The district court granted summary judgment for Ameritox, holding Millennium’s claimed trade dress was functional and thus not protectable; it also dismissed the § 17200 claim.
- This appeal focuses on whether the specific visual layout of Millennium’s report is functional (bar to trade dress protection) and whether summary judgment was appropriate.
- The Ninth Circuit applies a two-step functionality inquiry (Inwood/Qualitex/TrafFix synthesis): Step One—Inwood test (essential to use or affects cost/quality); Step Two—aesthetic functionality (competitive disadvantage if protected).
- The Ninth Circuit concluded genuine issues of material fact exist on functionality (both steps) and reversed and remanded the summary judgment and § 17200 ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Millennium’s specific report layout is functional under the Lanham Act | Millennium: layout is an aesthetic, source-identifying format (nonfunctional) | Ameritox: format is functional because it serves the utilitarian purpose of presenting comparable/ historical test results | Reversed—genuine factual disputes exist; a jury could find the layout nonfunctional under Step One and Step Two analyses |
| Proper test for functionality (Disc Golf four-factor vs. two-step Inwood/Qualitex/TrafFix approach) | Millennium: Disc Golf test inapplicable/should be abandoned for aesthetic formats | Ameritox: Disc Golf remains valid; courts should apply the two-step (merged) approach | Court: use two-step approach incorporating Disc Golf factors for Step One; Disc Golf not displaced by TrafFix; two-step applied here |
| Whether summary judgment on functionality was appropriate | Millennium: disputed evidence (design process, alternatives, advertising, costs) precludes summary judgment | Ameritox: evidence shows functionality as a matter of law so summary judgment proper | Reversed—summary judgment improper because material factual disputes remain on all Disc Golf factors and aesthetic functionality |
| Whether California unfair competition claim survives given Lanham Act result | Millennium: § 17200 claim tied to trade dress claim and should survive if trade dress survives | Ameritox: § 17200 claim fails if trade dress is not protectable | Reversed—because trade dress summary judgment reversed, § 17200 claim also cannot be resolved on summary judgment |
Key Cases Cited
- TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23 (clarifies relationship between Inwood and Qualitex tests; functionality bars trade dress)
- Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (defines functionality: essential to use or affects cost/quality)
- Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159 (discusses competitive disadvantage aspect of functionality)
- Disc Golf Ass’n v. Champion Discs, Inc., 158 F.3d 1002 (Ninth Circuit four-factor functionality test)
- Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062 (adopts two-step framework; applies Inwood for Step One and aesthetic-functionality for Step Two)
- Clicks Billiards, Inc. v. SixShooters, Inc., 251 F.3d 1252 (discusses focus on overall visual impression and application of functionality analysis)