193 F. Supp. 3d 245
S.D.N.Y.2016Background
- Kwik Lok, long-time U.S. manufacturer of reusable plastic bag closures, owns incontestable U.S. Trademark Registration No. 1,972,043 (the ’043 Registration) for a closure configuration (square/slightly rectangular perimeter with beveled corners and a triangular slot) and sells the J‑NRP series widely through distributors and in machines (notably the Kwik Lok 872 machine).
- Schutte B.V. (Netherlands) and its U.S. subsidiary Schutte, Inc. developed the Clipps G closure and sought to enter the U.S. market; Kwik Lok sued for trade dress infringement and dilution, and Schutte counterclaimed seeking a declaration of non‑infringement and cancellation of the ’043 Registration as functional.
- The parties tried the case in a five‑day bench trial with expert testimony on plastics engineering, machine forces, patents, product testing, marketing, and industry practice; PTO file history of the ’043 Registration was also presented.
- Schutte argued the asserted trade dress is functional (thus unprotectable); Kwik Lok relied on the incontestable registration presumption of validity and argued the configuration is arbitrary and source‑identifying, with alternative‑design evidence offered by both sides.
- The court found the asserted trade dress affects cost and quality (machine fit, strength, manufacturability, operation in the 872 lok track) and is disclosed in Kwik Lok’s expired utility patents; it held the registered mark functional, ordered cancellation of the ’043 Registration, and entered declaratory judgment for Schutte of non‑infringement and non‑dilution.
Issues
| Issue | Kwik Lok (Plaintiff) Argument | Schutte (Defendant) Argument | Held |
|---|---|---|---|
| Validity / Functionality of the registered product configuration | Registration incontestable; PTO accepted multiple specimens; configuration is distinctive and arbitrary, not functional | Configuration is functional: essential for machine operation, affects cost/quality, disclosed in expired patents — so unprotectable | Held functional under TrafFix utilitarian test (affects cost/quality; patent disclosures strong evidence) — registration cancelled |
| Trade dress infringement / likelihood of consumer confusion | Clipps G is substantially similar to Kwik Lok closures; incontestable registration indicates strength and likelihood of confusion | Even if similar, products are sold in labeled packaging to sophisticated wholesale buyers through distributors; no evidence of actual confusion; Schutte’s branding and distribution mitigate confusion | Infringement not found; alternatively non‑infringement because no likelihood of confusion (Polaroid factors weigh against confusion) |
| Federal dilution (15 U.S.C. § 1125(c)) | Kwik Lok’s mark is famous and distinctive; Schutte’s use will dilute | Kwik Lok lacks fame among the general consuming public (niche fame only); Clipps G use not dilutive | Held Kwik Lok failed to show nationwide fame required for federal dilution; claim dismissed |
| New York anti‑dilution / unfair competition (N.Y. Gen. Bus. Law § 360‑1 and common law) | State law protects trade dress/dilution even without national fame | Product design claim is preempted by federal patent policy when designs are patentable/functional; purchasers are sophisticated so dilution/unfair competition unlikely | Held: state dilution and unfair competition claims dismissed (functional/unprotectable; preemption concerns and lack of likely confusion/bad faith) |
Key Cases Cited
- TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001) (Supreme Court clarified functionality test: feature is functional if essential to use/purpose or affects cost/quality; patents are strong evidence of functionality)
- Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995) (trade dress protection principles; utilitarian/functionality limits)
- Wal‑Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205 (2000) (caution in extending trade dress to product design; product designs often serve non‑source functions)
- Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) (trade dress can be protected when inherently distinctive or with secondary meaning)
- Christian Louboutin S.A. v. Yves Saint Laurent America Holdings, Inc., 696 F.3d 206 (2d Cir. 2012) (discusses utilitarian test and how a feature affecting cost/quality is functional)
- Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961) (sets out the multi‑factor likelihood‑of‑confusion test used in the Second Circuit)
- Valu Engineering, Inc. v. Rexnord Corp., 278 F.3d 1268 (Fed. Cir. 2002) (Morton‑Norwich factors summarized for functionality analysis; role of patents and alternatives)