AuthorSipe, Matthew G.

INTRODUCTION 1826 I. A BRIEF HISTORY OF TRADEMARK FUNCTIONALITY 1834 A. Pre-Lanham Act Cases 1834 B. From the Lanham Act to Qualitex 1840 C. TrafFix and the Present 1844 II. A FRAGILITY THEORY OF FUNCTIONALITY 1849 A. The Trouble with TrafFix 1849 B. Fragile Functionalities 1858 1. Placebo Functionality 1858 2. Social Functionality 1860 III. ORGANIZATIONAL FUNCTIONALITY 1863 IV. DESIGN FUNCTIONALITY 1866 V. INTERLOCKING FUNCTIONALITY 1869 VI. REFORMULATING THE LAW 1873 IV APPLICATIONS AND EFFECTS OF A FRAGILITY STANDARD FOR TRADEMARKS 1877 A. Fragility and Copyright 1878 B. Fragility, Dilution, and Post-Sale Confusion 1882 C. Fragility and Welfare Effects 1888 D. Breaking Fragility 1893 E. Improving Fragility 1895 CONCLUSION 1899 INTRODUCTION

A set of test subjects are randomly assigned to one of two treatment groups for their frequent headaches: generic or brand-name ibuprofen (Nurofen[R]). They are provided with multiple doses and instructed to take one for each of their headaches over the next few weeks, rating their pain relief and any side effects each time. In reality, for both groups, only half of the doses contain actual ibuprofen; the other half are covert placebos. Unsurprisingly, the generic-label placebo doses do not perform nearly as well as the generic-label doses with real active ingredients. The Nurofen-label doses, however, exhibit no such difference. That is, whether they take a Nurofen-labeled placebo or the real thing, subjects report similarly high levels of pain relief and low incidence of side effects. Thus, as if by magic, a simple sugar pill with a trademark manages to perform just as well as the genuine, but generic-label, pharmaceutical. (1)

Experiments performed with other medications yield similar outcomes. Subjects given trademark-branded anti-anxiety drugs, for example, present with lower blood pressure and less severe side effects than those given identical generics. (2) But the phenomenon is not limited to medicine. From athletic equipment (3) and test-taking materials (4) to powdered drink mix (5) and deli meat, (6) otherwise identical products perform better when they are endowed with trademarked names, symbols, and designs. Through a variation of the placebo effect, human psychology transforms these seemingly inert names and logos into measurable product enhancements.

Fundamental trademark doctrine clashes with this scientific reality. It is a "well-established rule" that trademark protection is not available for functional product features. (7) And, as the Supreme Court recently reaffirmed, "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." (8) The rationale for this functionality doctrine is fairly straightforward: trademarks (unlike patents and copyrights) do not have term limits, and it would do more harm than good to allow a producer to monopolize a useful product feature forever. (9) Even if the feature is strongly associated with a single producer by the consuming public, it's better to ensure that improvements to cost, quality, and use eventually pass into the public domain.

The application of functionality doctrine might appear straightforward as well, at least at first glance. For example, near the turn of the twentieth century, Norwich Pharmacal began selling its novel stomach medicine--a pink-colored, liquid preparation of bismuth subsalicylate--under the trademark "Pepto-Bismol." (10) The product proved enormously popular and, by the 1950s, Pepto-Bismol was "nationally recognized and... undoubtedly the leader in the field of stomach assuagement." (11) Naturally, this created an opportunity for imitators, and competitor Sterling Drug soon began selling a product, identical in "chemistry [and] color," under the name "Pepsamar." (12) As the Second Circuit observed in the ensuing legal dispute, Norwich certainly could not obtain trademark protection for the bismuth subsalicylate composition itself: "[t]he medicinal ingredients, of course, are functional." (13) But Norwich also could not obtain trademark protection for the distinctive pink hue: "the pink color... present[s] a pleasing appearance to the customer and to the sufferer," and "a disordered stomach will accept that which is pleasing." (14) That is, the court recognized the more subtle functionality of the color pink's "psycho-somatic effect." (15)

Norwich's power to exclude competitors was thus limited to the mere name "Pepto-Bismol"--an assumedly harmless monopoly. But the placebo effect described above strongly suggests that a Pepto-Bismol by any other name will not actually be as effective, identical chemistry and color notwithstanding. So, functionality doctrine blocked trademark protection for some of Pepto-Bismol's features that "affect[]... quality," (16) but not all--despite the court's explicit recognition of psychosomatic power.

Contemporary cases have followed this unusual, seemingly contradictory pattern of allowing trademark protection for some features that affect quality but not others. Shire U.S.'s ADHD drug Adderall[R] is now off-patent, for example, so generic manufacturers are free to sell chemically identical amphetamine salt tablets. (17) And generic manufacturers are also free to mimic the color and shape of Adderall tablets, because there is a "clinical functionality that exists where a generic drug bears [visual] similarity to its branded version" (18)--"enhance[d] patient safety [based on] psychological acceptance." (19) Nevertheless, none of the generic manufacturers may use the name "Adderall" for their tablets; Shire alone will wield the psychological power of that name, perhaps in perpetuity.

Trademark law's apparent tolerance of this placebo functionality is a puzzle that contradicts the plain terms of Supreme Court precedent, but it is surprisingly not unique. On the contrary, there are a wide variety of product features that would seem to be functional under the Court's definition, yet obtain trademark protection without much scrutiny. Consider a Louis Vuitton clutch. At least some--perhaps most--of the purpose of this kind of high-status luxury item is conspicuous consumption. When consumers wear the clutch in public, they display its trademark features, such as the famous v print, which other observers recognize. The consumer is thus able to convey social status and economic power. The v-printed clutch, in other words, has a "use or purpose" (20) entirely separate from its basic ability to hold cards or keys. Independent of the product's physical integrity, carrying capacity, or durability, the trademark print itself performs a highly sought-after social function. Nevertheless, the famous logo and print marks associated with luxury brands do not appear to be in any serious danger of invalidation for functionality.

Further examples abound, from certification marks reducing the costs of industrial organization, (21) to shape and color marks affecting the quality of interoperability. (22) But this doctrinal puzzle goes well beyond the specifics of any particular fact pattern to the basic features shared by all trademarks. It is bedrock legal theory that trademarks act to reduce search costs for consumers (23) as well as provide a reputational incentive for producers to improve and maintain product quality. (24) Any worthwhile trademark, in other words, "affects the cost or quality" (25) of the underlying article--and should thus be invalidated as functional. This cannot be the correct result, yet it is paradoxically demanded by the governing case law.

Perhaps unsurprisingly then, despite a century of jurisprudence (and two decades since the last relevant Supreme Court opinion), functionality doctrine has proved nearly impossible to define in practice. The doctrine is, at its core, based on a facially incoherent standard that cannot mean what it says, leaving no actual guidance to courts and administrators below. If only some effects on cost, quality, and use are actually impermissible, then which ones? The case law seems to accommodate a multitude of answers. Perhaps those that rise to the level of patentability. (26) Perhaps those that suppress competition. (27) Perhaps those that are utilitarian, rather than aesthetic. (28) The various combinations, weights, and definitions that could be assigned to these criteria lead to a multiplicity of rules and standards in turn.

The history of functionality doctrine shows precisely this kind of disarray. Faced with the task of actually adjudicating functionality, charitable judges describe the doctrine as "checkered," (29) lacking "clarity," (30) and simply "confusing." (31) As one district court judge expressed after a bench trial on the matter: "Even a summary of the law defining the various components of this concept would be voluminous." (32) The Supreme Court's own holdings are limited to brief dicta or cryptic attempts at synthesis and revision; circuit splits emerge and are barely papered over, only to reemerge again; and even the USPTO acts in some tension with prevailing case law. (33)

This Article suggests a novel theory of functionality doctrine that is grounded in the full history of precedent, coherently applicable to all trademarks, and--most importantly--descriptively accurate to real-world eligibility outcomes. That is: a functionality theory centered on fragility. There are some product features that affect cost, quality, use, or purpose in ways that are now-fragile; the feature can be copied by all producers simultaneously without weakening or destroying its effects. The chemical compounds ibuprofen and amphetamine sulfate are functional in this sense. There is no difference in their pharmacological efficacy, administered blind, whether the compounds are produced by one company or one thousand. So too with, e.g., Pepto-Bismol's pink color--the psychosomatic soothing effect does not depend on exclusivity...

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