McAirlaids, Inc. v. Kimberly-Clark Corp.

Addressing whether a pattern of dots embossed on an absorbent pad was functional, the U.S. Court of Appeals for the Fourth Circuit reversed a lower court’s summary judgment in favor of the accused infringer and remanded the case, finding sufficient evidence to raise a genuine issue of material fact regarding the functionality of the pad’s pixel pattern.  McAirlaids, Inc. v. Kimberly-Clark Corp.,Case No. 13-2044 (4th Cir., June 25, 2014) (Duncan J.).

McAirlaids produces “airlaids,” a textile-like material that is used in absorbent goods including absorbent pads.  The material is formed using a pressure-fusion process by which cellulose fibers are shredded and arranged into loosely formed sheets.  The sheets are embossed at specific areas, the dots, to form the pads without glue or binders.  Instead, the cellulose fibers are fused at the dots to hold the material together.  The size and spacing of the dots within the pattern must fall within certain parameters for the material to hold together and also be absorbent.  The pressure-fusion process of forming the material was patented by McAirlaids.

McAirlaids uses a pixel pattern of embossed dots for use in its absorbent products.  McAirlaids registered this pattern as trade dress with the U.S. Patent and Trademark Office (PTO).  McAirlaids sued Kimberly-Clark for trade dress infringement and unfair competition, as well as state law claims for using a similar dot pattern on its GoodNites bed mats.  The GoodNites bed mats are manufactured by a different process than McAirlaids’ patented pressure-fusion process.  Kimberly-Clark filed a counterclaim alleging the pixel pattern was functional and therefore unavailable for protection under trade dress laws.  The district court found McAirlaids’ pixel dot design functional and therefore not protectable as trade dress, granting summary judgment for Kimberly-Clark.  McAirlaids appealed.

In overturning the district court’s decision, the 4th Circuit distinguished the Supreme Court’s decision in TrafFix Devices v. Marketing Displays (IP Update, Vol. 15, No. 5) and concluded that, although the pressure-formed dots of the pixel design are themselves functional, McAirlaids had presented sufficient evidence to show a genuine dispute as to whether the embossed pattern as a whole is functional.  The court distinguished TrafFix on two points.  First, although McAirlaids obtained utility patents relating to the absorbent pads, the patents covered the process and material, but did not mention a particular embossing pattern.  The existence of a utility patent does not automatically render all features relating to the patent functional.  Second, McAirlaids’ pixel pattern was properly registered as trade dress with the PTO.  The registered trade dress provides a presumption of validity, which has a burden-shifting effect requiring the party challenging the registered mark to show the trade dress is invalid by a preponderance of the evidence.  While the district court had found McAirlaids’ evidence of non-functionality insufficient to show a genuine dispute, the 4th Circuit made clear that where the design is the subject of a trade dress registration, the burden of proof to show functionality falls on the trade dress challenger.  Although the dots of the pixel design are functional in holding the material together, the pattern of the dots is not inherently functional.