In a recent decision, McAirlaids, Inc. v. Kimberly-Clark Corporation, — F.3d — (4th Cir. 2014), the Fourth Circuit reversed and remanded a summary judgment order after finding there were triable issues regarding whether a dot pattern for absorbent pads is functional. This decision reflects the ongoing struggle with how to apply the Supreme Court’s holding in Traffix Devices v. Marketing Displays and distinguish between functional and non-functional trade dress when a utility patent is involved.

McAirlaids made absorbent pads for medical or hygienic use that contain the pixel-embossed dot pattern shown below:

Click here to view the image.

McAirlaids owned a federal registration for the above pattern based on acquired distinctiveness and filed suit in the Western District of Virginia against Kimberly-Clark for trade-dress infringement and unfair competition after Kimberly-Clark began using a similar dot pattern on its GoodNites bed mats.

Even though McAirlaids owned a utility patent for the absorbent pads, it asserted that its dot pattern was ornamental and did not serve a utilitarian function. In Traffix, the Supreme Court held that the presence of a utility patent is strong evidence of functionality. Accordingly, Kimberly-Clark argued that McAirlaids’ utility patent was strong evidence that the dot pattern was functional and thus not protectable as trade dress. The district court agreed and granted summary judgment to Kimberly-Clark. McAirlaids appealed.

On appeal, the Fourth Circuit distinguished this case from Traffix, finding that while McAirlaids’s utility patents covered the manufacturing process and materials of the absorbent pads, a question of fact remained as to whether the patents pertained to the dot pattern. Further, the Fourth Circuit held that the existence of a utility patent is only one of several factors that the district court should have considered in evaluating the functionality of the dot pattern. In that regard, the district court failed to properly weigh McAirlaids’ trade dress registration, which is prima facie evidence that the trade dress is non-functional. Also, McAirlaids had presented evidence of alternative “functionally equivalent” designs to show that no matter which dot pattern was used, the functionality of the pads was the same, thus making its specific dot pattern non-functional trade dress.

In light of these factual disputes regarding functionality, the Fourth Circuit reversed the lower court’s summary judgment order.