Source indicator vs. competitive advantage

Trademark functionality covers two distinct issues. Trademarks should “function as a source identifier” but to prevent monopolies, should not “contain functional material”.

Thinking about applying for a trademark involving a product with a prominent trademark element? Does this element do more than just showing who made the product? Or, are you thinking about selling some Merch? If so, you may get a chance to explore the murky area of trademark functionality law. Among other confusing features, the same term “functional” has two different legal meanings!

A trademark functioning as a source identifier vs. a trademark with functional matter

Consider TMEP 1201.17(c), “Failure to Function. Here, the USPTO states that: “the mark must serve as an indicator of the source of the goods or services, identifying and distinguishing them from those of others.” So a tee-shirt (or hat) with a big conspicuous slogan or graphic might encounter some flack. This could be rejected as mere “ornamentation” under TMPEP 1202.03.

About secondary meaning: Trademark law can be expansive. Text, appearance, sounds, and even smells associated with a product can also be trademarked. This idea is similar to the psychological concept of a stimulus and a “conditioned reflex.” Yup, you can get legal protection as “trade dress” if you can prove that your product has a “stimulus” that has acquired “secondary meaning.”

For example, the brown color of UPS trucks is a valid trademark because it has acquired “secondary meaning.” The smell of Play-Doh has also been trademarked, but see below.

Rule 2: A trademark must not contain “functional matter”. This is material that is “essential to the use or purpose of the article or that affects the cost or quality of the article.”

Wait, isn’t IP all about getting limited monopolies on things like this?

Yes and no. For patents and copyrights, yes. Patent and copyright law come from the social policy to promote innovation. Here, innovators are granted a limited duration monopoly over their new creations. However, to prevent harmful monopolies, unless relevant patents or copyrights are in effect, anyone can otherwise copy these products.

However, for trademarks, “no.” Trademark law comes from a different social policy regarding unfair competition. Trademarks are only about protecting source indicators, full stop. Keep in mind that brands can potentially last forever. A trademark that contains “functional matter” could give its holder an unfair competitive advantage.

Under TMEP 1202.02(a)(iii)(A), the USPTO (citing the Traffix ruling below) states: “A feature is functional as a matter of law if it is “essential to the use or purpose of the article or if it affects the cost or quality of the article.” So, for example, although Hasbro got a trademark on the Play-Doh smell, you can’t trademark a perfume. The difference is that the Play-Doh smell does not contain “functional mater”. A perfume smell does.

An example where these two types of trademark functionality can get mixed up. Assume I get a utility patent for dog food cans with built-in electronic chips that make bell sounds. I market my invention as “Pavlov’s dog food.” My customers and their dogs then come to expect the bell sound whenever they use my dog food. The dogs love it.

My patent then expires. Can I get a trademark for a bell sound for dog food?

For many years, due to my patent, my brand was the only ringing dog food on the market. The bell sound has acquired a legitimate secondary functional meaning as a source identifier. But arguably the brand also contains functional matter. It makes dogs salivate. So is the bell sound acting as more than just a source identifier?

The overriding law, in this case, is the 2001 Supreme Court Traffix ruling. SCOTUS avoided hard-and-fast rules. They voided an older “utility patents prove functional material” holding. Instead, their judgment considers more general factors such as “essential,” or “cost and quality.” The results are not always exact. Does the bell (or the Play-Doh smell) impact “cost or quality?”. Let’s discuss!