Eppendorf-Netheler-Hinz GMBH v. Ritter GMBH

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-60875

EPPENDORF-NETHELER-HINZ GMBH,

Plaintiff - Appellee - Cross-Appellant,

v.

RITTER GMBH; RK MANUFACTURING, INC.,

Defendants - Appellants - Cross-Appellees.

No. 01-60658

EPPENDORF-NETHELER-HINZ GMBH,

Plaintiff - Appellee,

v.

RITTER GMBH; RK MANUFACTURING, INC.,

Defendants - Appellants,

Appeals from the United States District Court

for the Southern District of Mississippi

April 22, 2002

Before JONES and DeMOSS, Circuit Judges, and FELDMAN,1 District

Judge.

EDITH H. JONES, Circuit Judge:

1

United States District Judge of the Eastern District of Louisiana,

sitting by designation.

Defendants-Appellants Ritter GMBH and RK Manufacturing,

Inc., appeal the district court’s judgment that they infringed upon

Eppendorf-Netheler-Hinz GMBH’s trade-dress rights in violation of

the Lanham Act, 15 U.S.C. § 1125(a). For the reasons discussed

below, we conclude that Eppendorf failed to carry its burden of

proof on the issue of non-functionality, and reverse the judgment

of the district court.

I. BACKGROUND

Eppendorf is a German company which manufactures medical

and laboratory equipment. At issue in this case is Eppendorf’s

line of disposable pipette tips2 and dispenser syringes capable of

accurate and rapid “multiple dispensing” of liquids. Eppendorf’s

disposable pipette tips are sold in the United States marked with

the word-marks “COMBITIPS,” “EPPENDORF” and “EPPENDORF COMBITIPS”

(hereinafter referred to as “Combitips”). Eppendorf manufactures

eight Combitip sizes, from .05 milliliters to 50 milliliters. All

eight sizes are designed to fit into the “Combitip Dispenser

Syringe”. By attaching a Combitip to the dispenser syringe, a user

can rapidly dispense liquids in precisely measured aliquots.

Ritter is a German manufacturer specializing in

injection-molded plastic products. In the early 1990s, Ritter

2

Pipette tips attach to dispenser syringes, and are frequently

replaced to avoid contamination. Pipette tips are commonly known in the

marketplace as “tips”.

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began manufacturing disposable pipettes virtually identical to the

Combitips. At that time, there was a large American market for

disposable pipettes, and the market was dominated by Eppendorf.3

Ritter, through its American distributor, RK Manufacturing, Inc.,

entered the American market in March of 1994. Ritter’s disposable

pipettes were marked with the word-mark “RITIPS” (hereinafter

“Ritips”) and distributed in boxes marked with Ritips and Ritter’s

name. Ritter also introduced its own dispenser syringe, known in

the market as the “Ripette”. However, the Ritips were compatible

with Eppendorf’s Combitip Dispenser Syringe, and the Ritips were

marketed as a “direct replacement” for Combitips. Ritter priced

its Ritips below Eppendorf’s Combitips in an attempt to acquire

market share from Eppendorf.

In June of 1998, Eppendorf filed suit in the Eastern

District of New York against Ritter and RK, asserting various

trademark and trade dress infringement claims under § 43(a) of the

Lanham Act, 15 U.S.C. § 1125(a). Eppendorf’s suit was transferred

to the Southern District of Mississippi. Eppendorf alleges that

Ritter infringed on its trade dress rights by “slavishly

mimick[ing]” the design and trade dress of the “entire family of

Eppendorf [Combitips].” Second Amended Complaint at 6. Eppendorf

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According to the trial testimony, Eppendorf had sold over 10 million

Combitips in the United States by 1989. Over the past 20 years, Eppendorf has

sold almost 150 million Combitips.

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contends that Ritter infringed upon eight elements of the

Combitips’s trade dress: (1) the flange on top of the tip; (2) the

fins connecting the flange to the body of the tip; (3) the plunger

head; (4) the plunger; (5) the length of the tips; (6) the eight

sizes of the tips; (7) the coloring scheme on the tips; and (8) the

angle of the stump on the tips. Eppendorf also contends that

Ritter willfully and intentionally infringed upon its trade dress

rights.

In June of 2000, Eppendorf’s claims were tried before a

jury in the Southern District of Mississippi. The jury returned a

verdict for Eppendorf, finding that Ritter and RK infringed upon

Eppendorf’s trade dress rights. The jury also determined that

Ritter and RK willfully violated Eppendorf’s trade dress rights by

marketing the Ritips with an intent to confuse or deceive. The

jury awarded Eppendorf $750,000 in lost profits and $250,000 in

lost licensing fees. The district court entered final judgment for

Eppendorf for $1,000,000 in damages awarded by the jury, and an

additional $750,000 in enhanced damages on the basis of the jury’s

finding of willful infringement. The district court also

permanently enjoined Ritter and RK from selling or marketing in the

United States dispenser syringes or syringes of “a confusingly

similar design” to Eppendorf’s syringes.

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Ritter and RK now appeal. They contend, inter alia, that

Eppendorf failed to carry its burden of proving that the eight

elements are non-functional. Eppendorf cross-appeals the district

court’s denial of its motion for attorneys’ fees and pre-judgment

interest. For the reasons discussed below, we conclude that

Eppendorf failed to carry its burden of proving non-functionality

and find it necessary to reverse the judgment of the district

court.

II. DISCUSSION

A.

The Lanham Act, 15 U.S.C. § 1125(1), establishes a cause

of action for trade dress infringement. “Trade dress” refers to

the design or packaging of a product which serves to identify the

product’s source. Traffix Devices, Inc. v. Marketing Displays,

Inc., 523 U.S. 23, 28, 121 S.Ct. 1255, 1259 (2001). The purpose of

trade dress protection, like trademark protection, is to “secure

the owner of the [trade dress] the goodwill of his business and to

protect the ability of consumers to distinguish among competing

products.” Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763,

774, 121 S.Ct. 2753, 2760 (1992) (citation omitted).

Trade dress protection, however, is not intended to

create patent-like rights in innovative aspects of product design.

Trade dress protection, unlike patent law, does not foster

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innovation by preventing reverse engineering or copying of

innovative product design features. See J. THOMAS MCCARTHY, MCCARTHY

ON TRADEMARKS AND UNFAIR COMPETITION, § 6:3 (4th ed. 2001) (“Unlike patent

law, the purpose of trademark and trade dress law is to prevent

customer confusion and protect the value of identifying symbols,

not to encourage invention by providing a period of exclusive

rights.”). “Trade dress protection must subsist with the

recognition that in many instances there is no prohibition against

copying goods and products.” Traffix, 523 U.S. at 29, 121 S.Ct. at

1260. Therefore, trade dress protection extends only to

incidental, arbitrary or ornamental product features which identify

the source of the product. If a product feature is functional, it

cannot be protected trade dress. Unless protected by patent or

copyright, functional product features may be copied freely by

competitors in the marketplace. Id. “Allowing competitors to copy

will have salutary effects in many instances. ‘Reverse engineering

. . . often leads to significant advances in technology.’”. Id.

(citing Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S.

141, 160, 109 S.Ct. 971 (1989)).

The Lanham Act expressly limits the scope of trade dress

protection by providing that “the person who asserts trade dress

protection has the burden of proving that the matter sought to be

protected is not functional.” 15 U.S.C. § 1125(a)(3). The

requirement of non-functionality “prevents trademark law, which

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seeks to promote competition by protecting a firm’s reputation,

from instead inhibiting legitimate competition by allowing a

producer to control a useful product feature.” Qualitex Co. v.

Jacobson Products Co., Inc., 514 U.S. 159, 164, 115 S.Ct. 1300,

1304 (1995). “Protection of functional product features is the

province of patent law, which confers a monopoly over new product

designs for a limited time only, after which competitors are free

to copy at will.” Abercrombie & Fitch Stores, Inc v. American

Eagle Outfitters, Inc., 280 F.3d 619, 640 (6th Cir. 2002) (citing

Qualitex, 514 U.S. at 164, 115 S.Ct. 1300).

It is clear that functional product features do not

qualify for trade dress protection. However, the definition of

“functionality” has not enjoyed such clarity. See J. THOMAS MCCARTHY,

MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION, § 7:67 (4th ed. 2001)

(discussing the “plethora of definitions” for functionality). In

Traffix, the Supreme Court recognized two tests for functionality.

First, the Court recognized the “traditional” definition of

functionality: “a product feature is functional, and cannot serve

as a trademark, ‘if it is essential to the use or purpose of the

article or if it affects the cost or quality of an article.’”

Traffix, 532 U.S. at 32, 121 S.Ct. 1255 (citations omitted). Under

this traditional definition, if a product feature is “the reason

the device works,” then the feature is functional. Id. at 34. The

availability of alternative designs is irrelevant. Id. at 33-34.

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In addition to the traditional definition, Traffix

recognized a second test for functionality: “a functional feature

is one the ‘exclusive use of which would put competitors at a

significant non-reputation-related disadvantage.’” Id. at 32

(quoting Qualitex, 514 U.S. at 165, 115 S.Ct. 1300). This

“competitive necessity” test for functionality is an expansion of

the traditional test. Id. The Court emphasized, however, that the

“competitive necessity” test is not “a comprehensive definition” of

functionality. Id. at 33. The primary test for functionality is

the traditional test, and there is no need to consider the

“competitive necessity” test where a product feature is functional

under the traditional definition. Id. at 33-35.

Eppendorf correctly argues that before Traffix, this

circuit had adopted a “utilitarian” test of functionality. Under

this utilitarian test, “[t]he ultimate inquiry concerning

functionality [] is whether characterizing a feature or configura-

tion as protected ‘will hinder competition or impinge upon the

rights of others to compete effectively in the sale of goods.’”

Sicilia Di R. Biebow & Co. v. Cox, 732 F.2d 417, 429 (5th Cir.

1984) (citation omitted); see also, Pebble Beach Co. v. Tour 18 I

Ltd., 155 F.3d 526, 537-38 (5th Cir. 1998); Sunbeam Products, Inc.

v. West Bend Co., 123 F.3d 246, 255 (5th Cir. 1997). This court’s

“utilitarian” test, with its focus on the ability of competitors to

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compete effectively in the marketplace, is virtually identical to

the “competitive necessity” test discussed in Traffix.

Accordingly, Traffix supersedes the definition of functionality

previously adopted by this court. The “utilitarian” test, although

still valid as a secondary test, is not a comprehensive definition

of functionality. Traffix, 532 U.S. at 32-33. In light of

Traffix, the primary test for determining whether a product feature

is functional is whether the feature is essential to the use or

purpose of the product or whether it affects the cost or quality of

the product. Id.4

B.

The crucial issue presented by this appeal is whether the

eight design elements of the Eppendorf Combitips are functional as

a matter of law. This case was tried in June of 2000, almost ten

months before the Supreme Court decided Traffix. The district

court, correctly applying this circuit’s utilitarian test of

functionality, instructed the jury as follows:

A design or characteristic is nonfunctional if there are

reasonably effective and efficient alternatives possible.

4

This court noted in Sunbeam that the utilitarian definition of

functionality “lowers the threshold for trade dress protection.” 123 F.3d at 255

n.18. This broad definition of functionality is not consistent with the Court’s

recent discussion of functionality. The Court, in Traffix, cautioned against

“misuse or over-extension of trade dress [protection].” See Traffix, 532 U.S.

at 29, 121 S.Ct. 1255 (citing Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529

U.S. 205, 213, 112 S.Ct. 2753 (1992)). A product feature that satisfies the

traditional definition of functionality is not shielded from functional status

merely because the feature is not a competitive necessity.

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Hence, a product’s trade dress is functional only, one,

if competitors need to incorporate it in order to compete

effectively because it is essential to the product’s use,

or, two, if it significantly affects the cost or quality

of the article. A design is functional and thus

unprotectable if it is one of a limited number of equally

efficient options available to competitors and free

competition would be significantly disadvantaged by

according the design trademark protection.

Relying on this instruction, the jury determined that the Combitips

were non-functional. Ritter and RK Manufacturing moved for

judgment as a matter of law on the issue of functionality, and the

district court denied the motion.

“We review de novo the district court’s ruling on a

motion for judgment as a matter of law, applying the same legal

standards at the trial court.” Flowers v. Southern Reg’l

Physicians Serv., Inc., 247 F.3d 229, 235 (5th Cir. 2001). In

reviewing a motion for judgment as a matter of law, “we consider

all of the evidence, drawing all reasonable inferences and

resolving all credibility determinations in the light most

favorable to the non-moving party.” Id. (citations omitted).

Judgment as a matter of law will only be granted where the facts

and inferences point “so strongly and overwhelmingly in the

movant's favor that reasonable jurors could not reach a contrary

conclusion.” Omnitech Int'l, Inc. v. Clorox Co., 11 F.3d 1316,

1322 (5th Cir. 1994).

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Eppendorf contends that the evidence supports the jury’s

finding of non-functionality because “[t]he evidence clearly

established that there were alternative designs to each of the

eight non-functional features.” Appellee’s Brief at 20. Indeed,

there is extensive testimony in the record regarding available

alternative designs for each of the eight elements. For example,

Eppendorf’s expert testified that the number of fins under the

flange “could be increased or decreased or their appearance could

be changed.” Appellee’s Brief at 5. Thus, Eppendorf argues that

the fins are non-functional because alternative designs are

available to competitors in the marketplace.

Eppendorf’s argument, while consistent with this

circuit’s utilitarian definition of functionality, is unpersuasive

in light of the Court’s discussion of functionality in Traffix. As

explained above, the primary test for functionality is whether the

product feature is essential to the use or purpose of the product

or if it affects the cost or quality of the product. In Traffix,

the Court determined that the dual-spring design on a wind-

resistant road sign was functional because the dual-spring design

“provides a unique and useful mechanism to resist the force of the

wind.” 532 U.S. at 33, 121 S.Ct. at 1262. The Court rejected the

argument that the springs were non-functional because a competitor

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could use three or four springs which would serve the same purpose.

Id. The Court explained,

There is no need, furthermore, to engage, as did the

Court of Appeals, in speculation about other design

possibilities, such as using three or four springs which

might serve the same purpose. . . . The dual-spring

design is not an arbitrary flourish in the configuration

of [the road sign]; it is the reason the device works.

Other designs need not be attempted.

Id. at 33-34, 121 S.Ct. at 1261. Accordingly, the design features

for which Eppendorf seeks trade dress rights are functional if they

are essential to the use or purpose of the Combitips or affect the

cost or quality of the Combitips. The availability of alternative

designs is irrelevant.

In this case it is undisputed that the Combitips’s fins

provide necessary support for the flange. Without the fins, the

flange is subject to deformation. The only testimony offered by

Eppendorf to prove non-functionality of the fins related to the

existence of alternative design possibilities. Eppendorf’s

functionality expert testified that the appearance and number of

fins could be changed without affecting the function of the fins.

Eppendorf did not prove, however, that the fins are an arbitrary

flourish which serve no purpose in the Combitips. Rather,

Eppendorf’s experts concede that fins of some shape, size or number

are necessary to provide support for the flange and to prevent

deformation of the product. Thus, the fins are design elements

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necessary to the operation of the product.5 Because the fins are

essential to the operation of the Combitips, they are functional as

a matter of law, and it is unnecessary to consider design

alternatives available in the marketplace. Traffix, 532 U.S. at 33-

34, 121 S.Ct. at 1261.

Likewise, a careful review of the record demonstrates

that Eppendorf failed to prove that the remaining Combitip design

elements are unnecessary, non-essential design elements. It is

undisputed that: (1) The flange is necessary to connect the

Combitip to the dispenser syringe; (2) The rings on the plunger

head are necessary to lock the plunger into a cylinder in the

dispenser syringe; (3) The plunger is necessary to push liquids out

of the tip, and the ribs on the plunger stabilize its action; (4)

The tips at the lower end of the Combitips are designed to easily

fit into test tubes and other receptacles; (5) The size of the

Combitip determines the dispensed volume, and size is essential to

accurate and efficient dispensing; (6) The color scheme used on the

Combitip - clear plastic with black lettering - enables the user

easily to see and measure the amount of liquid in the Combitip, and

black is standard in the medical industry; and (7) The stumps of

5

Additionally, Eppendorf’s experts concede that some of the suggested

alternative designs would slightly increase the cost of the product. This

provides further support for the conclusion that the fins are functional under

the traditional definition of functionality.

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the larger Combitips must be angled to separate air bubbles from

the liquid and ensure that the full volume of liquid is dispensed.

Thus, all eight design elements identified by Eppendorf are

essential to the operation of the Combitips.

Eppendorf’s theory of non-functionality focused on the

existence of alternative designs. Eppendorf’s design expert

summarized Eppendorf’s approach to functionality: “My conclusion

was that to achieve the same functional purpose, [the design

elements identified by Eppendorf] can be changed significantly,

considerably without affecting the overall intended purpose.”

Although alternative designs are relevant to the utilitarian test

of functionality, alternative designs are not germane to the

traditional test for functionality. Each of the eight design

elements identified by Eppendorf is essential to the use or purpose

of the Combitips, and are not arbitrary or ornamental features.

Therefore, no reasonable juror could conclude that Eppendorf

carried its burden of proving non-functionality.

CONCLUSION

We conclude that Eppendorf failed to carry its burden of

proving non-functionality. Therefore, pursuant to 15 U.S.C. §

1125(a)(3), Eppendorf is not entitled to trade dress protection

because the eight Combitip product features are functional as a

matter of law. Accordingly, we REVERSE the judgment of the

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district court and RENDER judgment for Ritter and RK Manufacturing.

We likewise VACATE the injunction entered by the district court.

Eppendorf’s cross-appeal is DENIED.

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