The Sixth Circuit Court of Appeals recently held that a reasonable jury could find a design pattern on rifle scopes is “nonfunctional” and thus potentially amenable to trade dress protection. Since 2002, Leapers, Inc. has been selling adjustable rifle scopes with knurling on the surface. Knurling is a common manufacturing technique that allows users to grip and fine-tune products more easily.

Leapers asserted “that it uses a unique knurling pattern that is distinctly ‘ornamental’ and by which customers recognize [Leapers] as the source of the product.” Leapers had executed an exclusive manufacturing contract with a Chinese company, but chose to end that relationship in 2011. The manufacturer agreed to cease using all technical specifications and designs, but later a factory manager from the manufacturer formed his own company and began manufacturing scopes allegedly using Leapers’ knurling design.

Leapers sued for trade dress infringement. Under the Lanham Act, “a plaintiff must show that its design is
(1) nonfunctional,
(2) has acquired secondary meaning, and
(3) is confusingly similar to the allegedly infringing design.”

The nonfunctionality requirement serves to “channel the legal protection of useful designs from the realm of trademark to that of patent.”  A plaintiff must demonstrate that its design neither “is essential to the use or purpose of the article” nor “affects the cost or quality of the article.” As the Sixth Circuit explained, “the burden of proving nonfunctionality is unusual because it requires a party to introduce affirmative evidence that a quality is not present—to introduce ‘evidence of an absence’ rather than merely an absence of evidence.” Evidence of a design’s roots in aesthetics can support a finding of nonfunctionality.

Leapers also had to show the knurling design lacked “aesthetic functionality.” Designs have aesthetic functionality when they manifest a “use, purpose, cost, or quality of the product in a way that competitors cannot avoid replicating without incurring costs ‘not to copy but to design around.’”  By contrast, a design communicating “the source of the article—rather than anything about the article’s use, purpose, cost, or quality—is not functional.” Leapers offered evidence that its design was chosen for ornamental reasons; the design did not actually enhance functionality (in fact, other designs did the job better); and that competition in the rifle scope market is motivated by a grip’s performance in adjusting the scope, rather than “on the visual appeal of knurling or of adjustment knobs more generally.”

In granting summary judgment in favor of the defendant, the district court found that “Plaintiff’s trade dress is a functional grip, not just decoration.”  But on appeal, the Sixth Circuit reversed. Leapers’ testimony that it was unaware of any functional benefit to the design, combined with evidence that the design was chosen merely for aesthetic reasons, was sufficient to support a possible jury finding that Leapers’ “design is purely ornamental and therefore nonfunctional.”

The court thus vacated summary judgment and remanded for further analysis of the remaining infringement elements, including secondary meaning.  K&L Gates will continue to monitor this case and other trade dress cases in the consumer retail market. The ability to resolve product design trade dress cases prior to trial remains an important strategic consideration for both plaintiffs and defendants.

The case caption is Leapers, Inc. v. SMTS, et al., No 17-1007 (6th Cir. Jan. 10, 2018). Click here for the opinion.