Trademarks, Functionality, and Competition

Courts and commentators have long thought that the purpose of trademark and unfair competition law is to distinguish fair competition from unfair competition and prohibit the latter. Yet, trademark law has a more fundamental, more foundational purpose. Before trademark law can distinguish fair competition from unfair competition, there must first be competition. That makes ensuring competition trademark law’s highest priority. Identifying and prohibiting unfair competition becomes, by necessity, a subordinate concern. Until 1982, courts recognized this hierarchy and enforced a broad and flexible functionality limitation on trademark or trade dress protection to ensure competitive markets. In 1982, however, this changed. Judge Rich of the Court of Customs and Patent Appeals held that a product feature could serve an important non-trademark function, and thus be functional in fact, yet nevertheless not be functional for purposes of trademark law. Over the ensuing two decades, this approach spread and sharply constrained the reach of the functionality limitation. In 2001, the Supreme Court stepped in and seemed to reinstate the broad and flexible approach. Yet, courts have failed to let go of Judge Rich’s approach. As a result, courts continue to protect as trademarks product features that serve important non-trademark purposes. This was and is a mistake. Recognizing that ensuring competition, rather than ensuring fairness, is trademark law’s primary objective leads to a simple conclusion. If consumers, or at least, some of them, want a product feature for its own sake, without regard to who made the product, then the product feature is functional and may not be protected under trademark or unfair competition law.