1202.02(a)(iii)    Background and Definitions

1202.02(a)(iii)(A)    Functionality

Functional matter cannot be protected as a trademark. 15 U.S.C. §§1052(e)(5), (f), 1064(3), 1091(c), 1115(b). 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." TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 32, 58 USPQ2d 1001, 1006 (2001) (citing Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165, 34 USPQ2d 1161, 1163-64 (1995)); Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10, 214 USPQ 1, 4 n.10 (1982).

While some courts had developed a definition of functionality that focused solely on "competitive need" – thus finding a particular product feature functional only if competitors needed to copy that design to compete effectively – the Supreme Court held that this "was incorrect as a comprehensive definition" of functionality. TrafFix, 532 U.S. at 33, 58 USPQ2d at 1006. The Court emphasized that where a product feature meets the traditional functionality definition – that is, it is essential to the use or purpose of the product or affects its cost or quality – then the feature is functional, regardless of the availability to competitors of other alternatives. Id.; see also Valu Eng'g, Inc. v. Rexnord Corp., 278 F.3d 1268, 1276, 61 USPQ2d 1422, 1427 (Fed. Cir. 2002) ("Rather, we conclude that the [TrafFix] Court merely noted that once a product feature is found functional based on other considerations there is no need to consider the availability of alternative designs, because the feature cannot be given trade dress protection merely because there are alternative designs available" (footnote omitted).)

However, since the preservation of competition is an important policy underlying the functionality doctrine, competitive need, although not determinative, remains a significant consideration in functionality determinations. Valu Eng’g, Inc., 278 F.3d at 1278, 61 USPQ2d at 1428.

The determination that a proposed mark is functional constitutes, for public policy reasons, an absolute bar to registration on either the Principal or the Supplemental Register, regardless of evidence showing that the proposed mark has acquired distinctiveness. See TrafFix, 532 U.S. at 29-33, 58 USPQ2d at 1005-07; In re MK Diamond Prods., Inc., 2020 USPQ2d 10882, at *18-19 (TTAB 2020) (quoting In re Honeywell, Inc., 187 USPQ 576, 578 (TTAB 1975)); see also In re Controls Corp. of Am., 46 USPQ2d 1308, 1312 (TTAB 1998) (rejecting applicant’s claim that "registration on the Supplemental Register of a de jure functional configuration is permissible if the design is ‘capable’ of distinguishing applicant’s goods"). Thus, if an applicant responds to a functionality refusal under §2(e)(5) of the Trademark Act, 15 U.S.C. §1052(e)(5), by submitting an amendment seeking registration on the Supplemental Register that is not made in the alternative, such an amendment does not introduce a new issue warranting a nonfinal Office action. See TMEP §714.05(a)(i). Instead, the functionality refusal must be maintained and made final, if appropriate, under §23(c) and §45 of the Act, 15 U.S.C. §§1091(c), 1127, as that is the statutory authority governing a functionality refusal on the Supplemental Register. Additionally, for functionality refusals, the associated nondistinctiveness refusal must be withdrawn. See In re Heatcon, Inc., 116 USPQ2d 1366, 1370 (TTAB 2015) .

See TMEP §§1202.02(a)(v)–(a)(v)(D) regarding evidentiary considerations pertaining to functionality refusals.

1202.02(a)(iii)(B)    "De Jure" and "De Facto" Functionality

Prior to 2002, the USPTO used the terms "de facto" and "de jure" in assessing whether "subject matter" (usually a product feature or the configuration of the goods) presented for registration was functional. This distinction originated with the Court of Customs and Patent Appeals’ decision in In re Morton-Norwich Prods., Inc., 671 F.2d 1332, 213 USPQ 9 (C.C.P.A. 1982) , which was discussed by the Federal Circuit in Valu Eng'g, Inc. v. Rexnord Corp., 278 F.3d 1268, 1274, 61 USPQ2d 1422, 1425 (Fed. Cir. 2002):

Our decisions distinguish de facto functional features, which may be entitled to trademark protection, from de jure functional features, which are not. ‘In essence, de facto functional means that the design of a product has a function, i.e., a bottle of any design holds fluid.’ In re R.M. Smith, Inc., 734 F.2d 1482, 1484, 222 USPQ 1, 3 (Fed. Cir. 1984). De facto functionality does not necessarily defeat registrability. Morton-Norwich, 671 F.2d at 1337, 213 USPQ at 13 (A design that is de facto functional, i.e., ‘functional’ in the lay sense . . . may be legally recognized as an indication of source.’). De jure functionality means that the product has a particular shape ‘because it works better in this shape.’ Smith, 734 F.2d at 1484, 222 USPQ at 3.

However, in three Supreme Court decisions involving functionality – TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 58 USPQ2d 1001 (2001), Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 54 USPQ2d 1065 (2000), and Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 34 USPQ2d 1161 (1995) – the Court did not use the "de facto/de jure" distinction. Nor were these terms used when the Trademark Act was amended to expressly prohibit registration of matter that is "functional." Technical Corrections to Trademark Act of 1946, Pub. L. No. 105-330, §201, 112 Stat. 3064, 3069 (1998). Accordingly, in general, examining attorneys no longer make this distinction in Office actions that refuse registration based on functionality.

De facto functionality is not a ground for refusal. In re Ennco Display Sys. Inc., 56 USPQ2d 1279, 1282 (TTAB 2000) ; In re Parkway Mach. Corp., 52 USPQ2d 1628, 1631 n.4 (TTAB 1999) .