Federal Circuit Precedential

Holding:  Utility patents are strong evidence that a trademark is functional, but the patent does not need to explicitly disclose that the trademarked feature is functional. The doctrine of unclean hands may be used as an affirmative defense in a trademark functionality proceeding.  However, the TTAB may exercise its discretion to refuse this defense in view of the public policy interest of cancelling ineligible trademarks.

CeramTec manufactures artificial hip components made from a zirconia-toughened alumina (“ZTA”) ceramic that contains chromium oxide, known as chromia.  The chemical composition of CeramTec’s hip components was claimed in US Patent No. 5,830,816, which expired in January 2013.  The amount of chromia in the ZTA ceramic affects the coloring in the artificial hip components and can improve the hardness of the ZTA ceramic.  The range of chromia claimed in the ‘816 Patent could product a variety of colors, including pink, red, purple, yellow, black, gray, and right.  CeramTec’s commercial product, Biolox Delta, contains chromia at a 0.33 weight percentage, which makes the product pink.

In January 2012, CeramTec applied for two trademarks claiming protection for the color pink used in ceramic hip components.  CoorsTek is a competitor that manufactures ZTA ceramic hip implants, including a product line that includes chromia, so that the CoorsTek product is pink.  CoorsTek filed a cancellation petition with the Trademark Trial and Appeal Board seeking to cancel CeramTec’s trademarks on the grounds that the claimed pink color was functional.  The Board found in favor of CoorsTek, concluding the color pink to be functional and cancelled the trademarks.

The Federal Circuit affirmed the TTAB’s ruling finding the CeramTec trademarks to be functional. Functionality of a trademark is analyzed under the Morton-Norwich factors, which include:

1. The existence of a utility patent disclosing the utilitarian advantages of the design;
2. Advertising materials in which the originator of the design touts the design’s utilitarian advantages;
3. The availability to competitors of functionally equivalent designs; and
4. Facts indicating that the design results in a comparatively simple or cheap method of manufacturing the product.

For the first factor, utility patents are strong evidence that the claimed elements are functional, and if trademark protection is sought for those features, the patent greatly weighs in favor of finding functionality.  This inquiry can be aided by examining the specification of the patent and the prosecution history to determine if the feature for which trademark protection is sought is a useful part of the invention.  However, it is not required that the patent explicitly disclose that the claimed feature is functional.  For the third factor, there must be evidence of actual or potential alternative designs that work equally well to the trademark design for the trademark owner to show the availability of functionally equivalent designs.

CeramTek also argued that CoorsTek should be precluded from asserting that the CeramTek trademarks were functional due to the doctrine of unclean hands, since CoorsTek had previously contended that chromia provided no material benefit to ZTA ceramics.  The TTAB had ruled that the unclean hands defense is unavailable for functionality proceedings in view of the public interest in removing registrations of functional marks from the register.  The Federal Circuit ruled that the Board spoke too strongly, and there is no categorical rule prohibiting an unclean hands defense when determining functionality of a trademark.  However, the Federal Circuit found this error to be harmless, since the TTAB may still use its discretion to refuse an unclean hands defense in view of the strong public policy in cancelling ineligible trademarks.

Full Opinion (PDF)