A federal judge has granted Ameritox’s motion for summary judgement in the trade dress infringement suit Millennium Laboratories (ML) filed against Ameritox in April 2012. In its motion, Ameritox argued the trade dress in question was functional in nature and therefore not entitled to protection. The judge agreed and dismissed the suit.
What is trade dress?
For those who do not know, according to the Cornell University School of Law, trade dress refers to:
[t]he design and shape of the materials in which a product is packaged. Product configuration, the design and shape of the product itself, may also be considered a form of trade dress.
[t]rade dress can be protected under trademark law if it is distinctive and a showing can be made that the average consumer would likely be confused as to product origin if another product had a similar appearance.
Before 2011, both ML and Ameritox reported results with text only; no pictures or graphs were used.
Then in May 2011, Ameritox added a bell curve to its RxGuardian CD report so as to provide visual result reporting.
One month later, ML updated its R.A.D.A.R. report and added two graphs, one that demonstrates (with a bell curve) how the patient’s current urine drug concentration compares to all patients on that same drug tested by Millennium. The second shows the patient’s historical drug levels. ML’s graphs are below (from the decision):
In March 2012, Ameritox released a new RxGuardian report format that contained its original bell curve but also added a line graph to compare the patient’s historical results. Ameritox’s graphs are below (also from the decision):
A month after Ameritox’s new report was released, ML filed suit, alleging Ameritox’s use of the two graphs represented a trade dress violation.
Ameritox filed a motion to dismiss, claiming ML’s allegations both lacked specificity and failed to satisfy the elements necessary to bring a trade dress violation suit, but that motion was denied in October 2012.
Ameritox later filed a motion for summary judgement, arguing that the graphs in question serve a functional purpose and are therefore not eligible for legal protection, as only nonfunctional trade dress can be protected.
According to the judge in the case, there are four factors that must be considered with respect to functionality of trade dress:
(1) Whether the design yields a utilitarian advantage; (2) Whether alternative designs are available; (3) Whether advertising touts the utilitarian advantages of the design; (4) Whether the particular design results from a comparatively simple or inexpensive method of manufacture
Using information from ML’s own website, internal memos and sales documents, and the deposition of ML’s Director of Clinical Strategy from a previous lawsuit ML had filed against Ameritox, as well as a slide Ameritox used in a presentation and internal Ameritox emails, the judge concluded the graphs do indeed have a functional purpose.
And because the graphs have a functional purpose, they are not protected trade dress and the judge dismissed the suit.
Ameritox and Millennium speak out
I asked Ameritox and ML to give me their thoughts about the judge’s decision, and they were both kind enough to respond.
Mr. Lon Wagner, Director of Communications for Ameritox, had this to say:
We’ve said before that our competitor has a penchant for making wide-ranging, unfounded allegations against us in lawsuits, so we are pleased that a federal judge has agreed with Ameritox and closed this case without wasting any additional time or taxpayer money.
The Court’s ruling does not contradict the fact that Ameritox blatantly copied the look and feel of the graphed results contained in Millennium’s RADAR reports. Millennium prides itself on being an innovator and market-leader in the industry. While Millennium is flattered by Ameritox’s effort to mimic the signature style of Millennium’s reports, Millennium firmly believes that Ameritox should not benefit simply from attempting to trade on Millennium’s goodwill instead of investing in its own products and services, particularly when it may result in consumer confusion. Importantly, the Court’s ruling on summary judgment concerned a very narrow and technical issue concerning trade dress functionality. While Millennium respects the Court’s decision, we believe that it is incorrect and, accordingly, we have appealed the decision to the United States Court of Appeals for the Ninth Circuit.
It will be interesting to see how the Ninth Circuit rules on ML’s appeal.
The judge’s order granting summary judgement is here.