If you thought that a patent or copyright was the only way to stop the
sale of a product, think again.
A recent case, Fluke Corp. v. Tektronix, Inc. (Dist. Ct. W. Dist. of Washington, No. C96-966R) demonstrates the power of the unfair competition laws--not the patent laws--in stopping or preventing the sale or distribution of a product.
Law of unfair competition. In general, this law, when used in connection with product designs, whether in a state or a federal version, permits the owner of rights in a trademark or trade dress (e.g. product appearance or visual image) to prevent a later user of the same or a similar trademark or trade dress from selling or distributing product which would cause the purchaser or public to be confused as to the identity or source of the related products.
Fluke v. Tektronix, cited above, is on appeal, thus is not final, but illustrates the concept. Fluke manufactured and sold its 80 Series digital multimeter (DMM), which had a dark casing and bright yellow holster or border. Tektronix' DMM, which bears the legend 800 Series, has a dark case and yellow-colored holster. In addition, the two models share similarities in the location of receptacles or jacks, dials, and displays.
But Tektronix alleges that Fluke cannot have exclusive rights because other existing products have a dark casing and a yellow holster, receptacles or jacks, a dial, and a display. Moreover, the selection of the color yellow and the positioning of the jack, dial, and display are driven by functional considerations and functional elements cannot be appropriated by any one entity under theories of trademark, trade dress, and unfair competition. In other words, Tektronix's position is that it is doing what is already common and necessary in the industry, and Fluke cannot have rights therein.
For example, Tektronix argues yellow is a standard color that signifies safety. Functional reasons explain the position of the receptacles, dials, and displays. Tektronix used photos of similar devices in support of its position regarding industry usage.
The Court, however, found that Fluke had demonstrated a likelihood of success on its claim, that Tektronix had adopted a confusingly similar model numbering system and coloring system, and, therefore, Fluke was entitled to a preliminary injunction. In other words, the Court found that the total visual image of the Tektronix meter was confusingly similar to the Fluke meter, and Fluke was likely to succeed at trial on the merits of its claim.
In addition to the appearance arguments, Tektronix asserted that purchasers of the multimeters could identify the differences between the meters, identify the source and so discriminate in purchases. Thus Tektronix argues there would be no confusion. Fluke argues that there are less sophisticated purchasers, such as non-technical purchasing agents and buyers. Moreover, there was testimony that a person could not differentiate between the units from a distance of 10 feet.
The Court in considering both arguments held that the tests for confusion should consider the likelihood of confusion of an unsophisticated purchaser. On that basis the Court found that likelihood of confusion existed and thus for Fluke.
The Court found that Tektronix had a number of other available designs that it could have chose. But instead Techtronix chose colors, designs and systems that infringed Fluke's rights.
This is but a specific example of the generalized issue of how state unfair competition laws and the federal law in the Lanham Act, more specifically 15 USC Section 1125, can impact product design.
Appearances count. Tektronix has recently settled the case by agreeing not to put yellow holsters on its DMMs, but the point to remember is that under the law the owner of rights in a trademark or trade dress can enforce those rights against another. This usually, but not always, relates to appearance issues, so an engineer or product designer needs to be aware that even though not patented, an existing product design can impact a proposed design.
The ultimate problem is to define how close one can come to an existing product in developing a new product. This judgment call requires knowledge of the existing facts.