Ninth Circuit Declines to Expand Aesthetic Functionality Doctrine
Background of the case: Au-Tomotive Gold ("Auto Gold") sold key chains and license plate covers bearing Volkswagen's and Audi's trademarks (including logos). Auto Gold sued Audi and Volkswagen ("Audi/VW") for a declaration of no infringement, and Audi/VW counterclaimed for trademark infringement. In the district court, Auto Gold won on summary judgment that there was no infringement based on a finding of aesthetic functionality. Not surprisingly, Audi/VW appealed. The Ninth Circuit then reversed, vacated, and remanded.
Argument rejected by the Ninth Circuit: In the district court, Auto Gold successfully argued that it used the Audi/VW marks not because they signify that the license plates and key chains are manufactured or sold by Audi/VW, but because there is an aesthetic value to the marks that customers want, i.e., "the trademark is the feature of the product which constitutes the actual benefit the consumer wishes to purchase." The Ninth Circuit rejected this argument as it would sound "the death knell for trademark protection" – a trademark being desirable to consumers does not render it unprotectable. The Ninth Circuit cited a litany of examples of consumers buying products for the appeal of the mark allegedly without regard to its source-identifying function, like "the Nike Swoosh, the Playboy bunny ears, the Mercedes tri-point star, [and] the Ferrari stallion," which the court does not view as aesthetically functional.
Application of the Ninth Circuit test: The "essential to the use" test failed because, without use of the marks, Auto Gold's license plate covers and key chains would still frame license plates and hold keys, and the cost or quality would be unaffected. The "significant non-reputation-related competitive disadvantage" test failed as well. Aesthetic function, in practice, "has been limited to product features that serve an aesthetic purpose wholly independent of any source-identifying function," such as coloring dry cleaning pads to avoid visible stains, coloring edges of cookbook pages to avoid color bleeding between pages, and using color the black to reduce apparent size of an engine. Because the "demand for Auto Gold's products is inextricably tied to the trademarks themselves," Auto Gold could not satisfy this test either.
Conclusion: The Ninth Circuit's ruling makes clear that aesthetic functionality will continue to be construed narrowly and it will not extend to logos.