When A Patent Is Greater Than A Trademark: The Round Beach Towel

Some trademarks might not be worth the paper they’re written on. That’s the hard lesson one trademark holder learned from the U.S. Seventh Circuit Court of Appeals in Jay Franco & Sons, Inc. v. Franek.

Laying Out the Facts

In 1988, Clemens Franek’s company was granted a trademark on the “configuration of a round beach towel.” The towel was pitched to consumers as both a fashion statement and a way for sunbathers to avoid the need to constantly readjust their towels as the sun moves.

In 2006, Franek learned that Jay Franco & Sons was selling round beach towels and sued two of Franco’s customers for unauthorized use of his trademark. Franco had agreed to indemnify and defend its customers in such suits, so it sued Franek to invalidate the mark.

The district court ruled in Franco’s favor, finding that the round beach towel was functional and, therefore, not eligible for trade dress protection. Franek appealed.

Trademark Deemed All Wet

A design is functional when it’s essential to the use or purpose of the device or affects the costs or quality of the device. As the Seventh Circuit explained, “A design that produces a benefit other than source identification is functional.”

To determine whether the towel design was functional, the court looked to utility patents for similar products, “because any design claimed in a patent is supposed to be useful.” It found one patent describing a round beach towel laced with drawstrings that could turn the towel into a satchel. The court held that this patent created a presumption that the round shape is useful.

Franek failed to rebut that presumption. In fact, Franek’s own advertising highlighted two functional aspects of the design — fashion and convenience.

The court was also reluctant to grant a producer the exclusive use of a basic design element, such as shapes, materials and colors. It found that the more rudimentary and general the element, the more likely that restricting its use would significantly impair competition. And, because trademarks can be continued indefinitely, allowing Franek to trademark circular towels would grant him an unrestricted competitive advantage.

Plaintiff Gets Soaked

The court noted that many cases hold that fashionable designs can be freely copied unless protected by patent law. (Unlike trademarks, patents generally expire after 14 to 20 years.) But Franek chose to pursue a trademark rather than a design patent to protect the circularity of his towel, so he “must live with that choice.”

About the firm:

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution. 

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