High Court Eases Rules on Off-Patent Designs

The U.S. Supreme Court gave companies more freedom to copy competitors’ designs on once-patented products in a trademark ruling Tuesday that absolved a small San Clemente road sign company of liability for its look-alike products.

The high court, in a unanimous decision written by Justice Anthony M. Kennedy, decided that a Michigan company cannot claim so-called trade-dress protection for devices that prevent road signs, like those reading “Road Work Ahead,” from falling over in high winds.

The ruling frees rival TrafFix Devices Inc. to sell products similar to those of Marketing Displays Inc. of Farmington, Mich.

Kennedy wrote that two expired patents on the dual-spring design that keeps the signs upright were strong evidence that the design is functional, and therefore not eligible for trade-dress protection.

Trade-dress law focuses on product design and packaging, rather than the names or logos covered under traditional trademark law. The decision by the high court narrows the scope of safeguards that a company can expect from the way products are shaped, styled or packaged.

“I think the decision represents an example of what’s common sense,” said Jon Hokanson, a Los Angeles patent and trademark lawyer. “I think, in most cases, businesses would have the view that once their patent expires, they no longer have the ability to protect designs through trade-dress protection.”

While a patent protects an innovative product for 14 to 17 years, a trademark is good for 20 years and can be renewed for as long as it is used. Trade-dress rules fall under a trademark.

Once a patent expires, companies are generally free to copy its unique aspects, but many have thought twice about making similar products because they feared lawsuits over claims of violating trade-dress designs, said John Roberts Jr., a Washington lawyer for TrafFix.

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Bloomberg News was used in compiling this report.