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Court Finds Trade Dress May Cover Urine Report

PASADENA, Calif. (CN) - The visual layout of a lab company's urine-test reports may qualify for protection from trade dress infringement, the Ninth Circuit ruled Monday.

Millennium Laboratories Inc. and Ameritox, competitors in the medication-monitoring industry, both sell urine-testing services to health care providers who treat chronic pain patients with powerful pain medications.

Millennium sued Ameritox in April 2012 for trade dress infringement under the Lanham Act, claiming that Ameritox had copied its graphic design for urine-testing reports.

Ameritox moved for summary judgment on the Lanham Act claim, arguing that the disputed design was "functional" under the Act and therefore not eligible for protection. The Lanham Act provides that trade dress protection cannot be asserted for any functional features of a product.

A federal judge granted Ameritox's motion, but the Circuit's three-judge panel reversed the ruling.

Writing for the panel, Circuit Judge Ronald Gould began the opinion by explaining trade dress protection's functionality limitation.

"Although Congress does not want consumers to be confused about a product's source, it also does not want to restrict the availability and use of functional features that enhance the utility of the product," Gould said in the 15-page opinion.

He said that the Supreme Court has interpreted the Lanham Act to hold that "a product feature is functional if it is essential to the use or purpose of the article or if it effects the cost or quality of the article," and that a functional feature is one whose "exclusive use" would "put competitors at a significant non-reputation-related disadvantage."

The Circuit has outlined a four-factor test for functionality under the Lanham Act, Gould said, which considers "(1) whether the design yields a utilitarian advantage, (2) whether alternative designs are available, (3) whether advertising touts the utilitarian advantages of the design and (4) whether the particular design results from a comparatively simple or inexpensive method of manufacture."

Applying the test to the layout of the urine-test reports, Gould said that there is a genuine issue of material fact as to the first three factors.

For example, he said, a reasonable jury could conclude that the layout was "merely aesthetic, not functional" and that Millennium's advertisements "focused on the benefits of the 'graphed results' rather than on the benefits of the specific layout."

The fourth factor is "at most neutral" and the trial court was therefore wrong to grant Ameritox summary judgment, Gould said.

"The key point is that even if a comparison of results is functional, this could be presented in many ways, and the precise format used by a company asserting trade dress is not necessarily functional," he said.

Considering also whether protection of the design would impose "a significant non-reputation-related disadvantage," the Circuit held that Millennium presented enough evidence for a jury to assess that matter.

"Here, Millennium's chosen design for its test results was, at least in part, crafted to distinguish the R.A.D.A.R. Report from its competitors, and not simply to attract consumers," Gould said.

The Circuit remanded the case to the district court for further proceedings.

Ameritox's arguing attorney, Eric Miller, declined to comment.

Millennium's arguing attorney, Randall Kay, did not immediately respond to an email requesting comment on Monday morning.

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