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Round Beach Towel Loses|Trademark Protection

(CN) - The 7th Circuit invalidated an inventor's trademark for round beach towels, saying the design is too functional to enjoy trademark protection. "Granting a producer the exclusive use of a basic element of design ... impoverishes other designers' palettes," Chief Judge Frank Easterbrook wrote.

The same year that Huey Lewis and the News came out with the song "It's Hip to Be Square," Clemens Franek sought to trademark the circular beach towel. His company, CLM Design, pitched the towel as a fashion statement, recruiting "Cheers" actor Woody Harrelson to promote the new design.

Advertisements touted the round towel as "the most radical beach fashion item since the bikini" and targeted lazy sunbathers: "The round shape eliminates the need to constantly get up and move your towel as the sun moves across the sky," one ad stated. "Instead merely reposition yourself."

Franek got the towel trademarked in 1988, but his company dissolved six years later. Undaunted, he kept selling the round towels.

In 2006, he learned that Jay Franco & Sons, a bedding and bath company, was selling similar round towels. He sued two of its customers, Target and Walmart, for trademark infringement.

Jay Franco countersued to void Franek's trademark, claiming the mark is "functional" and thus invalid.

"[T]he functionality doctrine polices the division of responsibilities between patent and trademark law by invalidating marks on useful designs," Easterbrook explained.

A federal judge sided with Jay Franco, and the federal appeals court in Chicago rejected Franek's appeal.

A trademark holder "cannot block innovation by appropriating designs that undergird further improvements," the ruling states. "Patent holders can do this, but a patent's life is short; trademarks can last forever, so granting trademark holders this power could permanently stifle product development.

"If we found Franek's trademark nonfunctional, then inventors seeking to build an improved round beach towel would be out of luck," Easterbrook added. "They'd have to license Franek's mark or quell their inventiveness. That result does not jibe with the purposes of patent or trademark law."

The chief judge noted that the better route would have been a design patent.

"Franek chose to pursue a trademark, not a design patent, to protect the stylish circularity of his beach towel. He must live with that choice. We cannot permit him to keep the indefinite competitive advantage in producing beach towels this trademark creates."

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