Flexible Steel Lacing Co. v. Conveyor Accessories, Inc.

955 F.3d 632

FLEXIBLE STEEL LACING COMPANY, Plaintiff-Appellant,

v.CONVEYOR ACCESSORIES, INC., Defendant-Appellee.

No. 19-2035

United States Court of Appeals, Seventh Circuit.

Argued February 19, 2020

Decided April 7, 2020

David H. Levitt, Joshua G. Vincent, Attorneys, Hinshaw & Culbertson LLP, Chicago, IL, for Plaintiff-Appellant.

Joseph R. Lanser, Vincent Smolczynski, Attorneys, Seyfarth Shaw LLP, Chicago, IL, for Defendant-Appellee.

Before Wood, Chief Judge, and Flaum and Ripple, Circuit Judges.

Ripple, Circuit Judge.

Flexible Steel Lacing Co. ("Flexco") brought this action for trade dress infringement and unfair competition against Conveyor Accessories, Inc. ("CAI"). Flexco alleges that CAI infringed its registered and common law trade dress by promoting and selling conveyor belt fasteners with a product design that is confusingly similar to the product design of Flexco’s fasteners. In its complaint, Flexco set forth claims brought under the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a), claims for common law unfair competition and trademark infringement, and a claim brought under the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/2.¹

CAI answered the complaint and asserted counterclaims seeking cancellation of Flexco’s registered trademarks and seeking a declaratory judgment of invalidity, unenforceability, and noninfringement. CAI moved for summary judgment, contending that Flexco’s trade dress is functional and therefore invalid. Flexco moved for partial summary judgment on other grounds.

The district court granted summary judgment in favor of CAI, holding that Flexco’s trade dress was functional. It denied Flexco’s motion for partial summary judgment and dismissed CAI’s remaining counterclaims as moot. Flexco filed a timely notice of appeal seeking reversal of the district court’s grant of summary judgment in favor of CAI with respect to one of its registered marks.²

We agree with the district court’s ruling and hold that Flexco’s trade dress is invalid because it is functional. We accordingly affirm the district court’s judgment.

I.BACKGROUND

A. Facts

1. Belt Conveyor Systems and Fasteners

Flexco and CAI are competitors in the belt conveyor industry. Belt conveyors are used in a wide variety of material handling applications, ranging from transporting coal from a mine shaft to moving groceries at the checkout lane. Many belt conveyor systems employ an endless flexible rubber belt comprised of multiple high-strength rubber-belt segments that are spliced together.

Mechanical belt fasteners can be used to splice the belt segments together. Flexco likens mechanical belt fasteners to steel clips.³ The following illustrations, Figures 1 and 4 of Flexco’s design patent, depict, respectively, a perspective view of a conveyor belt fastener and a left side elevational view of the conveyor belt fastener:

[Editor’s Note : The preceding image contains the reference for footnote⁴ ].

The fasteners feature top and bottom plates that are joined by curved bows. The plates have holes through which rivets are driven. A set of fasteners is attached to the end of a belt segment by inserting rivets through each of the holes in the upper plate. The rivets then puncture the conveyor belt material before exiting through the holes in the bottom plate. Securing the fastener in this fashion draws the top and bottom plates together and causes the fastener to "bite" into the belt.⁵ This process is repeated with a second set of fasteners that is attached to the opposing end of a second belt segment. After the fasteners have been installed onto the respective ends of the opposing belt segments, the belt segments are connected together by interlocking the opposing fasteners and inserting a hinge pin through the space formed by the interlocking fastener bows. Once the hinge pin is inserted, the fasteners form a mechanical splice. The mechanical splice operates like a door hinge that flexes with the conveyor belt as it rotates around the conveyor system.

Flexco manufactures a variety of products for the belt conveyor industry, including mechanical belt fasteners, which are the subject of its asserted trade dress. The holding capacity of Flexco’s fasteners is achieved through a combination of compression and penetration, which is how firmly and deeply the top and bottom plates bite into the belt.⁶ In general, one of the goals when designing a belt fastener is to ensure that the fastener provides sufficient holding capacity for the particular application without making the plates too thick.⁷ The particular fastener design at issue in this case involves the shape and the profile of the fastener’s leading edge. The following illustration, Figure 2 of Flexco’s utility patent, depicts a strip of fasteners before it is riveted to a belt:

[Editor’s Note : The preceding image contains the reference for footnote⁸ ]

The numbers 44 and 46 in the illustration above identify the leading edges of the upper and lower plates.⁹ Plates that are too thick may be subject to "blunt impacts from the scraper blades and plows, as well as highly abrasive products carried on the belt such as coal or stone, resulting in excessive wear on the fastener’s leading edge that, over time, will affect the integrity of the splice."¹⁰

2. Flexco’s Fastener With A Scalloped Leading Edge

Flexco always has beveled the leading edges on its fasteners to reduce wear.¹¹ Traditionally, the leading edges of Flexco’s fasteners have been straight edged. In 1999, however, Flexco introduced the Scalloped Edge™ fastener, a mechanical belt fastener featuring leading edges that are scalloped,¹² as depicted in the above illustrations. As shown in Figure 2 of the utility patent above, the scalloped leading edge, identified by the number 46, is comprised of two outer convex curves, both identified by the number 88, and a single concave curve, identified by the number 90.

Edward Musil, an engineering manager at Flexco from 1972 until 2006, was involved in the development of the scalloped edge fastener. Before the fastener’s commercial release, Mr. Musil stated that "the main purpose of a scalloped edge will be to prevent fasteners from getting scraped off by the [belt] cleaner."¹³ In 1998, Mr. Musil visited a testing site and observed that the scalloped edge fastener "had noticeably gentler impact" than a standard fastener.¹⁴ Mine personnel, who used belt conveyor systems with mechanical fasteners, believed that the scalloped edge fastener would extend the life of both the conveyor splice and conveyor cleaner blades.¹⁵ The Vice President of Engineering for Flexco prepared a confidential interoffice correspondence addressed to Mr. Musil and others concluding that, based on testing, the scalloped edge fastener "should perform equal [to] or better than the standard" straight edge fastener.¹⁶

"Compared to a straight-edged fastener, the Scalloped Edge™ fastener displaces and compresses less rubber when it is installed because less plate material is being imbedded in the belt."¹⁷ The single center concave curve, 90, of the scalloped leading edge, 46, acts as a "reservoir" for the "incompressible rubber to be displaced ... when the fastener is being compressed onto the belt."¹⁸ As Flexco explains, when the rubber is "squished down," it "needs somewhere to go, so it flows into that semi-circular space."¹⁹

3. Intellectual Property Protection of Flexco’s Fastener With A Scalloped Leading Edge

Flexco has pursued patent and trademark protection for its scalloped edge fastener. First, in 1997, Flexco filed a utility patent application with the United States Patent and Trademark Office ("USPTO"). The application issued in April 2000 as U.S. Patent No. 6,053,308 ("the utility patent"). The utility patent discloses a fastener having both a beveled and scalloped leading edge. Figure 2 of the utility patent is an illustration of the disclosed fastener:

[Editor’s Note : The preceding image contains the reference for footnote²⁰ ]

The utility patent expired on September 23, 2017.²¹

In 1998, Flexco applied for a design patent for the three-dimensional design of its scalloped edge fastener. The design patent issued in April 2000 as U.S. Patent No. 423,749 ("the design patent"). Gregory Westphall, Flexco’s Global Engineering Director and corporate designee, testified that, as the expiration of the design patent neared, Flexco was "concerned that [the] Scalloped Edge patent was running out" and at least one employee asked if there was anything that could be done to "preserve the Scalloped Edge due to competitive threats."²² Just days before the design patent expired, Flexco filed six trademark applications with the USPTO, two of which ultimately issued.

Flexco’s U.S. Trademark Registration No. 4,971,326 ("Flexco’s registered trade dress" or the "beveled center scallop"), the only trade dress that Flexco pursues on appeal, was registered on June 7, 2016.²³ Flexco’s registered trade dress claims only the beveled concave curve of the leading edge, as indicated by the darkened outline border in the below illustration:

[Editor’s Note : The preceding image contains the reference for footnote²⁴ ]

Flexco’s registered trade dress describes the claimed trade dress as the following: "the mark consists of a three-dimensional configuration of the curved beveled scalloped upper edge of a metal fastener."²⁵

During prosecution of Flexco’s registered trade dress, Mr. Westphall submitted three declarations to the USPTO. In the first declaration, Mr. Westphall stated that "Flexco neither obtained nor sought to obtain utility patent protection" for the claimed trade dress.²⁶ He acknowledged that the fastener’s low profile reduced the leading edge’s exposure to impacts from other belt conveyor components but maintained that it was nevertheless nonfunctional because of the availability of alternative designs.²⁷ In his second declaration, Mr. Westphall further explained that the shape of Flexco’s scalloped edge fastener contributes to the quality...