In the
United States Court of Appeals
For the Seventh Circuit
Nos. 07-1435 & 10-2670
S PECIALIZED S EATING, INC.,
Plaintiff/Counterclaim Defendant-Appellee,
v.
G REENWICH INDUSTRIES, L.P., doing business as Clarin,
Defendant/Counterclaim Plaintiff-Appellant.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 1197—James F. Holderman, Chief Judge.
A RGUED M AY 24, 2010—D ECIDED A UGUST 11, 2010
Before E ASTERBROOK, Chief Judge, and P OSNER and
E VANS, Circuit Judges.
E ASTERBROOK, Chief Judge. For more than 80 years, Clarin
has been making x-frame folding chairs. In 1999 it applied
for registration of one particular x-frame design as a
trademark. The Patent and Trademark Office issued
Registration No. 2,803,875 in January 2004. This is the
registered mark:
2 Nos. 07-1435 & 10-2670
The principal register describes it thus: “a configuration
of a folding chair containing an X-frame profile, a flat
channel flanked on each side by rolled edges around the
perimeter of the chair, two cross bars with a flat channel
and rolled edges at the back bottom of the chair, one cross
bar with a flat channel and rolled edges on the front
bottom, protruding feet, and a back support, the outer
sides of which slant inward.”
Clarin was acquired by Greenwich Industries in 1993.
We refer to Greenwich Industries as Clarin, the name
under which it does business. Harvey Hergott, Clarin’s
general manager at the time of the acquisition, left
later that year and, after honoring a five-year restrictive
covenant, joined Specialized Seating, Inc., in 2001, two
years after his son Alfred had founded that business.
Specialized competes in Clarin’s principal market: the
Nos. 07-1435 & 10-2670 3
sale of folding chairs to auditoriums, sports stadiums,
convention centers, and other places that need to
deploy lots of seats, which owners want to be as light
and compact as possible for storage when not in use.
Specialized sells a folding chair that to an untrained eye
looks like Clarin’s trademark chair. There are differences
in construction and detail; the chair is not a slavish
knockoff, but the basic design tracks the registered
mark. That similarity had led to this litigation in
which Specialized sought a declaratory judgment that
its design does not violate Clarin’s rights under the
Lanham Act, 15 U.S.C. §§ 1051–1129, and Clarin coun-
terclaimed for an injunction.
Clarin has been using the mark long enough for its
registration to be “incontestable” under 15 U.S.C. §1065.
The word “incontestable” is misleading, however, be-
cause an incontestable mark may be contested, and de-
feated, on many grounds. The principal effect of incon-
testable status is to relieve the trademark proprietor of
any need to show “secondary meaning”—in other words,
whether consumers associate a mark with a particular
producer is not relevant when the mark is incontestable.
Clarin’s customers buy in bulk and are sophisticated; it
is exceedingly unlikely that any of them is confused
about who makes which chair. Because the mark is
incontestable, however, the absence of confusion does not
matter. Still, nine defenses are available to a person
charged with infringing an incontestable mark. 15 U.S.C.
§1115(b). Specialized Seating asserted two of these de-
fenses: that “the registration . . . was obtained fraudu-
4 Nos. 07-1435 & 10-2670
lently” (§1115(b)(1)) and that “the mark is functional”
(§1115(b)(8)).
The district court held a bench trial and ruled in
Specialized’s favor on both of these issues. 472 F. Supp. 2d
999 (N.D. Ill. 2007). The judge found that the x-frame con-
struction is functional because it was designed to be an
optimal tradeoff between a chair’s weight (and thus its
cost, since lighter chairs use less steel) and its strength;
an x-frame chair also folds itself naturally when knocked
over (an important consideration for large auditoriums,
where it is vital that chairs not impede exit if a fire or
panic breaks out); the flat channel at the seat’s edge,
where the attachment to the frame slides so that the
chair can fold, was designed for strength and attaching
hooks to link a chair with its nearest neighbor; the
front and back cross bars contribute strength (and allow
thinner tubing to be used in the rest of the frame); and
the inward-sloping frame of the back support allows
the chair to support greater vertical loads than Clarin’s
older “a-back” design, which the “b-back” design, de-
picted in the trademark registration, succeeded. The a-
back design is on the left and the b-back on the right:
Nos. 07-1435 & 10-2670 5
Clarin chairs with a-back designs failed when the
audience at rock concerts, seeking a better view, sat on
top of the chairs’ backs and put their feet on the seats.
The tubing buckled at the bend in the frame. The b-back
design is less likely to buckle when someone sits on it,
and it also produces a somewhat wider back, which
concert promoters see as a benefit. (Patrons sometimes
try to get closer to the stage by stepping through rows
of chairs. The gap between b-back chairs is smaller, so
they are more effective at keeping crowds in place.)
Having concluded not only that the overall design of
Clarin’s chair is functional, but also that each feature is
functional, the district judge added that Clarin had de-
frauded the Patent and Trademark Office by giving
misleadingly incomplete answers to the trademark exam-
iner’s questions. The examiner initially turned down
Clarin’s proposal to register the design as a trademark,
observing that the design appeared to be functional.
Clarin replied that the design was chosen for aesthetic
rather than functional reasons. (This was not a complete
answer, as attractiveness is a kind of function. See Jay
Franco & Sons, Inc. v. Franek, No. 09-2155 (7th Cir. Aug. 11,
2010), slip op. 10–12. But we need not pursue that sub-
ject.) Clarin observed that a patent it held on an x-frame
chair, No. 1,943,058, issued in 1934, did not include
all of the features in the mark’s design. What Clarin
did not tell the examiner is that it held three other
patents on x-frame designs: No. 1,600,248, issued in 1926;
No. 2,137,803, issued in 1938; and No. 3,127,218, issued
in 1964. The district judge concluded that the four
6 Nos. 07-1435 & 10-2670
patents collectively cover every feature of the design
submitted for a trademark except the b-back, and that as
the b-back is a functional improvement over the a-back
Clarin should have disclosed all of these utility patents.
Had it done so, the judge thought, the examiner would
have refused to register the proposed mark.
Clarin’s appeal was delayed by settlement negotia-
tions. Briefing and argument were deferred until after
they broke down. It was further delayed by the district
court’s failure to enter a proper judgment, a common
problem in the Northern District of Illinois. See, e.g.,
Rush University Medical Center v. Leavitt, 535 F.3d 735
(7th Cir. 2008). The judge stated that Specialized is
entitled to a declaratory judgment that the registration
is invalid because of both fraud and functionality.
A declaratory judgment must be set out on a separate
document containing its terms. Fed. R. Civ. P. 58(a). The
judgment in this case does not do that. The parties, and
perhaps the district judge, seem to have assumed that,
if the judge’s opinion names the winner, no one need
bother with the step of producing a concise declaration
in a separate document. But “[i]f courts are to require
that others follow regular procedures, courts must do so
as well.” Hollingsworth v. Perry, 130 S. Ct. 705, 715 (2010).
Clarin complicated matters by omitting the defective
judgment from the appendix to its brief, despite the
requirement in Circuit Rule 30(a) that it be included—
and despite counsel’s representation to the court, see
Circuit Rule 30(d), that Rule 30(a) had been followed. The
court discovered the problem on its own, and at oral
argument we questioned whether appellate jurisdiction
exists given the absence of any relief. See, e.g., Horn v.
Nos. 07-1435 & 10-2670 7
Transcon Lines, Inc., 898 F.2d 589 (7th Cir. 1990); Azeez v.
Fairman, 795 F.2d 1296 (7th Cir. 1986). We invited the
parties to return to the district court and ask the judge to
issue a proper declaratory judgment. They did, the judge
did, and Clarin’s new appeal (No. 10-2670) has been
consolidated with the original one (No. 07-1435). The case
is at last ready for decision.
Findings of fact made after a bench trial must stand
unless clearly erroneous. Fed. R. Civ. P. 52(a)(6); Anderson
v. Bessemer City, 470 U.S. 564 (1985). Although “function-
ality” is the “ultimate issue” in a case such as this, an
“ultimate” issue (such as whether the defendant was
negligent or engaged in racial discrimination) remains
one of “fact” under this standard, because it is gener-
ated by applying legal principles to factual conclusions.
See, e.g., Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709
(1986); Pullman-Standard v. Swint, 456 U.S. 273 (1982).
“Functionality” certainly isn’t an issue of law; it repre-
sents a fact-specific conclusion about whether aspects of a
design are “essential to the use or purpose of the article
or if it affects the cost or quality of the article”. Inwood
Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 850
n.10 (1982); see also TrafFix Devices, Inc. v. Marketing
Displays, Inc., 532 U.S. 23, 32–33 (2001). Many decisions
apply Rule 52’s standard to a finding that a mark is
functional. See, e.g., Service Ideas, Inc. v. Traex Corp., 846
F.2d 1118, 1123 (7th Cir. 1988); Pebble Beach Co. v. Tour 18 I
Ltd., 155 F.3d 526, 537 (5th Cir. 1998); Fuji Kogyo Co. v.
Pacific Bay International, Inc., 461 F.3d 675, 681 (6th Cir.
2006); Clamp Manufacturing Co. v. Enco Manufacturing
8 Nos. 07-1435 & 10-2670
Co., 870 F.2d 512, 514 (9th Cir. 1989); Epic Metals Corp. v.
Souliere, 99 F.3d 1034, 1037 (11th Cir. 1996).
Clarin tries to evade this standard of review by con-
tending that the district judge’s findings were influ-
enced by legal errors. We don’t see any. The district
judge started from the proposition, which the Supreme
Court articulated in TrafFix, that claims in an expired
utility patent presumptively are functional. Since utility
patents are supposed to be restricted to inventions that
have utility, and thus are functional, that’s a sensible
starting point—and since inventions covered by utility
patents pass into the public domain when the patent
expires, it is inappropriate to use trademark law to
afford extended protection to a patented invention. See
also Jay Franco, slip op. 5–8. Clarin itself obtained four
utility patents for aspects of the x-frame folding chair.
These patents disclose every aspect of the asserted trade-
mark design except for the b-back. And the district
judge did not commit a clear error by concluding
that the b-back design is a functional improvement over
the a-back design. This means that the trademark design
is functional as a unit, and that every important aspect
of it is independently functional. It looks the way it does
in order to be a better chair, not in order to be a better
way of identifying who made it (the function of a trade-
mark).
We do not doubt that there are many other available
functional designs. Sometimes the function of the func-
tionality doctrine is to prevent firms from appropriating
basic forms (such as the circle) that go into many de-
Nos. 07-1435 & 10-2670 9
signs. Our contemporaneous opinion in Jay Franco dis-
cusses that aspect of the functionality doctrine. This does
not imply that preserving basic elements for the public
domain is the doctrine’s only role.
Another goal, as TrafFix stressed, is to separate the
spheres of patent and trademark law, and to ensure
that the term of a patent is not extended beyond the
period authorized by the legislature. A design such as
Clarin’s x-frame chair is functional not because it is the
only way to do things, but because it represents one
of many solutions to a problem. Clarin tells us that
other designs are stronger, or thinner, or less likely to
collapse when someone sits on the backrest, or lighter
and so easier to carry and set up. Granted. But as Clarin’s
‘248 patent states, the x-frame design achieves a favor-
able strength-to-weight ratio. Plastic chairs are lighter
but weaker. Y-frame chairs are stronger but use more
metal (and so are heavier and more expensive); some
alternative designs must be made with box-shaped metal
pieces to achieve strength, and this adds to weight and
the cost of fabrication. The list of alternative designs is
very long, and it is easy to see why hundreds of different-
looking folding chairs are on the market.
What this says to us is that all of the designs are func-
tional, in the sense that they represent different com-
promises along the axes of weight, strength, kind of
material, ease of setup, ability to connect (“gang”) the
chairs together for maximum seating density, and so on.
A novel or distinctive selection of attributes on these
many dimensions can be protected for a time by a utility
10 Nos. 07-1435 & 10-2670
patent or a design patent, but it cannot be protected
forever as one producer’s trade dress. When the patent
expires, other firms are free to copy the design to the
last detail in order to increase competition and drive
down the price that consumers pay. See, e.g., Bonito
Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989);
Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964). Once
Harvey Hergott’s restrictive covenant expired, he was
free to do that too.
Clarin reminds us that a product whose overall ap-
pearance is distinctive can be protected under the trade-
mark laws, even though most of the product’s con-
stituent elements serve some function. See, e.g., Service
Ideas, 846 F.2d at 1123; W.T. Rogers Co. v. Keene, 778
F.2d 334, 339–40 (7th Cir. 1985). That’s true enough, but
what made the appearance “distinctive” in these and
similar decisions was a non-functional aspect of the
design. For example, Keene dealt with a letter tray that
had irregular hexagons as end caps; each hexagon had
an interior cutout. End caps serve the function of
making letter trays stable and separating the lower tray
from the upper tray, and cutouts make them lighter
while reducing the cost of materials, but neither the
irregular shape of the hexagon nor the shape of the
cutout served any function. They made the tray distinc-
tive and enabled consumers to determine which firm
made it. If Clarin had placed a cutout in the backrest,
or given it a distinctive pattern, it could claim those
attributes as trade dress. But what Registration No.
2,803,875 claims is the x-frame profile with three cross
Nos. 07-1435 & 10-2670 11
bars and a slanted back support. All of the claimed
features are functional; none was added to produce a
distinctive appearance that would help consumers
identify the product’s source.
Because the district court did not commit clear error in
finding Clarin’s design to be functional, it is unnecessary
to decide whether Clarin committed fraud on the
Patent and Trademark Office. All a finding of fraud does
is knock out the mark’s “incontestable” status, and its
registration, under §1115(b)(1). It does not affect the
mark’s validity, because a trademark need not be reg-
istered to be enforceable. See Orient Express Trading Co. v.
Federated Department Stores, Inc., 842 F.2d 650, 653–54
(2d Cir. 1988) (a trademark can be enforced under 15
U.S.C. §1125(a) even after its federal registration is
cancelled for fraud); Far Out Productions, Inc. v. Oskar, 247
F.3d 986, 996 (9th Cir. 2001) (a trademark can be enforced
under state common law even after its federal registration
is cancelled for fraud); see also J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition §31:60
(2006 ed.). A finding of fraud therefore would not end
the case; a finding of functionality does.
Clarin contends that we should consider this topic
even though it does not affect Specialized’s right to sell a
copycat chair, because it might matter to attorneys’ fees,
but fees have not been awarded. A decision on legal
issues just because they might matter to some later
dispute would be advisory. Clarin also appears to be
concerned that the district judge’s finding of fraud might
affect future litigation against a different competitor, but
12 Nos. 07-1435 & 10-2670
issue preclusion (collateral estoppel) applies only to
issues actually and necessarily resolved in the first case.
Brown v. Felsen, 442 U.S. 127, 139 n.10 (1979); Restatement
(Second) of Judgments §27 (issue preclusion operates only
if the earlier resolution was “essential to the judgment”).
It was not necessary to address fraud on the PTO, so the
district judge’s opinion on this subject does not have
preclusive effect.
A FFIRMED
8-11-10