Georgia-Pacific and Kimberly-Clark: Quilted Designs and Functional Trade Marks

Intellectual property is the cornerstone of many modern businesses, and the law offers various mechanisms to safeguard know how, creativity, ingenuity and investment in reputation and marketing. A significant complexity when it comes to securing rights is deciding which means of protection is/are appropriate. An important factor in such a decision is the nature of a particular piece of IP – for example, is the purpose of a particular product design feature to differentiate it from other goods?  Is it to endow the product with an aesthetic advantage? Or does it perhaps make the product better at doing its job?

A recent dispute between Georgia-Pacific and Kimberly-Clark highlights the importance of these issues when it comes to securing protection. The case involved alleged infringement of trade marks held by GP relating to the quilted design of toilet paper, a product they have been selling for over 100 years, and which they had improved with a diamond-shaped quilted design 20 years ago when also rebranding it as Quilted Northern. In addition to trade mark protection, GP had also obtained utility and design patents for their innovative tissue, a strategy which would arguably be their undoing.

Notable here is that some of the IP protection secured by GP had expired by the time the dispute arose, however, as rights which can be renewed indefinitely, their trade marks continued to be in force.

In the early 1990s, Kimberly-Clark also added a quilted design to its toilet paper, sparking a dispute between the two companies involving 675,000 documents and more than 12 witnesses. Crucial in determining the existence of trade mark infringement was whether the subject of the trade marks was functional. Trade marks are used to distinguish the origin of goods, and under US law a defence is available to alleged infringers of a trade mark if they can show that the mark is functional. In this instance the Court found clearly in favour of KC.

The Court’s finding that there was no trade mark infringement rested in part on Georgia-Pacific’s proprietorship of several utility patents covering the quilted design. These operated as evidence that the design was in fact functional. In case law cited by the Judge, it was explained that a design is functional:

‘if it is essential to the use or purpose of the article or if it affects the cost or quality of the article’

In GP’s utility patent, the quilted design was claimed to improve the perception of softness and bulk, and reduced ‘nesting’ and ‘ridging’.

The Court stated that ‘if a design is functional the owner cannot trademark the design and block innovation. Georgia-Pacific, whether intentionally or not, patented their Quilted Diamond Design and claimed it to be functional. They must now live with that choice and can benefit only under the protection of a patent, not that of a trademark.’

Another key factor in the decision was the advertising strategy employed by GP. The Court looked queried whether the advertising ‘tout[ed] the utilitarian advantages of the asserted design’, finding evidence of functionality in GP advertising, which included the following claims:

–          Quilted to Absorb;

–          Quilted to create thousands of places for moisture to go;

–          Our two softest layers of premium tissue are gently quilted together to give you and your family exceptional softness and comfort; and

–          Quilted Northern Ultra with a unique new quilted design for more quilting and comfort than ever before.

This case offers an important lesson about patents and trade marks products. By filing patents covering or related to the functionality of the quilted designs, the company made it far more difficult to argue a case for trade mark infringement. Similarly, by marketing the product based on the functionality of the quilted diamond design, GP further weakened its argument.

While some might argue that GP effectively shot itself in the foot, on the other hand could it not simply be the case that irrespective of the IP registration strategy adopted, protection of the quilted designs belongs in the realm of patents. That the utilitarian properties of the design render them subject to more time-limited protection than the indefinite security offered by the trade mark regime.

Either way, the dispute is a timely reminder that marketing, design and legal professionals need to cooperate in order to manage risk effectively, make informed decisions, and succeed in the marketplace and the courts.