Georgia-Pacific Consumer Produ v. Kimberly-Clark Corporation, et al
Filing
Filed opinion of the court by Judge Evans. AFFIRMED. Michael S. Kanne, Circuit Judge; Terence T. Evans, Circuit Judge and Diane S. Sykes, Circuit Judge. [6325929-3] [6325929] [10-3519]
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In the
United States Court of Appeals
For the Seventh Circuit
No. 10-3519
G EORGIA -P ACIFIC C ONSUMER P RODUCTS LP,
Plaintiff-Appellant,
v.
K IMBERLY-C LARK C ORPORATION, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 1:09-cv-02263—Virginia M. Kendall, Judge.
A RGUED JUNE 6, 2011—D ECIDED JULY 28, 2011
Before K ANNE, E VANS, and S YKES, Circuit Judges.
E VANS, Circuit Judge. Toilet paper. This case is about
toilet paper. Are there many other things most people
use every day but think very little about? We doubt it.
But then again, only a select few of us work in the
rarefied air inhabited by top-rate intellectual property
lawyers who specialize in presenting and defending
claims of unfair competition and trademark infringement
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under the Lanham Act, 15 U.S.C. §§ 1051 et seq. And the
lawyers on both sides of this dispute are truly firstrate. Together they cite some 119 cases and 20 federal
statutes (albeit with a little overlap) in their initial
briefs. We are told that during the “expedited” discovery
period leading up to the district court decision we are
called upon to review, some 675,000 pages of documents
were produced and more than a dozen witnesses were
deposed. That’s quite a record considering, again, that
this case is about toilet paper.
We’ll start by introducing the combatants. In the far
corner, from an old cotton-producing state (Dixie: “I wish
I was in the land of cotton, old times there are not forgotten.”) and headquartered in the area (Atlanta) where
Scarlett O’Hara roamed Tara in Margaret Mitchell’s epic
Gone With the Wind, we have the Georgia-Pacific Company.
Important to this case, and more than a bit ironic, is that
the name of Georgia-Pacific’s flagship toilet paper is
Quilted Northern. In the near corner, headquartered in the
north, in Neenah, Wisconsin (just minutes away from
Green Bay), and a long way from the land of cotton, we
have the Kimberly-Clark Corporation. Ironically, its
signature toilet paper brand is called Cottonelle.
The claim in this case is that a few of Kimberly-Clark’s
brands of toilet paper are infringing on Georgia-Pacific’s
trademark design. But again, this case is about toilet
paper, and who really pays attention to the design on
a roll of toilet paper? The parties, however, are quick to
inform us that in a $4 billion dollar industry, designs
are very important. Market share and significant profits
are at stake. So with that, we forge on.
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Georgia-Pacific has been selling toilet paper since 1902.
In the early 1990s, it rebranded its toilet paper as Quilted
Northern, emphasizing a new diamond-shaped embossed
design on the tissue, which gives it the appearance of a
quilt. This design—recognizable for the commercials with
cartoon quilters1 —is referred to as the “Quilted Diamond
Design.” To protect the Quilted Diamond Design, GeorgiaPacific applied for and received several trademarks,
copyrights, and utility and design patents. Most relevant
to this case are trademarks Reg. Nos. 2,710,741; 1,778,352;
1,806,076; and 1,979,345 and utility patents 5,436,057 (’057
patent); 5,573,830 (’830 patent); 5,597,639 (’639 patent);
5,620,776 (’776 patent); and 5,874,156 (’156 patent). The
same lattice designs depicted in Georgia-Pacific’s trademarks appear in the five utility patents.
Reg. N o. 2,710,741
Reg. N o. 1,778,352
‘057, ‘156, and ‘639 patents
1
Reg. N o. 1,806,076
Reg. N o. 1,979,345
‘776 and ‘830 p atents
A video of a 2003 Quilted Northern advertisement featuring
the quilters is available at: http://www.youtube.com/watch?v=
ttoiVqy8C3c&feature=related (last visited June 21, 2011).
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In 2008, Georgia Pacific discovered that Kimberly-Clark,
one of its main competitors in the toilet paper industry,
had redesigned its Cottonelle Ultra bath tissue and
Scott Kimberly-Clark Professional. Both products used
a quilted design which Georgia-Pacific believed to be
very similar to its Quilted Diamond Design.
Georgia-Pacific unrolled this suit against KimberlyClark, alleging unfair competition and trademark infringement under the Lanham Act, for KimberlyClark’s introduction of its redesigned toilet paper.2
Kimberly-Clark moved for summary judgment, arguing
that Georgia-Pacific’s Quilted Diamond Design is functional and therefore cannot be protected as a registered
trademark. The district judge agreed and granted
Kimberly-Clark’s motion. Georgia-Pacific now appeals.
We review the district judge’s grant of summary judgment de novo, viewing all facts in favor of the nonmoving
party. Buie v. Quad/Graphics, Inc., 366 F.3d 496, 502 (7th
Cir. 2004). Summary judgment is appropriate where the
admissible evidence shows that “there is no genuine
dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” FED. R. C IV . P. 56(a).
Therefore, despite the fact that the judge dutifully plied
her opinion, we now wipe the slate clean and address
Georgia-Pacific’s claims.
2
Georgia-Pacific later filed another suit against KimberlyClark for its introduction of Scott Extra Soft bath tissue, also
claiming it infringed the Quilted Diamond Design. The
district judge consolidated the two actions.
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Under the Lanham Act, registration of a trademark
creates a rebuttable presumption that the mark is valid,
but the presumption “evaporates as soon as evidence of
invalidity is presented.” Door Systems, Inc. v. Pro-Line Door
Systems, Inc., 83 F.3d 169, 172 (7th Cir. 1996). Thus, the
burden of proof originates with the party seeking to
invalidate the registered mark. But if that party can put
forward strong evidence of functionality, the mark
holder carries a “heavy burden of showing that the
feature is not functional, for instance by showing that it
is merely an ornamental, incidental, or arbitrary aspect
of the device.” TrafFix Devices v. Marketing Displays,
Inc., 532 U.S. 23, 30 (2001); Eco Manufacturing LLC v.
Honeywell International, Inc., 357 F.3d 649, 653 (7th Cir.
2003). Here, the burden of proof lies with KimberlyClark, but Kimberly-Clark can shift that burden to its
opponent by producing strong evidence of functionality.
Georgia-Pacific begins by arguing that summary judgment was inappropriate because functionality is an
issue of fact. While Georgia-Pacific is correct, we have
recently held that the functionality of an asserted design
can be determined on summary judgment in appropriate cases. See Jay Franco & Sons, Inc. v. Franek, 615 F.3d
855, 857 (7th Cir. 2010); see also TrafFix, 532 U.S. at 34-35.
Georgia-Pacific also argues that its trademarks are
“incontestable” under 15 U.S.C. § 1065. Unfortunately
for Georgia-Pacific, incontestable is not invincible; the
Lanham Act lists a number of affirmative defenses an
alleged infringer can use, including showing that the
mark is “functional.” See 15 U.S.C. § 1115(b)(8); Franek, 615
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F.3d at 857. As we explained in Franek, “patent law alone
protects useful designs from mimicry; the functionality
doctrine polices the division of responsibilities between
patent and trademark law by invalidating marks on
useful designs.” Id.; see also Qualitex Co. v. Jacobson
Products Co., Inc., 514 U.S. 159, 164 (1995). In other
words, if the Quilted Diamond Design is functional, the
trademark is invalid.
In TrafFix, the Supreme Court found 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.”
532 U.S. at 32 (internal citations and quotations omitted). Courts look to several factors to determine whether
a design is functional:
(1) the existence of a utility patent, expired or unexpired, that involves or describes the functionality of
an item’s design element; (2) the utilitarian properties
of the item’s unpatented design elements; (3) advertising of the item that touts the utilitarian advantages
of the item’s design elements; (4) the dearth of, or
difficulty in creating, alternative designs for the
item’s purpose; (5) the effect of the design feature
on an item’s quality or cost.
Specialized Seating, Inc. v. Greenwich Industries, L.P., 472
F. Supp. 2d 999, 1011 (N.D. Ill. 2007); see also Valu Engineering Inc. v. Rexnord Corp., 278 F.3d 1268, 1274 (Fed.
Cir. 2002).
Kimberly-Clark argues, correctly we think, that GeorgiaPacific’s trademarks covering the Quilted Diamond
Design overlap with the ‘057, ‘156, ‘639, ‘776, and ‘830
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utility patents and are strong evidence of functionality.
In Franek, we found that “utility patents serve as
excellent cheat sheets [for determining functionality]
because any design claimed in a patent is supposed to
be useful.” 615 F.3d at 857; see also TrafFix, 532 U.S. at
29 (finding that expired utility patents are “strong
evidence that the features therein claimed are functional”). Specifically, if the “central advance” claimed
in the utility patent matches the “essential feature” of
the trademark, there is strong evidence that the design
is functional. TrafFix, 532 U.S. at 30.
As an initial matter, Georgia-Pacific argues on appeal,
as it did in the district court, that the patents cover the
manufacturing method or techniques of “offsetting”
the pattern and “varying the depth” of the embossed
elements, and not the design itself. But as the district
judge found, a patent claim involving a tangible item
is different from a claim relating to a process. See In re
Kollar, 286 F.3d 1326, 1332 (Fed. Cir. 2002). There is no
question that the patents at issue refer to toilet paper—a
tangible product—and not the step-by-step approach
to creating it.
We therefore turn to the actual trademarks and patents.
The parties agree that the essential feature of the trademarks is the Quilted Diamond Design, which is embossed
on the toilet paper, giving it a quilt-like appearance.
See Reg. Nos. 2,710,741; 1,778,352; 1,806,076; and 1,979,345.
Therefore, the question is whether the Quilted Diamond
Design is also the “central advance” claimed in any of
the utility patents. Unfortunately for Georgia-Pacific, all
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five utility patents disclose a diamond lattice design
filled with signature bosses and claim the benefits of this
design as the “central advance.” For example, the ‘830
patent discloses a “sheet of tissue” with a “nonwoven
fibrous web” that exhibits “puffiness and bulk”; the ‘776
patent references “diamond shaped cells” and a “sheet
of tissue exhibiting puffiness and bulk” that minimizes
“nesting”; the ‘057 patent claims a “lattice pattern . . . filled
with a signature debossment” that reduces “nesting”; and
the ‘639 patent notes that embossing a lattice design
and the signature bosses at different heights can
achieve utilitarian benefits. Each of the patents discusses the benefits of the Quilted Diamond Design.
Kimberly-Clark argues that this language is strong evidence of functionality. We agree.
Georgia-Pacific argues, however, that the Quilted
Diamond Design is merely “incidental” under TrafFix.
Accordingly, we will “[go] beyond” the patent claims
to the specifications. See TrafFix, 532 U.S. at 34. The abstracts for the ‘639 and ‘156 patents state that “[t]he
perceived softness of embossed tissue can be increased greatly
while avoiding nesting when a particular pattern is
embossed into the tissue.” (Emphasis added.) The ‘776
abstract describes that patent as “[a]n embossed tissue
having improved bulk and puffiness while being non-nesting
by having a lattice pattern and at least two signature
bosses.” (Emphasis added.) And the ‘057 patent states
that “[t]his invention relates to the discovery that
perceived softness of embossed tissue can be increased greatly
while avoiding prior art nesting problems if a particular
pattern is embossed into the tissue.” (Emphasis added.) So
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Georgia-Pacific’s argument fares no better here;
these abstracts all refer to the Quilted Diamond Design’s
utilitarian benefits of softness, bulk, and non-nesting.
Moreover, the patents claim the Quilted Diamond
Design as the “most preferred embodiment.” (The preferred embodiment of the ‘057 patent is a lattice pattern
of diamond cells filled with signature debossments;
the most preferred embodiment for the ‘639 patent is a
lattice comprised of “diamond shaped” cells filled with
a “signature boss.”) And while the preferred embodiment
alone is not definitive of functionality, the language
Georgia-Pacific uses in the preferred embodiment (a
lattice pattern filled with hearts and flowers) matches
the language in the claims (a lattice structure and
diamond-shaped cells). As with the language in the
specifications, the consistency in language between
the preferred embodiment and the claims is evidence
of functionality.
Thus, reading the language of the patents, we find that
the “central advance” claimed in the utility patents
is embossing a quilt-like diamond lattice filled with
signature designs that improves (perceived) softness
and bulk, and reduces nesting and ridging. This is the
same “essential feature” claimed in the trademarks. Thus,
the language of the patents—the claims, abstracts, and
preferred embodiment—is “strong evidence” that the
Quilted Diamond Design is functional, and Georgia-Pacific
has failed to offer evidence that the design is merely
incidental.
Georgia-Pacific also argues that the existence of design
patents precludes a finding of functionality, or at least
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is evidence of non-functionality. But, like a trademark,
design patents do not preclude a finding of functionality.
See Eco Manufacturing, 357 F.3d at 653 (affirming
district court denial of preliminary injunction due to
functionality of design even though design had been
protected by expired design patent); Talking Rain
Beverage Co., Inc. v. South Beach Beverage Co., 349 F.3d 601,
605 n.3 (9th Cir. 2003). Therefore, we agree with the
district judge—the functionality of the Quilted Diamond
Design remains undisturbed by the design patents
because of the utilitarian benefits that are clearly disclosed in the utility patents.
Georgia-Pacific next asserts that expert testimony
creates a genuine issue of material fact. First, we note
that because we can readily discern the scope and
content of the utility patents at issue from the drawings,
specifications, and claims, it is unnecessary to rely on
extrinsic evidence, such as expert testimony. Kara Technology, Inc. v. Stamps.com, Inc., 582 F.3d 1341, 1348 (Fed. Cir.
2009); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576,
1584 (Fed. Cir. 1996) (“[T]he expert testimony, which
was inconsistent with the specification and file history,
should have been accorded no weight.”). Therefore, to
the extent that the experts’ opinions on how to read a
patent conflict with the actual language of the patent,
that conflict “does not create a question of fact nor can
the expert opinion bind the court or relieve the court of
its obligation to construe the claims according to the
tenor of the patent.” Modine Manufacturing Co. v. U.S.
International Trade Commission, 75 F.3d 1545, 1550
(Fed. Cir. 1996) (internal citation omitted) (abrogated
on other grounds).
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Here, Georgia-Pacific presented expert testimony that
the utilitarian benefits of the Quilted Diamond Design
are not the result of the particular pattern but, rather,
the technique used to emboss the tissue, and that embossing is not required to produce soft tissue. But to
the extent that the experts’ testimony conflicts with our
findings—findings derived from the language of the
patents—we afford it no weight, and it does not create
a question of fact.
Georgia-Pacific also claims, in the alternative, that
while the Quilted Diamond Design might have been
functional once, it is no longer functional. According to
Georgia-Pacific, this is critical because “technological
change can render designs that were functional years
ago no longer so.” Franek, 615 F.3d at 859. GeorgiaPacific is correct. We held in Eco Manufacturing that “what
was once functional may . . . later be ornamental.
Passage of time diminishes a utility patent’s significance.” 357 F.3d at 653. But in both of the cases GeorgiaPacific cites, the patents at issue had expired, whereas
here the ‘830 and ‘776 patents are still active. Indeed, in
Franek we noted that “more recent patents are often
better evidence” of functionality. 615 F.3d at 859. Thus,
Georgia-Pacific’s claim that even if the Quilted Diamond
Design was once functional it no longer is, does not
hold water; two of the patents at issue in this case are
still in effect. Accordingly, the first factor weighs heavily
in favor of finding functionality.
Because the second factor—the utilitarian properties
of the unpatented design elements—is not at issue in this
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case, we move to third factor of functionality: whether
advertising touts the utilitarian advantages of the
asserted design. Georgia-Pacific’s advertisements
include the following claims: (1) “Quilted to Absorb”;
(2) “Quilted to create thousands of places for moisture to
go”; (3) “Our two softest layers of premium tissue are
gently quilted together to give you and your family
exceptional softness and comfort”; and (4) “Quilted
Northern Ultra with a unique new quilted design for
more quilting and comfort than ever before.”
Georgia-Pacific makes two claims with regard to
these advertisements. First, it argues that they are mere
puffery and, therefore, not factual statements about
the product. But looking to the ads, the district judge
was spot-on in noting that the language “links the
quilted feature to numerous utilitarian benefits, such as
softness, comfort, and absorption,” further affirming
that the Quilted Diamond Design is functional. See
Franek, 615 F.3d at 859 (finding that a product’s functionality was bolstered by the advertisements, which
highlighted the functional aspect of the design).
Second, Georgia-Pacific argues that its advertising
creates a genuine issue of material fact. Georgia-Pacific
relies on Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277,
299-300 (7th Cir. 1998), a case in which we reversed
summary judgment because a material question of fact
existed concerning whether advertisements touted functional aspects of trade dress. But, as Kimberly-Clark notes,
Thomas & Betts is distinguishable; in that case it was
unclear whether the advertisements were about the
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asserted design feature (an oval-shaped cable tie head)
or other features of a cable tie, while here, the language in the ads is clear—the Quilted Diamond Design
is unequivocally linked to functional benefits such as
absorbency, softness, and comfort. Georgia-Pacific’s ads
do not create a genuine issue of material fact. See In re
Bose Corp., 772 F.2d 866, 871-72 (Fed. Cir. 1985) (finding
that advertisements were strong evidence of functionality when Bose advertised the shape of its speaker
as a performance-enhancing part of the sound system).
The next factor in determining functionality is the
availability of alternative designs for the item’s purpose.
Georgia-Pacific argues that the toilet paper can be embossed with any number of designs, such as octagons or
hexagons (as it mentioned in the ‘776 and ‘830 patents),
and still possess the same utilitarian benefits as the
Quilted Diamond Design. But as we noted in Specialized
Seating, Inc. v. Greenwich Industries, L.P., the design in
question does not have to be the only possible design to
be functional; rather, it is functional if it “represents one
of many solutions to a problem.” 616 F.3d 722, 727 (7th Cir.
2010) (emphasis added). And like in Specialized Seating,
we do not doubt that there are many other available
functional designs for toilet paper (indeed, marketleader Charmin proves there are), but if the Quilted
Diamond Design is a solution to a problem, as GeorgiaPacific claimed it to be in its patents, it is functional and
thus remains in the sphere of patent protection and not
in that of trademark. Id. Accordingly, because we find
the design to be functional, the fact that there are numerous alternative designs does not, on its own, render
the design nonfunctional and incidental. Id.
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The final factor of functionality concerns the effect of
the design on a item’s quality or cost. Here, KimberlyClark asserts only that the Quilted Diamond Design
affects the quality of the bath tissue, and so we will
focus our inquiry there. Kimberly-Clark argues that the
utility patents’ claims and specifications explicitly note
that the Quilted Diamond Design improves softness
and comfort, increases bulk, enhances roll structure, and
prevents nesting and ridging—all claims of quality.
Kimberly-Clark also notes that Georgia-Pacific’s ads
highlight the same benefits of the design. GeorgiaPacific’s own language, in both the utility patents and
the advertisements, consistently refers to the increased
quality—softness, comfort, bulk, and reduced nesting
and ridging—when using the Quilted Diamond Design.
We agree with the district judge that Georgia-Pacific’s
own claims tout the improved quality of the product
due to the Quilted Diamond Design.
We thus find that Kimberly-Clark has produced strong
evidence of functionality, and Georgia-Pacific has failed
to prove that the design is incidental. In Franek and Specialized Seating, we explained that functionality polices the
division between patent and trademark law, and 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.
We next address Georgia-Pacific’s claim that the district judge erred in failing to address whether Kimberly-
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Clark infringed Georgia-Pacific’s trademarks by using
the design on its packaging. Georgia-Pacific argues that
regardless of whether the Quilted Diamond Design on
the toilet paper is functional, it absolutely is not
functional when used on packaging. But if a product is
functional and thus unregistrable, as we have found the
Quilted Diamond Design to be, then “the accurate depiction of that [product] is also unregistrable.” In re CNS,
Inc., No. 76250116, 2005 WL 3175107 at *6 n.11 (T.T.A.B.
Nov. 18, 2005); Textron Inc. v. Pilling Chain Co., Inc., 175
U.S.P.Q. (BNA) 621, 622 (T.T.A.B. 1972) (one cannot claim
trademark right in the configuration or illustration of a
purely functional item); see also 1 J. Thomas McCarthy,
McCarthy on Trademarks & Unfair Competition § 7:37
(4th ed. 2009) (“No one competitor should have the exclusive right to show a picture of a functional product. This
would be the competitive equivalent of an exclusive
right to the generic name of the product, which no one
can own.”). Thus, Georgia-Pacific cannot trademark the
Quilted Diamond Design on its packaging for the same
reason it cannot trademark the design on the toilet
paper—the design is functional.
Finally, Georgia-Pacific argues that laches bars KimberlyClark from asserting the functionality defense. To establish laches, Georgia-Pacific must show that KimberlyClark unreasonably delayed in asserting its functionality
defense, and that Georgia-Pacific reasonably relied
upon, and was prejudiced by, the delay. Maher v. City
of Chicago, 547 F.3d 817, 822 (7th Cir. 2008); see also
Chattanoga Mfg., Inc. v. Nike, Inc., 301 F.3d 789, 792-93 (7th
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Cir. 2002) (noting that in trademark cases, laches applies
where the defendant can show “that the plaintiff had
knowledge of the defendant’s use of an allegedly infringing mark . . . that the plaintiff inexcusably delayed in
taking action with respect to the defendant’s use, and
that defendant would be prejudiced by allowing the
plaintiff to assert its rights at this time”).
According to Georgia-Pacific, Kimberly-Clark knew
about the utility patents for at least a decade, and
therefore cannot now use functionality as an affirmative
defense. Kimberly-Clark claims, however, that it did not
sleep on its rights because until Georgia-Pacific sued, it
had no obligation or reason to challenge the validity of
Georgia-Pacific’s trademark registrations. Anderson v.
Board of Regents of the Univ. of Wisconsin System, 140 F.3d
704, 707 (7th Cir. 1998) (“A target of a potential lawsuit
has no obligation, however, to point out the flaws in
the complainant’s action before the suit is even filed
with the court.”). Moreover, the Lanham Act does not
permit the filing of a trademark cancellation claim in
federal court absent an independent basis for federal
jurisdiction, such as a claim of infringement of the registered mark. Ditri v. Coldwell Banker Residential Affiliates,
Inc., 954 F.2d 869, 873-74 (3d Cir. 1992). Kimberly-Clark
did not delay in raising functionality as an affirmative
defense; it did so in response to Georgia-Pacific’s claims.
Therefore, there was no inexcusable delay or prejudice,
and laches does not apply.
For the foregoing reasons, Georgia-Pacific’s Quilted
Diamond Design is functional and therefore cannot
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be trademarked. The judgment of the district court
is A FFIRMED.
7-28-11
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