Also known as:affect the cost or quality · affecting the cost or quality · material alteration · material change
Written by attorneys · grounded in primary & secondary sources — see below
A product feature is functional, and thus ineligible for trademark protection, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article. The second prong covers features that permit the article to be manufactured at a lower cost or that constitute an improvement in the operation of the article.
Sources & Authorities
How it applies
Common Examples
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Reliance on Oral Fee Adjustment
Andre Antoine hired Aether Technologies to build custom software under a written contract requiring all changes to be in writing. Midway through the project an unforeseen regulatory audit expanded the scope. The parties orally agreed to an additional fee and Aether hired extra developers while Andre restructured his compliance team. When Andre later refused the extra payment Aether sued. The court enforced the modification because Aether's material change of position in reliance on the promise made non-enforcement unjust.
Altered Quotation in News Article
Ariana Azizi, a public official, gave an interview to a reporter. The published article deliberately rearranged her words so that a statement about policy priorities became a statement about personal ethics. Ariana sued the newspaper for defamation. Because the alteration produced a material change in meaning the court held that actual malice could be found even though the individual words were accurate.
Select any source to read its text and confirm it supports the definition.
Cases
Uniform Acts
Common Law
Restatements
Study Supplements
Post-Signing Hardship in Prenup
Adrian Aguilar and Alexandra Armstrong signed a premarital agreement waiving spousal support. Five years after marriage Adrian suffered a disabling illness that left him unable to work. Alexandra sought to enforce the waiver. The court refused enforcement because the material change in circumstances after signing would cause substantial hardship to Adrian.
Unenforceable Oral Modification
Anthony Arnold contracted in writing with Alpine Mining to supply equipment over two years. The parties later orally agreed to reduce the quantity. Alpine made no change in position in reliance on the oral deal. When Alpine later demanded the original quantity Anthony refused. The court held the prior contract was not modified because the second agreement was unenforceable under the Statute of Frauds and no material reliance occurred.
Reliance on Subsequent Agreement
Alfred Ashford agreed in writing to deliver goods to Argonaut Shipping by a fixed date. The parties later orally agreed that delivery could be delayed. Relying on the new arrangement Argonaut reconfigured its warehouse schedule at significant expense. When Alfred insisted on the original date the court enforced the subsequent agreement because reinstatement of the original terms would be unjust given Argonaut's material change of position.
Color Feature in Product Design
Aether Technologies sold industrial equipment whose housing was painted a distinctive green shade. A competitor began using the same shade. Aether claimed trademark protection. The court held the color was functional because it affected the cost or quality of the equipment by allowing cheaper production and better visibility in low-light work environments, so the color could not serve as a trademark.
Qualitex Co. v. Jacobson Products Co.514 U.S. 159 (1995)
Common questions
Frequently Asked
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What does it mean for a feature to affect the cost or quality of an article?+
A feature affects cost or quality when its exclusive use would allow the article to be made at lower cost or would improve its operation or performance. Courts treat such features as functional and therefore unprotectable as trademarks.
How does the cost-or-quality test differ from the essential-to-use-or-purpose test?+
The essential-to-use-or-purpose test asks whether the feature is dictated by the article's function. The cost-or-quality test asks whether the feature confers a competitive advantage unrelated to source identification by lowering production costs or improving performance.
Can a feature be functional under the cost-or-quality prong even if alternatives exist?+
Yes. The existence of alternatives does not defeat functionality if the feature itself lowers cost or improves quality. The test focuses on whether exclusive use of the feature puts competitors at a significant non-reputation-related disadvantage.
514 U.S. 159 (1995)Trademark Law
…feature is functional,” and cannot serve as a trademark, “if it is essential to the use or purpose of the article or if it affects the cost or quality of the article,” that is, if exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage. Inwood Laboratories, Inc. , supra , at 850, n. 10.…
TortsIntentional torts · Harms to the person and property interests (assault, battery, false imprisonment, infliction of mental distress, trespass to land and chattels, conversion)UBEFoundational