February 08, 2021 WEBINAR FEATURE

Is It Functional or Is It Functional? Trade Dress vs. Design Patent “Functionality”

Manon Burns and Lisa Holubar

©2021. Published in Landslide, Vol. 13, No. 3, January/February 2021, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Unlike most people, you did not fill your time during the COVID-19 quarantine binge-watching questionable television or baking bread from wild yeast. No, you designed a widget. Everyone loves your widget. Your widget is a new product having a unique ornamental design and appearance. How will you protect your widget? Trademark and/or design patent law.

The purpose of a trademark is to source-identify. A trademark can be anything that identifies and distinguishes the source of goods offered by one party from those of others. To be protectable, a trademark must be inherently distinctive or have acquired distinctiveness through secondary meaning.1 Trade dress is a trademark species, and originally referred to how a product was “dressed,” e.g., its labeling or packaging.2 Protectable trade dress has broadened over time to include the overall appearance, shape, and design of a product itself.3 Thus, if the overall appearance of your widget is something that consumers recognize as coming from a single source—you—then you might be able to protect it as a trademark.4

“The purpose of the design patent law is to promote the decorative arts and to stimulate the exercise of inventive faculty in improving the appearance of articles of manufacture.”5 Design patents protect the new, ornamental design of articles of manufacture for a limited time.6 You apply for design patent protection by submitting an application—including drawings and descriptions of your design—and the requisite fee with the United States Patent and Trademark Office. A patent examiner will compare your design to all similar designs that the examiner can identify. If approved, you will be granted a design patent, which gives you the exclusive right to use your design for 15 years from the date of the patent grant.7 You therefore may be able to protect the design of your widget via design patent if it is new and ornamental. Unlike design patents, utility patents do not protect the look of a product but can be obtained to protect new functional aspects of your invention.

When Trade Dress and Design Patents Protect One Design

Can both trademark and design patent laws protect your widget? In theory, yes. For example, “[t]he design patent protects the patentee against another’s making, using or vending the bottle; a trademark registration . . . indicates only that the bottle is capable of distinguishing applicant’s soft drink which is sold in the bottle.”8 But successfully attaining both trade dress and design patent protections can be challenging, and both have limits, including most significantly a concept called “functionality.” Although the word is the same and the concept is similar in trademark and design patent law, functionality is determined differently depending on which form of intellectual property is at issue.9

Functionality in the World of Trade Dress

Utility and design patents encourage “invention by granting inventors a monopoly over new product designs or functions for a limited time, after which competitors are free to use the innovation.”10 But trademarks have no set expiration. “If a product’s functional feature were permitted to be used as a trademark, competition would be unduly stifled because a trademark can be ‘renewed in perpetuity.’”11 Functionality is thus meant to prevent useful innovations that are properly within the province of patent law from obtaining unending protection via trademark law.12 Not surprisingly, when a product design is claimed in a utility patent, that is strong evidence the design is functional.13 However, the existence of a design patent covering the design in the claimed trade dress may bolster evidence of nonfunctionality.14

Trademark functionality is a term of art, yet undefined by the Lanham Act.15 Various courts have defined “functionality” differently.16 In 2001, the U.S. Supreme Court solidified two tests for functionality in TrafFix Devices, Inc. v. Marketing Displays, Inc.,17 addressing whether the design of a sign supported on the bottom by two springs was protectable trade dress. The Court said trade dress is functional (1) when the claimed design is essential to the purpose of the article or affects the cost or quality of the article, or (2) if it is competitively necessary to use the feature of the design in the relevant market.18 The first test is often referred to as the utilitarian functionality test and the second as the aesthetic functionality test.

The Supreme Court noted: “There is no need . . . to engage . . . in speculation about other design possibilities . . . . Here, the functionality of the spring design means that competitors need not explore whether other spring juxtapositions might be used.”19 That language has resulted in a not insignificant level of uncertainty as to what extent alternative designs are relevant to a trade dress functionality determination. Some courts post-TrafFix have held that alternative designs are irrelevant in determining utilitarian functionality but are properly considered in the context of aesthetic functionality.20 Some note that alternative designs need not be considered as part of the utilitarian functionality test when the design is claimed in a utility patent.21 Some have held that the availability of alternative designs remains one factor to weigh among others,22 especially when there is no utility patent claiming the trade dress design.23 One thing is clear: the mere existence of alternative designs does not result in nonfunctionality.24

The Utilitarian Functionality Test

In June 2020, the Ninth Circuit Court of Appeals addressed the utilitarian functionality test in connection with Herman Miller’s claimed Eames and Aeron chair trade dresses.25 Regarding the Eames trade dress, the defendant argued that the overall design was functional because some of the elements of the chair design possessed utilitarian functionality.26 The court quickly dismissed that argument: “[E]very chair’s appearance is affected by having a backrest, as opposed to having no backrest, which serves the utilitarian function of providing back support. But that does not mean that every chair’s overall appearance is functional . . . .”27 The court then addressed the Disc Golf28 factors to hold that the jury correctly determined the overall appearance of the Eames chair was not functional. The evidence showed the chairs “were designed largely to be distinctive and/or beautiful, even at some expense to their ‘utilitarian advantage,’” and several of the elements that made up the trade dress had no function at all.29 Herman Miller’s advertisements emphasized their distinct appearance as opposed to any utilitarian advantage, some of the manufacturing techniques for the chair required special equipment, and there were a variety of alternative designs.30

In April 2020, the Fourth Circuit Court of Appeals thoroughly examined whether two claimed trade dresses, namely the configuration and the color scheme for chicken pan feeders, were functional under the utilitarian functionality test.31 Affirming summary judgment, the court concluded that each was functional. The court examined the upper spoke section of the trade dress, the lower pan section of the trade dress, and the combination of the two. It found both functional, whether separate or combined. First, the court reviewed the upper section and found that it served the functional purpose of permitting birds to safely exit the feeder.32 The court was persuaded by the plaintiff’s expired utility patent’s recitation that the upper section “ma[de] it easier for birds and animals to climb out of the feeder than to climb in.”33 Similarly, the plaintiff touted the functional benefit of the upper spoke configuration in its ads.34 The court declined to consider the plaintiff’s arguments regarding possible alternative designs, because “[w]hether or not a three-sided spoke, or some other alternative design, serves the same purpose does not render Plaintiff’s engineering-driven L-shaped spoke design arbitrary or non-functional.”35 The court found the pan portion of the claimed trade dress functional because it served the purpose of containing and presenting feed.36

The court then considered whether the claimed red and gray color scheme was functional. Again, the plaintiff’s utility patent proved relevant: “it is relatively well known within the agricultural industry that adult turkeys and chickens are attracted to the color red and, therefore, many adult turkey and chicken feeding trays are now colored red.”37 Similarly, as to the gray color, the plaintiff’s patent taught to use metallic flakes because chickens are attracted to reflective particles. As such, the red and gray colors, alone or together, were found functional for chicken pan feeders.38 The court also found the configuration as a whole was functional: “The overall feeder profile thus results from a simple and utility-driven amalgamation of its two functional halves.”39

The Aesthetic Functionality Test

If a product feature is functional under the utilitarian test, then “there is no need to proceed further to consider if there is a competitive necessity for the feature.”40 Not surprisingly, the aesthetic test is not frequently addressed.41

The most recent circuit court case to address aesthetic functionality came down in early 2020. The Ninth Circuit affirmed the District of Arizona’s summary judgment ruling that Jack Daniel’s registered bottle trade dress was not aesthetically functional. At issue in that case was VIP’s “Bad Spaniels Silly Squeaker” dog toy, which was roughly the same shape as a bottle of Jack Daniel’s but with “dog-related twists.”42 VIP sought a declaration that the bottle trade dress was aesthetically functional. The Ninth Circuit, without much discussion or reference to cited evidence, stated: “None of the evidence cited by VIP demonstrates that, ‘taken together,’ the elements of the bottle design registration—including ‘an embossed signature design comprised of the word “JACK DANIEL”’—are functional or nondistinctive.”43

In 2019, the District of New Jersey, in a case involving the trade dress for “Pocky” brand snacks, briefly addressed aesthetic functionality even though it had already found utilitarian functionality.44 The court found that the Pocky trade dress was also aesthetically functional. “Here, there is no question that affording Plaintiffs the trade dress protection they seek to maintain permits Plaintiffs to hold a monopoly over the features of the design which are ‘essential to a successful’ thin, partially dipped biscuit cookie—the exact scenario that the functionality doctrine seeks to prevent.”45 Although the Third Circuit Court of Appeals affirmed the trade dress was functional in October 2020, it did not address aesthetic functionality.46

Functionality in the World of Design Patents

Design patent functionality is approached from the reality that the patented ornamental design is applied to an article of manufacture, and thus the underlying article necessarily has some functionality. Nevertheless, a design patent protects only those aspects of the design that are nonfunctional.47 Unlike a trademark, a design patent does not need to link a particular design to a particular manufacturer in the mind of a consumer. Rather, a patent owner applies for a design patent in order to exclude others from using that design for a set number of years, as long as the design is novel and nonobvious.48

A design patent protects features that are ornamental, or directed to the appearance of the article of manufacture. “Ornamental,” in addition to being nonfunctional, implies that the features must be seen by consumers rather than concealed.49 A design patent is invalid as functional when “the appearance of the claimed design is ‘dictated by’ the use or purpose of the article.”50 This is similar, but not identical, to utilitarian trademark functionality, wherein the design is functional if it is essential to the use or purpose of the article. However, design patent functionality does not include aesthetic functionality.

“[A]n inquiry into whether a claimed design is primarily functional should begin with an inquiry into the existence of alternative designs.”51 And whether the overall design is dictated by the function of the article is determined by weighing:

whether the protected design represents the best design; whether alternative designs would adversely affect the utility of the specified article; whether there are any concomitant utility patents; whether the advertising touts particular features of the design as having specific utility; and whether there are any elements in the design or an overall appearance clearly not dictated by function.52

Importantly, a court is not supposed to break the design into its component parts to determine the functionality of each of them.53 Rather, the focus is meant to be on the functionality of the design as a whole. Further complicating matters, the analysis cannot end if a court determines that the overall design is not entirely dictated by function. At that point, claim construction of the design—or putting the elements claimed in the drawings into words—distinguishes “between features of the claimed design that are ornamental and those that are purely functional”54 before the designs are compared for purposes of testing infringement or validity.

It is rare for a design patent to be found invalid as functional.55 This is in part because of the importance of alternative designs to the analysis, and in part because courts are required by precedent to consider how the functional aspects of a design contribute to its overall visual appearance, rather than ending the inquiry at finding a design to be functional. After all, even the most basic of functional widgets look like something—and, as long as that something could be designed in a different way, there must be some ornamental aspect to the widget’s appearance.

All patent cases are appealed to the Federal Circuit. The most recent Federal Circuit case to find a design patent invalid due to functionality was a 2001 decision56 concerning a design for a lawnmower ramp. The defendant in that case provided evidence that every element of the ramp was functional, and that alternative designs would cost more or be less functional than the patented ramp. The Federal Circuit found that there was enough evidence to support the jury’s finding that the entire design was dictated by its function. The analysis performed was not extensive and leaves an open question as to why costing more, a feature originating in the competitive concerns of trademark functionality, should be applied to design patent functionality.

Spigen Korea is one of the few contemporary cases that has found a design patent invalid for being primarily functional.57 In that Central District of California case, the defendants argued that many elements of the phone case design were found in the prior art and were functional, and that this was supported by a utility patent that covered all of the design elements that differed from the prior art.58 The plaintiff argued that the utility patent was not directed to the functional benefits of elements claimed in the design patent.59 The court agreed with the defendants, finding that the majority of elements existed in the prior art, and for those that differed, the design patent and utility patent shared similar elements emphasizing the protective screen of the design. Notably, the court did not consider alternative designs.

Functionality Meets Functionality

Not infrequently, both trade dress and design patents are at issue in a litigation covering the same product design.60 Yet rarely does a court substantively address the issue of functionality in such cases from the perspective of both design patent and trademark. This could be, in part, due to a recognition by the parties that it is easier to attack the trade dress portion of the litigation than the design patent portion. In Sugarfina v. Bouquet Bar, for example, the defendant moved to dismiss Sugarfina’s complaint for design patent and trade dress infringement of Sugarfina’s candy display box.61 Bouquet Bar directly attacked the functionality of Sugarfina’s claimed trade dress in its motion to dismiss, but when addressing Sugarfina’s design patent, it argued only that the scope of the design patent was limited by its functional elements—not that the design patent was invalid because it was functional.

An automotive association attempted to port concepts of functionality from trade dress to design patents. But the Federal Circuit disagreed: “The considerations that drive the aesthetic functionality doctrine of trademark law simply do not apply to design patents.”62 The court rejected the argument that aesthetic functionality should apply in the same way to design patents as to trademarks, because the competitive considerations that drive the doctrine in trademark law do not apply to design patents, which “expressly grant to their owners exclusive rights to a particular aesthetic for a limited period of time.”63

As the above discussion shows, functionality does not always equal functionality. Perhaps the biggest difference is that in trade dress, the availability of alternative designs often does not matter. If anything, the availability of alternative designs is but one of many factors a court considers, and it is not weighed heavily, if at all. Alternative designs may be more relevant under the aesthetic functionality test, but few decisions reach that test, and thus few decisions examine the availability of alternative designs as a means to defeat aesthetic functionality. In practice, the availability of alternative designs rarely defeats a trade dress functionality claim. When analyzing design patents for invalidity, however, alternative designs are an important, if not determinative, consideration when examining whether the overall design is dictated by the function of the article.

In short, while both trade dress and design patent protections are subject to the limitation of functionality and threatened by the existence of utility patents covering similar designs, the case law shows it is much easier to prove that trade dress is functional than to prove that a design patent is functional.64

Conclusion

What does all of this mean for your widget? Ultimately, the best way to protect your widget design is by weaving multiple layers of safeguards: first, with design patent protection, and second, by building up consumer recognition during the life of your design patent so that your design becomes associated with you as the source. In this way, your design patent protection can serve to help develop your trade dress protection. Importantly, advertising should not be directed to the functional aspects of your design, but rather how unique and ornamental your design is in its field. Further, careful consideration should be given to whether a utility patent should be obtained for your design in that doing so may negatively impact your perpetual trade dress rights.

Endnotes

1. Marks are classified in categories of increasing distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful. The latter three categories are inherently distinctive and entitled to protection. Marks that are merely descriptive of a product are not inherently distinctive, but they may acquire distinctiveness, allowing them to be protected. Generic terms can never be trademarks. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768–69 (1992).

2. 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 8:1 (5th ed. 2017).

3. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 209 (2000); Kohler Co. v. Moen Inc., 12 F.3d 632, 635 (7th Cir. 1993) (“Early decisions . . . held that a product or container shape was not entitled to trademark protection. Subsequent TTAB decisions and the courts reviewing TTAB rulings, however, have interpreted § 45 to allow trademark protection for product configurations.” (citations omitted)).

4. This article does not analyze trade dress distinctiveness.

5. Ex parte Mars Signal-Light Co., 85 U.S.P.Q. (BNA) 173 (Comm’r Patents 1950) (citing cases).

6. 35 U.S.C. § 171.

7. Assuming your application was granted after May 13, 2015.

8. In re Pepsi-Cola Co., 120 U.S.P.Q. (BNA) 468 (T.T.A.B. 1959).

9. See Sarah Burstein, Commentary: Faux Amis in Design Law, 105 Trademark L. Rep. 1455, 1456–57 (2015).

10. Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164 (1995) (emphasis added) (citation omitted).

11. Flexible Steel Lacing Co. v. Conveyor Accessories, Inc., 955 F.3d 632, 644 (7th Cir. 2020) (emphasis added) (citing Qualitex).

12. Id. at 643–44.

13. Id. at 645 (citing TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 30 (2001)).

14. Atari Interactive, Inc. v. Hyperkin Inc., No. 2:19-CV-00608-CAS-AFMx, 2020 WL 4287584, at *10 (C.D. Cal. July 27, 2020) (“Thus, while the existence of a utility patent is evidence that the features therein claimed as trade dress are functional, ‘[t]he existence of a design patent may be some evidence of non-functionality.’”).

15. Blumenthal Distrib., Inc. v. Herman Miller, Inc., 963 F.3d 859, 865 (9th Cir. 2020).

16. 1 McCarthy, supra note 2, § 7:69.

17. 532 U.S. 23.

18. Id. at 32–33.

19. Id. at 33–34.

20. See, e.g., Flexible Steel Lacing Co. v. Conveyor Accessories, Inc., 955 F.3d 632, 650 (7th Cir. 2020); Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062, 1071–72 (9th Cir. 2006); Eppendorf-Netheler-Hinz GMBH v. Ritter GMBH, 289 F.3d 351, 355 (5th Cir. 2002); Pearson’s Inc. v. Ackerman, No. 7:18-CV-00013-BP, 2019 WL 3413501, at *13 (N.D. Tex. July 29, 2019).

21. See, e.g., CTB, Inc. v. Hog Slat, Inc., 954 F.3d 647, 663–64 (4th Cir. 2020).

22. See, e.g., Valu Eng’g, Inc. v. Rexnord Corp., 278 F.3d 1268, 1276 (Fed. Cir. 2002) (“Nothing in TrafFix suggests that consideration of alternative designs is not properly part of the overall mix.”); Georgia-Pacific Consumer Prods. LP v. Kimberly-Clark Corp., 749 F. Supp. 2d 787, 800 (N.D. Ill. 2010) (“The Court, however, can look to the existence of alternative designs as an overall part of its analysis.”), aff’d, 647 F.3d 723 (7th Cir. 2011).

23. McAirlaids, Inc. v. Kimberly-Clark Corp., 756 F.3d 307, 312 (4th Cir. 2014) (“TrafFix did not hold that ‘the availability of alternative designs cannot be a legitimate source of evidence to determine whether a feature is functional in the first place.’”).

24. Indeed, “the mere existence of alternatives does not render a product nonfunctional.” Talking Rain Beverage Co. v. S. Beach Beverage Co., 349 F.3d 601, 604 (9th Cir. 2003); see also Specialized Seating, Inc. v. Greenwich Indus., L.P., 616 F.3d 722 (7th Cir. 2010) (finding that chair alternative designs proved only “that all of the designs are functional” for chairs).

25. Blumenthal Distrib., Inc. v. Herman Miller, Inc., 963 F.3d 859, 859 (9th Cir. 2020).

26. Id. at 867.

27. Id.

28. The Disc Golf factors are: “(1) whether the design yields a utilitarian advantage, (2) whether alternative designs are available, (3) whether advertising touts the utilitarian advantages of the design, and (4) whether the particular design results from a comparatively simple or inexpensive method of manufacture.” Id. at 865 (quoting Disc Golf Ass’n v. Champion Discs, Inc., 158 F.3d 1002, 1006 (9th Cir. 1998)).

29. Id. at 867.

30. The Ninth Circuit opinion did not address Herman Miller’s utility patents as evidence of functionality.

31. CTB, Inc. v. Hog Slat, Inc., 954 F.3d 647, 662 (4th Cir. 2020).

32. Id. at 659.

33. Id. at 660.

34. Id.

35. Id. at 663.

36. Id. at 665.

37. Id. at 666.

38. Id. at 668.

39. Id. at 665.

40. TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 33 (2001).

41. To be clear, aesthetic functionality is frequently alleged in the context of motions to dismiss, but it is rare to find a substantive analysis.

42. VIP Prods. LLC v. Jack Daniel’s Props., Inc., 953 F.3d 1170, 1172 (9th Cir. 2020).

43. Id. at 1174.

44. Ezaki Glico Kabushiki Kaisha v. Lotte Int’l Am. Corp., No. 15-5477, 2019 WL 8405592 (D.N.J. July 31, 2019).

45. Id. at *7.

46. Ezaki Glico Kabushiki Kaisha v. Lotte Int’l Am. Corp., No. 19-3010, 2020 WL 5951113, at *3–4 (3d Cir. Oct. 8, 2020) (“Viewed as a whole, Pocky’s trade dress is functional. The claimed features are not arbitrary or ornamental flourishes that serve only to identify Ezaki Glico as the source. The design makes Pocky more useful as a snack, and its advantages make Pocky more appealing to consumers. As Ezaki Glico’s own documents acknowledge, ‘Pocky provides a functional value [Enjoy chocolate lightly].’ . . . Every aspect of Pocky is useful. The nine other designs do not make it less so.”).

47. KeyStone Retaining Wall Sys., Inc. v. Westrock, Inc., 997 F.2d 1444, 1450 (Fed. Cir. 1993).

48. 35 U.S.C. § 171.

49. In re Stevens, 173 F.2d 1015, 1015 (C.C.P.A. 1949).

50. PHG Techs., LLC v. St. John Cos., 469 F.3d 1361, 1366 (Fed. Cir. 2006).

51. Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d 1312, 1330 (Fed. Cir. 2015).

52. PHG Techs., 469 F.3d at 1366.

53. “[T]he ultimate question is not the functional or decorative aspect of each separate feature, but the overall appearance of the article . . . .” L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993).

54. Ethicon Endo-Surgery, 796 F.3d at 1333.

55. See, e.g., Graphic Packaging Int’l, LLC v. Inline Packaging, LLC, No. 15-CV-03476-ECT-LIB, 2019 WL 4786148, at *5 (D. Minn. Oct. 1, 2019) (“[C]oncluding that a design or its features are functional does not mean that a design or its elements cannot possess protectable ornamentation.”).

56. Five Star Mfg., Inc. v. Ramp Lite Mfg., Inc., 4 F. App’x 922 (Fed. Cir. 2001).

57. The Federal Circuit reversed and remanded the case based on the lower court’s obviousness ruling but did not discuss the lower court’s functionality holding. Spigen Korea Co. Ltd. v. Lijun Liu, No. SA CV 16-9185-DOC-DFMx, 2018 WL 8130608 (C.D. Cal. Dec. 12, 2018), rev’d and remanded sub nom., Spigen Korea Co. v. Ultraproof, Inc., 955 F.3d 1379 (Fed. Cir. 2020).

58. Id. at *13.

59. Id.

60. In Lifted Ltd., LLC v. Novelty Inc., for example, the plaintiff alleged the ornamental design for a lighter holder and tool was protected by both design patent and trade dress. No. 16-CV-03135-PAB-GPG, 2020 WL 3956786, at *1 (D. Colo. May 27, 2020). On the defendant’s motion for partial summary judgment that the design patent was invalid as functional, the court ruled in favor of the plaintiff. However, the defendant has also argued trade dress functionality but not yet moved on that argument. As of the date hereof, the case is still pending.

61. Sugarfina, Inc. v. Bouquet Bar, Inc., No. 8:18-CV-01305-CJC-DFM, 2018 WL 6844720 (C.D. Cal. Oct. 9, 2018).

62. Auto. Body Parts Ass’n v. Ford Glob. Techs., LLC, 930 F.3d 1314, 1320 (Fed. Cir. 2019), cert. denied, 140 S. Ct. 1298 (2020).

63. Id.

64. Although it is easier for a defendant to successfully challenge trade dress on the basis of functionality, when considering infringement, it is much easier to show that a consumer is likely to be confused and trade dress infringed than it is to show design patent infringement. This is because design patent infringement is based on a comparison of images with limited scope—while the test for design patent infringement is that of the ordinary observer, it is easier to find differences in overall appearance of the images and thus less likely to find infringement. Whereas with trade dress infringement, the likelihood of confusion factors consider much more than just similar appearance—similarity of goods/services, similarity of trade channels, intent of the alleged infringer, evidence of actual confusion, etc.

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Manon Burns is an associate at Irwin IP LLC in Chicago, Illinois, where she practices intellectual property litigation.

Lisa Holubar is a partner at Irwin IP LLC in Chicago, Illinois, where she focuses her practice on trademark litigation.