In a lengthy opinion resulting from nearly four years of litigation, the U.S. District Court for the Southern District of New York found on June 14, 2016 that Netherlands-based Schutte Bagclosures Inc. (“Schutte”) did not infringe any trademark rights Kwik Lok Corporation (“Kwik Lok”) held in connection with the shape of plastic bag closures.  The court further held that Kwik Lok’s claimed trademark rights were invalid because the shape of the closure was “functional” and therefore could not be claimed as a trademark by Kwik Lok.

For decades, Kwik Lok was virtually the only manufacturer and distributor of plastic square closures that are applied automatically by machines to plastic bread bags, fruit bags and other food bags.  Kwik Lok had prevented competitors from using similar shaped closures by claiming trademark rights to the shape of the closure.  These closure shapes were designed to work with the most commonly used machines that apply the plastic closures to the food bags, see image below.

Schutte’s victory opens up the market to competitors that can now sell competitive bagclosures that would be compatible with these commonly used machines, potentially ending Kwik Lok’s multi-decade nearly exclusive domination on the market for those closures.As Judge Koeltl of the Southern District of New York explained, “[a]lthough they may look like simple pieces of plastic, bag closures are products of considerable engineering designed to ensure that the closures perform several important functions.”   Judge Koeltl based his finding that Kwik Lok did not have valid trademark rights to the shape of its closure on the grounds that one company cannot monopolize functional features of a product design: “The products’ shape affects how the closures are produced, stored, and how the closures work in bag closing machines.  The products’ configuration affects how efficiently the closure serves its purpose of closing bags for various forms of merchandise.  Permitting Kwik Lok to maintain property rights in the closure design would negatively impact the competition that the functionality doctrine aims to protect.”

The same parties previously faced each other in court in the Netherlands, where the judge also ruled that Kwik Lok did not have valid trademark rights in their bag closures.

The full Opinion and Order of the U.S. case can be found at https://b4kb90.p3cdn1.secureserver.net/wp-content/uploads/DE241-Opinion-and-Order.pdf

Schutte Bagclosures, Inc. was assisted in the New York proceeding by Carl M. R. van der Zandt and Marc Reiner, partners of the New York law firm Hand Baldachin & Amburgey LLP.

For more information:

Marc S. Reiner (mreiner@hballp.com; (212) 956-9500)

Carl M. R. van der Zandt (cvdzandt@hballp.com; (212) 956-9500)