U.S. District Judge Edward Korman. (Photo: Rohanna Mertens)

The U.S. Court of Appeals for the Ninth Circuit needs a new model jury instruction on trademarks and functionality.

On Thursday the appellate court reversed a jury verdict that found Herman Miller Inc.'s iconic Aeron chair unprotectable by trademark because of its functionality. The problem: U.S. District Judge John Kronstadt of the Central District of California had instructed jurors that the overall appearance of the chair could be considered functional if it is "part of the actual benefit that consumers wish to purchase when they buy the product," rather than merely signaling the identity of the designer.

"We agree with [Herman Miller] that this excerpt misstates the law," visiting U.S. District Judge Edward Korman wrote for the Ninth Circuit. Indeed, the Ninth Circuit has held that the notion "flies in the face of existing case law," Korman wrote.

It's hard to blame Kronstadt for giving the instruction. It's part of the Ninth Circuit Model Civil Jury Instructions. But that doesn't make it the law. "Because that instruction does not accurately track our functionality caselaw … its use was error and we must reverse," Korman wrote in Blumenthal Distributing v. Herman Miller.

The decision contained additional good news for Herman Miller, which has sold 6.5 million Aeron chairs since introducing them in 1994, and one positive for Blumenthal Distributing, which sells chairs under the Office Star brand.

Herman Miller accused Blumenthal of infringing the design of both its Eames chairs, introduced in 1958 and featured in the TV show "Mad Men," and the Aeron chairs. The jury found for Herman Miller on the Eames chairs, awarding $3.4 million for willful trademark infringement and $3 million for dilution of trade dress.

The Ninth Circuit affirmed the $3.4 million for infringement, again rejecting Blumenthal's arguments that the chair's appearance has utilitarian functions that make it unfit for trademarking. But the court ruled for Blumenthal on trade dress, concluding that no reasonable jury could have found the Eames chair met the Ninth Circuit's "very high standard" of achieving "household name" status among the general consuming public.

The Ninth Circuit has previously ruled that the Trek bicycle mark was not famous, despite the company spending $3 million to $5 million a year on advertising in publications like Rolling Stone magazine and Playboy and logging 4.5 million visits to its website per year.

By contrast, Herman Miller spent $550,000 a year advertising the Eames chair, it appeared only in niche publications such as Contract and Metropolis, and had at most 875,000 unique followers on Facebook, Twitter and Instagram combined.

"Because the evidence of the claimed Eames trade dresses' fame is plainly weaker than the evidence" in the Trek case, "we must hold that, as a matter of law, those trade dresses were not famous," Korman wrote. That knocked out the $3 million in trade dress damages.

Still, Foley & Lardner partner Jonathan Moskin, who argued the appeal for Herman Miller, said, "We're very happy with the outcome." He said he could not comment in further detail without approval from his client.

Lewis Roca Rothgerber Christie partner David Dillard, who represented Blumenthal Distributors, did not immediately respond to a request for comment.

Ninth Circuit Judge Andrew Hurwitz concurred in Korman's opinion.

Judge Michelle Friedland mostly concurred, but dissented from the portion overruling the jury on the fame of the Eames chair and the dilution verdict. She said the issue shouldn't be reduced to a side-by-side comparison of advertising budgets and web presences.

"The jury was entitled to find that the consuming public recognized trade dresses central to that design as a signature of chairs made by a leading furniture manufacturer, even if they could not specifically name [Herman Miller] as that manufacturer," she wrote. "Although this was not the only finding the jury could have made based on the evidence, it was a reasonable one."