This is an interesting read:
http://library.findlaw.com/2001/Apr/1/133329.html
In fairness to the Sixth Circuit, in holding that the spring design was not functional, they relied upon the Supreme Court's (apparent) restrictive language of what is "functional" in the 1995 Qualitex decision, specifically, "If it affects the cost or the quality or the objective (nonreputational) desirability of competitors' products negatively enough, then the trade dress element may be deemed legally functional. Having any effect on cost or quality is not enough. Exclusive use of a feature must put competitors at a significant non-reputation-related disadvantage" before trade dress protection is denied on functionality grounds. Qualitex, 514 U.S. at 165.
Here are the last two paragraphs:
Last year in Samara, the Court explicitly directed lower courts to err on the side of denying trade dress protection for product designs. The Court in TrafFix gave a similar warning to potential litigants if they continued to make trade dress claims in features that were or could be covered by patents. "If, despite the rule that functional features may not be the subject of trade dress protection, a case arises in which trade dress becomes the practical equivalent of an expired utility patent, that will be time enough to consider the matter."
Thus, it is essential that clients and their lawyers consider functionality and its impact on trade dress claims prior to filing any utility patent application. Further, what is clear from the TrafFix decision is that those seeking to protect a product's design as an indicator of origin must be extremely careful in either a patent prosecution or even marketing literature about making any claim about the design that relates to functionality. The TrafFix Court ruling indicates that such claims will leave the design owner with an almost insurmountable burden to carry when seeking trade dress protection.
My emphasis added.
My opinion on the law:
I'm not a lawyer. If I were I would be billing clients $200 an hour instead of posting here :) The arm chair quarterback in me says Spyderco would probably lose this court case. I read the following from Spyerco:
http://spyderco.com/edge-u-cation/index.php?item=7 and to me says the hole is all about function.
Ethically I am torn. It would be easy for competitors who want to use non hole shape openings to do so. Then you get the gray area of what if a competitor wants a single hole with smaller holes or a single hole with some other marking. On the other hand, Spyderco did have exclusive access to the hole feature for seventeen years to build their brand name.
I need to finish writing some Byrd and R2 reviews and leave the questions of law and ethics to the lawyers and philosphers.
Josh