Has Justin Hughes (Loyola LA) solved it? He has posted Cognitive and Aesthetic Functionality in Trademark Law (forthcoming Cardozo L. Rev.) on SSRN. Here is the abstract:
This article explores trademark law’s controversial and confusing aesthetic functionality doctrine, a doctrine that has been largely unexamined in the legal literature. The article argues that the most convincing cases for aesthetic functionality aren’t really about aesthetics, but concern cognitive and psychological responses in consumers that come from evolution or acculturation. At the same time, much of the instability of aesthetic functionality case law comes from the doctrine being an unrecognized battleground in the shift from trademarks being purely indicators of source to trademarks being valuable intangibles in and of themselves. Based on these observations, the Article proposes that aesthetic functionality makes the most sense – and would be a more stable, helpful doctrinal tool in trademark law – if it is limited to situations in which the consumer preference at issue comes from cognitive, perceptual, or aesthetic biases that are widespread among consumers before the trademark owner began its own marketing efforts. The Article explores how this insight lines up with most of the aesthetic functionality case law and prevents the doctrine from being used to undermine modern marketing, branding, and trademark realities.I've bolded his proposed test. I don't have too much to say on this paper because I think this is a messy area and it will take more time and thought than I have for this blog post to parse it. Unsurprisingly, I do have a couple comments, though.
First, whether you agree with the proposal or not, this paper is a thorough survey into the cases and stated and unstated rationales for decision. It is worth reading just to get a feel for what's happened in aesthetic functionality. It would be interesting to compare against other aesthetic functionality papers to see if the case takeaways are the same.
Second, I'll have to think hard about the notion that aesthetic functionality can only arise from a bias before marketing. The reasons to have this rule are clear: you don't want everyone under the sun to imitate a distinctive design made popular by significant marketing investment, only to claim that the imitation is necessary because the public really wants the original (which they want because of significant marketing investment). Part of this relies on a view that trademarks are not just about consumer confusion, but also an intangible good themselves, and Hughes makes this explicit in his analysis.
My concern is that we sometimes don't know what the preexisting biases were until someone actually released a design that took advantage of them. This is not to say such efforts shouldn't be protected; the type of investment that predicts a bias can be protected by a design patent, which is (theoretically, at least) more rigorous to obtain and enforce. Further, we might consider some sort of protection for market experimentation (as Abramowicz & Duffy argue).
Thus, I'm torn. On the one hand, I'm very skeptical of arguments that everything is aesthetically functional simply because people like it. On the other hand, I've long written that certain protectable features might become de facto unprotectable standards given enough time.