Legal Definitions - functional discount

A functional discount is a type of discount given to customers for buying a product in bulk or for other functional reasons. It is also known as a trade discount. For example, a retailer may offer a functional discount to a customer who buys a large quantity of a product, such as a case of soda or a pallet of paper.

In trademarks, a functional feature is an essential attribute of a product that is necessary for its proper operation or manufacture. It is utilitarian rather than ornamental in every detail and cannot be protected by trademark law. For example, the shape of a bottle may be a functional feature if it is necessary for the bottle to stand upright or for the cap to fit properly.