Stratus Update: Federal Circuit Affirms TTAB Refusal to Register Telecoms Mark

By on April 30, 2020
Posted In Trademarks

The US Court of Appeals for the Federal Circuit affirmed a US Patent & Trademark Office (PTO) Trademark Trial and Appeal Board (TTAB) refusal to register the mark STRATUS over the existing registration for STRATA, finding a likelihood of confusion between the two marks. Stratus Networks, Inc. v. UBTA-UBET Communications, Inc., Case No. 19-1351 (Fed. Cir. Apr. 14, 2020) (Reyna, J.).

Stratus Networks, a telecommunications provider, filed an application at the PTO seeking to register its STRATUS mark:

UBTA-UBET Communications, also a telecommunications provider, owns a PTO registration for its STRATA mark:

UBTA opposed Stratus’s application for the STRATUS mark based on a likelihood of confusion with its registered STRATA mark. The TTAB found a likelihood of confusion and refused registration of the STRATUS mark. Stratus appealed, arguing that the two marks had coexisted for more than six years without confusion.

The Lanham Act bars the registration of trademarks that are likely to cause confusion with a registered mark. The owner of a registered mark that believes it may be damaged by a trademark application may commence an opposition proceeding before the TTAB. The TTAB analyzes likelihood of confusion based on the 13 DuPont factors. In the case at hand, the TTAB found six DuPont factors relevant to the subject opposition.

Stratus challenged several of the TTAB’s factual findings on individual DuPont factors. The Federal Circuit dismissed most of Stratus’s challenges as “effectively ask[ing] us to reweigh the evidence considered by the Board. That is not the role of this court. Instead, we evaluate whether the Board’s factual findings for each considered DuPont factor are supported by substantial evidence.”

The Federal Circuit explained that the TTAB based its decision for each of the DuPont factors it considered on record evidence. The Court noted that the TTAB’s finding on the similarity of the marks was properly based on dictionary definitions of the relevant terms and on the marks themselves. Similarly, the TTAB’s finding on the similarity of services and the similarity of trade channels was based on the services identified in Stratus’s application and UBTA’s registration, as well as the unrebutted declaration testimony. The TTAB’s finding on the strength of UBTA’s mark was based on dictionary definitions of the relevant terms, third-party registrations and websites. The TTAB’s finding on actual confusion was supported by record testimony.

As to all of these findings, the Federal Circuit concluded that the record evidence was adequate to support the TTAB’s conclusions under the substantial evidence standard of review.

The Federal Circuit rebuffed Stratus’s argument that the record evidence supported a different conclusion, explaining that none of Stratus’s “arguments demonstrate that the Board’s finding lacks substantial evidence.” As the Court noted, “[e]ven if Stratus were correct that different conclusions may reasonably be drawn from the evidence in record, we must sustain the Board’s decision as supported by the substantial evidence outlined above.”

With regard to two factors, consumer sophistication and actual confusion, Stratus argued legal error on the part of the TTAB. The TTAB found that the consumer confusion factor was either neutral or weighed slightly against finding a likelihood of confusion. Stratus argued that the TTAB improperly discounted this factor in its analysis. The Federal Circuit disagreed, explaining that “[w]hile the TTAB is required to consider each DuPont factor for which it has evidence, the TTAB may focus its analysis on dispositive factors, such as similarity of the marks and relatedness of the goods,” and that absence of explicit findings on this factor does not give rise to reversible error.

With regard to actual confusion, Stratus argued that the TTAB committed error because the parties’ marks had coexisted for more than six years without any actual confusion. Stratus further argued that since the TTAB found an overlap in the parties’ trade channels, there must be a determination that the lack of actual confusion weighs heavily against a likelihood of confusion. The Federal Circuit disagreed, noting that the TTAB “record shows that, although the parties offer similar services in similar trade channels, the parties’ services did not geographically overlap. As a result, the record indicates that no consumers were exposed to both trademarks during the relevant time periods, further reducing the significance of the absence of actual confusion.” Based on the TTAB analysis, the Court found no error in the TTAB’s finding.