Confused? How Do You Factor That?

By on May 27, 2021
Posted In Trademarks

Considering the eight-factor likelihood of confusion test, the US Court of Appeals for the Sixth Circuit affirmed the district court’s finding on all factors, concluding that two competing marks in the transportation logistics industry are overlapping to the extent that consumers would likely be confused. AWGI, LLC v. Atlas Trucking Co., LLC, Case No. 20-1726 (6th Cir. May 18, 2021) (Cook, J.)

Atlas Movers owns the “Atlas” mark and a federal registration for the mark for “freight forwarding services and transportation of household goods of others.” It first used the mark “Atlas Van Lines” in 1948 for transportation and logistics services. In 2007, it revised its name to Atlas Relocation Services and marketed its services under “Atlas Logistics.”

Atlas Trucking, a part of Eaton Steel, manufactured and distributed steel under its Atlas Trucking mark starting in 1999. Later, in 2003, Eaton expanded its services to ship other goods under the mark Atlas Logistics. Eaton admitted it knew of Atlas Van Lines for logistics before it began using the mark.

Atlas Movers sued Eaton for infringement of its “Atlas” mark and Eaton counterclaimed that it owned the Atlas Logistics mark.

The district court found that Eaton’s use of “Atlas” creates a likelihood of confusion with Atlas Movers. The court went through the eight-factor likelihood of confusion test, considering: (1) strength of the plaintiff’s mark; (2) relatedness of the goods or services; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7) defendant’s intent in selecting the mark and (8) likelihood of expansion of the product lines or services “Atlas” marks. The court ultimately found for Atlas Movers on its trademark infringement claim. Eaton appealed.

The Sixth Circuit agreed with the district court’s analysis. First, on commercial strength, the district court found Atlas Movers’ mark to be commercially strong because of its significant advertising expenditures, exposing consumers to its trademark with public recognition. Eaton tried to demonstrate weakness of the mark by presenting evidence of third parties’ use of similar marks, but the lower court rejected the argument, noting the other marks did not use “Atlas” for transportation and logistics. The court found this factor favored Atlas Movers.

The Sixth Circuit also agreed with the district court on the second factor, relatedness of goods and services, concluding buyers would be likely to believe the parties’ respective goods and services, which relate to the same industry and are directed to common consumers, come from the same source or are connected with a common company. The court found this factor also favored Atlas Movers.

Third, as to similarity of the marks, the lower court gave weight to pronunciation, appearance and verbal translation of the marks in their entirety, finding the dominant potion of the mark (“Atlas”) was identical. Again, this factor favored Atlas Movers.

Fourth, on the issue of actual confusion, the lower court considered evidence of five people experiencing actual confusion from Eaton’s use of its “Atlas” mark. There were also consumer surveys that revealed confusion between marks, supporting Atlas Movers’ claim with circumstantial evidence. The Sixth Circuit found that even though evidence of confusion by five people was only “slim” evidence of actual confusion, it could not find that the district court erred in its finding.

Fifth, on marketing channels, the trial court considered how and to whom respective goods or services of parties are sold, such as whether the goods are sold through the same channels, to overlapping customers, and how the goods or services are marketed. The court found overlap between the parties’ marketing channels because both use websites, social media and salesmen . The Sixth Circuit agreed, finding this factor also favored Atlas Movers.

Sixth, on likely degree of purchaser care, the trial court considered a customers’ attentiveness to marketing differences. While customers are presumed to exercise ordinary care, courts may apply a higher degree of care if goods and services are expensive, or if consumers have sophistication and experience in the goods and services. Here, neither party showed evidence of a higher degree of consumer care. Eaton claimed that the trial court overlooked the sophistication of relevant customers in ruling that even if Eaton was correct, it would have only minimally decreased the balance on this factor since the marks are identical, and thus, the degree of purchaser care would not have as much impact. The lower court found this factor neutral, and the Sixth Circuit agreed.

Seventh, on intent, the trial court, noting that Eaton adopted its “Atlas” mark after it had actual knowledge of Atlas Movers’ prior use of the mark, concluded that Eaton intended to benefit from customer recognition of Atlas Movers’ mark. Eaton argued the district court lacked an adequate evidentiary basis for this inference, but the Sixth Circuit concluded the trial court was within its discretion in crediting the evidence on intent.

Eighth, addressing the factor of likelihood of expanding products or services to compete with the other party, the trial court noted that since the parties already compete in overlapping transportation and logistical services, this factor did not require evaluation.

Overall, the trial court found that the most important factors in this case were the similarity of marks and strength of mark, both of which heavily favored Atlas Movers. None of the other six factors favored Eaton. The Sixth Circuit agreed and affirmed.

Also having resolved the claim that Atlas Movers used “Atlas” for logistics services in commerce before the defendant used it, the Sixth Circuit found Eaton’s claim of ownership of the mark “Atlas Logistics” was foreclosed because Eaton cannot own and use “Atlas Trucking” or “Atlas Logistics,” as either is likely to cause confusion with Atlas Movers’ “Atlas” mark.

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