The US Court of Appeals for the Ninth Circuit reversed and remanded a district court’s dismissal of a Lanham Act action, finding that this case was not the rare instance where there was no plausible likelihood that a reasonably prudent consumer would be confused about the origin of the goods that allegedly bore the distinctive marks at issue. Trader Joe’s Co. v. Trader Joe’s United, Case Nos. 24-720; -2826 (9th Cir. Sept. 8, 2025) (Sanchez, Thomas, Donato, JJ.)
Trader Joe’s, a US grocery store chain, owns the red typeface logo
and sells reusable tote bags and other branded goods bearing its marks. Trader Joe’s United (TJU), a labor union representing certain Trader Joe’s employees, markets (for profit) various products via its website, including reusable tote bags. Its website header features a logo that uses the distinctive red typeface and the concentric circle design in Trader Joe’s logo. The image below shows totes from Trader Joe’s (left) and TJU (right).
TJU allegedly began using Trader Joe’s marks in commerce, and Trader Joe’s sent TJU a cease-and-desist letter. Trader Joe’s noted that its demand was directed solely at TJU’s commercial use of the marks on merchandise sold to consumers on the TJU website, not the reference to Trader Joe’s to identify the union or discuss the union’s cause.
Trader Joe’s sued TJU, asserting several claims, including trademark infringement, and sought to permanently enjoin TJU from using Trader Joe’s trademarks in connection with the sale of commercial merchandise on the TJU website. Trader Joe’s also sought the destruction of all infringing merchandise and recovery of damages. TJU moved to dismiss, arguing that Trader Joe’s filed its trademark infringement complaint in retaliation over an ongoing labor dispute and asserting that there was no plausible likelihood that a consumer would believe that products sold on TJU’s website were sponsored, endorsed, or approved by Trader Joe’s.
Applying the Sleekcraft likelihood-of-confusion factors, the district court agreed with TJU and noted several differences between the marks. The district court also explained that Trader Joe’s does not sell many of the products sold on TJU’s website, including buttons, t-shirts, and mugs. The district court concluded that confusion about the origin of these products was unlikely for a reasonable consumer because TJU’s website clearly identified itself as a website of a labor union and was openly critical of Trader Joe’s labor practices. Trader Joe’s appealed.
The Ninth Circuit concluded that when the allegations were viewed in the light most favorable to Trader Joe’s, the district court erred when applying the fact-specific likelihood-of-confusion test. To prevail on a trademark infringement claim, Trader Joe’s would need to establish that it had a protectible ownership interest in the mark and that TJU’s use of the mark was likely to cause consumer confusion. To determine whether a reasonably prudent consumer in the marketplace was likely to be confused about the origin of TJU’s products, the Ninth Circuit considered the Sleekcraft factors:
(1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and degree of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product lines.
The Ninth Circuit decided that the strength of the marks (regarding which there was no dispute), the relatedness of the parties’ goods, and the similarity of the marks weighed in favor of Trader Joe’s. The other five Sleekcraft factors were neutral.
The Ninth Circuit noted that the proximity of goods factor is measured by whether the products are complementary, sold to the same class of purchasers, and similar in use and function. The core question in noncompetitive goods cases is “whether customers are likely to be confused about the source or sponsorship of the products.” The district court erred when deciding that the reusable tote bag was the only product currently sold by both parties instead of considering a broader category of similar non-grocery goods. But even the analysis of the parties’ tote bags showed that the products were clearly related and identical in use and function, and they targeted the same class of purchasers – the general public. Trader Joe’s directed its demand solely at TJU’s commercial use of Trader Joe’s trademarks on merchandise sold to consumers (distinguished from district-court-cited decisions related to a union’s use of the employer’s name for the sole purpose of union identification), including products allegedly bearing Trader Joe’s unique typeface, red lettering, and concentric circle design.
Next, considering the similarity of the marks, the Ninth Circuit explained that the analysis evaluates appearance, sound, and meaning; that marks should be considered in their entirety and as they appear in the marketplace; and that similarities weigh more heavily than differences. The Trader Joe’s and TJU marks are strikingly similar, with name “Trader Joe’s” in capitalized lettering, the same red color, and stylized fonts, found within concentric circles. TJU argued that its marks are dissimilar because they inherently criticize Trader Joe’s labor practices and/or communicate the union’s message. But this requires an assumption that reasonable consumers would equate the Trader Joe’s mark combined with a raised fist holding a boxcutter with TJU’s labor protest message, and not assume that Trader Joe’s was expressing solidarity with social justice causes. How a reasonable consumer might interpret an image of a raised fist holding a boxcutter is a question of fact that could not be resolved at the pleading stage.
The Ninth Circuit also found that the district court erred when dismissing a dilution claim under the nominative fair use doctrine without providing Trader Joe’s an opportunity to respond or apply the requisite three-factor test in its analysis. Trader Joe’s asserted dilution by blurring, a theory where the relevant inquiry is “whether the association arising from the similarity between a mark or trade name and a famous mark impairs the distinctiveness of the famous mark.” The district court did not analyze Trader Joe’s dilution claim because it found that TJU’s use of the Trader Joe’s mark constituted nominative fair use, but TJU had never raised the nominative fair use defense in its briefing before the district court.
