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Drink Up, but Not with Lehman Brand

In the context of an opposition proceeding, the US Court of Appeals for the Federal Circuit upheld a Trademark Trial & Appeal Board (Board) refusal to register a trademark based on likelihood of confusion with a famous but expired mark, notwithstanding the applicant’s assertion of abandonment of the mark by the original registrant. Tiger Lily Ventures Ltd. v. Barclays Capital Inc., Case Nos. 21-1107;- 1228 (Fed. Cir. June 1, 2022) (Lourie, Bryson, Prost, JJ.)

Tiger Lily sought to register the word mark LEHMAN BROTHERS for beer and spirits and for bar services and restaurant services. Barclays, whose Lehman Brothers marks had expired, opposed the applications based on likelihood of confusion. Tiger Lily argued that Barclays had abandoned the mark and filed an opposition to Barclays’ application to register the work mark LEHMAN BROTHERS. The Board sustained Barclays’ oppositions on the grounds of likelihood of confusion and dismissed Tiger Lily’s opposition. Tiger Lily appealed.

Tiger Lily challenged the Board’s decision, arguing that the Board erred in its determination that Barclays did not abandon its rights in the LEHMAN BROTHERS mark and, relatedly, that Barclays established priority with respect to the LEHMAN BROTHERS mark in its own application. Tiger Lily also argued that the Board erred in finding that its proposed mark for beer and spirits and its proposed mark for bar services and restaurant services would cause a likelihood of confusion with Barclays’ LEHMAN BROTHERS mark.

Addressing the issue of abandonment, the Federal Circuit explained that “there are two elements to a claim for abandonment: (1) nonuse; and (2) intent not to resume use,” and “even limited use can be sufficient to avoid a finding that use of a mark has been ‘discontinued.’” The Court noted that Tiger Lily acknowledged that Barclays had used the mark “continuously in the course of winding up the affairs of at least one Lehman Brothers affiliated company” and thus failed to prove nonuse. Whether Lehman Brothers would exist after bankruptcy proceedings ended was immaterial.

On the issue of likelihood of confusion and the DuPont factors, the Federal Circuit found that “because the LEHMAN BROTHERS mark has achieved a high degree of fame, it is afforded a broad scope of protection.” Tiger Lily attempted to draw a distinction between “consumer recognition” as compared with “goodwill” as a factor and argued that it was actually trying to trade on the “bad will” associated with the mark. The Court found “no legal support for [this] subtle distinction.” The Court concluded that “Tiger Lily’s attempts to capitalize on the fame of the LEHMAN BROTHERS mark weighs in favor of finding a likelihood of confusion,” and that the Board’s findings on the remaining factors were supported by substantial evidence.




You Want Some “Metchup” with That?

The US Court of Appeals for the Fifth Circuit found no infringement by a large, well-known company that used the registered mark of an individual whose own use was local and generated only a few sales and minimal profits. The Court vacated and remanded the case to determine whether plaintiff had abandoned the mark. Dennis Perry v. H.J. Heinz Co. Brands, L.L.C., Case No. 20-30418 (5th Cir. Apr. 12, 2021) (Graves, J.)

In 2010, Dennis Perry created a condiment concoction in his home kitchen that he named “Metchup,” constituting a blend of private label mustard and ketchup, and a blend of mayonnaise and ketchup. Perry sold the concoction in the lobby of his small motel in Louisiana. The US Patent & Trademark Office granted registration for his trademark “Metchup” and after five years declared his mark “incontestable.” Perry had slow sales, however, only selling about 60 bottles with $50 total profit over the years. Perry had a Facebook page for his product, but did not advertise or sell the product in stores or online.

Meanwhile, Heinz produced a condiment called “Mayochup,” a blend of mayonnaise and ketchup, that it began selling in the United States in 2018. Heinz held an online naming contest to promote its product, and when one participant suggested the name “Metchup,” Heinz posted a mock-up picture with the “Metchup” name, along with other proposals. Heinz’s counsel saw Perry’s trademark registration, but because Heinz was not actually selling a product named “Metchup” and there were so few indications that Perry’s product was actually being sold, Heinz concluded that Perry’s mark was not in use and could be used in its promotion. When Perry saw Heinz’s posting, he sued for trademark infringement.

The district court found that while Perry may have once had a valid trademark registration for “Metchup,” there was no likelihood of confusion with the Heinz product and the mark had been abandoned as a consequence of de minimis use. Perry appealed.

The Fifth Circuit analyzed the dispute based on the eight-factor likelihood of confusion test. The Court found three factors weighed in Perry’s favor:

  • Product similarity: Both products were mixed condiments.
  • Potential purchaser care: Consumers would exercise less care for a low-priced condiment.
  • Mark similarity: Both products used the same word “Metchup,” although the Court noted that the packaging design looked very different.

The Court also found five factors weighed in Heinz’s favor:

  • The type of mark on the spectrum (i.e., whether the name is related to what the product is): Here, the mark was “suggestive” because it was a mash-up of names related to the sauces used.
  • Outlet and purchaser identity: The parties targeted different markets because Perry had limited sales in one motel, while Heinz targeted online and at almost all grocery stores.
  • Advertising identity: Perry did not advertise besides his one Facebook page without online sales, while Heinz had large-scale advertising and sales.
  • Defendant’s intent: Heinz did not intend to infringe because it assumed Perry’s mark was no longer [...]

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