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Likelihood of confusion
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David-Versus-Goliath Trademark Victory Isn’t Necessarily “Exceptional”

by | Jul 25, 2024 |

The US Court of Appeals for the Third Circuit vacated an award of attorneys’ fees for reanalysis, explaining that the district court’s finding that the case was “exceptional” under the Lanham Act was based on policy considerations rather than the totality of the circumstances. Lontex Corp. v. Nike, Inc., Case Nos. 22-1417; -1418 (3rd Cir. July 10, 2024) (Hardiman, Matey, Phipps, JJ.)

Lontex Corporation is a small Pennsylvania business that manufactures and sells compression apparel to professional athletes and the public. Since 2008 it has held a registered trademark for the mark COOL COMPRESSION, which it used in conjunction with its sale of apparel. In 2015, Nike rebranded an athletic clothing line that included a category of “Cool” products designed to reduce body temperature, as well as various fits, including “Compression.” It also began using the words “Cool” and “Compression” together in the names of Nike clothing products sold online and in Nike catalogues. Nike used “Cool Compression” as a product name on tech sheets, which are internal documents used to explain Nike products to employees and third-party retailers.

The following year, upon discovering Nike’s use of the phrase “Cool Compression,” Lontex sent Nike a cease-and-desist letter. Nike’s lawyers directed the company to stop using the phrase “as soon as possible.” Nike took steps to remove the phrase from its website and catalogs but not its tech sheets. Two years later, Nike reached out to its third-party retailers and asked them to stop using “Compression” in product names.

Lontex sued Nike for trademark infringement of its COOL COMPRESSION mark, for contributory infringement based on its supply of “Cool Compression” products to retailers, and for counterfeiting. The district court dismissed the counterfeiting claim, and a jury trial was held on the infringement actions. The jury returned a verdict for Lontex, finding Nike liable for willful and contributory infringement. The jury awarded Lontex $142,000 in compensatory damages and $365,000 in punitive damages but declined to award Lontex disgorgement of Nike’s profits.

Post-trial, Nike renewed motions for judgment as a matter of law on fair use, trademark infringement, contributory infringement, willfulness and punitive damages. Lontex moved for disgorgement of profits and trebling of the damages awarded by the jury. The district court granted Lontex’s request for treble damages, increased the compensatory award to $426,000, and separately awarded Lontex almost $5 million in attorneys’ fees after finding that the case was “exceptional” under the Lanham Act. Both parties appealed.

As to the willfulness finding, Nike argued that the jury should not have been permitted to infer willfulness solely from its continued use of the mark after it received its cease-and-desist letter. The Third Circuit disagreed, pointing out that not only did Nike adopt the “Cool Compression” phrase without doing a trademark search, it also continued to use the phrase after receiving Lontex’s cease-and-desist letter and being advised by its own legal team to stop using it as soon as possible. The Court concluded that a jury could reasonably infer willful infringement. For similar reasons, [...]

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It’s an Old Tune: Third-Party-Use Evidence From Long Ago Can Support Genericness

by | Jul 18, 2024 |

The US Court of Appeals for the Fifth Circuit found that the district court abused its discretion in wholesale exclusion of evidence on the issue of genericness. The evidence was offered to show prior use of a trade dress from more than five years prior to an alleged infringer’s first use of a mark. Gibson Inc. v. Armadillo Distribution Enterprises, Inc., Case No. 22-40587 (5th Cir. July 8, 2024) (Stewart, Clement, Ho, JJ.)

Gibson filed trademark infringement and counterfeiting claims against Armadillo Distribution Enterprises in 2019, alleging that Armadillo infringed four of Gibson’s trademarked guitar body shapes, one guitar headstock shape and two word marks. Just before trial, the district court made several evidentiary rulings on the parties’ motions in limine, including one in which Gibson sought to exclude all arguments and evidence related to advertisements or sales of third-party guitars before 1992, arguing they had limited probative value and were unduly prejudicial. Gibson argued that any third-party-use evidence should be restricted to a five-year period from 1992 to 1997. In its first exclusion order, the district court found that evidence of third-party use was relevant to determining whether a mark was generic or unprotectable but concluded that the probative value of the evidence from before the 1990s was low and found that the five-year cutoff date was reasonable. Armadillo objected to that ruling, leading to oral argument and a second exclusion order upholding the first order. The district court relied on Federal Rule of Evidence (FRE) 403 and the 2018 Federal Circuit ruling in Converse v. International Trade Commission to support this wholesale exclusion of evidence prior to 1992.

The parties proceeded to trial in mid-2022. A jury found that Armadillo infringed all of the trademarks other than one word mark and found that Armadillo marketed counterfeits. Armadillo appealed based on the district court’s exclusion of decades of third-party-use evidence. Armadillo asserted that this evidence was central to Armadillo’s counterclaim seeking cancellation of the marks and its main defense of genericness.

The Fifth Circuit first considered the district court’s reliance on Converse and determined that the district court abused its discretion in excluding the third-party evidence predating 1992. Armadillo argued that reliance on Converse was error because that case concerned secondary meaning and not genericness. Gibson countered that genericness and secondary meaning are closely related issues and that the five-year period predating infringement is the most logical measuring line. Alternatively, Gibson argued that 15 U.S.C. § 1064 would bar evidence predating 1992 because it provides that a petition to cancel a mark’s registration must be filed within five years from the date of registration of the mark.

The Fifth Circuit found that Converse did not rule that third-party-use evidence from more than five years prior to the alleged infringer’s first use was irrelevant to the issue of genericness and did not compel a strict five-year limitation of third-party-use evidence. The Court further reasoned that under Converse, evidence of prior use is relevant if such use was likely to have [...]

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Smart Choice: Survey Design Didn’t Render Survey Unreliable

by | Jul 18, 2024 |

Underscoring its faith in a jury’s competency to use its “common sense and experience” in evaluating evidence, the US Court of Appeals for the Ninth Circuit affirmed a district court’s judgment in favor of the defendants in a trademark infringement action following a trial, as well as its order partially denying the defendants’ motion for attorneys’ fees. BillFloat, Inc. v. Collins Cash, Inc., Case Nos. 23-15405; -15470 (9th Cir. July 1, 2024) (Thomas, McKeown, Christen, JJ.)

BillFloat and Collins Cash both provide financing to small businesses. In 2013, BillFloat began using SMARTBIZ as a trademark and registered the mark in 2014. That same year (2014), Collins Cash began using the mark SMART BUSINESS FUNDING, although it did not file an application to register the mark until 2020. Meanwhile, in 2018, BillFloat and Collins Cash entered into a partnership agreement under which Collins Cash would refer current and prospective customers to BillFloat in exchange for a referral fee. The parties’ agreement stated that “[i]f either Party employs attorneys to enforce any right arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys’ fees.”

In 2020, upon learning of Collins Cash’s use of the SMART BUSINESS FUNDING mark, BillFloat brought claims for federal and state trademark infringement, breach of contract, unfair competition and unlawful business practices. The district court granted summary judgment to Collins Cash on the breach of contract claim and proceeded to trial on the trademark infringement claim.

Collins Cash engaged an expert to conduct a likelihood of confusion survey using the so-called “Squirt” methodology, which is used for lesser-known marks. BillFloat filed a motion to exclude the expert and his survey from trial, arguing that various errors made the survey unreliable and therefore inadmissible. The district court denied the motion and admitted the expert’s testimony and his survey. The district court also admitted testimony from BillFloat’s expert that challenged the survey. Both experts were cross-examined on their qualifications and on the merits of the survey.

The jury found that BillFloat had not established trademark infringement by a preponderance of the evidence. Post-trial, BillFloat moved for judgment as a matter of law and for a new trial, and Collins Cash moved for attorneys’ fees and non-taxable costs. The district court denied BillFloat’s motion and awarded Collins Cash attorneys’ fees under the partnership agreement for the breach of contract claim but declined to award Collins Cash attorneys’ fees for the trademark infringement claim or non-taxable costs for either claim. Both parties appealed.

BillFloat argued that the district court abused its discretion in admitting Collins Cash’s expert testimony and survey evidence. It also argued that the district court erred in declining to give BillFloat’s proposed jury instruction not to draw any inferences about the fact that BillFloat did not offer its own survey evidence.

The Ninth Circuit found no abuse of discretion on these issues. The Court pointed to the distinction between the admissibility of survey evidence as opposed to the relative weight a [...]

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What Makes a Trademark Case “Exceptional” in the Fifth Circuit?

by | Jul 11, 2024 |

The US Court of Appeals for the Fifth Circuit affirmed a senior party mark but found that the district court committed clear error in finding that a similar junior party mark was valid. The Fifth Circuit also found that the district court abused its discretion in awarding attorneys’ fees to the senior user. Appliance Liquidation Outlet, L.L.C. v. Axis Supply Corp., Case No. 23-50413 (5th Cir. June 21, 2024) (Smith, Haynes, Douglas, JJ.)

Appliance Liquidation Outlet (ALO), a decades-old appliance store in San Antonio, Texas, brought a trademark action under the Lanham Act and Texas law (which in all relevant aspects tracks the Lanham Act) against Axis Supply Corporation, another San Antonio appliance store that opened in 2021. Axis’s store and social media prominently featured the phrase “Appliance Liquidation”:

ALO noted that Axis’s opening happened to coincide with an influx of customers conflating ALO with Axis. ALO’s storefront had prominently displayed a banner reciting “Appliance Liquidation Outlet” for years:

Although ALO had never registered its mark, ALO had long engaged in a variety of promotional activities to raise brand recognition, including partnering with local sports teams and holding antique exhibitions and car shows.

Soon after Axis opened its store, ALO experienced a rush of customers who failed to differentiate between the stores and believed that ALO operated both. ALO requested that Axis stop using “Appliance Liquidation” and sued Axis in state court when Axis refused. Axis removed the dispute to the federal district court. After a bench trial, the district court held for ALO, enjoining Axis from using “Appliance Liquidation” and “Appliance Liquidation Outlet” and causing confusion between the two businesses. The district court also awarded attorneys’ fees under 15 U.S.C. § 1117(a) to ALO, finding that Axis’s decision to change its name only a week before trial (about 1.5 years into the dispute) amounted to litigating in an unreasonable manner. Axis appealed.

The Fifth Circuit affirmed the district court’s holding that Axis had infringed ALO’s “Appliance Liquidation Outlet” mark but assigned clear error to the district court’s finding that “Appliance Liquidation” was valid mark. The Fifth Circuit also found that the district court had abused its discretion in awarding attorneys’ fees to ALO.

With respect to the marks’ validity, the Fifth Circuit noted that both marks were unregistered and thus were not presumptively valid. The Court found that the record did not support the conclusion that “Appliance Liquidation” was a source identifier and thus found that it was not a valid mark. However, the Fifth Circuit was satisfied that “Appliance Liquidation Outlet” served as a source identifier. The Court found that although “Appliance Liquidation Outlet” was descriptive, the evidence established that San Antonian consumers perceived the mark as conveying information about ALO, not merely reflecting a class of services or businesses, and [...]

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Hot Mess? Second Circuit Douses Injunction Based on Weak Mark

by | May 2, 2024 |

The US Court of Appeals for the Second Circuit reversed a district court’s grant of preliminary injunction for abuse of discretion based on an erroneous evaluation of the strength of the “inherently descriptive” marks at issue. City of New York v. Henriquez, Case No. 23-325 (2d Cir. Apr. 16, 2024) (Livingston, CJ; Walker, Carney, JJ.)

Juan Henriquez is a first responder with the Fire Department of New York (FDNY). Henriquez began organizing what he called “medical special operations conferences” (MSOCs) around the United States. In New York, he partnered with the FDNY. Six years into organizing with the FDNY, the relationship soured. Henriquez then applied to register “Medical Special Operations Conference” as a trademark. The US Patent & Trademark Office (PTO) rejected his application on the basis that the mark was merely descriptive. Henriquez amended his application under § 2(f) of the Lanham Act, which allows registration of descriptive marks that have been used on a “substantially exclusive and continuous basis” for at least five years. The PTO agreed to register his mark.

The FDNY and the City of New York brought suit, seeking to cancel Henriquez’s trademark. Henriquez counterclaimed for trademark infringement of his registered “Medical Special Operations Conference” mark and the related unregistered mark “MSOC”. The district court granted Henriquez a preliminary injunction and barred the FDNY from using “medical,” “special” and “operations” in its branding. The FDNY appealed.

The FDNY raised two issues on appeal: did the district court abuse its discretion by enjoining the FDNY’s use of the marks, and alternatively, did the district court grant an “overbroad” injunction?

The Second Circuit agreed with the FDNY on the first injunction issue and therefore did not reach the second.

The Second Circuit requires analysis of the eight “likelihood of confusion” factors under Polaroid when considering a preliminary injunction. While no one factor is dispositive, the strength of a mark “is especially important,” and therefore the Court is “reluctant to affirm any preliminary injunction founded upon an erroneous strength analysis.”

The Second Circuit found three “missteps” that led the district court to commit legal error by improperly categorizing Henriquez’s two marks as “at least strongly suggestive,” when in fact the marks were inherently descriptive.

First, the Second Circuit explained that the district court did not properly consider Henriquez’s past concessions about his marks. Henriquez registered his mark under § 2(f) of the Lanham Act – conceding descriptiveness. Henriquez also argued to the district court that both of his marks were valid based on secondary meaning, which is only necessary for descriptive marks. Because “[w]hat parties say about their marks matters,” the district court was wrong to ignore admissions of descriptiveness.

Second, the Second Circuit found that the district court did not properly consider the PTO’s characterization of the marks as descriptive. Courts should “accord great weight to the PTO’s conclusions” and only decline to follow those conclusions “for compelling reasons.” The Court noted that the PTO initially rejected Henriquez’s application and only granted registration under § 2(f), which [...]

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Trademark Trial & Appeal Board Gets a DuPont 101 Lesson

by | Feb 22, 2024 |

Addressing errors in the Trademark Trial & Appeal Board’s likelihood of confusion analysis in a cancellation action, the US Court of Appeals for the Federal Circuit vacated and remanded, holding that the Board erred by failing to give sufficient weight to the first DuPont factor (similarity of the marks) and failing to consider the relevant evidence for the third (similarity of established trade channels). Naterra International, Inc. v. Samah Bensalem, Case No. 22-1872 (Fed. Cir. Feb. 15, 2024) (Moore, Stoll, Cunningham, JJ.)

In 2020, Naterra International filed a petition to cancel Samah Bensalem’s registration for BABIES’ MAGIC TEA for use in connection with “medicated tea for babies that treats colic and gas and helps babies sleep better” based on a likelihood of confusion with Naterra’s multiple registrations for BABY MAGIC for use in connection with infant toiletry products such as lotion and baby shampoo. The Board denied Naterra’s petition, finding that Naterra failed to prove a likelihood of confusion. The Board found that while the first DuPont likelihood of confusion factor (similarity of the marks) weighed in favor of a likelihood of confusion, factors two (similarity of the goods) and three (similarity of established trade channels) did not, and Naterra’s BABY MAGIC mark “fell somewhere in the middle” for factor five (fame of the prior mark). The Board found that factors four (conditions of purchasing), six (number and nature of similar marks in use on similar goods), eight (length of time and conditions of concurrent use without evidence of actual confusion), 10 (market interface between applicant and owner of a prior mark) and 12 (extent of potential confusion) were neutral. Naterra appealed.

Naterra argued “that substantial evidence does not support the Board’s finding that the similarity and nature of the goods (DuPont factor two) and trade channels (DuPont factor three) disfavor a likelihood of confusion,” and that the Board did not properly weigh the first (similarity of the marks) and fifth (fame of the prior mark) DuPont factors.

DuPont Factor Two – Relatedness of the Goods

The Board rejected Naterra’s expert testimony that other so-called “umbrella” baby brands offered both infant skincare products and ingestible products, calling it “unsupported by underlying evidence.” The Federal Circuit disagreed, stating that “testimony that third-party companies sell both types of goods is pertinent to the relatedness of the goods.” Nonetheless, because the Court could not determine whether the Board rejected the expert testimony for other reasons, it remanded the case for further consideration and explanation of its analysis on this point.

DuPont Factor Three – Similarity of Trade Channels

The Board found that the third factor weighed against a likelihood of confusion, stating that it lacked the “persuasive evidence” necessary to “conclude that the trade channels are the same.” The Federal Circuit found that the Board erred by not addressing relevant evidence, namely Bensalem’s admission that the parties’ goods were sold in similar trade channels. The Court also noted that the Board “did not identify in its decision any evidence showing a lack of [...]

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Bling It On: Laches Prevents Profit Disgorgement in Diamond-Studded Trademark Battle

by | Feb 8, 2024 |

In a dispute involving allegedly counterfeit luxury watches, the US Court of Appeals for the Fifth Circuit affirmed a district court’s finding of trademark infringement and its finding that a laches defense prevented disgorgement of profits. Rolex Watch USA, Incorporated v. BeckerTime, L.L.C., Case No. 22-10866 (5th Cir. Jan. 26, 2024) (Douglas, King, Willett, JJ.)

Rolex is a luxury watch seller with legally protectable interests in numerous trademarks. BeckerTime modifies Rolex-branded watches by adding diamonds, aftermarket bezels, and bands not authorized by Rolex and then sells them as “Genuine Rolex” watches. Rolex filed a lawsuit against BeckerTime, alleging trademark infringement and seeking an injunction and disgorgement of profits. After a bench trial, the district court concluded that BeckerTime infringed Rolex’s trademark but refused to order disgorgement of profits based on BeckerTime’s laches defense. This appeal followed.

On the issue of infringement, BeckerTime argued that the district court erroneously applied the traditional likelihood of confusion analysis without considering the Supreme Court’s decision in Champion Spark Plug v. Sanders (1947). In Champion, the Supreme Court held that a defendant in a trademark infringement case was not obligated to remove trademarks from repaired or reconditioned products. This ruling was grounded in the distinction that these products were distinctly marketed as “repaired or reconditioned” as opposed to brand new items. The Supreme Court clarified that a misnomer exception would only be applicable if the extent or nature of the repair or reconditioning was so profound that using the original name would be misleading, even if terms such as “used” or “repaired” were added to describe the item.

In drawing a comparison to Champion, the Fifth Circuit differentiated BeckerTime’s actions from mere repairs or reconditioning. Unlike the defendant in Champion, BeckerTime went beyond restoration, actively modifying Rolex watches by incorporating diamonds, aftermarket bezels and bracelets or straps. Consequently, the watches BeckerTime sold were materially distinct from those offered by Rolex. The Court reasoned that BeckerTime’s alterations amounted to customization rather than mere restoration, as was the case in Champion. Applying the misnomer exception from Champion, the Fifth Circuit affirmed the district court’s decision, asserting that BeckerTime’s customized watches created a likelihood of confusion among consumers and thereby infringed upon Rolex’s trademark.

On the issue of disgorgement of profits, the Fifth Circuit affirmed the district court’s application of laches to deny an award of disgorgement. Rolex argued that BeckerTime’s deliberate counterfeiting precluded laches, while BeckerTime responded that Rolex had failed to show the required unclean hands or undue prejudice to justify disgorgement. The Fifth Circuit agreed with the district court that Rolex had failed to establish unclean hands by BeckerTime, as the evidence did not show intentional infringement. The Court also agreed that the delay in filing the lawsuit caused undue prejudice to BeckerTime by enabling it to build a successful business.

While Rolex sought a complete ban on BeckerTime’s use of non-genuine bezels and dials on its modified Rolex watches, the Fifth Circuit only partially agreed. Recognizing the potential for consumer confusion, the Court ordered [...]

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SHAZAM! CAPTAIN CANNABIS Registration Defeated by Prior Analogous Trademark Use

by | Jan 18, 2024 |

Addressing the issue of analogous trademark use, the Trademark Trial & Appeal Board designated precedential a September 6, 2022, decision in which the Board cancelled a registration for CAPTAIN CANNABIS based on the petitioner’s evidence of prior use that was “analogous to trademark use.” Laverne John Andrusiek v. Cosmic Crusaders LLC and Lewis J. Davidson, Cancellation No. 92064830 (TTAB Jan. 3, 2024) (Wolfson, Lynch, Larkin, ATJs).

Laverne John Andrusiek claimed to have first created a comic book featuring the title character, Captain Cannabis, during the 1970s. Although Laverne’s sales of comic books under the CAPTAIN CANNABIS mark did not begin until 2017, he promoted his Captain Cannabis character much earlier. For example, Laverne stated that he attended a trade show in New Orleans in 1999 where he distributed flyers describing an adult animated series “in development” featuring the character Captain Cannabis. That same year, Laverne registered the captaincannabis.com domain name, where he alleges he operated a website promoting and selling Captain Cannabis products. In 2006, Laverne claims to have printed 5,000 copies of a comic book that included a Captain Cannabis character and to have first sold those comic books via an online retailer, where sales continued through 2017.

Cosmic Crusaders registered CAPTAIN CANNABIS for “comic books” in Class 16. The subject application was filed on April 2, 2014, and issued on July 28, 2015. Laverne petitioned to cancel this registration in 2016 under Section 2(d) of the Trademark Act, claiming that use of this mark was likely to cause confusion with his prior common-law use of the identical mark in connection with identical goods. Cosmic Crusaders did not contest that contemporaneous use of both marks would be likely to cause confusion, and there was no dispute that the marks were not distinctive. Therefore, the only issue for the Board to determine was priority.

To establish priority, Laverne had to show (by a preponderance of the evidence) that he owns a trademark previously used in the United States that has not been abandoned. Because priority was based on common-law use in this case, Laverne was also required to establish prior actual trademark use or prior use analogous to trademark use, “such as use in advertising brochures, trade publications, catalogues, newspaper advertisements and Internet websites that created a public awareness of the designation as a trademark identifying Petitioner as the source of the relevant goods.”

Analogous use does not require “survey evidence or other direct evidence of the consuming public’s identification of the CAPTAIN CANNABIS mark with [Andrusiek] as the source of comic books or related goods such as DVDs and animated videos.” Rather, Laverne had to show that he had used the CAPTAIN CANNABIS mark in the US in a way that was “sufficient to create an association in the mind of the relevant consumers between the mark and the goods, followed by actual trademark use of the mark within a ‘commercially reasonable time.’”

The Board found that Laverne’s CAPTAIN CANNABIS mark was reasonably well known within the niche [...]

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Just How Similar Must Competing Marks Be to Survive Dismissal?

by | Oct 5, 2023 |

After a de novo review, the US Court of Appeals for the Sixth Circuit affirmed in part and reversed in part a district court’s motion to dismiss, finding the competing marks sufficiently similar to avoid dismissal, and the attorneys’ fee award. Bliss Collection, LLC v. Latham Companies, LLC, Case Nos. 21-5723; -5361 (6th Cir. Sept 21, 2023) (Mathis, Bush, JJ.) (Larsen, J., dissenting).

This case between Bliss and Latham was the latest installment in a series of cases between the children’s clothing companies after a Bliss founder left to start Latham as a competitor company. Here, Bliss sued Latham for infringement of three trademarks for Bliss’s stylized lowercase “b” logo, appearing as if stitched out in thread. Bliss sued for federal copyright infringement, federal trademark infringement, federal trade dress infringement, federal false designation of origin and misappropriation of source, federal unfair competition, trademark under Kentucky law and unfair competition under Kentucky law.

The competing marks are depicted below:

Latham moved to dismiss, and the district court dismissed the federal copyright and trade dress claims. The district court did not initially dismiss the remaining claims, but later did so after a motion for reconsideration. The district court determined that Latham was not entitled to attorneys’ fees because the case was not exceptional, and Bliss had brought the suit in good faith. Bliss appealed the federal trademark infringement, federal trade dress infringement and trademark infringement under Kentucky common law only.

The Sixth Circuit focused its analysis on whether the amended complaint properly alleged that Latham’s logo was a use of Bliss’s trademark. The Court noted that dismissal was not warranted for anything but the most extreme cases, concluded that this was not such a case and reversed.

The Sixth Circuit found that Latham used the accused mark “in a trademark way” (i.e., to identify goods). Then, weighing the Frisch factors to determine likelihood of confusion between the marks, the Court found that the similarity between the marks and their “impression” favored Bliss despite the fact “that the logos share no words or homophones.” Overall, the Court found that five of the eight factors favored Bliss and that two were neutral. Only the likelihood of purchaser care factor was found to favor Latham. The Court thus found that Bliss had plausibly alleged a likelihood of confusion and that its complaint stated a federal trademark infringement claim. Applying the same logic to the state trademark claims, the Court also reversed the dismissal of those claims.

The Sixth Circuit affirmed the dismissal of the trade dress claim, however, because Bliss failed in its affirmative duty to plead facts in support of nonfunctional trade dress.

Turning to the attorneys’ fee award, the Sixth Circuit found that the mere fact that Bliss sued Latham was not sufficient to warrant an “exceptional” case finding in terms of an award for fees. The Court was also unpersuaded that the trade dress claim was worthy of a fee award [...]

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What’s Kühler Than Kühl? No Likelihood of Confusion

by | Sep 28, 2023 |

Addressing unfair competition claims under the Lanham Act, the US Court of Appeals for the Tenth Circuit concluded that no reasonable juror would confuse an alcohol distributer’s use of the word “kühl” with use of a similar mark by a clothing company. Alfwear, Inc. v. Mast-Jägermeister US, Inc., Case No. 21-4029 (Fed. Cir. Sept. 7, 2023) (Holmes, Kelly, Carson, JJ.)

Alfwear has used the mark KÜHL on its outdoor apparel line since 1993 and has registered the mark in connection with apparel, wine and beer. Mast-Jägermeister US (MJUS), a German herbal liqueur distributor, began incorporating “kühl” into its advertisements on billboards, commercials and digital advertising in phrases such as “kühl as ice” and “drink it ice kühl.” In response, Alfwear filed suit against MJUS, asserting trademark infringement and unfair competition. The district court granted MJUS’s motion for summary judgment, finding that there was no likelihood of confusion because all but one factor for assessing likelihood of confusion supported MJUS. Alfwear appealed.

Alfwear argued that the district court erred by not concluding that MJUS’s use of the word “kühl” was likely to cause confusion with Alfwear’s use of the essentially the same word. To determine whether a likelihood of confusion exists, the following factors must be considered:

  • The degree of similarity between the marks
  • The intent of the alleged infringer in adopting its mark
  • Evidence of actual confusion
  • Similarity of products and manner of marketing
  • The degree of care likely to be exercised by purchasers
  • The strength or weakness of the marks.

The Tenth Circuit found that the two marks were not similar in sound, meaning or appearance, and that MJUS only used “kühl” in association with other MJUS marks. The Court explained that Alfwear often depicts the KÜHL mark alongside a logo of a shield-type shape containing a stylized, snow-covered mountain peak in the colors brown, black and white against a bright blue sky. In contrast, MJUS uses the word “kühl” in phrases such as “kühl shots” or “kühl as ice,” on top of a black or green background and accompanied by a combination of either the mark JÄGERMEISTER, the Jägermeister logo or images of a Jägermeister bottle.

The Tenth Circuit also found that MJUS did not intend to copy Alfwear’s mark, explaining that MJUS was not aware of Alfwear’s trademark when designing the new advertising campaign, and noting that when MJUS became aware of the trademark, MJUS intended to avoid infringement by not placing the mark on its apparel or liquor products. The Court also determined that there was insufficient evidence of actual confusion. Alfwear presented anecdotal evidence from Alfwear executives who had heard about confusion from individuals and survey evidence that demonstrated consumers experienced an approximately 30% chance of confusion. The Court found that the anecdotal evidence was de minimis and found that the survey was not designed properly because the products were not shown to survey participants as they would appear in the marketplace and used leading questions. The Court also found that the two [...]

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