November 20, 2013

Tenth Circuit rejects survey in likelihood of confusion analysis

A recent Tenth Circuit opinion offers guidance as to what may be unacceptable methodologies for a likelihood of confusion survey. In Water Pik, Inc. v. Med-Systems, Inc., 726, F.3d 1136 (10th Cir. 2013), the Court affirmed the trial court's summary judgment ruling that appellee's ("Water Pik") mark was not likely to cause confusion with appellant's ("Med-Systems") mark. Id. Med-Systems' word mark, SINUCLEANSE, was "conspicuously feature[d]" as "the stylized term 'SinuCleanse.'" Id. at 1141. Water Pik's word mark was SINUSENSE, and on packaging it appeared with a "waterpik" logo. Id. Both companies used these marks on sinus irrigation products. Id. at 1140-41.

Med-Systems offered the following Internet consumer survey, designed by its expert, as evidence of actual confusion:

After first answering a few questions for demographic identification and to establish their experience with purchasing healthcare products, respondents were shown the unitalicized typewritten words "SinuCleanse," "SinuSense," and "NeilMed" [another competitor in the same market] in varying orders and were asked (Question 3) what came to mind when they saw those marks. . . . They then viewed packages for SinuCleanse-branded products, SinuSense-branded products, and NeilMed-branded products in varying orders and were asked to rank, on a scale of one to seven, how appealing they found the design of each package. These initial questions were to disguise the goal of the survey while focusing attention on the packages.

Next, respondents were shown packaging for saline refill packets that carried the SinuCleanse, SinuSense, and NeilMed brands. After viewing each brand's package in isolation, then all three packages side by side, respondents were given a sequence of three questions aimed at measuring confusion. The first asked whether they thought that two or more of the displayed products were made by the same company. The second asked whether they thought that one or more of the companies whose brands were displayed had a business relationship with one of the other companies. And the third asked whether they thought that one or more of the companies whose brands were displayed had obtained permission or approval from one of the other companies. Respondents were presented with the second question only if they responded no or not sure to the first, and they were presented with the third question only if they had responded no or not sure to the second. Respondents who answered yes to any one question were asked to identify which two or three brands they thought were related and why. The survey also used this same procedure, with the same questions, to gauge reactions to neti pots branded as SinuCleanse, SinuSense, and NeilMed. In both cases, after the three-question sequence all respondents answered a final question in which they were shown three pairs of typewritten words--"SinuCleanse and SinuSense," "NeilMed and SinuCleanse," and "SinuSense and NeilMed" --and were asked (Question 10) to rank the similarity between the paired words on a scale from 1 to 7.

Id. at 1144 (internal citations omitted). The district court ruled that the survey results were "devoid of any probative value and therefore irrelevant." Id. at 1146.

The district court concluded that "Questions 3 and 10 did not present the marks as they would appear to a consumer," namely, "divorced from packaging, and without any italics; and the SinuSense mark was unaccompanied by the distinctive 'waterpik' logo that appears on packaging for SinuSense products." Id. at 1145. The Tenth Circuit agreed, explaining that, by presenting both marks differently from how they appear on packaging, these questions "exaggerated the similarities between the two marks, likely increasing the confusion of the respondents." Id. at 1146-47.

Furthermore, "by suggesting the possibility that SinuSense might be connected with another brand, and limiting the candidates to SinuCleanse and NeilMed, the survey questions risked sowing confusion between SinuSense and SinuCleanse when none would have arisen otherwise." Id. at 1148. The Tenth Circuit cited a number of cases from different circuits as support for the premise that survey questions cannot improperly suggest a link between a plaintiff and defendant. See id. at 1147-48 (citing Fifth and Second Circuit cases and a Fourth Circuit district court decision).

Additionally, the district court concluded that "the survey presented images of Water Pik's products and images of Med-Systems' products side by side, thereby failing to recreate the true conditions of the marketplace." Id. at 1145. The Tenth Circuit explained that

[a] side-by-side comparison can emphasize differences in marks that might not be noticed by the actual shopper . . . or it may bring to mind the senior mark when the respondent would not otherwise have thought of it . . . . Although Med-Systems did point to screenshots of search results from online shopping websites, where both SinuCleanse products and SinuSense products are featured, these screenshots do not support its contention that a side-by-side comparison was the proper survey design. In none of the screenshots are SinuCleanse, SinuSense, and NeilMed products isolated and displayed next to one another; rather, they are scattered among a host of other sinus remedies . . . . The district court could properly distrust the survey's side-by-side format.

Id. at 1145. Finally, the Tenth Circuit observed that, even if the expert's survey was methodologically sound, it did not show consumer confusion because it had not reliably controlled for "'background noise,' or false positives arising from something other than the particular confusion that is alleged and that the survey aims to capture." Id. at 1149.

The district court also concluded that the universe of respondents ("potential purchasers of sinus remedies in general, not potential purchasers of sinus-irrigation products in particular (which account for only 1% of sinus-remedy sales)") was overinclusive, and that the expert "skewed the survey population to ensure that 42% of respondents were older than 55, but an independent market study indicated that fewer than 29% of sinus-remedy consumers belonged to that age group." Id. at 1145. The Tenth Circuit did not add analysis to these findings.

This opinion offers clear and precise reasons for potentiailly rejecting a survey, which may assist in designing defendable surveys. While the Third Circuit "is generally more skeptical of surveys" than other circuits "and is often willing to disregard such evidence for flawed methodology, " Patrick M. Bible, Defining and Quantifying Dilution Under the Federal Trademark Dilution Act of 1995: Using Survey Evidence to Show Actual Dilution, 70 U. Colo. L. Rev. 295, 340 n.112 (1999), it has still recognized that survey evidence is "the most direct method of showing the likelihood of confusion created by an infringing defendant." Charles Jacquin Et Cie, Inc. v. Destileria Serralles, Inc., 921 F.2d 467, 475 (3d Cir. 1990); cf. Sabinsa Corp. v. Creative Compounds, LLC, 609 F.3d 175, 190 (3d Cir. 2010) (Ambro, J., concurring) (noting that plaintiff "could have easily conducted a survey of customers to assess actual confusion in the relevant market. Given this, we could reasonably infer that [plaintiff] expected that any survey results would undermine its case").

June 28, 2013

TTAB refuses trademark protection to "Mott" surname

On April 30, the Trademark Trial and Appeals Board (TTAB) affirmed rejection of Mott's LLP's application to trademark its name on baby food products. It affirmed the examiner's decision that the surname "Mott" - after Samuel R. Mott, the company's founder, id. at 5 - was "primarily merely a surname" under Section 2(e)(4) of the Lanham Act, and thus cannot be trademarked.

While not precedential, this opinion indirectly offers some guidance for those looking to trademark a surname. First, if available, offer as much evidence as possible of the historical significance of a name. In this respect, the Board disagreed with the applicant's contention that Mr. Mott "is a historical figure for purposes of the Section 2(e)(4) analysis," explaining the argument would have "carried more weight had it been supported by a reference other than applicant's website and had Samuel Mott been identified in any of the dictionaries [cited by the examiner]." Id. at 6. Instead, the Board concluded that "Mott" was primarily merely a surname under Section 2(e)(4), relying on lists of the name in nationwide directories, dictionary entries listing it as a surname, and the fact that the mark had the "look and feel of a surname." See id. at 4-7.

Second, prior registrations, especially if offered without their prosecution histories, may not suffice to establish that a surname is protectable. The applicant in this case had ten other registrations for "Mott's." None of the registrations cite a 2(f) claim for acquired distinctiveness, and further, its marks that combined "Mott's" with other words were not relevant. The marks that were simply "Mott's" "[did] not conclusively rebut the Trademark Examining Attorney's contention that MOTT'S is primarily merely a surname." Id. at 8. The Board explained that

Needless to say, while a uniform standard for assessing registrability of marks is an admirable goal, the Board must assess each mark on the record of public perception submitted with the application. Accordingly, the prior registrations owned by applicant have little probative value especially without their accompanying prosecution histories having been made of record.


In re Mott's LLP.pdf

June 5, 2013

Second Circuit rejects Oprah Winfrey's fair use defense.

In a recent reversal, the Second Circuit rejected Oprah Winfrey's fair use defense in a suit filed by the owner of the service mark "Own Your Power," which the plaintiff federally registered in connection with her motivational services business. Kelly-Brown v. Winfrey, et al., No. 12-1207 (2d Cir. May 31, 2013). Although the district court found that Oprah's use of the mark was descriptive, and did not constitute use "as a mark," the Second Circuit disagreed. The Second Circuit found that Oprah's use of the phrase "Own Your Power" across various media supported the inference (at the motion to dismiss stage) that the media empress was engaged in a pattern of use of the phrase that could support a finding that she was "attempting to build a new segment of her media empire around the theme or catchphrase "Own Your Power[.]" Id. at 18. As a result, the Second Circuit found that the plaintiff's complaint sufficiently alleged that Oprah had used the phrase as a mark, contrary to the findings of the district court, and a fair use defense was therefore unavailable at the motion to dismiss stage. Id. at 22; see also JA Apparel Corp. v. Abboud, 568 F.3d 390, 400 (2d Cir. 2009) (defense of fair use requires use that was "(1) other than as a mark, (2) in a descriptive sense, and (3) in good faith") (emphasis added).

The Second Circuit also rejected Oprah's argument that the plaintiff's trademark infringement claim could not prevail as a matter of law if the plaintiff could not show that Oprah used the phrase "Own Your Power" as a mark - that is, without showing that Oprah was "using the 'term as a symbol to attract public attention.'" Id. at 13 (quoting JA Apparel Corp., 568 F.3d at 400). The Second Circuit explained that the "use in commerce" element of a trademark infringement claim need not be "use of the mark in any particular way." Id. at 13. Rather, "in determining whether the plaintiffs have satisfied the 'use in commerce' requirement, we ask whether the trademark has been displayed to consumers in connection with a commercial transaction." Id. at 14. Accordingly, the "use" required for a trademark infringement claim is far broader than the "use" relevant to a fair use defense. In the context of a fair use defense, determining whether a phrase was used "other than as a mark" involves "a more detailed determination of the particular manner in which the mark was used." Id. In this case, the Second Circuit found that the complaint adequately alleged that the defendants' use of "Own Your Power," "through repetition across various forms of media," was directed at creating an "association between Oprah and the phrase" so as to "function[] as a mark" and preclude a fair use defense. Id. at 20-21.

March 22, 2013

Third Circuit Affirms Entry of Default and Award of Attorney's Fees.

In World Entertainment, Inc. v. Brown, the Third Circuit affirmed the Eastern District of Pennsylvania's entry of default judgment and award of damages, including attorney's fees, against defendant for trademark infringement. 487 F. App'x 758, 2012 U.S. App. LEXIS 15685 (3d. Cir. July 30, 2012).

Plaintiff was a special events production company and defendant the lead singer of one of plaintiff's bands called CTO Tribeca. Id. at *1. "Each of [defendant's] band names bears its federally registered trademark 'CTO,' and many also end with the name of a New York City locale." Id. at *2. Defendant left plaintiff's company on poor terms, formed another production company ("Grand") and band, and utilized plaintiff's mark in the band's advertisements. Id. at *2-3. Defendant also "used 'CTO' in Internet metatags and paid Google AdWords, an advertising product, and Yahoo! for the phrase 'CTO Tribeca' so Grand would come up under Internet searches." Id. at *3. "Despite these actions, [defendant] acknowledged that [plaintiff] was the owner of 'the trademarked name CTO Tribeca.'" Id. Plaintiff sent cease and desist letters, to no effect. Id. at *3. When a process server attempted to serve plaintiff's ensuing complaint, defendant "shut the door, locked it, and closed her garage." Id. at *4. The process server left the papers at the door. Id. The District Court entered default for plaintiffs. Id. "Pointing to [defendant's] culpable conduct in refusing to accept service and failing to answer the complaint, as well as her failure to set forth a complete and meritorious defense, the [District] Court denied [defendant's] motion" to set aside the default and awarded $429,997 in damages to plaintiff, more than half of which constituted attorney's fees. Id. at *5, n.2. Defendant allegedly continued to infringe following the District Court's order. Id.

The Third Circuit affirmed the decision of the District Court. Service was proper, especially given the circumstances. Id. at *6. The District Court had not abused its discretion in entering a default because of defendant's lack of a meritorious defense and her "willful disregard for responding to Plaintiffs' legal communications." Id. at *9. The Third Circuit also affirmed the damages award that disgorged defendant's profits because defendant used plaintiff's marks "in advertising through search engine phrase matching, and thus diverting internet traffic to Grand's website" and because defendant had continued to infringe after the District Court enjoined use of the mark. Id. at *11. Finally, the Third Circuit affirmed the award of attorney's fees; this was an exceptional case under 15 U.S.C. ยง 1117(a) because defendant "exhibited bad faith and knowing infringement when she continued to violate Plaintiffs' trademark despite cease and desist letters, the entry of default, and her acknowledgment in writing that the 'CTO' trademark belonged to Plaintiff." Id. at *12.

January 18, 2013

Protecting Colors - Second Circuit's 2012 Louboutin Decision Provides Useful Guidance, But Avoids Making the Hard Decision.

The Supreme Court has explained that a single color may meet the requirements for trademark protection under the Lanham Act. Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159 (1995). In Qualitex, the color at issue was a greenish-gold used by the plaintiff to identify the press pads it sold to dry cleaners. As the Supreme Court explained, "[w]e cannot find in the basic objectives of trademark law any obvious theoretical objection to the use of color alone as a trademark, where that color has attained 'secondary meaning' and therefore identifies and distinguishes a particular brand (and thus indicates its 'source')." Id. at 163. The Supreme Court therefore found that a single color could be trademark protected if it "act[s] as a symbol that distinguishes a firm's goods and identifies their source, without serving any other significant function." Id. at 166. Although the Court found no theoretical objection to trademark protection of color, it left open the door to case by case practical objections to trademark protection of color.

The question of whether a single color could be trademark protected arose again in 2012, in a closely followed case about shoes (expensive ones). Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 696 F.3d 206 (2d Cir. 2012). At issue in that case was whether the plaintiff's registered trademark, consisting of a red lacquered sole on women's high heeled shoes, was a valid and protectable trademark under the Lanham Act. As the Southern District of New York explained, "in fashion markets color serves not solely to identify sponsorship or source, but is used in designs primarily to advance expressive, ornamental and aesthetic purposes." Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 778 F. Supp. 2d 445, 451 (S.D.N.Y. 2011). The Southern District found that the plaintiff's use of a red sole on its shoes could not be trademark protected because it was functional in the context of the fashion world, where (as Mr. Louboutin, himself, admitted) it was used to evoke feelings of "flirtatious[ness]" and "sex[iness], and to "attract[] men to the women who wear [Louboutin] shoes." Id. at 453. The color red has been characterized as evoking similar psychological responses outside of Mr. Louboutin's admissions. See John Williams, Your Brand's True Colors (March 7, 2007) (available at ("Red activates your pituitary gland, increasing your heart rate and causing you to breathe more rapidly. This visceral response makes red aggressive, energetic, provocative and attention-grabbing."). In the high stakes world of women's fashion, it would seem indisputable that a "sexy" and "attention-grabbing" product will sell. In turn, it would seem that the use of the color red in women's fashion would serve a useful aesthetic function.

The Second Circuit did not believe that was the case, though. It acknowledged that the "ultimate test of aesthetic functionality . . . is whether the recognition of trademark rights [in an aesthetic design feature] would significantly hinder competition." Id. at 221 (quoting Qualitex, 514 U.S. at 170) (alteration in original). Where aesthetic functionality is raised as a defense to trademark infringement, the Second Circuit explained, "courts must 'inquire' as to whether recognizing the trademark 'would put competitors at a significant non-reputation-related disadvantage.'" Id. (quoting TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32-33 (2001)). As the Second Circuit summarized it, "a mark is aesthetically functional, and therefore ineligible for protection under the Lanham Act, where protection of the mark significantly undermines competitors' ability to compete in the relevant market." Id. at 222. The court also cautioned that, "[b]ecause aesthetic function and branding success can sometimes be difficult to distinguish, the aesthetic functionality analysis is highly fact-specific." Id.

Despite outlining in great detail the aesthetic functionality doctrine, the Second Circuit never reached the issue on the merits. The court instead determined that the plaintiff's trademark protection should be limited in a manner that would result in a finding of no infringement (and thus no need to perform the aesthetic functionality analysis). In other words, the Second Circuit found that the plaintiff's trademark protection could extend only to its use of red soles on shoes with contrasting uppers (for example, black or white high heels with red soles). Id. at 225. The defendant's accused products, on the other hand, were monochromatic--that is, their red soles matched their red uppers, and therefore could not be found to infringe the plaintiff's trademark as limited by the Second Circuit. Id.

In so ruling, the Second Circuit avoided deciding more difficult issues. For example, the court did not need to decide whether, in the high end women's fashion industry where hundreds and even thousands of dollars may be spent on a single pair of shoes, there could really be any legitimate risk of consumer confusion based on a given designer's use of a color. The court also avoided making a determination of the relevant market, which presumably would have included arguments relating to price point and other fact intensive issues. Most importantly, the court avoided deciding whether the use of red soles, in this particular market and in the context of high end fashion, should be considered aesthetically functional since the color red (as Mr. Louboutin admitted) uniquely evokes certain psychological responses that would seem to drive consumer demand beyond any correlation consumers might draw between the color red and the Louboutin brand. In other words, by limiting the scope of Louboutin's trademark protection so that the defendant could not be found to infringe, the Second Circuit avoided ruling that Louboutin could be, forever, the only shoe maker that could legally sell black or white high heels which, when viewed from behind, appear "flirtatious," "sexy," and "attention-grabbing" as a result of bright red soles. Had the Second Circuit so ruled, any woman who wished to purchase such a pair of high heels, with red soles which Mr. Louboutin characterized as "sexy" and "attract[ing] men to the women who wear my shoes," would have as her only option purchasing shoes that cost hundreds or even thousands of dollars. Such a ruling would seem inconsistent with trademark law's goal of preserving a "vigorously competitive market for the benefit of consumers." See id. at 216 (internal quotation marks omitted).