Confusion Exists Despite 20 Years of Trademark Coexistence

Generally, long periods of trademark coexistence between two marks weighs in favor of finding no likelihood of confusion. Unfortunately for MDR Fitness Corp., the Trademark Trial and Appeal Board found that the lack of actual confusion evidence after 20 years of trademark coexistence did not outweigh the other likelihood of confusion factors in favor of finding a likelihood of confusion existed.

MDR owns a federal registration for the mark CARDIO TONE (standard characters) for “dietary and nutritional supplements.” MDR disclaimed the word CARDIO. MDR filed its application for the CARDIO TONE mark on April 1, 2013 and the trademark registration issued on May 20, 2014. The claimed dates of first use of the trademark were November 1, 1997.

Ayush Herbs, Inc. filed a petition to cancel the CARDIO TONE mark on May 21, 2015. Ayush alleged that the CARDIO TONE mark was likely to cause confusion with its prior registered mark CARDITONE (standard characters) for “dietary supplements.”

As we have seen in many cases before, the Board found that the channels of trade and class of consumer overlapped because the identification of goods descriptions were unrestricted. MDR should have petitioned to partially cancel the CARDITONE registration to conform it to the marketplace reality.

The Board also found the CARDIO TONE and CARDITONE marks were similar. MDR offered 70 third-party registrations for marks using CARDIO for dietary supplements and other related goods and services. However, only 1 of the 70 third-party registrations was for the mark CARDI, which is far less that than the 10 registration minimum. Accordingly, the trademark coexistence of the other 69 third-party registrations did not establish a week mark. MDR should have included a dictionary definition that shows CARDI- is a known prefix for a number of heart related words including CARDIO. This would have helped all 70 third-party registrations become persuasive.

When it came to the lack of evidence of actual confusion despite 20 years of trademark coexistence, the Board said that it must examine this factor in connection with the actual marketplace to determine the opportunity for confusion to occur. It also noted how this factor is at odds with the presumptions it must find regarding overlapping channels of trademark and classes of consumers when the goods and services descriptions are unrelated. Nevertheless, because the Board found that the actual trade channels for CARDIO TONE and CARDITONE do not significantly overlap, the fact that there was no evidence of actual even though there was 20 years of trademark coexistence was not surprising. Therefore, the Board found that this lack of evidence was insufficient to outweigh the other factors in favor of finding a likelihood of confusion exists.

This is a good lesson on the importance of filing trademark applications early.

Lesson on Distinguishing Identical Words With Designs

It is a well settled principle that in the case of composite marks containing both words and a design, the verbal portion of the mark is the one most likely to indicate the origin of the goods. But that does not mean that a design is incapable of distinguishing two trademarks that use identical words. Whether the capability exists depends on how the design is used.

ChuChu TV Studios a/k/a ChuChu TV filed an application register the mark ABBY and a design of a hippopotamus in connection with various clothing items and plush toys. The Trademark Office refused registration of ChuChu TV’s mark on the ground that it was likely to cause confusion with the prior registered mark ABBY (in standard characters) for a variety of dolls. The Trademark Office found that dolls and plush toys are related, much like it found plush toys and toy figures were related about four months ago.

Despite the relatedness of the goods, ChuChu TV argued that its hippopotamus design that dominated the word ABBY by a large margin was sufficient to distinguish its mark from the prior registration for just the word. Unfortunately, the Board disagreed.

For a design to distinguish the use of identical words, it is helpful that the words are difficult to distinguish from the design. In such a case, the design is more likely to be perceived by consumers as dominating the words. In ChuChu TV’s case, the ABBY term was clearly separate from the hippopotamus design. In fact, the term ABBY appeared directly below the design.

As trademark searchers it is important to understand when a design is capable of distinguishing the use of two identical words. When reviewing trademark search results, we may be able to justify recommending to a client an otherwise problematic word mark.

10 Mark Threshold Met: Weak Trademark Found

MCNS Polyurethanes USA, Inc. offered enough third-party registrations to cross what we suggest is the 10 Mark threshold and it was rewarded with a weak trademark finding. MCNS applied to register the mark SUPERCORE (in standard characters) for, among other goods, polyurethane foam used as insulation. When the SUPERCORE mark was published for opposition by the Trademark Office, WFI Global, LLC filed a notice of opposition.

WFI alleged that MCNS’ SUPERCORE mark was likely to cause confusion with its prior registered mark U-CORE (in standard characters) also for polyurethane foam used as insulation. MCNS denied WFI’s allegations and asserted the affirmative defense that there was no likelihood of confusion between the marks.

MCNS offered 15 third-party registrations that included -CORE as a suffix for some type of insulation. Only one of the third-party registrations specifically mentions a foam insulation product and six of the third-party registrations are specifically for acoustic insulation not building insulation like the goods identified in the SUPERCORE application and U-CORE registration. Nevertheless, the Trademark Trial and Appeal Board found that the goods were close enough that it would give consideration to the six acoustic insulation registrations when assessing whether U-CORE was a weak trademark.

This is a much different approach than what the Board took in the LUNA case less than a month ago. In that case, the Board refused to give any consideration to numerous third-party registrations because the registrations did not identify the goods at issue; namely, women’s bicycle apparel. Instead, the third-party registrations identified only women’s apparel. Women’s apparel and women’s bicycle apparel were not close enough.

The Board found that the third-party registrations were sufficient to show  that the term CORE when used with insulation products have been “extensively adopted and registered . . . .” It then found the term CORE “has significance in the insulation industry which makes its [sic] suggestive [sic] of these types of insulation products.” Extensive use and suggestive are generally not terms used in the same sentence. Extensive use generally demonstrates the existence of descriptive not suggestive term.

Nevertheless, the Board correctly held that strength for likelihood of confusion purposes is not an all or nothing proposition. Instead, it exists on a sliding scale. While CORE may be a suggestive term when used in connection with insulation products, it exists in a crowded field, which lowers its conceptual strength.

Ultimately, the Board found that WFI’s U-CORE mark was a weak trademark. This finding paved the way for the Board’s ultimate finding of no likelihood of confusion between the two marks.

How to Standout When the Search Reveals a Saturated Market

As trademark searchers, one thing we need to be on the look out for is a saturated market. In a trademark context, a saturated market exists when multiple trademarks share the same element for related goods or services. We know this is important because it tells us that either the entire mark or a portion of it is conceptually weak and that consumers are likely to rely on something else to distinguish between goods or services.

Unfortunately, the Trademark Trial and Appeal Board and the District Courts have not given much guidance on what changes are sufficient to avoid a likelihood of confusion with one of the marks in the saturated market. Nevertheless, that does not stop trademark owners from asking the question and expecting a firm answer about what changes they can make to avoid a dispute with another member of the saturated market.

As a trademark searcher, you should never tell a trademark owner that if they make a change that no harm will come to them because there is no such thing as a perfect trademark search. Additionally, litigation in general is unpredictable and you cannot forecast with any real certainty how another member of the field will react to the trademark. But if the trademark owner asks the question, you can’t refuse to answer. Here are some things to consider when formulating your answer:

  1. There are degrees to the saturated market, and not all saturated markets are the same. First assess whether the saturated market as a few or numerous members;
  2. Saturated markets with few members require more distinctive changes. Stay away from adding descriptive terms; and
  3. Saturated markets with numerous members generally require less distinctive changes. It may be possible to add a descriptive term to distinguish the mark from the others in the market. However, adding a distinctive term is always the safer bet.

As always, if the possibility of a rebrand within at least the first five years of using the trademark would result is big setback for the trademark owner’s business, then avoid the saturated market all together and choose a new name.

American Airlines Sues Expedia Over ADD ON ADVANTAGE Mark

The stereotypical trademark bullying case is the big company picking on the small company. But as we saw yesterday, a big company suing a smaller company for trademark infringement does not necessarily mean the big company is a bully. And what we will talk about today demonstrates that trademark bullying can occur between equally sized companies.

American Airlines sued Expedia for trademark infringement because of its ADD ON ADVANTAGE program. Expedia’s program allows users to add on a discounted hotel booking after using the site to book airfare or a rental car. It is descriptive of a feature of its program. American Airlines alleged that this mark is likely to cause confusion with its AADVANTAGE mark for its customer loyalty program.

ADVANTAGE is a highly diluted mark when used in connection with a customer loyalty program. Click HERE to see BOB search for the ADVANTAGE mark “customer loyalty programs” and HERE for “frequent flyer services.“ The TROP ADVANTAGE mark is in the same travel industry as the AADVANTAGE mark and so are several other ADVANTAGE marks. Yet, American Airlines is willing to co-exist with these other marks.

Trademark bullying occurs when one party attempts to assert rights in a trademark beyond what it is reasonably entitled to assert. When a trademark owner, regardless of its size, attempts to assert broader rights, the trademark bully label is appropriate. Unfortunately, the label is in name only given there is no legal consequence to being a trademark bully.

American Airlines attempts to justify its trademark infringement claim by characterizing Expedia’s service as a bundling program similar to what American Airline’s offers under its AADVANTAGE program. Although the law is unsettled, some Courts have held that harm is to be presumed when a likelihood of confusion finding is made. American Airlines should hope that Texas is one of those courts because it is highly unlikely that it will suffer any actual harm from Expedia’s use of the AD ON ADVANTAGE mark.

Hard Rock Should Not Have to Pay Startup Attorney Fees

Hard Rock Cafe Inc. does not think it’s fair to pay the attorney fees of a startup after suing the young company for trademark infringement. Hard Rock Cafe is a chain of theme restaurants founded in 1971 that has expanded to include casinos, hotels, a park, and sports stadium.

RockStar Hotels launched in January 2017, but includes a healthy portfolio of properties. The meaning behind the RockStar name is not to convey a party atmosphere, but that the guests will be treated like celebrities. This distinct difference in meaning resonated with the United States District Court for the Southern District of Florida and Hard Rock’s motion for a preliminary injunction was denied. Now, RockStar Hotels is asking the Court to order Hard Rock Cafe to pay $462,000 to reimbursement the startup for its attorney fees.

Under the Trademark Act, attorney fees are recoverable by a party when the case is exceptional. Whether a case is exceptional depends on the totality of the circumstances, which considers the respective merits of the parties’ case and the manner in which a case is litigated. Because the Trademark Act does not allow the prevailing party to recover its attorney fees, an exceptional case finding is the only way a party that is being bullied by a trademark owner can recover the costs to defend itself.

In response to RockStar Hotel’s attorney fees petition, Hard Rock argued that it did the right thing and dropped its lawsuit after the court denied its request for a preliminary injunction. We are guessing it was hard for Hard Rock’s attorneys to say that with a straight face. However, without knowing all the details, it is hard to say Hard Rock’s lawsuit was completely without merit. The Hard Rock mark is used on hotels and on restaurants, which are related to hotel services.

The better question that Hard Rock should have asked itself is whether RockStar Hotels will either take business away from them or will harm its reputation such that it loses business from the negative association. Obviously, the answer to these two questions was no otherwise it would not have dropped the lawsuit. Losing at the preliminary judgment stage does not mean you are prevented from ultimately winning at trial.

Just because a lawsuit is unwise does not mean the plaintiff is a bully just because it is bigger than the defendant. What is more suspect is startup RockStar Hotel’s attorney fees petition for $462,000 when the case is only at the preliminary judgment stage. By the time a preliminary judgment motion is filed, not much has happened in the case, and responding to a preliminary motion is not a hundreds of thousands of dollars event.

Reinforcement that Trademark Classes are Irrelevant

The Trademark Trial and Appeal Board has said before that trademark classes are irrelevant to determining likelihood of confusion. A recent decision involving the SWISS certification mark reinforces this point. Pearl 9 Group, LLC filed a trademark application to register the mark I.W. SUISSE for “clocks and watches; parts for watches; watch bands and straps; ***; timepiece dial faces, and parts for timepieces ***” in International Class 14. The Trademark Office refused registration of Pearl 9’s mark on the ground that it was likely to cause confusion with the prior registered certification mark SWISS for “horological and chronometric instruments, namely, watches, clocks and their component parts and fittings thereof” in Class A.

The Board held that the classification as a certification mark has very little effect on our determination as to whether or not there is a likelihood of confusion. Because the certification mark owner does not itself use the mark, the question of whether there is a likelihood of confusion is based on a comparison of the mark as applied to the goods or services of the certification mark users.

Using trademark classes in a trademark search only helps to narrow the universe of marks that trademark searchers need to evaluate. From there, the trademark searcher is left to sift through the results using only intuition to determine whether anyone of those marks is likely to prevent the registration of the proposed mark being searched.

And any software program that includes only the similarity of the marks and irrelevant International Class numbers yet provides a “score” for the search results begs the question of what that score represents. If all the search is telling is that there are similar marks registered with the United States Patent and Trademark Office, that information is largely unhelpful and something you can discover by yourself and for free.

And over reliance on trademark classes will result in overlooked trademarks that may be consequential marks in the likelihood of confusion analysis. That may have been the case in the Pearl 9 case. Focusing solely on International Class 14 where jewelry and watches are classified, would have resulted in missing the SWISS certification mark in Class A.

Similar Trademarks Matter In The Dilution Analysis

The dilution analysis requires evaluating  search results for more than just trademarks sharing a similar element. It requires finding similar trademarks. This issue was on display in a recent Trademark Trial and Appeal Board decision.

Don Vintache Inc. filed a trademark application to register the mark DIAMONDS ON THE ROCKS (in standard characters) for “jewelry, namely, diamond jewelry.” The Trademark Office refused registration of Don Vintache’s mark on the ground that it was likely to cause confusion with the prior registered mark SILVER ON THE ROCKS (in standard characters) for “jewelry made in whole or significant part of silver.”

It was easy for the Board to find that the goods at issue were related. “Diamond jewelry” was broad enough to include silver settings. When it came to the similarity of the marks, the Board found, without identifying much, if any, support, that ON THE ROCKS was a unitary phrase. A unitary phrase has observable characteristics that render the elements inseparable. This finding would prove to be the downfall for Don Vintache’s dilution argument.

Don Vintache identified several third-party registrations that contained the term ROCKS for various jewelry items. However, the Board found that in all the examples offered, the meaning of “rocks” was different from the meaning of “on the rocks.” The clear meaning in the third-party registrations was “to be extremely enjoyable, pleasing, or effective.” The meaning of “on the rocks” is “served undiluted and with ice cubes; experiencing difficulties and likely to fail.” These different meanings rendered the third-party registrations and unitary phrase ON THE ROCKS dissimilar. Therefore, because the dilution analysis requires similar marks the Board gave no weight to the third-party registrations offered by Don Vintache.

In addition to the third-party registrations, Don Vintache offered five third-party online jewelry store websites that use ON THE ROCKS. Unfortunately, this was five examples short of the ten example minimum generally required by the Board. Accordingly, Don Vintache’s dilution argument failed, and the Board found that DIAMONDS ON THE ROCKS and SILVER ON THE ROCKS are similar trademarks.

Heisman Trophy Trust Sues Owners of Heisman Watch Website

The Heisman Trophy is awarded to the most outstanding player in college football. Unlike other most valuable player awards, the Heisman Trophy winner is spotlighted. ESPN, for example, has the Heisman Watch, but not the MLB, NFL, NBA, or NHL most valuable player tracker.

Chase Leavitt, Joseph Middleton, and Kimball Dean Parker are Utah residents and operate a website at the <> and <> websites. The website uses a regression model to identify statistical influencers that drive the Heisman votes. For example, it predicted with almost certainty that Baker Mayfield would win the Heisman Trophy in 2017. The website is purely informational.

The Heisman Trophy Trust sued Chase, Joseph, and Kimball in New York for, among other claims, federal trademark infringement. The Trust alleged that it licensed ESPN to use the HEISMAN mark in connection with the Heisman Watch offering on its website, and that the boys from Utah do not have the same authorization. In this case, the Trust has the upper hand, just not in New York.

There is nothing illegal about using another party’s trademark provided that use refers to the trademark owner. In legal terms, this is called nominative fair use. In this case, the boys from Utah could have called their calculator something else, but said that it predicts the likely winner of the Heisman Trophy. In the context, HEISMAN is clearly being used to refer to the Trust. However, the moment the term was included the trademark for the calculator, a line was crossed.

But the Trust will have a difficult time keeping the case in New York. A passive website does not confer personal jurisdiction in every state simply because the website is accessible by people in every state. And the <> website is a totally passive website. Its only purpose is to provide information about the Heisman Trophy race. Rather than fighting the battle in New York, Chase, Joseph, and Kimball should make the Heisman Trust fight the battle in Utah.

Study Shows Correlation Between A Trademark Filing And Growth

When dealing with intangible property, it is often hard for a business owner to understand why money should be spent on, for example, a trademark filing. Obtaining a trademark registration can be expensive depending on the path the business owner chooses when starting the trademark registration journey. And the effects of that decision to make a trademark filing may go unnoticed or the positive effects of that decision may be misattributed to something else in the business.

A working paper titled An Anatomy of U.S. Firms Seeking Trademark Registration was recently published by the National Bureau of Economic Research, and it may provide the clarity and understanding business owners need to see that a trademark filing makes a business money. The working paper was also released in perfect timing with the U.S. Senate’s Resolution to Increase Trademark Protection Awareness.

The study created a new dataset by combining the USPTO trademark filing data with firm characteristics, performance, and dynamics in the United States as reported by the U.S. Census Bureau. The paper then provided a first look at the connection between a trademark filing and the broader measures of firm outcomes.

The study found that a trademark filing is highly correlated with the ultimate success of an early entrepreneurship activity including employment and revenue growth. Firms that do not apply for a trademark registration in their initial years are unlikely to do so unless they experience employment growth. However, difference-in-differences analysis suggests sizable treatment effects, with firms making a trademark filing having substantially higher employment and greater revenue in the period following the first trademark filing.

Hopefully, this paper will be peer-reviewed and ultimately validated because, if accurate, it provides businesses with the most valuable justification for protecting a trademark: namely, that it likely will make you money.  More businesses need to recognize the importance of filing trademark applications and the data suggests that too few businesses understand this. According to the Kauffman Startup Index in 2017 there were about 540,000 new business owners each month during the year. That means for the entire year there were about 6.5 million new business owners in 2017. However, through the third quarter of 2018, there are only 480,111 new trademark applications that have been filed in 2018.

Every business, whether a startup or established enterprise, should pursue trademark protection for not only its business name, but also the names of its goods or services. But if you are going to spend the money to protect your brand, you might as well do it wisely. Engage a naming firm to help with the design of a new name and conduct a trademark search to make sure the name is available.