North Carolina Jury not Kind to Walmart in BACKYARD Lawsuit

"Woman counting money as jury orders Walmart to pay $95.5M"

About a month ago we talked about the trademark infringement loss Walmart suffered over its use of the BACKYARD GRILL mark. We reported that in the first case, Walmart was ordered to pay Variety Stores $32.5M. Walmart successfully appealed this decision and the case was retried before a jury. The jury found in favor of Variety Stores and the case entered the second phase where the jury would decide how much Walmart is obligated to pay Variety Stores.

The jury has spoken and has ordered Walmart to pay Variety Stores $95.5M. This is a little less than three times the $32.5M a judge ordered Walmart to pay Variety Stores in 2016. This is one of the larger damage awards involving trademark infringement, but million dollar and multimillion dollar damage awards are not uncommon in trademark infringement cases.

On August 22, 2018, DatabaseUSA.com, L.L.C. was ordered to pay Infogroup, Inc. $4M for the trademark infringement claim and $43.6M for the unfair competition claim. On July 31, 2017, iShow.com was ordered to pay Lennar Corp. $5.5M for its trademark infringement. On October 5, 2016, Costco Wholesale Corporation was ordered to pay Tiffany and Company $15.8M for trademark infringement.

Walmart made the decision to adopt a mark with known words and that shared the dominant term BACKYARD with another trademark owner. From a trademark searching perspective, marks comprised of known words generally exist to a certain degree in a crowded field. If you layer in international markets on top of it, the probability of finding a mark that is 100% in the clear in every jurisdiction is extremely low. When a trademark owner decides to adopt a mark with known words, the owner needs to accept some amount of risk and work to put himself and herself in the best defensible position should an issue arise.

A New Trend for the Relatedness of Goods or Services Factor?

"White Horse Auto dealership related goods or services to car washes"

A recent Trademark Trial and Appeal Board decision involving car dealerships and car washes may signal a change in how the Board will assess the relatedness of goods or services likelihood of confusion factor. White Horse Auto, LLC filed a service mark application to register the mark WHITE HORSE AUTO (in standard characters) for “automobile dealerships.” White Horse Wash, LLC opposed the registration of White Horse Auto’s application on the ground of priority and likelihood of confusion.

Not surprisingly, the Board found that the marks were virtually identical. And White Horse Auto failed to demonstrate that the WHITE HORSE phrase was diluted for automobile related goods and services. Ultimately, this case came down to whether the services at issue were sufficiently related to likely cause confusion.

The Board held that providing automobile-related services by the parties was not enough by itself to establish the services at issue were related. “A finding that the goods are similar is not based on whether a general term or overarching relationship can be found to encompass them both.” This a departure from cases the TTAB decided as early as last year. For example, in the SONIA SONI LIFE IS A RECIPE, the broad description “spices” was enough for the Board to conclude that the applicant’s goods covered the registrant’s goods. The only time the Board departed from this interpretation was when the goods or services descriptions at issue were vague or involved technical goods.

In the present case, there is nothing vague nor technical about “automobile dealerships” or “car washes,” nor is either description vague. Nevertheless, the Board looked at the real world marketplace to determine what the actual services were. And based on the similarities the Board found in the circumstances surrounding the marketing of the two marks, the Board concluded the services at issue were related. Unfortunately for White Horse Auto, its application was denied registration. But if at first you don’t succeed, it’s okay to try again.

More importantly for trademark searchers, could we be seeing a change in how the Board assesses the relatedness of the goods and services factor? This is definitely an issue to watch in 2019 as the Board decides more cases because the relatedness of goods or services factor is critical to not only conducting trademark searches but also assessing whether a likelihood of confusion exists between two marks.

Visual Similarity Sinks SEXIFIT Trademark Application

"Sexifit logo refused primarily because of visual similarity"

SEXIFIT is the name of a workout program primarily directed at women that focuses on strength and core. The workout was developed by a former NFL and NBA dancer. The name is a composite word comprised of a spelling variation of SEXY (i.e., SEXI) and FIT to form the unitary mark SEXIFIT. Unfortunately, the Board’s primary focus on visual similarity would lead to the downfall of a trademark application that included this term.

Procheer Fitness and Dance filed an application to register the mark THE OFFICIAL SEXIFIT & Design mark in connection with “providing fitness instruction services in the field of dance, and physical fitness.” The United States Patent and Trademark Office examined the application and finding no likelihood of confusion issue, published the mark for opposition.

During the 30 day opposition period, ICON Health & Fitness, Inc. opposed the registration of Procheer’s mark alleging it was likely to cause confusion with its prior registrations for IFIT. ICON Health & Fitness owns several fitness brands: Nordictrack, Freemotion, Proform, and iFit. The iFit brand is a mobile application combined with a virtual personal trainer. Although in the fitness or exercise field, a fitness class is different than personal training and definitely appeal to different classes of consumers.

Nevertheless, none of these limitations appeared in THE OFFICIAL SEXIFIT & Design application nor in any of the IFIT registrations. Accordingly, because the Trademark Trial and Appeal Board was forced to compare fitness and exercise with fitness and exercise, it had to conclude the services at issue were related. However, what was abnormal was the Board conclusion that ICON’s IFIT mark was famous for fitness instruction services when all the evidence presented demonstrated that IFIT may be famous for fitness equipment. Fame is not transferable this way.

When it came to the similarity of the marks, the Board gave no consideration to the difference in meaning between the THE OFFICIAL SEXIFIT & Design mark and IFIT mark. Likewise, it gave no consideration to the phonetic dissimilarity between SEXIFIT and IFIT. For trademark searchers, this is an example that visual similarity between two marks is generally the most important consideration when evaluating two marks.

The Board also ignored the design elements in the SEXIFIT & Design mark stating that the literal element is the most important because consumers use words to order and refer to goods and services. Focusing on the literal portion of the mark, the Board found that ICON’s entire IFIT mark was incorporated into the SEXIFIT portion of Procheer’s mark. This is another example for trademark searchers to pay attention to. If a prior registered mark is subsumed in its entirety in the mark you are searching and you can’t find dilution or have credible argument about the unrelatedness of the goods or services at issue, then the mark likely is unavailable.

Accordingly, primarily focusing on visual similarity, the Board granted ICON’s opposition and denied registration of Procheer’s THE OFFICIAL SEXIFIT & Design mark.

Who Wants Some Football with Their Commercials?

"mercedes-benz stadium in background of super bowl trophy and new england patriots and los angeles rams football helmets when most viewers cared more about the commercials"

Super Bowl LIII was the culmination of the 2018-2019 National Football League season. It was a hard fought game between the New England Patriots and Los Angeles Rams with the Patriots winning their sixth Super Bowl. Although the game was entertaining, a significant number of people tuned in just for the ads.

Prior to the Super Bowl, the American Marketing Association published some interesting statistics about the big game. According to the AMA article, the price for a 30 second advertisement was more than $5 million. In 2018, 114 million people watched the Super Bowl, which represents about a third of the United States population. About 25% of surveyed Super Bowl viewers consider the commercials to be the most important part of the game.

At first impression, these statistics convey that only a select group of companies are capable of taking advantage of the Super Bowl platform to promote their goods or services. But for trademark owners the statistics should represent something more. These statistics are the type of information trademark owners need to collect to establish consumer recognition of their brands for purposes of secondary meaning and to established the strength of their mark.

Spending $5 million on a commercial is a significant number, but if it reaches only a relatively small number of prospective purchasers then its significance decreases. Context is key when assessing secondary meaning and strength. As a trademark owner, you should track not only advertising spend but also advertising reach. Internet advertising makes this easy by collecting impression statistics, but this type of data should be collected for other forms of advertising as well.

If you watched the Super Bowl for the commercials, you can see who the winners and losers were by checking out the USA Today Ad Meter. You can even exercise your Super Bowl viewer right and weigh in with you opinion.