Service Mark Strength Can’t Be Established By A Strong Trademark

"orange grove trees where Sunkist has strong trademark rights can't establish service mark strength"

Trademark strength for likelihood of confusion purposes is often misunderstood for fame in the context of dilution. The two concepts are different with fame for dilution being difficult to achieve. The common mistake service mark owners make is to assume that because their rights are strong for particular goods or services that this strength transfers to other goods or services. Trademark strength in the likelihood of confusion context does not transfer this way, which is a lesson Sunkist Growers, Inc. learned too late.

Sunkissed Families sought to register the service mark SUNKISSED FAMILIES (in standard characters with FAMILIES disclaimed) for “information in the field of parenting concerning the health of children” in International Class 44. The Trademark Office approved the mark for publication and Sunkist Growers, Inc. opposed.

Sunkist Growers plead numerous registrations for marks containing SUNKIST in connection with a wide variety of goods and services. However, because Sunkist Growers did not plead a family of SUNKIST marks, the Board focused on the registration with the most relevant description; namely, SUNKIST KIDS (Stylized) for “education and entertainment services, namely, providing a website featuring games, quizzes, experiments, educational lesson plans for teachers and educators, and related multimedia materials all in the field of food, health, and diet for the benefit of children” in Class 41. All trademark searchers should note that the Board looked for related services descriptions not overlapping International Class numbers.

Sunkist Growers argued that its mark was commercially strong entitling it to a broad scope of rights. The Board found that while Sunkist Growers provided evidence of its strength in the fruit field it provided no evidence of the strength of the SUNKIST KIDS mark in the education and entertainment services field. Therefore, the Board held that the SUNKIST KIDS mark was entitled to a normal scope of protection afforded to inherently distinctive marks. Sunkissed Families was only able to must 9 instances of third-party use of the SUNKIST mark, which was less than the 10 third-party registrations or use needed to establish conceptual weakness.

Brand is Not Just a Marketing Expense, It’s a Company Opportunity

"marketing materials that are part of marketing expense"

Brand is commonly thought of as the marketing department’s responsibility. And if the marketing expense is high, that should translate into a high brand valuation. But brand is not just a marketing responsibility.

Truly Inc. published a podcast with Tracy Chong – co-founder of Strata Insights – about a brand method she helped create called Brand Economics. According to Ms. Chong, Brand Economics differs from Brand Valuation or Brand Evaluation because it considers all aspects of a business (human resources, operations, marketing, finance). These factors are then used to assign a financial qualification to the brand.

Brand drives revenue. In fact, according to a 2017 Strata Insights study, brand contributed to 34%-74% of the S&P 500’s value. Therefore, it is important to understand the brand’s ability to attract customers. According to Strata Insights, brand is not a marketing expense, it is an organizational opportunity.

As an organizational opportunity, a brand economics valuation looks at: the businesses customers, sales channels, distributors, product or service, pricing in each channel, partners, and the market at large. All aspects of the business can and does contribute to the customer’s experience with a brand.

A couple areas may be missing from Strata Insight’s model – although, Ms. Chong may not have disclosed every consideration during the podcast. The first is starting with the right name. If the theory of brand economics is a brand’s ability to attract customers, having the right name is a crucial starting point. Not only does the name have to be appealing, but it also has to standout from the crowd. Another reason why working with a naming professional is important for every business.

The second consideration focuses on the legal department and the enforcement of rights against unauthorized use of confusing similar trademarks. Ms. Chong explained that it is important to consider the entire business because any department can negatively impact the customer experience with a brand. One example she gave was the IT department designing a website to have three separate logins, which frustrates customers and creates a bad experience with the brand.

One reason to enforce trademark rights against confusingly similar marks is to prevent any negative experiences to be misattributed to your brand. This does not mean that a trademark owner needs to take on all comers, although bad trademark attorneys will say that you do. Enforcement needs to be strategic and thoughtful, but it is something that every brand owner should do because it could be the case that the brand economics assessment indicates that your business is doing all the right things to produce a high brand economic value, but the acts of another party is depressing the value of the brand.

List of the Top 50 Most Valuable Apparel Brands

"person wearing NIKE shoes are the the most valuable apparel brands"

Brand Finance issued its list of the Top 50 Most Valuable Apparel Brands, and topping the list for a second year is NIKE. Brand Finance used the same valuation methodology in its evaluation of the Top 500 Bank Brands. Rounding out the Top 10 Apparel Brands are ZARA, ADIDAS, H&M, CARTIER, LOUIS VUITTON, UNIQLO, HERMES, GUCCI, and ROLEX.

Examining the list reveals an important insight. The majority of luxury brands are associated with a well-known designer. PRADA was founded by Mario Prada in 1913. GUCCI was founded by Guccio Gucci in 1921. HERMES was founded by Thierry Hermes in 1837. LOUIS VUITTON was founded by Louis Vuitton in 1854. CARTIER was founded by Louis-Francois Cartier in 1847.

The non-luxury brands are not associated with designers and are all inherently distinctive marks. Nike was a goddess in Greek mythology who personified victory. Victory being suggestive of sports apparel. The North Face being suggestive of outdoor apparel. Under Armour is also suggestive of athletic apparel.

These non-luxury brands demonstrate the importance of starting the journey from trademark to well-known brand with a suggestive, arbitrary, or fanciful mark. The law rewards creativity, and that reward comes in part with a finding that the mark is conceptually strong. Conceptual strength forms the keystone upon which a commercially strong mark can be built.

Coming up with a suggestive, arbitrary, or fanciful mark that resonates positively with consumers is not easy. That is why working with a naming professional is important. While cost is a concern for startups, considering the cost of a rebrand not only in terms of money spent but also lost time puts into perspective the value you get with a professional namer. Because of their experience, professional namers have a better sense for what will resonate with consumers than the founder of a company who more often than not chooses a name that sounds goods or merely describes the goods or services, which is not where you want to be.

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.

Rare Loss for Plaintiff in Alcoholic Beverages TTAB Case

"Thunder Road whiskey bottle wins at TTAB"

Breweries, distilleries, and wineries that are defendants in Trademark Trial and Appeal Board cases have not fared well this year. More often than not, alcoholic beverage defendants foolishly cling to overly broad goods descriptions that ultimately prove to be their downfall. The scene was set for another plaintiff victory in a recent TTAB case, but in a rare turn of events the defendant prevailed because it properly offered sufficient third-party use evidence to establish the term in common with the plaintiff’s mark was conceptually weak.

Thunder Road Brands, LLC applied to register the mark THUNDER ROAD (in standard characters) for “alcoholic beverages, namely, Tennessee sour mash whiskey and moonshine.” E. & J. Gallo Winery opposed the registration of the THUNDER ROAD mark based on its prior registered mark THUNDERBIRD for the broad description “alcoholic beverages except beers.” Thunder Road Brands did not bring a motion to narrow E. & J. Gallo Winery’s broad description to the actual THUNDERBIRD product, which is a flavored fortified wine.

Accordingly, with the goods being legally identical – thus less similarity between the marks required for a likelihood of confusion to exist – and the marks sharing the THUNDER term in the first position, things were not looking good for Thunder Road Brands. Its only hope was to convince the TTAB that the THUNDER term was so incredibly weak that the difference between ROAD and BIRD was enough to avoid a likelihood of confusion.

E. & J. knew this and offered evidence of its commercial strength:  (1) continuous use since 1957 (over 60 years); (2) sales volume and revenue from 2009-2016; (3) advertising expenses from 2009-2015; (4) two YouTube videos showing a THUNDERBIRD television advertisement; and (5) third-party publicity in two songs, one by ZZ Top and the other by The Beastie Boys. The TTAB was unpersuaded by this evidence because it was stale and showed a downward trend. Strength or fame must be determined at the time of trial.

Similarly, E. & J. relied on two stale brand awareness studies, but more importantly E. & J. failed to properly authenticate the studies. Nevertheless, while the evidence did not establish fame for likelihood of confusion purposes, the Board did find that the evidence demonstrated the THUNDERBIRD mark was entitled to broader than normal scope of protection. However, based on what happened next, “broader than normal” probably means THUNDER used with a bird name.

Thunder Road Brands offered 25 third-party registrations and 13 Internet examples of THUNDER formative marks mostly for beer. These examples were relevant because the Board found that beer, wine, and spirits are related goods. The Board held that these third-party examples were enough to outweigh the evidence of commercial strength offered by E. & J. to the degree that it concluded the THUNDER term for alcoholic beverages is overall a weak term.

What makes trademark issues deceptively simple is the interplay between the likelihood of confusion factors, which are generally overlooked by attorneys that merely dabble in trademark law. In this case, because the Board found the THUNDER term was weak, the difference between ROAD and BIRD was sufficient to distinguish the marks despite the goods being legally equivalent.

The Heavy Burden of Proving Fame for Dilution Purposes

"Peter Piper Pizza has no trademark dilution fame"

Most companies that have been using a federally registered trademark for ten years or more often mistakenly assume that the mark is famous. Long periods of use is a factor in the ultimate fame determination, but fame for dilution purposes is much different than fame for likelihood of confusion purposes. In fact, trademark owners would be better offer not using the word “fame” in the context of a likelihood of confusion. Recently, we saw this mistake play out in a case before the Trademark Trial and Appeal Board.

OTG Experience, LLC filed applications to register the mark PETER PIPER and PETER PIPER SMARTRUCK (in standard characters) for a variety of mobile food related services. OTG Experience’s applications were published for opposition and Peter Piper, Inc. opposed their registration relying on its prior registrations for PETER PIPER PIZZA (in standard characters with PIZZA disclaimed) in connection with “pizza” and “restaurant services.”

Peter Piper Pizza was founded in Arizona in 1973, and has used the PETER PIPER PIZZA mark for over 40 years. The company generates about $300 million in annual revenue across about 143 locations (although 43 are in Mexico) and spends about $20 million annually in advertising. While these numbers are significant, they were not enough to establish the fame of the PETER PIPER PIZZA mark.

The Trademark Trial and Appeal Board held that it is the burden of the party asserting fame to clearly prove it. In other words, fame needs to be proven by clear and convincing evidence. This standard requires the evidence presented must be highly and substantially more probable to be true than not and the trier of fact must have a firm belief or conviction in its factuality.

What this means for trademark owners is that offering numbers alone is highly unlikely to result in a fame finding. What a trademark owner needs to do is offer context for the raw statistics to demonstrate the general reputation the mark was with the public. Unfortunately, more often than not, trademark owners fail to provide the necessary context and the fame assertion fails because of it. That is what to Peter Piper Pizza.

Nevertheless, the raw statistics were enough for the Board to find that the PETER PIPER PIZZA mark was on overall strong mark entitled to a broad scope of protection. OTG Experience tried to counteract the strength evidence by relying on third-party use. Unfortunately, OTG Experience could only find three examples, well below the 10 minimum it appears is required to establish the weakness of a mark.

Trademark Fame Lacking Admissible Evidence

"Misel Disel preshave liquid too similar to Diesel despite no trademark fame finding"

Plaintiffs arguing trademark fame for purposes of the likelihood of confusion analysis is about as common as defendants arguing the plaintiff’s trademark is conceptually weak. Plaintiffs want to establish trademark fame because strong marks are entitled to a broad scope of protection. For the record, trademark fame for likelihood of confusion purposes is different from fame for trademark dilution purposes.

More often than not, a trademark fame argument fails not because the evidence of fame does not exist, but because the plaintiff fails to properly admit the evidence to the Trademark Trial and Appeal Board. During the discovery period it is easy to get fixated on obtaining the evidence the party needs and not on the admissibility of the evidence being acquired. This was the problem Diesel S.p.A. encountered in its recent case before the Trademark Trial and Appeal Board.

Misel Disel, LLC filed an application seeking registration on the Principal Register of the mark MISEL DISEL (in standard characters) for “smooth shave enhancer, namely, pre-shave liquid.” The Trademark Office reviewed the application and found no conflicting marks that would bar registration under Trademark Act Section 2(d). The MISEL DISEL mark was published for opposition and Diesel S.p.A. opposed the registration of the mark.

Diesel was the owner of several prior registrations for DIESEL (in standard characters) and DIESEL formative marks, but the Trademark Trial and Appeal Board focused on one:  DIESEL (in standard characters) for, among other goods, “pre- and after shave creams and lotions.” The Board found that the MISEL DISEL and DIESEL marks were similar, the goods closely related, and there was no weakness based on the co-existence of third-party registrations. Misel only came up with three registrations for DIESEL and none were for goods remotely close to pre- and after shave creams and lotions.

Diesel argued that its DIESEL mark was famous for likelihood of confusion purposes. To support this argument, it relied on documents only. It offered no testimony, which was Disel’s fatal mistake.

Financial information is key to establishing trademark fame, but this information must be offered through testimony. It is not self-authenticating evidence. Web pages can be self-authenticating, but the Web pages are admissible of what they show on their face only, not to prove the truth of any matter asserted in the them.

Documents produced in response to a Document Request are also inadmissible unless other authenticated through a Request for Admission.

Because Diesel did not give any consideration to admissibility, it was left with minimal evidence on trademark fame and the Board was unable to find that the DIESEL was famous for likelihood of confusion purposes.