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Federal Circuit Affirmed: STONE LION CAPITAL and LION CAPITAL Confusingly Similar

The two parties involved in this matter are Lion Capital, LLP (hereinafter referred to as either “Opposer” or “Registrant”) and Stone Lion Capital Partners, L.P. (hereinafter referred to as the “Applicant”). The Opposer began using the trademarks LION AND LION CAPITAL in the U.S. in 2005 and filed for registration of the marks under Section 44(d) the Trademark Act. The United States Patent & Trademark Office issued registrations for these marks in 2008 and 2009 respectively. The applicant filed an intent-to-use trademark application on August 20, 2008 for the word mark STONE LION CAPITAL. Both parties identified specific financial services in their respective applications. The Applicant disclaimed the term “Capital” in its trademark application. A disclaimer is a statement within the application wherein the Applicant does not claim the exclusive right to use a specific term or element apart from the mark as shown. See Trademark Manual of Examining Procedure (TMEP) §1213. Essentially, no rights are being asserted in the disclaimed term standing alone, but rights are claimed in the composite mark. The Opposer filed an Opposition with the Trademark Trial and Appeal Board (hereinafter “TTAB” or “Board”) claiming a likelihood of confusion will result if the application for STONE LION CAPITAL registers.

The TTAB refused registration of the Applicant’s mark for STONE LION CAPITAL and the Federal Circuit affirmed the decision. See Stone Lion Capital Partners, L.P. v. Lion Capital, LLP, 110 USPQ2d 1157 (Fed. Cir. 2014) [precedential]. The Board conducted the likelihood of confusion analysis according to the thirteen factors set forth in the case In re E.I. du Pont Nemours & Co., 476 F.2d 1357, 1361 (C.C.P.A. 1973). The Applicant’s appeal to the Federal Circuit focused on alleged errors made by the Board with respect to the comparison of the marks, the comparison of the classes of consumers and trade channels, and the level of sophistication of the purchasers of the services (factors 1, 3, & 4). The second factor was not challenged because the TTAB determined that the parties’ respective investment services were legally identical.

Regarding the comparison of the marks, the Board pointed out that the Applicant’s mark STONE LION CAPITAL incorporated the entirety of both of the Registrant’s marks (LION and LION CAPITAL). “LION” was considered the dominant part of the marks. Adding the term “Stone” although a non-descriptive word in relationship to the services, was insufficient to distinguish the trademarks. The Federal Circuit agreed with the Board’s conclusion that the marks were similar in sight, commercial impression, sound, and meaning. This factor favors the Opposer.

The Trade channel analysis did not need to be especially intricate because some of the recited services in the parties’ application and registration were legally identical. When this finding is made by the Board, it frequently concludes that the classes of consumers and channels of trade are the same. The TTAB is required to focus on the identification of services in the application and in the registration. See Octocom Systems, Inc., v. Houston Comp. Svcs., Inc., 918 F.2d 937, 942 (Fed. Cir. 1990). Applicant argued that since there was no overlap of real world investors, the warranted conclusion was there were different classes of consumers. This is not a persuasive argument because the Board is not required to review real world conditions. A trademark application without restrictions on trade channels or classes of consumers cannot be narrowed by testimony. Id at 943.

In connection with the sophistication of potential customers, the Applicant again incorrectly argues that real world conditions prove that their clientele is sophisticated. Applicant overlooks the fact that the application contains a broad scope of services. The Board held that the recited services could be offered to ordinary consumers. Although ordinary consumers use care when purchasing financial services, this does not equate to this group of consumers being immune from confusion in the marketplace.

Moreover, Board precedent mandates that this decision should be based on the least sophisticated potential group of consumers. Gen. Mills, Inc., v. Fage Diary Proc. Indust. S.A., 100 USPQ2d 1584 (TTAB 2011). Therefore, similar to the first and third factors, the fourth factor also favors the Opposer. The Federal Circuit held that the Board’s reasoning was sound. It also determined that the record supported the Board’s ultimate conclusion that the Opposer established by a preponderance of the evidence that STONE LION CAPITAL was likely to cause confusion with the marks LION AND LION CAPITAL. The refusal to register STONE LION CAPITAL was affirmed.

Conducting likelihood of confusion analyses is a skill learned over time. The lawyers at our firm have years of experience with this type of analysis. Please feel free to contact one of our NY trademark attorneys for a courtesy consultation with regard to your trademark matter.