Westchester Women's Bar Association
NYSBA

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Chanel, Inc. (“Opposer” or “Chanel”) filed an Opposition proceeding against an individual applicant Jerzy Makarczyk (“Applicant”) who filed to register the mark CHANEL. The Applicant was interested in protecting the mark CHANEL for real estate development and construction of commercial, residential, and hotel properties in International Class 37. Chanel opposed the application on the grounds of dilution by blurring under §43(c) of the Trademark Act, 15 U.S.C. §1152(a), likelihood of confusion, and false suggestion of a connection under the Trademark Act. Opposer uses the CHANEL mark on a variety of  goods, including but not limited to apparel, jewelry, sunglasses, perfume, and cosmetics. And also for retail store services in the field of clothing and accessories. The Trademark Trial and Appeal Board (“TTAB” or “Board”) did not reach the issues of likelihood of confusion or false suggestion of a connection under the Trademark Act. See Chanel, Inc. v. Jerzy Makarczyk, Opposition No. 91208352 (May 27, 2014)[precedential].

The Trademark Act Sections 13 and 43(c) (15 U.S.C. §§ 1063 and 1125(c)) provide a cause of action for dilution. Dilution by blurring is an association arising from a similarity between a trademark or trade name and a famous mark that impairs the distinctiveness of the famous trademark. The Court of Appeals for the Federal Circuit set forth four elements a plaintiff must prove in order to succeed on this type of claim in a Board proceeding:

(1)   Plaintiff’s trademark must be “famous” and “distinctive”;

(2)   Defendant must be using a mark in commerce that allegedly is diluting the Plaintiff’s famous mark;

(3)   The Defendant’s use of the trademark must have begun after the Plaintiff’s mark became famous; and

(4)   The Defendant’s use is likely to cause dilution by blurring.

This standard was set forth in Coach Services, Inc. v. Triumph Learning LLC, 668 F.3d 1356, 101 USPQ2d 1713, 1723-1724 (Fed. Cir. 2012). To address the first element, the following factors must be reviewed: (1) the duration, extent, and reach of the brand’s advertising and publicity; (2) the amount, volume, and extent of sales or services;  and (3) the extent of actual recognition of the trademark (wide spread recognition by the general public is required). Proving the level of fame required for a dilution claim is a high standard and the opposer has the burden of proof. See our blog post entitled TTAB Precedent – How Fame Impacts A Likelihood Of Confusion Determination, to compare the requirements for a fame showing under different standards.  Another way to determine if a mark is “famous” for dilution purposes is to answer this question in the affirmative, if the general public encounters the trademark, will it associate the trademark with the mark’s owner?

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On May 20, 2014, Blue Sphere Inc. doing business as Lucky 13 (hereinafter “Lucky 13” or “Plaintiff”) and Robert Kloetzly filed a lawsuit in California Federal Court against Taylor Swift (hereinafter “Swift”) and her business entities alleging trademark infringement, unfair competition, trademark dilution, and common law misappropriation. Plaintiff is seeking injunctive relief, Swift’s profits, his lost profits, damages, including punitive damages and attorney fees. Lucky 13 owns multiple U.S. Trademark Registrations for LUCKY 13 for goods included but not limited to the following categories: clothing in International Class 25, various types of bags and purses in International Class 18, jewelry in International Class 14, hair products and body sprays in International Class 3, and other consumer goods related to automobiles and motorcycles. It is alleged that Swift started selling clothing under the mark LUCKY 13 sometime in 2012. In the Complaint, it is also alleged that Swift also started to sell other merchandise under the brand LUCKY 13 in and about that same time.

Lucky 13 further claims that Swift had filed about sixty federal trademark applications with the United States Patent & Trademark Office (USPTO). Many of these trademarks were for apparel and similar goods. It seems curious that Swift pursued trademark registrations for other clothing brands, but choose not to file an application for her mark LUCKY 13. Lucky 13 contends that this was because Swift was aware of their use of LUCKY 13, and knew that an application would be refused. There is ample discussion in the Complaint with regard to Swift being a smart entrepreneur. However, this is a strategic and backhanded compliment to imply that she should have known better, before violating Lucky 13’s trademark rights.

Plaintiff contends that Swift’s use of the mark LUCKY 13 is likely to cause confusion as to source and origin because both parties’ goods are sold in the same distribution channels at similar price points. The parties appear to be targeting the same consumer demographic. Plaintiff claims that Swift markets herself as liking fast cars and dangerous men and by admission Lucky 13 targets the same consumer type.

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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.

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This recent precedent of the TTAB involves concurrent use registration. This trademark concept allows two unrelated trademark owners to co-exist with legally identical trademarks, each having a registration limited to a distinct geographic area. As practitioners we work with clients with concurrent use issues. However, the TTAB does not render many concurrent use decisions and even fewer are precedential. For these reasons, it is important to pay close attention to the Board’s Findings in Boi Na Braza LLC v. Terra Sul Corporation a/k/a Churrascaria Boi Na Brasa, Concurrent Use No. 94002525 March 26, 2014 [precedential].  In 2002 Boi Na Braza Inc. (hereinafter “Plaintiff”) registered two marks for the term BOI NA BRAZA (one word mark, the other a design mark incorporating the term “Boi Na Braza”) for restaurant services. Terra Sul Corporation (hereinafter “Defendant”) petitioned to cancel the word mark for BOI NA BRAZA, based on priority of use of its mark BOI NA BRASA for restaurant services and other related services. The Board granted the cancellation petition. Then, Plaintiff initiated a concurrent use proceeding for a geographically restricted registration.

Concurrent use proceedings are governed by the Trademark Act, Section 2(d) of 15 U.S.C. §1052. There are two conditions precedent to the issuance of concurrent registrations. These two conditions are as follows: (1) the parties must be entitled to concurrent use of the marks in commerce, and (2) there would be no likelihood of confusion, mistake, or deception as to the source of the goods or services in the market place resulting from the continued concurrent use of the marks. See America’s Best Franchising Inc. v. Abbott, 106 USPQ2d 1540 (TTAB 2013). In addition, the Plaintiff’s use must have commenced prior to the filing date of the Defendant’s trademark application.

The first requirement means that one must adopt the trademark in good faith without the knowledge of a prior user in another geographical area, without any confusion as to source and there must be a level of public recognition. See Woman’s World Shops Inc. v. Lane Bryant Inc., 5 USPQ2d 1985 (TTAB 1988). The Plaintiff satisfied this mandate. The second condition precedent requires that there be no likelihood of confusion if a geographic restriction is applied to the registration. To determine this the Board looks to how long the parties coexisted without evidence of actual confusion. Here, there has been 15 years of coexistence without confusion as to source. This weighs in favor of allowing concurrent use. In addition, the Board and Courts have held that with certain types of services, specifically restaurant services, confusion can be avoided with identical trademarks and like services if there are geographic restrictions. See Pinocchio’s Pizza v. Sandra Inc., 11 USPQ2d 1227 (TTAB 1989); Nark Inc. v. Noah’s Inc., 212 USPQ 934 (TTAB 1981). The reasoning is that restaurant services by definition are rendered in a particular geographic area. Therefore, the second requirement was also satisfied.

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On May 2, 2014, The Trademark Trial and Appeal Board (TTAB) rendered this precedential decision.  Inter IKEA Systems B.V. v. Akea, LLC, Opposition No. 91196527 (May 2, 2014) [precedential]. This decision sends a message to trademark owners (even to those owners of “famous” marks). Similar trademarks will be allowed in the marketplace, if there are differences in the goods and services, channels of trade and if consumers are using a moderate degree of care in their purchasing decisions. In this case, Akea, LLC (the “Applicant”) filed an application for the mark AKEA.  The trademark application identified Class 5 for nutritional supplements, herbal supplements, and vitamin and mineral supplements, Class 35 for retail services by direct solicitation by sales agents in the field of nutritional supplements; online retail services for nutritional supplements, and advice in the field of career and business opportunities, and Class 44 for providing advice on lifestyle topics of nutrition, diet, nutritional supplements, and gardening (this list is abbreviated). Inter IKEA Systems B.V. (the “Opposer”) challenged the application on the grounds of likelihood of confusion and dilution.

The Board first reviewed whether there would be a likelihood of confusion on the part of the consumers when encountering the marks. To make this determination, the probative facts in evidence would be considered along with the relevant likelihood of confusion factors. In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973). See our firm page entitled, Simple Trademark Rules and Considerations where the thirteen factors are set forth. See also our blog post entitled, Narrowing Identifications In Your Trademark Application May Bring Favorable Results, where the Board was swayed by the differences in the marks and determined that there was no likelihood of confusion. In this case, The TTAB focused on five factors, similarities between the marks, differences between the goods and services, fame of Opposer’s mark, trade channels of the parties, and the consumer’s degree of care in purchasing decisions.

The Board’s analysis is particularly interesting because it found that Opposer’s trademark for IKEA was famous (for retail store services in the area of furniture, housewares, and home furnishings) under the likelihood of confusion determination, but not famous under the dilution analysis. See our blog post entitled, TTAB Precedent -How Fame Impacts A Likelihood Of Confusion Determination. Keep in mind that under the likelihood of confusion analysis, fame is just one factor among multiple factors to  consider. Regarding the goods and services listed in classes 5 & 44, when balancing the remaining factors, the Opposer’s fame was outweighed by differences in the goods and services, channels of trade, and the degree of care exercised by the Applicant’s and Opposer’s relevant consumers. However, there was a different result for the services listed in International Class 35.

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A recent decision from the TTAB (Trademark Trial and Appeal Board or the Board) provides us with further guidance in an area that can be fraught with subtleties in trademark law. See In re Nature’s Youth, Inc., Serial No. 85747419 (March 13,  2014) [not precedential]. Here, the Examining Attorney did not submit enough evidence into the record to support its decision of refusal of the trademark application. The Board found that there was insufficient proof on the prong of “materiality”.  The TTAB could not uphold a refusal to register the mark based on the mark  being primarily geographically and deceptively misdescriptive.

The Applicant in this case is Nature’s Youth Inc. and it filed a trademark application with the United States Patent & Trademark Office (USPTO) to register the mark NY for cosmetics, face creams, and lotions for cosmetic purposes. The Examining Attorney refused the application on three grounds: (1) the mark was geographically deceptive; (2) the mark was primarily geographically deceptively misdescriptive; and (3) failing to comply with a request for information concerning the goods. The Applicant appealed this decision.

women-make-up-1378868-mThe test for determining whether a mark is either geographically deceptive or primarily geographically deceptively misdescriptive is the same.  See TMEP 1210.05(b) for the elements of a §2(e)(3) refusal. The Examining Attorney must submit proof into the record to demonstrate four criteria. The first is that the primary significance or meaning of the mark is generally a known geographic place. The TTAB agreed with the Examining Attorney on this prong. The Board held that “consumers viewing applicant’s proposed mark NY on or in connection with the identified goods will understand this as an abbreviation for New York.” See In re Nature’s Youth, Inc., Serial No. 85747419 (March 13, 2014) [not precedential].  Although the Applicant submitted evidence to show that the term “NY” had different meaning other than New York, the meanings were obscure and had no relationship to the goods identified in the trademark application.

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One week ago in a precedential opinion, the TTAB affirmed the Examining Attorney’s refusal of the mark TOURBILLON & Design filed by The Swatch Group Management Services AG (hereinafter either “Applicant” or “Swatch”). The proposed trademark TOURBILLON & Design was seeking registration for  “jewellery, horological and chronometric instruments” in International Class 14. See In re The Swatch Group Management Services AG, Serial No. 85485359, April 18, 2014 [precedential]. The basis for the refusal was Section 2(e)(1) of the Trademark Act on the ground that the trademark was merely descriptive of its goods. A term is merely descriptive of goods or services if it communicates to consumers an immediate idea of a quality, ingredient, characteristic, feature, purpose, function, or use of the goods or services. See In re Chamber of Commerce of the U.S., Serial No. 675 F.3d 1297, 102 USPQ2d 1217, 1219 (Fed. Cir. 2012). See also our blog post entitled King.com Limited Abandons Its Federal Trademark Application For Candy, where we discuss how merely descriptive marks may be registered on the Supplemental Register.

Whether a mark is merely descriptive is determined in relation to the goods and services as identified in the trademark application. A finding that a trademark is merely descriptive is a factual finding. This determination must be based on substantial evidence. See In re Bayer Aktiengesellschaft, 488 F.3d 960, 82 USPQ2d 1828, 1831 (Fed. Cir. 2007). It is important to keep in mind that the question to ask when evaluating a term for descriptiveness is whether someone who knows what the goods and services are will understand the mark to convey information about the goods and services. See DuoProSS Meditech Corp. v. Inviro Medical Devices, Ltd., 695 F.3d 1247, 103 USPQ2d 1753, 1757 (Fed. Cir. 2012). Often, applicants believe that the central inquiry is whether someone presented with the mark could guess what the goods and services are; however this is incorrect.

Swatch’s trademark consisted of the word “Tourbillon” and a design of a tourbillon. The Examining Attorney submitted into evidence an excerpt from wikipedia.org that essentially stated that a “Tourbillon” was an addition to the mechanics of a watch escapement. The Applicant admitted that the term Tourbillon described a mechanism that is part of the escapement found in highly specialized watches. There were also several other descriptions admitted into the record by the Examining Attorney, all consistent with the definition cited in wikipedia.org. Moreover, Applicant voluntarily entered a disclaimer of the exclusive right to use Tourbillon apart from the mark as shown (then later tried to restrict it to only certain goods). This evidence is incredibly persuasive because the applicant by admission acknowledged that the term lacked distinctive value for the goods identified in the trademark application.

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In the recent case of In re Innovation Ventures, LLC, Serial No. 85637294 (March 25, 2014) [not precedential] the Trademark Trial and Appeal Board (TTAB) held that the slogan “HOURS OF ENERGY NOW” for dietary supplements and energy shots did not function as a trademark.   After the Examining Attorney made its final refusal to register Hours Of Energy Now based on its opinion that the mark was incapable of functioning as a trademark to identify the source of origin of the goods, the Applicant appealed to the TTAB.  A slogan or an advertising phrase can register at the United States Patent & Trademark Office (USPTO) on the Principal Register, if it is capable of acting as a source indicator.  See In re Morganroth, 208 USPQ 284, 287 (TTAB 1980), where the Board held that an advertising phrase may register if it did not fall within one of the restrictions under Sections 2(a), (b), (c), (d), and the subsections of Section 2(e) of the Trademark Act. When discussing slogans and advertising phrases, it’s important to keep in mind that even an inherently distinctive mark can be refused for failing to function as a trademark.

In In re Innovation Ventures, LLC  the Examining Attorney first refused the trademark application on the basis of merely descriptiveness and failure to function as a trademark. However, after further consideration the Examiner withdrew the descriptive refusal and relied on the stronger basis of refusal, failure to act as a source indicator. Slogans can be refused for either descriptiveness or for failing to function as a trademark.  A good example of a slogan that was refused due to descriptiveness is the case of In re Sanda Hosiery Mills, 154 USPQ 631 (TTAB 1967).  In that case, the Board held that the slogan THE BABY BOOTIE SOCK THAT WILL NOT KICK OFF for socks was merely descriptive of the goods and thus, refused registration on the Supplemental Register. For more on descriptive refusals, see our blog post entitled King.com Limited Abandons Its Federal Trademark Application For CANDY, where this subject is discussed in more detail. Since the Examining Attorney withdrew the descriptive refusal, the only issue on appeal was whether the mark HOURS OF ENERGY NOW could function as a trademark and distinguish its goods from others.

The critical inquiry in determining this issue is how will the public perceive the proposed trademark. Relevant factors to consider would be specimens in use and third party use of the relevant advertising phrase. Applicant’s specimens used the phrase Hours Of Energy Now in conjunction with other informational text and in a less prominent position than the trademark 5-Hour Energy. Their packaging contained a listing of the following phrases: Hours of energy now, No crash later, Sugar free and 0 net carbs. This use appears to be merely informational and not capable of registration as a mark. The slogan is not set apart from the other laudatory phrases in anyway and simply describes characteristics of the product. The TTAB found that this usage underscored the informational nature of the trademark.

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This Trademark Trial and Appeal Board (TTAB) dispute involves the mark SHAPE (in both standard character and stylized format) owned by Weider Publications, LLC (Opposer) and the trademark SHAPES in standard character format owned by D & D Beauty Care, LLC’s (Applicant).   See Weider Publications, LLC v. D & D Beauty Care Company, LLC, 109 USPQ2d 1347 (TTAB 2014) [precedential]. The Applicant attempted to register SHAPES for beauty salon services, day spa services, and health spa services. The Opposer owns several registrations for the mark SHAPE, among them : (1) a magazine relating to physical fitness and exercise, in print format and online; (2) DVDs and CD-Roms featuring audio and video recordings in the areas of health, fitness and nutrition; and (3) apparel. Weider Publications filed a Notice of Opposition on the grounds of priority of use, and likelihood of confusion under Section 2(d) of the Trademark Act, and likelihood of dilution by blurring under Section 43(c) of the Trademark Act. The Applicant did not contest the Opposer’s priority of use. Therefore, the only issue to be determined is likelihood of confusion.

Likelihood of confusion must be proven by the Opposer by a preponderance of the evidence. When one of the parties alleges its trademark is “famous” under the definition of trademark law, often the TTAB will commence its analysis with the fame factor under the du Pont paradigm. Fame has a different definition under likelihood of confusion than it does under dilution. For purposes of likelihood of confusion, fame arises as long as a ” significant portion of the relevant consuming public … recognizes the mark as a source indicator.”  See Palm Bay Imports Inc. v. Veuve Clicquot Ponsardin Maison Fondee En 1772, 396 F.3d 1369, 73 USPQ2d 1689, 1692 (Fed Cir. 2005). Other relevant factors are volume of sales, length of time the trademark has been used in commerce, the reputation of the products and services, advertising expenditures of the goods and/or services sold under the mark, and recognition by independent sources of the goods and/or services identified by the trademark.

The evidence demonstrated that the Opposer had used the trademark SHAPE with its goods and services for over 30 years to identify its print magazine and for 15 years in connection with its online magazine. The print version of SHAPE magazine reached over 1.6 million readers while the online SHAPE magazine received an average of 3 million visitors per month. In addition, there is a newsletter wherein 700,000 readers subscribe. In the end, the audience for SHAPE magazine across all platforms is approximately 6 million per month. Deposition testimony supported these facts. There was also testimony regarding what an advertiser spent in the print version of the magazine for a full page ad – $182,000. SHAPE magazine generated substantial revenue since 2009.  It received multiple awards and widespread media coverage. Regarding the fame determination, the Board concluded that for purposes of likelihood of confusion, the SHAPE marks were famous for its print magazine and online content.

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Trademark practitioners will encounter a 2(d) Refusal (refusal due to a likelihood of confusion with a prior trademark registration) or a Notice of Opposition sooner or later in their practice. The case of Embarcadero Technologies, Inc. v. RStudio, Inc., 105 USPQ2d 1825 (TTAB 2013) [Precedential], reminds practitioners and applicants alike that the outcome of a 2(d) refusal or of an Opposition may be favorable if the Applicant is able to narrow its identification in such a manner as to avoid a likelihood of confusion with a prior registered mark or a senior user. A defendant may assert an affirmative defense by moving to restrict its goods and services.

Here, the applicant filed three applications for RSTUDIO in standard character format in International Classes 9, 41, & 42, for the following goods and services: computer software for statistical computing; computer software for software applications development; providing training in the use of computer software; providing training in the use of statistical methods; application service provider, computer software consultation, design and development of software; and technical support services. The Opposer filed a Notice of Opposition based on the grounds of priority and likelihood of confusion. Its registration is for ER/STUDIO in standard character format for entity relationship modeling software for SQL databases.

Before discovery closed, Applicant filed a motion to amend the application to narrow his identifications (limit his description of the goods and services). Under the Lanham Act Section 18, the Board is given equitable power to restrict the goods or services in a trademark application or registration. See 15 U.S.C. §1068, and TBMP 311.02(b). The current description of the Applicant’s goods is relatively broad.  From a reading of the goods in International Class 9 it is presumed that the software incorporates all types of statistical computing software. Similarly the software design, development and training services are broad enough to include all types of software design, development and training, including those described in Opposer’s registration. However, based on the proposed modification to the identification, Applicant will narrow the descriptions to the field of “advanced” statistical software using the “R” computer software language.

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