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“Conquesting”: Use of Rival’s Name as Keyword Search Term Isn’t Actionable Under Lanham Act

by Karen Gover | Nov 7, 2024 | Trademarks

Noting how rare it is for trademark infringement cases to be decided on summary judgment, the US Court of Appeals for the Ninth Circuit affirmed a district court’s grant of summary judgment finding that the plaintiff law firm failed to establish a likelihood of consumer confusion by virtue of the defendant’s purchase of a keyword search term. Lerner & Rowe PC v. Brown, Engstrand & Shely, LLC, et al., Case No. 23-16060 (9th Cir. Oct. 22, 2024) (Desai, de Alba, JJ.; Chen, Dist. J, sitting by designation) (Desai, J., concurring).

The parties in this matter are rival personal injury law firms based in Arizona. Lerner & Rowe, PC, is the larger of the two firms. It has 19 offices and has spent more than $100 million promoting its brand and trademarks in the state. Brown, Engstrand & Shely, LLC, does business as The Accident Law Group (ALG). From 2015 to 2021, ALG engaged in an internet advertising strategy called “conquesting,” whereby companies promote themselves to potential customers who search for a competitor on the internet. ALG purchased the term “Lerner & Rowe” as a keyword search term so that whenever someone searched for that term, ALG’s advertisements would appear near the top of the search results list. The ALG advertisements themselves never included the term “Lerner & Rowe.”

In 2021 Lerner & Rowe filed a complaint alleging federal and state trademark infringement, unfair competition, and unjust enrichment claims. In 2023 the district court granted summary judgment in favor of ALG as to the trademark infringement and unjust enrichment claims but denied summary judgment on the unfair competition claims. ALG moved for reconsideration, and the district court subsequently granted summary judgment as to all the claims. Lerner & Rowe appealed.

Because there was no dispute that Lerner & Rowe had a protectable interest in its marks, the Ninth Circuit’s trademark infringement analysis focused on assessing the likelihood of consumer confusion. At issue here was “initial interest confusion,” confusion that arises when an alleged infringer uses a competitor’s mark to direct attention to its own product. The Ninth Circuit used the four-factor test articulated in its 2011 decision in Network Automation v. Advanced Sys. Concepts to analyze likelihood of confusion in a keyword advertising context:

Strength of the mark.
Evidence of actual confusion.
Type of goods and degree of care likely to be exercised by the purchaser.
Labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page.

Other less relevant factors include “the proximity of the goods, similarity of the marks, marketing channels used, defendant’s intent in selecting the mark, and likelihood of expansion of the product lines.”

The Ninth Circuit found, and ALG did not dispute, that Lerner & Rowe’s mark was strong, but the Court concluded that the other three factors favored ALG. As to evidence of actual confusion, Lerner & Rowe offered 236 phone calls received by ALG in which the caller mentioned Lerner & Rowe by name when asked [...]

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No Need to Call for Backup at the PTAB (Sometimes)

by Sydney E. McDermott | Oct 24, 2024 | America Invents Act

The US Patent & Trademark Office (PTO) published a final rule entitled, Expanding Opportunities to Appear Before the Patent Trial & Appeal Board; 89 Fed. Reg. 82172 (Oct. 10, 2024).

The new rule, set to take effect on November 12, 2024, will apply to America Invents Act (AIA) proceedings, which, until now, have required that a party designate lead counsel and backup counsel. Lead counsel was required to be a registered practitioner, and non-registered practitioners could be backup counsel upon a showing of good cause.

The PTO filed a notice of proposed rulemaking on February 21, 2024, in which it proposed amending the regulations to allow the Board to permit a party to proceed without separate backup counsel as long as lead counsel is a registered practitioner. The PTO also proposed to allow a non-registered practitioner admitted pro hac vice to serve as either lead or backup counsel for a party as long as a registered practitioner was also counsel of record for that party, and to allow a non-registered practitioner who was previously recognized pro hac vice in an AIA proceeding to be considered a Board-recognized practitioner and eligible for automatic pro hac vice admission in subsequent proceedings via a simplified and expedited process.

Citing the benefits of flexibility where good cause is shown while ensuring parties are well represented, the PTO has now issued a final rule that will allow parties to proceed without backup counsel. The PTO noted that a party may demonstrate good cause, for example, by demonstrating lack of financial resources to retain both lead and backup counsel. However, the Board will question any claim of lack of financial resources where a party has also elected to pursue litigation involving the challenged patents in other forums. As a result, this rule is more likely to benefit patentees than patent challengers. The PTO also explained that the good cause analysis will center on the party, not on the counsel’s preferences. For example, the PTO is unlikely to find good cause where the lead counsel is a solo practitioner who prefers to work alone.

The PTO also issued a final rule simplifying the process for attorneys who were previously admitted to practice before the Board pro hac vice to gain admission for subsequent matters and to do so without a fee. Any attorney seeking subsequent pro hac vice admission must file a declaration or affidavit stating that all the requirements set out by the Board are met. Opposing counsel also has the opportunity to object.

Finally, the PTO rejected an amendment that would allow non-registered attorneys to serve as lead counsel.

Got Pillaged? Not If You Didn’t Follow the APA and FTCA

by Christian Tatum | Oct 10, 2024 | Patents

The US Court of Appeals for the Federal Circuit affirmed a district court decision dismissing claims under the Administrative Procedure Act (APA) and Federal Tort Claims Act (FTCA) against the US Patent & Trademark Office (PTO) relating to “pillaged patents.” The Federal Circuit found that dismissal was appropriate because the plaintiff failed to exhaust administrative remedies and the claims were barred under collateral estoppel. Winfrey v. Dep’t of Com., Case No. 24-1260 (Fed. Cir. Sept. 25, 2024) (Prost, Hughes, Cunningham, JJ.) (per curiam).

Eula Winfrey filed a pro se complaint in district court seeking “relief for the issue of two pillaged patents,” one of which was directed to a “step-up diaper” and the other to a “stroller buddy.” Winfrey claimed that the PTO “improperly denied her two patent applications and wrongfully deemed the applications to be abandoned,” and that she was the true inventor of Huggies Pull-Ups diapers. Interpreting Winfrey’s requests for relief as claims under the FTCA and the APA, the district court dismissed the claims related to the step-up diaper patent application for failure to exhaust administrative remedies. The district court found that Winfrey never presented an administrative claim to the PTO as required by the FTCA and that she did not file a petition to revive the application after the PTO deemed it abandoned. The district court also dismissed Winfrey’s APA claim related to the stroller buddy patent application based on collateral estoppel because Winfrey had previously litigated that claim. Winfrey appealed.

Applying Eleventh Circuit law, the Federal Circuit affirmed the district court’s dismissal of all of Winfrey’s claims. Addressing the FTCA claim first, the Court noted that “nowhere in any of her extensive filings before this court do we find evidence that Ms. Winfrey filed the requisite administrative claim to bring a claim for money damages against the USPTO.” The Federal Circuit also affirmed the district court’s dismissal of claims related to the stroller buddy application based on collateral estoppel, finding that Winfrey had brought the claim unsuccessfully three times. Finally, with respect to the APA claim for the step-up diaper patent application, the Court affirmed the district court’s dismissal for failure to exhaust administrative remedies after finding that Winfrey failed to “present any evidence that she filed a petition with the USPTO to revive her application or challenge its abandonment determination.”

Creative License: Fair Use Defense Paints Over Infringement Battle

by Kyle Sorenson, PhD | Oct 3, 2024 | Copyrights, Trademarks

Affirming the application of the fair use defense to copyright infringement, the US Court of Appeals for the Fifth Circuit determined that a district court’s sua sponte invocation of a fair use defense to parallel trademark claims was harmless error. The Court also affirmed that the district court did not abuse its discretion in awarding attorneys’ fees based on the prevailing party standard for copyright claims. Keck v. Mix Creative Learning Ctr., L.L.C., Case No. 23-20188 (5th Cir. Sept. 18, 2024) (Jones, Smith, Ho, JJ.)

Michel Keck, a multimedia artist, sued Mix Creative Learning Center, a Texas-based art studio, for copyright and trademark infringement after Mix Creative sold art kits featuring Keck’s dog-themed artwork and a brief biography, intended for at-home learning during the pandemic. Keck had registered her Dog Art series (in the form of decorative works) with the US Copyright Office and her name as a trademark with the US Patent & Trademark Office. Keck claimed that Mix Creative’s art kits violated her rights. After receiving notice of the lawsuit, Mix Creative promptly ceased selling its kits.

Following discovery, both parties filed cross-motions for summary judgment. The district court granted summary judgment in favor of Mix Creative on Keck’s copyright claim, finding fair use, and also granted summary judgment on the trademark claim sua sponte, as both parties had agreed that the fair use defense applied to both claims. The district court further awarded Mix Creative more than $100,000 in attorneys’ fees and costs, although it declined to hold Keck’s attorneys jointly and severally liable.

Keck appealed, challenging the copyright fair use finding and the district court’s sua sponte application of the fair use defense to the trademark claim. Mix Creative challenged the district court’s refusal to hold Keck’s attorneys jointly and severally liable for fees.

The Fifth Circuit affirmed the district court’s application of the fair use defense to Keck’s copyright claims. The Court focused on the first and fourth factors of the fair use defense (respectively, the purpose and character of the use and the effect of the use on the potential market for or value of the original work), noting that the courts typically give these two factors special attention.

On the first factor, the Fifth Circuit found Mix Creative’s use to be transformative. Although Mix Creative is a commercial enterprise, the art kits served an educational purpose, distinct from the decorative purpose of Keck’s original works. As a result, the likelihood of Mix Creative’s kits serving as a substitute for Keck’s original works in the market was low.

The fourth factor also favored Mix Creative, as the Fifth Circuit found no evidence that Mix Creative’s kits would harm the market value of Keck’s original decorative works. In fact, the Court suggested that the kits might enhance Keck’s reputation and sales by providing her with free advertising. Furthermore, Mix Creative operated in a different market (educational rather than decorative), and Keck had not demonstrated any history of selling derivative works for children’s art lessons. The [...]

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Dolly Pardon: American Girl Can Sue Foreign Counterfeiter for Internet Sales

by Karen Gover | Sep 26, 2024 | Copyrights, Trademarks

The US Court of Appeals for the Second Circuit clarified its standards for establishing personal jurisdiction over foreign defendants that conduct business over the internet. American Girl, LLC v. Zembrka, DBA www.zembrka.com; www.daibh-idh.com, Case No. 21-1381 (2d Cir. Sept. 17, 2024) (Cabranes, Parker, Kahn, JJ.)

In 2021, American Girl, the famous doll manufacturer, filed suit against Zembrka in the US District Court for the Southern District of New York. American Girl brought multiple claims under the Lanham Act, including claims for trademark counterfeiting and trademark infringement, for advertising and sales of counterfeit American Girl dolls through Zembrka’s websites. Zembrka is located in and operates from the People’s Republic of China. American Girl was granted a temporary restraining order (TRO) that enjoined Zembrka from marketing, manufacturing, or distributing counterfeit American Girl products and from advertising counterfeit or confusingly similar American Girl marks.

Zembrka appealed and moved to dissolve the TRO and dismiss the complaint for lack of personal jurisdiction. Zembrka argued that it did not transact or do business in New York as required to establish personal jurisdiction under C.P.L.R. § 302(a)(1). American Girl asserted, with supporting evidence, that customers in New York could place orders through Zembrka’s interactive websites by inputting payment, billing, and shipping information, and that customers were sent confirmations of their orders to shipping addresses in New York. American Girl’s counsel purchased and paid for allegedly counterfeit American Girl merchandise through Zembrka’s website and received order confirmation emails. Zembrka conceded at oral argument that the allegedly counterfeit American Girl dolls were available via its website for purchase by people in New York.

The TRO was served on Zembrka. Two weeks later, Zembrka canceled the orders and refunded the payments for the purchases made by American Girl’s counsel. The district court granted the motion to dismiss for lack of personal jurisdiction, reasoning that because American Girl did not provide evidence that the allegedly counterfeit goods had shipped to New York, no business was transacted under § 302(a)(1). American Girl moved for reconsideration, providing evidence of other purchases of allegedly counterfeit merchandise by New York customers. It also produced evidence showing that New York customers purchased more than $41,000 worth of other Zembrka products over the past year via PayPal. The district court denied the motion because American Girl still did not demonstrate that any of the allegedly infringing products were actually delivered to New York, and customer payments were refunded. American Girl appealed.

The primary issue on appeal was whether American Girl sufficiently established that Zembrka transacted business in New York for the purposes of § 302(1)(a). The Second Circuit found that this requirement was easily satisfied, explaining that the district court had incorrectly interpreted the Second Circuit’s 2010 decision in Chloe v. Queen Bee of Beverly Hills as requiring a shipment to be an essential component of “transacting business.” It was enough that American Girl provided evidence that New York customers submitted orders and payments for allegedly counterfeit merchandise through Zembrka’s websites: “Section 302(a)(1) [...]

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When Can Same Claim Limitation Have Different Meanings? When It’s Functional, Of Course

by Sydney E. McDermott | Sep 26, 2024 | Patents

Addressing for the first time whether a functional limitation must carry the same meaning in all claims, the US Court of Appeals for the Federal Circuit determined that it need not, vacating a district court decision to the contrary. Vascular Sol. LLC v. Medtronic, Inc., Case No. 2024-1398 (Fed. Cir. Sept. 16, 2024) (Moore, Prost, JJ.; Mazzant, Dist. J., by designation).

The seven patents asserted by Teleflex syin this case all come from a common application and are directed to a “coaxial guide catheter that is deliverable through standard guide catheters by utilizing a guidewire rail segment to permit delivery without blocking use of the guide catheter.” The asserted patents all share a common specification. However, the asserted claims differ in how they refer to the “side opening.” Some claims include the side opening as part of the “substantially rigid portion/segment” while other claims recite that the side opening is separate and distal to the “substantially rigid portion/segment.”

This case has a long procedural history involving an initial preliminary injunction motion and multiple inter partes reviews (IPRs). At the second preliminary injunction stage, Medtronic and the district court grouped the asserted limitations into two mutually exclusive groups:

Group One, which included the “substantially rigid portion/segment” claim limitation.
Group Two, which “required that the side opening not be in the substantially rigid portion” (emphasis supplied).

In denying Medtronic’s preliminary injunction motion, the district court questioned “how a skilled artisan could possibly be expected to understand the scope of a patent when the same device could simultaneously infringe two mutually exclusive claims within that patent.”

The district court then proceeded to claim construction. It rejected both parties’ initial constructions and appointed an independent expert – former US Patent & Trademark Office Director Andrei Iancu – to propose a construction. Teleflex argued that Iancu should adopt a split construction (i.e., one construction for the Group One limitations and another construction for the Group Two limitations). Medtronic argued that the claims were indefinite. Iancu rejected both proposed constructions but agreed with the district court on the mutual exclusivity of the two groups. The district court determined that all claims that included the “substantially rigid portion/segment” were indefinite, and since all the asserted claims included that term, the parties stipulated to final judgment. Teleflex appealed.

Teleflex argued that the district court erred in determining that the boundary of the substantially rigid portion must be the same for all claims. Medtronic argued that the claims were indefinite.

The Federal Circuit concluded that the district court erred when it determined that the Group One and Group Two limitations were mutually exclusive and indefinite. The Federal Circuit cautioned that affirming the district court’s conclusion would mean that claims in a patent cannot vary in how they claim the disclosed subject matter and that independent claims must be entirely consistent with other independent claims, neither of which is a restriction in how patentees may claim subject matter. The Federal Circuit explained that at the claim construction stage [...]

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Lower the Red Flags: Flawed Fee Award Flops

by Keval Amin | Sep 5, 2024 | Patents

The US Court of Appeals for the Federal Circuit vacated and remanded a district court decision awarding attorneys’ fees, finding that the district court abused its discretion by failing to properly explain its basis for the fee award. Realtime Adaptive Streaming L.L.C. v. Sling TV, L.L.C., Case No. 23-1035 (Fed. Cir. Aug. 23, 2024) (Albright, Dist. J., sitting by designation; Moore, Lourie, JJ.)

Realtime Adaptive Streaming sued Sling and DISH for patent infringement related to digital data compression. The district court granted DISH’s motion for summary judgment of invalidity. While the invalidity finding was on appeal, the district court granted DISH’s motion for attorneys’ fees based on six so-called “red flags” that it found should have served as warning signs to Realtime that its case was fatally flawed.

The district court explained that the first red flag was two prior court decisions against Google and Netflix, which found similar claims of Realtime’s patent ineligible as abstract ideas under 35 U.S.C. § 101. Despite these decisions, Realtime pursued its claims. The second red flag came when the Federal Circuit ruled against Realtime in a related case. The third occurred when an inter partes review (IPR) proceeding invalidated key claims of Realtime’s patent. Following a nearly two-year stay, the district court identified the fourth and fifth red flags: a non-final office action from the US Patent & Trademark Office rejecting a key claim of the remaining patent, and a letter from DISH indicating its intention to seek attorneys’ fees if Realtime continued the case. The sixth red flag was an expert declaration from DISH that addressed invalidity of the claims at issue, and which was unfavorable to Realtime. Realtime appealed the district court’s attorneys’ fees award.

The Federal Circuit concluded that the district court erred by relying on the six so-called red flags without explaining the weight for each. Addressing the first flag, the Federal Circuit agreed with the district court’s reliance on the Google and Netflix decisions because they involved a patent with a virtually identical specification and essentially the same claims. The Court disagreed with the remaining red flags. The Court found that the second red flag related to a different technology and should not have put Realtime on notice that its patent claims were meritless. With respect to the third, fourth, and fifth flags, the Federal Circuit found that the district court did not adequately explain why these decisions supported exceptionality.

With regard to the sixth flag (the expert opinion), the Federal Circuit found that the district court’s analysis was insufficient. The Court explained that it is typical in a patent infringement case for the parties’ experts to disagree on invalidity issues. The Court found that Realtime and its expert developed critiques and counterarguments to DISH’s expert’s opinions, demonstrating that Realtime did not fail to give “serious consideration” to invalidity. While the district court may have found DISH’s expert more persuasive, that fact alone should not have put Realtime on notice that its claims lacked merit.

Accordingly, the Federal [...]

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Rebel Libertarians Aren’t at Liberty to Violate Lanham Act

by Karen Gover | Sep 5, 2024 | Trademarks

In a case that required the US Court of Appeals for the Sixth Circuit to articulate the boundary between the Lanham Act and the First Amendment when the trademark in question is the name of a political party, the Court found that the Lanham Act can constitutionally apply to use of the mark and that the defendants were improperly using the mark as a source identifier. Libertarian Nat’l Comm. Inc. v. Saliba, et al., Case No. 23-1856 (6th Cir. Aug. 28, 2024) (Cole, Gibbons, Readler, JJ.)

The Libertarian National Committee (LNC) owns the trademark LIBERTARIAN PARTY. Party bylaws of the LNC provide a licensing regime that authorizes recognized state affiliates, such as the Libertarian Party of Michigan, to use the LNC’s mark as a source identifier.

In 2022, two top officers of the Libertarian Party of Michigan resigned, and the third most senior member, Andrew Chadderdon, became acting chair of the Michigan affiliate. Chadderdon’s promotion sparked a dispute within the affiliate over the rightful leadership of the group. The dissenting members of the affiliate voted to remove him from the executive committee and voted themselves onto the committee. The Libertarian Party Judicial Committee determined that this replacement by the dissenting members violated the bylaws. It reinstated Chadderdon and voided the executive appointments, including those of the dissenting members, that resulted from the vote. However, the dissenting members (the defendants in this case) regarded themselves as the rightful executive board members of the Libertarian Party of Michigan. Despite being told to stop using LNC’s trademarks, the defendants continued to use them to hold themselves out as the official Libertarian Party of Michigan.

The LNC sued the defendants in federal court, bringing various claims of trademark infringement, and moved for a preliminary injunction barring them from continuing to use the LNC’s mark, which the district court granted. The defendants appealed.

The primary question before the Sixth Circuit was whether the defendants’ use of the LNC mark to “solicit party donations, fill out campaign finance paperwork, advertise events, and espouse political platform positions and commentary falls within the scope of the Lanham Act.” The defendants relied on the Sixth Circuit’s 2003 decision in Taubman Co. v. Webfeats to argue that their use of the LNC mark was political speech and therefore fell outside the ambit of the Lanham Act, which regulates commercial speech. Taubman concerned Webfeats’s use of a shopping mall’s trademark in domain names by the creator of a “fan site” and later a “gripe site.” Because Webfeats’s use of the mark was not to designate source but to comment on the trademark holder, it was protected expression.

The Sixth Circuit found Taubman to be inapposite, however. Citing the Supreme Court’s 2023 holding in Jack Daniel’s Properties, the Sixth Circuit pointed out that the defendants used the LNC’s mark “to designate the source of their political services as affiliated with the LNC” and thus implicated the core concern of trademark law: use of a mark as a source identifier.

The Sixth Circuit [...]

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Well-Pleaded Factual Allegations Must Be Taken as True When Considering Motion to Dismiss

by Lois D. Mermelstein | Aug 29, 2024 | Trademarks

The US Court of Appeals for the Fifth Circuit, in dismissing a trademark infringement matter under Rule 12(b)(6) for failure to state a claim, ruled that a district court “erroneously assumed the veracity” of the defendants’ assertions over the “well-pleaded factual allegations” in the plaintiff’s complaint. Molzan v. Bellagreen Holdings, LLC, Case No. 23-20492 (5th Cir. Aug. 12, 2024) (Davis, Southwick, Duncan, JJ.)

In 2008, Houston-based chef Bruce Molzan and two partners began the first of what would become a group of five Ruggles Green restaurants. In 2016, as part of a sale of the restaurants, Molzan licensed his Ruggles Green trademarks to Bellagreen Holdings and related entities (collectively, Bellagreen) and transferred the rugglesgreen.com domain name to Bellagreen. Following the sale, Bellagreen changed the name of the restaurants from Ruggles Green to Bellagreen.

Molzan filed a complaint against Bellagreen alleging federal and state trademark infringement, false advertising, unfair competition, trademark dilution, breach of a 2018 settlement agreement in which Bellagreen agreed to cease using the Ruggles Green trademark, and unjust enrichment. Molzan alleged that he had been unable to substantially reduce the internet association of the Bellagreen restaurants with him or his Ruggles Green trademark, even after a Uniform Domain-Name Dispute-Resolution Policy (UDRP) proceeding (a private, binding arbitration proceeding to resolve domain name disputes) ruled in Molzan’s favor. Although Bellagreen deleted references to Ruggles Green from its websites, the “knowledge panels” for Bellagreen continued to cause confusion in Google searches and Google Map searches for Ruggles, Ruggles Green, and Ruggles Black, even after Molzan requested that Google correct the information. Searches for Ruggles on Google Maps and other online maps as well as Houston First Corporation’s website resulted in results for Bellagreen restaurants, something Molzan alleged would have happened only with the approval and direction of Bellagreen.

The district court granted Bellagreen’s motion under Rule 12(b)(6) for failure to state a claim and denied Molzan leave to file a second amended complaint. In granting Bellagreen’s motion to dismiss, the district court determined that Molzan did not allege any facts explaining why Bellagreen would have a connection to any of the third-party websites or their users. Molzan appealed.

The Fifth Circuit, reviewing the district court’s judgment de novo by accepting all well-pleaded facts as true and drawing all reasonable inferences in favor of the nonmoving party, reversed the dismissals of Molzan’s federal and state trademark infringement claims, Molzan’s federal and state false advertising and unfair competition claims, and state (but not federal) trademark dilution claim. Because Molzan’s unjust enrichment claim relied on his underlying trademark infringement and unfair competition claims, the Court reversed the dismissal of this claim as well. The Court vacated the district court’s Rule 12(b)(6) dismissal of additional defendants involved in the website design and internet promotion for Bellagreen because the district court erred in ruling on the merits of Molzan’s claims against them prior to ruling on personal jurisdiction. The Court also vacated the district court’s order denying Molzan leave to amend his complaint.

The Fifth Circuit [...]

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Unbranded Brandy: COGNAC Certification Mark Matters, Even in Hip-Hop

by Katherine Pappas | Aug 15, 2024 | Trademarks

The US Court of Appeals for the Federal Circuit vacated a ruling from the Trademark Trial & Appeal Board, disagreeing with the Board’s dismissal of Bureau National Interprofessionnel du Cognac’s opposition to a trademark application filed by Cologne & Cognac Entertainment related to a hip-hop record label. Bureau National Interprofessionnel Du Cognac v. Cologne & Cognac Entertainment, Case No. 23-1100 (Fed. Cir. Aug. 6, 2024) (Lourie, Clevenger, Hughes, JJ.)

The certification mark COGNAC is protected by two entities: the Bureau National Interprofessionnel du Cognac (the interprofessional union of all growers, producers and merchants of COGNAC spirits) and the Institut National des Appellations d’Origine (an administrative agency within the French government) (collectively, the opposers). Unlike a trademark that indicates a single source for a product, a certification mark is used by an entity other than the owner and is typically used to certify regional or other origin-related characteristics of the product (e.g., FLORIDA oranges, DARJEELING tea or GEORGIA peaches). The opposers are responsible for controlling and protecting the common law certification mark COGNAC for brandy manufactured in the Cognac region of France according to particular standards.

The applicant filed a trademark application in March 2019 seeking registration of a composite trademark for Cognac & Cologne Entertainment to be used for hip-hop music and production services.

The opposers opposed that trademark application, claiming priority and arguing both a likelihood of confusion with the COGNAC certification mark and that the applicant’s mark, by creating an association with the COGNAC mark, would likely cause dilution through blurring. In a split decision, the Board dismissed the opposition, finding no likelihood of consumer confusion and no likelihood of dilution. The opposers appealed.

For likelihood of confusion, the opposers argued and the Federal Circuit agreed that:

The Board applied the wrong legal standard for “fame,” and its finding that the COGNAC mark was not famous was not supported by substantial evidence.
The Board legally erred in analyzing similarities in the parties’ marks, and its allegedly inconsistent findings showed that its conclusion on similarity was not supported by substantial evidence.
The Board applied the wrong legal standard in evaluating the relatedness of goods, trade channels and consumers.

The Federal Circuit reviewed the Board’s decision, working through each issue in turn. First, the Court assessed likelihood of confusion, reviewing the Board’s ultimate legal conclusion de novo and underlying factual findings for substantial evidence. The Court analyzed the DuPont factors to assess whether a likelihood of confusion existed.

Fame: DuPont factor five assesses the fame of the prior mark, including sales, advertising and length of use. Fame is not binary, but instead is a spectrum from very strong (i.e., very famous) to very weak. More famous marks have more extensive public recognition and renown and accordingly are afforded a broad scope of protection. The Federal Circuit found multiple reversible errors in the Board’s fame analyses.

The Federal Circuit explained that the first Board error was its requirement [...]

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