Author: LegalEase Solutions

QUESTIONS PRESENTED

1. Whether trademark infringement/dilution exists if the trademark was registered in stylized form and another company is using the exact same trademark and selling the same products? OR Whether “styling” of names makes enough of a difference for the defendant’s to avoid trademark infringement/dilution liability?

 SHORT ANSWER

The use and infringement of a mark in advertising is highly probative of whether the mark creates a likelihood of confusion in relation to another mark. If a mark is not stylistically and typographically distinguishable from the other mark, and if prospective purchasers recognize the two designations as one and the same without a distinct identity when considered in the “likelihood of confusion” analysis, a trademark dilution exist even if it is only registered in stylized form.

2. Whether there is a valid claim for trademark infringement when the mark has been deemed by the trademark registry to be “merely descriptive and laudable”? OR What is the legal effect of having a trademark on the Supplemental Registry as “merely descriptive and laudatory”? 

SHORT ANSWER

A trademark need not be registered in order to obtain protection as ownership of trademark is established by its use. A supplemental registration does not create a statutory presumption of validity. The mark may become distinctive and legally protectable through its use in commerce. Descriptive marks are not automatically protectable. However, they may be registered if they have acquired secondary meaning for the consuming public. Several years of substantial, exclusive and continuous use of a mark may be prima facie evidence of secondary meaning. There is no case law to hold that failing to qualify for registration on the Principal Register proves, or provides prima facie proof of, unprotectability.

Basic facts: 

Mattress Experts, Inc. in Texas registered “MATTRESS EXPERTS” in 2004 in a stylized form. The mark has been deemed by the Trademark Registry to be merely “descriptive and laudable.” There is another entity named “Mattress Experts, Inc.” of South Carolina against which a claim of infringement is raised by the Texas entity. The SC entity claims that the U.S. registration number obtained by Texas entity for “MATRESS EXPERTS” is for “stylized form” of the words and they do not appear in stylized or logo form.  Further there is no overlapping territory and they do not have an e-commerce presence.

RESEARCH FINDINGS

1. Whether “styling” of names enough of a difference for the defendant’s to avoid trademark infringement/dilution liability? OR Whether “styling” of names enough of a difference for the defendant’s to avoid trademark infringement/dilution liability? 

1. Strength and distinctiveness of the mark.

The strength and distinctiveness of the mark adopted is a key consideration in deciding how much protection should be afforded to the mark. Amstar Corp. v. Domino’s Pizza, Inc., 615 F.2d 252, 259 (5th Cir.), cert. denied, 449 U.S. 899 (1980). The “[s]trength of a trademark is determined by two factors.”  Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 330 (5th Cir. 2008). “The first factor considers where the mark falls on a spectrum” i.e., “generic, descriptive, suggestive, or arbitrary and fanciful ….” Id.  “The second factor is the standing of the mark in the marketplace.” Id. The greatest protection extends to marks that are purely arbitrary or fanciful and bear no relation to the products or services sold under the mark. Amstar Corp., 615 F.2d at 259.

1. Style of lettering.

In determining whether the design of a mark is similar, the court must examine the marks in their entirety rather than comparing only similar features. Oreck Corp. v. U.S. Floor Systems, Inc., 803 F.2d 166, 171 (5th Cir.1986), cert. denied, 481 U.S. 1069 (1987). The test is essentially an eyeball test. Exxon Corp. v. Texas Motor Exchange, 628 F.2d 500, 504 (5th Cir.1980). The courts have recognized that a mark can be infringed even when the infringer does not use the same letters because the style of the lettering was substantially the same. See, e.g., WSM, Inc. v. Tennessee Sales Co., 709 F.2d 1084, 1085–86 (6th Cir.1983) (“Music City USA” infringed  “Opryland USA” where similar lettering was used); Coca–Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183, 1188–89 (E.D.N.Y.1972) (court enjoined defendant from selling a poster consisting of an exact reproduction of the “Coca–Cola” trademark and distinctive script letters substituting “Cocaine” for “Coca–Cola”); Consolidated Freightways, Inc. v. Central Transport, Inc., 201 U.S.P.Q. (BNA) 524, 529 (E.D.Mich.1978) (virtually identical script used to form letters “CT” and “CF” and placement of letters in such a way as to obscure the differences between the “F” and the “T” justified injunctive relief). In Minturn Advert., Inc. v. Hermsen Design Associates, Inc., 728 F. Supp. 430, 433-34 (N.D. Tex. 1990), by contrast, the style of the letters was different and the letters themselves were different, thus making it difficult to argue that the marks made the same impression.

1. Similarities between the two marks and stylized design.

The trademark law prohibits the use of “a mark which so resembles a mark … when used on or in connection with the goods of the applicant to cause mistake, or deceive….” 15 U.S.C. § 1502(a). “The similarity of the marks in question is determined by comparing the marks’ appearance, sound, and meaning.” Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188, 201 (5th Cir. 1998).

Even if prospective purchasers recognize that the two designations are distinct, confusion may result if purchasers are likely to assume that the similarities in the designations indicate a connection between the two users. The relevant inquiry is whether, under the circumstances of the use, the marks are sufficiently similar that prospective purchasers are likely to believe that the two users are somehow associated.

Id. at 201.

In Quantum Fitness Corp. v. Quantum LifeStyle Centers, L.L.C., 83 F. Supp. 2d 810 (S.D. Tex. 1999), Quantum Fitness registered “Quantum Fitness” and “Quantum” as marks without any particular stylized design. Id. at 822. They used these marks in a number of promotional materials, at times with a stylized “Q.” Quantum LifeStyle used the mark “QLS QuantumLifeStyle Center” in advertisements and promotional materials, with the word “Quantum” set off from the rest of the name though the use of boldface lettering and a slightly larger font. Id. Plaintiff argued the marks to be sufficiently similar causing confusion. The “Quantum” portion of both the marks is the dominant portion by the use of the rare and infrequently found letter ‘Q’ in a unique and stylized form coupled with the defendant’s use of boldface lettering and a larger font size to set off the term “Quantum.” Id. at 823. Defendant argued that the marks are not confusingly similar to ordinary purchaser of the products because the Quantum LifeStyle “trademark is uniquely set out by use of the letters QLS before the contiguous word QuantumLifeStyle and the descriptive word center describing the mark as a facility. Id.

The court found the case to be heavily fact specific. Id. According to the court, “one feature of a mark may be more significant than other features, and … it is proper to give greater force and effect to that dominant feature.” Giant Food, Inc. v. Nation’s Foodservice, Inc., 710 F.2d 1565, 1570 (Fed.Cir.1983). However, “[w]hen the dominant portion of two marks are the same, confusion is likely.” Country Floors, Inc. v. A Partnership Composed of Gepner and Ford, 930 F.2d 1056, 1065 (3rd Cir.1991). Here the court found significant visual dissimilarities between the marks. Per the court, the marks do not have a physical appearance therefore standing alone will likely result in confusion. However, it was found that “given the dominance of the word ‘Quantum,’ under the circumstances of the use, ‘the marks [were] sufficiently similar that prospective purchasers are likely to believe that the two users are somehow associated.’” Quantum Fitness Corp., 83 F. Supp. 2d at 824 (quoting Elvis Presley Enters., 141 F.3d at 201)).

Examples:

In Giant Food, Inc. v. Nation’s Foodservice, Inc., 710 F.2d 1565 (Fed.Cir.1983), a supermarket chain was using the service marks GIANT and GIANT FOOD. They sued a restaurant chain using the mark GIANT HAMBURGERS for trademark infringement. The court observed that the word “GIANT” was dominant in both marks, in large part because the word was set off from the rest of the marks through the use of capital letters. Id. at 1570.

In Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175 (9th Cir. 1988), the plaintiff operated a system of franchised real estate brokerage offices under the service mark “Century 21.” They brought an infringement suit against one of its former franchisees, doing business as “Century Investments & Realty.” While affirming summary judgment in Plaintiff’s favor, the Ninth Circuit observed that “[t]he identical dominant term ‘Century’ is the lead word in each entity’s name, which can foster confusion.” Id. at 1179.

Similarly, in Country Floors, Inc. v. Partnership Composed of Gepner and Ford, 930 F.2d 1056 (3rd Cir. 1991), the manufacturer and seller of ceramic tiles under the tradename and service mark “Country Floors,” brought an infringement claim against a competitor doing business as “Country Tiles.” The district court granted summary judgment for the defendant. While vacating the district court’s order, the Federal Circuit observed that the word “Country” could be considered the dominant portion of both parties’ service marks, because the descriptive words “floor” and “tile” had been disclaimed. Country Floors, 930 F.2d at 1065.

However, in cases finding no infringement, the courts emphasize differences in the overall design and appearance of the competing marks. For Instance, in Universal Money Ctrs., Inc. v. AT & T, 22 F.3d 1527 (10th Cir.1994), an ATM card issuer had registered trademarks of the terms “Universal Money Card,” “Universal Money Center,” and “Universal Money.” They sued defendant for issuing credit card with the label “A T & T Universal Card.” Though the dominant portion of these marks may have been the term “Universal,” the court observed a slim likelihood of confusion based on the differences in the overall design of the cards, including lettering styles, logos, and coloring schemes. The court pointed out that even though the term “money” was disclaimed in the plaintiff’s trademark, it was still part of the mark and had to be considered in the “likelihood of confusion” analysis. The court also noted that the plaintiff rarely used the “Universal” mark alone, but rather with the word “money.” Quantum Fitness Corp., 83 F. Supp. 2d at 824.

Likewise, in Amstar Corp. v. Domino’s Pizza, Inc., both the names for sugar products and the name for pizza were dominated by the word “Domino.” Here the court found no infringement stating that the defendant’s mark was “stylistically and typographically distinguishable.” Amstar, 615 F.2d at 261. The court noted that the plaintiff’s mark was “almost always … presented on a bias with respect to the horizontal,” in contrast with the defendant’s mark. Id. The court also observed that defendant’s use of the term “Domino,” in possessive form, next to the word “pizza,” created an “Italian connotation” very different from the one created by the juxtaposition of the terms “Domino” and “sugar.” Id.

Further, in Brennan’s, Inc. v. Brennan, 512 F. Supp. 2d 559 (S.D. Miss. 2007) aff’d, 289 F. App’x 706 (5th Cir. 2008), the court noted that “[t]the exemplars of the marks themselves are not similar and would not reasonably lead one to infer a connection between the parties’ restaurants.” Id. at 566. As per the court, “[t]he ‘Brennan’s’ mark consists of the name ‘Brennan’s’ in simple, unadorned red script.” Id. “Defendants’ mark is decidedly different.” Id. “It is more elaborate and uses different words, a different font, different colors (black and green) and different insignia.” Id. The only similarity that the court found was that “‘Brennan’s’ appears in both marks, but the use of Clark and Blake Brennan’s first names identifies them as the owners and serves to distinguish theirs from the ‘Brennan’s’ marks.” Id.

“The use of a mark in advertising; is highly probative of whether the mark creates a likelihood of confusion in relation to another mark.” Elvis Presley Enters., 141 F.3d at 197. “Evidence of the context in which a mark is used on labels, packages, or in advertising material directed to the goods is probative of the reaction of prospective purchasers to the mark.” Id. (citations omitted). “Courts consider marks in the context that a customer perceives them in the marketplace, which includes their presentation in advertisements.” Id. (citing cases).

Based on the foregoing, the two words “Mattress” and “Experts” may be dominant names in both the parties’ trademark. The owner of the mark has been using it from 2004. Even though their presence is in different territories, any instance of overlapping may give rise to a “likelihood of confusion” on the purchasers as they sell the same products. Therefore, if the mark “MATRESS EXPERTS” is stylistically and typographically not distinguishable from Mattress Experts, Inc. and if prospective purchasers recognize the two designations as one and the same without a distinct identity when considered in the “likelihood of confusion” analysis, MATRESS EXPERTS may have a valid claim for trademark infringement against Mattress Experts, Inc.

1. Whether there is a valid claim for trademark infringement when the mark has been deemed by the trademark registry to be “merely descriptive and laudable”? OR What is the legal effect of having a trademark on the Supplemental Registry as “merely descriptive and laudatory”? 

“A trademark registration by the Patent and Trademark Office (PTO) is ‘prima facie evidence of the validity of the registered mark ….’” Xtreme Lashes, LLC v. Xtended Beauty, Inc., 576 F.3d 221, 232 (5th Cir. 2009) (quoting 15 U.S.C. § 1115(a)). “However, if the mark is found to be either generic or descriptive and lacking secondary meaning, a court may cancel it.” Id. (citing 15 U.S.C. § 1119; see Soweco, 617 F.2d at 1184 (holding that registration does not bar defenses to infringement).

“A ‘descriptive term’ ‘identifies a characteristic or quality of an article or service[.]’” Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1183 (5th Cir. 1980) (quoting Vision Ctr. v. Opticks, Inc., 596 F.2d 111, 115 (5th Cir. 1979)). Such terms include “its color, odor, function, dimensions, or ingredients.” Id. (citing American Heritage Life Insurance Co. v. Heritage Life Insurance Co., 494 F.2d 3, 11 (5th Cir. 1974)). “Although descriptive marks are not automatically protectable, they may be registered if they have acquired secondary meaning for the consuming public.” Id. (citing 15 U.S.C. § 1052(f)) (internal citation omitted). An example of descriptive mark “would be ‘Vision Center’ in reference to a place where one purchases eyeglasses or ‘EVERREADY’ with reference to batteries or light bulbs.” Id. at 1183-84.

In 1997, Estee Lauder brought an action against the Gap, claiming that the Gap’s use of the term “100%” on its body lotion packaging would cause consumers confusion because the term “100%” was similar to Estee Lauder’s use of the term “100%” on its body lotion packaging.  Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503 (2d Cir. 1997).  The Court discussed whether or not the term “100” could be protected as a trademark. Id. at 1509-1510. The issue as the Court framed it was whether “100%” was “suggestive” (and entitled to greater protection) or “descriptive” (entitled to protection upon showing of a secondary meaning).  Id.  The Court held that the term “100%” was a laudatory one, such as “Best,” “Plus,” or “Super” in that it appears to praise any product it is associated with, just as “Best” would do the same. Id. at 1509. Generally, it has been held that laudatory terms are descriptive and therefore not protected without a showing of secondary meaning. Id.

1. Registration on the Supplemental Register.

“Proof of trademark registration ‘constitutes prima facie evidence that the mark is valid and that the registrant has the exclusive right to use the registered mark in commerce with respect to the specified goods or services.’” T-Mobile US, Inc. v. AIO Wireless LLC, 991 F. Supp. 2d 888, 908 (S.D. Tex. 2014) (quoting Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 237 (5th Cir.2010)). According to United States District Court, S.D. Texas, Houston Division, “[n]either the Fifth Circuit nor other circuit courts has closely examined the meaning of registration in the Supplemental Register.” Id. “Registration in the supplemental register requires showing ‘not whether the mark is already distinctive of the applicant’s goods, but whether it is capable of becoming so.’” Id. at 909 (quoting In re Bush Bros. & Co., 884 F.2d 569, 570 (Fed.Cir.1989)). “‘Thus a mark that is ineligible for registration on the Principal Register because it is merely descriptive of the goods or services may be registered on the Supplemental Register.’” Id. (quoting In re Bush Bros. & Co., 884 F.2d at 570).

“‘[U]nlike principal registration, supplemental registration is not prima facie evidence of the validity of the registered mark, of ownership of the mark, or of the registrant’s exclusive right to use the registered mark in commerce.’” Id. at 909 (quoting George & Co. v. Imagination Entm’t, Ltd., 575 F.3d 383, 391 n. 8 (4th Cir.2009)). “But ‘[if] the mark later acquires distinctiveness through use in commerce, the mark becomes eligible for registration on the Principal Register.’” Id. (quoting In re Bush Bros. & Co., 884 F.2d 569, 570 (Fed.Cir.1989) (five years of substantially exclusive and continuous use as a mark may be prima facie evidence of secondary meaning)). “While supplemental registration does not create a statutory presumption of validity, the mark may still become distinctive and legally protectable through its use in commerce.” Id. The court in T-Mobile US, Inc. observed that it “has not found cases holding that failing to qualify for registration on the Principal Register proves, or provides prima facie proof of, unprotectability.” Id. (citing Cal. Cooler, Inc. v. Loretto Winery, Ltd., 774 F.2d 1451, 1454 (9th Cir.1985)). Additionally, the court in T-Mobile noted that “[a] ‘mark need not be registered in order to obtain protection because [o]wnership of trademarks is established by use, not by registration.’” Id. (quoting Bd. of Supervisors for La. State Univ. Agric. and Mech. College v. Smack Apparel Co., 550 F.3d 465, 475 (5th Cir.2008)).

In T-Mobile US, Inc., T–Mobile registered the magenta mark on the Supplemental Register. Defendant argued that such registration established the invalidity of the trademark right T–Mobile asserts. However, Defendant relatedly argued that T–Mobile’s failure to object or appeal the placement of the magenta mark in the Supplemental Register concedes that the magenta mark lacks secondary meaning. Id. at 908. The court noted the well settled position that “a mark owner’s acceptance of registration on the Supplemental Register constitutes an admission that the mark is descriptive at the time of registration.” Id. at 909 (citing In re Future Ads LLC, 103 U.S.P.Q.2d 1571, 1574 (T.T.A.B.2012)). T–Mobile introduced its magenta mark in the United States in 2002 and registered it in the Supplemental Register in 2007. Id. After more than ten years T–Mobile introduced its magenta mark in commerce. Id. According to the court, “almost six years after its registration in the Supplemental Register—and after T–Mobile spent billions of dollars on marketing that emphasized Pantone Process Magenta as uniquely and ubiquitously associated with the company’s wireless telecommunications services—the landscape has surely changed.” Id. According to the court defendant’s argument in the case was not a persuasive basis to discount the evidence showing secondary meaning, or to alter the court’s finding and conclusion that the magenta color has acquired secondary meaning. Id.

CONCLUSION

The infringement of a trademark is probative of whether the mark creates a likelihood of confusion in relation to another mark. If two marks are stylistically and typographically distinguishable from each other, and prospective purchasers recognize these marks as two designations with a distinct identity, an infringement is not likely to occur even if one mark is registered in a stylized form.

Furthermore, a supplemental registration does not create a statutory presumption of validity the mark may still become distinctive and legally protectable through its use in commerce, A mark may become distinctive and legally protectable through its use in commerce and not by registration. Descriptive marks are not automatically protectable. In order to be protectable, they have to acquire secondary meaning for the consuming public. Evidence of several years of substantial, exclusive and continuous use may satisfy the mark to have been acquired a secondary meaning.