Federal Court Reverses TTAB's "NIKEPAL" Decision on "NIKE" Dilution Claim

The Seattle Trademark Lawyer blog reports (here) that the U.S. District Court for the Eastern District of California has reversed the TTAB's April 2005 decision (TTABlogged here) dismissing Nike, Inc.'s opposition to registration of the mark NIKEPAL for various products and services for laboratories. New survey evidence submitted by Nike convinced the court that "there is a likelihood that NIKE will suffer dilution if Nikepal is allowed to continue its use of NIKEPAL." The court therefore issued a permanent injuntion on Nike's federal and state dilution claims. Nike, Inc. v. Nikepal Int'l, Inc., 84 USPQ2d 1820 (E.D. Cal. 2007).

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The Board had "no hesitation" in finding that the NIKE mark meets the "truly famous" standard of Toro Co. v. ToroHead Inc., 61 USPQ2d 1164, 1178 (TTAB 2001). However, it also found that the marks NIKE and NIKEPAL are not substantially similar, as required for dilution purposes. Id. at 1183. The addition of the term PAL "results in a mark which has a sufficiently different overall commercial impression." Consequently, the Board found that "there is no dilution."

Nike sought review in the federal district court pursuant to Section 1071(b) of the Trademark Act. By choosing that route, rather than an appeal to the Federal Circuit, Nike was allowed to present additional evidence. It did so in the form of a survey, the results of which convinced the court to make a "contrary finding on the similarity of the parties' marks."

"Mr. Johnson's survey [showed] that the vast majority of the survey respondents, representing a significant segment of Nikepal's target customer group, associate Nike and/or its products and services when they encounter NIKEPAL, thus perceiving the two marks as essentially the same."

While giving deference to the TTAB's fact-finding, "the evidence presented by Nike compels reversal of the TTAB's decision dismissing Nike's opposition to the registration of Nikepal's mark."

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TTABlog comment: As a result of this decision, we may see more survey evidence in TTAB dilution cases. If the marks in question are not virtually identical on their faces, the way to prove substantial similarity is to provide evidence of assocation. A survey may be expensive, but hey!, owners of famous marks probably can afford it.

Text Copyright John L. Welch 2007.