Wednesday, February 13, 2013

TTAB Sustains 2(d) Opposition to WAL-ZYR, Finding it Confusable with ZYRTEC

The Board sustained this Section 2(d) opposition to registration of the mark WAL-ZYR for "“pharmaceuticals, namely, allergy medications," finding the mark likely to cause confusion with the previously-used mark ZYRTEC for allergy medications. It found ZYRTEC to be a strong mark, the goods identical, the channels of trade and classes of customers the same, the mark similar, and the purchasing decisions to be less than highly sophisticated. Walgreen's survey evidence was deemed not sufficiently probative to affect the result. McNeil-PPC, Inc. v.Walgreen Co., Opposition No. 91184978 (January 22, 2013) [not precedential]. 

Opposer McNeil is the exclusive licensee under the ZYRTEC mark, not the owner, and so it had to prove priority by way of its common law rights. Walgreen relied on its filing date of September 9, 2007, as its constructive first use date. McNeil established priority by showing a "clear chain of trademark rights from prior licensees," and use of the mark by predecessors since 1996.

Brand awareness studies, advertising evidence, and sales figures convinced the Board that ZYRTEC is "both conceptually and commercially very strong."

As to the goods, there was no dispute that they are identical. In fact, they are displayed side-by-side on store shelves. This du Pont factor weighed heavily in McNeil's favor.

The purchasers of these over-the-counter products are "ordinary consumers with no special knowledge or expertise," and although they may spend time confirming the particular uses for the products, that does not mean they are immune from source or sponsorship confusion. So the Board found this factor to be neutral.

Turning to the marks, the Board noted once again that when the goods are identical, a lesser degree of similarity between the marks is necessary to support a finding of likely confusion. The Board found that Walgreen's incorporation of the distinctive first portion of Opposer's mark with the first portion of its house mark "creates a substantially similar mark to opposer's previously-used mark." An appreciable number of consumers could believe that "some sort of sponsorship or affiliation exists between the two sources where [applicant has] taken the first and most prominent portion of the respective marks to create a combined mark identifying both of them."

In short, the Board found that the similarities in appearance, sound, connotation and overall commercial impression outweigh the dissimilarities.

Walgreen submitted the results of an Ever-Ready type survey, which the Board found to be in proper form but flawed because the questions "do not expose the full potential for confusion."

The record shows that applicant incorporated the first part of opposer’s mark ZYRTEC in its WAL-ZYR mark because it conveyed equivalence with ZYRTEC. Although the survey included an “affiliation” question, the answers were less than illuminating.

Moreover, the results "rely on assumptions as to how the respondent's would interpret the questions regarding the affiliation aspect. The survey assumes that respondents would, in answering question 3, include in the category of affiliation the circumstance where WAL-ZYR and ZYTREC contain ingredients from the same supplier."

The survey found a confusion rate of less than 7%. Although that number is low, it is not particularly probative because, according to the Board, in this case "confusion is more focused on the sponsorship/affiliation aspect or the possible perception of potential consumers that the ingredients come from the same manufacturer." In addition, the responses showed "more a lack of knowledge about sources of OTC drugs in general, rather than clearly showing a lack of confusion."

Walgreen pointed to the lack of actual confusion evidence despite the goods being sold side-by-side for about three years. The Board, however, observed that proof of actual confusion is difficult to find, and is not necessary to prove likelihood of confusion.

McNeil contended that Walgreen intended to confuse consumers when it adopted its mark. Walgreen maintained that it chose the mark "not to confuse but rather to assist consumers:" the WAL-ZYR mark helps consumers identify the source of the product (Walgreen) and the name brand equivalent (ZYRTEC), while making sure they understand that WAL-ZYR is a value-priced alternative to ZYRTEC. The Board found the evidence to be inconclusive, and so it considered this 13th du Pont factor to be neutral.

Balancing all the relevant factors, the Board found confusion likely, and it sustained the opposition.

Read comments and post your comments here.

TTABlog comment: Well, what do you think? What's with this idea of confusion as to the ingredients? Just because two drugs may contain the same ingredient, would a consumer think they came from the same source? Let's hope that some of our friend-of-the-blog survey experts weigh in on this.

Text Copyright John L. Welch 2013.


At 7:33 AM, Anonymous Mark H. Jaffe said...

The consistent results in private-label store-brand trademark cases is that the store brand generally prevails if they invoke the trade dress of the big manufacturer, but not when they use its brand name.

At 8:22 AM, Blogger Kevin W. Grierson said...

My two cents: When you're familiar with both products, it's tough to separate the PTO application from the real-world use. In practice, the way Walgreen's brands its store brands is not at all confusing with the original manufacturers. Generally Walgreen's even invites consumers to compare the ingredients in the products (because they offer the same ingredients at substantially lower prices), a practice which serves to reduce confusion. So, In a real-world suit, I think the Zyrtec owner loses. Here, with just a standard character mark, it's closer, but I still don't think Wal-Zyr and Zyrtec look or sound all that much alike.

At 9:35 AM, Anonymous Mark Donahey said...

I agree that this is one of those cases where real life and the TTAB's 2(d) analysis diverge.

For example, it is common practice for drug and grocery stores to place their store-brand generics next to their name brand counterparts. Therefore, I would think the placement of WAL-ZYR next to ZYRTEC would help signal to consumers that each brand came from a different source, thereby making confusion less likely than if the products were placed on different shelves or in different stores.

However, I don't know how the Board could consider this argument unless Walgreens could somehow restrict the scope of the identification to only include side-by-side sales. I'd be interested to hear anyone's thoughts on how one might word something like that.

Also, what are Walgreen's chances on appeal to district court?

At 9:50 AM, Anonymous Orrin A. Falby said...

I don't agree with this decision. There is no question of Walgreens intent in adopting the WAL-ZYR mark, but calling to mind the ZYRTEC brand does is not likelihood of confusion. Consumers are well aware how the generic drug market works and are more sophisticated than the Board believes. This method of branding is typical and consumers often look for and expect to find the store brand equivalent in order to save money and they do not believe that there is an association with the brand-name drug. With the rising cost of prescription drugs and insurance companies refuising to pay for the brand-name drugs, consumers have adapted and become more knowledgeable.

Wlagreens also owns numerous WAL formative marks. Whether they could be considered a family of marks, I don't know, but its a good point to make in this particular case.

As to the treatment of the survey evidence, I too would love to hear the experts weigh in on that issue.

At 10:09 AM, Anonymous Anonymous said...

Perhaps the most revealing part of the decision, aside from the fact that it is probably a reflection of the Boards fear of appeal than arriving at a correct decision, is the complete dismissal of evidence of the "lack of actual confusion." The products have been sold side-by-side for 3 years, consumers are well aware of that stores have generic brands, and the marks are quite different. Yet, we (the very ignorant public) will think, by a likelihood (which means probability as opposed to possibility), that a company has authorized and in-fact is affiliated with the store brand.

I often find it enormously backwards that the complete lack of actual confusion (with every opportunity for such confusion to exist) has no bearing on its likelihood of confusion analysis. It is yet another evidence of the Board's complete disregard for real world application of the law. If this was a traffic matter, it would almost be equivalent of getting a speeding ticket because it was likely you were speeding despite no evidence that you were speeding. Of course, if the cop had you on the radar, this would be evidence of speeding.

Perhaps equally important is the Board's believe that the public is either absolutely mentally retarded or its feeling that the Board is needed to protect public (despite the fact that its sole jurisdiction is whether the public can use a r in circle).

At 10:23 AM, Anonymous Anonymous said...

How do retailers sell generic brands without drawing from some element of its counterpart?

At 12:02 PM, Anonymous Anonymous said...

I'ts novel to suggest that confusion ought to include the idea that consumers would think that the companies source their ingredients from the same suppliers or place. This is something never tested in Eveready studies and were it to be the new standard, it essentially would undermine each and every Eveready study in the context of generic or private label goods because a new inquiry would be requiired, that is, whether or not consumers believe that the companies source their ingredients from the same sources. Separately, whether or not this is confusion is questionable and the board seems to have gone way beyond norms.

At 3:33 PM, Anonymous Bob Klein said...

This decision highlights the difference between the world as viewed through the TTAB's glasses and the real world of the marketplace. In a real-world likelihood of confusion survey, the focus would be on Walgreen's shoppers, and they would be well aware of the way Walgreens markets its private-label versions of brand-name over-the-counter drugs. Moreover, the substantial price difference between the brand-name and the Walgreens product would make it clear to consumers that these things are just not the same.
And I agree with the previous comment, that the source of the ingredients of the product have little to do with Lanham Act likelihood of confusion. at least this decision is not a precedent.

At 1:26 PM, Anonymous Brian Samuel Malkin, Esq. said...

Is it possible that tweaking the survey to specifically ask the question - do you believe that Wal-Zyr and Zyrtec are made by the same company would have changed the Board's mind? (Assuming the survey showed a resounding "No")


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