Thursday, May 28, 2015

TTAB Orders Cancellation of "AAA CarFacts" Registration: Confusable with CARFAX

The Board granted a petition for cancellation of a registration for the mark AAA CarFacts for vehicle history reports [CAR FACTS disclaimed], finding the mark likely to cause confusion with various CARFAX-formative marks registered for highly similar services. Respondent AAA’s sketchy laches and estoppel defenses went nowhere, and the Board found that Respondent “had simply added its well-known AAA house mark to the phonetic equivalent of Petitioner’s mark." Carfax, Inc. v. American Automobile Association, Inc., Cancellation No. 92056568 (May 7, 2015) [not precedential].

Laches: AAA pointed to Petitioner’s 20-month delay (from the publication date of the underlying application to the filing of the petition). The Board observed that 20 months generally cannot be considered unreasonable, since the Lanham Act provides that a petition for cancellation under Section 2(d) may be brought up to five years after issuance of a registration. [Compare the recent Ava Ruha decision, TTABlogged here, where the Board ruled that at delay of just over three years and two months could support a laches defense]. However, the two elements for proving laches – unreasonable delay and resulting harm – must be considered together.

AAA claimed that it relied on Petitioner Carfax’s failure to oppose when AAA decided to begin using the mark, and therefore the loss of goodwill would be prejudicial. However, there was no evidence of record regarding any investments in or expenditures connected with the mark by AAA, and so in view of the lack of proof of prejudice, the Board declined to find laches.

Estoppel: AAA claimed that an estoppel defense “arises from the prejudice to Registrant.” Estoppel, however, requires misleading conduct by the other party that leads the first party to reasonably infer that rights will not be asserted against it. Here, however, Carfax voiced its concerns beginning shortly after publication and beyond. In short, AAA could not reasonably have believed that Carfax would consent to its use of the AAA CarFacts mark.

Likelihood of Confusion: The Board focused its analysis on the Carfax mark most similar to AAA’s mark, shown immediately below, for providing online vehicle history information. AAA admitted in its answer that the services of the parties are highly similar and related, but it argued that the services are different in that AAA does not provide information regarding specific vehicles, but only more generally by make, model, and year. However, the services identified in the challenged registration make no such distinction, and in any case AAA conceded the relatedness of the involved services.

Because the services are in part identical, the Board presumed that they are offered through the same channels of trade to the same classes of consumers. AAA pointed out that its services are rendered only to its members, but again the Board noted that there was no such limitation in the challenged registration. The evidence showed that AAA and Carfax have a long history of working together, which only increases the likelihood of confusion “because consumers may used to seeing Petitioner’s services offered on Respondent’s website.”

AAA admitted that the CARFAX mark is well-known and is arbitrary and distinctive. Nevertheless, it asserted that when spoken, CARFAX sounds like “car facts” and is therefore entitled to a narrower scope of protection. But, the Board observed, “CARFAX is more than a ‘mere misspelling” of ‘car facts.’” The combination of “car” and “fax” is incongruous or arbitrary and is a distinctive mark, as AAA admitted. The record was devoid of any third party use of the term “car facts.” In any case, Carfax’s evidence of thirty years of use, and of its position as market leader in its field, established that CARFAX is “at least a fairly strong mark ... entitled to a concomitantly broad scope of protection.”

Turning to the marks, AAA contended that its mark is dominated by AAA, since that is the first term in the mark. But looking at the marks in their entireties, the Board found that AAA had simply added its house mark to the phonetic equivalent of Petitioner’s mark. “The addition of AAA to CarFacts does not change the connotation or commercial impression of the term CarFacts. Rather, it merely tells consumers that the CarFacts service is offered by AAA." And despite AAA’s disclaimer of CAR FACTS, and even assuming that “car facts” is descriptive of facts about cars, “it does not follow that CARFAX is not entitled to protection from phonetically similar marks for legally identical services.” Confusion should be avoided between “weak” marks, as well as between “strong” marks, or between a “weak” and a “strong” mark. The Board concluded that the similarities between the marks outweigh their differences, and that AAA’s mark is substantially similar to Petitioner’s CARFAX marks.

Balancing the relevant duPont factors, the Board found confusion likely and it granted the petition for cancellation.

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TTABlog note: The Board did not consider the real marketplace conditions, and so would AAA be collaterally estopped on the issue of likely confusion if an infringement action were brought?

Text Copyright John L. Welch 2015.


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