CAFC Reverses TTAB: Paw Print Marks Not Confusingly Similar

In a precedential ruling, the U.S. Court of Appeals for the Federal Circuit overturned the Board's June 2014 decision (TTABlogged here) that found the two marks shown immediately below to be confusingly similar for various clothing items. The court agreed with the Board, however, in dismissing Jack Wolfskin's counterclaim seeking cancellation of New Millennium's pleaded registration on the ground of abandonment. Jack Wolfskin Ausrustung fur Draussen GmbH & Co. KGaA v. New Millennium Sports, S.L.U., 116 USPQ2d 1129 (Fed. Cir. 2015) [precedential].

Cancellation counterclaim: Jack Wolfskin's counterclaim alleged that New Millennium had stopped using the registered version of its mark (above right) and instead had been using it in the form shown below since 2004 :

The CAFC has held, in the context of a priority dispute, that if the old form and the new form of a mark are "legal equivalents," then tacking will be permitted. "Two marks are legally equivalent if they 'create the same, continuing commercial impression' and where the modified version of the mark does not 'materially differ from or alter the character' of the original mark."

The CAFC ruled that the same legal standard applied in the abandonment context. "Accordingly, when a trademark owner uses a modified version of its registered trademark, it may avoid abandonment of the original mark only if the modified version 'create[s] the same, continuous commercial impression.'"

In Hana Fin., Inc. v. Hana Bank, the Supreme Court recently held, in the priority context, that "the same continuing commercial impression" is a question of fact, "thus abrogating our practice of viewing this inquiry as a question of law subject to de novo review." The CAFC found no reason why the standard of review should differ for the abandonment issue. Therefore, the court concluded that it must review the TTAB's factual determination for substantial evidence. "[W]e must ask whether a reasonable fact finder might find that the evidentiary record supports the Board's conclusion."

Reviewing the two version of New Millennium's mark, the court observed that only the font of the word KELME and the style of the paw print has changed. It agreed with the Board that the change in font did not materially alter the impression created by the word KELME, and that the addition of claws to the paw print likes was not a material change because the claws are 'a very small component' and because 'it is common knowledge that an animal's paws are accompanied by claws.'" Jack Wolfskin provided no persuasive reason why these alterations change the commercial impression that the mark creates.

The CAFC concluded that the Board's finding that New Millennium did not abandon its mark was supported by substantial evidence, and a reasonable fact-finder could conclude that the new version creates the same continuing commercial impression as the registered mark.

Likelihood of confusion: The determination of likelihood of confusion is an issue of law based on underlying factual findings. Jack Wolfskin contended that the Board erred with regard to two of the du Pont factors: the similarity of the marks and the number and nature of similar marks in use.

The court agreed with appellant that the Board failed to adequately consider the literal part of the cited mark, the word KELME. The Board essentially ignored the verbal portion and found that the two paw print designs were substantially similar. In short, it did not consider the marks as a whole.

The Board's statement that companies often use the design portion of a composite mark alone as shorthand for their brand was unsupported by evidence. And there was no evidence that consumers recognize the paw print portion of New Millennium's mark as a source indicator for its products.

The Board can, in proper circumstances, give greater weight to a design component of a composite mark, but it must provide a rational reason for doing so. It did not do so here, and therefore its finding regarding the similarities of the marks was not supported by substantial evidence.

Moreover, Jack Wolfskin provided voluminous evidence of paw print design elements registered and used for clothing, but the Board for the most part discounted that evidence.

The CAFC agreed with Jack Wolfskin that the Board erred in its consideration of this evidence. Such extensive evidence of third-party use, as recently explained in the CAFC's Juice Generation decision, is "powerful on its face" even when the specific extent and impact of the usage has not been proven. Here, the evidence demonstrated "the ubiquitous use of paw prints on clothing as source indicators."

Given the volume of evidence in the record, consumers are conditioned to look for differences between paw designs and additional indicia of origin to determine the source of a given product. Jack Wolfskin’s extensive evidence of third-party uses and registrations of paw prints indicates that consumers are not as likely confused by different, albeit similar looking, paw prints.

The CAFC therefore ruled that the Board finding as to this factor was not supported by substantial evidence.

New Millennium cannot escape the fact that the KELME element of its registered mark is the dominant portion of the mark. By narrowly focusing on the paw print element of the registered mark, the Board failed to appreciate that the KELME element is unlike anything that appears in Jack Wolfskin’s applied-for mark. The dissimilarity of the marks is further confirmed by the considerable evidence of third-party registration and usage of marks in commerce that depict paw prints on clothing. This evidence indicates that the paw print portion of New Millennium’s mark is relatively weak. Balancing the factors, the Board’s determination that Jack Wolfskin’s mark would likely cause consumer confusion cannot be sustained.

The CAFC therefore affirmed the dismissal of the counterclaim, but reversed the Board's decision sustaining New Millennium's Section 2(d) claim. It remanded the case to the Board for further consideration in light of this opinion.

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TTABlog comment: I'm not sure what the Board is supposed to do on remand.

Text Copyright John L. Welch 2015.