CAFC Affirms TTAB's Dismissal of SKY CINEMAS Opposition: Not Confusable with SKY NEWS for News Reporting Services

In a nonprecedential ruling, the CAFC upheld the Board's decision dismissing an opposition to registration of SKY CINEMAS for "movie theaters" [CINEMAS disclaimed], finding the mark not likely to cause confusion with SKY NEWS for radio and television news services. The Board concluded that the involved services are not related nor offered through the same trade channels, and it found that opposer failed to show that movie theaters are within its natural zone of expansion. [TTABlogged here]. Sky International AG v. Sky Cinemas LLC, Appeal No. 21-1575 (Fed. Cir. December 17, 2021) [not precedential].

Opposer Sky International raised three issues on appeal: it argued that (1) the Board improperly "bifurcated" the case by deciding International's own claims before considering Cinema's counterclaims; (2) the Board erroneously considered only International's standard character registrations; and (3) the Board's finding that movie theaters were outside of International's natural zone of expansion was not supported by substantial evidence.

As to the first argument, the court did not agree that the case was bifurcated. And in any case, the Board merely postponed consideration of the counterclaims and then addressed the counterclaims in a separate order. 

As to the second argument, the court agreed that the Board should have considered a word-plus-design registration owned by International, since it included service in addition to those recited in the two standard character registrations for SKY NEWS that the Board considered. However, the error was harmless because the Board did consider the additional services when it analyzed International's natural-zone-of-expansion argument. 

As to the third argument, the court reviewed the Board analysis as to whether International was likely to "bridge the gap" between its services and the operation of movie theaters. The Board found that there was an overlap in customers and direct competition between the involved services, that International has expanded its business into the production of films, and that it offered streaming services for a variety of platforms, including mobile devices, laptops, and desktop computers.

Nonetheless, the Board found that a motion picture production company would be unlikely to “go into the business of operating a movie theater without significant new technology or know-how,” that the nature of the parties' services was different, and that “there [was] no record evidence showing that companies that produce films or distribute films over users’ personal devices have expanded to owning or running movie theaters.” 

And so, the CAFC held that "substantial evidence supports the Board’s finding that operating movie theaters is not within Sky International’s natural zone of expansion."

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TTABlogger comment: By considering the marketplace in dealing with the natural-zone-of-expansion argument, the Board has created some serious issue preclusion problems for Sky International if it pursues an infringement suit against Sky Cinema. 

Text Copyright John L. Welch 2021.