CAFC Affirms TTAB' s LEHMAN BROTHERS Ruling of No Abandonment and Likelihood of Confusion
The CAFC affirmed the TTAB's decision [TTABlogged here], sustaining an opposition to registration of the mark LEHMAN BROTHERS for beer, spirits, and bar and restaurant services, on the ground of likelihood of confusion with the identical mark used for various financial services. The appellate court also upheld the dismissal of Appellant Tiger Lily's counterclaims challenging Barclays' application to register the mark for financial services on the grounds of lack of bona fide intent, likelihood of confusion, and fraud. Tiger Lily Ventures Ltd. v. Barclays Capital Inc. and Barclays PLC, 2022 USPQ2d 513 (Fed. Cir. 2022) [precedential].
Barclays purchased the LEHMAN BROTHERS mark in 2008, after Lehman Brothers declared bankruptcy. Barclay then licensed the mark back to Lehman Brothers in connection with certain of the latter's retained operations. Tiger Lily filed its application to register on March 6, 2013, and Barclays applied to register the same mark for financial services on June 2, 2014.
Barclays had let the registrations for the mark lapse, and so Tiger Lily alleged that Barclays abandoned its mark, thereby making the mark available for Tiger Lily’s adoption and use and negating Barclays’ claim of priority. The Board found, however, that Barclays still possessed prior common law rights in the mark.
The CAFC first considered the Board's findings on abandonment and priority, ruling that substantial evidence supported the Board's conclusion that the LEHMAN BROTHERS mark had not been abandoned. The "decisive factor" was Tiger Lily's acknowledgement that the mark has been continuously used in the winding up of the affairs of at least one Lehman Brothers' affiliated company. Thus, Tiger Lily "essentially concedes that it cannot prove the 'nonuse' element" of its abandonment claim. Tiger Lily asserted that the bankruptcy proceedings will eventually end and Lehman Brothers will not emerge as a continuing enterprise, but the CAFC found this irrelevant, since use has not yet been discontinued. As to priority, since Barclays has not abandoned the mark, it enjoys priority.
Tiger Lily also challenged the Board's finding of likelihood of confusion, claiming that the Board committed a number of errors. The CAFC observed that the identity of the marks weighs heavily in the Section 2(d) analysis. As to the similarity of the involved goods and services, Barclays introduced extensive evidence of companies that have promoted financial services through use of their trademarks for alcohol, food, and beverages. Moreover, Lehman Brothers used its mark in connection with whisky and alcoholic beverages.
As a highly famous mark, LEHMAN BROTHERS merits a broad scope of protection. Although Tiger Lily may not be "actively 'confusing' consumers" it is seeking to take advantage of the fame of the LEHMAN BROTHERS mark.
Tiger Lily attempts to draw a distinction between "consumer recognition" as compared with "goodwill," and argues that it is actually trying to trade on the "bad will" associated with the LEHMAN BROTHERS mark. *** But we find no legal support for these subtle distinctions, and we thus find that Tiger Lily's attempts to capitalize on the fame of the LEHMAN BROTHERS mark weighs in favor of finding a likelihood of confusion.
In sum, substantial evidence supported the Board's DuPont findings regarding likelihood of confusion. "Moreover, Tiger Lily's attempt to benefit from the fame of the LEHMAN BROTHERS mark 'plays a dominant role in the process of balancing the DuPont factors."
With respect to Tiger Lily's lack-of-bona-fide intent claim, in light of the continuous use of the LEHMAN BROTHERS mark since 2008 and Barclays' capacity to offer financial services, the Board's finding that Tiger Lily failed to prove a lack of bona fide intent was supported by substantial evidence. Since Tiger Lily's fraud claim was predicated on Barclays' alleged lack of bona fide intent, it too failed.
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TTABlogger comment: Why should Tiger Lily's intent play any role in the likelihood of confusion analysis?
Text Copyright John L. Welch 2022.
posted by John L. Welch @ 6/06/2022
10 comments
10 Comments:
Tiger Lily's own director admitted that "it seeks to draw a connection between its goods and services and the financial and investment business LEHMAN BROTHERS, and only filed its application when it believed that the LEHMAN BROTHERS mark was abandoned.
If you admit your intention is to actually create a false connection with the senior mark, then you have conceded likelihood of confusion. That testimony is tantamount to a signed confession.
And as far as the CAFC is concerned, if you openly admit that you intended to create a false association with the senior mark, and only did so believing the other mark was abandoned, then the only remaining question is whether or not the senior mark was indeed abandoned. Who is the CAFC to conclude that there was not a likelihood of confusion when you've already admitted that's precisely what you set out to accomplish?
Isn't the question consumers perception? Suppose you intend to create confusion but fail?
If you intend to create confusion, isn't it LIKELY that you will? After all, the issue here is not whether you succeed or fail at creating confusion (or consumers drawing a connection with the LB). Rather, the issue is whether there is a likelihood that you will succeed at creating confusion. IMHO, evidence of intent is highly relevant to the likelihood of confusion analysis, especially for registration purposes. I don't think it's dispositive, but it's pretty close.
Almost 70 years ago, Judge Jerome Frank made an insightful comment on the relationship between intent and consumer confusion in the famous “Atmos” clock case: Mastercrafters Clock & Radio Co. v. Vacheron & Constantin-LeCoultre Watches, Inc., 221 F.2d 464, 466–67 (2d Cir. 1955)
“Plaintiff's intention thus to reap financial benefits from poaching on the reputation of the Atmos clock is of major importance. Of course, where there is no likelihood of confusion- as, e.g., where the alleged infringing article is not in a sufficiently adjacent field then an alleged infringer's intent becomes irrelevant, since an intent to do a wrong cannot transmute a lawful into an unlawful act. But where the copying is unlawful if only there is a likelihood of confusion, then the intent of the copier becomes decidedly relevant: It gives rise to a powerful inference that confusion is likely, and puts on the alleged infringer the burden of going forward with proof that it is not. Here the plaintiff's intent is unmistakable; accordingly, plaintiff had the burden of going forward with proof showing an absence of such likelihood; and that burden plaintiff did not discharge. Consequently, we do not accept the judge's findings as to the absence of unfair competition by plaintiff.”
While maybe not "bad faith" in its truest sense in this case, the applicant's intent still gets weighed under 13th Factor.
If you intend to create confusion but fail, that failure also would come in under the 13th Factor to counterbalance the original intent to create confusion weighing in favor of likelihood of confusion.
How would one establish that they failed to create confusion? I shudder to think of how that survey would be worded.
I think considering the intent of Tigerlily is similar to the deference that the Court/Board gives to assertions by the involved businesses themselves that confusion is not likely , as occurred in the Dupont opinion -- specifically, their judgment/belief carries weight because they will be directly affected, and they are making decisions based on actual understanding/experience of the relevant market. If the Board will consider evidence that the relevant users/owners don't believe confusion is likely, or believe that it may be avoided etc, then it would also make sense to take notice that Tiger Lily believed that copying the famous user would be profitable. It's a reflection of their knowledge of the marketplace and belief that confusion will be likely (to their advantage)
Thank you Anonymous for your comments. The admission was key.
Applicant said that it "it seeks to draw a connection between its goods and services and the financial and investment business LEHMAN BROTHERS." Does that mean it intended to create confusion? Or just call to mind the LEHMAN BROTHERS name?
Recommended Reading: Casagrande on the Role of Intent in Likelihood of Confusion Analysis
http://thettablog.blogspot.com/2011/10/recommended-reading-casagrande-on-role.html
A wine called "Lehman Sisters" brings to mind and draws a connection to the investment firm Lehman Brothers, but I'd argue does not infringe. Similarly, it may be that the wine Lehman Brothers draws a connection to or brings to mind the investment firm, but does not create consumer confusion.
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