CAFC Reverses TTAB's "FL FLEX" Decision Due To Errors In Assessing the Strength of the Opposer's Marks

The CAFC vacated and remanded the Board's decision in Flex Ltd. v. Spireon, Inc., Opposition No. 91252138 (Feb. 10, 2022) [pdf here], wherein the Board found confusion likely between Spireon's mark FL FLEX for electronic devices for tracking the location of mobile assets, and Flex's registered marks FLEX, FLEX (Stylized), and FLEX PULSE for supply chain and logistics management services. The court concluded that the Board erred in its assessment of the strength of Flex's marks, both as to conceptual and commercial strength, by failing to consider all relevant evidence. The Board also erred when, in comparing the marks at issue, it mistakenly analyzed Spireon's mark against the mark FLEX PLUS instead of the correct mark FLEX PULSE. Spireon, Inc. v. Flex Ltd., 2023 USPQ2d 737 (Fed. Cir. 2023) [precedential].

Conceptual Strength: In concluding that Flex 's marks are not conceptually weak, the Board improperly discounted the probative value of 15 registered marks comprising compound terms that included "another word or letters in addition to 'FLEX.'" After excluding those marks, the Board concluded that the record evidence of third-party uses and registrations was "far less than the amount of evidence found convincing in Jack Wolfskin and Juice Generation wherein ‘extensive evidence of third-party uses’ of similar marks was shown." That exclusion of evidence was an error:

At least where the registrations and application [at issue] are for non-identical marks, as they are here, it is error for the Board to effectively disregard third-party composite marks. The composite third-party registrations are relevant to the question of whether the shared segment—in this case, “flex”—has a commonly understood descriptive or suggestive meaning in the field and whether there is a crowded field of marks in use. The composite marks have probative value and should have been included in the Board’s analysis.

The Board "compounded this error by apparently giving no weight" to Spireon’s evidence and argument that "flex"is highly suggestive because it is a shortened form of "flexible."

It seems apparent that the term “flex” “hint[s] at some attribute of the goods or services,” 2 McCarthy, supra, § 11:64 (capitalization altered), in this industry and is thus suggestive. On remand, the Board must consider all relevant evidence to determine whether Flex’s marks are conceptually weak.

Commercial Strength: The Board erred again in declining to consider third-party use of composite marks. In addition, Spireon argued that the Board should have considered two third-party registrations for the mark FLEX for supply chain and logistics management software, and a third registration for a transportation controller, even though there was no record evidence of use of the marks. This led the CAFC to a consideration of the burden of proof regarding third-party registrations.

The court observed that it is well-established that the opposer has the burden of proof in opposition proceedings, which would suggest that, once an applicant has introduced a third-party registration, opposer has the burden to show the mark is not in use. "In other words, absent proof of non-use, use could be assumed." However, "in prior cases, we and our predecessor court appear to have assumed, without explicitly stating, that in connection with the analysis of commercial strength, the burden rested on the applicant to establish that prior marks were actually in use."

The CAFC declined to address "the broader question of which party bears the burden of establishing non-use as a general matter."

This case presents the far narrower question of whether the burden of showing non-use of identical marks for identical goods rests with the opposer. We think it necessarily does. Otherwise, the opposer would be able to dismiss the commercial significance of previously registered identical marks for identical goods where the opposer’s own mark should perhaps have not been granted registration in the first place.

On remand, Flex "should be given the opportunity" to show that these identical marks are not in use. "If Flex fails to establish non-use, the commercial strength of the Flex marks must be considered weak as to Spireon’s non-identical mark."

FLEX PLUS?: Flex argued that the Board's error in considering the mark FLEX PLUS rather than FLEX PULSE was harmless error because the Board's overall analysis was supported by substantial evidence. The CAFC disagreed:

We note that FLEX PULSE is quite different from FL FLEX in appearance and sound. “Flex” appears as the first word in the FLEX PULSE mark, while it is the last word in the FL FLEX mark. On remand, the Board should analyze the correct mark, taking into account all the differences between FL FLEX and FLEX PULSE.

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Text Copyright John L. Welch 2023.