Monday, December 12, 2011

Precedential No. 33: TTAB Rejects ROLEX Dilution Claim for Failure to Prove Likely Impairment of the Distinctiveness of the Mark

The Board's recent JUST JESU IT and MOTOWN METAL decisions seemed to waken the Rip Van Winkle of TTAB jurisprudence - Section 43(c) dilution - from its long slumber. By discarding its "substantial similarity" or "near identity" standard for comparing the marks at issue, the Board had surely made it easier to prove dilution. But this new decision may put old Rip back to sleep. The Board dismissed Opposer Rolex's dilution-by-blurring claim, concluding that Opposer had failed to prove that the applied-for mark ROLL-X for "x-ray tables for medical and dental use" would, despite an "actual association" between the marks, impair the distinctiveness of Opposer's famous ROLEX mark. And in a further ruling, the Board dismissed Rolex's claim that Applicant AFP did not have a bona fide intent to use the ROLL-X mark when it filed its application to register. Rolex Watch U.S.A., Inc. v. AFP Imaging Corporation, 101 USPQ2d 1188 (TTAB 2011) [precedential], vacated January 29, 2013 (TTAB). [TTABlogged here].

Fame: The Board had little difficulty finding the ROLEX mark to be famous for dilution purposes based on: nearly one hundred years of use, a lack of any third-party use or registration of similar marks, the fact that the mark is a coined and fanciful term, hundreds of millions of dollars in annual sales, tens of millions of dollars in annual advertising expenditures in a variety of media, and unsolicited, "intense" media coverage.

Fame when?: Most of Opposer's evidence pre-dated the 2008 filing date of Applicant's intent-to-use application, leading the Board to conclude that the fame of the ROLEX mark was well established prior to Applicant's constructive use date.

Dilution by blurring?: Dilution by blurring arises when a substantial percentage of consumers, when seeing the junior party's mark, are immediately reminded of the famous mark and associate the junior party's use with the owner of the famous mark - even if they do not believe that the goods come from that owner. Even if such an association is established, the Board must determine whether such association is likely to impair the distinctiveness of the famous mark.

The Board considered the six non-exhaustive factors set forth in Section 43(c). As to the first factor, the similarity of the marks, the Board noted that Nike v. Maher embraced a new test based simply on a comparison of the marks as to appearance, sound, connotation and commercial impression: i.e., whether the marks are sufficiently similar to cause consumer to conjure up the famous mark when confronted with the junior mark. Here, the Board found that the differences between the marks in appearance, meaning, and commercial impression "greatly outweigh any similarities in pronunciation." More specifically, Applicant's mark is likely to be viewed as comprising the word "roll," as in moving on rollers, and "x," as in x-ray. Thus this factor favored Applicant.

The second factor, the distinctiveness of the famous mark favored Rolex. The third factor, the extent that owner is engaging in substantially exclusive use of the famous mark, also favored Rolex, as did the fourth factor, the degree of recognition of the famous mark.

The fifth factor, whether the junior party intended to create an association with the famous mark, favored Applicant. In fact, the only evidence on the issue indicated that Applicant chose the mark ROLL-X based on the product's attributes.

As to the sixth factor, whether there is an actual association between the junior mark and the famous mark, Rolex relied on a survey targeted on "animal professionals" responsible for purchasing x-ray tables. When asked if something came to mind when first shown the ROLL-X table, 82% said yes, and 42% of those respondents said it was "Rolex/Watch." The Board found this level of association to be insufficient to prove a likelihood of dilution:

This figure is not persuasive given that a higher percentage, 50% of respondents who replied that something came to mind, thought of a feature of the goods (portable, rolling) or the actual goods themselves (x-ray tables/equipment). Moreover, the survey results, while showing an “actual association” between opposer’s and applicant’s marks, do not establish that such an association would impair the distinctiveness of opposer’s famous mark.

The Board concluded that the dissimilarity between the marks, the conflicting results of the survey, and the lack of evidence of Applicant's intent to create an association, outweigh the recognition, distinctiveness, and substantially exclusive use of the ROLEX mark. Moreover, Rolex did not provide any evidence of the degree to which its marketing power would potentially be diminished by Applicant's intended use of its mark. Therefore the Board dismissed Rolex's dilution claim.

Lack of bona fide intent: Rolex also claimed that Applicant did not have a bona fide intent to use the ROLL-X mark at the time it filed its application to register. Indeed, Opposer established a prima facie case by showing that Applicant had no documentation (e.g., labels or advertising materials) to support its claim of a bona fide intent.

However, Applicant AFP submitted sufficient evidence to rebut the claim: it promotes and advertises other imaging products, and it owns the registered mark DENT-X for film processors and x-ray machines and advertises that mark for its human dental x-ray business. Thus the filing of the ROLL-X application was consistent with an extension of AFP's product line. In addition, AFP has the capacity to manufacture and market the goods identified in the challenged application.

And so the Board concluded that Applicant filed its application in good faith, not merely to reserve a right in the ROLL-X mark.

TTABlog comment: Please provide your thoughts on how one would go about proving that the marketing power of a famous mark would be diminished by another mark, particularly one that is not yet in use. Is it a matter of better survey results regarding the percentage of association?

If the marks had been identical, would that have brought a different result? In other words, does proof of dilution by blurring still hinge on proving that the marks are substantially similar or nearly identical?

TTABlog further note: I like to think that the Board took to heart Professor McCarthy's comment, posted on the TTABlog, concerning the June 2010 decision finding dilution of the THE OTHER WHITE MEAT (here):

What I think is missing from the T.T.A.B.’s opinion is any discussion of what “dilution by blurring means” and whether the applicant’s mark was likely to “impair the distinctiveness of the famous mark.” Exactly how would the accused slogan probably sap the strength of the famous slogan? Just by itself or because it would likely be the first of many? The Board is silent.

The Board goes through the non-exclusive list of six factors and assumes in one sentence that blurring is likely: “Accordingly, after considering all the relevant factors, we find herein a likelihood of dilution by blurring.” None of the six factors directs attention to whether there is any evidence that it is likely that the famous mark’s strength will be “impaired.” This statutory omission apparently led the Board to simply ignore this crucial link in the chain of proof.

Text Copyright John L. Welch 2011.


At 12:19 AM, Anonymous Anonymous said...

The Board's decision in favor of applicant is surprising based on the general position that dilution by blurring is intended precisely to prevent entities from encroaching on famous marks such as Rolex. The decision opens the possibility that in addition to ROLL-X for x-ray tables, it will support phonetically similar marks so long as the applicant/defendant can support the selection with a nexus to the goods or services. A fortune teller service can be called Inn-Tell because it is found in inns. A key manufacturer could use Nite Key for glow in the dark keys. As in these examples, it seems highly unlikely that the individuals selecting Roll-X did not consider the possibility that the mark sounded similar to Rolex.

At 8:44 AM, Anonymous Orrin A. Falby said...

Sound alone in just but one factor that "could" be used in determining whether the marks are "similar" for likelihood of dilution purposes. It is also given very little weight in the analysis, since "there is no correct pronunciation of trademarks". At the end of the day, despite the alleged similarity in sound (in the English language I think they are called homonyms), the marks do not have a similar meaning or create a similar commercial impression. The Board got it right in my opinion.

At 7:57 AM, Anonymous Jessica Smith said...

I agree with you Orrin A. Falby

rolex watchs


Post a Comment

<< Home