Friday, August 14, 2020

Precedential No. 31: Laches, Acquiescence, and No Inevitable Confusion Doom Attack on BROOKLYN BREW SHOP for Beer Making Kits

In an exhaustive 70-page opinion, the Board denied a petition for cancellation of a registration for the mark BROOKLYN BREW SHOP and dismissed an opposition to that mark in stylized form, for "beer making kits," ruling that laches and acquiescence barred the plaintiff's Section 2(d) claims. In reaching that conclusion, the Board found that confusion between defendant's marks and plaintiff's marks BROOKLYN and BROOKLYN BREWERY for beer was not inevitable. The Brooklyn Brewery Corporation v. Brooklyn Brew Shop, LLC, 2020 USPQ2d 10914 (TTAB 2020) [precedential] (Opinion by Judge Thomas Shaw).

Defendant's registration for BROOKLYN BREW SHOP issued on October 4, 2011 on an application that was published on July 19, 2011. Plaintiff filed its petition for cancellation on December 10, 2015. However, plaintiff admitted that it first became aware of defendant's use of BROOKLYN BREW SHOP in 2010. Between 2011 and 2016 the parties collaborated on projects related to beer making, including co-branding beer making kits (see picture below).

Laches, estoppel, and acquiescence are defenses available in trademark proceedings. See Section 1069 of the Trademark Act. Even if proven, however, these equitable defenses cannot bar a Section 2(d) claim if confusion is inevitable, because any injury to defendant is outweighed by the public interest in preventing confusion. See, e.g., Ultra-White Co. v. Johnson Chem. Indus., Inc., 465 F.2d 891, 175 USPQ 166, 167 (CCPA 1972).

Laches: Although the defense of laches is generally not available in an opposition (since laches doesn't begin to run until the application is published for opposition), the defense may be available if the applicant owns a prior registration for substantially the same mark and goods. See Aquion Partners Ltd. P’ship v. Envirogard Prods. Ltd., 43 USPQ2d 1371, 1373 (TTAB 1997). Here, defendant's prior registration of the standard character mark BROOKLYN BREW SHOP "entitles it to use the wording in any font style, including that of the opposed application." [Is "entitles it to use" the correct phrase, or would it be better to say that the registration covers all variations of the mark? - ed.]. And so the Board concluded that the laches defense is available in this opposition as well as in the cancellation proceeding.

To establish the laches defense, a party must prove (1) an unreasonable delay in the assertion of rights, and (2) material prejudice attributable to the delay. See Bridgestone/Firestone Research Inc. v. Auto. Club de l’Ouest de la France, 245 F.3d 1359, 58 USPQ2d 1460, 1463 (Fed. Cir. 2001). Because the plaintiff was aware of defendant's use of the mark, laches began to run on the date of publication of the underlying application (July 19, 2011). See Ava Ruha v. Mother's Nutritional Center, Inc., 113 USPQ2d 1575 (TTAB 2015). Defendant may also rely on that date for its laches defense in the opposition. Plaintiff filed its notice of opposition about four years and two months later, and its cancellation petition about four years and five months later. The Board found this delay unreasonable because plaintiff undoubtedly had full knowledge of defendant's activities during that time period.

Moreover, plaintiff's claim that its delay was justified by defendant's progressive encroachment was rejected by the Board, since the beer making kits sold by defendant did not change over that period of time. Moreover, plaintiff was aware of defendant's nationwide sales, and so those sales could not be considered a "low level"of encroachment.

The Board found that defendant suffered material prejudice because of the delay: it continued to grow its business, increased its advertising expenditure, published two books of recipes, and tripled its sales. Loss of trademark rights would result in "severe economic prejudice" resulting from defendant's delay.

And so the Board concluded that defendant "has proven laches as to the beer-making kits."

Acquiescence: Unlike laches, the defense of acquiescence requires some affirmative act by the trademark owner. To establish this defense a defendant must prove that the plaintiff's conduct amounted to "an assurance by the plaintiff to the defendant, either express or implied, that plaintiff will not assert its trademark rights against the defendant." CBS, Inc. v. Man’s Day Publ’g Co., 205 USPQ 470, 473-74 (TTAB 1980).

Acquiescence requires proof of three elements, namely that: (1) plaintiff actively represented that it would not assert a right or a claim; (2) the delay between the active representation and assertion of the right or claim was not excusable; and (3) the delay caused defendant undue prejudice. See Coach House Rest. Inc. v. Coach and Six Rests., Inc.,934 F.2d 1551, 19 USPQ2d 1401, 1409 (11thCir. 19 USPQ2d 1401 (11th Cir. 1991).

In view of defendant's public collaboration with plaintiff, the Board found that plaintiff actively represented that it would not assert its rights against defendant's use of BROOKLYN BREW SHOP for beer making kits. Moreover, the Board found that the delay was inexcusable and that defendant was unduly prejudiced by the delay. In sum, plaintiff's actions constituted a "classic example of acquiescence."

Inevitable Confusion: In determining this issue, the Board applied the relevant DuPont factors. The Board focused on plaintiff's BROOKLYN BREWERY and BROOKLYN marks, in standard characters. It found, not surprisingly, that beer making kits are related to beer and are sold in the same channels of trade to overlapping classes of consumers.

Turning to the marks, the Board found plaintiff's marks to be inherently weak, noting that they were registered with a claim of acquired distinctiveness under Section 2(f). Plaintiff is located in Brooklyn and the addition of the generic term BREWERY "does little to bolster the inherent strength of Plaintiff's primarily geographically descriptive BROOKLYN BREWERY mark." However, the marks have achieved a degree of commercial recognition. Concluding that these findings offset one another, the Board ruled that the marks are "entitled neither to an enhanced nor a diminished scope of protection." Comparing the marks at issue, the Board found them to be more similar than dissimilar.

Plaintiff asserted that the evidence of actual confusion was overwhelming, but the Board disagreed. Although there were many instances of confusion, they were not entitled to the weight that plaintiff ascribed to the evidence. Much of the alleged confusion occurred during the period when the parties were actively promoting the co-branded beer making kits. "Given the parties' co-branding of beer-making kits and joint participation in numerous marketing events, it is hardly surprising that consumers could have been confused as to whether the parties were affiliated in some way."

Simply put, although some customers may have been confused as to whether the companies were affiliated, they cannot have been confused as to the source of the goods because both parties were in fact the source of the goods. Accordingly, Plaintiff’s evidence from 2012 and later does not establish actual confusion among consumers.

The remaining examples of actual confusion were "too infirm" to constitute evidence of sufficient probative value to support a finding of actual confusion.

The standard of confusion for a finding of inevitability of confusion is "an increment higher that that required for a finding of a likelihood of confusion." Coach House, 19 USPQ2d at 1409;Generally, inevitable confusion has been found when the marks and the goods/services are identical, or nearly so. See, e.g., Metro Traffic Control, Inc. v. Shadow Network Inc., 104 F.3d 336, 41 USPQ2d 1369, 1373 (Fed. Cir. 1997). Here, the evidence failed to establish that confusion is inevitable as to defendant's beer making kits. Neither the marks nor the goods are identical. Plaintiff's CEO said he had "no problem" with defendant's use of BROOKLYN BREW SHOP for the kits. "If Plaintiff's CEO has 'no problem' ... confusion is not inevitable as to the kits."

And so the Board dismissed the opposition and denied the cancellation petition as to plaintiff's Section 2(d) claims regarding beer making kits.

Mere Descriptiveness: Plaintiff also sought cancellation on the ground that BROOKLYN BREW SHOP is merely descriptive of defendant's kits. The Board noted that the defense of laches and acquiescence are not available against claims of mere descriptiveness. See Saint-Gobain Abrasives Inc. v. Unova Indus. Automation Sys. Inc., 66 USPQ2d 1355, 1359 (TTAB 2003). The Board agreed with plaintiff that the mark is geographically descriptive of the goods, since defendant is located in Brooklyn, but plaintiff did not plead Section 2(e)(2). The mark does not describe a "quality, feature, function, or characteristic" of the goods, and therefore it is not merely descriptive under Section 2(e)(1).

Other Goods: The opposed application also included beverage glassware and sanitizing preparations. The equitable defenses did not apply to those goods, and so the Board went through an ordinary DuPont analysis. As to the glassware, the Board found confusion likely, since plaintiff also sold glassware, but as to the sanitizing preparations, the difference in the goods was dispositive.

Read comments and post your comment here.

TTABlogger comment: After reading this exhausting decision, I could use a few beers.

Text Copyright John L. Welch 2020.


At 7:22 AM, Blogger Gene Bolmarcich, Esq. said...

Oh, come on..if you take out the pictures, it's only about 67 pages. I agree with you that the Board misspoke. "The registration covers all stylizations of the mark" is how they should have said it. A standard character mark does not allow someone to use the Coca Cola font if the registration includes soft drinks.

At 2:49 PM, Anonymous Catherine Cavella said...

I find it very surprising the Board found that Brooklyn Brew Shop is only geographically descriptive and not 2(e)(1) in light of their finding in Sporting Soles a few days ago, which if I recall they found was merely descriptive of stores selling athletic footwear. If Sporting Soles fails under 2(e)(1) then surely Brooklyn Brew Shop should as well.

So perhaps Sporting Soles is better understood as deference to the Examiner's findings vs. the Board's actual leanings in mere descriptiveness cases. Personally, I believe Sporting Soles is fairly far away from "merely" descriptive and merits registration at the very least on the Supplemental Register, due to the double entendre, which takes it closer to suggestive territory.


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