United States: "Reasonable Manners" Standard Does Not Apply To Ex Parte Trademark Examinations

This article previously appeared in Last Month at the Federal Circuit, April 2012

Judges: Dyk, Moore, and O'Malley (author)

[Appealed from TTAB]

In In re Viterra Inc., No. 11-1354 (Fed. Cir. Mar. 6, 2012), the Federal Circuit affirmed the TTAB's refusal to register the trademark XCEED, in standard character form, for agricultural seed. The Court found that this mark would likely cause confusion with the previously registered word and design mark for agricultural seeds X-SEED. In doing so, the Court applied its recent holding in Citigroup Inc. v. Capital City Bank Group, Inc., 637 F.3d 1344 (Fed. Cir. 2011), which eliminated the "reasonable manners" standard in an inter partes opposition case, to ex parte examination cases.

Viterra Inc. ("Viterra") sought to register the mark XCEED for agricultural seed in standard character form without claim to any particular font, style, size, or color. For the same class of goods, X‑Seed, Inc. ("registrant") had previously registered the mark X-SEED in special form as a word and design mark, consisting of a stylized letter X and surrounding dots in red with the term "-Seed" in black and outlined in gray. In its registration, X-Seed had disclaimed rights to the term "seed" apart from the mark.

The TTAB affirmed the examining attorney's refusal to register Viterra's mark, giving heavy weight to the identical nature of the goods involved. It also noted the similarity of the marks—sounding virtually identical—and presumed that the goods travel in overlapping trade channels and are bought by the same classes of potential customers. Regarding similarity of appearance, the TTAB applied the "reasonable manners" standard, which requires consideration of all reasonable manners in which the words could be depicted. The TTAB concluded that one reasonable variation of XCEED could include a large capital letter "X" followed by "ceed" in smaller letters, thus resembling the X-SEED mark. Because of this evidence, the TTAB agreed that purchasers familiar with X-Seed's agricultural seed would be likely to mistakenly believe, upon encountering Viterra's mark, that the goods originated with, or were somehow associated with or sponsored by, X-Seed, i.e., there would be a likelihood of confusion. Consequently, the TTAB affirmed the examiner's registration refusal. Viterra appealed.

On appeal, the parties argued only one factor from In re E.I. DuPont de Nemours & Co., 476 F.2d 1357, 1361 (C.C.P.A. 1973), bearing on the likelihood of confusion—the similarity of the marks. Viterra asserted that its XCEED mark and registrant's X-Seed Mark are dissimilar because: (1) the marks differ in appearance because of X-Seed's distinctive design and color claims; (2) the marks differ phonetically because XCEED would be pronounced "exceed" whereas X‑SEED would be pronounced "X" followed by "seed"; and (3) the marks would have different connotations because Viterra's would be construed as "exceeding" customer expectations while X-Seed's would be susceptible to multiple interpretations.

First, concerning the marks' appearances, the Federal Circuit agreed that the TTAB's holding that a standard character mark, like Viterra's XCEED mark, is not limited to any particular font, size, style, or color. Consequently, the Court found that Viterra's standard character mark was not distinct from
X-Seed's mark registered in stylized lettering with design.

Additionally, the Federal Circuit rejected Viterra's attempt to limit Citigroup to inter partes oppositions. The Court explained that Citigroup, decided after the TTAB decision on appeal in this case, broadens the potential variations of standard character marks to be considered in the likelihood-of-confusion analysis, thus making the TTAB's decision less vulnerable to attack, and nothing in that decision limits it to the inter partes context. Moreover, the Court confirmed that Citigroup applies in cases where a standard character mark is compared to a design, or word-and-design, mark. In reaffirming its rejection of the "reasonable manners" standard, the Court cautioned that standard character marks should not encompass all possible design elements of the mark, but left the determination of appropriate methods of comparison design marks with standard character marks to future cases.

The Federal Circuit also rejected Viterra's argument that the TTAB misconstrued the dominant portion of the X-Seed Mark. The Court found that the design feature of the X-Seed Mark was not entirely distinct from the literal portion of the mark; "rather, the color and design features are incorporated in the letter 'X' and are covered in part by the '-Seed' portion of the mark." Slip op. at 15. Thus, the Federal Circuit held that "[t]he design itself is a stylized letter that overlaps with, and is covered by, other literal features of the mark." Id. And the Court reiterated that although the registrant disclaimed exclusive rights to the
term "-Seed," the dominant portion of a composite word and design mark is the literal portion, even where the literal portion has been disclaimed. Accordingly, the Court found that the TTAB's determination—that the entire literal portion "X-Seed" is the dominant portion of the mark, and not just the stylized "X"—was supported by substantial evidence.

The Federal Circuit also rejected Viterra's argument regarding the pronunciation of the marks. The Court found that substantial evidence supported the TTAB's factual findings that any minor differences in the sound of the two marks may go undetected by consumers and therefore would not be sufficient to distinguish the marks.

Finally, the Court rejected Viterra's contention that the marks have different connotations —XCEED will be construed by customers as "exceeding" their expectations, whereas the X-Seed Mark is subject to a variety of meanings—because substantial evidence supported the TTAB's conclusion that purchasers may give the same meaning of superiority to registrant's mark.

The Federal Circuit concluded that while Viterra's arguments focused on only one DuPont factor, the TTAB also gave "heavy weight" to the identical nature of the goods. Accordingly, although the marks involved are not identical, the Court found "any minor differences between them . . . insufficient to outweigh the remaining factors that favor refusal of the registration in this case." Id. at 18.

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