The U.S. Court of Appeals for Federal Circuit held that the mere fact that both parties’ products are physically identical does not render them related for purposes of determining a likelihood of confusion. M2 Software, Inc. v. M2 Communications, Inc., 2006 U.S. App. LEXIS 13936 (Fed. Cir. 2006) (Mayer, J.). Rather, despite the common use of "M2" in each party’s mark and use of the respective marks on CDs, the court must examine the uses of each party’s product.

The opposer, M2 Software, owned a trademark registration for M2 for CD-ROMs providing information in the field of music and film. The applicant, M2 Communications, applied for the mark "M2 Communications" for CD-ROMs providing information in the fields of medicine and pharmaceuticals. During prosecution M2 Communications disclaimed "communications" apart from the mark. Nevertheless, the Trademark Trial and Appeal Board (TTAB) granted judgment in favor of M2 Communications, finding confusion not likely, and dismissed the opposition. M2 Software appealed.

The Federal Circuit affirmed. Focusing on the Dupont factor of the relatedness of the goods in question, the Federal Circuit agreed with the TTAB that the parties’ products were sufficiently dissimilar such that there was no likelihood of confusion.

The Court rejected the argument that the fact that both parties’ products were CD-ROMs rendered them related for purposes of determining a likelihood of confusion. "[G]iven the pervasiveness of software and software-related goods in society, it would be inappropriate to presume relatedness on the mere basis of goods being delivered in the same media format, especially where, as here, the goods described in both the application and the registration are narrowly defined, along distinct industry lines."

The Federal Circuit also found that M2 Communications’ customers and channels of trade did not overlap with those of M2 Software. The Court reasoned that it "was difficult to establish likelihood of confusion" if the parties’ products and customers did not overlap.

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