United States: Trademarks In The Crosshairs: Non-Trademark Use Of A Descriptive Term

Sorensen v. WD-40 Co.

Addressing likelihood of confusion and the fair use defense in a trademark infringement suit pertaining to corrosion inhibitors, the U.S. Court of Appeals for the Seventh Circuit affirmed a lower court's summary judgment ruling, holding that the use of the term "inhibitor" constituted non-trademark descriptive fair use and, further, that the trademark holder failed to raise a genuine issue of material fact regarding likelihood of source confusion related to its orange crosshair mark. Sorensen v. WD-40 Co., Case No. 14-3067 (7th Cir., June 11, 2015) (Flaum, J.).

Jeffrey Sorensen is the founder and CEO of Inhibitor Technology Corporation, which sells rust-prevention products having a volatile corrosion inhibitor (VCI) under the incontestably registered word mark THE INHIBITOR. Sorensen further claims common law trademark ownership in an orange-and-black crosshair design. Sorensen's VCI products each include the word mark THE INHIBITOR, but only some of the products include the crosshair design, and its appearance is inconsistent.

WD-40 markets its own brand of VCI corrosion inhibitors, referred to as the WD-40 Specialist product line. With one exception, each of the products in the Specialist line are in metal aerosol spray bottles having the familiar WD-40 yellow shield trademark and the word mark SPECIALIST. Below the SPECIALIST mark, the specific name of the Specialist product, such as "Long-Term Corrosion Inhibitor," and a gray-and-burnt orange crosshair design are displayed. WD-40's VCI Specialist products are targeted to different consumer industries than those of Sorensen's products, and none of its print and online marketing media overlap with media advertising Sorensen's products.

Sorensen filed suit against WD-40, alleging trademark infringement and unfair competition under federal and state law. Sorensen's claims related to the use of the word "inhibitor" in WD-40's "Long-Term Corrosion Inhibitor" Specialist product and WD-40's use of its crosshair design. The district court granted summary judgment against Sorensen on all counts, holding that the word "inhibitor" was a descriptive fair use and no genuine issue of material fact existed that WD-40's crosshair mark was confusingly similar to Sorensen's. Sorensen appealed.

Under § 1115(b)(4), a defendant may invoke a fair use defense by demonstrating that alleged trademark infringement "is a use, otherwise than as a mark . . . which is descriptive of and used fairly and in good faith only to describe the goods or services of such party." To prevail on its fair use defense, WD-40 was required to show that its use of the term "inhibitor" was not as a trademark, descriptive of the goods to which it refers, and fair and in good faith.

The 7th Circuit found for WD-40 on all three elements. Although a product can have multiple indicators of source, WD-40's use of the term "inhibitor" was less prominent, less noticeable and less attention-grabbing than its famous shield mark, the word mark SPECIALIST and even the word "Corrosion." Indeed, as the court explained, although a plurality of words serving as a full name or phrase may act as an indicator of source, each individual word need not serve as a mark. With respect to descriptiveness, the court further explained that the descriptiveness of a term not only depends on the word itself, but also the product for which it serves as a source indicator. WD-40's use of "inhibitor" simply described a characteristic of its product, which contains VCI and is meant to inhibit corrosion over a long period of time. Finally, although WD-40 appeared to have knowledge of Sorensen's mark, it did not act in bad faith because it did not believe that it was using the word "inhibitor" as a trademark. Accordingly, WD-40 was under no obligation to conduct a trademark search, which the court deemed would have been useless in any event.

Next, the court turned to the likelihood of consumer confusion between the two crosshair designs. The court relied on seven factors to determine likelihood of confusion: (1) similarity between the marks in appearance and suggestion, (2) similarity between the products, (3) the area and manner of consistent use, (4) the degree of care likely to be exercised by consumers, (5) strength of the plaintiff's mark, (6) evidence of actual confusion and (7) the intent of the defendant to palm off his product as that of the plaintiff. Although several of the factors at least weakly supported Sorensen, the court found that the most prominent factors—similarity of the marks, bad faith intent, and evidence of actual confusion—were all decisively in WD-40's favor. Moreover, the court found that the strength of Sorensen's mark was clearly lacking.

Regarding the similarity of the marks, the court stated that the crosshair designs must be evaluated not in isolation but as a whole with additional surrounding labeling of the products, and concluded that the two designs were dissimilar. In particular, the coloring of the products, the coloring of the crosshair designs and the two-dimensional affects thereof created two different overall commercial impressions. The strength of WD-40's famous shield mark additionally indicated a lack of a likelihood of confusion. Moreover, Sorensen failed to present evidence of WD-40's bad faith intent or of actual consumer confusion. Indeed, according to the court, WD-40's use of its shield design on the Specialist products tended to suggest a lack of bad faith, as inclusion of the shield indicates that the product originates from WD-40, not from Sorensen. Finally, the Court found that Sorensen's crosshair design is clearly weak because of its inconsistent use – which sometimes appeared with symbols in quadrants of the crosshairs, sometimes had no symbols or different symbols, and sometimes did not appear on Sorensen's products at all.

Trademarks In The Crosshairs: Non-Trademark Use Of A Descriptive Term

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