Are these two marks, both of which cover various types of clothing, confusingly similar? If you answered "yes," you correctly predicted the outcome of an opposition proceeding before the Trademark Trial and Appeal Board (TTAB). But if you answered "no," then you correctly predicted the outcome of the same case in the Federal Circuit, which recently reversed in part the TTAB's ruling.
The applicant (Jack Wolfskin) applied to register the mark shown above left. The application was opposed by the opposer (New Millennium) on the basis of its registered mark shown above right. Jack Wolfskin counterclaimed to cancel New Millennium's mark as abandoned. The TTAB dismissed the abandonment counterclaim and denied registration of Jack Wolfskin's mark based on a likelihood of confusion with New Millennium's existing mark.
The Federal Circuit agreed that there was no abandonment. New Millennium had stopped using the registered version of its mark (the first mark below) and had begun using a slightly modified version (the second mark below). Thus, the question was one of trademark "tacking"—the ability of a trademark owner to make minor changes to its mark without losing priority. In an issue of first impression for the court, the Federal Circuit confirmed that the same standard applies to tacking in an abandonment context as applies in a priority context. That is, the new mark and old mark must be "legal equivalents," i.e., they must "create the same, continuing commercial impression."
Until recently, the Federal Circuit treated trademark tacking as an issue of law to be reviewed de novo on appeal. However, the US Supreme Court recently held that trademark tacking presented an issue of fact. Hana Fin., Inc. v. Hana Bank, 135 S. Ct. 907 (2015). In light of Hana Financial, the Federal Circuit reviewed the TTAB's findings under the more deferential "substantial evidence" standard. The court concluded that the TTAB's finding that the new version of the mark contained only minor stylistic difference was supported by substantial evidence. (For more information about Hana Financial, see our Trademark Alert on the case.)
Turning to the likelihood-of-confusion issue, the Federal Circuit parted ways with the TTAB's analysis, finding that there was no likelihood of confusion. In particular, the Federal Circuit held that the TTAB had erred in considering "two critical factors."
First, the TTAB had erred in assessing the similarity of the two marks by failing to compare the marks in their totality. The Federal Circuit held that the TTAB had "essentially disregarded the verbal portion of New Millennium's mark"—the term KELME, which the court held was the "dominant" portion of the mark—"and found that the two paw print designs were substantially similar." The court expressly declined to decide whether a likelihood of confusion could be based on a "commercial practice of truncating the registered mark" through use of just the paw print, stating that "[n]one of the examples in the record . . . conclusively establishes that the paw print alone was used for source identification."
Second, the TTAB failed to give appropriate weight to the "voluminous evidence of paw print design elements that have been registered and used in connection with clothing." Contrary to the TTAB's determination that this factor was neutral, the Federal Circuit concluded that the evidence "indicate[d] that consumers are not as likely [to be] confused by different, albeit similar looking, paw prints."
The case is Jack Wolfskin Ausrustung Fur Draussen GmbH & Co. KGAA v. New Millennium Sports, S.L.U., 797 F.3d 1363 (Fed. Cir. 2015), rev'g, Opposition No. 91195604, 2014 WL 2997637, 2015 TTAB LEXIS 244 (June 10, 2014).
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