Before discussing the elements of trademark infringement regarding likelihood of confusion, we need to ascertain which company has priority of use of its mark supposing there will be confusion-based infringement issues.
PRIORITY OF USE:
The first application to be filed with the USPTO was Jupiter’s intent-to-use application on December 1, 2006. “A person who has a bona fide intention, under circumstances showing the good faith of such person, to use a TM in commerce may apply to register the TM. . . .” (Lanham Act §1(b)) Filing of the ITU application is deemed to be the constructive use date, subject to meeting the prerequisites of §1b. (Zirco) First, Jupiter must file an affidavit affirming use in commerce in order for the TM to grant full registration within 6 months from filing. Thus, we cannot attack this prong of the ITU application, because Jupiter has at a minimum until June 1, 2007 to complete this. Second, Jupiter must have filed the application “to the best of [its] knowledge that no other entity has the right to use the identical mark or in such near resemblance of the mark as to be likely to cause confusion, mistake or to cause to deceive.” We can make an argument that Jupiter knew of NON STOP (“NOS”) in the U.S. since as our rival it is familiar with our product lines and likely knew NEVER STOP (“NES”) would be confusingly similar. Likewise NOS had been marketed nationally, although limited, since Sep. 1, 2006. However, even if the ITU application remains valid, we can show that we attained common law (“CL”) rights in our mark before that date.
We may argue NOS successfully attained TM rights on June 1, 2006 as a bona fide use in commerce. “‘Use in commerce’ means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.” (§45). Our distribution was interstate, in the ordinary course of trade and has been continuous. Furthermore, the use was not “token” or used in a sporadic, nominal manner intended for TM maintenance. In Farah, the shipping date was used to ultimately determine who first used the goods “in commerce.”
There are now two issues with regard to common law priority use we must address. First, Jupiter may claim that it established CL TM rights before because it had been selling its product in Canada, and a portion of its advertising had been received in Northeastern U.S. It has been held that mere advertising alone (where unaccompanied by actual rendering of services in US) is not enough to assert interstate commerce which is necessary to establish CL TM rights in the U.S. (Mother’s Restaurant). Furthermore, the advertising was not part of an overall plan to enter the U.S. market, since an announcement was formally made in Jan. 2007, and an ITU was filed in Dec. 2006. Second, Ekte may claim CL rights in Don’t Stop (“DS”) since it has been selling it in interstate commerce since spring 2004. Since Jupiter is acquiring Ekte, it will also acquire any CL trademark rights attached to the company. We can argue Ekte did not attain CL TM rights because its mark is scandalous and immoral.
Section 2(a) of the Lanham Act is an absolute bar to registration of a mark that “consists of or comprises immoral, deceptive, or scandalous matter.” In determining scandalousness the court must first determine the likely meaning of the matter in question by looking at the claimed TM with the good or product considering the whole mark and the good to which it is attached (contextual). Second, the substantial composite test is applied – in view of the likely meaning, the TM must be scandalous to the substantial composite of the general public, in the context of contemporary attitudes. (Harjo) Although the advertising might be deemed scandalous, when looking to the “ordinary and common meaning” of DS, as applied to a chocolate bar, it is not scandalous in context. If the advertising campaign did not occur, the average consumer would not associate the phrase “Don’t Stop” as a sexual innuendo in reference to a candy bar, but to gluttonous consumption. Additionally, intent to shock, or ensure a scandalous connotation, is not dispositive of the issue of scandalousness.” (Old Glory Condom).
Lastly, with respect to concurrent use of the marks, and the limited area exception, the argument that we could retain priority in Florida, Texas and Chicago is weak because the separate marks must be in local markets wholly remote from one another. (Rectanus). Here, although the products were initially sold concurrently in separate markets, Ekte has utilized its mark in several large cities, and has an ad campaign appearing on the internet and recognized in nationally circulated newspapers. Ekte’s presence was likely on a large enough scale to reach consumers in our markets. Although we aren’t the “Little Guy”, we may still argue that all sales of DS were confined to Ekte stores and Ekte must limit their expansion into our initial niche markets. Overall, Ekte likely acquired priority of TM rights of DS through use, and Jupiter will bring an opposition proceeding against registration of NOS alleging likelihood of confusion. We must then show NOS does not infringe DS. We should also attempt to enjoin the NES ITU from maturing to registration since we have priority over NES and it would cause confusion with NOS.
Jupiter will attempt to enjoin the sale of NOS and prevent its registration. With regard to refusing registration of a TM the analysis the USPTO will use isn’t rich but it will use many of the same factors courts use when conducting infringement analysis. Since neither mark is currently registered, section 43(a) applies. To determine likelihood of confusion, we will examine the Second Circuit Polaroid factors. Confusion must be as to source, sponsorship, affiliation or approval. Furthermore, there must be probable confusion and not merely possible confusion. (Medic Alert).
First: Strength of "DS" theoretically and in terms of market presence. DS is suggestive and possibly arbitrary for a chocolate bar since it does not outright suggest the product. With regard to market strength, DS is exclusively limited to Ekte shops which are only located in certain cities. But it has an ad campaign recognized by nationally distributed NY newspapers and the cities it sells in are large. Weighing the arbitrariness of the mark and its market strength, DS is moderately strong.
Second: Similarity of the Marks Used – There must be an evaluation to the overall impression created by the marks and the context in which they found in order to consider the totality of factors that could cause confusion among prospective purchasers. Courts may consider whether one part of the mark is dominant for a composite mark. (Marshall Fields). Here, "Stop" is not dominant because the TM is a phrase which without both words would fail to have meaning. The marks are similar in sound because both contain the "stop" and a short negating word before it. This is also relevant for similarity in meaning which causes confusion when “it conveys the same idea, or stimulates the same mental reaction." Both suggest no stopping point in consumption of their candy. However, "Don't" and "Non" are different in that "Don't" conveys a command whereas Non seems to describe the endless amount of candy in the package or endless amount of fun eating NOS. The more descriptive the name for a product, the easier it is to find similar meanings.
Similarity of Sight/Trade dress - Both have black packaging and white font. But DS has a script logo and capitalizes "Stop.” Furthermore, NOS has graphics of its colored pieces on its packaging whereas DS shows a portion of its bar so consumers can see a glimpse of the actual product inside. Significantly, the house mark appears on both trade dresses which shows a different manufacturer. Lastly, DS is a bar instead of pieces and would not cause confusion with NOS post-sale, out of its packaging.
Third: Similarity/Proximity of the products – Both are chocolate candy, but DS is a bar and NOS are chocolate buttons with a candy coating. These are relatively dissimilar products within the chocolate category which comprises a huge portion of candy. Only if the category was candy in general would the chocolate factor be somewhat relevant. Of significance is the literal proximity of the products. DS is sold exclusively in Ekte stores so consumers will never see the two products sold next to each other.
Fourth: Likelihood That DS will Bridge the Gap: Ekte is exclusive and has not expanded into normal retail stores making confusion less likely. However, under Jupiter ownership they may claim to plan on expanding into normal stores. Marketing channels may also be different since it appears DS’ raunchy ads might be targeting an older audience and be placed in more mature mediums.
Fifth: Evidence of Actual Confusion –no evidence - but failure to show actual confusion is not a prerequisite to finding likelihood of confusion. To help our case we should conduct a survey where we show consumers NOS to see if they would be confused as to source.
Sixth: Defendant’s Good Faith in Adopting the Mark: There is generally an inference of bad intent where the senior mark holder’s TM is arbitrary and fanciful. DS is likely only suggestive; its sales have been limited to its exclusive stores in cities NOS did not distribute to; so a good faith argument is plausible.
Seventh: Quality of Defendant’s Product: NOS is high quality and wouldn’t jeopardize DS’ reputation.
Eighth: Sophistication of Buyers: Chocolate candy is an inexpensive impulse item to which the average unsophisticated consumer does not devote a great deal of care and consideration in purchasing. However, whereas NOS is bought by children and adults and is impulsive while in supermarkets etc., DS is sold exclusively in upscale chocolate shops (assumed), where adults primarily shop. Chocolate is not an impulse item in a chocolate shop and consumers will be more discerning.
Based on the fact that the products are different kinds of chocolate candy; are not sold in the same store; and are meant for different consumers, we have a colorable claim that NOS can coexist with DS. Although Jupiter will own both NES and DS marks, we still have priority of use over the NES mark and can enjoin its use. With regard to the Polaroid factors listed above, likelihood of confusion is more probable than between NOS and DS for the following reasons:
First: NOS has sold 1.2 million units and will expand to retail stores throughout the U.S. making its market presence moderately strong.
Second: “Never” and Non” are closer substitutes in sound and meaning. “Never” can mean: “will not run out or halt” like “non”; or it can be a command like “don’t”. For trade dress, the NES logo has similar font and placement and also has floating graphics of buttons on the packaging. Its brand name is portrayed more similarly with script-like writing in an oval.
Third: Both products are essentially identical and would soon be sold in the same vicinity of the same retail shops in the U.S.
Fourth: We have current plans to expand our operation throughout the U.S.
Sixth: Jupiter, an arch-rival, is well versed to our product line. Their knowledge of NOS will be a presumption of an intention to copy our mark in bad faith.
Eighth: Both products will be sold on candy shelves and will be impulse items grabbed by children or adults. This has implications for initial interest confusion which occurs when a consumer is initially deceived by an infringing product believing it to come from another source and upon realizing, decides to purchase the infringing product nonetheless. A consumer then buying NES would be trading off our goodwill.
Conclusion: NOS must demonstrate no likelihood of confusion with DS and show likelihood of confusion with NES. This appears to be entirely feasible.
The word count in this section is 1,997.