Thursday, May 14, 2015

Prior proceedings: no confusion where defendant existed for 100 years

Sovereign Military Hospitaller Order of Saint John v. Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John, 2014 WL 8804752, No. 09–81008–CIV (S.D. Fla. Aug. 19, 2014)
Westlaw just coughed this one up and I found it interesting because of prior proceedings (okay, fine, pun intended).  The district court initially found that the plaintiff had committed fraud on the PTO, and the Eleventh Circuit reversed the cancellation of plaintiffs’ word marks (later amending its opinion to deal with the admission of historical testimony by a group leader who didn’t have personal knowledge and wasn’t admitted as an expert, for those of you interested in evidentiary issues).
On remand, the district court analyzed plaintiff’s likely confusion claim against defendant and found it wanting.  Plaintiff had a design mark and four word marks (Knights of Malta; Sovereign Military Hospitaller Order of St. John of Jerusalem of Rhodes and of Malta; Hospitallers of John St. of Jerusalem; and Order of St. John of Jerusalem).  It challenged defendant’s design mark and word mark, Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem and Knights of Malta, the Ecumenical Order. (Pictures are in my earlier post.)
Plaintiff’s design mark was an eight-pointed cross (commonly known as a Maltese cross) on an unadorned shield, while defendant’s was a cross on a shield, superimposed over a larger Maltese cross with an outline. A crown is centered above the Maltese cross and shield.  The court pointed out that the Maltese cross design “has existed in one form or another for more than a thousand years.”  It was the insignia of Amalfi, Italy, “long before the original Knights of Malta adopted the symbol,” and is still in use there.  It “frequently appears in portraiture, ceremony, and trade.” Defendant’s parent began using its mark in the US as early as 1911, and defendant/those in privity with it used the mark continuously in Canada and the United States, including New Jersey, Pennsylvania, Delaware, Florida, Texas, North Carolina, South Carolina, the Rockies, Texas, and Louisiana. By contrast, plaintiff’s US use in commerce began in 1926.  As a result, the marks weren’t arbitrary or suggestive, given their widespread use, and they were weak.  (Note that the Abercrombie spectrum doesn’t work well for images, as the court implicitly holds by just saying “not strong” rather than “descriptive.”) 
However, plaintiff’s design mark was incontestable and thus “immune” to a mere descriptiveness challenge, so the “type of mark” weighed in plaintiff’s favor for the design mark. (This doesn’t make sense, but the Eleventh Circuit lets incontestability make a weak mark stronger, so it’s not the district court’s fault.)
Components of the word marks were also in widespread use.  “At least 20 charitable organizations can be found on the Internet that use the terms ‘Saint John,’ ‘Knights,’ ‘Hospitallers,’ and ‘Knights of Malta’ in the names…. In addition to other Orders of St. John operating in the United States, at least three United States groups and a Cuban association share the nonexclusive license to use Plaintiff’s name.”  This made the word marks weak, except that the second and third marks were incontestable and so “type of mark” weighed in plaintiff’s favor.
Similarity of marks: the design marks were visually dissimilar and easily distinguishable.  The word marks were unmistakably similar.  “The addition of the ‘Florida Priory’ and ‘Ecumenical Order’ language is insufficient to render the word marks dissimilar.”
Similarity of services: the parties both engaged in charitable activities, favoring plaintiff.  Similarity of trade channels and customers: Plaintiff claimed that “[b]oth parties seek the participation of persons who are inclined to perform charitable works or donate funds towards charitable works without regard to religion.”  The court found both similarities and differences in fundraising; plaintiff sought donations almost exclusively from its members, but not entirely, and defendant did the same. “Application of this factor … slightly favors Defendant’s organization, as Plaintiff directs some of its fundraising efforts to governmental and Catholic sources in a manner that Defendant does not, and Defendant’s parent has appeared on television, whereas Plaintiff has not.” Similarity of advertising media and communication: again there were similarities and differences, but plaintiff presented no evidence that the parties’ advertising reached the same individuals, thus favoring defendant.
Intent: Defendant preexisted plaintiff in the US, and thus didn’t have a bad intent.  Its parent even added “Ecumenical Order” to its unregistered word mark “to avoid any accusation that it was purposefully attempting to trade on Plaintiff’s name.”
Actual confusion: Here was the killer.  When plaintiff first attempted to register its marks, the examiner found defendant’s parent.  At that point, plaintiff argued that defendant’s mark, “Sovereign Order of Saint John of Jerusalem” wasn’t confusingly similar to “Sovereign Order of Malta.” The plaintiff also distinguished itself as a “charitable organization” as opposed to defendant’s parent’s “membership organization.” The plaintiff’s previous position on lack of confusion “lends support to a finding of absence of actual confusion.” Likewise, the oath about exclusive use executed by plaintiff’s counsel as part of its registration, while not constituting fraud on the PTO, showed that there was no confusion.  That oath said that, to the best of counsel’s knowledge, no one else had the right to use a confusingly similar mark. “Either Plaintiff was aware that Defendant’s parent existed but did not believe that the marks were confusingly similar, or Plaintiff was unaware that Defendant’s parent existed. Either scenario leads to a finding of absence of actual confusion.”
Plaintiff’s evidence of lack of confusion was insufficient.  Plaintiffs submitted a letter from King Michael of Romania (!) in which the King wrote that he has “always considered the Sovereign Military order of Malta as the only institution which is subject to international law in this field, and the only repository of the noble and ancient traditions begun in the 11th Century.” “King Michael is not located in the United States, nor is he a consumer,” and the letter didn’t indicate confusion anyway.  Defendant also solicited a donation from an individual who then contacted the Order of Malta’s American Association, but she was the cousin of Plaintiff’s American Association licensee’s president. There was no testimony that she was a donor or that she was confused about which entity was which. Her email showed that she immediately recognized the difference between “this group and your Order of Malta....” She even recalled seeing their separate and distinct presence in her worldwide travels.
The court concluded that confusion was unlikely: the most important factors, the type of mark and the absence of actual confusion (given 100 years in which to find some!), weighed in defendant’s favor.
Furthermore, the prior use defense overrode the incontestability of plaintiff’s incontestable marks. Under 15 U.S.C. § 1115(b)(5) and (6), “the record is clear that Defendant’s Order, or its predecessors in privity with it, have used the name ‘Knights of Malta’ and a Maltese cross in commerce since 1908 and thereafter incorporated in New Jersey in 1911.”  Plaintiff argued that there was no privity because there was no evidence that the earlier entities used the marks in connection with charitable or fundraising services, as opposed to corporate or club membership names. But the parties stipulated from the outset that both organizations are charities, and there was no evidence supporting plaintiff’s claim.  Given the nearly 100 years of activity before plaintiff’s registration, defendant could continue to use its marks in parts of the US where it had been active.  (The court is less than clear about whether this means defendant’s potential expansion is blocked, but I’d say given the lack of confusion defendant wins even in areas where it previously didn’t exist.)

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