Thursday, July 28, 2016

Court of appeals says FU to state university's TM claim

Florida International University Board of Trustees v. Florida National University, Inc., 2016 WL 4010164, --- F.3d ----, No. 15-11509 (11th Cir. Jul. 26, 2016)

FIU sued FNU for changing its name from Florida National College to Florida National University; the district court rejected FIU’s claims and the court of appeals affirmed. 

FIU is a public university founded in 1965.  “It has grown to become one of the nation’s largest public four-year universities, with over 50,000 full-time students enrolled in the fall of 2012.”  FNU is a for-profit higher education institution that, when founded in 1987, offered only associate’s degrees.  It began as Florida International Institute, changed to Florida International College, then changed again to Florida National College when FIU sued for trademark infringement.  In the 21st century, Florida National College became accredited to offer bachelor’s degrees and a master’s degree, and in 2012 it changed its name to FNU.  It had 2,795 students enrolled in a recent winter term; it currently operates two campuses in Miami-Dade County – one of which is less than two miles from FIU’s main campus – and also offers online courses.  FIU has opposed FNU’s 2012 applications for the word mark “Florida National University” and a related design mark.

In the confusion analysis, the strength of the accusing mark is the second most important factor.  In the 11th Circuit, incontestability enhances strength, and FIU’s word mark was incontestable.  The reasoning here is not logical but the result is sensible:

The district court observed that, viewed in isolation, the terms comprising FIU’s word mark were either generic or descriptive. But, in light of its incontestable status, the court appropriately presumed that FIU’s mark was relatively strong. Nonetheless, it determined that FNU had rebutted the presumption of strength by showing extensive third-party use of the mark, explaining that FNU had identified “13 other entities using the terms ‘Florida’ and ‘University’ – all of which are aimed at the same education marketplace as FIU.” Thus, the district court adjudged FLORIDA INTERNATIONAL UNIVERSITY and the attendant acronym to be “relatively weak.”

Note: it seems a little odd to treat incontestability, which is an irrebuttable presumption of distinctiveness, as creating a rebuttable presumption of “relative” strength, but not a lot odder than treating it as an uptick in strength.

The court of appeals agreed that the evidence of third-party use was “an essential factor in determining a mark’s strength.”  Here, the district court’s findings of diminished strength of the name and acronym were reasonable.  Florida A&M University (FAMU), Florida Atlantic University (FAU), Florida Christian University (FCU), Florida Gulf Coast University (FGCU), Florida Memorial University (FMU), Florida Polytechnic University (FPU), Florida State University (FSU), University of Central Florida (UCF), University of Florida (UF), University of North Florida (UNF), University of South Florida (USF), and University of West Florida (UWF), were geographically proximate and offered the same services, which was sufficient to weaken the FIU marks.  “[I]n context, it seems to us that FIU operates in a crowded field of similar names.”

FIU argued that the district court focused too much on conceptual strength and not on commercial strength.  “The practical problem with FIU’s argument, however, is that FIU didn’t offer any direct evidence of commercial strength.”  Yes, FIU spends millions annually on marketing, but that “tells us precious little about the efficacy of those efforts in creating marketplace recognition of FIU’s mark. Absent comparative evidence establishing that FIU has spent substantially more on advertising than its competitors in the field of higher education, or ‘direct evidence of consumer recognition,’” FIU’s promotional efforts didn’t count as evidence of commercial strength that would require the district court to ignore third-party uses. 

The district court also, inconsistently, accepted FIU’s claim to own a famous mark within the meaning of the Florida Anti-Dilution Act, which requires  that a mark be very strong and distinctive. Third-party use cuts against a finding of fame, but there was no error in the court’s ultimate conclusion that FIU’s mark was weak.  The court relied in its dilution reasoning on FIU’s duration and extent of use, duration and extent of advertising, and federal registration, ignoring the other five factors identified by the state legislature in the statute. Also, the district court didn’t give full attention to the fame inquiry because it found FIU’s dilution claim failed on other grounds.  There was no clear error in the finding that FIU’s mark was relatively weak.

Similarity of marks: The district court reasoned that there were similarities in sound and appearance, but that the antonymic meaning of the words “national” and “international” outweighed any similarity. This was a reasonable conclusion,

especially in a field where so many competitors have names that appear and sound similar. Moreover, in a crowded field of similar acronyms, the district court reasonably found that the addition of one more school identifying itself with an acronym containing the letters F and U would not materially add to the confusion. This is especially true in a field like post-secondary education, where the primary consumers – potential students (and likely their parents too) – generally spend a substantial amount of time and energy learning about their options before choosing a school and are, therefore, unlikely to be confused by similar names.

Note: consumer sophistication comes in here because the 11th Circuit doesn’t have that as a separate factor.

Similarity of goods/services: Favored FIU. 

Similarity of retail outlets and customers: The district court found that the student populations were significantly different: “most FNU students are seeking associate’s degrees or ESL programs that FIU doesn’t provide; FIU targets students who are directly out of high school and seeking a four-year degree, whereas most FNU students have been out of high school for an average of ten years; and, unlike FIU, FNU doesn’t require students to submit standardized test scores prior to admission.”  But, both schools offer bachelor’s and master’s degrees as well as online courses and, therefore, they have some potential overlap in prospective students. This favored confusion but not heavily so.

FIU argued that the district court underweighed this factor because of the substantial overlap in students and campuses.  The court of appeals disagreed, because nearly half of FNU’s students sought an associate degree, which FIU doesn’t offer.  (If FIU is like many other state schools, though, it admits plenty of students with associate degrees.)  Over 21% were enrolled in ESL programs; though FIU offered ESL as well, that was only for students “seeking to enter college or professional schools.” Also, while FIU generally offers a “traditional” four-year college experience, including living on campus, almost all of FNU’s students commute to class at night after work.  The campuses and websites for students were also dissimilar. FIU has a “342-acre metropolis” containing residential halls, an eight-story library, a nature preserve, an athletic stadium, and an art museum. FNU has two main campuses, each consisting of a single building.  And each offers online courses through their own websites, which “would dispel rather than cause confusion ... because the websites are separate and distinct, suggesting two completely unrelated [ ] entities.” The district court didn’t clearly err in assigning little weight to this factor.

Similarity of advertising media: the parties advertised in the same types of printed publications, “there was no evidence that any of the readers of FIU’s publications were likely to also read magazines or other publications in which FNU advertises.” They do advertise on the same South Florida NPR station.  Again, the district court reasonably found that this favored confusion, but had little weight overall.

FNU’s intent: The district court found that FNU’s knowledge of FIU’s marks, and the prior litigation between the parties, wasn’t evidence of improper intent because the parties had peacefully coexisted for more than twenty years after settling that lawsuit. FNU’s shifting explanations for its name change—it first said that it had to do so to be accredited, and when that proved false it said that “university” was more attractive to foreign students—could support a finding of bad intent.  But the district court’s finding to the contrary was not clear error, given FNU’s reasonable explanation for adopting “university.”

Actual confusion: There was no evidence of actual confusion among prospective students at either institution.  However, there was one email from a FedEx employee to an FIU administrator asking whether FNU “is accredited with FIU”; and one letter sent to FNU from a California high school student who requested information regarding “both admission to and programs at Florida International University” because she was investigating “the various colleges and universities [that she was] considering attending” as part of a sophomore class project. Also, a radio announcer who was reading an FNU advertisement once said “Florida Int -- Florida National University.”  The district court found that the FedEx employee wasn’t shown to be an actual consumer; that the student’s letter was de minimis evidence; and that the announcer’s “flub” wasn’t evidence of confusion. Thus, actual confusion didn’t weigh in favor of FIU, and this conclusion wasn’t clear error, especially given the sophistication that a reasonable consumer would exercise in deciding among institutions of higher education.

Given all this, there was no clear error in the district court’s balancing of the factors.

Along with its classic trademark infringement claim, FIU argued that “FNU’s name change, its intentional omission of its for-profit status, and its adoption of the course numbering system of Florida’s state universities were all part of an attempt to falsely associate itself in the public eye with Florida’s state universities.”  The district court recognized that “a significant portion of the public may be confused about FNU’s affiliation with the State of Florida,” but concluded that this confusion had not resulted in confusion over FNU’s affiliation with FIU.  (Sounds like a job for the Florida AG—except the Florida AG doesn’t have a great record of pursuing for-profit educational institutions.)

The court of appeals affirmed on other grounds.  “The district court’s construction of Section 43(a) of the Lanham Act would render that cause of action wholly duplicative of a trademark infringement action for trademark holders, when in fact the language of Section 43 is much broader.”  The language of §43(a) “seems to encompass FIU’s false association theory that FNU has used a name, symbol (its logo), and device (the course naming and numbering system) that create the false impression that FNU is associated with the State of Florida.”  But the court of appeals didn’t resolve the issue, because FIU didn’t explain how it was harmed by FNU’s acts associating itself with Florida public universities.  FNU’s expert testified that 30% to 50% of survey respondents thought that the State of Florida or some other government entity operates FNU, but less than 1% of survey respondents associated FNU with FIU.

Dilution: Lack of similarity; lack of intent to piggyback on FIU’s name or goodwill; and lack of risk of association doomed the claim. 

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