Thursday, July 25, 2013

suggestive mark is too weak for confusion

Action Ink, Inc. v. Anheuser-Busch, Inc., 2013 WL 3776548 (E.D. La.)

This case goes to show that defendants face extreme bars to getting attorney’s fees even in eyeroll-inducing cases.  Action Ink registered THE ULTIMATE FAN in 1985 for “promoting the goods and/or services of others by conducting a contest at sporting events.”  Action Ink worked with several NBA teams between 1983 and 1987 to hold THE ULTIMATE FAN contests and promotions, but other attempts to work on NBA promotions were unsuccessful, as were other endeavors.  In 1988, Action Ink’s president wrote to Anheuser-Busch requesting that it stop using the phrase “THE ULTIMATE CUBS FAN BUD MAN SEARCH.”  Counsel for the Chicago Cubs didn’t agree, arguing that the phrases were different and that “ultimate” was descriptive.  Action Ink submitted a declaration of incontestability and renewed the registration at the appropriate time.

In 1995, Action Ink learned that Major League Baseball was considering holding an “Ultimate Fan” contest. After a C&D, the MLB agreed to add language to its signs indicating that the phrase “Ultimate Fan” was being used with Action Ink’s permission.  Action Ink sent over 60 C&Ds between 2006 and 2012; some of the recipients agreed to stop using the phrase, and GEICO and the Louisiana Lottery settled with Action Ink.  After a C&D about past uses, Tulane contributed tickets to a charity as payment and signed a license agreement allowing it to use the mark from 2013-2014.  No one else licensed the mark.

In 2009, Action Ink contacted three NFL teams about contests it thought were infringing, and heard that Anheuser-Busch was responsible for two of them.  Action Ink sent a C&D related to the “Bud Light©/ Washington Redskins Ultimate Fan Sweepstakes.”  A-B responded asking for more information, but nothing else happened.  In 2011, Action Ink discovered A-B’s use of the phrase “Ultimate Fan Experience” during a Bud Light promotion advertised in supermarkets and in commercials aired during NFL games.  Action Ink sent a C&D, to which A-B responded that it would neither C nor D since it wasn’t infringing.  In early 2012, Action Ink sued; it filed a separate suit against the New York Jets in connection with the Jets’ registration of ULTIMATE FAN in connection with computer games.  In May 2013, the judge in the Jets case granted summary judgment for the Jets on the ground that Action Ink had abandoned the mark. 

The court here found that collateral estoppel applied to bar Action Ink’s claims against A-B, which were based on the same alleged mark.  Action Ink disputed the merits of the Jets decision, but the correctness of the earlier decision is not an issue in collateral estoppel.

In any event, Action Ink failed to show likely confusion. Its theory was reverse confusion.  Despite the similarity of the marks and the “concepts” (services?), the other factors favored A-B or couldn’t be assessed by the court for want of evidence, entitling A-B to summary judgment.

The commercial strength of Action Ink’s mark was “quite weak.”  A-B showed that many companies run “Ultimate Fan” promotions, including promotions held for sports fans.  “This significantly lessens the likelihood that the phrase, while known to the public, is associated with defendant specifically.”  The record showed dozens of examples from Action Ink’s own discovery production, as well as 157 other examples, including uses by the Los Angeles Angels, the Chicago Bulls, the New England Patriots, and the Seattle Seahawks.  The over 60 C&Ds in a 6-year period also showed the prevalence of the phrase.  Action Ink, by contrast, had no evidence of secondary meaning such as surveys or consumer testimonials.  This favored A-B.

As a side note, the court pointed out that it wasn’t clear that A-B was using the challenged term as a mark; all uses were accompanied by BUD or BUD LIGHT, its own strong marks; the court nonetheless assumed for these purposes that A-B was using the term as a service mark.

The court then evaluated A-B’s intent, and naturally there was no evidence that A-B wanted to take advantage of Action Ink’s goodwill.  “Indeed, plaintiff has not used the Mark in any recent public campaigns; this fact alone prevents the public from associating the Mark with plaintiff.”  Given the widespread use of the term, there was no support for a finding that A-B intended to “pirate” Action Ink’s goodwill.  The 1988 letter didn’t serve to show A-B’s awareness of the mark and subsequent bad faith, given the ten-year delay between the notice and the current dispute and Action Ink’s lack of use of the mark during that time.

Then, the court turned to the conceptual strength of the mark.  The pause to evaluate intent is another indicator that conceptual and marketplace strength simply don’t play well together.  A-B argued that the mark was descriptive without secondary meaning; Action Ink rejoined that incontestability meant a conclusive presumption of nondescriptiveness/secondary meaning.  (This is already a weird parsing of the law, but then again who really understands what incontestability means for strength?)  Assuming that the mark hadn’t been abandoned, “the Court will accord the Mark nondescriptive status.”  Nonetheless, the mark was entitled to “minimal” protection because it was at best suggestive, not fanciful or arbitrary. 

Digression: Given that courts regularly say that “descriptive with secondary meaning” means “relatively strong,” and that suggestive marks are “relatively weak,” are we developing a line of cases that flips two entries on the Abercrombie spectrum, so that it in practice goes suggestiveàdescriptive with secondary meaningàarbitraryàfanciful in terms of increasing (conceptual) strength?  That might make sense, especially given how little courts require to put a mark in the category of “suggestive” instead of “descriptive.” Conceptual and marketplace strength are supposed to be distinct, but a claimant needs some amount of marketplace strength to claim a descriptive term as a mark, so there has to be some crossover and the question is where to place a descriptive term that is in fact serving as a mark on the Abercrombie spectrum.  Hypothesis: if a trademark owner does the minimum needed to show that the symbol it claims as a mark is in fact serving as a mark, then just getting over the line “descriptive with secondary meaning” makes the mark stronger than just getting over the line “suggestive.”  Hmm … actually, that makes a fair amount of sense, though I still balk at calling a mark that’s only been shown to be descriptive with secondary meaning “relatively strong” without more.

Anyhow: THE ULTIMATE FAN is associated with a contest among sports fans.  “Ultimate” means “beyond which it is impossible to go” and “greatest or highest possible; maximum; utmost,” and it’s logical that an “ultimate fan” is either a big supporter or a winner of a fan contest.  The relationship between the phrase and the service took the mark out of the arbitrary/fanciful category, and thus it got less protection; this factor didn’t favor Action Ink.

There was no evidence of actual confusion, which “militate[d] strongly” against a finding of likely confusion.  “Indeed, plaintiff's inability to produce any evidence of actual confusion underscores the absence of its mark from the public eye.”  As for the other factors, such as retail outlets, purchasers, or media used, they were impossible to evaluate “because plaintiff has none to speak of for the Mark. … Plaintiff has not been involved in a promotion using the Mark in almost twenty years. Thus, there is no possibility that consumers have been unable to discern whether a contest called ‘The Ultimate Fan’ originates from plaintiff or another company because plaintiff has no public presence related to the Mark.”

A-B sought attorneys’ fees, which require bad faith.  Though Action Ink abandoned the mark, its claims weren’t so implausible as to necessitate an inference of bad faith.

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