Monday, December 19, 2016

Facebook, Twitter fans could substitute for sales to show secondary meaning, 6th Cir. rules

Kibler v. Hall, No. 15-2516 (6th Cir. Dec. 13, 2016)

Lee Jason Kibler, a disc jockey, sued Robert Bryson Hall, II, a rapper, and professional entities supporting Hall’s work for trademark infringement and dilution.  Kibler has performed and released several albums under the name “DJ LOGIC” since 1999 though he currently has no record deal. Kibler registered “DJ LOGIC” as a trademark in 2000, allowed the registration to lapse in 2003, and re-registered the name in 2013. He’s also been known as just “LOGIC.”

Hall has performed under the name “LOGIC” since 2009. His 2014 album sold over 170,000 copies.

The court found that the strength of the mark favored defendants.  DJ LOGIC was moderately strong conceptually, but lacked commercial strength.  “A mark cannot be strong unless it is both conceptually and commercially strong.”  (American Airlines?  Disney?  OK, 6th Circuit, whatever.)  Conceptual strength requires inherent distinctiveness, and courts presume that incontestable marks are conceptually strong.  [This is one of the worst games of telephone played in the courts in the trademark area.  (1) Incontestability goes to precluding arguments based on mere descriptiveness, and descriptiveness (even with secondary meaning) is conceptual weakness, (2) no, most circuits don’t presume strength of any kind from incontestability, and the key one that did recently expressed discomfort with doing so.  Sovereign Military Hospitaller Order of Saint John v. Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John, 809 F.3d 1171, 1183 (11th Cir. 2015) (“The law in this Circuit is almost certainly incorrect. The incontestability of a mark, by itself, says nothing about its strength.”).]

The district court found that “DJ LOGIC” is moderately strong conceptually because “DJ” is descriptive but “LOGIC” is arbitrary. Kibler argued that the court erred in not considering the mark’s incontestability—wait, what?  The expired registration lost its incontestability and the new registration is at most three years old. The court of appeals didn’t address this argument because the district court’s finding “renders ‘DJ LOGIC’ at least as conceptually strong as a finding of incontestability would.”  [I feel a little sick to my stomach.]

Anyway, “a mark can be conceptually strong without being commercially strong, and thus weak” for the purposes of likely confusion.  Plaintiffs without survey evidence need other evidence of “broad public recognition” to show strength, and Kibler didn’t have it.  Kibler sold fewer than 300 albums in the past three years and fewer than 60,000 albums in the past sixteen years; he currently lacked a recording contract; and he’d never had a recording contract with a major label. Third parties weakened the mark even further by marketing music under nearly ninety variations of “logic.”

Not sufficient evidence of strength: a sworn declaration that Kibler advertised in print and online, including on MySpace (!), Twitter, and Facebook; a 2006 Downbeat article featuring him, a 2001 New York Times review mentioning him, and a 1999 Gig article featuring him; and appearances on television shows such as The Tonight Show Starring Jimmy Fallon, The Today Show, and Good Morning America.  Kibler failed to provide the number of his Facebook “likes” or Twitter followers, and he testified that appeared on the television shows to support other, headlining artists.  Kibler’s evidence of Twitter/Facebook promotion was marketing, and magazine and TV appearances were evidence of commercial strength, but “some proof is not enough.” Kibler didn’t offer evidence that would permit a reasonable jury to determine that “wide segments” of the public recognize “DJ LOGIC” as a mark. “This means ‘extensive’ marketing and ‘widespread’ publicity around the music and mark.” The number and kind of Kibler’s Twitter followers could have provided such evidence.  “A large number of followers, or celebrities likely to re-tweet Kibler’s messages to their large number of followers, for example, would suggest that many types of people know his work and mark.”  Ditto with Facebook.  [The court of appeals does not say the same for MySpace.]  Nor did Kibler provide the circulations or target audiences of Downbeat and Gig, “which appear to be niche publications,” and he was only a supporting musician mentioned in the NYT review focusing on two other artists. Plus, these were over fifteen years old, and continuing awareness is required.

The court of appeals found that it was correct that Kibler enjoyed limited commercial success, but commented that “[a]lbum sales and even recording contracts are less critical markers of success than before because of widespread internet use.”  Thus, “web-based indicators of popularity, e.g., YouTube views” could also suffice to show commercial success, but Kibler didn’t.

The court of appeals also found that third parties hadn’t weakened the mark, because “[d]efendants identify the parties’ marks as trademarks in their brief, but do not show they are registered.”  [Of course, registration isn’t evidence of commercial strength, and the PTO applies the opposite—and probably more appropriate, for a use-based system—rule, which is that what people in the market are doing is more important for assessing similar uses than the existence of registrations without evidence about use.]  Anyway, the defendants didn’t show use in the relevant market.  “Music sold in the US on Amazon and iTunes” was too broad a market, as was hip-hop: it should have been “DJ music.”

Product relatedness: “Products belonging to the same industry are not necessarily related. To be related, they must be marketed and consumed in ways that lead buyers to believe they come from the same source.”  Here, this factor was neutral because the products were related but not directly competitive—only Hall used his vocals, and Hall markets himself as a rapper while Kibler markets himself as a disc jockey.

Similarity of marks: based on the anti-dissection rule, this factor favored defendants because “DJ” changed the look and sound of the mark, as well as its meaning.  Kibler was wrong to argue that the court should “focus on the dominant features of each mark and disregard the non-dominant features”; that’s precisely what the anti-dissection rule forbids. Although Kibler argued that he’d used “LOGIC” alone as a trademark, he hadn’t registered it (which the court of appeals thought ended the matter).

Actual confusion: This is the strongest proof of likely confusion, but its weight depends on the amount and type of confusion, in context. Persistent mistakes and confusion by actual customers is really important, but inquiries rather than purchases aren’t.  Kibler’s evidence was of at most ten instances of actual confusion. These include tweets and webpages advertising a performance by “DJ Logic,” but meaning Hall; an email offering to book “DJ Logic,” but meaning Hall; and inquiries about whether Kibler would be performing somewhere advertising “logic” and referring to Hall. But “[i]f ‘LOGIC’ really threatened to confuse consumers about the distinctions between Hall and Kibler, one would see much more than ten incidents throughout 170,000 album sales, 1.7 million album downloads, and 58 million YouTube views.”  Plus, none of the incidents were purchases.  Kibler failed to present the quantity or type of proof that would tilt the actual confusion factor substantially in his favor.

Marketing channels: Most entities advertise online today. In determining whether that matters, the court of appeals asked: “First, do the parties use the internet as a substantial marketing channel? Second, are the parties’ marks used with web-based products? Third, do the parties’ marketing channels overlap in any other way?” The court of appeals found that the district court was right that this factor was neutral, but underestimated the impact of the internet.  There’s overlap in terms of Twitter and Facebook promotion, and Amazon and iTunes sales, but “the popularity of these channels makes it that much less likely that consumers will confuse the sources of the parties’ products. There are just too many other contenders.”  So widespread use decreases likely confusion—which might actually mean something about the expected sophistication of internet users, not so much “marketing channels” per se.  Even though they performed at some of the same venues, so did thousands of artists, making it less likely that any one attendee encountered them both, let alone confused them.

Likely degree of consumer care: varies greatly among music consumers; the appropriate pool was not just fans of each artists, but a wide variety of people.  This factor was insignificant here.

Intent: the court of appeals followed the common, but unfortunate, rule that (1) likely confusion can be inferred from intent to confuse, and (2) (the bad part) evidence that the defendant knew of the plaintiff’s trademark can be sufficient circumstantial evidence of intent to confuse.  The court explicitly rejected defendant’s argument that intent to usurp goodwill is required for bad intent.  Lack of intent is irrelevant.  Kibler argued that a Google or YouTube search for “logic music” or “logic musician” yielded “DJ LOGIC” and Kibler’s picture or music before Hall adopted “LOGIC.” Hall testified that he ran Google, Facebook, and Twitter searches for “any other rappers” using “LOGIC” before adopting it, “[t]o see if [any rapper] with this name was already at a level where it wouldn’t make sense for two people to coexist with the same name.”  This factor was neutral.  While evidence that defendants knew of “DJ LOGIC” while using “LOGIC” would be sufficient circumstantial proof of intent, there was no proof that Hall searched for “logic music” or “logic musician,” no reason to believe he had to, and thus no evidence he knew of “DJ LOGIC” before adopting “LOGIC.”

Likely expansion: the district court properly found this factor neutral, concluding that it was “unlikely that the parties will expand their markets to put them in competition.” Kibler offered no proof that the parties would expand their businesses, which was his burden.

Balancing the factors, confusion was unlikely.  Evidence of actual confusion favored Kibler “only marginally” and strength of plaintiff’s mark and similarity of the marks favored defendants; these were the most important factors.

Federal dilution: a famous mark is a “household name.” That is, “when the general public encounters the mark in almost any context, it associates the term, at least initially, with the mark’s owner.” “It is difficult to establish fame under the Act sufficient to show trademark dilution.” No reasonable jury could find “DJ LOGIC” famous.

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