morning your honors my name is colin holly and with the law firm water heater hoffer and fitzgerald l l p representing appellant shale beverage l l c may please the court your r s st i'd like to reserve five minutes of my time for a like to talk about your honour's is the error with respect to the similarity factor and here the district court erred in not following the aspect of that law that says similarities in the parties use of the marks must be weighed more heavily than the differences that test is a bit nebulous i understand that but there is guidance that this court can look at in particular not recent decisions of this court that applied to use of marks a close look at that case and the images in the opinion in that case are very instructive and illustrative in terms of what the guideposts are in terms of winning similar similarities more heavily than differences in the palm wonderful case the marks at issue were both the term pompey o m in the use of that mark in connection with pomegranate flavored beverages and if you look at the images in the opinion one of the parties uses that mark in connection with a bottle shape that is very hourglass shaped is incredibly distinctive the other product is a can that has the mark on it as well but fairly small has a bigger word pure in it it's got branding of the company that sells it so if you look at those two products in that case it's quite easy to tell that it's not the same product however the court focused more heavily as as it was required to do on the similarities in a particular that that word palm that both companies were using as a brand identifier and the court ultimately found that there was there was similarity that favored a likelihood of confusion in the pond case it more recently than that in that case your hon we have the prior appeal in this case so we have an opinion of this court and judge wallace was part of that panel and the court gave guidance when it reminded on a number of points one of which was the similarity point and  panel when it sent it back down in the opinion specifically discussed the similarities between the use of the lips by the two parties in this case and we've quoted in our papers exactly what this court said  among other things the court pointed out that there are new moment numerous similarities in the appearance both of puckered human lips as the focal point of their design the lips have a similar angle in shape and critically the lips are color coordinated with the flavor of vodka so we we have a very deferential standard of review here so i mean we even if we agree with you that the district court didn't give enough weight to how similar these lips are there are still other differences in the bottles i mean that and there are other factors of the test so it's hard to see how i mean do you think if we disagree with one piece of the multi factor test we have to remain and your honor i think you have to look at all the errors the court made the court you know we pointed out three different air legal errors the court made in applying this the craft factors but i do think that that error alone would be enough to change the way that the likelihood of confusion test is determined and frankly if you go back to the palm  in the palm case the th circuit this court determined that the likelihood of confusion test should have ruled basically reversed and held that that test should have been determined the other way that was in connection injunction and the court did not remain back to the court to you know redo that test the court said no when you apply the factors correctly using the correct law there should have been a finding of likelihood of confusion and that's what i do believe should happen here if we're talking about the similarity test this isn't in my view a close call as to whether the district court apply the test correctly or not and maybe give a little bit more weight to differences in similar i think it would be hard to come up with a stronger example of a court applying a granular deconstructionist type of analysis to the marks i mean here we're talking about the lips with the the stylized lips with  the colored the colors to track the flavor of the vodka this court went to the extent of saying well if you count the creases in the lips one of the marks has more creases than the other and that's the epitome of a deconstructionist view of these marks and that's not what the court is supposed to do and again your honor i think this court gave the just record guidance when to send it back down and the district just flat out went the other way and focused entirely on differences and didn't mention at all selecting initially this mark as what it was going to brand its product with so and we're not talking about what beam did after it found out that there was another mark being used in congress that was similar to what was focusing on ok when they started looking at what they were going to do in terms of branding they acted in good faith and coming up with this design but that's absolutely not the test as this court held in ruling on the prior appeal the intent factor quote favors the plaintiff where the alleged infringer adopted his mark with knowledge actual or constructive that it was another straight another's trademark and that's of course prior appeal twenty eight fed rd at one hundred and eleven mill so the question for a defendant your honor is really what did you do after you knew did you the defendant still go to market using the trademark after learning that another company the wasn't part of the maybe i misunderstood  part of the district court's good faith idea was they knew about the mark but thought they weren't infringing i believe the court did say that your honor however again that's not the test it's not a subjective test on whether a party knew it was infringing  the reason for that is trademark law is not intended ultimately to protect the parties that the people selling the products it's intended to protect consumers so the question is at a time when you know that there's another company  and you have actual or constructive knowledge of that did you go forward and roll out the product anyway or did you not and that that really for the purposes of this context is the question because that you're trying to protect the consumer grip of the good faith question for the consumer would be do we think consumers are going to be confused and i thought what the district court with saying was they didn't think that consumers would be confused ultimately i think in saying that the court was conflating the intent question with the similarity question because when you're talking again about similarity with a ten especially when we have a reverse confusion claim as well you're only looking at at the point where the defendant learns as actual or constructive no knowledge of another using a mark that's argu what did they do and this goes back if you think that there's inconsistency in our case law and that i mean it seems like there are a lot of cases that have knowledge of the other mark and yet don't find liability you know i think ultimately that comes down to that there are it's a multi factor test and case law is clear that ultimately you don't have a structured counting of fact x factors for x fucked factors against funding like that of confusion so courts do kind of look at some issues that seem to blur i would say but what we're talking about here is the court really relied heavily on intent and similarity to find against jail beverage and the trial of the product being confusing explain then so certainly after two thousand and eleven the johnnie love the product was selling that diminished greatly and that's largely because of the parker vodka flooding the market with a very confusing mark ultimately the that the owners of the johnnie love the product decided that they were not generating this is the whole purpose of reverse confusion being a point of law is that you can't generate any goodwill for yourself when the i mean what did it look like i mean were they like all the sudden it was going up with an awesome crashing i didn't think it was like that no your honor i would disagree that it was a failing product they were certainly still in the early stages of what they thought was going to be a multi decade plan to roll out this product but they had extensive sales in certain areas for instance as we noted in our papers they were selling on alaska airlines they had sold over a one million small bottles over a period of time on that airline and just consider the number of consumers who are exposed to products just from that alone and so on alaska airlines in two thousand and eleven when the vodka was there was there also the other odd time because earlier in time so that they would have been can competing at that period  time but there were continued sales frankly as we put in our statement facts there were sales and marketing efforts all the way through trial of this matter so it seems like those are like special order sales and people who would have definitely known what they were or they were making efforts to go into certain markets you know they were focusing on florida with a particular distributor and things like that so certainly sales were diminished but there were clearly piers a time where there was overlap they were looks like i've gone krause case is basically on all fours with dairy queen with dairy queen stood for in that case was not equitable disgorgement at all it was a contract case fact to quote the court in dairy queen court held the complaint requests money judgment which unquestionably legal the accounting call for dairy queen was a let measure of legal damages it was a breach of contract which called for payment for this franchise to be based on a set payment plus a percentage of revenue therefore the percentage of revenue was a legal damage claim marty was under copyright here's a copy or a claim but isn't copyright in a contract claim in that case one i disagree with the position taken by counsel in this case that the right to the property under contract and therefore you had to determine what the measures were in the plight the copyright measure for disgorgement because that was a surrogate for the actual name it's not because it was based on unjust enrichment there's a surrogate for the actual damages based on the contract claim and say we disagree with you about that one think we need a basis to just to distinguish copyright and and trademark is there one trademark rights well the we have a lanham act and trademark rights arise from common law it is a common law concept and try to market x state and the lanham act incorporate common law principles corporate equitable principles consequently right they actually expire guess expressive and copyrights as with patents they are a creature exclusively of the united states constitution as the only basis on which they arise therefore they are different regimes however let's assume they're not different regimes the but compensatory damages calculated the following way and no one has argued for example that a jury can't calculate compensatory damages for any reason those are legal issues in their title to a juror and i would point the court the fact that much more like dairy queen which is calculating and dairy queen for example they have to calculate the revenues the profits for purpose of germany what the loss was the legal loss the legal claim therefore  not a measure not a pet story damages not a surrogate for damages but equitable discordant for unjust enrichment is clearly exclusive in equitable playing and we cite that case in that's  excuse me judge to properly applied fifty six dollars hope road which was properly decided and not in conflict with the dairy queen at all nor in conflict was sitting marta crossed now i'd be happy to do you or has more issues on that but  one of the things that i hear in this case is that there really is an argument that they believe that the trial court below simply got it wrong they do now actually challenge judge whose findings the challenge have not challenge the finding that all brand activities ceased in twenty thousand and eighty three years before my client launched its product and in fact they can't have any sales there no sales after two thousand and eleven the year my client launched it in fact they sold evidences sold one hundred and twelve cases in two thousand and eleven and mr d the president of the appellate stated he has no evidence he ever sold another product after two thousand and eleven despite these suggestions that maybe is potentially possible you could have contacted him got the case they never made any sales therefore the suggestion that somehow his client's sales fell off because of my client's launch are simply not true his client had ceased all operations had stopped sales before my clients now the other thing you look at here is in terms of we talk about intent what do you look at in terms of intent you look at intent at the time of adoption and what is the test for intent it is not knowing adoption as your honor pointed out the test is knowing adoption of a market of another that you believe is similar to that mark there was you have to show both that you knew about the mark if you would on our  court to examine the very fact is now the court didn't direct for example that the marks are similar so that there are similarities and you look at it i was addressing a temporal step up there you know what i'm asking about intent do you think what what the district court  in order that's being appealed now about intent is consistent with what our courts when it remained at the earlier stage of this i believe it is i believe it is because in applying the intent standard the judge looked at did you adopt the mark one knowing about it to believing it to be similar and doing anyway and if you do that at the time that you adopted them or the time to launch by the time the adoption them are there is not a shred of evidence that they knew about at the evidence is clear fact the court examines closely to not ignore this is the only didn't know about it because it didn't read the letter from the lawyers i mean isn't there at least like a recklessness here that is very concerning so letter from counsel of cease and desist was after the mark was adopted and there's nothing to require them is that no not that letter the review i mean there was a letter when they said are there other copy the trademark review analysis that i thought came from their own counsel that said oh yeah there is this other mark and they didn't read the attachment so that's how they didn't know about this other brand no that's not that's they want to is yes they do this in court examine this beam has a regular process one adopts any beers wines and cetera liquids in the marketplace it's a crowded market therefore the markets crowded the similarities have to be greater you cannot assert rights to money that when the review came in  to beam that the person who got it didn't notice that this mark was described in the letter in the in the document is i believe they relied upon the opinion that said there's nothing conflicting here and did not back cited it's not addressed in the pellets brief so i have not specifically address that here because it seems like you're saying they were entitled to rely on the statement that there is no infringement but i don't know that we have a statement that there is no infringement in our record well it's been up to the record because it was not raised on appeal by the appellant what was in the record below was that again look at this back up a minute in terms of intent we've heard this discussion here from counsel that knowing adoption is all you need we know that's not the case law is not the case s b knowing about it will mark which you believe the similar we don't have that here too the knowing adoption the time of adoption no one knew about this th absence of malice is no defense it's not a defense standpoint if there's infringement but it's also not a point saying that you can infer infringement you can infer intent to infringe  attend infringement analysis is we will infer that you will infringe if you intend to infringe because you're trying to infringe that's the point but if you absent malice know the facts you don't intend if in fact you infringe doesn't excuse the infringement but constitutes a presumption of willfulness supreme court said that's a denial of due process you cannot force someone to stop doing something simply his lawyer wrote a letter now in this case after this case was after is actually being sold at that point they got a letter mark that they're talking about was a subsequent application filed by the public in this case after my client's adoption and was issued by the trademark office because it was just lips alone my client had already abandoned it application to register its entire label which was extremely difficult to entirely will because they found out that they used to stock art lip and they're not permitted to register that under the terms the contract with stock art so they'd already withdrawn it found they're not similar not only other products as a whole and here you need to look at it in the context of trademark infringement easily get the context of how does the bark appear to the consuming public in the marketplace in that case we have these entirely different looking products as counsel pointed out the word mark the law is very clear that the analysis and alice is when you have a word mark like palm it's a slightly different analysis so when you have a design mark for example is judged you found if you're in a bar or you're in a restaurant you want to order a drink you use the name you say johnny love or you say puck or you don't say give me something with lips on therefore that's why a word mark is a much stronger mark than a design mark and the law is very clear on that as well and the judge recognizes judge walk through the standard i'm sorry my time is up here ok so and i had to address the some of the other issues like similarity that the judge walked through them and one of these you look in the brief you'll see that he lined up he created displayed during trial for witnesses to look at it say can you separate these out if you took the caps off so that dissimilarity was no longer present put a spout on it judge st rejected it because did not believe that's how it was displayed to consumers but allowed to go forward anyway and every single witness asked was successfully able to separate every single one of those products never was once confused although they both had lips on because the products look very very different and it's how the market appears the consumer this credit report honors your just quickly on that similarity point for her back into something else what we note in our brief and what the court needs to focus on is in addition to dealing with the similarities and differences just in general the overall appearance of the marks you have to consider what aspects of each product are being used for branding purposes and we put in the findings of the fact by the district court were for instance the different colored colored tops on the defendants bottles were not being used for branding purposes and different colored tops were used by many types of flavor vikas to show different flavors so you have to look at what aspect of the two products is being used for branding purposes if you look at these two products side by side the thing that jumps out at you on both of them is in the middle of the front label there is that lip logo that changes color with the flavors these are the only two companies who have that on their vodka lines so that's keep also your honor going back to that statement council made about finding that the district court made about timing branding stopping i would note her findings were inconsistent in that regard at one the st volume of the excerpts of record page eight paragraph twenty two dollars the judge found quote consumers technically were still able to purchase johnny  of trial and then going back to the intent factor your honor your honors your point was correct as to a couple things one we're not just talking about actual knowledge of  when another company is marking out their constructive knowledge as part of the test as well as soon as johnny law of vodka as soon as the owner of the company registered the marks with the u s p t o everybody in the world is on constructive notice including the bean companies and when their attorneys did searching to see if there were any marks out there that were conflicting those registrations existed their attorneys found them so that is constructive knowledge right there and based on that alone if you look at the the boldface licensing case which is an incredibly close fact pattern in terms of a tent the court noted that as soon as the registration was in place any other company had constructive knowledge and the intent factor should have favored jail beverage in connection with that factor what do you think the deal is that we start considering the launch of the product is it when they start making it or when they start selling it or do we have a case that tells us in terms of adoption of the mark technically or our adoption of the market is when the mark is used in commerce either by way of sales or marketing but you guys disagree about that because he says it's when we started making the bottles i disagree i mean it's ultimately again this is a test that goes to consumers receiving some exposure to the mark so it's when its marketing or sales go to the public that's adoption the mark quickly i do want to talk about the what was their advertising marketing before the actual sales and this would that help them with i believe they rolled out marketing sales essentially simultaneously but i frankly don't know that exactly right i do have less a minute but i wanted to briefly the court was in my talk about the issue of the district court striking the demand for jury trial and i do want to point out