Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-01181/USCOURTS-ca10-90-01181-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

COHERENT, INC., 

Plaintiff-Appellant, 

FILED 

United Sratts Coun of A{>f>eals 

Temh Circuit 

JUN 5 1991 

ROBERT L. HOECKER 

Clerk 

v. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

No. 90-1181 

COHERENT TECHNOLOGIES, INC., 

Defendant-Appellee. 

Appeal from the United States District Court 

For the District of Colorado 

D.C. No. 89-A-952 

Veronica Colby Devitt (Carol L. Smith, Limbach, Limbach & Sutton, 

San Francisco, California; and Bruce G. Klaas, Klaas & Law, 

Denver, Colorado, with her on the briefs) of Limbach, Limbach & 

Sutton, San Francisco, California, for Plaintiff-Appellant. 

Charles H. Jacobs (David A. Weinstein, Denver, Colorado, with him 

on the brief) of Bourke Jacobs Luber P.C., Denver, Colorado, for 

Defendant-Appellee. 

Before MOORE, SETH, and ANDERSON, Circuit Judges. 

MOORE, Circuit Judge. 

Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 1 
Coherent, Inc., (Coherent) filed suit against Coherent 

Technologies, Inc., (Coherent Technologies) alleging trademark 

infringement and false designation of origin under 15 u.s.c. 

§§ 1114 and 1125(a) (1988), and unfair competition under Colorado 

common . law. -·The. district .court ruled against. Coherent after a 

bench trial, deciding that Coherent Technologies' use of the word 

"coherent" constituted a fair use and was not likely to cause 

confusion. Coherent, Inc. v. Coherent Technologies, Inc., 736 

F. Supp. 1055 (D. Colo. 1990). Because we affirm the district 

court's holding that there is no likelihood of confusion, Coherent 

has failed to establish any of its claims. Therefore, we need not 

address the fair use defense to infringement. 

I 

This dispute stems from the use of the word "coherent" by two 

companies which work with laser technology. The U.S. Trademark 

Trial and Appeal Board defined the word when it granted Coherent's 

first trademark registration: "'[C]oherent' means the light waves 

or photons are not scattered or random but are in phase in 

frequency and spatial relationship. It is the coherency of the 

radiation which results in the highly concentrated energy that 

makes lasers useful in a great variety of applications." The 

district court found that all lasers emit coherent light to some 

degree, and the term is commonly used descriptively in the 

scientific community. That determination is not challenged on 

appeal. 

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Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 2 
Coherent has been manufacturing lasers and laser systems and 

offering services related to the use of its products since 1966. 

It is headquartered in Palo Alto, California, and has a 

subsidiary, Coherent General, in Sturbridge, Massachusetts. The 

company has used "COHERENT" .as.a trademark on goods in interstate 

commerce since April 3, 1973, and obtained its first federal 

registration of the mark on June 13, 1978. Five of Coherent's six 

registrations have become incontestable through continuous use for 

five years. 15 u.s.c. § 1065. Over the years, Coherent has spent 

between $200 250 million to promote products under the 

"COHERENT" name and mark. By dollar volume of lasers sold, 

Coherent occupies about twenty percent of the worldwide market. 

Coherent Technologies was incorporated in 1984 and is located 

in Boulder, Colorado. It develops and markets coherent laser 

radar systems, known as lidar systems, for atmospheric sensing and 

target tracking, ranging, and imaging. Coherent Technologies uses 

lasers, such as those produced by Coherent, as components in its 

systems but does not produce lasers itself. Coherent Technologies 

does not affix its corporate name to any product. At the time of 

trial, it had completed one project. 

II 

To properly analyze this case, we first clarify the legal 

significance of "COHERENT" as an incontestable mark. The district 

court cited a portion of 15 u.s.c. § 1115(b), which provides: 

To the extent that the right to use the registered mark 

has become incontestable under Section 1065 of this 

title, the registration shall be conclusive evidence of 

the validity of the registered mark and of the 

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Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 3 
registration of the mark, of the registrant's ownership 

of the mark, and of the registrant's exclusive right to 

use the registered mark in commerce. Such conclusive 

evidence shall relate to the exclusive right to use the 

mark on or in connection with the goods or services 

specified in the affidavit filed under the provisions of 

said Section 1065 . . . . 

Describing -this as an evidentiary presumption, the district 

court then proceeded to analyze the fair use defense, one of the 

enumerated defenses to use of an incontestable mark. 15 U.S.C. 

§ 1115(b) (4). Concluding that Coherent Technologies had 

established fair use, the district court stated Coherent "may not 

rest on the incontestability of its trademarks and service marks 

to prove infringement." Coherent, Inc., 736 F. Supp. at 1063. 

Next, the court found no likelihood of confusion under § 1114, 

which sets forth the elements of an infringement cause of action. 1 

By addressing the issues in this order, the district court left 

1section 1114 states in part: 

(1) Any person who shall, without the consent of the 

registrant--

( a) use in commerce any reproduction, 

counterfeit, copy, or colorable imitation of a 

registered mark in connection with the sale, 

offering for sale, distribution, or advertising of 

any goods or serv1ces on or in connection with 

which such use is likely to cause confusion, or to 

cause mistake, or to deceive; or 

(b) reproduce, counterfeit, copy, or colorably 

imitate a registered mark and apply such 

reproduction, counterfeit, copy, or colorable 

imitation to labels, signs, prints, packages, 

wrappers, receptacles or advertisements intended to 

be used in commerce upon or in connection with the 

sale, offering for sale, distribution, or 

advertising of goods or services on or in 

connection with which such use is likely to cause 

confusion, or to cause mistake or to deceive, 

shall be 

registrant. 

liable in a 

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civil action by the 

Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 4 
unclear the relationship between incontestable status and the need 

to show likelihood of confusion. 

We conclude that a plaintiff with an incontestable mark must 

still show likelihood of confusion as an element of an 

infringement claim .... Incontestability . establishes a plaintiff's 

right to use a trademark, subject only to certain enumerated 

defenses. 15 u.s.c. §§ 1115(b)(l)-1115(b)(8). However, it does 

not mean that any use by another party automatically constitutes 

infringement. Congress amended § 1115(b) in 1988, adding the 

clause, "[s]uch conclusive evidence of the right to use the 

[incontestable] registered mark shall be subject to proof of 

infringement as defined in section 1114." The revision clarified 

that "incontestability does not relieve the owner of an 

incontestable registration from the burden of proving likelihood 

of confusion." S. Rep. No. 515, lOOth Cong., 2d Sess. 38, 

reprinted in 1988 U.S. Code Cong. & Admin. News 5577, 5601; see 

also 2 J. Thomas McCarthy, Trademarks and Unfair Competition 

§ 32:44, at 764 (2d ed. 1988). We implicitly took this approach 

in Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920 (lOth 

Cir. 1986), in which we analyzed likelihood of confusion to decide 

whether an incontestable mark had been infringed. 2 Because 

incontestability does not eliminate Coherent's burden of proving 

2

see also The Keds Corp. v. Renee Int'l Trading Corp., 888 F.2d 

215, 222 (1st Cir. 1989); Lois Sportswear, U.S.A., Inc. v. Levi 

Strauss & Co., 799 F.2d 867, 869, 871 (2d Cir. 1986); United 

States Jaycees v. Philadelphia Jaycees, 639 F.2d 134, 137 n.3 (3d 

Cir. 1981); Union Carbide Corp. v. Ever-Ready Inc., 531 F.2d 366, 

381 (7th Cir.), cert. denied, 429 U.S. 830 (1976). 

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Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 5 
likelihood of confusion to establish infringement, we resolve this 

issue before considering Coherent Technologies' fair use defense. 

III 

Likelihood .of .confusion is a.question of fact. Beer Nuts, 

805 F.2d at 923 n.2. Reviewing the district court's decision 

under the clearly erroneous standard, we affirm the finding of no 

likelihood of confusion. 

We identified several factors relevant to likelihood of 

confusion in Beer Nuts, emphasizing that no one factor is 

determinative and the list is not exhaustive: 

(a) the degree of similarity between the 

designation and the trade-mark or trade name in 

(i) appearance; 

(ii) pronunciation of the words used; 

(iii) verbal translation of pictures or 

designs involved; 

(iv) suggestion; 

(b) the intent of the actor in adopting the 

designation; 

(c) the relation in use and manner of marketing 

between the goods or services marketed by the 

actor and those marketed by the other; 

(d) the degree of care likely to be exercised by 

purchasers. 

805 F.2d at 925. The district court analyzed each of these 

factors and added two of its own, likelihood of expansion of 

product lines and actual confusion. 

Despite concluding that Coherent's trademark and Coherent 

Technologies' trade name are similar, the district court found the 

other factors outweighed that similarity. Coherent Technologies 

adopted its name in good faith. The two companies are not 

competitors although their products are related because Coherent's 

lasers may be used in Coherent Technologies' systems. The 

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Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 6 
district court found no evidence that Coherent Technologies 

intended to begin making lasers or that Coherent intended to 

expand into producing lidar systems. Although both companies have 

the federal government as a customer, and both have listings in 

the Laser Focus Buyers' Guide, the two companies otherwise market 

through different channels. Coherent sells its products through 

mass-produced catalogs and sales representatives, while Coherent 

Technologies relies on solicitations from parties interested in 

lidar systems and on proposals submitted in response to project 

announcements. Finally, Coherent's customers are likely to be 

careful buyers for several reasons: They are sophisticated 

persons, such as engineers, project managers and corporate 

officers; the price of Coherent's products and services ranges 

from several hundred to 1.5 million dollars with laser products 

averaging between $50,000 to $75,000; and laser products depend on 

exact specifications. Our review of the record confirms these 

findings. 

Coherent maintains none of these findings precludes 

likelihood of confusion, focusing its appeal on the district 

court's analysis of evidence regarding actual confusion. 3 we have 

held that surveys can be used to show actual confusion, but their 

evidentiary value depends on the relevance of the questions asked 

3coherent only appeals the court's rejection of its survey 

evidence, not the discounting of evidence that Coherent 

Technologies' vice-president received several calls asking whether 

Coherent Technologies was affiliated with Coherent. The district 

court pointed out that this evidence is double-edged: It may 

suggest confusion, but it may also suggest awareness of a 

potential difference. See Jordache Enter., Inc. v. Hogg Wyld, 

Ltd., 828 F.2d 1482, 1487 (lOth Cir. 1987). 

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Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 7 
and the technical adequacy of the survey procedures, including how 

closely the survey mimics market conditions. Jordache Enter., 

Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1487-88 (lOth Cir. 1987). 

The district court did not clearly err in concluding that 

Coherent's survey did not show actual confusion because it failed 

to simulate decisions in the marketplace. 

A sample of Coherent's customers and potential customers was 

asked over the phone whether they had heard of several companies, 

including Coherent Technologies. If interviewees responded 

affirmatively to a name, they were asked the location of the 

company headquarters. 4 Fifty-nine percent of all interviewees 

reported they had heard of Coherent Technologies; forty-one 

percent of those thought it was headquartered in California or 

Massachusetts, which are Coherent's locations. None mentioned 

Colorado, which is Coherent Technologies' home. However, as the 

district court succinctly stated, confusion about headquarters 

location "does not establish actual confusion in the marketplace, 

where Plaintiff and Defendant sell substantially different 

products and/or services through different means." 736 F. Supp. 

at 1067. The survey also failed to describe Coherent Technologies 

4 Interviewees were also asked how long the company had been in 

business or how long ago they became aware of it. Coherent does 

not appeal the district court's refusal to give any weight to the 

answers to this question. The survey consultant stated that a 

certain percentage did not know the location of Coherent 

Technologies, but reported the company had been in business or 

they had become aware of it more than five years ago. The 

district court pointed out, "Both Plaintiff and Defendant had been 

doing business for more than five years as of the date the survey 

was taken however. Therefore, no inference of confusion may be 

drawn from this data." 736 F. Supp. at 1060 n.S. 

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Appellate Case: 90-1181 Document: 01019297902 Date Filed: 06/05/1991 Page: 8 
by its name, address, and phone number, as the court found it is 

described in its advertising. 

Coherent cites two cases in which surveys were accepted as 

establishing actual confusion. However, both involved closer 

simulations of market conditions. In Standard Oil Co. v. Standard 

Oil Co., 252 F.2d 65, 74-75 (lOth Cir. 1958), we found a forty 

percent confusion rate proof of actual confusion. The survey 

asked: "If you were to stop at a service station in Michigan 

displaying the name SOHIO as shown here, what oil company would 

you think put out the gas and oil sold there?" 252 F.2d at 74-75, 

n.31. In A.T. Cross Co. v. TPM Distrib., Inc., 226 U.S.P.Q. 521, 

523-24 (D. Minn. 1985), the two surveys, which yielded forty-three 

percent and thirty-three percent rates of confusion, showed 

consumers models of pens made by two companies. Because 

Coherent's survey did not measure marketplace confusion, neither 

of these cases indicates it should be given more weight. 

IV 

Having reached the conclusion that the district court did not 

err in holding Coherent failed to establish the likelihood of 

confusion, the remaining issues presented for review are moot. 

Accordingly, the judgment of the district court is AFFIRMED. 

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