Source: https://www.bna.com/competitors-registered-mark-n12884904390/
Timestamp: 2018-01-17 22:19:54
Document Index: 408315700

Matched Legal Cases: ['§ 1114', '§ 1125', '§ 1115', '§ 1115', '§ 1127', '§ 1065', '§115']

Competitor's Use of Registered Mark Fair Use Where Trademark Was a Descriptive Phrase | Bloomberg BNA
Competitor's Use of Registered Mark Fair Use Where Trademark Was a Descriptive Phrase
The phrase “All In One” is routinely used by companies to indicate to consumers the all-inclusive nature of their services, and thus BIC Corp.'s use of the phrase to describe its comprehensive catalog was fair use and did not infringe the “All-In-One” trademark used by its owner to market customized writing instruments, the U.S. District Court for the Southern District of California held Nov. 7 (Marketquest Group Inc. v. BIC Corp., S.D. Cal., No. 3:11-cv-00618-JLS-WMC, 11/7/11).
The court, after determining that the BIC's use of the mark was likely to result in confusion, concluded that the fair use doctrine protected BIC's use of the descriptive phrase. Accordingly, the court declined to grant a preliminary injunction because it said that BIC would likely prevail on a fair use defense.
Parties Directly Compete With Each Other
Marketquest Group Inc. owns four registered trademarks in connection with the “All-In-One” phrase. The marks are in connection with “writing instruments, namely, pens, pencils, markers, highlighting markers.” Marketquest does not sell the customized products individually to consumers, but rather markets its products to companies that buy customized products on a wholesale basis.
In addition to the All-In-One marks, Marketquest also has registrations for “The Write Choice,” which also relates to writing instruments. The marks were registered from 2001 to 2009
BIC Corp., a market leader with respect to the sale of writing instruments, acquired in 2009 Norwood Promotion Products LLC. BIC then printed a catalog that it marketed as “Norwood All in One,” which was a comprehensive catalog that listed all of Norwood's products.
Marketquest also alleged that in 2010 BIC began using the phrase “The Write Pen Choice” to market its products.
Marketquest filed suit alleging that its All-In-One and The Write Choice marks were being infringed. The complaint alleged trademark infringement under 15 U.S.C. § 1114(1), unfair competition under 15 U.S.C. § 1125(a), and state law trademark infringement.
Marketquest also requested a preliminary injunction with respect to BIC's use of the All in One phrase.
Mark Incontestable, Not Abandoned
As articulated by the Supreme Court in Winter v. Natural Resource Defense Council Inc., 129 S. Ct. 365 (2008), a preliminary injunction can only issue if the plaintiff can demonstrate: (1) a likelihood of success on the merits; (2) a likelihood that it will suffer irreparable injury if the injunction is not issued; (3) that a balance of the equities favor injunction; and (4) that an injunction will serve the public interest.
The court determined that a thorough analysis of all four factors was not necessary in the immediate case because it concluded that BIC's use of the term was likely fair use, and therefore Marketquest could not satisfy the first prong of the test.
As an initial matter, the court rejected BIC's argument that the mark had been either abandoned or fraudulently obtained. BIC claimed that Marketquest never intended to sell the products bearing the All-in-One logo in commerce—as it stated on its application—“rather, it intended to sell and in fact did sell versions of these products customized with the marks of clients.” BIC. Thus, BIC argued that the mark was either obtained fraudulently, in violation of 15 U.S.C. § 1115(b)(1), or was abandoned under 15 U.S.C. § 1115(b)(2). The court disagreed.
Use in commerce, as defined by the Lanham Act, is “the bona fide use of a mark in the ordinary course of trade,” 15 U.S.C. § 1127. Quoting In re Morganroth, 208 USPQ 284 (TTAB 1980), the court said, “A trademark need not ‘appear in any particular position on the goods' … Instead, the key to the use in commerce inquiry is whether Marketquest used the mark as a trademark, to identify the source of the gods or services.”
Judge Janis L. Sammartino said that it was likely that Marketquest could establish that its use of the mark was bona fide, and thus it did not fraudulently obtain the mark by misleading the Patent and Trademark Office with its application.
Similarly, the court said that there was no evidence that the mark had been abandoned by Marketquest. Rather, the court concluded that the mark was properly registered, and had been in use for over five years and therefore was “incontestable” under 15 U.S.C. § 1065.
BIC's Use Likely to Confuse Consumers
The court next applied the eight factor test set forth in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 204 USPQ 808 (9th Cir. 1979), to determine whether BIC's use of the mark was likely to result in consumer confusion. The test examines:
(1) the strength of the mark; (2) the proximity or relatedness of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the marketing channels used; (6) the degree of care customers are likely to exercise in purchasing the goods; (7) the defendant's intent in selecting the mark; and (8) the likelihood of expansion into other markets.
Looking first at the conceptual strength of the mark, the court noted that there was no inherent relationship between a company that sells customizable business products and the “all in one” phrase. Thus, quoting Brookfield Communications Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 50 USPQ2d 1545 (9th Cir. 1999), the court determined that All-in-One was “at least a suggestive mark because it ‘requires a metal leap from the mark to the product,' and as a registered mark it is inherently distinctive.” As a result, the court said that the mark was relatively strong, a conclusion that weighed in Marketquest's favor.
The second factor “decidedly weighs in favor of Marketquest,” the court said, noting that “the products at issue here are virtually interchangeable.”
Turning next to the third factor, the court noted that “standing alone the words are identical in all respects.” But that did not end the inquiry into whether the marks were similar because the court must look take into account the “appearance, sound, and meaning” of the two marks.
The court noted that BIC used the mark in connection with the Norwood mark, thus informing consumers that the goods originate from Norwood. In fact, the phrase all in one is always placed below the Norwood mark, and appears in smaller text.
Regardless of the appearance, Marketquest argued that the simple use of the mark by BIC, a competitor, demonstrated an attempt to engage in reverse confusion. The court was not convinced. It said:
BIC's marketing materials clearly explain its use of the phrase as the title of its Catalog, such that consumers could deduce BIC intended to use the phrase in its descriptive sense, referring to the Catalogue's omnibus contents, not as a mark indicating the source of the products contained therein.
Ultimately, the court said that Marketquest's reverse confusion theory, coupled with the substantial similarity between the marks, tipped the factor slightly in favor of a finding of confusion.
After weighing the remaining factors, the court found that there was a likelihood of confusion. Accordingly, the court turned next to BIC's affirmative defenses.
BIC Raises Fair Use Defense
Under 15 U.S.C. §115(b)(4), a party may avoid infringement liability if it can demonstrate that its use of the mark was done “in good faith only to describe the goods or services of such party.”
Here, the court noted that although the mark was distinctive in that it does not describe Marketquest's services “it is nonetheless a phrase commonly used by companies in general to describe the comprehensive nature of their services.”
The court looked to the Supreme Court's decision in Park ‘N Fly Inc. v. Dollar Park and Fly Inc., 469 U.S. 189, 224 USPQ 327 (1985), which determined that any confusion that results from the use of a descriptive mark “is a risk the plaintiff accept(s) when it decide(s) to identify its product with a mark that uses a well known descriptive phrase.”
The court determined that BIC's use of the phrase was in order to “distinguish one particular catalogue as a catch-all catalogue containing all of BIC's customizable promotional products.” This descriptive use was likely covered by the fair use doctrine, the court concluded. As a result, it denied Marketquest's injunction because it said that the company was unlikely to succeed on the merits of its trademark infringement claim.
Marketquest did not move for an injunction with respect to BIC's use of the “Write Pen” phrase.
Marketquest Group Inc. was represented by Kent M. Walker of Walker, Pendergrass & Tietswort, San Diego. BIC Corp. was represented by Richard P. Sybert of Gordon and Rees, San Diego.
Opinion at http://pub.bna.com/ptcj/110618Nov07.pdf