Opinion ID: 799526
Heading Depth: 3
Heading Rank: 2

Heading: Factual Findings under Frisch

Text: We have recognized four kinds of trademark infringement: palming off, confusion of sponsorship (also known as association), reverse confusion of sponsorship, and dilution. Ameritech, Inc. v. Am. Info. Techs. Corp., 811 F.2d 960, 964-65 (6th Cir.1987). As the district court correctly noted, Maker's Mark focuses on confusion of sponsorship. Maker's Mark does not appeal the district court's adverse ruling on its dilution claim. Confusion of sponsorship occurs where the goods do not directly compete. In this situation, the goods are unrelated enough that no inference arises that they originated from the same source, but the similarity of the trademarks erroneously suggests a connection between the sources. Id. at 964. In any case, a court considering a claim for trademark infringement must determine the likelihood of consumer confusion. The factors the court should consider are: 1. strength of the plaintiff's mark; 2. relatedness of the goods; 3. similarity of the marks; 4. evidence of actual confusion; 5. marketing channels used; 6. likely degree of purchaser care; 7. defendant's intent in selecting the mark; [and] 8. likelihood of expansion of the product lines. Frisch's Rests., Inc. v. Elby's Big Boy, Inc., 670 F.2d 642, 648 (6th Cir.1982) (quoting Toho Co., Ltd. v. Sears, Roebuck & Co., 645 F.2d 788, 790 (9th Cir.1981)). We review the district court's factual findings under Frisch for clear error. Tumblebus Inc. v. Cranmer, 399 F.3d 754, 764 (6th Cir.2005). We assess each factor with respect to the relevant consumer market; potential buyers of the junior product (here, Cuervo's Reserva de la Familia) are the relevant consumers. Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., 502 F.3d 504, 518 (6th Cir.2007). Cuervo appeals the district court's findings on only three of the eight Frisch factors: strength, similarity, and actual confusion.
To evaluate the strength factor under the Frisch analysis, this Court focuses on the distinctiveness of a mark and its recognition among the public. Therma-Scan, Inc. v. Thermoscan, Inc., 295 F.3d 623, 631 (6th Cir.2002). One leading commentator usefully characterizes this evaluation as encompassing two separate components: (1) conceptual strength, or placement of the mark on the spectrum of marks, which encapsulates the question of inherent distinctiveness; and (2) commercial strength or the marketplace recognition value of the mark. 2 J. THOMAS McCARTHY, McCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 11.83 (4th ed.). In other words, [a] mark is strong if it is highly distinctive, i.e., if the public readily accepts it as the hallmark of a particular source; it can become so because it is unique, because it has been the subject of wide and intensive advertisement, or because of a combination of both. Homeowners Grp. v. Home Mktg. Specialists, Inc., 931 F.2d 1100, 1107 (6th Cir.1991) (internal quotation marks omitted). Because the strength of a trademark for purposes of the likelihood-of-confusion analysis depends on the interplay between conceptual and commercial strength, the existence of inherent distinctiveness is not the end of the inquiry. See Therma-Scan, Inc., 295 F.3d at 631-32 (noting that a mark can be inherently distinctive but not especially strong if it fails to attain broad public recognition); Homeowners Grp., Inc., 931 F.2d at 1107 (The District Court's finding that HMS was an arbitrary and inherently distinctive mark is only a first step in determining the strength of a mark in the marketplace.); see also McCARTHY, supra § 11:83 ([T]he true relative strength of a mark can only fully be determined by weighing [both] aspects of strength.). Thus, although inherent distinctiveness may provide powerful support for the strength of a mark, the full extent of that support nonetheless depends on the scope of commercial recognition. Here, the district court appropriately evaluated both components of the strength factor. From the physical characteristics of the mark, the district court specifically found the red dripping wax seal to be inherently distinctive based on its uniqueness and its potential to draw in the customer in an unusual manner. This finding of conceptual strength is bolstered by the mark's status as incontestable, which entitles it to a presumption of strength, though the relative import of that presumption within the overall strength analysis still requires an analysis of whether the mark is distinctive and well-known in the general population. Therma-Scan, Inc., 295 F.3d at 632; see also Wynn Oil, 839 F.2d at 1187. As to commercial recognition, the district court found the seal acquired secondary meaning through fifty years of use, extensive advertising and consumer recognition. [3] The district court also found that Maker's Mark's advertising was intensive, citing the extent of its advertising budget that focuses almost entirely on branding the red dripping wax, as well as the significant public attention that the wax seal has received through the media. In further support of these findings, the district court also cited studies showing significant amounts of consumer dialogue about the brand, as well as a high level of recognition among both whiskey drinkers and distilled-spirits drinkers more generally. Cuervo argues that the district court erred in its evaluation of the strength of the mark by (1) disregarding third-party use of red dripping wax seals; (2) failing to give proper weight to the lack of a survey regarding recognition of the red dripping wax seal; (3) relying in its analysis on Maker's Mark's advertisements without apparent evidence of their dates or circulation; and (4) relying on evidence of the strength of the mark in the overbroad group of distilled spirits drinkers instead of prospective Reserva purchasers. We recognize that extensive third-party uses of a trademark [may] substantially weaken the strength of a mark. Homeowners Grp., 931 F.2d at 1108; Herman Miller, Inc. v. Palazzetti Imps. & Exps., Inc., 270 F.3d 298, 317 (6th Cir. 2001) (noting the possibility that the strength of a plaintiff's mark may be `weakened' by widespread use in the market, causing the mark to lose its significance as an indication of source. (quoting McCARTHY, supra § 17:17)). Contrary to Cuervo's argument, the district court did consider evidence of third-party use of similar seals on distilled spirits, but rejected that evidence as limited and unconvincing because it concerned seals used on all distilled spirits; the court found that the relevant use of the seals is limited to the relevant market, and not among all distilled spirits. We agree with the district court's finding and reasoning. Next, while survey evidence is the most direct and persuasive evidence of whether a mark has acquired secondary meaning, consumer surveys . . . are not a prerequisite to establishing secondary meaning. Herman Miller, Inc., 270 F.3d at 312, 315 (citations and internal quotation marks omitted). Nor is such evidence indispensable to the broader question of commercial recognition. In light of the abundance of other evidence demonstrating market recognition, such as Maker's Mark's extensive marketing efforts focusing on the red dripping wax seal and its widespread publicity, it was not clear error for the district court to overlook the lack of survey evidence because that evidence was not determinative of the strength of the mark. As to the district court's consideration of advertising evidence, the district court discussed the nature of the advertising and found that advertising efforts by Maker's Mark usually focus directly on the red dripping wax seal. As the record and the district court's opinion show, the district court had before it, and considered, an abundance of Maker's Mark advertisements that specifically feature the red dripping wax seal. Moreover, these advertisements were recent, relevant, and strong enough to convince Business Week, in 2002, to declare the dripping wax seal one of the most recognizable branding symbols in the world, and CBS Sunday Morning, in 2008, to refer to the process by which the seal is applied as the famous dip in red sealing wax. These findings support the district court's ultimate conclusion regarding the breadth of market recognition of Maker's Mark's trademarked red dripping wax seal. Finally, as to the district court's discussion of evidence of the mark's strength within the broader group of distilled spirits drinkers, the district court considered, but did not rest its holding on, this evidence. Instead, the district court based its holding primarily on the seal's unique design and [Maker's Mark's] singular marketing efforts. We therefore find no error here. In sum, none of Cuervo's arguments undermines the district court's finding that the Maker's Mark red dripping wax seal is an extremely strong mark due to its unique design and the company's singular marketing efforts. We therefore conclude that the district court did not clearly err in its evaluation of the strength of the red dripping wax seal.
In assessing similarity, courts must determine whether a given mark would confuse the public when viewed alone, in order to account for the possibility that sufficiently similar marks may confuse consumers who do not have both marks before them but who may have a general, vague, or even hazy, impression or recollection of the other party's mark. Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Cntr., 109 F.3d 275, 283 (6th Cir.1997) (internal quotation marks omitted). The district court found this factor narrowly favor[s] Maker's Mark, and found that, though [v]ery few consumers . . . would buy one product believing it was the other, the seals were facially similar. The district court examined the two seals and found that nothing on the products other than the red dripping wax . . . would suggest an association between the two. Cuervo focuses its argument on the relevance of the house marksproduct labels identifying the name of the manufactureron the bottles. We have held that the presence of a house mark can decrease the likelihood of confusion. Therma-Scan, Inc., 295 F.3d at 634 ([T]he presence of [a house mark on a product] does not eliminate the similarity between the trademarks. Instead, this labeling diminishes the likelihood of confusion created by the comparable marks and reduces the importance of this factor.); AutoZone, Inc. v. Tandy Corp., 373 F.3d 786, 797 (6th Cir.2004) (The co-appearance of a junior mark and a house mark is not dispositive of dissimilarity, but it is persuasive.). The district court concluded that this consideration is not as important in an association case, when the two products are related enough that one might associate with or sponsor the other and still use their own house mark. In AutoZone, we found that the proximity of the Radio Shack house mark to the POWERZONE mark would alleviate any confusion between POWERZONE and AUTOZONE marks. AutoZone does not, however, stand for the proposition that the presence of a house mark always has significant weight in the similarity analysis; it merely states that presence of a house mark is a factor to be considered in the evaluation of similarity and, depending on the facts of the case, may be significant to the overall likelihood of confusion. AutoZone, Inc., 373 F.3d at 796-97. Furthermore, the district court's analysis in this case highlights two factors that diminish the significance of the house marks in the present context. First, testimony in the record indicates that many consumers are unaware of the affiliations between brands of distilled spirits, and that some companies produce multiple types of distilled spirits, which supports the district court's assessment here. Second, the presence of a house mark, as the district court correctly noted, is more significant in a palming off case than in an association caseas the district court reasoned, in an association case when the two products are related enough . . . one might associate with or sponsor the other and still use their own house mark. Accordingly, the district court did not clearly err in its factual findings under this factor, and we adopt its findings.
The district court stated that neither party produced meaningful evidence related to actual confusion and concluded that the lack of evidence was neutral. The district court reasoned that, though evidence of actual confusion might have been obtainable if it existed, Cuervo sold Reserva for a limited time and in limited quantities, and so the district court did not place weight on the fact that Maker's Mark did not furnish meaningful evidence of actual confusion. Despite Cuervo's arguments to the contrary, this finding falls squarely within this Circuit's case law. Though [e]vidence of actual confusion is undoubtedly the best evidence of likelihood of confusion . . . a lack of such evidence is rarely significant. Daddy's, 109 F.3d at 284 (citation and internal quotation marks omitted). Here, the Reserva product was sold for a short time and in limited quantities; under these circumstances, it is reasonable that no meaningful evidence of actual confusion was available. The district court did not clearly err in finding the lack of actual confusion evidence non-determinative, and we adopt its findings.