Opinion ID: 4161423
Heading Depth: 2
Heading Rank: 2

Heading: Whether there was a trademark use

Text: The Lanham Act defines “trademark” as “any word, name, symbol, or device . . . used by a person . . . to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.” 15 U.S.C. § 1127. In order to state a claim of trademark infringement under the Lanham Act, a plaintiff must allege that (1) it owns the registered trademark; (2) the defendant used the mark in commerce; and (3) the use was likely to cause confusion or mistake. 15 U.S.C. § 1114(1). There is no dispute the Track Owners own the trademarks and that Defendants used the trademarks in commerce; the sole issue is whether Defendants’ use was likely to cause confusion. The “touchstone of liability [for trademark infringement] is whether the defendant’s use of the disputed mark is likely to cause confusion among consumers regarding the origin of the -4- No. 16-5582, Oaklawn Jockey Club, Inc., et al. v. Kentucky Downs, LLC, et al. goods offered by the parties.” Daddy’s Junky Music Stores, Inc. v. Big Daddy’s Family Music Ctr., 109 F.3d 275, 280 (6th Cir. 1997). “To frame it another way, the ultimate question is whether relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way.” Champions Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1116 (6th Cir. 1996) (internal quotation marks omitted). “When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth.” Prestonettes, Inc. v. Coty, 264 U.S. 359, 368 (1924). “Trademark law’s likelihood-of-confusion requirement . . . is designed to promote informational integrity in the marketplace. By ensuring that consumers are not confused about what they are buying, trademark law allows them to allocate their capital efficiently to the brands that they find most deserving.” Groeneveld Transp. Efficiency, Inc. v. Lubecore Int’l, Inc., 730 F.3d 494, 512 (6th Cir. 2013). Generally, we evaluate the likelihood of confusion through an eight-factor inquiry.2 See Daddy’s Junky Music Stores, Inc., 109 F.3d at 280. Before employing this test, however, we ask whether Defendants are using Plaintiffs’ trademarks to identify the source of Defendants’ product. Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 610 (6th Cir. 2009). “If defendants are only using [the] trademark in a ‘non-trademark’ way—that is, in a way that does not identify the source of a product—then trademark infringement and false designation of origin laws do not apply,” Interactive Prods. Corp. v. a2z Mobile Office Sols., Inc., 326 F.3d 687, 695 (6th Cir. 2003), and it is unnecessary to consider the eight-factor test. Here, we must determine whether 2 The factors considered by the court include: (1) the strength of the senior mark; (2) the relatedness of the goods or services; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the marketing channels used; (6) the likely degree of purchaser care; (7) the intent of the defendant in selecting the mark; and (8) the likelihood of expansion of the product lines. Daddy’s Junky Music Stores, Inc., 109 F.3d at 280. -5- No. 16-5582, Oaklawn Jockey Club, Inc., et al. v. Kentucky Downs, LLC, et al. Defendants’ use of Plaintiffs’ trademarks in the video recreations of the historic horse races constitutes a “trademark use.” Our inquiry focuses on “whether a consumer is likely to notice [the plaintiff’s trademark] . . . and then think that the [defendant’s product] may be produced by the same company[.]” Id. at 696 (finding that the presence of the plaintiff’s trademark in a URL path for the defendant’s product would not create a likelihood of confusion and was not a trademark use). This court’s decision in Hensley Manufacturing is particularly instructive. There, we acknowledged that the likelihood of confusion is generally a question of fact that is inappropriate to resolve at the motion-to-dismiss stage. Hensley Mfg., 579 F.3d at 613. Nevertheless, we affirmed the dismissal of the suit because although the defendant’s advertising materials used the plaintiff’s trademark, the defendant did not use the trademark to identify the source of its products or to suggest an association between the defendant and the plaintiff. Id. at 611. Because there was no likelihood of consumer confusion regarding whether the plaintiff trademark owner was the source of the defendant’s products, we held that the defendant’s use of the trademark was a permissible non-trademark use. We concluded that “[the plaintiff] contends that ‘facts may exist that establish a level of consumer confusion[.]’ . . . But mere speculation is insufficient; it was [the plaintiff’s] burden to allege those facts, if they indeed exist, in the first instance.” Id. at 613 (emphasis in original). The Track Owners argue that Defendants’ display of their trademarks constitutes a trademark use because it confuses consumers into believing that the Track Owners provided or verified the video replays. We disagree. The System does not display live feeds of races being run at the Track Owners’ venues, nor does it show actual video replays of previous races. The System merely shows brief, computer-generated generic recreations of the finish lines of -6- No. 16-5582, Oaklawn Jockey Club, Inc., et al. v. Kentucky Downs, LLC, et al. historical races and states the locations at which the races were run. These depictions are sufficiently different from the Track Owners’ product—live horse racing at their venues—that the minimal use of the trademarks, preceded by the word “Location,” would not confuse consumers into believing the videos were provided by Plaintiffs. The Track Owners attempt to analogize their trademarks to that of technology giant Apple Inc. They argue that “[j]ust as . . . a computer may be an Apple® computer, so too can a horse race be, for example, an Oaklawn® horse race or a Churchill Downs® horse race.” Appellant Br. at 13. This analogy may be apt in certain circumstances; for instance, deciding where to watch a live horse race or which livebroadcast race to watch may be similar to deciding which brand of computer to purchase. Here, however, the fact that a race occurred at Oaklawn or Churchill Downs is relevant only as a factual matter—it is used so consumers can substantiate the race’s result, not to promote the quality of Exacta’s product. The Track Owners’ assertion that their trademarks are used “to substantiate or legitimize the video” has some merit. Appellant Br. at 5. However, they substantiate the video only in the sense that they provide consumers with the requisite details to verify the video game’s accuracy. If the System displayed inaccurate results, it is unlikely that a wagerer would file a complaint with the relevant Track Owner under the belief that the Track Owner was the source of the videogaming product or the inaccurate information. Rather, a customer would likely contact one of the parties actively representing the accuracy of the results: Exacta, Kentucky Downs, or the Kentucky Horse Racing Commission. The term “Location” preceding the trademarks sufficiently explains to consumers that the trademarks are being used in a wholly descriptive manner and does not cause a likelihood of confusion as to the source of the video. The fact that -7- No. 16-5582, Oaklawn Jockey Club, Inc., et al. v. Kentucky Downs, LLC, et al. the replay is entirely generic and does not visually depict the Track Owners’ facilities further supports this conclusion. Additionally, Exacta’s advertising materials do not mention the Track Owners at all; the only display of specific track names in the advertisement appears in a screenshot of a video replay, and the track names used are not owned by any Plaintiff. In fact, the brochure highlights that the System is certified by Gaming Laboratories International, and was “the result of decades of experience in developing legally compliant products for central determinant gaming markets.” R. 20-7, PID 156–57. The advertising material thus promotes the System by trading on the goodwill of Gaming Laboratories International and Exacta itself, rather than that of the Track Owners. The allegations in the amended complaint that Defendants’ use of the trademarks is likely to cause confusion, and that such confusion has harmed the Track Owners’ businesses and goodwill “in an amount that cannot be ascertained at this time” are conclusory. R. 20, PID 124. The amended complaint pleads no facts from which to infer that Defendants are engaging in a trademark use of Plaintiffs’ trademarks. “[A] conclusory and ‘formulaic recitation’ of the elements of a trademark infringement cause of action is insufficient to survive a motion to dismiss,” Hensley Mfg., 579 F.3d at 611, and thus the claim was properly resolved on Defendants’ motion to dismiss. Because this was a non-trademark use of Plaintiffs’ trademarks, we need not reach the question whether the fair-use defense applies. Additionally, since “likelihood of confusion is the essence of an unfair competition claim,” Champions Golf Club, Inc., 78 F.3d at 1123 (internal quotation marks omitted), and courts “apply the same analysis for Kentucky common law trademark infringement and unfair competition claims as they do for federal claims of trademark -8- No. 16-5582, Oaklawn Jockey Club, Inc., et al. v. Kentucky Downs, LLC, et al. infringement,” Maker’s Mark Distillery, Inc. v. Diageo N. Am., Inc., 703 F. Supp. 2d 671, 688 n.17 (W.D. Ky. 2010), aff’d, 679 F.3d 410 (6th Cir. 2012), the preceding analysis also forecloses Plaintiffs’ unfair competition claim.