Opinion ID: 2443
Heading Depth: 2
Heading Rank: 4

Heading: Trademark Infringement and Unfair Competition Claims

Text: To prevail on a trademark infringement and unfair competition claim under 15 U.S.C. §§ 1114(1), 1125(a), in addition to demonstrating that the plaintiff's mark is protected, the plaintiff must prove that the defendant's use of the allegedly infringing mark would likely cause confusion as to the origin or sponsorship of the defendant's goods with plaintiff's goods. Savin Corp., 391 F.3d at 456 (The crucial issue in an action for trademark infringement... is whether there is any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question. (internal quotation marks omitted)); Star Indus., Inc., 412 F.3d at 384 (In order to be confused, a consumer need not believe that the owner of the mark actually produced the item and placed it on the market. The public's belief that the mark's owner sponsored or otherwise approved the use of the trademark satisfies the confusion requirement. (quoting Dallas Cowboys Cheerleaders, 604 F.2d at 204-05 (internal quotation marks omitted))). [6] In determining whether there is a likelihood of confusion, we apply the eight-factor balancing test introduced in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir.1961). The eight factors are: (1) strength of the trademark; (2) similarity of the marks; (3) proximity of the products and their competitiveness with one another; (4) evidence that the senior user may bridge the gap by developing a product for sale in the market of the alleged infringer's product; (5) evidence of actual consumer confusion; (6) evidence that the imitative mark was adopted in bad faith; (7) respective quality of the products; and (8) sophistication of consumers in the relevant market. Star Indus., 412 F.3d at 384. The application of the Polaroid test is not mechanical, but rather, focuses on the ultimate question of whether, looking at the products in their totality, consumers are likely to be confused. Id.; see also id. at 383 ([A] plaintiff must prove ... a probability of confusion, not a mere possibility, affecting numerous ordinary prudent purchasers in order to establish a likelihood of confusion) (internal quotation marks omitted); Gruner + Jahr USA Publ'g v. Meredith Corp., 991 F.2d 1072, 1077 (2d Cir.1993). Here, that the Starbucks Marks are strong ones (first factor), that the parties use their respective marks in connection with the sale of coffee products (third factor), and that there is no competitive gap to be bridged between the relevant commercial activities of the parties (fourth factor) are not disputed. Whether these factors should favor Starbucks, however, is contested to some extent by Black Bear. Specifically, although Black Bear accepts that the third factor favors Starbucks in determining the likelihood of confusion, Black Bear argues that the first and fourth factors do not favor Starbucks in the determination of a likelihood of confusion. [7] We agree with Black Bear's first argument that the bridging the gap factor is irrelevant and thus should not favor Starbucks where, as here, the two products are in direct competition with each other. Star Indus., 412 F.3d at 387 (explaining that when products are in direct competition, there is really no gap to bridge, and [the bridging] factor is irrelevant to the Polaroid analysis). Thus, in this respect, we find error in the District Court's Polaroid analysis. Of course, we hasten to add that this error was inconsequential because the District Court ultimately concluded that it was not likely that Charbucks would be confused with Starbucks. We reject Black Bear's second argument, however, that the particularly strong Starbucks Marks should weigh ... against the likelihood of confusion. In so arguing, Black Bear ignores the rule that a strong mark would be a factor favoring the trademark plaintiff.  Hormel Foods Corp., 73 F.3d at 503 (emphasis added); id. (The more deeply a plaintiff's mark is embedded in the consumer's mind, the more likely it is that the defendant's mark will conjure up the image of the plaintiff's product instead of that of the junior user.); see also, e.g., Playtex Prods., Inc., 390 F.3d at 164. To be sure, we have held that a strong mark may nonetheless weigh against the likelihood of confusion in the limited circumstance where the defendants' mark is a clear parody and there is widespread familiarity with the parody. See Hormel Foods Corp., 73 F.3d at 503. But Black Bear's Charbucks is, at most, familiar only to the New England region and some consumers on the internet. Cf. id. (finding against the owners of the SPAM mark in infringement action because the use of the name `Spa'am' is simply another in a long line of Muppet lampoons. ... [T]his Muppet brand of humor is widely recognized and enjoyed). More importantly, Charbucks is not a clear parody as Black Bear urges because the purported parody designates a product that is in direct competition with the products identified with the Starbucks Marks. See supra Part II(B)(3) (The Parody Exception); White v. Samsung Elecs. Am., Inc., 971 F.2d 1395, 1401 (9th Cir. 1992) (The difference between a `parody' and a `knock-off' is the difference between fun and profit.); cf. Deere & Co., 41 F.3d at 45 (noting that parodies may offer no excuse to claims of trademark dilution when the object of the joke is the mark of a directly competing product); id. (The line-drawing in this area becomes especially difficult when a mark is parodied for the dual purposes of making a satiric comment and selling a somewhat competing product.). Accordingly, we find no error in the District Court's consideration of the strength of the Starbucks Marks to favor Starbucks in the Polaroid analysis. With respect to the remaining five Polaroid factors, namely, (1) similarity of the marks; (2) evidence of actual consumer confusion; (3) evidence that the imitative mark was adopted in bad faith; (4) respective quality of the products; and (5) sophistication of consumers in the relevant market; we find no error in the District Court's determinations as to each individual factor  with the exception of (5)  and agree that, ultimately, there is no likelihood that consumers will confuse the Charbucks Marks with the Starbucks Marks. Starbucks' argument that the District Court clearly erred in finding that the Charbucks Marks and the Starbucks Marks were minimally similar is rejected for the same reasons discussed supra Part II(B)(1) (Dilution by Blurring). Starbucks further argues in its challenge to the District Court's Polaroid analysis that the court clearly erred because it presuppose[d] that no consumer who searches for `Charbucks' on the Internet, either purposefully or as the result of a typing error, is without perfect information about the true source, affiliation or sponsorship of the product. The District Court, however, considered the similarity between the Charbucks Marks with the Starbucks Marks in the context in which each were presented to the public and did not presuppose perfect knowledge by the consumer: It is possible, by using a search engine, to reach a page within [Black Bear's] Internet web site that lists Mr. Charbucks Blend for sale along with other types of Black Bear coffee and that does not show the Black Bear logo or company name as such. The internet address for this page does, however, include the blackbearcoffee.com domain name utilized by [Black Bear]. This page of the web site is not indicative of stand-alone or other potentially confusing use by [Black Bear] of the word Charbucks in promoting its products. See Star Indus., 412 F.3d at 386; cf. Savin, 391 F.3d at 458 (noting that stylistic differences between marks may be of less significance on the internet, where marks are shown as text-based). Given the prominence of Black Bear on the Charbucks products and the conspicuous differences between the Charbucks Marks and the Starbucks Marks as they are presented to the public, it was not clearly erroneous for the District Court to find that the two were only minimally similar. See supra Part II(B)(1) (Dilution by Blurring). Starbucks next argues that the District Court clearly erred in finding that evidence of actual confusion  or the court's finding of a lack thereof  favored Black Bear in the Polaroid analysis. The only evidence as to actual confusion submitted by Starbucks was a telephone survey where 3.1% of 600 respondents named Starbucks as a possible source of a Charbucks product; 30.5% of 600 respondents immediately thought of `Starbucks' upon hearing Charbucks; and 9% of consumers immediately thought of coffee ... after hearing `Charbucks.' Particularly in light of the fact that the survey was administered by telephone and did not present the term Charbucks in the context in which Black Bear used it, the District Court did not clearly err in finding that the survey was insufficient to make the actual confusion factor weigh in [Starbucks'] favor to any significant degree. Moreover, Starbucks' own witness, a Director of Brand Management, testified that Starbucks had no knowledge that any consumer had ever actually become confused that Charbucks was a Starbucks product. Although actual confusion is not necessary to establish a likelihood of confusion, Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 78 (2d Cir.1988), as Black Bear observes, [t]he co-existence of the Starbucks mark and `Charbucks Blend' and `Mr. Charbucks' marks for eleven years with no report of a single customer becoming confused is a `powerful indication' that there is no confusion or likelihood of confusion, [8] see id. (stating that a lack of evidence showing actual confusion may under some circumstances be used against a plaintiff). Starbucks also argues that the District Court erred in considering whether Charbucks was adopted by Black Bear in bad faith to mislead the public. Starbucks argues that the District Court applied the wrong legal standard because Black Bear's intent to capitalize on Starbucks' reputation is undisputed and its alleged lack of intent to mislead is irrelevant to the `intent' factor. We reject Starbucks' argument, however, because the only relevant intent is intent to confuse. There is a considerable difference between an intent to copy and an intent to deceive. 4 McCarthy on Trademarks § 23.113; see also Star Indus., 412 F.3d at 388 (Bad faith generally refers to an attempt by a junior user of a mark to exploit the good will and reputation of a senior user by adopting the mark with the intent to sow confusion between the two companies' products.). Although deliberate copying may indicate that the defendant acted in bad faith, Paddington Corp. v. Attiki Importers & Distributors, Inc., 996 F.2d 577, 587 (2d Cir.1993), the District Court is not required to draw that inference where there is evidence to the contrary. Here, Black Bear wrote in 1997 that the Char part of Charbucks would prevent anyone from purchasing the dark roasted coffee by mistake and that [s]ince the name was going on our packaging, and since our graphics bore no similarity whatsoever to Starbuck's [sic] graphics, it seemed perfectly obvious that no one could possibly be confused into thinking we were in any way connected to Starbucks. Indeed, presumably because of its small operation and its local customers' disdain for large corporations, Black Bear's owner testified that Black Bear's association with a large corporation ... would be very bad for us. Thus, the District Court reasonably concluded that Black Bear did not intend to mislead the public that the Charbucks coffees were Starbucks products, and, accordingly, the court did not clearly err in its consideration of the bad faith factor. Starbucks also challenges the District Court's consideration of the comparability of goods factor. Instead of challenging the District Court's factual determination that both Starbucks and the Charbucks line of products were high quality coffees, Starbucks argues that the court's conclusion that the goods were of comparable quality should favor Starbucks in the analysis of likelihood of confusion. In support of this argument, Starbucks cites to Morningside Group Ltd. v. Morningside Cap. Group, LLC, 182 F.3d 133, 142 (2d Cir.1999); however, that case concluded that when goods or services of equal quality compete, the quality factor cuts both ways. Id. at 143. Thus, Starbucks' argument that the factor must only favor it is unsupported by the law. [9] Finally, Starbucks argues that the District Court clearly erred in finding that the ordinary purchaser is very unlikely to mistake [Black Bear's] `Mr. Charbucks Blend' or `Charbucks Blend' product for one offered by Starbucks, whether or not that person is `highly discriminating,' and consequently concluding that the consumer sophistication factor favored Black Bear. Starbucks argues that its base of coffee customers are not sophisticated enough to discriminate between the Charbucks Marks and the Starbucks Marks because consumers generally make quick, casual purchasing decisions about low-cost goods and therefore are more likely to form mistaken impressions about the products' affiliation or sponsorship. The District Court's determination that purchasers were unlikely to be mistaken whether or not they were sophisticated does not logically support its conclusion that consumer sophistication, as an individual factor, favored Black Bear. The District Court appears to have been anticipating its final balancing of the Polaroid factors within its consumer sophistication analysis. Moreover, Starbucks is correct that our case law has associated the purchase of low-cost goods in a supermarket environment with low customer sophistication. See, e.g., Lever Bros. Co. v. Am. Bakeries Co., 693 F.2d 251, 259 (2d Cir. 1982). But price alone is not determinative of the care a consumer will take in making purchases, and our touchstone remains the general impression that is left with the ordinary consumer. The Sports Auth., Inc. v. Prime Hospitality Corp., 89 F.3d 955, 965 (2d Cir.1996). Given the lack of evidence provided to the District Court regarding consumer sophistication, we decline to give this factor much, if any, weight in our de novo balancing of the Polaroid factors. See Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 78-79 (2d Cir.1988). In sum, considering all of the Polaroid factors, we conclude that there is no likelihood of confusion in this case. Notably, the District Court  in coming to the same conclusion we reach here  considered the fourth Polaroid factor (bridge the gap factor) in favor of Starbucks. Having concluded that the bridge the gap factor should not have weighed in favor of Starbucks in the Polaroid analysis, we a fortiori agree with the District Court's ultimate conclusion that there is no likelihood of confusion as to source, sponsorship, or association of [Charbucks] with the Starbucks mark, notwithstanding our determination that the consumer sophistication factor should not have been given much weight in the analysis.