Court Opinion

ID: 9555560
Source: CourtListenerOpinion
Date Created: 2023-08-14 14:01:05.089449+00
Date Added: 2024-06-11T15:36:42.424474
License: Public Domain

Case: 22-1839   Document: 34     Page: 1   Filed: 08/14/2023

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                    BAD ELF, LLC,
                      Appellant

                            v.

                      FLEX LTD.,
                        Appellee
                 ______________________

                       2022-1839
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Trademark Trial and Appeal Board in No.
 91254336.
                  ______________________

                Decided: August 14, 2023
                 ______________________

     MARINA CUNNINGHAM, McCormick, Paulding & Huber
 PLLC, Hartford, CT, argued for appellant. Also repre-
 sented by NICHOLAS HOLMES.

     JULIA SHURSKY, Sheridan Ross PC, Denver, CO, argued
 for appellee. Also represented by MATTHEW CHRISTIAN
 HOLOHAN, PAMELA NICOLE HIRSCHMAN.
                 ______________________

      Before DYK, MAYER, and REYNA, Circuit Judges.
Case: 22-1839    Document: 34      Page: 2    Filed: 08/14/2023

 2                                   BAD ELF, LLC v. FLEX LTD.

 DYK, Circuit Judge.
     Bad Elf, LLC appeals a decision of the Trademark Trial
 and Appeal Board (“Board”). The Board sustained Flex
 Ltd.’s opposition to the registration of Bad Elf’s FLEX
 mark on the grounds of likelihood of confusion with Flex’s
 three registered marks FLEX, FLEX (stylized), and FLEX
 PULSE. Because the Board erred in its analysis of the
 strength of Flex’s marks, we affirm-in-part, vacate-in-part,
 and remand.
                        BACKGROUND
     Bad Elf filed an intent-to-use trademark application
 under 15 U.S.C. § 1051(b) seeking to register the mark
 FLEX on June 24, 2019, for “Global positioning system
 (GPS) apparatus; Global positioning system (GPS) receiv-
 ers in International Class 9; and GPS navigation services
 in International Class 39.” 1 J.A. 1–2. On February 26,
 2020, Flex opposed the registration on the grounds of pri-
 ority and likelihood of confusion with Flex’s three regis-
 tered marks, FLEX, FLEX (stylized), and FLEX PULSE.
 The Board limited its focus to FLEX and FLEX PULSE.
     Relevant here, Flex’s FLEX mark was registered July
 12, 2016, for services including, in class 35, “supply chain
 management services; transportation logistics services,
 namely, arranging the transportation of goods for others;
 logistics management in the field of electronics; . . . [and]
 inventory management services for others.” J.A. 100.
 Flex’s FLEX PULSE mark was registered on December 12,

     1    International Classes (“classes”) are categories of
 various goods and services as established by the interna-
 tional classification system under the Nice Agreement Con-
 cerning the International Classification of Goods and
 Services for the Purposes of the Registration of Marks. See
 37 C.F.R. §§ 2.85, 6.1.
Case: 22-1839     Document: 34     Page: 3    Filed: 08/14/2023

 BAD ELF, LLC v. FLEX LTD.                                   3

 2017. FLEX PULSE was registered for goods and services,
 including, in class 9, for the goods:
     [c]omputers; computer software for use in supply
     chain management, logistics and operations man-
     agement, quality control, inventory management,
     and scheduling of transportation and delivery;
     [c]omputer software in the nature of downloadable
     mobile applications for use in supply chain man-
     agement, logistics and operation management,
     quality control, inventory management, and sched-
     uling of transportation and delivery[.]
 J.A. 102. 2
     Because Flex challenged Bad Elf’s registration in both
 class 9 and class 39, the Board considered the likelihood of
 confusion between (1) Bad Elf’s FLEX and Flex’s FLEX
 PULSE for each mark’s class 9 goods and (2) Bad Elf’s
 FLEX for its class 39 services and Flex’s FLEX for its class
 35 services. The Board considered the factors set forth in
 In re E.I. DuPont DeNemours & Co., 476 F.2d 1357, 1361
 (CCPA 1973), 3 ultimately finding a likelihood of confusion
 between each set of marks.

     2   Flex’s marks are registered for other goods and ser-
 vices in other classes. We focus on FLEX and FLEX
 PULSE in these particular classes because the Board based
 its analysis on only FLEX and FLEX PULSE in these clas-
 ses of goods and services.
      3  The DuPont factors are:
     (1) The similarity or dissimilarity of the marks in
     their entireties as to appearance, sound, connota-
     tion and commercial impression.
     (2) The similarity or dissimilarity and nature of the
     goods or services as described in an application or
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 4                                    BAD ELF, LLC v. FLEX LTD.

     The Board first considered the similarity or dissimilar-
 ity of the marks, finding FLEX and FLEX PULSE to be
 “similar in appearance, sound, connotation and overall
 commercial impression,” J.A. 23, weighing in favor of a

     registration or in connection with which a prior
     mark is in use.
     (3) The similarity or dissimilarity of established,
     likely-to-continue trade channels.
     (4) The conditions under which and buyers to
     whom sales are made, i. e. “impulse” vs. careful, so-
     phisticated purchasing.
     (5) The fame of the prior mark (sales, advertising,
     length of use).
     (6) The number and nature of similar marks in use
     on similar goods.
     (7) The nature and extent of any actual confusion.
     (8) The length of time during and conditions under
     which there has been concurrent use without evi-
     dence of actual confusion.
     (9) The variety of goods on which a mark is or is not
     used (house mark, “family” mark, product mark).
     (10) The market interface between applicant and
     the owner of a prior mark . . . .
     (11) The extent to which applicant has a right to
     exclude others from use of its mark on its goods.
     (12) The extent of potential confusion, i. e., whether
     de minimis or substantial.
     (13) Any other established fact probative of the ef-
     fect of use.
 476 F.2d at 1361.
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 BAD ELF, LLC v. FLEX LTD.                                  5

 finding of likelihood of confusion. The Board further noted
 that Bad Elf’s FLEX and Flex’s FLEX are identical and
 found that this “strongly favors [a finding of] a likelihood
 of confusion.” J.A. 24.
     The Board then considered the strength of Flex’s
 marks. The Board first considered the issue of commercial
 strength. Bad Elf had submitted twelve third-party uses
 of marks that included the word “flex.” The Board found
 that about half those marks pertained to logistics and ren-
 dered FLEX “somewhat commercially weakened” but not
 so weak “that it falls on the weaker end of the strength
 spectrum, making the term commercially weak.” J.A. 27.
     The Board then considered the conceptual strength of
 Flex’s marks. Bad Elf had submitted four third-party reg-
 istrations for goods in class 9, including “FLEX” for “com-
 puter software used for logistics management” and “FLeX”
 for “[a]dvanced transportation controller for managing a
 variety of intelligent transportation systems.” J.A. 28. The
 Board found that the third-party registrations had “some
 probative value” but that the marks were “insufficient in
 number to be probative of any conceptual weakness of
 FLEX for the goods or services listed in [Flex’s] pleaded
 registrations.” J.A. 29.
      The Board then considered the goods and services
 listed in each mark’s registration. The Board compared the
 class 9 goods for Bad Elf’s FLEX and Flex’s FLEX PULSE
 and found that “[Bad Elf’s] GPS apparatus and receivers
 are related to [Flex’s] computer software and mobile app
 insofar as they could perform the same functions and be
 used in the same field” and that, therefore, the factor
 weighed in favor of finding a likelihood of confusion.
 J.A. 37. For the services identified by Bad Elf’s FLEX and
 Flex’s FLEX marks, the Board found the services to be com-
 plimentary and thus to weigh in favor of a finding of a like-
 lihood of confusion.
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 6                                  BAD ELF, LLC v. FLEX LTD.

     Next, the Board considered the channels of trade and
 classes of consumers. For both the goods and services, the
 Board found that the channels of trade overlap and that
 the goods and services were likely to be encountered by the
 same consumers, thus further favoring a finding of a like-
 lihood of confusion.
     Considering the purchasing conditions and the degree
 of sophistication of the consumers, the Board found that,
 given the nature of Bad Elf’s goods and services, the aver-
 age consumer would “exercise a greater degree of care in
 making purchasing decisions.” J.A. 42. Accordingly, the
 Board found that this factor weighed against finding a like-
 lihood of confusion.
     The Board next considered Bad Elf’s alleged use of its
 mark since November 12, 2019, without any reported inci-
 dents of confusion, which the Board found to be a neutral
 factor. Finally, the Board considered whether Bad Elf had
 the right to exclude third parties from using its mark. Ab-
 sent evidence of a right to exclude, the Board found this
 factor to be neutral.
      The Board balanced the factors and determined that
 “[a]lthough we find that the relevant consumers are likely
 to exercise some degree of care, this is outweighed by the
 strong similarity and identical nature of the marks, the re-
 latedness of the goods and services, and overlapping estab-
 lished, likely-to-continue channels of trade.” J.A. 44.
 Thus, the Board found there to be a likelihood of confusion
 between both (1) Bad Elf’s FLEX mark for its class 9 goods
 and Flex’s FLEX PULSE for its class 9 goods and (2) Bad
 Elf’s FLEX mark for its class 39 services and Flex’s FLEX
 mark for its class 35 services.
    Bad Elf appealed. A separate case also involving Flex’s
 marks, Spireon, Inc. v. Flex Ltd., No. 2022-1578 (Fed. Cir.
 June 23, 2023), was identified as related, and oral argu-
 ment for both cases was held on the same day. On June 26,
 2023, the Court issued an opinion in Spireon, holding that
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 BAD ELF, LLC v. FLEX LTD.                                   7

 the Board had erred in its treatment of the strength of
 Flex’s marks and vacating and remanding for the Board to
 reconsider the likelihood of confusion factors in light of the
 Spireon opinion. After the Spireon opinion was issued, the
 panel ordered supplemental briefing in the present case on
 the following question: “What bearing does Spireon, Inc. v.
 Flex Ltd., No. 2022-1578 (Fed. Cir. June 23, 2023), have on
 the issue of the commercial and conceptual strength of Ap-
 pellee’s marks?” Order 2, Dkt. No. 31. The parties submit-
 ted supplemental briefing. We have jurisdiction under 28
 U.S.C. § 1295(a)(4)(B).
                             DISCUSSION
     Likelihood of confusion is a question of law based on
 underlying factual findings regarding the DuPont factors.
 In re i.am.symbolic, llc, 866 F.3d 1315, 1322 (Fed. Cir.
 2017). We review the Board’s legal conclusions de novo and
 factual findings for substantial evidence. Id.
                                 I
     This case potentially presents an issue similar to that
 involved in Spireon. In Spireon, the applicant was seeking
 to register the mark FL FLEX on goods that were similar
 to the goods and services registered under Flex’s FLEX,
 FLEX (stylized), and FLEX PULSE marks. In the opposi-
 tion proceeding, the applicant submitted third-party regis-
 trations that were identical to Flex’s FLEX mark for
 identical goods or services. We held that, where the third-
 party marks are identical marks for identical goods or ser-
 vices as the opposer, absent evidence of non-use for the
 commercial strength analysis, the marks must be given
 substantial weight in both the conceptual strength and
 commercial strength analyses. Where the third-party
 marks and opposer’s marks are identical marks for identi-
 cal goods or services, opposer’s marks nevertheless “will re-
 tain some measure of protection against a new registration
 for an identical mark for identical goods.” Spireon, slip op.
 at 13–14. Where the applicant’s marks and opposer’s
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 8                                    BAD ELF, LLC v. FLEX LTD.

 marks are not identical, and the opposer does not prove
 non-use of the third-party registrations, “the commercial
 strength of the [opposer’s] marks must be considered weak
 as to [the applicant’s] non-identical mark,” id. at 14, as was
 the case in Spireon.
      Under Spireon, the Board must determine whether
 third-party prior registrations exist using an identical
 mark for identical goods or services as the opposer’s regis-
 tered marks, and, if so, whether the opposer’s registered
 marks at issue are different from the applicant’s marks for
 identical goods or services. Here, the only relevant opposer
 mark is FLEX (FLEX PULSE being different from the prior
 third-party mark on its face), which indisputably was used
 in one earlier third-party-registered mark. However, the
 parties disagree whether FLEX was used for identical
 goods or services in the earlier third-party-registered
 mark. The third-party registration generally covers goods
 for software for logistics management. Flex’s FLEX mark
 at issue here covers services, including “supply chain man-
 agement services; transportation logistics services,
 namely, arranging the transportation of goods for others;
 logistics management in the field of electronics; . . . [and]
 inventory management services for others.” J.A. 100.
 While the prior third-party mark covers goods rather than
 services, the goods covered are nonetheless virtually iden-
 tical to the services covered by Flex’s FLEX mark. See In
 re Detroit Athletic Co., 903 F.3d 1297, 1307 (Fed. Cir. 2018)
 (goods and services may be compared for assessing the
 DuPont factors).
     If the third-party marks and opposer’s marks are iden-
 tical, as here, then the opposer’s marks and the applicant’s
 marks are compared to see if they are identical or non-iden-
 tical for identical goods or services. Here, the parties agree
 that one of Flex’s and one of Bad Elf’s marks (FLEX) are
 the same and appear to agree that the goods and services
 covered by Bad Elf’s FLEX (GPS apparatus and receivers,
 and GPS navigation services) and the services covered by
Case: 22-1839     Document: 34     Page: 9    Filed: 08/14/2023

 BAD ELF, LLC v. FLEX LTD.                                  9

 Flex’s FLEX (logistics management services) are not iden-
 tical. Indeed, the Board found the services covered by each
 party’s FLEX mark to be “complementary,” J.A. 38, not
 identical. Therefore, we come to the same conclusion as we
 did in Spireon, that is, that the conceptual and commercial
 strength of the opposer’s mark is substantially diluted.
     With respect to the Board’s analysis of the conceptual
 strength of Flex’s marks, we also note an inconsistency in
 the Board’s reasoning. The Board found that the “third-
 party registrations are related to [Flex’s] transportation or
 logistics services, and therefore have some probative
 value.” J.A. 29 (emphasis added). But the Board found
 that this evidence was nonetheless “insufficient in number
 to be probative of any conceptual weakness of FLEX for the
 goods or services listed in [Flex’s] pleaded registrations.”
 J.A. 29. In short, the Board claimed to give the evidence
 probative value but ultimately did not give it any weight in
 the conceptual strength analysis. Having determined that
 the evidence was probative, the Board erred in failing to
 give it weight in the strength analysis.
     The probative value of evidence of third-party registra-
 tions is to show that a mark is conceptually weak. Strength
 is not an all-or-nothing measure, but rather varies along a
 spectrum. See Joseph Phelps Vineyards, LLC v. Fairmont
 Holdings, LLC, 857 F.3d 1323, 1325 (Fed. Cir. 2017) (per
 curiam). Thus, it is inconsistent to give evidence of third-
 party registrations probative value, but then find that the
 evidence in no way weakens opposer’s marks.
     Regarding the FLEX PULSE mark, the Board inde-
 pendently found a likelihood of confusion between Flex’s
 FLEX PULSE for its class 9 goods and Bad Elf’s FLEX for
 its class 9 goods. But in analyzing the strength of the
 FLEX PULSE mark, the Board treated it the same as the
 FLEX mark itself. Given our conclusions with regard to
 the FLEX mark, the Board must reconsider the strength
 determination as to the FLEX PULSE mark as well. If the
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 10                                   BAD ELF, LLC v. FLEX LTD.

 FLEX mark is considered to be weak, that may also affect
 the Board’s finding that Bad Elf’s FLEX mark and Flex’s
 FLEX PULSE mark “are similar in appearance, sound,
 connotation and overall commercial impression.” J.A. 23.
     The parties also disagree as to whether Spireon is rel-
 evant in other respects to this case on the issue of strength.
 We think these issues are best addressed by the Board in
 the first instance on remand.
     We vacate with respect to the Board’s analysis as to the
 strength of Flex’s marks and remand to the Board to recon-
 sider this DuPont factor (and then to reweigh the DuPont
 factors) in light of this opinion and Spireon.
                               II
     Bad Elf also argues that the Board erred with respect
 to other issues. Regarding commercial strength, Bad Elf
 primarily argues that Flex provided no survey evidence to
 show marketplace strength and that the Board erred in not
 considering this to be a negative factor. Bad Elf further
 argues that the lack of actual confusion was a factor that
 favored Bad Elf.
    We find neither of these other arguments persuasive.
 We therefore affirm in all respects other than the Board’s
 analysis of the strength of Flex’s marks as described above
 and the ultimate weighing of the DuPont factors.
                         CONCLUSION
     We vacate the Board’s opinion with regard to the
 strength of Flex’s marks (an analysis that could also affect
 the comparison between the FLEX and FLEX PULSE
 marks). In other respects, the Board’s decision is affirmed.
 The case is remanded to the Board to reconsider the con-
 ceptual and commercial strength of Flex’s marks and re-
 weigh the DuPont factors in light of this opinion and
 Spireon.
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 BAD ELF, LLC v. FLEX LTD.                              11

   AFFIRMED-IN-PART, VACATED-IN-PART, AND
                 REMANDED
                             COSTS
 No Costs.