as a purchaser usually gives, as to cause him to purchase the one

supposing it to be the other.

TRADEMARK A Week 8
Factors to Determine Likelihood of Confusion
A.M. No. 10-3-10-SC Rule 18
EVIDENCE IN TRADEMARK
COMPETITION CASES

INFRINGEMENT

AND

UNFAIR

Section 1. Certificate of registration. A certificate of registration of a

mark shall be prima facie evidence of:
a) the validity of the registration;
b) the registrants ownership of the mark; and
c) the registrants exclusive right to use the same in connection with
the goods or services and those that are related thereto specified in
the certificate.
Sec. 2. Well-known mark. In determining whether a mark is wellknown, account shall be taken of the knowledge of the relevant sector
of the public, rather than of the public at large, including knowledge in
the Philippines which has been obtained as a result of the promotion of
the mark. The following criteria or any combination thereof may be
taken into account in determining whether a mark is well-known:
a) the duration, extent and geographical area of any use of the mark;
in particular, the duration, extent and geographical area of any
promotion of the mark, including advertising or publicity and the
presentation, at fairs or exhibitions, of the goods and/or services
to which the mark applies;
b) the market share, in the Philippines and in other countries, of the
goods and/or services to which the mark applies;
c) the degree of the inherent or acquired distinction of the mark;
d) the quality-image or reputation acquired by the mark;
d) the extent to which the mark has been registered in the world;
e) the exclusivity of registration attained by the mark in the world;
f)
h) the extent to which the mark has been used in the world;
g) the exclusivity of use attained by the mark in the world;
j) the commercial value attributed to the mark in the world; the
record of successful protection of the rights in the mark;
h) k) the outcome of litigations dealing with the issue of whether the
mark is a well-known mark; and
i)
l) the presence or absence of identical or similar marks validly
registered for or used on identical or similar goods or services and
owned by persons other than the person claiming that his mark is
a well-known mark.
Provided, further, that the mark is well-known both internationally and
in the Philippines.
Sec. 3. Presumption of likelihood of confusion. Likelihood of
confusion shall be presumed in case an identical sign or mark is used
for identical goods or services.
Sec. 4. Likelihood of confusion in other cases. In determining
whether one trademark is confusingly similar to or is a colorable
imitation of another, the court must consider the general impression of
the ordinary purchaser, buying under the normally prevalent conditions
in trade and giving the attention such purchasers usually give in buying
that class of goods. Visual, aural, connotative comparisons and overall
impressions engendered by the marks in controversy as they are
encountered in the realities of the marketplace must be taken into
account. Where there are both similarities and differences in the
marks, these must be weighed against one another to see which
predominates.
In determining likelihood of confusion between marks used on nonidentical goods or services, several factors may be taken into account,
such as, but not limited to:
a) the strength of plaintiffs mark;
b) the degree of similarity between the plaintiffs and the defendants
marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f)
the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.
Colorable imitation denotes such a close or ingenious imitation as to
be calculated to deceive ordinary persons, or such a resemblance to
the original as to deceive an ordinary purchaser giving such attention

SEC. 5. Determination of similar and dissimilar goods or services.

Goods or services may not be considered as being similar or dissimilar
to each other on the ground that, in any registration or publication by
the Office, they appear in different classes of the Nice Classification.
SEC. 6. Intent to defraud or deceive. In an action for unfair
competition, the intent to defraud or deceive the public shall be
presumed:
a) when the defendant passes off a product as his by using imitative
devices, signs or marks on the general appearance of the goods,
which misleads prospective purchasers into buying his merchandise
under the impression that they are buying that of his competitors;
b) when the defendant makes any false statement in the course of
trade to discredit the goods and business of another; or
c) where the similarity in the appearance of the goods as packed and
offered for sale is so striking.
Sec. 7. Generic marks. A registered mark shall not be deemed to be
the generic name of goods or services solely because such mark is
also used as a name of or to identify a unique product or service.
The test for determining whether the mark is or has become the
generic name of goods or services on or in connection with which it
has been used shall be the primary significance of the mark to the
relevant public rather than purchaser motivation.
Rule 416 Trademark Regulations
The applicant must indicate the names of the goods or services for
which the registration is sought, grouped according to the classes of
the Nice Classification, together with the number of the class of the
Nice Classification to which each group of goods or services belongs.
(a) CLASSIFICATION OF GOODS
TITLE Class
Chemical products used in industry, science, photography,
agriculture, horticulture, forestry; artificial and synthetic resins;
plastics in the form of powders, liquids or plates, for industrial use;
manures (natural and artificial); fire extinguishing compositions;
tempering substances and chemical preparations for soldering;
chemical substances for preserving foodstuffs; tanning substances;
1 adhesive substances used in industry.
Chemicals used in industry, science and photography, as well as in
agriculture, horticulture and forestry; unprocessed artificial resins,
unprocessed plastics; manures; fire extinguishing compositions;
tempering and soldering preparations; chemical substances for
preserving foodstuffs; tanning substances; adhesives used in
industry.
Paints, varnishes, lacquers, preservatives against rust and against
2 deterioration of wood; coloring matters; dyestuffs; mordants; natural
resins; metals in foil and powder form for painters and decorators
Bleaching preparations and other substances for laundry use;
3 cleaning, polishing, scouring and abrasive preparations; soaps;
perfumery; essential oils, cosmetics, hair lotions, dentrifices
Industrial oils and greases (other than edible oils and fats and
essential oils);lubricants; dust laying and absorbing compositions;
4
fuels (including motor spirit) and illuminants; candles, tapers,
nightlights and wicks
Pharmaceutical, veterinary and sanitary substances; infants; and
invalids foods; plasters, material for bandaging; material for
5
stopping teeth, dental wax; disinfectants; preparations for killing
weeds and destroying vermin
Unwrought and partly wrought common metals and their alloys;
anchors, anvils, bells, rolled and cast building materials; rails and
other metallic materials for railway tracks; chains (except driving
6 chains for vehicles); cables and wires (non-electric); lock-smiths
work ; metallic pipes and tubes; safes and cash boxes; steel balls;
horseshoes; nails and screws; other goods in non-precious metal
not included in other classes; ores
Machines and machine tools; motors (except for land vehicles);
7 machine couplings and belting (except for land vehicles); large size
agricultural implements; incubators
8 Hand tools and instruments; cutlery, forks and spoons; side arms
9 Scientific, nautical, surveying and electrical apparatus and
instruments (including wireless), photographic, cinematographic,

optical, weighing, measuring, signalling, checking (supervision), life

saving and teaching apparatus and instruments; coin or counterfreed apparatus; talking machines; cash registers; calculating
machines; fire-extinguishing apparatus
Surgical, medical, dental and veterinary instruments and apparatus
10
(including artificial limbs, eyes and teeth)
Installations for lighting, heating, steam generating, cooking,
11
refrigerating, drying, ventilating, water supply and sanitary purposes
12 Vehicles; apparatus for locomotion by land, air or water
Firearms; ammunition and projectiles; explosive substances;
13
fireworks
Precious metals and their alloys and goods in precious metals or
14 coated therewith ( except cutlery, forks and spoons); jewelry,
precious stones; horological and other chronometric instruments
Musical instruments (other than talking machines and wireless
15
apparatus)
Paper and paper articles, cardboard and cardboard articles; printed
matter, newspaper and periodicals, books; bookbinding materials;
photographs; stationery, adhesive materials (stationery); artists
16
materials; paint brushes; typewriters and Office requisites (other
than furniture); instructional and teaching material (other than
apparatus);playing cards; (printers) type and cliches (stereotype)
Gutta percha, india rubber, balata and substitutes, articles made
from these substances, and not included in other classes; plastics
17 in the form of sheets, blocks and rods, being for use in
manufacturers; materials for packing, stopping or insulating;
asbestos, mica and their products; hose pipes (non-metallic)
Leather and imitations of leather, articles made from these
materials, and not included in other classes; skins, hides, trunks
18
and travelling bags; umbrellas, parasols and walking sticks; whips,
harness and saddlery
Building materials, natural and artificial stone, cement, lime, mortar,
plaster and gravel; pipes of earthenware or cement; road-making
19
materials; asphalt, pitch and bitumen; portable buildings; stone
monuments; chimney pots
Furniture, mirrors, picture frames; articles (not included in other
classes) of wood, cork, reeds, cane, wicker, horn, bone, ivory,
20
whale-bone, shell, amber, mother-of-pearl, meerschaum, celluloid,
substitutes for all these material, or of plastic
Small domestic utensils and containers (not of precious metal, nor
coated therewith);combs and sponges; brushes (other than paint
brushes);brush-making materials; instruments and materials for
21
cleaning purposes; steel wool; unworked or semi-worked glass
(excluding glass used in building); glassware, porcelain and
earthenware not included in other classes
Rope, string, nets, tents, awnings, tarpaulins, sails, sacks; padding
22 and stuffing materials (hair, capoc, feathers, seaweeds, etc.); raw
textile materials
23 Yarns, threads
Tissues (piece goods); bed and table covers; textile articles not
24
included in other classes
25 Clothing, including boots, shoes and slippers
Lace and embroidery, ribbons and braids; buttons, press buttons,
26
hooks and eyes, pins and needles; artificial flowers
Carpets, rugs, mats and matting; linoleums and other materials for
27
covering existing floors; wall hangings (non-textile)
Games and playthings; gymnastic and sporting articles (except
28
clothing); ornaments and decorations for Christmas trees
Meat, fish, poultry and game; meat extracts; preserved, dried and
29 cooked fruits and vegetables; jellies, jams; eggs; milk and other
dairy products; edible oils and fats; preserves, pickles
Coffee, tea, cocoa, sugar, rice, tapioca, sago, coffee substitutes;
flour, and preparations made from cereals; bread, biscuits, cakes
30
pastry and confectionery, ices; honey, treachel; yeast, bakingpowder; salt mustard; pepper, vinegar, sauces; spices; ice
Agricultural, horticultural and forestry products and grains not
included in other classes; living animals; fresh fruits and
31
vegetables; seeds; live plants and flowers; foodstuffs for animals,
malt
Beer, ale and porter; mineral and aerated waters and other non32 alcoholic drinks; syrups and other preparations for making
beverages.

33 Wines, spirits and liqueurs

34 Tobacco, raw or manufactured; smokers articles; matches
(b) CLASSIFICATION OF BUSINESS OR SERVICES
35 Advertising and business
36 Insurance and financial
37 Construction and repair
38 Communication
39 Transportation and storage
40 Material treatment
41 Education and entertainment
42 Miscellaneous

Polaroid Corp. v. Polaroid Electronics Corp.

287 F.2d 492 (1961)
Summary:
Plaintiff Polaroid Corporation is the owner of the trademark Polaroid
and holder of 22 United States registrations thereof granted between
1936 and 1956 and of a New York registration granted in 1950. It
brought this action, alleging that defendant's use of the name Polarad
as a trademark and as part of defendant's corporate title infringed
plaintiff's Federal and state trademarks and constituted unfair
competition. It sought an injunction. Defendant's answer, in addition to
denying the allegations of the complaint, sought a declaratory
judgment establishing their right to use Polarad in the business in
which defendant was engaged, an injunction against plaintiff's use of
Polaroid in the television and electronics fields, and other relief. The
Judge dismissed both the claim and the counterclaims, concluding that
neither plaintiff nor defendant had made an adequate showing with
respect to confusion and that both had been guilty of laches. Both
parties appealed but defendant has withdrawn its cross-appeal. The
High Court found it unnecessary to pass upon the Judges
conclusion that defendant's use of Polarad does not violate any
of plaintiff's rights. They agreed that plaintiff's delay in
proceeding against defendant bars plaintiff from relief so long as
defendant's use of Polarad remains as far removed from plaintiff's
primary fields of activity as it has been and still is.
Facts:

The name Polaroid was first adopted by plaintiff's predecessor in

1935. It has been held to be a valid trademark as a coined or
invented symbol and not to have lost its right to protection by
becoming generic or descriptive. Polaroid had become a well
known name as applied to sheet polarizing material and products
made therefrom, as well as to optical desk lamps, stereoscopic
viewers, etc., long before defendant was organized in 1944.

During World War II, plaintiff's business greatly expanded due in

large part to government contracts. Included in this government
business were three sorts on which plaintiff particularly relies, the
sale of Schmidt corrector plates, an optical lens used in television;
research and development contracts for guided missiles and a
machine gun trainer, both involving the application of electronics;
and other research and development contracts for what plaintiff
characterizes as "electro-optical devices employing electronic
circuitry in combination with optical apparatus."

In 1947 and 1948 plaintiff's sales declined to little more than their
pre-war level; the tremendous expansion of plaintiff's business
came after the development of the Land camera in 1948.

Defendant was organized in December, 1944. Originally a

partnership called Polarad Electronics Co., it was converted in
1948 into a New York corporation bearing the name Polarad
Television Corp., which was changed a year later to Polarad
Electronics Corp. Its principal business has been the sale of
microwave generating, receiving and measuring devices and
of television studio equipment. Defendant claimed it had
arrived at the name Polarad by taking the first letters of the first
and last names of its founder, Paul Odessey, and the first two
letters of the first name of his friend and anticipated partner, Larry
Jaffe, and adding the suffix "rad," intended to signify radio;
however, Odessey admitted that at the time he had "some
knowledge" of plaintiff's use of the name Polaroid, although only

as applied to glasses and polarizing filters and not as to

electronics.

As early as, 1945, plaintiff learned of defendant; it drew a credit

report and had one of its attorneys visit defendant's quarters;
plaintiff made no protest.

By 1946, defendant was advertising television equipment in a

trade journal. These advertisements and other notices with
respect to defendant came to the attention of plaintiff's officers;
still plaintiff did nothing.

In 1950, a New York attorney who represented plaintiff in foreign

patent matters came upon a trade show display of defendant's
television products under the name Polarad and informed
plaintiff's house counsel; the latter advised plaintiff's president, Dr.
Land, that "the time had come when he thought we ought to think
seriously about the problem." However, nothing was done save to
draw a further credit report on defendant, although defendant's
sales had grown and the report related, as had the previous one,
that defendant was engaged "in developing and manufacturing
equipment for radio, television and electronic manufacturers
throughout the United States."

In, 1951, defendant, under its letterhead, forwarded to plaintiff a

letter addressed to "Polarad Electronics Corp." at defendant's
Brooklyn address, inquiring in regard to "Polaroid material
designed for night driving"; there was no protest by plaintiff.

In 1953, defendant applied to the United States Patent Office for

registration of its trademark Polarad for radio and television units
and other electronic devices; in August, 1955, when this
application was published in the Official Gazette of the
Patent Office, plaintiff for the first time took action by filing a
notice of opposition, which was overruled by the Examiner in
April, 1957. Still plaintiff delayed bringing suit until late 1956.
Through all this period defendant was expending
considerable sums for advertising and its business was
growing employees, fixed assets, and inventories increasing
considerably.

Plaintiffs Contention:

Conceding that the bulk of its business is in optics and

photography, lines not pursued by defendant, plaintiff
nevertheless claims to be entitled to protection of its
distinctive mark in at least certain portions of the large field
of electronics. It relies on its sales of Schmidt corrector plates,
used in certain types of television systems sold all over the
market. It also relies on certain instances of confusion,
predominantly communications intended for defendant but
directed to plaintiff.

Defendants Contention:
Against this, defendant asserts that its business is the sale of
complex electronics equipment to a relatively few customers;
that this does not compete in any significant way with
plaintiff's business, the bulk of which is now in articles
destined for the ultimate consumer; that plaintiff's
excursions into electronics are insignificant in the light of the
size of the field; that the instances of confusion are minimal;
that there is no evidence that plaintiff has suffered either
through loss of customers or injury to reputation, since
defendant has conducted its business with high standards;
and that the very nature of defendant's business, sales to
experienced industrial users and the government, precludes
any substantial possibility of confusion. Defendant also
asserts plaintiff's laches to be a bar.
ISSUE/S: How far will a valid trademark be protected with respect to
goods other than those to which its owner has applied it?
HELD/RATIO:

Where the products are different, the prior owner's chance of

success is a function of many variables: the strength of his
mark, the degree of similarity between the two marks, the
proximity of the products, the likelihood that the prior owner will
bridge the gap, actual confusion, and the reciprocal of defendant's
good faith in adopting its own mark, the quality of defendant's
product, and the sophistication of the buyers. Even this extensive
catalogue does not exhaust the possibilities the court may
have to take still other variables into account.

Here plaintiff's mark is a strong one and the similarity between the
two names is great, but the evidence of actual confusion, when

analyzed, is not impressive. The filter seems to be the only case

where defendant has sold, but not manufactured, a product
serving a function similar to any of plaintiff's, and plaintiff's sales
of this item have been highly irregular, varying, in amount in
different years.
If defendant's sole business were the manufacture and sale of
microwave equipment, we should have little difficulty in approving
the District Court's conclusion that there was no such likelihood of
confusion. What gives us some pause is defendant's heavy
involvement in a phase of electronics that lies closer to plaintiff's
business, namely, television.
Defendant makes much of the testimony of plaintiff's executive
vice president that plaintiff's normal business is "the interaction of
light and matter." Yet, although television lies predominantly in the
area of electronics, it begins and ends with light waves. The
record tells us that certain television uses were among the factors
that first stimulated Dr. Land's interest in polarization, plaintiff has
manufactured and sold at least two products for use in television
systems, and defendant's second counterclaim itself asserts
likelihood of confusion in the television field.
We are thus by no means sure that, under the views with
respect to trademark protection announced by this Court in
such cases as Yale Electric Corp. v. Robertson, [locks vs.
flashlights]; L. E. Waterman Co. v. Gordon, [mechanical pens
and pencils vs. razor blades]; Triangle Publications, Inc. v.
Rohrlich, [magazines vs. girdles]; and Admiral Corp. v.
Penco, Inc [radios, electric ranges and refrigerators vs.
sewing machines and vacuum cleaners], plaintiff would not
have been entitled to at least some injunctive relief if it had
moved with reasonable promptness. However, we are not
required to decide this since we uphold the District Court's
conclusion with respect to laches.
Judgment of the Lower Court is affirmed.

Quality Inns International, Inc. v. Mcdonald's Corp.

695 F.Supp. 198 (D.Md. 1988)
.
SUMMARY: Quality Inns marketed a new chain of economy hotels
under the name McSleep Inn. McDonalds now claims trademark
infringement in line with McLanguage being a family of McDonalds
family of marks. The issue is w/n McSleep results in confusion. the
Court has considered at length and determined to be especially
important to any conclusion, the following: (1) the evidence of
confusion; (2) the similarity of the contexts of uses of the marks such
as the logo forms in which they are presented, the similarity of facilities
on which they are used, the media forms in which they are used, and
any other language or logos which might distinguish them or make
them more similar; (3) the proximity of the markets for the products and
services identified by the marks, and the likelihood that the gap
between the markets will be bridged; and (4) the intent of the junior
user in adopting his mark and his good faith in doing so.
The court held using the evidence surveys presented that McSleep
results in confusion. Twenty-four of the 147 persons who understood
that McSleep Inn was being advertised, or 16.3 percent, said that
McDonald's was the owner or operator of the hotel, and if the
survey is limited to persons who make the decision about where to
stay when traveling, 21.4 percent believed that McSleep Inn, even
with the clarifying language, was owned or sponsored by
McDonald's.
FACTS:

Quality Inns International, Inc. announced a new chain of

economy hotels to be marketed under the name "McSleep Inn."

The response of McDonald's Corporation was immediate. It

demanded by letter sent three days later that Quality International
not use the name "McSleep" because it infringed on McDonald's
family of marks that are characterized by the use of the prefix
"Mc" combined with a generic word.

Five days later, on September 29, 1987, Quality International filed

this action seeking a declaratory judgment that the mark
"McSleep Inn" (1) does not infringe McDonald's federally
registered trademarks (2) does not constitute a false designation
of origin or a false description or representation of services as
being associated with or originating with McDonald's in violation

of and (3) does not infringe or violate any common law rights that
McDonald's may have to its marks.
McDonald's filed a counterclaim alleging trademark infringement
and unfair competition. In addition, McDonald's alleges dilution of
its marks.

Quality International Background

Quality International is a Delaware corporation with its principal

offices in Silver Spring, Maryland. It is engaged in the lodging
business, particularly in inns, hotels, suites, and resorts. Since
1981 it has been the fastest growing hotel franchise chain in the
United States and is now the third largest franchiser of hotels both
in terms of hotels and rooms available. Its sales for 1987 were
over $ 56 million.

Having no product to compete in the economy segment, Quality

International designed a concept for a hotel with a smaller basic
room. These economy hotels would all be of new construction
and a consistent architecture. The name selected by Mr. Hazard
(CEO of Quality) for this product was "McSleep Inn."

To improve its marketing of all products, Quality International

adopted a "three chain logo" which consists of the three
individualized but compatible logos for each of the products
offered (Clarion, Quality Inn, and Comfort Inn), arranged
horizontally under the caption "Quality International."

This three chain logo will be expanded into a four chain logo when
the McSleep Inns join the family of Quality International hotels
and motels. As the new corporate signature of Quality
International, the four chain logo will be featured in all corporate
advertising.
McDonald's Background

McDonald's Corporation is a Delaware corporation with its

principal offices in Oak Brook, Illinois. It is now the largest fast
food business in the world, with over 10,000 restaurants in 45
countries and over $ 14 billion in sales annually.

In mass marketing McDonald's has widely promoted its

business philosophy of "quality, service, cleanliness and
value," or "Q.S.C.V." It first began network television advertising
in 1965, and today 85 percent of its advertising is television
advertising, although it also advertises on the radio and in print.
Approximately 22 years ago, McDonald's created the figure of
Ronald McDonald, a fictitious clown who presides over
McDonaldland. Ronald McDonald is also used extensively in
connection with Ronald McDonald Houses, a charitable function
supported by McDonald's.

McDonald's has achieved an extremely high awareness in the

minds of the American public. It claims that when asked to
name a fast food restaurant, 90 percent of the public will name
McDonald's. The recognition of Ronald McDonald by children
between the ages of two and eight is 100 percent, a figure
matched only by Santa Claus (LOL)
In 1977, McDonald's began advertising a fanciful language
called "McLanguage" that featured the formulation of words by
combining the "Mc" prefix with a variety of nouns and adjectives.
In television advertising viewed by the Court, Ronald McDonald is
shown teaching children how to formulate "Mc" words, and he
used words such as McService, McPrice, McFries and McBest.
In a consistent vein McDonald's has coined "Mc" words for many
of its products and services. McChicken, Chicken McNuggets,
Egg McMuffin or Sausage McMuffin, McD.L.T., McHappy Day,
McFortune Cookie, McFeast, McCola, McPizza, McSnack are but
some of the many. It has obtained trademark registrations for all
of these.
McDonald's marks are not limited to the fast food area, and it has
obtained registrations for the use of marks in other areas as well.
In the areas of children's clothing, it owns McKids; in interstate
travel plazas, McStop; in job programs, McJobs; in computer
software, McClass; in ground shuttle transportation, McShuttle. It
calls its own hotel at its home offices in Oak Brook, Illinois,
McLodge.
There is no evidence to suggest that anyone prior to McDonald's
used "Mc" with a generic word. This is not to say, however, that
every use today of "Mc" plus a generic word belongs to
McDonald's family of marks.

ISSUE: WON using McSleep results in confusion --- YES

HELD / RATIO:
Quality International's defenses may be summarized under four points,
as follows:
1) No likelihood of confusion : McDonald's cannot claim ownership
over every formative of "Mc" plus a generic word, and the
formative "McSleep" is not a name or, when used in its logo form,
is not a logo that is likely to cause confusion.
2) Noncompeting uses : McDonald's marks have been developed in
the fast-food business and do not preclude the use of "McSleep
Inn" in the lodging business.
3) Extensive third-party uses : By allowing or acquiescing in the use
by third parties of a proliferation of the use of words formulated by
combining "Mc" with a generic word, McDonald's should be
denied the right to preclude the use of "McSleep Inn."
4) " Mc" is generic : The use of "Mc" as a prefix has become generic
and has entered into the English language with a recognized
meaning of its own.
McSleep
In presenting his idea of McSleep, Mr. Hazard described the new
product in terms not only suggestive of McDonald's advertising but
openly modeled on the McDonald's concept:
The marketing promise of McSleep is "a
consistent, convenient, quality product at a low
price."
The marketing hook is the name "McSleep;" The
name McSleep should help consumers instantly
identify the product for what it is -- a consistently
clean, quality product at a low price.
McSleep is aimed at the entire travel market. Like
McDonald's, it is acceptable for the upscale
traveler who wants only a good night's sleep and
for the economy traveler who wants to save
money.
A trademark search was conducted of "McSleep" in which the report
revealed to Quality International management numerous uses of "Mc"
formatives owned by McDonald's. Mr. Frederick W. Mosser, the vice
president in charge of franchising, said that he was surprised at how
many marks McDonald's owned. He indicated that while he perceived
some risk in proceeding with the name McSleep, he felt that these
reservations were overcome in his mind by the facts that
McDonald's was in the food business and Quality International
was in the lodging business, and that the names would be
displayed in a distinctive manner.
Despite the persistent questioning by representatives of Quality
International with respect to its rights to use McSleep Inn, Mr. Hazard
proceeded with the public announcement on September 21, 1987.
Quality International not only was aware of the risk that attended
its adoption and use of the name McSleep Inn, a risk that it was
infringing McDonald's family of marks, but it also had good
reason to believe that the public might be actually confused. It
nevertheless proceeded with both the announcement and its
plans to sell franchises for McSleep Inn.
Beginning in June, 1987 Quality International began making changes
in the presentation of McSleep Inn that were intended to emphasize
McSleep Inn's association with Quality International. Quality
International's four chain logo was to be pictured on a flag to be placed
outside each McSleep Inn, on a decal to be placed on the front door,
and on the wall behind the registration desk. It changed the name from
"McSleep" to "McSleep Inn."
McLanguage
McDonald's is the largest single brand advertiser in the United States
could alone lead to the conclusion of the strong public awareness of its
marks, the evidence showed affirmatively that awareness was virtually
universal, to the point where a journalist could allude to McDonald's,
without using its name, by coining words as "McLaw," "McPaper," and
"McFashion."

The attribution to McDonald's, however, has not been totally under its
control. Journalists have created their own words by adding "Mc" to a
generic word. The Court was presented with literally hundreds of such
uses, such as McLaw, McTax, McNews, McPaper, McSurgery, McArt,
even McGod.
As part of its promotion, McDonald's created a language that it
called "McLanguage" from which it developed a family of marks for
its products such as McChicken, McNugget, McPizza, as well as marks
outside the food area related to its business such as McStop, McKids,
and McShuttle. There is no evidence that this language or these
marks existed before McDonald's created them or that, outside of
McDonald's sphere of promotion and presence, anyone would
understand these words to mean anything. "Mc" obviously is a Scottish
or Irish surname used in proper names. The use to form words,
however, was unique at the time. The marks that are owned by
McDonald's and that were formulated by combining "Mc" and a generic
word are fanciful and enjoy a meaning that associates the product
immediately with McDonald's and its products and service.
They also constitute a family of marks that is enforceable against
infringing uses, and since they are fanciful they will be given the
strongest protection. McDonald's Corp. v. McBagel's, Inc.
McConfusion
The central question for resolution in this litigation is whether the
use of McSleep Inn is likely to cause confusion so that an
appreciable number of the public attribute the product and
services of McSleep Inn to McDonald's.
In Pizzeria Uno Corp. v. Temple, the Fourth Circuit accepted a list of
seven factors to consider in determining the likelihood of confusion.
The list directs inquiry into the following factors: (1) the strength or
distinctiveness of the mark; (2) the similarity of the two marks; (3) the
similarity of the goods or services which the marks identify; (4) the
similarity of the facilities used by the parties in conducting their
businesses; (5) the similarity of advertising used by the parties; (6) the
defendant's intent; and (7) actual confusion.
Polaroid Corp. v. Polarad Electronics Corp, The Second Circuit has
developed a similar list of some nine factors to consider, as follows: (1)
the strength of the mark; (2) the similarity between the two marks; (3)
the similarity of the products; (4) the likelihood that the prior owner will
bridge the gap; (5) actual confusion; (6) the good faith of the junior
user in adopting its mark; (7) the quality of the junior user's product; (8)
the sophistication of buyers; and (9) the relative harm to the parties if
an injunction is granted.
These lists are not exhaustive or exclusive, and some of the factors
may not always be relevant or equally emphasized in each case.
The Court will therefore address in addition to the strength of the
marks, which the Court has considered at length and determined to be
especially important to any conclusion, the following: (1) the evidence
of confusion; (2) the similarity of the contexts of uses of the marks such
as the logo forms in which they are presented, the similarity of facilities
on which they are used, the media forms in which they are used, and
any other language or logos which might distinguish them or make
them more similar; (3) the proximity of the markets for the products and
services identified by the marks, and the likelihood that the gap
between the markets will be bridged; and (4) the intent of the junior
user in adopting his mark and his good faith in doing so.
McEvidence of Confusion
The concern was that even if McDonald's was not affiliated with Quality
International, perhaps a perception could reasonably be entertained
that McDonald's and Quality International were somehow together in
the McSleep Inns venture so that McDonald's reputation would be on
the line. The question could well be asked: "With so much suggestion
of or association with McDonald's, could it be true that perhaps
McDonald's is a sponsor of McSleep Inns?"
The question whether a "likelihood of confusion" exists is,
however, answered most persuasively by the survey evidence
presented at trial.
Survey summary:

Tested whether or not terms such as McTravel, McSleep,

McTavish resulted in an association or confusion with

McDonalds. Around 30% were expected to be confused.

(telephone survey no visual stimuli present)
Another survery, wherein McSleep in was with a clarifying
sign underneath which reads by Quality International
over 70 percent of the respondents who correctly associated
McSleep Inn with Quality International did so because they
were reading the qualifying language "by Quality
International."
Twenty-four of the 147 persons who understood that
McSleep Inn was being advertised, or 16.3 percent, said
that McDonald's was the owner or operator of the hotel,
and if the survey is limited to persons who make the decision
about where to stay when traveling, 21.4 percent believed
that McSleep Inn, even with the clarifying language, was
owned or sponsored by McDonald's.

This is, in the Court's judgment, the most indicting evidence on the
likelihood of confusion. In the absence of the clarifying language, the
evidence shows that the extent of confusion jumps significantly. Even
the 16.3 percent is an appreciable number that cannot be dismissed.
McSimilarity of the Context of Marks
Based on the observation of the logos of the parties, pictures and
renderings of the facilities, and the advertising utilized by the parties,
the Court agrees that, in the absence of the name McSleep Inn,
confusion is not likely to result. The advertising of Quality International,
moreover, focuses on the traveler and usually uses the print medium
that confronts the traveler. On the other hand, McDonald's primarily
utilizes national television advertising.
Thus, although the Court agrees that the logos in design, color and
shape, as well as the facilities, are not confusingly similar, it is the use
of the name McSleep Inn that suggests an ownership,
sponsorship, or association with McDonald's.
The confusion caused by the name is not mitigated to an acceptable
level by the distinctive uses of the logo, facilities and advertising. Even
use of the clarifying language "by Quality International" and the
substantial use of its corporate signature does not avoid the likelihood
of confusion in this case.
The Court concludes that the name McSleep is so similar to the
McDonald's family of marks that in whatever clothing it is dressed, the
public will persist in perceiving some connection with McDonald's. The
marketing hook, as Mr. Hazard observed, is the name McSleep, which
would be "instantly recognized." So long as the word McSleep is used,
the infringement occurs
McRelatedness of Products
Quality International urges that marks in the lodging business cannot
be confused with marks in the food business. This is not based on
applicable legal principles and is not consistent with the demonstrated
facts.
The evidence did show that Quality International's McSleep Inns would
not compete with a line of products sponsored by McDonald's. The
evidence showed, however, that the fast food and the motel business
were related. Some motels actually provide food in competition with
fast food businesses which seem to spring up around motels.
The public has come to associate the two markets to such an extent
that one would expect that McDonald's has or would enter into this
market. This was amply demonstrated by all the survey evidence in
which an applicable number of the public would believe that a McSleep
Inn was sponsored by McDonald's.
Thus, while the Court does not consider it necessary to find the
relatedness of markets, because the evidence of confusion builds in
that perception by the public, the evidence is undisputed that lodging
and fast foods are natural partners.
As noted earlier, the boundaries of enforceability of a mark are defined
by where and in what markets an appreciable number of the public are
confused. Here the confusion in a different, but related market, entitles
McDonald's to enforce its marks in that market.

McIntent
Intent of the infringing user to confuse is not necessary to
establish a likelihood of confusion. On the other hand, the existence
of an intent to confuse is "strong evidence establishing likelihood of
confusion, since one intending to profit from another's reputation
generally attempts to make his signs, advertisements, etc., to resemble
the other's so as deliberately to induce confusion."
Pizzeria Uno, 747 F.2d at 1535. And an intentional infringement will
entitle a plaintiff to an injunction; the defendant has no equity to object
to one.
The Court finds that Mr. Hazard hoped that Quality International would
become the "McDonald's of lodging." He believed, though mistakenly,
that because he was in the lodging business and McDonald's was in
the fast food business, he was free to borrow, and expected that the
confusion that would result would benefit his product. He wanted
instant recognition, an image of consistency, quality, and value, all at
the courtesy of McDonald's.
While the intent of Mr. Hazard in the selection and adoption of the
name was deliberate, the Court believes that he and his staff believed
that the use could be defended, albeit with a tainted understanding of
their rights. Quality International knew of the risk but elected to
proceed. Perhaps he had a good faith belief he could use the name
legally and truly intended, after adopting it, to try to distinguish it from
McDonald's. But its use was not available.
McConclusions
For the reasons given the Court finds and concludes that (1)
McDonald's is entitled to enforce its family of marks that are
characterized by the combination of the prefix "Mc" with a generic
word; (2) the name McSleep Inn is likely to cause an appreciable
number of the public to be confused by believing that McSleep Inn is
sponsored, associated, affiliated, connected, or endorsed by
McDonald's; and (3) the adoption and use by Quality International of
the name McSleep Inn was a deliberate attempt to benefit by the
good will and reputation of McDonald's. Therefore, the Court will find
trademark infringement, unfair competition, and dilution under the
Illinois statute

E. & J. Gallo Winery v. Consorzio del Gallo Nero

782 F.Supp. 457 (1991)
Summary: An action for trademark infringement and dilution was filed
by E. & J. Gallo Winery (Gallo) against Consorzio del Gallo Nero
(Gallo Nero). Gallo is a US-based brand that features the Gallo
trademark and is the owner of several registrations of the Gallo mark,
and has been using the same since 1933. Over 2 billion bottles of wine
bearing the said mark has been sold since then. And for the last 50
years, Gallo has spent some $500M in its promotional campaigns.
Gallo Nero is an Italian brand promoting wine produced from the
Chianti region of Italy. Prior to its formation on 1987, its predecessor,
which started in 1924, has consistenly used the symbol of a black
rooste, or gallo nero, which is a symbol historically strongly
associated with the Chianti region of Italy. Such symbol is found in
Gallo Neros neck seals. However, the same has not yet been used on
any Gallo Nero wine distributed in the US. In deciding in favor of Gallo,
the Court used the following factors in determining likelihood of
confusion: (1) strength of plaintiffs mark, (2) similarity of marks used,
(3) similarity of goods sold, (4) similarity of marketing channels used,
(5) degree of care exercised by purchasers, (6) evidence of actual
confusion, and (7) defendants intent in adopting the Gallo name.
Using the foregoing factors, the Court noted that clearly, the Gallo
mark is a mighty fortress in the US wine market and the use of that
name on a bottle of competing wine marketed through similar channels
leads to an initial finding of infringement. Thus, Gallo is entitled to
summary judgment on its infringement claim.
FACTS (almost just the same as the one in the summary thats
really all there is )

E. & J. Gallo Winery (Gallo) filed an action for trademark

infringement and dilution against Consorzio del Gallo Nero
(Gallo Nero).
Background of the two brands:
(1) GALLO
the largest winery in the US
produces and sells a variety of wine featuring the
Gallo trademark
owner of several federal registrations of the Gallo
mark
since 1933, it has consistently used said name in
relation to its wines and has sold over 2 billion bottles
of wine to consumers through restaurants, grocery
wines, wine shops, and liquor stores
spent some $500M in the last 50 years in promoting
the Gallo brand, calculated to reach every consumer
in the US 50-70 times a year
(2) GALLO NERO
an Italian trade association based in Florence, Italy
promotes Chianti Classico wine produced by its
individual members in the Chianti region of Italy
its predecessor, Consorzio Vino Chianti Classico
(CVCC) used to represent the Chianti Classico
producers since 1924
CVCC consistently used the symbol of a black rooster,
or gallo nero to represent its wines, since said
symbol is strongly associated with the Chianti region
the symbol appeared on the neck seal of its bottles
surrounded by the Consorzio Vino Chianti Classico
designation
Consorzio del Gallo Nero was selected as the
successors name on the basis of the association
between the symbol and the wines of the Chianti
region

ISSUE WON Gallo is entitled to summary judgment on its infringement

claim - YES
RATIO (super long because the court extensively discussed each
factor. Better sure than sorry )
The Court used the foregoing factors in deciding in favor of Gallo
STRENGTH OF PLAINTIFFS MARK

A registered mark is "presumed to be distinctive and should

be afforded the utmost protection."

Therefore, in light of Gallo's current federal registration of several

versions of the "Gallo" mark, plaintiff has established as an initial
matter the validity and distinctiveness of the mark and Gallo's
exclusive right to use the mark in promoting and selling its wines
in the United States.

In addition to these statutory presumptions, the Gallo mark itself

has been held by a sister court of this Circuit to have achieved
"virtually universal recognition as a trademark for wine," and that
it is "universally known both nationally and in California, and has
become an extraordinarily strong and distinctive mark."

Gallo Nero contests the strength of the Gallo mark by noting that
there are numerous third-party uses of the "Gallo" name, and
that "Gallo" itself is merely a common surname and basic
element of Italian vocabulary.
However, "[e]vidence of other unrelated potential infringers is
irrelevant to claims of trademark infringement," and Gallo Nero
has not shown that these third-party uses are in any way
connected to the production, promotion, and sale of wine, much
less that any of these uses has achieved significant consumer
recognition.

Secondly, a family name is entitled to protection as a mark

so long as it has acquired a recognized "secondary
meaning" through use, advertising, and public recognition.
Case of Gallo Cattle (the previous case where Gallo was
also involved): "Gallo" has clearly become associated with wine
in the United States such that its evolution to "secondary
meaning" status may not be seriously questioned.

Academy of Motion Picture Arts and Sciences v. Creative

House Promotions: While the strength of plaintiff's mark is but
one of several issues to be considered in determining whether
there is a likelihood of confusion between the parties' products, a

strong mark is `afforded the widest ambit of protection from

infringing uses.
SIMILARITY OF MARKS USED

Similarity of marks is judged by their sound, appearance, and

meaning.
GALLOS CONTENTION: the two marks share the total identity of
the substantive term "Gallo" and are therefore substantially similar
for purposes of trademark infringement.
GALLO NEROS ARGUMENT: its use of surrounding terms, i.e.,
Consorzio del Gallo Nero, sufficiently distinguishes the latter from
the "Gallo" mark to render the two uses dissimilar.

It is undisputed that Gallo has valid, current federal

registrations of the "Gallo" mark used in conjunction with
other words, e.g., "Ernest & Julio Gallo," and that Gallo has
consistently combined the word "Gallo" with other descriptive
terms, e.g., "Gallo Premium Blush" and "Gallo Classic Burgundy."

Therefore, there is a logical conclusion that consumers are

accustomed to seeing the "Gallo" mark used in conjunction
with other terms or surrounded by other words.

The distinctive term in each instance is "Gallo," which, as

discussed above, has clearly obtained a unique status when
coupled with wine.

ANOTHER GALLO NERO ARGUMENT: the presentation of the

terms on the bottle sufficiently distinguish the two uses such that
defendant's use is dissimilar to plaintiff's. Gallo Nero notes
that the use of the term "Gallo" is always in conjunction with the
term "Nero," and its proposed limitation to small script on the neck
seal strengthens the immediate dissimilarity arising from the
otherwise clearly different labels attached to the parties' bottles of
wine.
WHAT THE COURT SAID: Gallo Nero's argument, while
having some merit, is neither dispositive nor persuasive on the
issue of similarity between marks. As an initial matter, Gallo Nero
is arguably well aware of the similarity of the "Gallo Nero"
name to that of "Gallo" in light of defendant's interactions
with foreign trademark offices.
o
Defendants predecessor, CVCC, sought to register the
words "Gallo Nero" as a trademark in Canada.
o
The application, however, was rejected because the
Canadian trademark office concluded that "Gallo Nero" was
likely to be confused with Gallo's registered marks.
o
Moreover, just prior to commencing its U.S. marketing
campaign, Gallo Nero opposed plaintiff's application to
register "Ernest and Julio Gallo" in the United Kingdom on
the ground that this mark would be "deceptive or confusing"
with "Gallo Nero."

Therefore, because "Gallo" is the single "dominant" or

"substantive" term used by plaintiff on all its products, the
two terms are significantly similar for purposes of a finding
of a likelihood of confusion between the two uses.
SIMILARITY OF GOODS SOLD

"When the goods produced by the alleged infringer compete

for sales with those of the trademark owner, infringement
usually will be found if the marks are sufficiently similar that
confusion can be expected."

Both parties are involved in the sale of wine, although of

arguably different varieties.

The Patent and Trademark Office has repeatedly found that

wines of all types constitute a single class of goods.
SIMILARITY OF MARKETING CHANNELS USED

Both parties market their products through retail establishments

like wine shops and liquor stores, and utilize magazines for
advertizing purposes.

Indeed, Gallo Nero notes use of the same retail establishment in

Washington, D.C., the Mayflower Wine & Spirits Shop, by both
parties in selling their respective wines.
DEGREE OF CARE EXERCISED BY PURCHASERS

Confusion between marks is generally more likely where the

goods at issue involve relatively inexpensive, "impulse"
products to which the average, "unsophisticated" consumer
does not devote a great deal of care and consideration in
purchasing.

Taylor Wine Co. v. Bully Hill Vineyards: Wine has been

deemed an "impulse" product, and certainly so with respect to
the average consumer, effectively compelling the consumer's
reliance "on faith in the maker."
The average American who drinks wine on occasion can
hardly pass for a connoisseur of wines.
GALLO NEROS DEFENSE: a single 1959 case from the Middle
District of Alabama, stating that "the wine-buying public
insofar as their selection and purchase of wine is concerned is
a highly discriminating group."
COURTS REPLY: That case, however, involved plaintiff's
"THUNDERBIRD" fortified wine with the "Gallo" name above
versus the defendant's "THUNDERBOLT" with the words
"Private Stock" immediately below both products arguably
failing any classification as "fine wines." Moreover, with all due
respect to Alabama, it would seem common knowledge that wine
was not a widely appreciated beverage in the South in 1959.
Therefore the Court finds that the lack of consumer
sophistication significantly enhances the likelihood of confusion
between the two products.

EVIDENCE OF ACTUAL CONFUSION

The failure to prove instances of actual confusion is not

dispositive'" of an infringement claim.

Evidence of actual confusion "is merely one factor to be

considered ... and it is not determinative" if it is not shown.

Therefore, at a minimum, the absence of actual confusion will

not defeat an otherwise successful claim of infringement by Gallo
as this Court must find only a likelihood of confusion.

GALLO NEROS DEFENSE: survey conducted entitled

"Consumer Perceptions of Wine Bottles Bearing the Consorzio
del Gallo Nero Neck Seal" (the "Jacoby Survey")
In the survey, individual participants were shown an array of
eight bottles of red wine, including two bottles of Gallo
wines and two bottles of Gallo Nero wines.
Participants were then asked a series of questions designed
to assess the likelihood of "point-of-sale" confusion as to the
source of the respective wines.
Dr. Jacoby found "only a trivial level of likely confusion as to
source among these consumers," as "only three of the 216
respondents (1.4%) identified one or more E & J Gallo bottles
and one or more Consorzio del Gallo Nero bottles as coming
from the same source."

GALLOS ANSWER: it would be impossible at this stage to show

actual confusion other than in the artificial setting of a survey as
Gallo Nero has not sold a single bottle of wine in the U.S.
bearing the words "Gallo Nero."
Gallo proffers its own survey evidence conducted by Robert
Lavidge of Elrick & Lavidge, a custom marketing research firm
(the "Lavidge Survey").
In that survey, 512 respondents were shown the neck seal
with the "Consorzio del Gallo Nero" designation, and another
512 were shown the advertisement which appeared in the Wine
Spectator in 1986.
Gallo reports that 43% of the respondents unequivocally
associated the neck seal with the Ernest & Julio Gallo Winery,
and 38% did so with regard to the advertisement. Lavidge
Survey at 9-10.
(TIP FROM ME AS A FORMER PSYCH MAJOR (not in the case) :
point is, the two experiments employed two different means. Different
methods could lead to different results. As it did in this case)

WHAT THE COURT SAID: Numerous courts hold a side-by-side

comparison like the one conducted by Dr. Jacoby to be
legally irrelevant in determining whether defendant's use of a
similar mark leads to a finding of a likelihood of confusion.
The proper test for likelihood of confusion is not whether
consumers would be confused in a side-by-side comparison
of the products, but whether confusion is likely when a
consumer, familiar with the one party's mark, is presented
with the other party's goods alone.
On the other hand, other authorities maintain that the proper
survey evidence is that which attempts to most closely replicate
the marketplace setting in which consumers will typically
encounter the competing marks. Under such a view, then clearly
the Gallo Nero survey has relevance in gauging a likelihood of
consumer confusion when confronted with bottles of wine

sporting the "Consorzio del Gallo Nero" name.

Court finds nonetheless that there is some evidence of a
likelihood of confusion under both surveys.

The word pale pilsen on ABIs trademark does not constitute

trademark infringement for it is a generic word descriptive of the color
of a type of beer thus belong to the public domain.

INTENT IN ADOPTING THE NAME

Just as with actual confusion, a showing of intent is not

necessary to support a finding of a likelihood of confusion.

However, where an infringer adopts a particular name with

knowledge of plaintiff's mark, courts presume that there was
an intent to copy the mark.

AMF, Inc. v. Sleekcraft Boats: one who adopts the mark of

another for similar goods acts at his own peril and any doubt
concerning the similarity of the mark must be resolved against
him.

The record here establishes that Gallo Nero was aware of the
"Gallo" mark prior to beginning its U.S. marketing campaign in
1989, as demonstrated both by its predecessor's direct
knowledge of the potentially infringing use of "Gallo" in its
advertisements of "Gallo Nero" as well as the communications
with the trademark offices of Canada and the United Kingdom.

The present issue is not whether Gallo Nero had admirable

motivations when it initially adopted its name in 1987, but
whether Gallo Nero had knowledge of the potentially
infringing effect its use of the "Gallo Nero" and "Consorzio del
Gallo Nero" marks would have when it entered the U.S. wine
market.

ABI is likewise not guilty of unfair competition. The universal test for
this is whether the public is likely to be deceived. Actual or probable
deception and confusion on the part of the customers by reason of
defendants practices must appear. However, this is unlikely to happen
in the case at bar for consumers generally order beer by brand.

Trade Dress Confusion

Asia Brewery Inc. v. CA & San Miguel
G.R. No. 103543, July 5, 1993

San Miguel Pale Pilsen

Also, the fact that ABI also uses amber-colored steinie bottles cannot
constitute unfair competition. SMC did not invent but merely borrowed
the steinie bottle from abroad. The color amber is the most effective
color in protecting beer from light. 320 ml is likewise the standard
prescribed under Metrication Circular No. 778. The fact that it is the
first to use the steinie bottle does not give SMC a vested right to use it
to the exclusion of everyone else. Nobody can acquire any exclusive
right to market articles supplying the simple human needs in containers
or wrappers of the general form, size and character commonly and
immediately used in marketing such articles.
There is no confusing similarity between the competing beers therefore
ABI neither infringed SMCs trademark nor did it commit unfair
competition.
Facts:

Sept. 15 1988 - San Miguel Corporation (SMC) giled a

complaint against Asia Brewery (ABI) for infringement of
trademark and unfair competition (Beer Pale Pilsen/Beer na Beer
vs. San Miguel Pale Pilsen)

August 27, 1990 - Complaint was dismissed by lower court

September 30, 1991 - CA reversed the trial court's decision

o
ABI was restrained from manufacturing such
product
o
ABI was asked to pull out all other units of such
product
Asia Brewery Beer na
Beer
o
ABI was asked to pay P5Million as double the
income they have gathered from the product
o
ABI was asked to pay P2M as moral damages,
and P500K as exemplary damages, and P250K for
attorney's fees plus costs

Motion for reconsideration denied

Thus, this petition for certiorari under rule 45

Issue: WON ABI infringes SMC's trademark San Miguel Pale Pilsen
with Rectangular Hops and Malt Design, thereby committing unfair
competition
Held: NO

Summary
San Miguel Corp. (SMC) filed a complaint against Asia Brewery Inc.
(ABI) for infringement of trademark and unfair competition. RTC
dismissed the complaint. The CA reversed the decision finding that ABI
is guilty of trademark infringement and unfair competition thus the case
at bar.
SC reversed CA. Infringement is determined by a test of dominancy. If
the competing trademark contains the main or essential or dominant
features of another and confusion and deception is likely to result,
infringement takes place. A closer look at the trademark of both
companies will show that the dominant features of each absolutely
bear no similarity to each other. Besides, the dissimilarities in trade
dress abound (Neck size, Font, Texts printed, Presence of slogan and
logos, other graphics and price per bottle) .

Ratio:
Findings of Fact; Exception

As a general rule, factual findings of the CA are conclusive

upon the SC, however, there are some exceptions
o
This case falls under one of the exceptions as the
determination of facts of the lower court differed as to that of
the CA
o
There is no concurrence between the trial court and the
Court of Appeals on the lone factual issue of whether ABI, by
manufacturing and selling its Beer Pale Pilsen in amber
colored seniie bottles of 320 ml. Capacity with a white
painted rectangular label has committed TRADEMARK
INFRINGEMENT and UNFAIR COMPETITION against SMC.
Infringement Defined

Infringement of trademark is a form of unfair competition

What constitutes Infringement :

o
Any person who shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection
with the sale, offering for sale, or advertising of any goods,
business or services on or in connection with which such use
is likely to cause confusion or mistake or to deceive
purchasers or others as to the source or origin of such goods
or services, or identity of such business; or reproduce,

counterfeit, copy or colorably imitate any such mark or tradename and apply such reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or
services, shall be liable to a civil action by the registrant for
any or all of the remedies herein provided.
This definition implies that only registered trade marks, trade
names and service marks are protected against infringement
or unauthorized use by another or others. The use of
someone else's registered trademark, trade name or service
mark is unauthorized, hence, actionable, if it is done "without
the consent of the registrant.

SMB

How The Question of Infringement of Trademark is Determined

Infringement is determined by the "test of dominancy" rather than
by differences or variations in the details of one trademark and of
another.
o
Similarity in size, form and color, while relevant, is not
conclusive. If the competing trademark contains the main or
essential or dominant features of another, and confusion and
deception is likely to result, infringement takes place.
o
Duplication or imitation is not necessary;
o
neither it is necessary that the infringing label should
suggest an effort to imitate

The question at issue in cases of infringement of trademarks is

whether the use of the marks involved would be likely
to cause confusion or mistakes in the mind of the public or
deceive purchasers.

The SAN MIGUEL PALE PILSEN bottle has a

tapered neck.

The words "pale pilsen" on SMC's label are printe

and
laced
letters
along
a diago
straight horizontal band.

The names of the manufacturers are prominently p

their respective bottles. SAN MIGUEL PALE P
"Bottled by the San Miguel Brewery, Philippines,"

On the back of ABI's bottle is printed in big, bo

under a row of flower buds and leaves, its co
slogan: "BEER NA BEER!"

The back of the SAN MIGUEL PALE PILSEN bott

the SMC logo,

The SAN MIGUEL PALE PILSEN bottle cap is stam

a coat of arms and the words "San Miguel
Philippines" encircling the same.

Finally, there is a substantial price difference betwe

PALE PILSEN (currently at P4.25 per bottle) and

Applying the Dominancy test to case at bar

o
The dominant feature of SMC's trademark is the name of the
product: SAN MIGUEL PALE PILSEN,
o
written in white Gothic letters with elaborate serifs at the
beginning and end of the letters "S" and "M"
o
on an amber background across the upper portion of the
rectangular design.
o
o

the dominant feature of ABI's trademark is the name: BEER PALE

PILSEN,
with the word "Beer" written in large amber letters, larger than any
of the letters found in the SMC label.
SMB

o
o

BNB
The dominant feature of
SMC's trademark is the
name of the product:
SAN MIGUEL PALE
PILSEN,
written in white Gothic
letters with elaborate
serifs at the beginning
and end of the letters "S"
and "M" on an amber
background across the
upper portion of the
rectangular design.

the dominant feature

of ABI's trademark is
the name: BEER
PALE PILSEN,
with the word "Beer"
written in large amber
letters, larger than
any of the letters
found in the SMC
label.

The trial court perceptively observed that the word "BEER" does
not appear in SMC's trademark, just as the words "SAM MIGUEL"
do not appear in ABI's trademark.
Hence, there is absolutely no similarity in the dominant features of
both trademarks. Neither in sound, spelling or appearance can
BEER PALE PILSEN be said to be confusingly similar to SAN
MIGUEL PALE PILSEN. No one who purchases BEER PALE
PILSEN can possibly be deceived that it is SAN MIGUEL PALE
PILSEN. No evidence whatsoever was presented by SMC proving
otherwise.

Besides the dissimilarity in their names, the following other

dissimilarities in the trade dress or appearance of the competing
products abound:

One who pays only P4.25 for a bottle of beer cannot expect to
receive San Miguel Pale Pilsen from the storekeeper or bartender.
Generic Or Descriptive And Primarily Geographically
Descriptive Words are Non-Registrable And Not Appropriable

The fact that the words pale pilsen are part of ABI's trademark does
not constitute an infringement of SMC's trademark:
o
SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic words
descriptive of the color ("pale"), of a type of beer ("pilsen"), which
is a light bohemian beer with a strong hops flavor that originated
in the City of Pilsen in Czechoslovakia and became famous in the
Middle Ages.
o
"Pilsen" is a "primarily geographically descriptive word hence,
non-registerable and not appropriable by any beer manufacturer.
The Trademark Law provides:

"Sec. 4 . . . The owner of trade-mark, trade-name or servicemark used to distinguished his goods, business or services
from the goods, business or services of others shall have the
right to register the same [on the principal register], unless it:
. . . "(e) Consists of a mark or trade-name which, when
applied to or used in connection with the goods, business or
services of the applicant is merely descriptive or deceptively
misdescriptive of them, or when applied to or used in
connection with the goods, business or services of the
applicant
is primarily
geographically
descriptive or
deceptively misdescriptive of them, or is primarily merely a
surname."

No one may appropriate generic or descriptive words. They

belong to the public domain
o
The words "pale pilsen" may not be appropriated by SMC for its
exclusive use even if they are part of its registered trademark:
SAN MIGUEL PALE PILSEN, any more than such descriptive
words as "evaporated milk," "tomato ketchup," "cheddar cheese,"
"corn flakes" and "cooking oil" may be appropriated by any single
manufacturer of these food products, for no other reason than
that he was the first to use them in his registered trademark

Unfair Competition
Unfair competition is the employment of deception or any other means
contrary to good faith by which a person shall pass off the goods
manufactured by him or in which he deals, or his business, or services,
for those of another who has already established goodwill for his
similar goods, business or services, or any acts calculated to produce
the same result. (Sec. 29, Republic Act No. 166, as amended.)
Test to determine unfair competition in instance
The universal test question is whether the public is likely to be
deceived.
o
Nothing less than conduct tending to pass off one man's goods or
business as that of another will constitute unfair competition.
o
Actual or probable deception and confusion on the part of the
customers by reason of defendant's practices must always
appear
o
The test is not found in the deception, or possibility of the
deception, of the person who knows nothing about the design
which has been counterfeited, and who must be indifferent as
between that and the other. The simulation, in order to be
objectionable, must be such as appears likely to mislead the
ordinarily intelligent buyer who has a need to supply and is
familiar with the article that he seeks to purchase."
Protection Against Imitation is Limited To Nonfunctional Features
The petitioner's contention that bottle size, shape and color may not be
the exclusive property of any one beer manufacturer is well taken.
o
SMC's being the first to use the steinie bottle does not give SMC
a vested right to use it to the exclusion of everyone else. Being of
functional or common use, and not the exclusive invention of any
one, it is available to all who might need to use it within the
industry.
o
Nobody can acquire any exclusive right to market articles
supplying simple human needs in containers or wrappers of the
general form, size and character commonly and immediately used
in marketing such
ABI does not use SMC's steinie bottle. Neither did ABI copy it.
o
ABI makes its own steinie bottle which has a fat bulging neck to
differentiate it from SMC's bottle.
The amber color is a functional feature of the beer bottle.
o
As pointed out by ABI, all bottled beer produced in the Philippines
is contained and sold in amber-colored bottles because amber is
the most effective color in preventing transmission of light and
provides the maximum protection to beer.
o
Moreover, no one may have a monopoly of any color.
o
Not only beer, but most medicines, whether in liquid or tablet
form, are sold in amber-colored bottles.
That the ABI bottle has a 320 ml. capacity
o
is not due to a desire to imitate SMC's bottle but because that
bottle capacity is the standard prescribed under Metrication
Circular No. 778, dated 4 December 1979, of the Department of
Trade, Metric System Board.
With regard to the white label of both beer bottles,
o
ABI explained that it used the color white for its label because
white presents the strongest contrast to the amber color of ABI's
bottle;
o
it is also the most economical to use on labels, and the easiest to
"bake" in the furnace.
o
No one can have a monopoly of the color amber for bottles, nor of
white for labels, nor of the rectangular shape which is the usual
configuration of labels.

Our decision in this case will not diminish our ruling in "Del Monte
Corporation vs. Court of Appeals and Sunshine Sauce Manufacturing
Industries," 181 SCRA 410, 419,
o
that: ". . . to determine whether a trademark has been infringed,
we must consider the mark as a whole and not as dissected. If the
buyer is deceived, it is attributable to the marks as a totality, not
usually to any part of it."
That ruling may not apply to all kinds of products.
o
The Court itself cautioned that in resolving cases of infringement
and unfair competition, the courts should "take into consideration
several factors which would affect is conclusion, to wit:
o
the age, training and education of the usual purchaser, the nature
and cost of the article, whether the article is bought for immediate
consumption and also the conditions under which it is usually
purchased."
o
The Del Monte case involved catsup,
o
a common household item which is bought off the store shelves
by housewives and house help who, if they are illiterate and
cannot identify the product by name or brand, would very likely
identify it by mere recollection of its appearance.
o
Since the competitor, Sunshine Sauce Mfg. Industries, not only
used recycled Del Monte bottles for its catsup (despite the
warning embossed on the bottles: "Del Monte Corporation. Not to
be refilled.") but also used labels which were "a colorable
imitation" of Del Monte's label, we held that there was
infringement of Del Monte's trademark and unfair competition by
Sunshine.
o
Our ruling in Del Monte would not apply to beer which is not
usually picked up from a store shelf but ordered by brand by the
beer drinker himself from the storekeeper or waiter in a pub or
restaurant.

Secondary Confusion/Post Scale Confusion

Mastercrafters Clock & Radio Co. v. Vacheron &
Constantin-Lecoultre Watches, Inc., and Jaeger-Le
Coultre
221 F.2d 464, 350 U.S. 832 (1995)
FACTS

1952: Mastercrafters launched production and distribution of its

MODEL 308 CLOCK

Defendant Vacheron wired Masterchrafters and its customerdistributors that the said model was a counterfeit of the distinctive
appearance and configuration of the ATMOS CLOCK, distributed
by Vacheron.

Thereafter, Vacheron commenced state-court suits against

several Mastercrafters distributors for damages and injunction

Mastercrafters countered by bringing the present action seeking

declaratory judgment that its model 308 does not unfairly compete
with Vacheron, and asking damages allegedly resulting from
Vacherons suits.
o
Vacheron counter-claimed for damages from unfair
competition and injunction restraining the manufacture and
distribution of Model 308
o
Jaeger-Le Coutlre intervened and joined Vacheron

Trial Judge ruled in favor of plaintiff and dismissed the

counterclaims

Both appealedplaintiff because of the insufficiency of the award

of damage; and defendant because the judge ruled agains them
ISSUE: WON plaintiff is guilty of unfair competition
HELD: Reversed and remanded.

Needless to say, the shape of the bottle and of the label is unimportant.
What is all important is the name of the product written on the label of
the bottle for that is how one beer may be distinguished from the
others.
The Doctrine consider the mark as a whole and not as dissected
(to determine existence of infringement) NOT applicable in ALL
situations.. such as case at bar

RATIO

CONCLUSIONS OF JUDGE: The judge found that, before

plaintiff began production of its Model 308, the Atmos clock 'was
readily distinguishable from all other clocks then on the market by
virtue of its appearance'; that plaintiff's Model 308 copied that
appearance; that plaintiff 'undoubtedly intended to, and did, avail

10

itself of an eye-catching design and hoped to cater to the

priceconscious purchaser who desires to own a copy of a luxury
design clock regardless of mechanism or source'; that the Atmos
clock sold for not less than $175. while plaintiff's sold for $30. or
$40; that on 'two or three occasions Model 308 has been
described as ' a copy of Atmos." once by a representative of
plaintiff at an exhibit in Chicago, on the other occasions by
distributors of plaintiff's clock; that 'since the introduction of the
Model 308, Vacheron's salesmen have encountered considerable
sales resistance' and its sales have 'fallen off'; and that these
facts undoubtedly prove 'the uniqueness and even the aesthetic
qualities of' the Atmos clock. He further found that three
customers inquired as to 'the lower priced Atmos' and that others
'said they knew where they 'could get a clock for $30 or $40 just
like the Atmos." But he held there was no unfair competition by
plaintiff because (a) more than one person lawfully distributed the
Atmos clock and therefore there was no single source, (b) there
was no evidence to show that the public cared what was the
ultimate source, and (c) plaintiff's clock was plainly marked and
advertised as plaintiff's.
Absent a design patent or a secondary meaning, of course there
would be no actionable harm by plaintiff.
o
But the existence of a secondary meaning, attaching to the
unique appearance of the Atmos clock, is not precluded by
the mere fact that more than one person distributed that
clock in the same area.
The actionable harm, in a secondary-meaning case, may result
either from the likelihood
o
of loss of customers or
o
of loss of reputation, or
o
of both.
Such loss can result from the customer's belief that the competing
article derives from the same source as that of the party
complaining; and it matters not whether the customers know just
who is the source.
The ultimate source here was the Swiss manufacturer, while the
intermediate sources, in this country, were the defendant and
Cartier. All three had actionable claims against plaintiff, if its
conduct did or was likely to injure the reputation of the ultimate
source of the Atmos clock, for all three legitimately enjoyed the
benefits of that reputation.
True, a customer examining plaintiff's clock would see from the
electric cord, that it was not an 'atmospheric' clock. But, as the
judge found, plaintiff copied the design of the Atmos clock
because plaintiff intended to, and did, attract purchasers who
wanted a 'luxury design' clock. This goes to show at least that
some customers would buy plaintiff's cheaper clock for the
purpose of acquiring the prestige gained by displaying what many
visitors at the customers' homes would regard as a prestigious
article.
Plaintiff's wrong thus consisted of the fact that such a visitor would
be likely to assume that the clock was an Atmos clock. Neither the
electric cord attached to, nor the plaintiff's name on, its clock
would be likely to come to the attention of such a visitor; the
likelihood of such confusion suffices to render plaintiff's conduct
actionable.
Plaintiff's intention thus to reap financial benefits from poaching
on the reputation of the Atmos clock is of major importance. Of
course, where there is no likelihood of confusion-- as, e.g., where
the alleged infringing article is not in a sufficiently adjacent
field then an alleged infringer's intent becomes irrelevant, since
an intent to do a wrong cannot transmute a lawful into an unlawful
act.
o
But where the copying is unlawful, if only there is a likelihood
of confusion, then the intent of the copier becomes decidedly
relevant:
It gives rise to a powerful inference that confusion is likely, and
puts on the alleged infringer the burden of going forward with
proof that it is not.
Here the plaintiff's intent is unmistakable; accordingly, plaintiff had
the burden of going forward with proof showing an absence of
such likelihood; and that burden plaintiff did not discharge.
Consequently, we do not accept the judge's findings as to the
absence of unfair competition by plaintiff.
It would seem that the Swiss manufacturer was not an
indispensable party; but, even if it was, plaintiff waived its

absence as a party by not asserting that fact as a defense. We

reject plaintiff's argument that it will be unfair to plaintiff to hold it
liable here, because it may be subjected to a subsequent suit by
Cartier: Defendant and the intervenor are entitled to an injunction,
and also to the damages they have suffered; we need not now
decide whether Cartier can also later collect damages for the
harm done to it.
Since plaintiff was guilty of unfair competition, the judgment
against defendant must be reversed. We remand with directions
to dismiss plaintiff's complaint and, on the counterclaim, to grant
an injunction against plaintiff, and to ascertain the damages to
defendant and the intervenor.
The trial judge should determine whether defendant should also
be awarded a sum equal to plaintiff's profits from sales of the
infringing clock. We do not now decide that such an amount
should be awarded but leave that matter to be decided, in the first
instance at any rate, by the trial judge.

Reverse Confusion
Dreamwerks Production Group, Inc., v. SKG Studio,
DreamWorks SKG
142 F.3d 1127 (1998)
SUMMARY:
This is an unusual case wherein the junior mark is more famous than
the senior mark. Dreamwerks was established in 1984 and registered
its trademark in 1992 and has been organizing Trekkie Conventions.
DreamWorks (say SKG na lang) was established in 1994 and has
given us a whole bunch of great movies. So now Dreamwerks is
saying that SKG infringed on its mark, and is eating up its goodwill
because people get mad when they realize theyre dealing with
Dreamwerks and not SKG. Now, the District Court dismissed the case.
The SC merely REMANDED the case, just given standards to use.
First question is W/N a reasonably prudent consumer would be
confused, there are 8 factors called Sleekcraft factors. The court
narrowed it to 3 (1) arbitrariness of the mark, (2) similarity of sound,
sight and meaning, and (3) relatedness of goods (go to ratio to see the
explanation for each). But regardless of these factors, the court should
focus on the question of W/N Dreamwerks clients (the Trekkies)
would actually be misled into thinking and associating the
conventions with Dreamworks SKG. (And can I just say, Kozinski is
adorable, he uses Pshaw and Vulcan mind meld in the decision.)
FACTS:
DreamWorks SKG, established in 1994 by Steven Spielberg, Jeffrey
Katzenberg and David Geffen (each of whom graciously
contributed an initial to form the SKG part of the trademark).
DreamWorks is a film studio, having produced such well-advertised
movies as The Peacemaker, Amistad and Mouse Hunt. It has also
created DreamWorks Interactive (a joint venture with software
giant Microsoft); GameWorks (described in the press as a
micropub and virtual reality video arcade for the 90s); and
DreamWorks Toys (a joint venture with toy maker Hasbro).
Dreamwerks Production Group, Inc., a small Florida company that
since 1984 has been in the business of organizing
conventions in the Northeast and Midwest, mostly with a Star
Trek theme. At a typical Star Trek convention, Dreamwerks draws
customers with a star like DeForest Kelley (Bones), Leonard
Nimoy (Spock) or Michael Dorn (Worf from The Next Generation ).
For an admission fee of $25 or so, customers get autographs,
meet fellow trekkies, compete in costume contests, listen to
pitches for upcoming movies and browse the products of vendors
who have rented space at the convention.
Dreamwerks registered its mark with the United States Patent and
Trademark Office in 1992, it holds the senior mark . It claims that
DreamWorks SKG is causing confusion in the marketplace by
using a mark too similar to its own and is doing so with respect to
goods and services that are too similar to those it (Dreamwerks) is
offering.
Pshaw (thats right, Kozinski used Pshaw), one might say. What could
be better for Dreamwerks than to have people confuse it with a
mega movie studio? It is not interested in fooling consumers, and it
claims to suffer ill will when people buy tickets under the
misimpression that they are dealing with DreamWorks rather than
Dreamwerks. Dreamwerks also frets that its own goodwill will be

11

washed away by the rising tide of publicity associated with the

junior mark. Dreamwerks points out (somewhat wistfully) that it
hopes to expand its business into related fields, and that these
avenues will be foreclosed if DreamWorks gets there first. Finally,
Dreamwerks notes that whatever goodwill it has built now rests in
the hands of DreamWorks; if the latter should take a major misstep
and tarnish its reputation with the public, Dreamwerks too would be
pulled down.
The district court held that Dreamwerks had not because the core
functions of the two businesses are so distinct that there is no
likelihood of confusion as a matter of law. Dreamwerks appealed.
ISSUE/HELD:
The question presented here is whether Dreamwerks has stated a
claim for trademark infringement sufficient to survive summary
judgment. REMANDED FOR TRIAL. Read the Ratio, the Court
gives the standards there.
RATIO:
The test for likelihood of confusion is whether a "reasonably prudent
consumer" in the marketplace is likely to be confused as to the
origin of the good or service bearing one of the marks. The eight
factors to facilitate the inquiry:
1) strength of the mark;
2) proximity or relatedness of the goods;
3) similarity of sight, sound and meaning;
4) evidence of actual confusion;
5) marketing channels;
6) type of goods and purchaser care;
7) intent; and
8) likelihood of expansion.

In the usual infringement case, these factors are applied to

determine whether the junior user is palming off its products as
those of the senior user. In a reverse infringement case, like ours,
there is no question of palming off, since neither junior nor senior
user wishes to siphon off the other's goodwill. The question in such
cases is whether consumers doing business with the senior user
might mistakenly believe that they are dealing with the junior user.
More specifically, the question here is whether a reasonable
consumer attending a Dreamwerks-sponsored convention
might do so believing that it is a convention sponsored by
DreamWorks.

Before performing a Vulcan mind meld (I shit you not, this is copypasted from the decision, this Judge is such a geek LOLZ) on the
"reasonably prudent consumer," we note that if this were an
ordinary trademark case rather than a reverse infringement
case--in other words if DreamWorks had been there first and
Dreamwerks later opened up a business running
entertainment-related conventions--there would be little doubt
that DreamWorks would have stated a case for infringement
sufficient to survive summary judgment. The reason for this, of
course, is that a famous mark like DreamWorks SKG casts a long
shadow.

Three of the Sleekcraft factors are pivotal here:

(1) arbitrariness of the mark;
(2) similarity of sight, sound and meaning; and
(3) relatedness of the goods.

"Dreamwerks" is an arbitrary and fictitious mark deserving of

strong protection. But "Dream" is used in too many different ways
to suggest any particular meaning to the reasonable consumer. At
best, "Dreamwerks" conjures images related to fantasy, hope or
reverie. It's too great a mental leap from hopes to Star Trek
conventions for us to treat the mark as suggestive. The
Dreamwerks mark deserves broad protection.

There is perfect similarity of sound, since "Dreamwerks" and

"DreamWorks" are pronounced the same way. There is also
similarity of meaning: Neither literally means anything, and to
the extent the words suggest a fantasy world, they do so
equally.

Similarity of sight presents a slightly closer question. The man-inthe-moon DreamWorks logo, when presented in the full regalia of a
movie trailer, is quite distinctive. But "DreamWorks" often
appears in the general press and in Industry magazines
without the logo, leaving only the slight difference in spelling.
Spelling is a lost art. Moreover, a perceptive consumer who
does notice the "e" and lower-case "w" in Dreamwerks might
shrug off the difference as an intentional modification

identifying an ancillary division of the same company. While

we recognize that spelling matters, we're not sure substituting one
vowel for another and capitalizing a middle consonant dispels the
similarity between the marks.
The clincher is the relatedness of the goods. Twenty years ago
DreamWorks may have had an argument that making movies and
promoting sci-fi merchandise are different businesses promoting
different products. But movies and sci-fi merchandise are now as
complementary as baseball and hot dogs. The main products sold
at Dreamwerks conventions are movie and TV collectibles and
memorabilia; the lectures, previews and appearances by actors
which attract customers to Dreamwerks conventions are all
dependent, in one way or another, on the output of entertainment
giants like DreamWorks.
The district court emphasized that Dreamwerks has carved out a
narrow niche in the entertainment marketplace, while DreamWorks
controls a much broader segment. Dreamwerks targets trekkies;
DreamWorks targets everyone. But the relatedness of each
company's prime directive isn't relevant.
Rather, we must focus on Dreamwerks' customers and ask
whether they are likely to associate the conventions with
DreamWorks the studio. Entertainment studios control all sorts of
related industries: publishing, clothing, amusement parks,
computer games and an endless list of toys and kids' products. In
this environment it's easy for customers to suspect DreamWorks of
sponsoring conventions at which movie merchandise is sold. Other
studios are rapidly expanding their merchandising outlets:
Universal Studios has theme parks in California, Florida and Japan
with dozens of stores selling movie-related products, and Disney is
helping transform New York's Times Square into a G-rated
shopping center. Dreamwerks convention-goers might well assume
that DreamWorks decided to ride the coattails of Spielberg's
unparalleled reputation for sci-fi/adventure films (Jaws, E.T., Close
Encounters, Raiders, Jurassic Park ) into the sci-fi merchandising
business.
We do not decide the ultimate question presented in this case,
whether DreamWorks SKG infringes the trademark held by
Dreamwerks Production Group, Inc. We only remand for trial.
While it is somewhat unusual for a famous mark to defend its very
existence against a much lesser known mark, DreamWorks is in
no different a position than any other new company which
must ensure that its proposed mark will not infringe on the
rights of existing trademark holders. Counsel for DreamWorks
conducted a diligent search and discovered the Dreamwerks mark,
yet failed to make accommodations or select a different mark.
Fanciful marks not only give the trademark holder a pristine legal
landscape, they also add to the splendor of our language by giving
us new ways to express ourselves. If you received junk e-mail, you
were Spammed. The childish antics of politicians are Mickey
Mouse. Lousy, mindless work is a McJob. A quick fix is a Band-Aid.
Glitz and ditz make for a Barbie World. Calling something the Rolls
Royce of its class is shorthand for referring to a refined product
targeted at those with expensive tastes. And maudlin family
gatherings make for Kodak moments. None of these phrases had
any meaning before the trademark was absorbed into the
language; each is evidence of how commerce and culture
transform each other. A clever new trademark diversifies both
the marketplace and the marketplace of ideas; a takeoff or
copy of a mark, even if accidental, adds nothing but
confusion. This dispute could have been avoided had
DreamWorks been more careful, or a tad more creative, in
choosing its name.

OTHER DEFENSES
Sections 148, 159, IP Code
Section 148. Use of Indications by Third Parties for Purposes Other
than those for which the Mark is Used. Registration of the mark
shall not confer on the registered owner the right to preclude third
parties from using bona fide their names, addresses, pseudonyms, a
geographical name, or exact indications concerning the kind, quality,
quantity, destination, value, place of origin, or time of production or of
supply, of their goods or services: Provided, That such use is confined
to the purposes of mere identification or information and cannot
mislead the public as to the source of the goods or services.

12

159.1. Notwithstanding the provisions of Section 155 hereof, a

registered mark shall have no effect against any person who, in good
faith, before the filing date or the priority date, was using the mark for
the purposes of his business or enterprise: Provided, That his right
may only be transferred or assigned together with his enterprise or
business or with that part of his enterprise or business in which the
mark is used.
159.2. Where an infringer who is engaged solely in the business of
printing the mark or other infringing materials for others is an innocent
infringer, the owner of the right infringed shall be entitled as against
such infringer only to an injunction against future printing.
159.3. Where the infringement complained of is contained in or is part
of paid advertisement in a newspaper, magazine, or other similar
periodical or in an electronic communication, the remedies of the
owner of the right infringed as against the publisher or distributor of
such newspaper, magazine, or other similar periodical or electronic
communication shall be limited to an injunction against the
presentation of such advertising matter in future issues of such
newspapers, magazines, or other similar periodicals or in future
transmissions of such electronic communications. The limitations of
this subparagraph shall apply only to innocent infringers: Provided,
That such injunctive relief shall not be available to the owner of the
right infringed with respect to an issue of a newspaper, magazine, or
other similar periodical or an electronic communication containing
infringing matter where restraining the dissemination of such infringing
matter in any particular issue of such periodical or in an electronic
communication would delay the delivery of such issue or transmission
of such electronic communication is customarily conducted in
accordance with the sound business practice, and not due to any
method or device adopted to evade this section or to prevent or delay
the issuance of an injunction or restraining order with respect to such
infringing matter.

Fair Use
Sunmark, Inc. v. Ocean Spray Cranberries, Inc.
64 F.3d 1055 (1995)
SUMMARY: Sunmark (producer of a candy), through an injunction,
contested the use of Ocean Spray (producer of cranberry juice) of the
words sweet-tarts claiming that it has a trademark on SweeTARTS.
Sunmark anchors its case on the wide use of the words in its
advertisements both on TV and print. District court however, dismissed
the injunction complaint. SC affirmed stating that since Ocean Spray
was only using the words as descriptive and not as a mark, then it
could validly invoke fair use as a defense. Fair use has to be in good
faith and this was not question by Sunmark in the district court. It does
not follow that just because Sunmark has a trademark of SweeTARTS
for candies it can be gatekeeper of the words for the whole industry.
Additionally, under the Lanham Act, The use of a similar name by
another to truthfully describe his own product does not constitute a
legal or moral wrong, even if its effect be to cause the public to
mistake the origin of the product."
FACTS:

Sunmark produces Swee TARTS (yes, it is spelled like that), a

popular fruit-flavored sugar candy most often sold in a tablet
form similar to a brightly colored aspirin.

Ocean Spray Cranberries produces a variety of sugar-flavored

cranberry juice drinks that they often advertise as tasting sweet
and tart--or "sweet-tart."

Since 1963 Swee TARTS candy has been sold with this logo: The
"Swee" is rendered in bright blue, the "ARTS" in magenta; the "T"
in the middle is divided between the two colors.

Ocean Spray has advertised its juices as "sweet-tart" sporadically

since 1942.

Two campaigns with the most media exposure drew objections

from Sunmark or one of its predecessors (collectively Sunmark):

A 1973 television commercial for Ocean Spray cranapple

juice featured a Mounty and a maiden singing "Sweet-Tart"
to the tune of "Sweetheart, Sweetheart, Sweetheart" (song
owned by a Nelson Eddy or the Royal Canadian Mounted
Police). Sunmark asked Ocean Spray to discontinue use of
"sweet-tart" but responded that it saw no reason to quit using
words since it was descriptive, and it continued running the
commercials for several months. It continued to use "sweettart" in newspaper advertising but did not again use the term
in any broadcast advertising until 1991.
o
1991: Ocean Spray decided to distinguish its cranberry
products from other juice drinks by making "sweet-tart" the
centerpiece of its advertising. Television commercials
featured actors' faces saying "sweet-tart"--sometimes with a
pause, sometimes without--over a background jingle while
the two words were superimposed on the screen. The
phrases "A Sweet Tart of a Deal", "Sweet-Tart Savings", and
"Get the Sweet-Tart Taste of Ocean Spray" appeared in
newspaper coupons.
For two years, Sunmark and its predecessors negotiated with
Ocean Spray but to no avail until unwilling to accept the (minor)
concessions Ocean Spray offered, Sunmark sued in 1993 under
the Lanham Act and the Illinois Anti-Dilution Act.
Sunmark prays for an injunction unhappy with the hyphenated
version of the description, it has sued under the Lanham Act and
the Illinois Anti-Dilution Act.
District Judge: Adopted the magistrates report and refused to
grant preliminary hearing.
o

Section 159. Limitations to Actions for Infringement.

Notwithstanding any other provision of this Act, the remedies given to
the owner of a right infringed under this Act shall be limited as follows:

ISSUE: Whether Ocean Spray used Sunmarks mark at all. (NO)

HELD: AFFIRMED DISTRICT COURT RULING
RATIO:

Ocean Sprays Defense (fair use): If it employed the words

"sweet" and "tart" simply as descriptions, and "otherwise than
as a mark," it didn't, and there can be no violation of the Lanham
Act under what is known as the fair use defense.

SC: This is a factual question so they look into district courts

findings. Section 1115(b)(4) also requires that the use be in
good faith; Sunmark does not seriously dispute the district
court's finding that Ocean Spray did not act in bad faith.

DISTRICT COURT FINDINGS: The words sweet and tart, and

their conjunction, to be descriptive, although it acknowledged
that the SweeTARTS logo cannot be called descriptive.

Sunmarks Objections: Sweet-tart is an oxymoron and therefore

cannot be descriptive.

SC: Although an earlier litigation called the predecessor

"Sweetarts" mark "uncommon, arbitrary, and distinct" (Sweetarts
v. Sunline, Inc), the question in this litigation is not whether
"sweet-tart" or the Swee TARTS logo is an arbitrary mark when
used to describe Sunmark's candy. The question is whether
Ocean Spray has used "sweet-tart" descriptively, for a drink
that has elements of both sweetness (it is sugared) and
tartness (it is based on cranberries). Both sweet and tart are
words of description in ordinary English, quite unlike words
such as "Exxon" or "Kodak."

Under the Lanham Act it is irrelevant whether the SweeTARTS

mark is itself descriptive. The potential descriptive nature of
"sweet-tart" does not divest Sunmark of any rights to protect its
mark "SweeTARTS", for that mark is incontestable under 15
U.S.C. Sec. 1065. "SweeTARTS" is no longer subject to
challenge with respect to the products to which it applies,
whether or not the mark is descriptive.

Ocean Spray is not contesting the validity of the trademark; it was

invoking its right to use a descriptive phrase as a descriptive
phrase under Sec. 1115(b)(4).

That SweeTARTS is an incontestable mark for sugar candy does

not make Sunmark the gatekeeper of these words for the whole
food industry. (e.g in Cf. Qualitex Co. v. Jacobson Products Co.
by adopting gold-green as a trademark color for press pads, a
vendor cannot claim exclusive use of this color throughout
commerce).

Consider what would happen if a farm started selling apples

under the FLUFFY APPLE mark, no one could use it to refer to
fluffy oranges or fluffy cakes if it became well-known.

13

The question under Sec. 1115(b)(4) is whether "sweet-tart" is

descriptive as Ocean Spray uses it. "Sweet" is adjectival. "Tart" is
adjectival. Sunmark concedes that "sweet and tart" is descriptive.
For a word or mark to be considered descriptive it merely
needs to refer to a characteristic of the product. (e.g. sports
drink and hard drive).
In 1990, a full year before Ocean Spray began the advertising
campaign that Sunmark complains of here, eight New York Times
writers used the phrase "sweet-tart" in eleven articles.

More on the Lanham Act (re: fair use): "The use of a similar name
by another to truthfully describe his own product does not
constitute a legal or moral wrong, even if its effect be to cause the
public to mistake the origin of the product."

A number of courts have implied that confusion is inconsistent

with a fair use defense but none of them asks how an accurate
description can be objectionable. At all events, none of these
cases (several cited including ones we previously discussed like
Dallas Cowboys case) dealt with unrelated products. Zatarains,
for example, involved two products for frying fish, one with the
mark FISH-FRI, the other identified as a "fish fry".

When the products involved are similar, "likelihood of confusion"

may amount to using a word in a "misleading" way, violating 15
U.S.C. Sec. 1125(a)(1)--not because the likelihood of confusion
makes the use nondescriptive, but because the confusion about
the product's source shows that the words are being used, de
facto, as a mark. And the defense (fair use) is available only to
one who uses the words of description "otherwise than as a
mark". (So in short, nagkakaroon ng confusion kasi ginagamit
mo yung words as a de facto mark because it identifies the
source instead of just being descriptive --- kapag ganito, hindi mo
na pwedeng gamitin ang FAIR USE as a defense kasi it only
applies to descriptive words not used as a mark)
OBITER RE: USE OF OCEAN SPRAY CAN BE TRADEMARKABLE

DISTRICT COURT: After concluding that Ocean Spray used

"sweet-tart" descriptively, the district court remarked in passing
that Ocean Spray used the words as a trademark (labo ng District
Court), particularly in the "sweet-tart of a deal" ads. If so, Ocean
Spray cannot invoke the fair use defense.

SC: Ocean has not laid claim to exclusivity and could not object if
other juice producers used the phrase sweet-tart of a deal
(provided, of course, that it accurately described the competing
product). The "sweet-tart of a deal" language strikes us as a play
on words, a device that does not identify the goods' origin and
that anyone may use.

The homophone ("sweet-tart of a deal" = "sweetheart of a deal")

works only because the phrase "sweet-tart" describes the
product, so we have a descriptive use after all. Although
descriptiveness does not make status as a trademark impossible,
the possibility that after full proceedings the trier of fact will
disqualify Ocean Spray's employment of "sweet-tart" from the fair
use defense by calling it a trademark is too remote to support a
preliminary injunction--certainly not given that candy and fruit juice
are different products, making it conceivable that the phrase could
be used as a trademark on each without infringing the other
proprietor's rights.

U.S. Shoe Corp. v Brown Group Inc.

740 F.Supp. 196 (1990)
SUMMARY:
Plaintiff U.S. Shoe asserts trademark violation and unfair competition
against Brown Group, Inc., in connection with the advertising and sale
of women's dress shoes. Plaintiff advertises its women's dress pumps
under the slogan and musical jingle, "Looks Like a Pump, Feels Like a
Sneaker." Defendant has launched an advertising campaign that
compares its pump to a sneaker and asserts that it "feels like a
sneaker." The issue is whether or not defendant Brown Groups use of
the words feels like a sneaker falls squarely within the fair use
defense in the Lanham Act and hence valid defense to a trademark
infringement claim. The Court held in the affirmative by reasoning that
defendant uses the phrase not as an identifier or trademark to indicate
origin or source, but only to describe fairly and in good faith the goods
they market to the users, and under the fair use doctrine, such a use is

not an infringement. Also, plaintiff has not demonstrated a sufficient

likelihood of confusion, because the consumer is likely to understand
that it is the claimed features of both products that are being
discussed, and not their origin.
FACTS:

Plaintiff U.S. Shoe Corp. sells walking shoes under the trademark,
Easy Spirit.
o
In 1988, the plaintiff introduced under the same trademark a
line of "comfortable women's dress pumps" which were
intended to incorporate design and comfort elements of the
plaintiff's walking shoes.
o
Since that time, Easy Spirit has been advertised and
promoted under the slogan Looks Like a Pump, Feels Like
a Sneaker.
o
Because of these various advertisements, especially the TV
commercial wherein women are shown playing basketball in
Easy Spirit dress shoes, sales increased dramatically.

The defendant, Brown Group, Inc. is the manufacturer and

distributor of the NaturalSport line of walking shoes, and also of
the Townwalker, a comfortable women's dress pump considered
to be one of the key competitors of the Easy Spirit dress pump.
o
D'Arcy, one of defendants advertising agencies,
recommended a campaign to communicate the basic
product concept of the Townwalker: "a sneaker in a pump."
o
D'Arcy submitted several proposed print ads for the
Townwalker to the defendant, including some which used the
slogan, "The pump that feels like a sneaker."
o
The defendant rejected these ads, in part because of their
similarity to plaintiff's advertising slogan, "Looks Like a
Pump, Feels Like a Sneaker," of which defendant was
aware.
o
The print advertisement ultimately selected by defendant
features a photograph of a women's pump with the headline,
"Think Of It As A Sneaker With No Strings Attached."

The text of the ad includes the phrase, "And when we

say it feels like a sneaker, we're not just stringing you
along."

Now, plaintiff U.S. Shoe asserts trademark violation and unfair

competition against Brown Group, Inc., in connection with the
advertising and sale of women's dress shoes.
o
Plaintiff seeks a preliminary injunction barring defendant
from using the phrase.
Plaintiffs contentions:

The Townwalker ad's statement "And when we say it feels like a

sneaker" is deliberately meant to mislead consumers into
believing the Townwalker is the brand previously advertised by
the slogan, "Looks Like a Pump, Feels Like a Sneaker," and thus
cause consumers to purchase defendant's pump rather than
plaintiff's.
o
This constitutes a violation of the Lanham Act, as well as
unfair competition and trademark violation under state
common law.

The Townwalker ad's statement "And when we say it feels like a

sneaker" is deliberately meant to mislead consumers into
believing the Townwalker is the brand previously advertised by
the slogan, "Looks Like a Pump, Feels Like a Sneaker," and thus
cause consumers to purchase defendant's pump rather than
plaintiff's.
o
This constitutes a violation of the Lanham Act, as well as
unfair competition and trademark violation under state
common law.
ISSUE: Whether or not defendant Brown Groups use of the words
feels like a sneaker falls squarely within the fair use defense in the
Lanham Act and hence valid defense to a trademark infringement
claim YES
HELD

Defendant's use of the words "feels like a sneaker" falls squarely

within the "fair use" defense codified in Section 33(b)(4) of the
Lanham Act.

The fair use doctrine provides a statutory defense to a

trademark infringement claim when "the use of the name, term, or
device charged to be an infringement is a use, otherwise than as
a trade or service mark, ... of a term or device which is descriptive

14

of and used fairly and in good faith only to describe to users the
goods or services of such party, or their geographic origin."
o
The purpose of the defense is to prevent the trademark
rights of one party from being extended to preclude another
party from the description of his product to the public. (Eli
Lilly & Co. v. Revlon, Inc.)
o
If only one manufacturer of candy were permitted to call the
product "candy"; if only one were permitted to say that it is
"lemon flavored," then society would not be enriched but
impoverished.
o
Thus the trademark law presumptively forbids the
establishment of rights over "generic" or "descriptive" marks
marks that define or describe the product.

An exception was permitted, however, to a user of a

descriptive mark who over time had built up a customer
recognition (secondary meaning) in the mark.
o
Returning to the example of candy manufacturers, the fact
that one might acquire trademark rights over a descriptive
identifier like "chewy" or "lemon flavored" cannot deprive
society of the opportunity to be advised by other
manufacturers that their candy is chewy or lemon flavored.
o
Therefore, notwithstanding the establishment of trademark
rights over a descriptive term by a showing that it has
acquired secondary meaning, the statute preserves in others
the right to the use of such terms "fairly and in good faith
only to describe [and not to designate] the goods or
services."
o
The purpose of this provision is to ensure that the according
of monopoly trademark rights over descriptive marks (upon a
showing of acquired secondary meaning) will not
overbroadly deprive society of the use of those terms in their
descriptive sense in commercial communication.
In this case, the defendant uses the phrase "feels like a sneaker"
in a descriptive sense, claiming a virtue of the product.
o
It essentially restates the key selling claim of defendant's
product that the Townwalker shoe was designed
specifically to incorporate the comfort of athletic shoes.
Moreover, defendant is not using the phrase as an identifier or
trademark to indicate origin or source.
o
That function is performed in defendant's ad by the
NaturalSport logo, which is prominently displayed, and by
the slogan, "Walk our Way ... From Naturalizer."
o
Defendant's use of the words "feels like a sneaker" is not
even as a caption or slogan, but as a fragment of a sentence
in small print.
In short, defendant uses the words "otherwise than as a trade or
service mark, ... fairly and in good faith only to describe to users
the goods" marketed by defendant.
o
Under the fair use doctrine, such a use is not an
infringement.
o
There is no justification for permitting plaintiff to monopolize
an essentially descriptive phrase which claims virtues,
simply because plaintiff may have been the first to employ it
in widely distributed advertisements.
Plaintiff, furthermore, has not demonstrated a sufficient likelihood
of confusion as to source to justify a finding of infringement.
o
No confusion should be presumed, because the consumer is
likely to understand that it is the claimed features of both
products that are being discussed, and not their origin.
o
Notwithstanding that plaintiff may have built up consumer
recognition in its slogan and musical jingle, there is no
reason to suppose that consumers will assume that any
manufacturer who claims his shoes feel like a sneaker is the
plaintiff.

Car-Freshener Corporation v. S.C. Johnson & Son,

Inc.
70 F.3d 267 (1995)
SUMMARY: Car-Freshner Corporation sued S.C. Johnson for
trademark infringement on the latters air freshners called Plug-ins,
which are shaped like pine trees. The District Court rejected Johnsons
defense of fair use because according to them, only applies to
descriptive marks. However, it ruled that the products were sufficiently

dissimilar thus, there was no likelihood of confusion. On appeal, the

Court ruled that the use of fair right does not make any difference on
four-tiered hierarchy of trademark. What matters is whether the
defendant is using the protected word or image descriptively, and not
as a mark. The public's right to use descriptive words or images in
good faith in their ordinary descriptive sense must prevail over the
exclusivity claims of the trademark owner. In short, fair use permits
others to use a protected mark to describe aspects of their own goods,
provided the use is in good faith and not as a mark. Here, Johnson
was not using the pine-tree shape as its mark thus, fair use is not
defeated by the claims of trademark owner to exclusivity.
FACTS

Plaintiff Car-Freshner Corporation sells air fresheners for cars in

the shape of a pine tree. Over a number of years, Car-Freshner
has sold millions of such pine-tree-shaped fresheners.
o
Its air fresheners are made of flat scented cardboard and
come in a variety of colors and odors, including a green
pine-scented version. They have a string attached to the top
of the tree, so that they can be hung from the rear-view
mirror of an automobile.
o
We assume that plaintiff has established trademark rights in
the pine-tree shape of its product and in the name "Little
Tree," which it uses on some of its products.

Defendant S.C. Johnson & Son, Inc., sells air fresheners under
the trademark name "Glade." Johnson's "Glade" products include
a line of air fresheners called "Plug-Ins," designed to be plugged
into electrical outlets.
o
Glade Plug-Ins have a plastic casing that holds a
replaceable fragrance cartridge of scented gel.
o
When the unit is plugged in, the electrical current warms the
gel, causing release of the fragrance into the air. During the
Christmas holiday season, Johnson sells a pine-treeshaped, plug-in air freshener called "Holiday Pine Potpourri"
under its Glade Plug-Ins trademark.

Car-Freshner brought this action against Johnson, claiming that

Johnson's sale of its pine-tree-shaped plug-in freshener
violates Car-Freshner's trademark rights in the pine-tree shape
of its air fresheners and in its mark Little Tree.

Johnson, in addition to denying that its use of a pine-tree

shape creates a likelihood of confusion, asserted the
affirmative defense known in trademark law as fair use.
o
Johnson moved for summary judgment, arguing that the
dissimilarity between the two products and the fair use
defense precluded a finding of infringement as a matter of
law.

District Court Ruling

o
Rejected Johnson's claim of fair use and granted
summary judgment to Car-Freshner on that issue. The court
ruled that the defense of fair use applies only when the
plaintiff's mark is descriptive, and is not applicable here
because the court found plaintiff's mark to be
suggestive.
o
But it nonetheless granted summary judgment to
Johnson on the ground that the plaintiff's and
defendant's tree-shaped products were sufficiently
dissimilar that there was no likelihood consumers would be
confused as to the source of the two products. Accordingly,
judgment was awarded to the defendant Johnson.

Car-Freshner appeals. Johnson cross-appeals, arguing that the

district court erred in its fair use determination.
ISSUE: WON the Johnson had the right to use the pine-tree shape as
its freshener design YES
RATIO

The district court rejected Johnson's claim of fair use because it

believed such a defense could be mounted only against a mark
classed as "descriptive" in the four-tiered hierarchy of trademark
law--generic, descriptive, suggestive, and arbitrary or fanciful.
o
Although there is authority for that proposition, we believe
that notion is misguided.
o
It is true that the doctrine can apply only to marks consisting
of terms or images with descriptive qualities. That is because
only such terms or images are capable of being used by
others in their primary descriptive sense.

15

But it should make no difference whether the plaintiff's

mark is to be classed on the descriptive tier of the
trademark ladder (where protection is unavailable except
on a showing of secondary meaning).
o
What matters is whether the defendant is using the
protected word or image descriptively, and not as a
mark.
Whether the mark is classed as descriptive (and thus ineligible for
protection without secondary meaning) depends on the
relationship between the mark and the product described.
o
Thus words like SWEET or CHEWY would be descriptive for
a candy, but would be suggestive, or even arbitrary or
fanciful, if used in connection with bed sheets, a computer,
or an automobile.
o
Regardless whether the protected mark is descriptive,
suggestive, arbitrary, or fanciful as used in connection with
the product or service covered by the mark, the public's
right to use descriptive words or images in good faith in
their ordinary descriptive sense must prevail over the
exclusivity claims of the trademark owner.
o
An auto manufacturer's use of the mark SWEET for its cars
could not deprive anyone of the right to use that word in
good faith in its ordinary descriptive sense and not as a
trademark.
o
Thus a candy manufacturer would remain free to advertise
the sweetness of its candies without worry about the
trademark owner's bridging the gap and going into the candy
business.
o
If any confusion results to the detriment of the markholder,
that was a risk entailed in the selection of a mark with
descriptive attributes.
In short, fair use permits others to use a protected mark to
describe aspects of their own goods, provided the use is in
good faith and not as a mark.
Johnson's use of the pine-tree shape describes two aspects of its
product.
o
The pine tree refers to the pine scent of its air freshening
agent.
o
Furthermore, as a Christmas tree is traditionally a pine tree,
the use of the pine-tree shape refers to the Christmas
season, during which Johnson sells this item.
Johnson's use of the pine-tree shape is clearly descriptive. There
is no indication that Johnson uses its tree shape as a mark.
o
Its pine-tree-shaped air fresheners come in boxes
prominently bearing the "Glade Plug-Ins" trademark as well
as Johnson's corporate logo. Each unit has "Glade"
imprinted across the front of the product itself.
Car-Freshner contends that Johnson adopted the mark in bad
faith and therefore cannot claim fair use. Car-Freshner bases its
argument primarily on the fact that Johnson adopted its tree
shape with knowledge of Car-Freshener's use of the tree shape
and without consulting counsel. There is no merit to this
argument.
o
As Johnson was fully entitled to use a pine-tree shape
descriptively notwithstanding Car-Freshener's use of a tree
shape as a mark, the fact that it did so without consulting
counsel has no tendency to show bad faith.
o

We therefore reverse the district court's grant of summary judgment to

Car-Freshner on the defense of fair use and direct entry of summary
judgment in favor of Johnson on that issue. We thus affirm the
dismissal of Car-Freshner's complaint.

New Kids on the Block v. News America

971 F.2d 302 (1992)
SUMMARY: New Kids on the Block is a popular performing group.
There are several products and services rendered bearing the groups
name. One of the services is the 900 area code numbers (fans can call
and listen to New Kids). Two newspapers published polls about on the
New Kids and also used the 900 area code numbers to get answers to
the polls. People who decide to answer by calling would be charged
some 50-95 cents. Block filed complaint for trademark infringement.
Court ruled that there is fair use in this case. Even if profit can be

derived by the newspapers out of the polls (by calling), customers are
free to decide how they want to spend their money.
FACTS
o
The individual plaintiffs perform professionally as The New Kids
on the Block. This case requires us to weigh their rights in that
name against the rights of others to use it in identifying the New
Kids as the subjects of public opinion polls.
o
There are more than 500 products or services bearing the New
Kids trademark.

Services like: 900 area code numbers (fans would call

number and listen to New Kids talk about themselves)
o
The defendants (STAR and USA TODAY) in this case are two
newspapers which have been using the name of New Kids to
conduct polls by dialling the 900 area code number in
answering the polls. Dialling the number costs 50-95 cents.
Also, there are disclaimers that proceeds will go to charity. The
polls include questions like:

Who is the best on the block?

Which kid is your fave?

Which kid is sexiest?

o
New Kids filed a shotgun complaint in federal court raising no
fewer than ten claims: (1) common law trademark infringement;
(2) Lanham Act false advertising; (3) Lanham Act false
designation of origin; (4) Lanham Act unfair competition; (5) state
trade name infringement; (6) state false advertising; (7) state
unfair competition; (8) commercial misappropriation; (9) commonlaw misappropriation; and (10) intentional interference with
prospective economic advantage.
o
The two papers raised the First Amendment as a defense, on the
theory that the polls were part and parcel of their "newsgathering activities."
ISSUE: Whether there is fair use - YES
RULING
o
A trademark is a limited property right in a particular word, phrase
or symbol. And although English is a language rich in imagery, we
need not belabor the point that some words, phrases or symbols
better convey their intended meanings than others.
o
A related problem arises when a trademark also describes a
person, a place or an attribute of a product. If the trademark
holder were allowed exclusive rights in such use, the language
would be depleted in much the same way as if generic words
were protectable. Thus trademark law recognizes a defense
where the mark is used only "to describe the goods or services of
[a] party, or their geographic origin.
o
The 'fair- use' defense, in essence, forbids a trademark registrant
to appropriate a descriptive term for his exclusive use and so
prevent others from accurately describing a characteristic of their
goods.
o
To be sure, this is not the classic fair use case where the
defendant has used the plaintiff's mark to describe the
defendant's own product. Here, the New Kids trademark is used
to refer to the New Kids themselves.
o
A commercial user is entitled to a nominative fair use defense
provided he meets the following three requirements:

First, the product or service in question must be one not

readily identifiable without use of the trademark;

Second, only so much of the mark or marks may be used

as is reasonably necessary to identify the product or
service;

Third, the user must do nothing that would, in

conjunction with the mark, suggest sponsorship or
endorsement by the trademark holder.
o
While plaintiffs' trademark certainly deserves protection against
copycats and those who falsely claim that the New Kids have
endorsed or sponsored them, such protection does not extend to
rendering newspaper articles, conversations, polls and
comparative advertising impossible. The first nominative use
requirement is therefore met.
o
Also met are the second and third requirements. Both The Star
and USA Today reference the New Kids only to the extent
necessary to identify them as the subject of the polls; they
do not use the New Kids' distinctive logo or anything else

16

that isn't needed to make the announcements intelligible to

readers.
o
Regarding the profit derived by the newspapers out of these polls:
While the New Kids have a limited property right in their name,
that right does not entitle them to control their fans' use of their
own money.
o
The New Kids could not use the trademark laws to prevent the
publication of an unauthorized group biography or to censor all
parodies or satires which use their name.
The issues indicated by the Block were not all discussed in the
shortened version from Sir.

2.

3.

Parody
Mattel v. MCA
296 F.3d 894 (2002)
Summary: Mattel produced Barbie, the doll, in the early 1950s. Barbie
is the symbol of American girlhood, a public figure and a cultural icon.
Aqua, a Danish band, produced a song called Barbie girl in 1997,
wherein one bandmember impersonates Barbie while another
bandmember, who impersonates Ken, invites her to go party. Mattel
filed a case against the music companies who produced, marketed,
and sold Barbie Girl. The district court held that Barbie Girl is a parody
of Barbie and a nominative fair use. Also, MCAs use of the term Barbie
is not likely to confuse consumers as to Mattels affiliation with Barbie
Girl. SC affirmed District Courts ruling. The song does not reply on the
Barbie mark to poke fun at another subject but targets Barbie herself.
When an artistic work targets the original and does not merely borrow
anothers property to get attention, First Amendment interest (free
speech) weigh more heavily. MCAs use of Barbie is not an
infringement of Mattels trademark. Use of the Barbie in the song title
clearly is relevant to the underlying work. The song is about Barbie and
the values Aqua claims she represents. The title does not explicitly
mislead as to the source of the work; it does not, explicitly or
otherwise, suggest that it was produced by Mattel.
Facts:
1. Barbie was born in Germany in the 1950s as an adult collectors
item. Over the years, Mattel transformed her from a doll that
resembled a German street walker, as she originally appeared,
into a glamorous, long-legged blonde. Barbie has been labeled
both the ideal American woman and a bimbo. She remains a
symbol of American girlhood, a public figure who graces the aisles
of toy stores throughout the country and beyond. With Barbie,
Mattel created not just a toy but a cultural icon.
2. Aqua is a Danish band that has, as yet, only dreamed of attaining
Barbie-like status. In 1997, Aqua produced a song Barbie Girl on
the album Aquarium. In the song, one bandmember impersonates
Barbie, singing in a high-pitched, doll-like voice; another
bandmember, calling himself Ken, entices Barbie to go party.
Barbie Girl singles sold well and the song made it into Top 40
music charts.
3. Mattel brought this lawsuit against the music companies who
produced, marketed and sold Barbie Girl: MCA Records, Inc.,
Universal Music International Ltd., Universal Music A/S, Universal
Music & Video Distribution, Inc. and MCA Music Scandinavian AB
(Collectively MCA).
4. Mattel appeals the district courts ruling that Barbie Girl is a
parody of Barbie and a nominative fair use; that MCAs use of the
term Barbie is not likely to confuse consumers as to Mattels
affiliation with Barbie Girl or dilute the Barbie mark; and that
Mattel cannot assert an unfair competition claim under the Paris
Convention for the Protection of Industrial Property.
Issue:
1. WoN MCA is guilty of trademark infringement NO IT IS A
PARODY
2. WoN MCAs Barbie Girl diluted Mattels trademark - NO
Held: The parties are advised to chill. AFFIRMED.
On the Parody Issue (FOCUS HERE)
1. Trademarks often gill gaps in our vocabulary and add a
contemporary flavor to our expression. Once imbued with such

4.

5.

6.

7.

expressive value, the trademark becomes a word in our language

and assumes a role outside the bounds of trademark law.
Trademark rights do not entitle the owner to quash an
unauthorized use of the mark by another who is communicating
ideas or expressing point of view. Were we to ignore the
expressive value that some marks assume, trademark rights
would grow to encroach upon the zone protected by the First
Amendment. Simply put, the trademark owner does not have the
right to control public discourse whenever the public imbues is
mark with a meaning beyond its source-identifying function.
The female singer, who calls herself Barbie, is a Barbie girl, in
her Barbie world. She tells her male counterpart (Ken), Life in
plastic, its fantastic. You can brush my hair, undress me
everywhere/Imagination, life is your creation. And off they go to
party. The song pokes fun at Barbie and the values that Aqua
contends she represents. Im a blond bimbo girl, in a fantasy
world/Dress me up, make it tight, Im your dolly.
The song does not reply on the Barbie mark to poke fun at
another subject but targets Barbie herself. When an artistic work
targets the original and does not merely borrow anothers
property to get attention, First Amendment interest weigh more
heavily. A parodist whose expressive work aims its parodic
commentary at a trademark is given considerable leeway, but a
claimed parodic use that makes no comment on the mark is not a
permitted trademark parody use.
This case is therefore distinguishable from Dr. Seuss, where we
held that the book The Cat NOT in the Hat! Borrowed Dr. Seusss
trademark and lyrics to get attention rather than to mock The Cat
in the Hat! The defendants use of the Dr. Seuss trademarks and
copyrighted works had no critical bearing on the substance or
style of The Cat in the Hat!, and therefore could not claim First
Amendment protection.
Titles do not violate the Lanham Act unless the title has no artistic
relevance to the underlying work whatsoever, or, if it has some
artistic relevance, unless the title explicitly misleads as to the
source or the content of the work.
MCAs use of Barbie is not an infringement of Mattels trademark.
Use of the Barbie in the song title clearly is relevant to the
underlying work. The song is about Barbie and the values Aqua
claims she represents. The title does not explicitly mislead as to
the source of the work; it does not, explicitly or otherwise, suggest
that it was produced by Mattel.

On the Dilution Issue (not impt)

1. Mattel separately argues that, under the Federal Trademark
Dilution Act (FTDA), MCAs song dilutes the Barbie mark in two
ways: It diminishes the marks capacity to identify and distinguish
Mattel products, and tarnishes the mark because the song is
inappropriate for young girls.
2. Dilution refers to the whittling away of the value of a trademark
when it is used to identify different products. The FTDA protects
the owner of a famous mark against another persons
commercial use in commerce of a mark or trade name, if such
use begins after the mark has become famous and causes
dilution of the distinctive quality of the mark.
a. That is precisely what MCA did with the Barbie mark: It
created and sold to consumers in the marketplace
commercial products (the Barbie Girl single and the
Aquarium album) that bear the Barbie mark.
3. However, also under the FTDA, there are 3 uses that, though
potentially dilutive, are nevertheless permitted: comparative
advertising, news reporting and commentary, and noncommercial
use. (only the last one applies).
4. Noncommercial use refers to a use that consists entirely of
noncommercial, or fully constitutionally protected, speech. If
speech is not purely commercial that is, if it does more than
propose a commercial transaction then it is entitled to full First
Amendment protection.
5. Barbie Girl is not purely commercial speech, and is therefore fully
protected. To be sure, MCA used Barbies name to sell copies of
the song. However, as weve already observed, the song also
lampoons the Barbie image and comments humorously on the
cultural values Aqua claims she represents. Use of the Barbie
mark in the song Barbie Girl therefore falls within the
noncommercial use exemption to the FTDA. For precisely the

17

same reasons, use of the mark in the songs title is also

exempted.

Elvis Presley Enterprises, Inc. v. Capece

141 F. 3d 188 (1998)
Summary:
EPE is the assignee and registrant of all trademarks etc belonging to
the Elvis Presley estate. Without its consent, Capece registered the
service mark The Velvet Elvis and opened a bar of the same name,
with a concept of 60s lifestyle parody. The bar not only had designs
and decorations etc which depict such lifestyle, it also contained
references to Elvis Presley (statuettes, painting, even the menu). EPE
filed an infringement suit against Capece. The district court found no
infringement in EPEs marks since the bar was presented as a 60s
parody.
The Court disagreed with the district courts ruling and said that the
latter misapplied the doctrine of parody. It concluded that parody was
irrelevant in determining whether there is likelihood of confusion
between the 2 marks. Ultimately, the Court held that Capece infringed
EPEs marks.
Facts:

EPE is the assignee and registrant of ALL trademarks, copyrights,

and publicity rights belonging to the Elvis Presley estate, with at
least 17 federal trademark registrations and common-law
trademarks, for "Elvis Presley" or "Elvis" and other registrations
for his likeness

However, no mark was registered for the use in the restaurant

and tavern business

sandwiches, a favorite of Elvis; and "Your Football Hound

Dog," a hotdog.
The menu bears the caption "The King of Dive Bars," and one
menu publicized "Oscar at The Elvis," an Academy Awards
charity benefit to be held at the bar.
Numerous magazine photographs of Elvis, a statuette of Elvis
playing the guitar, and a bust of Elvis were also among the
decorations.
By the time of trial, many of these decorations had been removed
from the Defendants' bar and replaced with non-Elvis items.

Advertisements

Pictures and references to Elvis Presley appeared in advertising

both clubs

Some ads emphasized the "Elvis" portion of the name (the word
Velvet in smaller script was almost unnoticeable)

Made direct references to Elvis and Graceland in advertisements

with phrases such as "The King Lives," "Viva la Elvis," "HunkaHunka Happy Hour," and "Elvis has not left the building."

Advertisements also included a crown logo above the "V" in "The

Velvet Elvis" mark.

Advertised promotional events included parties commemorating

Elvis's birth and death and appearances by Elvis impersonators
and Elvis Presley's drummer.

Some advertisements publicizing the opening of the Richmond

Avenue location included direct references to Elvis and used the
tag-line "the legend continues" without using "The Velvet Elvis"
mark.

The Velvet Elvis: Richmond Avenue (Velvet, Ltd.)

After several months, Capece began soliciting investors to reopen

the nightclub at a new location, Richmond Avenue

The club will have the same name BUT will be run by a new
limited partnership, Velvet, Ltd., with Audley, Inc. as the general
partner and Capece the sole shareholder of Audley

EPE sent Capece a cease and desist letter, threatening him with
legal action if the bar opened with "Elvis" in its name

Despite the warning, the nightclub in Richmond opened in August

1994

Infringement suit

EPE filed a suit against Capece for unfair competition, trademark

infringement, trademark dilution and violation of its state-law
rights of publicity in Elvis Presleys name and likeness

Prayed for injunction, attys fees, costs and cancellation of

Capeces registration

District court: (reviewed bars service mark and dcor, then its
advertising practices separately)
o
Ruled in favor of EPE on its claims of trademark
infringement and unfair competition relating to the Capeces
advertising practices
o
DENIED EPEs claims relating to the use of "The Velvet
Elvis" service mark
(Found that the bar did not present a likelihood of confusion
with EPEs marks, since the bar was presented as a parody
of 60s lifestyle)
o
Judge issued injunction which barred Capece from using
Elvis Presley's image or likeness, phrases inextricably
linked to his identity, and from displaying the "Elvis" portion
of the service mark in print larger than the "Velvet" portion of
the mark
o
However, the court ruled in favor of Capece on the
trademark dilution and rights of publicity claims regarding
use of the word "Elvis" in the service mark, and allowed
Capece to continue using the service mark to identify
the bar

EPE appealed

The Velvet Elvis Concept to parody an era remembered for its

sensationalism and transient desire for flashiness (60s)

Issue: Whether or not a likelihood of confusion existed between

the marks YES

Some information about the nightclub/bar etc. (ie. Design, menu,

decor)

Serves a wide variety of food and liquor, including premium

scotches and bourbons

Live music is regularly featured at the bar, and the bar claims to
be the first cigar bar in Houston.

Its decor includes velvet paintings of celebrities and female nudes

Other "eclectic" decorations include lava lamps, cheap ceramic

sculptures, beaded curtains, and vinyl furniture. Playboy
centerfolds cover the men's room walls.

Held:

Reversed District Courts ruling and held that the Velvet Elvis
Mark, when viewed as a whole, INFRINGED EPEs marks

Enjoined Capeces further use of the Velvet Elvis mark

Also, found that the district court MISAPPLIED the DOCTRINE

of PARODY in this case and failed to consider the impact of
Capeces advertising practices on the service mark as a whole

The Velvet Elvis: Kipling Street Nightclub (Beers R Us)

Capece, operating through the limited partnership Beers 'R' Us,

opened a nightclub on Kipling Street in Houston, Texas called
"The Velvet Elvis."

Capece filed a federal service mark application for "The Velvet

Elvis" for restaurant and tavern services with the US Patent and
Trademark Office (PTO)

Although EPE was aware of the publication (in relation to the

application of the service mark), it did not file an opposition to the
marks registration within the prescribed period.

Service mark registration was issued to Capece

The Kipling nightclub closed after more than 2 years in operation

Reference to Elvis Presley

Velvet painting of Elvis; the menu includes "Love Me

Blenders," a type of frozen drink; peanut butter and banana

Ratio:
Trademark Infringement

For the trademark infringement claim to prevail, EPE must show

that Capeces use of The Velvet Elvis creates a likelihood of
confusion in the minds of potential consumers as to the source,
affiliation and sponsorship of Capeces bar

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Factors in determining whether a likelihood of confusion exists:

(non-exhaustive list)
(1) type of trademark allegedly infringed
(2) similarity between the two marks
(3) similarity of the products or services
(4) identity of the retail outlets and purchasers
(5) identity of the advertising media used
(6) defendant's intent, and
(7) any evidence of actual confusion
PARODY AS A FACTOR OF INFRINGEMENT

Parody is one such other relevant factor that a court may consider
in a likelihood of confusion analysis

Note: Parody is NOT a defense to trademark infringement some

will constitute parody, some will not

A non-infringing parody is merely amusing NOT confusing

This was the first occasion the Court had considered parody in
the context of trademark law, so it looked to the SC's decision in
Campbell v. Acuff-Rose (copyright infringement case)

In determining whether the borrowed portion of the work

constituted fair use or copyright infringement, the SC stated that if
the parody's purpose has no critical bearing on the
substance of the original work, the justification for borrowing
from the original work diminishes accordingly.

When parody takes aim at a particular original work, the parody

must be able to 'conjure up' at least enough of that original to
make the object of its critical wit recognizable

Thus, the SC in Campbell case held if the parody's purpose is to

criticize the original work, the parody must be able to borrow
enough of the original work for the audience to understand what is
being criticized

Back to Trademark: This same need to conjure up the original

exists when a parody targets a trademark or service mark.

Therefore, a parody of a mark needs to mimic the original mark

and from this necessity arises the justification for the mimicry, but
this necessity wanes when the original mark is not the target
of the parody

In this case, the district court found that "The Velvet Elvis" mark,
when combined with the bar's gaudy decor, was an integral part
of Capeces parody of the faddish, eclectic bars of the sixties

The intent was to parody a time or concept from the sixties--the

Las Vegas lounge scene, the velvet painting craze and perhaps
indirectly, the country's fascination with Elvis.
In his testimony, Capece stated that they were trying to make fun
of the Hardrock Cafes, the Planet Hollywoods, or some of the
places that were more pretentious and that they could
successfully perform their parody without using Elvis Presley's
name.
This testimony and the district court's analysis both indicate
that neither Elvis Presley nor EPE's marks were a target of
the Capeces parody.

Capeces parody of the faddish bars of the sixties does not

require the use of EPE's marks because it does not target
Elvis Presley

Therefore, the necessity to use the marks significantly

decreases and does not justify the use.
Without the necessity to use Elvis's name, parody does not weigh
against a likelihood of confusion in relation to EPE's marks. It is
simply irrelevant. As an irrelevant factor, parody does not
weigh against or in favor of a likelihood of confusion, and the
district court erred in relying upon parody in its determination of
the likelihood of confusion.

Louis Vuitton Mallatier S.A. v. Haute Diggity Dog,

LLC
507 F.3d 252 (2007)
SUMMARY:
Louis Vuitton Malletier S.A. (LVM), a French corporation located in
Paris, that manufactures luxury luggage, handbags, and accessories,
commenced this action against Haute Diggity Dog, LLC (HDD), a
Nevada corporation that manufactures and sells pet products
nationally, alleging trademark infringement, trademark dilution,

copyright infringement, and related statutory and common law

violations. HDD manufactures, among other things, plush toys on
which dogs can chew, which, it claims, parody famous trademarks on
luxury products, specifically LVM. HDD makes a chew toy labeled
"Chewy Vuiton" which mimics LVM's Louis Vuitton handbags.
The Court held that HDD's Chewy Vuiton dog toys are successful
parodies of LVM's trademarks, designs, and products. The Chewy
Vuiton dog toys convey just enough of the original design to allow the
consumer to appreciate the point of parody, but stop well short of
appropriating the entire marks that LVM claims. Hence, HDD's
products are not likely to cause confusion with those of LVM. HDD's
also is not liable for trademark dilution.
FACTS:

LVM is a well known manufacturer of luxury luggage, leather

goods, handbags, and accessories, which markets it worldwide. It
also has registered trademarks such as "Louis Vuitton" mark, "LV"
mark, "Monogram Canvas" mark (4 pointed stars with diamonds),
"Multidesign" (with copyright) and "Cherry design." It has been
using such marks as early as 1896 except for the Multicolor
design (2004) and Cherry design (2005).

LVM products have been featured in magazines (Vogue, etc.).

The handbags retailed in the range of $995 to $4,500. The
product copied by HDD costs $1190. LVM also spent millions of
dollars in advertising. It mainly sells its products in exclusive LVM
stores and its own in-store boutiques that are contained within
department stores.

LVM also has a limited selection of pet accessories such as

collars, leashes, and dog carriers bearing LVM's marks. Its price
range is from $200 to $1,600. It does not sell dog toys.

HDD is a small and new business located in Nevada. It

manufactures and sells a line of pet chew toys and beds whose
names parody elegant high-end brands such as Chewy Vuiton
(Louis Vuitton), Chewnel No. 5 (Chanel No. 5), Furcedes
(Mercedes), Jimmy Chew (Jimmy Choo), Dog Perignonn (Dom
Perignon), Sniffany & Co. (Tiffany & Co.), and Dogior (Dior). Its
products loosely imitate the signature product of the targeted
brand. The products are mostly sold on pet stores. It is usually
sold for less than $20, although some HDD's plush dog beds sell
for more than $100.

HDD's Chewy Vuitton loosely resemble miniature handbags and

undisputedly evoke LVM handbags of similar shape, design, and
color. In lieu of the Louis Vuitton mark, the dog toy uses Chewy
Vuiton; CV for LV; and other symbols and colors employed are
imitations, but not exact ones, of those used by LVM.

LVM sued HDD for trademark counterfeiting, trademark

infringement, trade dress infringement, unfair competition,
trademark dilution and similar Virginia common laws. The district
court entered judgment in favor of HDD relying mainly on the
conclusion that HDD's products amounted to successful parody of
LVM's mark. The Court affirmed the ruling of the district court
except for the basis on trademark dilution.
ISSUE: WON HDD infringed LVM's trademarks - NO; WON HDD is
liable for trademark dilution - NO.
HELD / RATIO:

HDD did not infringe LVM's trademarks. The Court used the PETA
case (determination of successful parody) and Pizzeria Uno case
(creation of likelihood of confusion).

PETA case doctrine: For trademark purposes, a parody is defined

as a simple form of entertainment conveyed by juxtaposing the
irreverent representation of the trademark with the idealized
image created by the mark's owner. A parody must convey two
simultaneous and contradictory messages: that it is the
original, but also that it is not the original and is instead a parody.
This second message must not only differentiate the alleged
parody from the original but also communicate some articulable
element of satire, ridicule, joking, or amusement. Thus, a parody
relies upon a difference from the original mark, presumably
humorous difference, in order to produce its desired effect.

In applying the PETA criteria to the facts of this case, we agree

with the district court that Chewy Vuiton dog toys are successful
parodies. Chewy Vuiton is smaller and coarser and invokes the
marks and design of LVM, albeit irreverently and incompletely. No
one can doubt that Chewy Vuiton is not the idealized image of the
mark created by LVM. Chewy Vuiton dog toy undoubtedly and

19

deliberately conjures up the famous LVM marks and trade dress,

but at the same time, it communicates that it is not the LVM
product. The juxtaposition of similar and dissimilar the
irreverent representation and the idealized image of an LVM
handbag immediately coveys a joking and amusing parody. It
pokes fun at the elegance and expensiveness of LVM that it is
being used and chewed by a dog. The satire is unmistakable. It
further enhanced that Chewy Vuiton dog toys are sold with similar
parodies of other famous and expensive brands. Chewy Vuiton
dog toys convey just enough of the original design to allow
consumer to appreciate the point of parody, but stop well short of
appropriating the entire marks that LVM claims.
Pizzeria Uno case doctrine: Successful parody only influences the
way in which the Pizzeria Uno factors are applied. An effective
parody will actually diminish the likelihood of confusion, while an
ineffective parody does not. The following are the non-exclusive
factors to consider whether there is confusion as stated in
Pizzeria Uno:
o
(A) The strength or distinctiveness of the plaintiff's mark
o
(B) Similarity of the two marks
o
(C ) similarity of the goods or services the marks identify
o
(D) similarity of the facilities the two parties use in their
businesses
o
(E) similarity of the advertising used by the two parties
o
(F) defendant's intent
o
(G) actual confusion
(A) the parties agree that LVM's mark are strong and widely
recognized but they disagree in its effect on confusion. The Court
held that in cases of parody, a strong mark's fame and popularity
is precisely the mechanism by which likelihood of confusion is
avoided. An intent to parody is not an intent to confuse the public.
Thus, the strength of LVM's mark in this case does not help LVM
establish a likelihood of confusion.
(B) HDD concedes that the marks are similar but that is the
essence of parody. The Court concluded that HDD mimicked a
part of the LVM's marks, but at the same time sufficiently
distinguished its own product to communicate satire. The
differences are sufficiently obvious and the parody sufficiently
blatant that a consumer encountering Chewy Vuiton dog toy
would not mistake its source or sponsorship on the basis of mark
similarity. The difference in trade channels that this products are
sold further enhances this argument.
(C ) there is a difference in the goods the mark identifies. Chewy
Vuiton is a dog toy while LVM products are hand bags. LVM's dog
collars, leashes, and pet carriers are fashion accessories, not dog
toys. Even if LVM were to make dog toys in the future, the fact
remains that the products at issue are not similar in any relevant
aspect, and this factor does not favor LVM.
(D) HDD sells its products in pet stores while LVM has its own
stores or boutiques withi department stores. The fact that both
products are sold on Macy's department store in New York is an
insignificant overlap.
(E) There is little or no overlap in terms of advertising. LVM
advertises through fashion magazines HDD advertises primarily in
pet-supply channel.
(F) There is no intent to cause confusion on the party of HDD.
Although HDD's intent to profit from such parodies, it does not
amount to bad faith. On the contrary, it is the opposite it evokes
a humorous, satirical association that distinguishes the products.
This factor does not favor LVM.
(G) There is no likelihood of confusion. LVM's contention that
retailers of HDD uses two "T" instead of one the invoices or order
forms. The misspellings are far more likely in this context to
indicate confusion over how to spell the product name than any
confusion over the source or sponsorship of the Chewy Vuiton
dog toys. This factor substantially favors HDD.
TRADEMARK DILUTION: HDD is not liable. The Court rejected
LVM's assertion that a parody automatically gives rise to
actionable dilution. The owner of a famous mark is entitle to an
injunction against another person who commences use of a mark
or trade name in commerce that is likely to cause dilution of the
famous mark, regardless of the presence or absence of actual or
likely confusion, of competition, or of actual economic injury. A
mark is famous when it is widely recognized by the general
consuming public of the United States as a designation of source
of the goods or service of the mark's owner.

Two kinds of dilution according to Trademark Dilution Revision Act

of 2006 (TDRA; US law).
o
dilution by blurring is the association arising from similarity
between a mark or trade name and a famous mark that
impairs distinctiveness of the famous mark. Distinctiveness
refers to the ability of the famous mark uniquely to identify a
single source and thus maintain its selling power
o
dilution by tarnishment is the association arising from
similarity between mark and a famous mark that harms the
reputation of the famous mark.
Elements for a dilution claim under TDRA
o
plaintiff owns a famous mark that is distinctive
o
defendant has commenced using a mark in commerce that
allegedly is diluting the famous mark
o
the similarity between the two marks gives rise to
association between the marks
o
association is likely to impair the distinctiveness of the
famous mark or likely to harm the reputation of the famous
mark
Three defenses under TDRA
o
fair use (with exceptions)
o
news reporting and news commentary
o
non commercial use
The first three elements of a trademark dilution are not at issue in
this case.
Factors in to consider whether a junior mark is likely to dilute a
famous mark through blurring
o
(1) degree of similarity of the two marks
o
(2) degree of inherent or acquired distinctiveness of the
famous mark
o
(3) extent to which the owner of the famous mark is
engaging in substantially exclusive use of the mark
o
(4) Degree of recognition of the famous mark
o
(5) whether the user of the mark or trade name intended to
create an association with famous mark
o
(6) any actual association between the mark or trade name
and the famous mark
Not every factor will be relevant in every case. Parody is not
automatically a complete defense to a claim of dilution by blurring
where the defendant uses the parody as its own designation of
source. Although the TDRA does provide that fair use is a
complete defense and allows that a parody can be considered fair
use, it does not extend the fair use defense to parodies used as
trademark. While a parody intentionally creates an association
with famous mark in order to be a parody, it also intentionally
communicates, if its is successful, that it is not the famous mark,
but rather a satire of the famous mark.
ON BLURRING: Factors (1), (2) and (4) are directly implicated by
consideration of the fact that the defendant's mark is a successful
parody which might actually enhance the famous mark's
distinctiveness. While a defendant's use of parody as a mark
does not support fair use defense, it may be considered in
determining whether the plaintiff-owner of a famous mark has
proved its claim that the defendant's use of a parody mark is likely
to impair distinctiveness of the famous mark.
While the establishment of these facts satisfies essential
elements of LVM's dilution claim, the facts impose on LVM an
increased burden to demonstrate that the distinctiveness of its
famous mark is likely to be impaired by a successfully parody.
Even HDD's parody mimics the famous mark, it communicates
simultaneously that it is not the famous mark, but is only satirizing
it. However, the unauthorized use of the famous marks
themselves on unrelated goods might diminish the capacity of
these trademarks to distinctively identify a single source. HDD
designed pet chew toy to imitate and suggest, but not use, the
marks of a high fashion Louis Vuitton handbag. The imitation of
HDD were not so similar as to be likely to impair the
distinctiveness of LVM's famous mark.
In factors (5) and (6), HDD intentionally associated its mark, but
only partially and certainly imperfect, so as to convey the
simultaneous message that it was not in fact the source of LVM
products.
ON TARNISHMENT: LVM simply asserts that Chewy Vuitton
might cause choke on dogs. In effect, it will harm the LVM's

20

reputation. The Court held that this is merely a speculation which

fails to prove dilution by tarnishment.

Promotional Goods
Comparative Advertising
Smith v. Chanel Inc.
402 F.2d 562 (1968)

Boston Athletic v. Sullivan

867 F.2d 22 (1989)

21