AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.

1979)

F: [AMF = SLICK VS NESCHER = SLEEK]

 Slickcraft Boat Company operated from 1954-1969, when it became a division of AMF Inc.
 Apr 1 1969 - Slickcraft mark was federally registered, continuously used as a trademark for recreational boats
o Distributed and advertised nationally.
o AMF has authorized over one hundred retail outlets to sell the Slickcraft line.
 1966-1974 - promotional expenditures for the Slickcraft line averaged approximately $200,000 annually.
Gross sales for the same period approached $50,000,000.
 Nescher organized sole proprietorship, Nescher Boats in 1962, after years in the boat-building business. Venture failed in
1967.
 He tried again in late 1968 – Adopted the name Sleekcraft Boats. Been used since then as Nescher trademark
o Name was selected w/o knowledge of Slickcraft
 AMF notified Nescher so Nescher adopted a distinctive logo and added the identifying phrase "Boats by Nescher" on
plaques affixed to the boat and in much of its advertising [DISTINCTION DONE BY NESCHER]
o Sleekcraft mark still appears alone on some stationery, signs, trucks, ads though.
o Like AMF, Nescher sells his boats through authorized local dealers
 POSSIBLE CONFUSION:
o Slickcraft boats are advertised primarily in magazines of general circulation.
o Nescher advertises primarily in publications for boat racing enthusiasts.
o Both parties exhibit their product line at boat shows, sometimes the same show.
 DISTRICT COURT: after a brief non-jury trial, found appellant AMF's trademark was valid, but not infringed, and denied
AMF's request for injunctive relief.
o The district judge held that confusion was unlikely.

H:

1. What is the standard of review? Depends on circumstances of the case [See CAB bullet]

 NESCHER ARG: Question of fact, erroneous standard should apply.

o an appeals court must accept the lower court's findings of fact unless the appellate court is definitely and firmly convinced that a mistake has
been made. In other words, it is not enough that the appellate court may have weighed the evidence and reached a different conclusion; the
lower court's decision will only be reversed if it is implausible in light of all the evidence.
 AMF ARG: Question of law de novo
o Under de novo review, the appellate court acts as if it were considering the question for the first time, affording no deference to the decisions
below. Legal decisions of a lower court on questions of law are reviewed using this standard. This is sometimes also called plenary review or the
"legal error" standard. It allows the appeals court to substitute its own judgment about whether the lower court correctly applied the law.
 COURT: Depends on the circumstances of the case
o appellate court must follow the conclusion of the trial court unless it finds the underlying facts to be clearly
erroneous
o "(W)here the conclusion of the trial court is based solely upon disputed findings of fact, the appellate court need
not follow the conclusion of the trial court where it finds the underlying facts to be clearly erroneous.
 CAB: facts were disputed at trial, and still are on appeal. Thus, we must first review the district court's findings of fact,
then assess its conclusion regarding the likelihood of confusion.
 RE: AMF Argues to pay less deference to district court because it merely endorsed findings of the other counsel
o The proposed findings are taken, often verbatim, from the court's Memorandum Opinion. Thus, there is no reason
to doubt that these findings are a product of the district court's own deliberations to which we should defer.

2. Has a likelihood of confusion been demonstrated? YES

1. 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. [COMPETITION]
2. When the goods are related, but not competitive, several other factors are added to the calculus. [NO COMPETITION BUT
RELATED GOODS]
3. If the goods are totally unrelated, there can be no infringement because confusion is unlikely [NO RELATION AT ALL]

RE: COMPETITIVE? NO (A/N so the 2nd situation kicks in)

  AMF ARG:
o Boat lines are competitive
o Both lines are comprised of sporty, fiberglass boats often used for water skiing
o the sizes of the boats are similar, as are the prices.
 NESCHER ARG:
o his boats are not competitive with Slickcraft boats because his are true high performance boats intended for racing
enthusiasts.
 DISTRICT COURT:
o Potential overlap BUT appealed to separate sub-markets; Slickcraft boats are for general family recreation, and
Sleekcraft boats are for persons who want high speed recreation [NO COMPETITION]
 COURT: Agrees with District Court [YES. NO COMPETITION BUT RELATED]
o Even though both boats are designed for towing water skiers, only the highly skilled enthusiast would require
the higher speeds the Sleekcraft promises.
o Slickcraft design emphasizes family fun: fishing, water skiing, pleasure cruises, and sunbathing
o Sleekcraft meanwhile, are low- profile racing boats designed for racing, high speed cruises, and water skiing.
Seating capacity and luxury are secondary.

RE: Likelihood of confusion

 Other Factors:
o 1. strength of the mark; 2. proximity of the goods; 3. similarity of the marks; 4. evidence of actual confusion; 5.
marketing channels used; 6. type of goods and the degree of care likely to be exercised by the purchaser; 7.
defendant's intent in selecting the mark; and 8. likelihood of expansion of the product lines
 Strength of the Mark
o A strong mark is inherently distinctive, for example, an arbitrary or fanciful mark; it will be afforded the widest
ambit of protection from infringing uses
 Ex. Dutch Boy
o A descriptive mark tells something about the product; it will be protected only when secondary meaning is shown
 Ex. Bbq beans used as a description
o In between lie suggestive marks which subtly connote something about the products. Although less distinctive
than an arbitrary or fanciful mark and therefore a comparatively weak mark, a suggestive mark will be protected
without proof of secondary meaning
o AMF ARG: Slickcraft is a fanciful mark and therefore entitled to wide protection
o DISTRICT COURT: Implied it was a suggestive mark. proof of secondary meaning was not offered or discussed, yet
it was offered protection from infringement.
o COURT: Slickcraft is a suggestive mark. weak mark protected only against similar goods, similarly marketed
 Distinction between suggestive vs descriptive:
o IMAGINATIVENESS OF SUGGESTION - how immediate and direct is the thought process from the
mark to the particular product.  From the word Slickcraft one might readily conjure up the
image of appellant's boats, yet a number of other images might also follow (a/n so 2ndary
meaning not shown)
o MONOPOLY OF MARK - whether granting the trademark owner a limited monopoly will in fact
inhibit legitimate use of the mark by other sellers  no evidence here that others have used or
desire to use Slickcraft in describing their goods
o INDICATION OF MARK - whether the mark is actually viewed by the public as an indication of the
product's origin or as a self-serving description of it  buyers probably will understand that
Slickcraft is a trademark, particularly since it is generally used in conjunction with the mark
AMF.
 Proximity of goods
o For related goods, the danger presented is that the public will mistakenly assume there is an association between
the producers of the related goods, though no such association exists
 The more likely the public is to make such an association, the less similarity in the marks is requisite to a
finding of likelihood of confusion
o CAB: so closely related that a diminished standard of similarity must be applied when comparing the two marks
 Similarity of the marks  COURT: the marks are quite similar on all three levels
 o DISTRICT COURT: "the two marks are easily distinguishable in use either when written or spoken."
o Similarity of the marks is tested on three levels: sight, sound, and meaning
o APPLICATION:
 SIGHT: Standing alone the words Sleekcraft and Slickcraft are the same except for two inconspicuous
letters in the middle of the first syllable  To the eye, the words are similar. Slickcraft name is the more
conspicuous part of the mark
o Nescher points out that the distinctive logo on his boats and brochures negates the similarity of
the words  COURT: YES. But the logo is often absent; word Sleekcraft is frequently found
alone in trade journals, company stationery, and various advertisements.
o Nescher also points out that the Slickcraft name is usually accompanied by the additional
trademark AMF  COURT: the AMF mark is down-played in the brochures and advertisements;
the letters AMF are smaller and skewed to one side
o Nescher also says we should disregard the common suffix "craft" and compare Slick and Sleek
alone.  COURT: Craft, a generic frequently used in trademarks on boats, is not itself
protectible, yet the common endings do add to the marks' similarity
 SOUND: is also important because reputation is often conveyed word-of-mouth.
o CAB: We recognize that the two sounds can be distinguished, but the difference is only in a
small part of one syllable
 Neither expert testimony nor survey evidence was introduced below to support the trial court's finding
that the marks were easily distinguishable to the eye and the ear
 MEANING: Closeness in meaning can itself substantiate a claim of similarity of trademarks.
o CAB: the words are virtual synonyms. Webster's New World Dictionary of the American
Language
 Evidence of actual confusion – WOULD BOLSTER ARGUMENT LANG; this factor is weighed heavily only when there is
evidence of past confusion or, perhaps, when the particular circumstances indicate such evidence should have been
available
o Evidence that use of the two marks has already led to confusion is persuasive proof that future confusion is likely
 Proving actual confusion is difficult, however, and courts have often discounted such evidence because
it was unclear or insubstantial
o CAB: District Court found it insubstantial  Court agrees. “Because of the difficulty in garnering such evidence,
the failure to prove instances of actual confusion is not dispositive”
 Marketing channels used
o Convergent marketing channels increase the likelihood of confusion
o CAB: Although different submarkets are involved, the general class of boat purchasers exposed to the products
overlap
 no evidence in the record that both lines were sold under the same roof except at boat shows.
 BUT  normal marketing channels used by both AMF and Nescher are, however, parallel.
o Both thru authorized retail dealers
o Same sales methods and price range
o Retail dealers also both promote by participating in small boat shows
o Both advertise in local newspapers, etc.
 Type of goods and degree of care likely to be exercised by purchaser (a/n Court is all over the place with this factor –
essentially just explains how the factor is used)
o Both parties produce high quality, expensive goods. According to the findings of fact, the boats "are purchased
only after thoughtful, careful evaluation of the product and the performance the purchaser expects.”
o In assessing the likelihood of confusion to the public, the standard used by the courts is the typical buyer
exercising ordinary caution
 when the goods are expensive, the buyer can be expected to exercise greater care in his purchases;
again, though, confusion may still be likely.
o trademarks are unimportant to the average boat buyer. Common sense and the evidence indicate this is not the
type of purchase made only on "general impressions”  This inattention to trade symbols does reduce the
possibilities for confusion
o equivalence in quality may actually contribute to the assumption of a common connection
 Intent in selecting the mark
 o GR: When the alleged infringer knowingly adopts a mark similar to another's, reviewing courts presume that the
defendant can accomplish his purpose: that is, that the public will be deceived

o CAB: after notification of the purported infringement, Nescher designed a distinctive logo  Good faith
 Good faith is less probative of the likelihood of confusion, yet may be given considerable weight in
fashioning a remedy
 Likelihood of expansion of product lines
o "strong possibility" that either party may expand his business to compete with the other will weigh in favor of
finding that the present use is infringing
o CAB: The evidence shows that both parties are diversifying their model lines. The potential that one or both of the
parties will enter the other's submarket with a competing model is strong.

3. What relief is warranted? Limited Injunctive Relief

 Both parties have used their trademarks for over a decade.

 AMF has a substantial investment in the Slickcraft name, yet a complete prohibition against appellee's use of the
Sleekcraft name is unnecessary to protect against encroachment of appellant's mark
o Appellee has also expended much effort and money to build and preserve the goodwill of its mark.
 little doubt both parties honestly desire to avoid confusion of their products.
o Nescher adopted the Sleekcraft name in good faith and has subsequently taken steps to avoid confusion. Use of
the Nescher logo in all facets of the business would ensure that confusion would not occur.
 At minimum, the logo should appear in all advertisements, signs, and promotional materials prepared either by appellee or
by his retail dealers, and on all appellee's business forms except those intended for strictly internal use. A specific disclaimer
of any association with AMF or the Slickcraft line seems unnecessary, nor do we think it necessary to enjoin Nescher from
expanding his product line. In its discretion the district judge may allow appellee sufficient time to consume supplies at
hand and to add the logo to more permanent assets, such as business signs.

REVERSED and REMANDED