Trademark Application Refusals on the Grounds of Potential Confusion

The essential requirement of a trademark or service mark is that it be distinctive. When a mark lacks uniqueness, there’s a chance the public could be confused about the identity of the company behind the mark. This defeats the primary purpose of a mark: to alert the public about the source of the goods or services, so they can make an informed decision about whether to buy. For this reason, the U.S. Patent and Trademark Office refuses to register marks when they are likely to cause confusion. This is called a 2(d) refusal after the controlling federal statute, 15 U.S.C. §1052(d), otherwise known as the Lanham Act.

But what is it about a proposed mark that makes it likely to cause confusion? The USPTO website presents numerous examples of how the text, imagery, sound and meaning of a mark can so similar to an existing mark that the result is confusing. Yet, given that confusion is largely in the mind of the confused, any analysis of similarities is bound to be subjective. So, how can an applicant anticipate whether an examiner might respond with a 2(d) refusal?

In a landmark court case, In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973), the U.S. Court of Customs and Patent Appeals laid out 13 factors an examiner must consider when deciding whether to make a 2(d) refusal:

  • The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression.
  • The similarity or dissimilarity of and nature of the goods or services as described in an application or registration or in connection with which a prior mark is in use.
  • The similarity or dissimilarity of established, likely-to-continue trade channels.
  • The conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing.
  • The fame of the prior mark (sales, advertising, length of use).
  • The number and nature of similar marks in use on similar goods.
  • The nature and extent of any actual confusion.
  • The length of time during and conditions under which there has been concurrent use without evidence of actual confusion.
  • The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark).
  • The market interface between applicant and the owner of a prior mark:
    • a mere “consent” to register or use.
    • agreement provisions designed to preclude confusion, i.e. limitations on continued use of the marks by each party.
    • assignment of mark, application, registration and good will of the related business.
    • laches and estoppel attributable to owner of prior mark and indicative of lack of confusion.
  • The extent to which applicant has a right to exclude others from use of its mark on its goods.
  • The extent of potential confusion, i.e., whether de minimis or substantial.
  • Any other established fact probative of the effect of use.

In DuPont, an examiner had refused to register a mark for RALLY, “a combination polishing, glazing and cleaning agent for use on automobiles,” because of the likelihood of confusion with a company named Horizon’s registered mark for RALLY, “an all-purpose detergent.”  The Trademark Trial and Appeal Board upheld the refusal and DuPont appealed to CCPA.

By the time the case got that far, DuPont and Horizon had already worked out a settlement, whereby “DuPont purchased Horizon’s mark for the automobile product…. Because Horizon retained RALLY for all-purpose detergent, an agreement designed to avoid conflict was entered into on the same day. Boundaries of use of the marks were established,” so that DuPont would occupy the “automotive after-market” and Horizon would have the “commercial building or household market.” However, neither the examiner nor the TTAB would allow DuPont a do-over.

TTAB pointed out that “despite any agreement between the parties the public interest cannot be ignored.” Finding that the sale of different products by different companies “under the identical mark ‘RALLY’ would be likely to result in confusion, mistake, or deception,” TTAB upheld the refusal.

However, after applying the factors listed above, CCPA did not believe confusion was likely. A key element in the court’s decision was the companies’ agreement to “restrict themselves in effect to the general purpose cleaning market (Horizon) and the automobile market (DuPont).”

In the court’s opinion, the examiner and the Board had gone too far in trying to prevent confusion, especially when each company had pledged to stay in its own lane. “Horizon is subject to suit for breach of contract and infringement if it promotes its RALLY products for cleaning automobiles. DuPont can be sued if it promotes its RALLY products in general cleaning. The fact that the goods of one party ‘could be used’ in the field of the other is too conjectural and too widely applicable to form the sole basis of decision, particularly where, as here, the parties have agreed to avoid the promotion of such cross-use.”

The Dupont decision is noteworthy for the 13 factors that should guide applicants whose marks bear some resemblance to an established mark. But it also presents an example of effective legal counsel rescuing a trademark application through shrewd negotiations that achieved a mutually beneficial solution. Trademark applicants who underestimate the importance of reliable legal advice truly do so at their own peril.

For advice you can trust on trademark applications, contact Kelley today.