Trademark Selection: Go Figure

April 19, 2012, 3:44 PM

In advising clients about whether a prospective mark is available i.e., whether it can but used without infringing anothers rights trademark lawyers seldom give unqualified advice. One mark infringes another if it is likely to cause confusion or mistake as to origin or source among an appreciable segment of consumers exercising ordinary care for purchases of the type. Judging whether a likelihood of confusion exists is a subjective judgment that calls on the trademark lawyer to read the minds of consumers as they may encounter the marks in the future. People differ, of course, so the task also calls for reading minds having very different perspectives. In addition, since the prospective mark is not yet in use, by definition the judgment is speculative and made with incomplete information about how consumers might encounter the marks.

None of us can read minds. Thus, courts, Patent and Trademark Office examiners, and attorneys look to surrogate factors to assess the potential for confusion. Different federal courts use different lists of factors. The PTO and its appellate court, the Federal Circuit, use a 13-item list known as the DuPont factors, and they have adopted many rules-of-thumb for analyzing each factor. There is no formula for weighing the factors, although usually the similarity of the marks (in sight, sound and meaning) as well as the relatedness of goods or services sold under the marks are the first and most important. Others include the similarity of trade channels, the care typically used in purchasing goods of the type, the distinctiveness and fame of the first-used mark, the number of similar marks already in use, the duration of concurrent use, any evidence of actual (as opposed to likely) confusion, and more. The legal analysis involves many judgment calls. Despite review by experienced lawyers applying the list of factors and the rules of thumb, often there is much room for differences of opinion, a fact illustrated by the abundance of office actions by PTO examiners and cases decided by the Trademark Trial and Appeal Board (TTAB).

When some similar marks are registered or in use with somewhat related goods, the question becomes how close is too close. Then, the strength of a mark can matter. There are two dimensions to mark strength or weakness. The first dimension is conceptual and focuses on a marks distinctiveness. If the prior mark stands out because it says little about the product (think MONSTER or AMAZON), it is viewed as strong and they owner can be entitled to prevent use of similar marks with even less related goods or services. By contrast, highly suggestive marks, while protectable, have a smaller scope of enforceable rights. The second dimension is empirical and focuses on the actual number of somewhat similar marks already in use with somewhat related products. For example, marks that use prefixes or suffixes like tech, dura, info or deluxe are very common and generally considered weak. In that situation, as with highly suggestive terms, the logic is that, with multiple users of somewhat similar marks, all must be co-existing without confusion and that consumers have learned to distinguish them based on relatively small differences. Obviously, it is better to own a strong rather than weak mark, and when selecting a mark it is particularly important to avoid anothers strong mark.

When the PTO or another user alleges that a clients mark is likely to cause confusion, one often counters by arguing the others mark is weak, by pointing to the mild suggestiveness of the others mark and/or the fact that there are several rather similar marks already un use with related products.

Because the marks otherwise are fairly similar, and because it is hard to know how consumers are actually reacting to the marks, it usually is hard to persuade the PTO or a court that anothers mark is so weak that confusion is unlikely. Yet, a recent decision by the TTAB illustrates the powerful role a marks weakness can sometimes play. Hartz Hotel Services had applied to register GRAND HOTELS NYC for hotel services, and the PTO examiner refused the application based on a prior registration of GRAND HOTEL for, you guessed it, hotel services. With virtually identical marks and identical services, normally there would be no doubt but that confusion is likely. Yet, in March 2012 the TTAB held that the addition of the geographically descriptive NYC was sufficient to distinguish GRAND HOTEL NYC, as a whole, from GRAND HOTEL and as a result that confusion was not likely. Go figure.

The Boards reasoning turned on both dimensions of mark weakness. HOTELS is a generic term for the services and so not in itself protectable. GRAND is highly suggestive, it found, a none-too-subtle hint about the hotels size and elegance. In addition, the suggestion was very common in the marketplace: the applicant pointed to multiple registrations and unregistered users of other uses of GRAND and/or GRAND HOTEL with hotel services having minor, often geographic additional terms (THE GRAND HOTEL AT MOUNTAINEER, ANCHORAGE GRAND, FORT LAUDERDALE GRANDE HOTEL, MGM GRAND HOTEL & CASINO, PENSACOLA GRAND HOTEL and several others). They appeared to be co-existing, and the PTO evidently thought them different enough to allow concurrent registration of several. The marks were almost identical, but in context different enough to avoid confusion.

While Hartz Hotel Services won, the decision also illustrates the legal and business shortcomings of weak marks. The TTAB concluded that all of these marks were highly suggestive and, while legally protectable, so weak that the scope of protection to which the cited registration is entitled is quite limited. Hartz thus can own GRAND HOTEL NYC as a mark, but (like all the others) its mark is so weak that it cannot prevent others from using very similar but nonidentical names with the same services. In a business that deals with travelers, Hartz also faces the challenge of competing and building a reputation for itself with a name that is so similar to so many others in different locations. One has to wonder whether the victory was worth the fight.

Chris Mugel practices intellectual property law from the Richmond, Virginia office of Kaufman & Canoles. Christopher J. Mugel