Joseph Phelps Vineyards, LLC v. Fairmont Holdings, LLC, (Fed. Cir. May 24, 2017) (Before Newman, Dyk, and Wallach, J.) (Opinion for the court, Per Curiam) (Concurring opinion, Newman, J.)
The Federal Circuit vacated and remanded the Trademark Trial and Appeal Board’s decision to deny the trademark cancellation petition, finding that the Board used an incorrect standard for “fame” in its likelihood of confusion analysis. The Board used an all-or-nothing approach when it should have viewed “fame” under the totality of the circumstances in relation to other confusion factors.
Joseph Phelps Vineyards, LLC (“Vineyards”) has produced and sold wines bearing the trademark INSIGNIA since 1978. In 2012, Fairmont Holdings, LLC (“Fairmont”) received federal registration for the mark ALEC BRADLEY STAR INSIGNIA for cigars and cigar products. The Board denied Vineyards’ petition for cancellation. It found that Vineyards’ INSIGNIA mark was not “famous” because “while it appears that Petitioner’s INSIGNIA branded wine has met with success in the marketplace, we are not persuaded on this record that Petitioner’s mark is a famous mark.” It gave this factor no weight in its confusion analysis and concluded that there was no likelihood of source confusion between Vineyard’s use of INSIGNIA for wine and Fairmont’s use of INSIGNIA for cigars.
The Court rejected the Board’s all-or-nothing analysis, holding that it must consider all of the relevant confusion factors, on a scale appropriate to their merits, under the totality of the circumstances. It explained that the proper legal standard for evaluating the fame of a mark is the class of customers and potential customers of a product or service, not the general public. Vineyards provided evidence that INSIGNIA wine is renowned in the wine market and among consumers of fine wine. The record shows extensive recognition and accolade for INSIGNIA brand wine, such as being selected as Wine of the Year in 2005 and 1997. The record also shows that INSIGNIA wine has been served at the White House on several occasions. Because the record shows appreciation by consumers and the wine market of Vineyards’ INSIGNIA brand, it was an error to refuse to accord any “fame” to Vineyards’ INSIGNIA mark. The Court vacated and remanded the Board’s decision for determination of the cancellation petition utilizing the correct standard.
Judge Newman concurred in the Court’s judgment, calling attention to two additional issues. First, Judge Newman argued that the Board should have examined the actual use of the ALEC BRADLEY STAR INSIGNIA mark. The Tenth Circuit has held that “[a] standard character registration does not override the requirement that the likelihood of confusion be measured by the perception of consumers in the marketplace, including the effect of packaging.” Here, the specimens submitted in support of the challenged registration show the presentation of Fairmont’s mark in commerce, where ALEC BRADLEY is separated from STAR INSIGNIA, and the relative sizes of the words STAR and INSIGNIA are different. Judge Newman stated that “[t]o the extent that the actual use of the ALEC BRADLEY STAR INSIGNIA mark presents a different impression to the consumer than the standard character mark viewed in the abstract, the Board should recall that the likelihood of confusion inquiry is ‘viewed through the eyes of a consumer’ to determine the commercial impression of the mark.” She concluded that consideration of how the Fairmont mark is actually used and viewed by the consumer is part of the totality of the circumstances of the likelihood of confusion and should be considered on remand.
Second, Judge Newman explained that the Board did not fully consider all aspects of the “relatedness” factor, despite noting that relatedness can be based on use together, complementary, or simultaneous consumption. Even if goods are not identical, the consuming public may perceive them as related enough to cause confusion about the source or origin. Relatedness is a broad concept, in that products may exhibit “relatedness” when they “are complementary products sold in the same channels of trade to the same classes of consumers.” For example, the Board found in In re Licores Veracruz, S.A. de C. V. (T.T.A.B. Jan. 26, 2012) that rum and cigars are related, move in the same channels of trade, and are sold to the same consumers. As a result, the applicant’s mark MOCAMBO for “rum” was likely to cause confusion with the mark MOCAMBO for “cigars.” Here, the Board concluded that wine and cigars are not “related” because they are products differing in both composition and method of manufacture. The Board also mistakenly treated relatedness as an all-or-nothing factor, rather than analyzing it on a sliding scale. Judge Newman found that the relatedness factor requires further analysis on remand.
When examining a mark’s “fame” in a likelihood of confusion analysis, the applicable viewpoint is that of the relevant market. Fame can arise when a significant portion of the relevant consuming public recognizes the mark as a source indicator. It is not an all-or-nothing factor and should be analyzed on a sliding scale. Additionally, “actual use” of the mark from the viewpoint of the consumer should be considered in a confusion analysis. Finally, different products may be related, and implicate confusion, when they are complementary products sold in the same channels of trade to the same consumers.