MEMORANDUM
TO:
FROM:
DATE:
RE:
Karin Mika
2657
February 22, 2005
Trademark Infringement Case against Vista Credit Bureau
ISSUE
WHETHER THE USE OF A FAMOUS PUBLIC DOMAIN FONT IN A
BUSINESS LOGO IS LIKELY TO CAUSE CUSTOMER CONFUSION
SUCH THAT A REGISTERED TRADEMARK OWNER MAY ENJOIN
DEFENDANT FROM USING THE LOGO?
STATEMENT OF FACTS
The plaintiff, the Walt Disney Company (hereinafter “Disney”), is a publicly traded
conglomerate that conducts various business activities, including operating theme parks and
television stations, in all fifty states of the United States. The plaintiff’s main operations are
located in Los Angeles, CA and Orlando, FL. The defendant, Vista Credit Bureau (hereinafter
“Vista”), is a private credit bureau associated with a teacher’s union and is located in
Kalamazoo, MI. The plaintiff has a “well-recognized” logo that was created by the founder, Walt
Disney, and trademarked by the Disney Corporation. Disney’s logo uses a public domain font
identified as the “Waltograph” font and though it has been displayed in various colors, is often
rendered in red or yellow.
In 1995, the defendant adopted a logo utilizing the “Waltograph” font. The color of the
logo is red and it has never received a trademark registration. In 2003, the defendant expanded
their business operation to Orlando, FL. There, the defendant prominently displays
advertisements of the plaintiff on the walls of their office. Further, Vista uses the “Waltograph”
font on all of their marketing literature. Though the defendants do not claim an affiliation with
Disney, they do not disclaim it either.
Disney wishes to bring a trademark infringement case against Vista, attempting to enjoin
them from the using the Vista logo.
DISCUSSION
15 U.S.C.A § 1114(1) states in part:
Any person who shall, without the consent of the registrant
(a) use in commerce any reproduction [ ] or colorable imitation of a registered
mark in connection with the sale, offering for sale, distribution, or advertising of
any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
(b) reproduce [ ] or colorably imitate a registered mark and apply such
reproduction [ ] or colorable imitation to labels, signs, prints, [ ] or advertisements
intended to be used in commerce upon or in connection with the sale, offering for
sale, distribution, or advertising of goods or services on or in connection with
which such use is likely to cause confusion, or to cause mistake, or to deceive.
Shall be liable in a civil action by the registrant [ ].
“Colorable imitation” is defined in the U.S.C.A. as “any mark which so resembles a
registered mark as to be likely to cause confusion.” 15 U.S.C.A. § 1127. In order for Disney to
bring a successful trademark infringement case, they will have to prove Vista’s use of their mark
was “likely to cause confusion” as to 1) the origin of their products and services or 2) whether
they are affiliated with [Disney]. Everest Capital Ltd. v. Everest Funds Mgmt., 393 F.3d 755,
759 (8th Cir. 2005).
In determining whether a mark is “likely to cause confusion” courts will consider eight
factors: 1) strength of mark; 2) proximity of goods; 3) similarity of marks; 4) evidence of actual
confusion; 5) marketing channels used; 6) types of goods and degree of care likely to be
exercised by purchaser; 7) alleged infringers intent in selecting mark; 8) likelihood of expansion
of product lines. AMF Inc v. Sleekcraft Boats, 599 F.2d 341, 348 (9th Cir. 1979). See also
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Playboy Enters., Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004)
(employing the eight Sleekcraft factors).
Further, courts do not have to focus on every Sleekcraft factor; they can turn their
analysis on the dispositive factors, thus only considering ones that are relevant. Shen Mfg. Co. v.
the Ritz Hotel Ltd., 393 F.3d 1238, 1241 (Fed. Cir. 2004). See GoTo.com v. the Walt Disney
Co., 202 F.3d 1199, 1205 (9th Cir. 2000) (stating the test is a pliant one, in which some factors
are more important than others).
One factor the court may consider relevant in the case at bar is [Disney’s] strength of
their mark. Sleekcraft, 599 F.2d at 348. Generally speaking, the stronger the mark, the greater the
likelihood of confusion, therefore more protection is afforded. Autozone Inc. v Tandy Corp., 373
F.3d 786, 794 (6th Cir. 2004). The “strength” of a trademark is evaluated in terms of its
conceptual strength and commercial strength. GoTo.com, 202 F.3d at 1207 (quoting McCarthy,
Trademarks and Unfair Competition § 11:83, at 11-143).
The Autozone court stated the
conceptual strength of a mark is generally categorized as fanciful [fame], arbitrary, suggestive, or
descriptive. Autozone, 373 F.3d at 794. The court further explained, “fanciful” and “arbitrary”
marks are to be considered the strongest and “suggestive” or “descriptive” marks [ ] are [to be]
considered weaker. Id. There, the court reasoned that “Autozone” was a weak mark because the
use of the word “zone” which is commonly found in other trademarks. Id. (contrasting Autozone
with a fanciful mark “Exxon” and an arbitrary mark “Starbucks”). There, the court reasoned the
more common a word or phrase is the less inherent trademark strength it may have, even when
the mark has an arbitrary relation to the good or service to which it applies. Id.; see also Daddy’s
Junky Music Stores, Inc. v. Big Daddy’s Family Music Ctr., 109 F.3d 275, 281 (6th Cir. 1997).
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Courts also investigate the commercial strength when determining the overall strength.
GoTo.com, 202 F.3d at 1207. Commercial strength is measured indirectly in terms of sales,
advertising [efforts/ expenditures], and media interest. Shen, 393 F.3d at 1242. In Shen, the court
referred to Giant Food, Inc. v Nation’s Foodservice, Inc. 710 F.2d 1565 (Fed. Cir. 1983), where
they held that Giant Eagle was a famous mark based on “45 years of use, sales in excess of $1
billion per year, extensive media exposure, and prominent display on the façade of
supermarkets.” Shen, 393 F.3d at 1242. The Shen court further explained that “Acoustic Wave
mark was famous based on 17 years of use, annual sales over $50 million, annual advertising in
excess of $5 million, and extensive media coverage.” Id. (referring to Bose Corp. v. QSC Audio
Prods., Inc., 293 F.3d 1367 (Fed. Cir. 2002)).
In considering strength of the mark, Disney should be able to prove their mark has
considerable strength. Disney should argue the conceptual strength of their mark is famous.
Teamed with Disney’s commercial strength, it will be hard to dispute its fame. Like in Giant
Food, the plaintiffs should be able to show a lasting use of the mark, extensive sales revenues,
large expenditures in advertisements, as well as extensive media coverage. See 710 F.2d at 1568.
Thus, the plaintiff’s should be able to prove they own a mark of unparalleled strength. Cf. Shen,
393 F.3d at 1242
Another factor courts consider in determining likelihood of confusion is proximity of
goods. Sleekcraft, 599 F.2d at 348. Generally speaking, the more goods are in competition with
each other, the greater the chance of confusion. Autozone, 373 F.3d at 797; see also Fleishmann
Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 153 (9th Cir. 1963) (stating that beer and
whiskey were in competition therefore a greater chance of likelihood of confusion). However,
courts have refused to recognize a close proximity of products when the goods are in
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“competition in the most limited fashion. Autozone, 373 F.3d at 798. There the court, reasoned
that a 1% overlap in products viz. batteries, was insufficient to construe a close proximity. Id.
Further, in Kellogg Co. v. Toucan Golf, Inc., 337 F.3d 616, 625 (6th Cir. 2003), the court
reasoned that the plaintiff-cereal manufacture’s advertisements at golf events and the
dissemination of promotional golf balls and shirts were not related enough to the golf industry to
constitute a close proximity. Conversely, the Goto.com court reasoned “the ever-growing
number of [ ] conglomerates may force us to conclude that even one hundred and one products
could all be sponsored by a single consortium. Goto.com, 202 F.2d at 1207.
In considering the proximity of goods, the plaintiffs may not be able to show a strong
connection between the services of an entertainment company with that of a credit union.
However, using the dicta from Goto.com, Disney may present an argument that though the
products are unrelated, their status as a conglomerate will afford them more leniency since a
reasonable consumer may confuse the defendants services with theirs. Id. at 1209.
The third factor that courts use to determine a likelihood of confusion is the similarity of
the marks. Sleekcraft, 599 F.2d at 348. Courts are guided by the “Anti Dissection Rule” which
states that courts must “view marks in their entirety and focus on their overall impression, not
individual features.” Autozone, 373 F.3d at 795. Generally speaking, courts will look at the
overall appearance, sound, and meaning of the marks in determining if they are similar. Id. In
Goto.com, the court held that two marks with white font on green circles against a yellow
background are sufficiently similar. 202 F.3d at 1206. Cf. Everest, 393 F.3d at 761 (citing
differences in font and graphics). In Autozone, the court looked toward the pronunciation
[sound] of the marks to determine that they were dissimilar. Autozone, 373 F.3d at 796. There,
the court reasoned that although both marks had three syllables, the pronunciation of the first two
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syllables and the accentuation of the entire mark was distinguishable. Id. Finally, courts have
held that marks with similar meanings are more likely to be confused. Sleekcraft, 599 F.2d at
352. There, the court reasoned that “Sleekcraft” and “Slickcraft” are virtual synonyms which are
more likely to be confused. Id.
In determining whether Disney’s and Vista’s marks are similar, the plaintiffs may be able
to show a parallel. First, and most importantly, Vista uses the identical font and color that the
plaintiff employs. Cf. 373 F.3d at 795. Disney can show the uniqueness of the font by arguing
that is was a byproduct of their founder’s creative efforts. Id. With respect to sound and
meaning, the plaintiffs will most likely not be able to show a connection. However, Disney
should focus on the first element and argue that the font, although a public domain item, is a
colorable imitation of their registered mark and the use of the font is a violation under 15
U.S.C.A. § 1114(a). Therefore, the defendant’s use of the “Waltograph” font is enough to create
a similarity between the marks, regardless of the sound and meaning.
The fourth factor considered in determining a likelihood of confusion is evidence of
actual confusion. Sleekcraft, 599 F.2d at 348. Generally speaking, “evidence of actual confusion
constitutes persuasive proof that future confusion is likely [and] if enough people have been
actually confused, then a likelihood that people are confused is established.” Playboy, 354 F.3d
at 1026 (emphasis original). The Playboy court stated that surveys are commonly introduced as
probative evidence of actual confusion. Id.; see also Schering Corp. v. Pfizer Inc., 189 F.3d 218,
255 (2nd Cir. 1999). The Playboy court reasoned that actual confusion is at the heart of the
likelihood of confusion analysis, and by using scientific analysis to show actual confusion,
Playboy effectively precluded the adverse judgment. Playboy, 354 F.3d at 1027. Thus, in order
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for the plaintiffs to benefit from this factor, they will have to offer scientific evidence that shows
actual consumer confusion.
The next factor courts analyze for the likelihood of confusion analysis is the marketing
channels used. Sleekcraft, 599 F.2d at 348. Generally speaking, where the litigants have different
customers and market their goods or services in different ways, the likelihood of confusion
decreases. Autozone, 373 F.3d at 793. The converse is also true. In Goto.com the court held that
internet search engines used the same methods and channels of marketing their sites. 202 F.3d at
1207. There, the court reasoned that the web as a marketing channel is particularly susceptible to
a likelihood of confusion since [ ] it allows for competing marks to be encountered at the same
time on the same screen. Id.
In the case at bar, the plaintiffs can show that the defendants use the same marketing
channels, if not material, as themselves. Disney should argue that they target the same customers
as Vista. See Sleekcraft, 599 F.2d at 348. This can be supported by showing that Disney
actively engages in attempting to secure the business of every single citizen in the country, if not
world, which would include the defendant’s customers, by every means available. Further,
Disney can analogize the court’s rationale in Goto.com. In Goto.com the court held that the
marketing by internet increased confusion. 202 F.3d at 1207. Disney may argue that, like theg
like the web, marketing in Orlando, FL, allows for the defendant’s mark and their mark to be
seen at the same time, increasing the likelihood of confusion. This argument is reinforced by
Vista’s use of Disney’s advertisements in their Orlando office.
Courts also look at the type of goods and the degree of care likely to be exercised by the
purchaser when determining the likelihood of confusion. Sleekcraft, 599 F.2d at 348. Generally
speaking, consumer care for inexpensive products is expected to be quite low [ ] in turn, [low
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customer care] increases the likelihood of confusion. Playboy, 354 F.3d at 1208. The standard of
care that courts employ is a “typical buyer exercising ordinary caution.” Autozone, 373 F.3d at
793. In Autozone, the court reasoned that consumers of both Autozone and Radio Shack were
unlikely to use anything more than ordinary caution based on their relatively inexpensive product
lines. Id. Conversely, the Goto.com court stated that the standard of care to be exercised [ ] will
be equal to that of the least sophisticated consumer. 202 F.3d at 1209. There, the court reasoned
that navigating websites required no effort whatsoever, an inexperienced user would not notice
minor differences; therefore a likelihood of confusion increases. Id.
Disney may have a difficult time in trying to convince a court to rule in their favor with
respect to this factor. Most likely the court will find that consumer care in planning a vacation to
a Disney resort, purchasing their stocks, or in the case of Vista, choosing a credit union are
instances where a typical buyer exercising ordinary caution would exercise more caution. Thus,
the likelihood of confusion would decrease.
Another factor courts look at when determining the likelihood of confusion is the alleged
infringer’s intent in selecting the mark. Sleekcraft, 599 F.2d at 349. With respect to trademark
infringement, courts have held that proving the alleged infringers intent [to infringe] is
recommended but not necessary [to succeed]. Autozone, 373 F.3d at 799; see also Goto.com,
202 F.3d at 1208. (intent to confuse is not required for a finding of trademark infringement).
However, when courts have found an intent to confuse, they have held that it constitutes
probative evidence of likely confusion. Playboy, 354 F.3d at 1028. Further, courts have held that
when a defendant does nothing to alleviate confusion and they profit from the confusion,
although it is not definitive, it provides some evidence of an intent to confuse. Id. at 1029. There,
the court reasoned since the defendant refused to remove the plaintiff’s marks from the keyword
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listing, even after they were prompted by advertisers, that an intent to confuse could be inferred.
Id.
In the case at bar, Disney should be able to show intent. The plaintiffs should argue that
through Vista’s practice of prominently displaying Disney advertisements on their office walls, it
is probative evidence that Vista intended to confuse their consumers by implying an affiliation to
Disney. See Autozone, 373 F.3d at 799. Additionally, Disney should argue that the use the
“Waltograph” font in all of Vista’s literature, with no affirmative statement disclaiming
affiliation to Disney, is even further evidence of intent to confuse. Id.
The last factor courts turn to in determining the likelihood of confusion is the likelihood
of expansion lines. Sleekcraft, 599 F.2d at 349. Courts have held, the likelihood of expansion
lines is irrelevant when two companies already compete to a significant extent. Goto.com, 202
F.3d at 1209. The Goto.com court’s rationale was that since the two internet search engines were
already competition, there was no need to look at a future possibility of competition through the
expansion of product lines. Id. In the case at bar, the facts would lead the court to hold the
likelihood of expansion lines is minimal, since no evidence of expansion is present. Therefore,
this factor would not weigh in Disney’s favor.
CONCLUSION
Generally speaking, the test for whether a likelihood of confusion exists is “whether a
reasonably prudent consumer in the marketplace is likely to be confused as to the origin of the
good or service bearing on of the marks.” Playmakers LLC v. ESPN, Inc., 376 F.3d 894, 897 (9th
Cir. 2004). See also Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129 (9th Cir.
1998). Courts generally discuss the eight Sleekcraft factors when determining a likelihood of
confusion, however, not all factors are relevant. Shen, 393 F.3d at 1241. In the case at bar, the
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relevant factors appear to be Disney’s strength of their mark, the similarity between the marks,
the marketing channels used, and the intent of Vista in choosing its mark. Disney should be able
to show their mark is unequaled through their superior commercial and conceptual strength. The
plaintiffs should also be able to prove that Vista’s use of the Waltograph font in their logo is a
colorable imitation of their registered mark and a violation of 15 U.S.C.A. § 1114(a). Therefore,
its use as a colorable imitation construes a strong similarity. It should be undisputed that both
litigants utilize the same marketing channels in Orlando. Disney can infer an intent to infringe on
their mark through the defendants display of plaintiff’s advertisements in their Orlando office.
Further, the plaintiff can show that the defendant has no affirmative statement disclaiming
affiliation to Disney, which only supports an intent to infringe. Considering the relevant case
law, the facts at bar, and their application, Disney will most likely be successful in the trademark
infringement case against Vista.
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