A small town Kansas restaurant, which filed a Trademark Trial and Appeal Board appeal in an attempt to register the name “Carl’s Bar,” has been denied by the Trademark Trial and Appeal Board (“TTAB”), who ruled it would likely to be confused with and negatively impact fast-food chain, Carl’s Jr.’s trademark. Carl’s Jr. Restaurants LLC initiated the opposition to the Carl’s Bar registration.
The TTAB determined that the similarities between the names and their services were sufficient to warrant concern that the average consumer would be confused by it. While there are more than 1200 Carl’s Jr. restaurants in the United States, Carl’s Bar & Delicatessen is a single entity in Kansas. According to the TTAB this discrepancy doesn’t lessen the likelihood of confusion between the marks.
In making its determination, the TTAB focused on the similarity of the restaurants marks and also the similarity of the services being provided. The TTAB ruled that given that both first words are “Carl’s” and that they are both in possessive form makes them very similar. Moreover, the services each name provides are alike as some Carl’s Jr. restaurants house bars and serve alcoholic beverages.
Finally, the TTAB also takes the fame of the opposer’s mark into account when making an approval determination. For example, because Carl’s Jr. restaurants sales exceeded $800 million in 2010, and the company spent over $36 million on advertising, the TTAB was convinced that Carl’s Jr. is established in the area around Carl’s Bar & Delicatessen.
In light of those factors the TTAB granted Carl’s Jr.’s motion and denied registration for “Carl’s Bar.”
The Carl’s Bar decision is a textbook application of the likelihood-of-confusion analysis that governs both TTAB opposition proceedings and federal trademark infringement cases under the Lanham Act. The controlling test is the multi-factor balancing framework articulated in In re E.I. du Pont de Nemours & Co., 476 F.2d 1357 (C.C.P.A. 1973). Courts and the TTAB weigh thirteen non-exclusive factors, but in practice, a small number of factors dominate most analyses.
This is typically the most important factor. Marks are compared in their entireties — appearance, sound, connotation, and commercial impression — not feature by feature. The TTAB in the Carl’s Bar case found that “CARL’S BAR” and “CARL’S JR.” are similar because the dominant first element, “Carl’s” in possessive form, is identical. The dominant element of a composite mark generally carries more weight in the similarity analysis, and here, “Carl’s” dominated both marks.
Trademark rights are tied to the specific goods and services for which a mark is used. However, relatedness does not require identity. The TTAB examines whether the goods or services are complementary, move through the same channels of trade, or are the type of goods or services that consumers would expect to come from the same source. Carl’s Jr. serves food and beverages, including alcoholic beverages at some locations. Carl’s Bar & Delicatessen serves food and alcoholic beverages. The TTAB found these services sufficiently related to create a likelihood of confusion.
Fame is an “all-or-nothing” factor in the likelihood-of-confusion analysis. If a mark is found famous, it receives a wider scope of protection — meaning a greater geographic reach and protection against use on a broader range of goods and services. Carl’s Jr.’s $800 million in annual sales and $36 million advertising budget established fame that the TTAB found extended to a small-town Kansas market. A local business cannot assume that its geographic isolation insulates it from the trademark rights of a nationally famous brand.
In opposition proceedings, the lack of evidence of actual consumer confusion is not dispositive. The standard under the Lanham Act is likelihood of confusion, not proven confusion. The TTAB and federal courts will find a likelihood of confusion based on the structural factors alone, even in the absence of reported instances where consumers were actually confused. Carl’s Bar likely could not produce evidence of actual confusion — the marks had probably not coexisted long enough or in sufficiently overlapping markets — but the TTAB did not require that evidence.
The Carl’s Bar case carries several important lessons for small businesses considering trademark registration:
The TTAB has jurisdiction over registration-related proceedings: oppositions to pending applications, petitions to cancel existing registrations, and interference proceedings. The TTAB cannot award monetary damages or grant injunctive relief. For claims of trademark infringement, trade dress infringement, or unfair competition that require damages or an injunction, the proper forum is federal district court.
A TTAB decision on likelihood of confusion has no direct preclusive effect in federal court infringement litigation, but a federal court considering the same marks may give it significant weight. Conversely, a federal court judgment that a plaintiff’s mark is valid and infringed may be used to support a TTAB cancellation petition against a conflicting registration.
If you have questions about trademark registration or enforcement, contact the trademark attorneys at Revision Legal. Call us at 855-473-8474 or complete our contact form.
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