Did the USPTO Make a SMART Decision?

Literally, yes. The United States Patent & Trademark Office’s (USPTO) Trademark Trial and Appeal Board (the Board) just published a binding opinion holding that the applicant mark SMART BALANCE for frozen meals would not be confused with SMART ONES for frozen entrees. The Board was faced with three issues: evidentiary issues, a likelihood of confusion claim, and a trademark dilution claim.

SMART ONES (Opposer) has a registered trademark and participates in the sale of frozen foods such as pre-prepared dinners, pizzas, and snacks. When SMART BALANCE (Applicant) submitted an application to register its own mark, for almost identical food products, SMART ONES filed a notice of opposition on the grounds that consumers would be confused between the products. Under the Trademark Act, an applicant mark that is likely to confuse consumers with a registered trademark can be denied registration by the Board.[1] The Opposer also claimed that Applicant’s mark would dilute Opposer’s own mark because its mark was famous. Under the Trademark Act, an applicant mark that is likely to dilute the distinctiveness of a famous mark can also be denied registration by the Board.[2]

Evidentiary Issues

The bulk of the evidentiary issues faced by the Board focused on two separate and competing reports filed by experts on either side concerning the likelihood of confusion test. Opposer filed a survey by a Dr. Sabol; Applicants filed two surveys, one by a Dr. Kaplan which served to critique the survey prepared by Dr. Sabol, and another survey prepared by a Dr. Johnson which stood alone as its own independent likelihood of confusion survey. Kaplan’s survey was used to “bolster” Johnson’s.

Opposer argued that the Johnson survey should not have been considered a rebuttal to the Sabol survey because it did not directly rebut the Sabol survey (in fact, it did not even mention it).[3] The Board held that Opposer had confused the term rebuttal, and that a survey prepared to reach a different conclusion from a prior survey, even without direct mention, could serve as a rebuttal.

Opposer further argued that Johnson’s oral testimony that the Sabol survey was deficient should not have been considered by the Board because Applicant did not inform it that his testimony would touch on its own expert’s study (especially considering his survey had not). The Board found that because Opposer had deposed Johnson during discovery, and Johnson had told it the problems he saw with Sabol’s survey,[4] Opposer could not claim it was surprised[5] by the testimony and therefore could not have it striken. Opposer did succeed, however, in striking oral testimony from Kaplan bolstering the Johnson survey as his deposition statements and prepared documents did not fairly disclose his intention to testify in such a manner.

Applicant also got in on the expert survey fun by challenging Sabol’s rebuttal/criticism of Johnson’s survey. Although the Board hinted at a possible procedural violation, it found any violation harmless and allowed the rebuttal testimony to be considered.

 

Likelihood of Confusion

 

When a mark is opposed based on likelihood of confusion, the Board looks to several factors laid out in the du Pont case.[6] In this matter, the Board focused on some of the more common factors and ultimately determined that there was no likelihood of confusion.

 

Relatedness of Goods and Services

 

The second factor as defined by du Pont asks the Board to consider “the similarity or dissimilarity and nature of the goods . . . described in an application or registration or in connection with which a prior mark is in use.” Essentially, the second factor tries to find a similarity between the types of goods or services each mark represents, with a higher similarity leading to a higher likelihood of confusion. This factor was an easy one for the Board; it determined that the factor swung towards confusion because the products were legally similar (under the same classifications of goods at the USPTO) and practically similar (they would be found near, if not next to each other, at the same supermarkets).

 

Purchasing Care

 

The next du Pont factor the Board considered was the fourth factor—the conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing. This factor seeks to establish a well-informed buyer. The more informed the buyer is, the more likely they are to pay attention to the mark and the product’s origin, and the more expensive the product, the more likely the buyer is to be informed about the product. In this case, the Board noted that frozen meals are cheap, ranging from $2.00 – $4.00. Applicant argued that even though the products were cheap, the buyers of the products were healthy eaters who were more likely to examine the nutritional value, and therefore the packaging itself, when making a decision to buy. The Board held that the analysis required a consideration of all customers, not just certain healthy eaters, and because the products are so cheap, the factor swung slightly toward confusion.

 

Similarity of the Marks

 

The Board next tackled the first and, generally, most influential factor: the similarity between the two marks. Both parties conceded that SMART was a weak, descriptive term not subject to trademark protection. However, Opposer argued that it gained some strength in that it was the only brand using SMART in relation to frozen foods. Applicant and the Board disagreed arguing that SMART gains no strength when used with frozen food because it is commonly associated with other foods to describe healthier products.

 

The Board then compared ONES to BALANCE and held that they were different. While the latter has an extra syllable, it also has a different meaning: ONES refers to the people who buy the product, while BALANCE refers to the product itself. Because the words are so different physically and because they focus the consumer on completely different ideas, the marks were found dissimilar and the factor swung away from confusion.

 

Fame of Opposer’s Mark

Otherwise known as strength of the mark, this factor gives much higher protection to marks that are deemed “famous.” Like the similarity factor, this factor is generally seen as very important. Fame can be proven by a showing of high sales, large amounts of money spent on advertising, and any other evidence the Opposer can muster. Of course, the burden is on the party claiming it has a famous mark to show that its mark really is famous.

 

Opposer first submitted proof of high sales figures and advertising expenditures. But the Board noted that most of the relevant numbers came from packaging that featured the WEIGHT WATCHERS mark on it as well, and if there is another mark contained on the same package, the data cannot be used to show a customer recognition of the mark. This is due to the consideration that it could be the other mark pulling the weight (which was probably the case here as Weight Watchers is one of the most well-known weight loss programs in the nation).

 

Opposer then submitted three studies that it claimed proved its mark was famous. The first two were dismissed by the Board because, again, they did not appear to distinguish SMART ONES from WEIGHT WATCHERS and thus were inapplicable. The third study was actually a survey conducted by Dr. Sabol which had him ask customers which of six brand names they recognized the most, with a seemingly impressive 82% picking SMART ONES. However, the Board was, and always has been, reluctant to give such studies much weight because the mark is put right in front of the eyes of those surveyed. Though probative in the sense that the mark is more recognizable than the other six, it did little to show any sort of fame of the mark. The factor ultimately swung against confusion, and combined with the equally strong similarity prong, the entire analysis led the Board to decide that Applicant’s mark was not likely to confuse.

 

Likelihood of Dilution

 

Finally, the Board also held against Opposer on its likelihood of dilution claim. Four elements must be proven to hold that a potential mark is likely to dilute an existing mark.[7] These are required elements, as in, each must be satisfied to win, as opposed to factors, which just provide a court with guidance in weighing its considerations. One of those elements requires that the party have a famous mark. Because the Board had already deemed Opposer’s mark not famous, its likelihood of dilution claim ended there.

 

Opposer lost on both its likelihood of confusion and likelihood of dilution claims, and the Board thus rejected its Opposition to the registration of Applicant’s mark.

 

 

[1] Trademark Act § 2(d), 15 U.S.C. § 1052(d).

[2] Trademark Act § 43(c), 15 U.S.C. § 1125(c).

[3] The reasons for this classification is that if it was not a rebuttal, it would have been stricken due to procedural defects, specifically in its tardy presentment to Opposer’s counsel.

[4] Johnson said in his deposition: “The universe that he included in the survey, the questions that he asked, the analysis he did, and the conclusions he reached.”

[5] To determine if Opposer was prejudiced by the testimonial evidence, the Board was to consider these 5 factors: 1) the surprise to the party against whom the evidence would be offered; 2) the ability of that party to cure the surprise; 3) the extent to which allowing the testimony would disrupt the trial; 4) importance of the evidence; and 5) the nondisclosing party’s explanation for its failure to disclose the evidence.

[6]     (1) The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression

(2) The similarity or dissimilarity and nature of the goods . . . 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.
• 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 the 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.
• The market interface between the applicant and the owner of a prior mark.
• The extent to which applicant has a right to exclude others from use of its mark on its goods.
• The extent of potential confusion.
• Any other established fact probative of the effect of use.

See In re E. I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973).

[7]           (1) the plaintiff owns a famous mark that is distinctive;

(2) the defendant is using a mark in commerce that allegedly dilutes the plaintiff’s famous mark;

(3) the defendant’s use of its mark began after the plaintiff’s mark became famous; and

(4) the defendant’s use of its mark is likely to cause dilution by blurring.

See Coach Servs. Inc. v. Triumph Learning LLC, 668 F.3d 1356, 101 USPQ2d 1713, 1723-24 (Fed. Cir. 2012).