Eight Means Eight

When it comes to applying an eight-factor test, that is, as noted by the Ninth Circuit in Jada Toys v. Mattel, case no. 05-55627 (Filed Aug. 2, 2007, amended Feb. 21, 2008).

Its a trademark case. In granting summary judgment to Jada on Mattel’s trademark infringement claim, the district court found as a matter of law that there was no likelihood of confusion between the marks (HOT RIGZ and HOT WHEELS), citing the dissimilarity of the marks as the only basis for the finding.

The Ninth reverses because the district court failed to evaluate the facts under the venerable 8-factor Sleekcraft test for likelihood of confusion. Using the dissimilarity of the marks as the sole basis for finding as a matter of law that there is no likelihood of confusion impermissibly bypasses this test, the Ninth says, notwithstanding that it has repeatedly commented on the flexibility of the test and warned against applying it with “excessive rigidity.” The district court’s approach impermissibly elevates one factor above all others and increases the chance that a court’s subjective impressions of dissimilarity will rule despite possibly strong countervailing factors.

(FYI, the Sleekcraft factors are: “(1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product lines.”)

The Evidence Prof Blog Arrives

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The Evidence Prof Blog is a new blog in the Law Professor Blogs Network. I only discovered them last Friday, though the blog has been up since October 2.

They recently posted regarding Rhoades v. Avon Products, Inc., case no. 05-56047 (9th Cir. Oct. 15, 2007), which applied Federal Rule of Evidence 408 in a trademark declaratory relief action. Issue: Whether a letter from counsel proposing settlement of a trademark dispute (and containing threats of litigation absent settlement) can be admitted to establish that a plaintiff seeking a declaratory judgment of non-infringement of the sender’s trademark has the requisite “real and reasonable apprehension that it would be subject to liability” if it continued to manufacture its product. Check ’em out.

By the way, I discovered Evidence Prof Blog by following one of the links in the feed in the right sidebar of this blog titled “Blogosphere Coverage of he Ninth Circuit.”  It pays to check some of those posts out once in a while.

Rockin’ the Boat after a Trademark Settlement

The ephemeral nature of trademark litigation comes out in Abercrombie & Fitch Co. v. Moose Creek, Inc., case no. 06-56774 (May 22, 2007). In 2004, Moose Creek sued Abercrombie, alleging that Abercrombie’s silhouette moose trademark infringed Moose Creek’s moose trademarks. Abercrombie, of course, claimed there was no likelihood of confusion between the marks.

The same year, while the action was pending, Abercrombie started using a new “outline” moose trademark in addition to its silhouette moose mark. The parties settled the lawsuit with an agreement that allowed each of them to continue using their marks.

After the case settled, Moose Creek started using two new moose trademarks, and now it was Abercrombie’s turn to allege infringement. Now making the argument in favor of likelihood of confusion under the venerable 8-factor analysis of AMF Inc. v. Sleekcraft Boats , 599 F.2d 341 (9th Cir. 1979), several of Abercrombie’s arguments were challenged as factually inconsistent with those it made in the first lawsuit, and the district court held that Abercrombie was thus judicially estopped from making those arguments.

The Ninth Circuit finds that the district court was within its discretion to preclude arguments on two of the Sleekcraft factors but abused its discretion by precluding arguments on two others. The parties’ reversal of position — Abercrombie having the senior mark this time, and Moose Creek having the junior mark — is instrumental in the analysis, as it changes the focus of inquiry regarding the relevant field of marks and which party’s customer base is the appropriate focus for evaluating likely confusion. On the other hand, two Sleekcraft factors — marketing channels and the likelihood of expansion in the product lines — are unaffected by the parties’ flip-flop in junior and senior status, and thus inconsistent arguments from Abercrombie are precluded absent an actual change in underlying facts. The court declines to reverse the trial court’s denial of a preliminary injunction against Moose Creek’s use of the marks, instead remanding to the district court for reconsideration in light of the arguments previously precluded.

All that said, this case caught my interest because of the business decision, not the legal one. My question: What the heck was Moose Creek thinking when it came out with two new moose marks? It already had a settlement agreement in place allowing it to continue using the old marks (which presumably continued to strengthen with time), and it knew that any new marks would be junior to Abercrombie’s marks, making them a potential litigatgion target. There must have been a strong market factor at work to justify the risk of litigation. My two cents to Moose Creek: when you settle this one, make sure you can live for a long, long time with the marks the agreement lets you continue to use.