Recot v. Becton

• Citation: 54 USPQ2d 1894,214 F.3d 1322
• Parties: (Fed. Cir. 2000) RECOT, INC., Appellant, v. M.C. BECTON, Appellee. 99-1291 DECIDED:
• Decision Date: 07 June 2000
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1322

214 F.3d 1322 (Fed. Cir. 2000)

RECOT, INC., Appellant, v. M.C. BECTON, Appellee.

99-1291

United States Court of Appeals for the Federal Circuit

DECIDED: June 7, 2000

Appealed from: Patent and Trademark Office, Trademark Trial and Appeal Board

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Robert D. Litowitz, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for appellant. On the brief were Laurence R. Hefter, Julia Anne Matheson, and Monica A. Riva.

Mark H. Elovitz, Elovitz Law Group, of Birmingham, Alabama, argued for appellee.

Before MICHEL, CLEVENGER, and RADER, Circuit Judges.

CLEVENGER, Circuit Judge.

Recot, Inc. ("Recot") opposes the application of M. C. Becton ("Becton") to register the mark FIDO LAY for natural agricultural products, namely edible dog treats. The Trademark Trial and Appeal Board ("Board") dismissed the opposition on the ground that there was no likelihood that consumers would confuse FIDO LAY with Recot's FRITO-LAY marks. See Recot, Inc. v. M.C. Becton, Opposition No. 96,518, 50 U.S.P.Q.2d 1439, 1444 (TTAB Dec. 4, 1998). Because the Board improperly discounted the fame of the FRITO-LAY marks, did not consider all of the relevant evidence when determining if the products were related, and improperly dissected the marks, we vacate and remand the case to the Board for further proceedings consistent with this decision.

I

Recot owns six federal registrations for the mark FRITO-LAY and related marks, all of which are incontestable, as illustrated below:

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Five of the registrations are for use with a wide range of snack foods, including numerous varieties of chips, pretzels, crisps, crackers, dips, salsas, cookies, and like foods. One registration is for use with several nonfood items, such as housewares, clothing, caps, lapel pins, stationery, and totebags.

Recot, through its predecessors in interest and through its affiliated company Frito-Lay, Inc. (collectively referred to as "Recot"), has manufactured and sold a wide variety of snack food under its mark, FRITO-LAY, for over thirty years. Recot now sells FRITO-LAY products nationwide in supermarkets, grocery stores, mass merchandisers and wholesale clubs, convenience stores, food services, and vending machines. In 1995, retail sales of FRITO-LAY products exceeded $6 billion, and FRITO-LAY products enjoyed a greater than 50 percent market share in the estimated $12.1 billion domestic snack chip industry. In any given year, up to 90 percent of American households purchase at least one FRITO-LAY brand snack. Recot spent about $80 million in 1996 on advertising and promotion for products with the FRITO-LAY mark. Recot also licenses for manufacture, promotion, and sale many widely varying goods bearing the FRITO-LAY mark, such as housewares, stationery, and clothing.

The applicant, Becton, sells natural dog treats--pig's ears, smoked turkey feet and the like-under the FIDO LAY mark in his pet food stores in the Birmingham, Alabama area and in Birmingham-area supermarkets. About 800-1100 units of FIDO LAY products have been sold. Becton also sells T-shirts and hats bearing the FIDO LAY mark.

In January 1994, Becton sought federal registration of its FIDO LAY mark. Recot opposed the mark as likely to cause confusion with its FRITO-LAY marks. The Board dismissed Recot's opposition, holding that there was no likelihood of confusion between the marks. The Board found that applicant's and opposer's goods are "simply not identical, nor otherwise related." Recot, 50 U.S.P.Q.2d at 1445. It noted that both Recot's and Becton's products are inexpensive and may be purchased on impulse, but held without explanation that these factors were "diminished in importance" because the goods are "so different in nature." Id. at 1445-46. Turning to the similarity or dissimilarity of the marks, the Board concluded that the marks were sufficiently dissimilar in meaning so as to be unlikely to cause confusion. The Board did not separately consider the sound or appearance of the marks, however. The Board noted that FRITO-LAY is a very famous mark, but did not treat the fame as "important" because the goods at issue were so different in nature. Finally, the Board found that there was no evidence of bad faith adoption of FIDO LAY. This appeal followed, conferring jurisdiction pursuant to 28 U.S.C. § 1295(a)(4) (1994).

II

The United States Patent and Trademark Office may refuse to register a trademark that so resembles a registered mark "as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1052(d) (1994). Whether a likelihood of confusion exists is a question of law, based on underlying factual determinations. See Lloyd's Food Prods., Inc. v. Eli's, Inc., 987 F.2d 766, 767, 25 USPQ2d 2027, 2028 (Fed. Cir. 1993); Kenner Parker Toys Inc. v. Rose Art Indus., Inc., 963 F.2d 350, 352, 22 USPQ2d 1453, 1455 (Fed. Cir. 1992). It is determined on a case-specific basis, applying the factors set out in In re E. I. DuPont DeNemours & Co., 476 F.2d 1357, 1361, 177 USPQ 563, 567 (CCPA 1973) (enumerating factors that may be considered when relevant evidence is of record). The DuPont factors are: (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 or services as described in an application or registration or in connection with which a prior mark is in use; (3) the similarity or dissimilarity of established, likely-to-continue trade channels; (4) the conditions under which and buyers to whom sales are made, i.e., "impulse" vs. careful, sophisticated purchasing; (5) the fame of the prior mark (sales, advertising, length of use) (6) the number and nature of similar marks in use on similar goods; (7) the nature and extent of any actual confusion; (8) the length of time during and conditions under which there has been concurrent use without evidence of actual confusion; (9) the variety of goods on which a mark is or is not used (house mark, "family" mark, product mark); (10) the market interface between applicant and the owner of a prior mark; (11) the extent to which applicant has a right to exclude others from use of its mark on its goods; (12) the extent of potential confusion, i.e., whether de minimis or substantial; and (13) any other established fact probative of the effect of use. See id.

Our review of the Board's ultimate conclusion is plenary. See Giant Food, Inc. v. Nation's Foodservice, Inc., 710 F.2d 1565, 1569, 218 USPQ 390, 394 (Fed. Cir. 1983). We uphold the Board's factual findings unless they are unsupported by substantial evidence. See Dickinson v. Zurko, 527 U.S. 150, 165, 50 USPQ2d 1930, 1937 (1999); In re Gartside, 203 F.3d 1305, 1315, 53 USPQ2d 1769, 1775 (Fed. Cir. 2000).

A

Recot argues that the Board failed to accord proper weight to the fame of the FRITO-LAY mark. The fifth DuPont factor, fame of the prior mark, when present, plays a "dominant" role in the process of balancing the DuPont factors. See Kenner Parker, 963 F.2d at 352, 22 USPQ2d at 1456 (citing Sure-Fit Prods. Co. v. Saltzson Drapery Co., 254 F.2d 158, 160, 117 USPQ 295, 296 (CCPA 1958)). Famous marks thus enjoy a wide latitude of legal protection. See id. at 352-53, 22 USPQ2d at 1456.

The Board acknowledged that the fame of Recot's mark was "unquestionably established," and indeed, Becton conceded this fame. Yet the Board did not treat the fame factor as "important" in this case because the dog treats sold under the FIDO LAY mark are "completely unrelated" to the human snacks sold under the FRITO-LAY marks. Recot, 50 U.S.P.Q.2d at 1446. The Board noted the law of this circuit stating that the fame of a mark "weighs heavily" in cases involving famous marks, but distinguished those cases because they "generally involved identical or closely related products or services." Id. at 1466 (listing cases).

The Board erred when it limited the weight accorded to the fame of the FRITO-LAY mark. We think that the Board's rule--that the fame of the FRITO-LAY marks extends no further than the products with which the marks are currently used-- undercuts the legal standard of protection for famous marks. Famous marks are accorded more protection precisely because they are more likely to be remembered and associated in the public mind than a weaker mark. See Kenner Parker, 963 F.2d at 352, 22 USPQ2d at 1455-56. For this reason, this court emphasizes:

When an opposer's trademark is a strong, famous mark, it can never be "of little consequence." The fame of a trademark may affect the likelihood purchasers will be confused inasmuch as less care may be taken in purchasing a product under a famous name.

Specialty Brands, Inc. v. Coffee Bean Distribs., Inc., 748 F.2d 669, 675, 218 USPQ 1281, 1284 (Fed. Cir. 1984); cf. Kenner Parker, 963 F.3d at 354, 22 USPQ2d at 1457 (stating that the fame of a mark does not "cut both ways" in the analysis of the likelihood of confusion).

This reasoning applies with equal force when evaluating the likelihood of confusion between marks that are used with goods that are not closely related, because the fame of a mark may also affect the likelihood that consumers will be confused when purchasing these products. Indeed, it is precisely these circumstances which demand great vigilance on the part of a competitor who is approaching a famous mark, for, as the present case illustrates, the lure of undercutting or discounting the fame of a mark is especially seductive. See Recot, slip op. at 19 ("It is applicant's position that opposer's marks are famous for a variety of human food products, but that the fame of opposer's marks does not extend beyond that field . . . ."). Accordingly, we hold that the fame of the mark must always be accorded full...