41 F.3d 223 (5th Cir. 1995), 94-50074, Society of Financial Examiners v. National Ass'n of Certified Fraud Examiners Inc.

Docket Nº:94-50074.
Citation:41 F.3d 223
Party Name:33 U.S.P.Q.2d 1328 SOCIETY OF FINANCIAL EXAMINERS, Plaintiff-Appellee, v. NATIONAL ASSOCIATION OF CERTIFIED FRAUD EXAMINERS INC., et al., Defendants, National Association of Certified Fraud Examiners, et al., Defendants-Appellants.
Case Date:January 03, 1995
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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41 F.3d 223 (5th Cir. 1995)

33 U.S.P.Q.2d 1328




al., Defendants,

National Association of Certified Fraud Examiners, et al.,


No. 94-50074.

United States Court of Appeals, Fifth Circuit

January 3, 1995

Page 224

John J. McKetta, III, David G. Henry and G. Michael Lawrence, Graves, Dougherty, Hearon & Moody, P.C., Austin, TX, for appellants.

Stephen Ravel, Bickerstaff, Heath & Smiley, L.L.P., Austin, TX, Vivian Polak, Deirdre F. Curtis, LeBoeuf, Lamb, Leiby & MacRae, New York City, for appellee.

Jerald A. Jacobs, Jenner & Block, Robert A. Wynbrantdt, Nory Miller, Washington, DC, for amicus Nat'l Org. for Competency Assurance, et al.

Appeal from the United States District Court for the Western District of Texas.


EDITH H. JONES, Circuit Judge:

Demand apparently exists for those professionals with the designation "CFE" on their resume. Two organizations offer the educational and training programs necessary to endow these initials with meaning. Unfortunately, whereas the defendant, the National Association of Certified Fraud Examiners, intends "CFE" to designate "Certified Fraud Examiner," the plaintiff, the Society of Financial Examiners, has historically utilized the same initials to represent a "Certified Financial Examiner." Whether the Lanham Act entitles the initial user of the designation to prohibit confusion generated by this state of affairs is resolved by answering two subsidiary questions:

(1) Is "CFE" too generic a mark to qualify for statutory protection?;

(2) Does a "likelihood of confusion" exist?

The district court thought the answers obvious, and entered summary judgment. Reviewing the district court's grant of summary judgment de novo, this court determines that these fact-intensive inquiries cannot be conducted properly without a trial. The district court's judgment must therefore be reversed. 1

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The Society of Financial Examiners (SOFE) was organized in 1973 as a non-profit professional organization of financial examiners and public-sector regulators who supervise, review and analyze the financial security of banks, insurance companies, credit unions, savings and loan associations and other financial institutions. SOFE maintains an array of accreditation and certification qualifications for membership in its organization. Most notably, SOFE demands adherence to a canon of ethics, successful performance on a comprehensive examination, and satisfaction of continuing education standards. Since 1974, SOFE has used "CFE" to designate this exam ("CFE Exam"), the preparation materials and programs for the test ("CFE Program"), and to refer to those who have completed the exam and adhere to the other requirements as "CFE Members." In September of 1992, SOFE obtained a service mark registration for "CFE" educational goods and association services. 2

In contrast, the National Association of Certified Fraud Examiners (NACFE) is an unincorporated professional association that has grown in a few years' time to include about 10,000 members engaged in detecting and deterring fraud and white-collar crime. Like SOFE, NACFE obliges its members to pass a uniform examination, maintain competency through continuing education and heed a code of professional ethics. In 1988, NACFE selected the designation "certified fraud examiner" and the corresponding acronym "CFE" to recognize those accountants, law enforcement professionals, regulators, lawyers, professors, auditors, and security managers and investigators who satisfied its standards.

Both organizations publish newsletters, organize and conduct seminars and conferences, and advise regulators and quasi-regulators on issues of concern.


"The gravamen for any action of trademark infringement or common law unfair competition is whether the challenged mark is likely to cause confusion." Marathon Manufacturing Co. v. Enerlite Products, 767 F.2d 214, 217 (5th Cir.1985) (citations omitted). In this circuit, whether NACFE's later use of "CFE" is "likely to cause confusion" is a question of fact. Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 258 (5th Cir.1980). Even total confusion, however, is irrelevant if "CFE" constitutes a "generic" mark. That too is a question of fact. American Automobile Association v. AAA Legal Clinic, 930 F.2d 1117, 1121 (5th Cir.1991).

Although both critical determinations were factual, the district court believed summary judgment appropriate. Whereas general principles of summary judgment assail this conclusion, the explicit guidance of Marathon Manufacturing--in the context of a nearly identical factual predicate--decimates it. In Marathon Manufacturing, this court repudiated exercise of summary judgment to determine whether a likelihood of confusion existed between "MARATHON" and "MARATHON 10" marks. Id. at 217. ("Although the parties filed cross-motions for summary judgment, this procedure was improper.") Notably, both parties had filed motions for summary judgment asserting that no material facts were in dispute.

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Notwithstanding this suggestion, identifying a genuine issue of material fact was not difficult in Marathon nor is it here. "[T]he fact that both parties simultaneously are arguing that there is no genuine issue of fact does not establish that a trial is unnecessary thereby empowering the court to enter judgment as it sees fit." Podberesky v. Kirwan, 38 F.3d 147 (4th Cir.1994) (citing 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure Sec. 2720 (2d ed. 1983)). 3 Indeed, both factual questions--whether CFE is generic and the existence of likelihood of confusion--pose a genuine issue of fact in this case.

A dispute about a material fact is "genuine" if the evidence would permit a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Hence this court tests the propriety of summary judgment by evaluating whether a reasonable fact finder could return a verdict for NACFE on either issue. Simply, would the result of submitting the case to a rational trier of fact be preordained? Considering all evidence in the light most favorable to the non-moving party and resolving all reasonable inferences in favor of the non-moving party, id. at 249, 106 S.Ct. at 2510-11, precipitates substantial doubt as to the proper solution to either issue. On this record, a trier-of-fact would be entitled to decide that "CFE" was generic or to adjudge the likelihood of confusion farfetched.


"The terms 'generic' and 'trademark' are mutually exclusive." McCARTHY, TRADEMARKS AND UNFAIR COMPETITION Sec. 12.01 at 12-3 (3d ed. 1992). Citing Blinded Veterans Assoc. v. Blinded American Veterans Foundation, 872 F.2d 1035, 1041 (D.C.Cir.1989) (Ginsburg, R.B., J.) (holding "blinded veterans association" generic), NACFE asserts that "certified financial examiner" likewise denotes little more than a class of individuals. 4 SOFE is also summoned to distinguish "certified financial examiner" from the generic "multistate bar examination" and "MBE." National Conference of Bar Examiners v. Multistate Legal Studies, 692 F.2d 478, 488 (7th Cir.1983). 5 This circuit challenges the trier-of-fact to isolate the generic. Texas Pig Stands v.

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Hard Rock Cafe, 951 F.2d 684, 692 (5th Cir.1992).

In principle, the touchstone is clear: "[T]he test for genericness [sic] is whether the public perceives the term primarily as the designation of the article." Blinded Veterans, 872 F.2d at 1041. In contrast, actually to divine whether "pig sandwich," for example, characterizes an article itself (i.e., a dish of barbecued pork on wheat or white bun) or instead typifies a singular member of the article's class 6 is "difficult." Texas Pig Stands, 951 F.2d at 692. 7 Put another way, "the primary significance of" a trademark "in the minds of the consuming public is not the product but the producer." Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 118, 59 S.Ct. 109, 113, 83 L.Ed. 73 (1938).

To secure protection, therefore, "CFE" must invoke the source of the designation and not just intimate a financial examiner who has been certified. Like J.D., M.B.A., Ph.D., and C.P.A., "certified financial examiner" could be poised to fail this test.

A mark answers the buyer's questions "Who are you? Where do you come from?" "Who vouches for you?" But the name of the product answers the question "What are you?" Many competitive products will give the same answer, regardless of source or origin--e.g., a computer, a box of cigars, a bar of soap. Such generic designations tell the buyer what the product is, not where it came from.

McCarthy Sec. 12:01 at 12-4. Enlightened by this gauge, unqualified faith that "CFE" primarily signifies origin could be only divinely inspired. 8 The summary judgment must be reversed on this basis alone.

Nevertheless, that "certified financial examiner" does--or did--evince provenance is not inconceivable. An apprehension of this possibility elucidates the Supreme Court's observation in Ibanez v. Florida Dept. of Business and Professional Regulation, --- U.S. ----, ----, 114 S.Ct. 2084, 2091, 129 L.Ed.2d 118 (1994), that "...

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