Stone Lion Capital Partners, L.P. v. Lion Capital LLP

• Decision Date: 26 March 2014
• Docket Number: No. 2013–1353.,2013–1353.
• Citation: 746 F.3d 1317
• Parties: STONE LION CAPITAL PARTNERS, L.P., Appellant, v. LION CAPITAL LLP, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

746 F.3d 1317

STONE LION CAPITAL PARTNERS, L.P., Appellant,

v.LION CAPITAL LLP, Appellee.

No. 2013–1353.

United States Court of Appeals, Federal Circuit.

March 26, 2014.

Pratik A. Shah, Akin Gump Strauss Hauer & Feld, LLP, of Washington, DC, argued for appellant. Of counsel on the brief were Karol A. Kepchar, Ruthanne M. Deutsch and Emily C. Johnson.

Michael Chiappetta, Fross, Zelnick, Lehrman & Zissu, P.C. of New York, New York, argued for appellee.

Before RADER, Chief Judge, REYNA, and WALLACH, Circuit Judges.

WALLACH, Circuit Judge.

Stone Lion Capital Partners, L.P. (“Stone Lion”) appeals from the Trademark Trial and Appeal Board's (“Board”) decision refusing registration of the mark “STONE LION CAPITAL” due to a likelihood of confusion with opposer Lion Capital LLP's (“Lion”) registered marks, “LION CAPITAL” and “LION.” Because the Board's decision is supported by substantial evidence and in accordance with the law, this court affirms.

Background

I. The Parties

Both Stone Lion and Lion are investment management companies. Appellant Stone Lion is a New York based company founded in November 2008, and manages a hedge fund that focuses on credit opportunities. Appellee Lion is a private equity firm based in the United Kingdom that invests primarily in companies that sell consumer products.

Lion has two registered marks with the Patent and Trademark Office (“PTO”), “LION CAPITAL” and “LION.” Lion started using these marks in the United States in April 2005, and filed the applications for “LION CAPITAL” and “LION” in May 2005 and October 2007, respectively.¹ The services recited in connection with Lion's registered trademarks include “financial and investment planning and research,” “investment management services,” and “capital investment consultation” for “LION”; and “equity capital investment” and “venture capital services” for “LION CAPITAL.” J.A. 7–8. There is no dispute that Lion has priority over Stone Lion with respect to these marks.

II. Proceedings Before the Board

On August 20, 2008, Stone Lion filed an intent-to-use application to register the mark “STONE LION CAPITAL” with the PTO. It proposed using the mark in connection with “financial services, namely investment advisory services, management of investment funds, and fund investment services.” U.S. Trademark Application Serial No. 77551196 (filed Aug. 20, 2008). Lion opposed the registration under section 2(d) of the Lanham Act, 15 U.S.C. § 1052(d) (2006), alleging Stone Lion's proposed mark would be likely to cause confusion with Lion's registered marks when used for Stone Lion's recited financial services.

The Board conducted the likelihood of confusion inquiry pursuant to the thirteen factors set forth in Application of E.I. DuPont DeNemours & Co., 476 F.2d 1357, 1361 (C.C.P.A.1973):

(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 concurrentuse 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.

(13) Any other established fact probative of the effect of use.

Id. The parties presented evidence regarding factors one through six. The Board found that factors one through four weighed in favor of finding a likelihood of confusion, and that the remaining factors were neutral. With respect to the first factor, the similarity of the marks, the Board reasoned that Stone Lion's mark “incorporates the entirety of [Lion's] marks,” and that the noun “LION” was “the dominant part of both parties' marks.” J.A. 13–14. The addition of the adjective “STONE” was “not sufficient to distinguish the marks,” and the Board concluded the marks were “similar in sight, sound, meaning, and overall commercial impression.” J.A. 14.

The Board determined the second DuPont factor, the similarity of the services, “weigh[ed] strongly in favor of likelihood of confusion,” J.A. 10, because at least some of the services recited in Stone Lion's application were “legally identical” to Lion's covered services, J.A. 11. For example, Stone Lion's applied-for services “management of investment funds” and “investment advisory services” were at least coextensive with Lion's recited services “management of a capital investment fund” and “capital investment consultation,” respectively. J.A. 10.

The Board found the third DuPont factor, considering the application's and registrations' “channels of trade,” also weighed strongly in favor of finding a likelihood of confusion. “[B]ecause the services described in the application and opposer's registrations are in part legally identical,” the Board presumed the services “ ‘travel[ed] in the same channels of trade and [were] sold to the same class of purchasers.’ ” J.A. 11 (quoting In re Smith & Mehaffey, 31 U.S.P.Q.2d 1531, 1532 (T.T.A.B.1994)).

Finally, the Board found that factor four, the sophistication of the purchasers, weighed in favor of Lion. Although the Board acknowledged that the parties in fact targeted “sophisticated” investors and required large minimum investments, it was “constrained to consider the parties' services as they are recited in the application and registrations, respectively.” J.A. 19. Because Stone Lion's “investment advisory services” and Lion's “capital investment consultation” “could be offered to, and consumed by anyone ..., including ordinary consumers seeking investment services,” the Board found the fourth DuPont factor favored Lion. J.A. 19.

The remaining factors were found to be “neutral.” In particular, the Board found factor five—the strength of Lion's marks—was neutral because Lion failed to show “that its marks are well-known in the financial services field.” J.A. 14. With respect to the sixth factor regarding the number and nature of similar third-party marks, the Board attached little importance to Stone Lion's internet printouts referencing third-party investment groups with “LION” in their name, stating that such “third-party evidence ... generally has minimal probative value where, as here, it is not accompanied by any evidence of consumer awareness.” J.A. 16. The Board ultimately found there was not a “crowded field of LION-formative marks for similar investment services.” J.A. 18. Upon weighing all of the pertinent DuPont factors, the Board found Lion met its burden to establish a likelihood of confusion by a preponderance of the evidence, and refused Stone Lion's application.

Stone Lion filed this timely appeal. This court has jurisdiction pursuant to 15 U.S.C. § 1071(a)(1) (2012) and 28 U.S.C. § 1295(a)(4)(B) (2012).

Discussion

Section 2(d) of the Lanham Act provides that a trademark may be refused registration if it so resembles a prior used or 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). Likelihood of confusion is a question of law with underlying factual findings made pursuant to the DuPont factors. M2 Software, Inc. v. M2 Commc'ns, Inc., 450 F.3d 1378, 1381 (Fed.Cir.2006). This court reviews the Board's factual findings on each DuPont factor for substantial evidence, In re Pacer Tech., 338 F.3d 1348, 1349 (Fed.Cir.2003), and its legal conclusion of likelihood of confusion de novo, On–Line Careline, Inc. v. Am. Online, Inc., 229 F.3d 1080, 1084 (Fed.Cir.2000). Substantial evidence is “such relevant evidence as a reasonable mind would accept as adequate to support a conclusion.” Consol. Edison Co. of N.Y. v. N.L.R.B., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938).

On appeal, Stone Lion challenges the Board's findings with respect to DuPont factors one, three, and four. It contends the Board: (1) “conducted an erroneous comparison of the marks,” pursuant to factor one, Appellant's Br. 32, (2) “erred in analyzing the purchasers and trade channels” in factor three, id. at 42, and (3) “committed legal error in dismissing purchaser sophistication and conditions of sale” in factor four, id. at 22. Each argument is considered in turn.

I. The Board Properly Compared the Marks Pursuant to the First DuPont Factor

The similarity of the marks is determined by focusing on “ ‘the marks in their entireties as to appearance, sound, connotation, and commercial impression.’ ” Palm Bay Imps. Inc. v. Veuve Clicquot Ponsardin Maison Fondee En 1772, 396 F.3d 1369, 1371 (Fed.Cir.2005) (quoting DuPont, 476 F.2d at 1361). With respect to the Board's reasoning that Stone Lion's mark “incorporates the entirety of [Lion's] marks,” Stone Lion contends “the Board's analysis rests on the faulty assumption that incorporating an opposer's mark necessarily results in a likelihood of confusion,” which, it says, “is not the law.” ² Appellant's Br. 34. Stone Lion further criticizes the Board's finding that the noun “LION” was “the dominant part of both parties' marks.” J.A. 14. “ ‘[L]ikelihood of confusion cannot be predicated on dissection of ... only part of a mark,’ ” and Stone Lion argues “the Board's analysis undertook the very...