National Data Corp., In re

• Decision Date: 30 January 1985
• Docket Number: No. 84-1137,84-1137
• Citation: 753 F.2d 1056,224 USPQ 749
• Parties: In re NATIONAL DATA CORPORATION. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 1056

753 F.2d 1056

224 U.S.P.Q. 749

In re NATIONAL DATA CORPORATION.

Appeal No. 84-1137.

United States Court of Appeals, Federal Circuit.

Jan. 30, 1985.

Stephen A. Bent, Schwartz, Jeffery, Schwabb, Mack, Blumenthal & Koch, P.C., Alexandria, Va., argued for appellant. With him on the brief was Peter G. Mack, Alexandria, Va.

Thomas E. Lynch, Associate Sol., Arlington, Va., argued for appellee. With him on the brief were Joseph F. Nakamura, Sol and Jere W. Sears, Deputy Sol., Washington, D.C.

Before DAVIS, SMITH and NIES, Circuit Judges.

NIES, Circuit Judge.

The decision of the Trademark Trial and Appeal Board, reported at 222 USPQ 515 (1984), which affirmed a refusal to register the service mark THE CASH MANAGEMENT EXCHANGE as shown in Serial No. 294,193 in view of the prior Registration No. 1,118,929 for the service mark CASH MANAGEMENT ACCOUNT, both used in connection with financial services, is affirmed.

I. Background

National Data Corporation filed an application to register THE CASH MANAGEMENT EXCHANGE on the Principal Register as a service mark for "computerized cash management services." Use of the mark is alleged since on or about November 18, 1980. The examiner refused registration under Sec. 2(d) of the Trademark Act of 1946, as amended, 15 U.S.C. Sec. 1052(d) (1976), on the ground that the mark sought to be registered so resembled the following mark as to be likely to cause confusion, or to cause mistake or to deceive:

CASH MANAGEMENT ACCOUNT, Reg. No. 1,118,929, issued May 22, 1979, for "financial services involving the use of plastic credit cards by the card holders for loans to card holders from their brokerage equity account."

No disclaimer of rights in CASH MANAGEMENT appears in the registration for CASH MANAGEMENT ACCOUNT.

A second basis for rejection was given under Sec. 2(e), 15 U.S.C. Sec. 1052(e) (1976), on the ground that the words CASH MANAGEMENT, as well as the word EXCHANGE, were descriptive of financial services and, thus, the mark as a whole was merely descriptive. ¹

National responded to the Office Action by voluntarily entering a disclaimer of exclusive rights in the words "cash management." National also submitted evidence purporting to show that "cash management" is an expression commonly used in the financial community to denote the concept of handling cash resources to maximize yield. It maintained, however, that its mark in its entirety is not descriptive because the combination of EXCHANGE with CASH MANAGEMENT is somewhat incongruous. Finally, it argued that its mark is distinguishable over the cited reference because the only similarity is in the descriptive or generic words "cash management." The examiner was unpersuaded to withdraw either ground of rejection and National appealed to the board.

The board reversed the rejection that the mark is merely descriptive, but upheld the alternate basis for refusal of registration, stating:

As for the Section 2(d) ground, we agree with the Examining Attorney that the marks THE CASH MANAGEMENT EXCHANGE and CASH MANAGEMENT ACCOUNT are confusingly similar in that the dominant feature of both marks, i.e., CASH MANAGEMENT, is identical, causing the marks to have very similar overall commercial impressions.

The board further rejected National's argument that likelihood of confusion could not be predicated on the expression "cash management," which National characterized as a merely descriptive expression in the public domain. The Board found that the evidence did not even come close to supporting an inference that "cash management" is generic for the particular services in the cited registration and that the absence of a disclaimer in the registration "must be presumed" to support the conclusion that it is not. Further, National's efforts to show otherwise were deemed an attack on the registration that could not be considered collaterally, that is, outside of a cancellation proceeding.

II.

This appeal raises a question with respect to the significance, in determining likelihood of confusion, that may be attributed to highly descriptive or generic terms which appear in composite marks. National argues that the board relied solely on such a term, i.e., CASH MANAGEMENT, in finding likelihood of confusion between the subject marks and, thus, erred as a matter of law. National points to a number of opinions of the United States Court of Customs and Patent Appeals in which marks were held not to be conflicting because the similarity between them rested solely in a descriptive or generic term which formed part of each mark. ² National further faults the board for presuming that the expression CASH MANAGEMENT in the cited registration "possesses trademark significance" and for precluding National from challenging the registrant's rights in these words.

While we do not agree with the board's analysis in all respects, we must nevertheless affirm the board's decision. National has failed to persuade us that the board erred not only in its approach to the ultimate issue, but also in the result.

III.

The basic principle in determining confusion between marks is that marks must be compared in their entireties and must be considered in connection with the particular goods or services for which they are used. Glenwood Laboratories v. American Home Products Corp., 455 F.2d 1384, 1385, 173 USPQ 19, 20 (CCPA 1972); 2 J. McCarthy, Trademarks and Unfair Competition Sec. 23:15A (2nd ed. 1984). It follows from that principle that likelihood of confusion cannot be predicated on dissection of a mark, that is, on only part of a mark. ³ On the other hand, in articulating reasons for reaching a conclusion on the issue of confusion, there is nothing improper in stating that, for rational reasons, more or less weight has been given to a particular feature of a mark, provided the ultimate conclusion rests on consideration of the marks in their entireties. ⁴ Indeed, this type of analysis appears to be unavoidable.

That a particular feature is descriptive or generic with respect to the involved goods or services is one commonly accepted rationale for giving less weight to a portion of a mark, for reasons which will be discussed infra. Without question, the descriptive or generic character of an expression which forms part of both marks under consideration is pertinent to the issue of likelihood of confusion. Thus, National was entitled to attempt to prove that the relevant public would understand that CASH MANAGEMENT in both marks was of this nature.

To this end, National attaches significance to the disclaimer of CASH MANAGEMENT in its application, ⁵ and, in effect, argues that in the inquiry here EXCHANGE and ACCOUNT should be treated as the marks of the parties or at least as the "dominant" portion of each mark. The board, on the other hand, noted the absence of a disclaimer in the cited registration and, from that fact, presumed that the words CASH MANAGEMENT were distinctive in the registered mark. We do not agree with either of these theories.

The technicality of a disclaimer in National's application to register its mark has no legal effect on the issue of likelihood of confusion. ⁶ The public is unaware of what words have been disclaimed during prosecution of the trademark application at the PTO. ⁷ It appears that National voluntarily disclaimed these words, as a tactical strategy, believing it would assist in avoiding a holding of likelihood of confusion with the cited mark. However, such action cannot affect the scope of protection to which another's mark is entitled.

National did not, however, rely solely on its disclaimer of rights in CASH MANAGEMENT to establish descriptiveness of the term, but, in addition, supported its position with articles from financial publications showing descriptive use thereof in the financial community. The board acknowledged that National's evidence was credible with respect to some financial services, but refused to give it any weight in resolving the ultimate issue because of the absence of a disclaimer in the registered mark. The absence of a disclaimer does not, however, mean that a word or phrase in a registration is, or has become, distinctive in the registered mark, so that that part of the mark must be treated the same as an arbitrary feature. The power of the PTO to accept or require disclaimers is discretionary under the statute, supra note 5, and its practice over the years has been far from consistent. Thus, it is inappropriate to give the presence or absence of a disclaimer any legal significance. See Lefkowitz, supra note 7.

In any event, the question is whether, at the time the issue of likelihood of confusion is being resolved, the public considers certain words to be arbitrary or descriptive, even though the words may have been arbitrary in the past so that no disclaimer would have...