Moke Am. LLC v. Am. Custom Golf Cars, Inc.

Docket NumberCIVIL 3:20cv400 (DJN)
Decision Date03 May 2023
PartiesMOKE AMERICA LLC, Plaintiff, v. AMERICAN CUSTOM GOLF CARS, INC., et ai, Defendants.
CourtUnited States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)




CIVIL No. 3:20cv400 (DJN)

United States District Court, E.D. Virginia, Richmond Division

May 3, 2023


David J. Novak, United States District Judge

This matter comes before the Court on the parties' cross-motions for judgment on partial findings pursuant to Fed.R.Civ.P. 52(c). By separate order, the Court will enter judgment for Plaintiff on Count I of the Amended Complaint (ECF No. 20) and Counts I, II and III of Defendants' Third Amended Counterclaims (ECF No. 146). On Counts II and III of the Amended Complaint, the Court will enter judgment for Defendants. This opinion contains the Court's findings of fact and conclusions of law with respect to the parties' motions pursuant to Rule 52(a) and (c).


A. Introduction

The instant suit, before the Court on appeal from the Trademark Trial and Appeal Board ("TTAB"), sounds in trademark law. The parties, both dealers in low-speed, open-air electric vehicles, compete for the United States rights to the "MOKE" mark. The claims and counterclaims in the case mirror each other, as both Plaintiff and Defendants seek (1) review of the TTAB's decision below, (2) a declaration of trademark ownership, and (3) a judgment against their counterpart for trademark infringement. The Court ultimately resolves the case on


the contested mark's validity, finding that neither side has established ownership rights in the mark, a generic term unfit for trademark protection. Because the factual and procedural background of this case is best digested with an understanding of the legal context in which the case arises, the Court first discusses the germane legal principles before describing the case in detail.

B. Applicable Legal Principles

Trademark law serves two related goals. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 782 n.15 (1992). First, trademark rights protect the public against commercial deception, assuring the consumer that when he "purchases] a product bearing a particular trademark [that he] knows, [he] will get the product which [he] asks for and wants to get." Id. Second, trademark protections shore up the property interests of trademark owners, shielding their expenditures of "energy, time, and money," and the resulting corporate goodwill, from "misappropriation by pirates and cheats." Id.

In furtherance of these two ends, the Lanham Act provides multiple means through which an entity may protect its trademark. For one, the United States Patent and Trademark Office ("USPTO") "administers a federal registration system for trademarks," Iancu v. Brunetti, 139 S.Ct. 2294,2297 (2019), whereby registered trademarks are published for public consumption on the USPTO's Principal Register. 15 U.S.C. § 1057. The listing of a mark on the Principal Register, though neither necessary nor sufficient to establish trademark ownership, confers several "procedural and substantive legal advantages" on registrants vis-a-vis those who rely strictly on common law trademark rights. 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:9 (5th ed. 2019). For example, federal registration constitutes "prima facie evidence" of a mark's validity, 15 U.S.C. § 1115(a), and serves as "constructive notice" to


third parties "of the registrant's claim of ownership," id. § 1072.

Registration decisions fall in the first instance to the USPTO's Examining Attorneys, who wield the power to grant or deny registration applications in whole or in part. Decisions of the Examining Attorneys are then appealable to the USPTO's Trademark Trial and Appeal Board, which also hears inter partes disputes between trademark applicants and interested third parties - in trademark parlance, "opposers" - who file a notice of opposition and move the USPTO to deny an applicant's pending registration. Decisions of the TTAB are in turn appealable in federal court, either via direct appeal to the Court of Appeals for the Federal Circuit under § 1071(a)(1) or by initiation of a new civil action in federal district court under § 1071(b). In appeals pursuant to § 1071(a)(1), the Federal Circuit limits its appellate review, much like its sister courts of appeal, to the factual record submitted before the TTAB. When a party appeals the TTAB's decision through a § 1071(b) action, on the other hand, the parties may supplement the record with new evidence. A district court hearing a § 1071(b) appeal "reviews the record de novo" and enjoys "authority independent of the USPTO to grant or cancel registrations and decide any related matters [,] such as infringement and unfair competition claims." Swatch AG v. Beehive Wholesale, LLC, 739 F.3d 150, 155 (4th Cir. 2014).

As another means of trademark protection, the Lanham Act provides a private right of action for trademark infringement - a right of which the holders of registered and unregistered marks alike may avail themselves. 15 U.S.C. §§1114 (registered), 1125(a) (unregistered). To prevail on a claim of trademark infringement, the plaintiff must show that (1) it owns a valid, protectable trademark, and (2) "that the defendant's use of a colorable imitation of the trademark is likely to cause confusion among customers." Synergistic Int'l, LLC v. Korman,


470 F.3d 162, 171 (4th Cir. 2006). Only the first element of the prima facie infringement claim - ownership of a valid, protectable mark - is in dispute in this case.

Ownership rights to unregistered trademarks - the type of trademark at issue here - flow from two necessary conditions: (1) priority of use of (2) a valid, protectable mark. George & Co. LLC v. Imagination Ent. Ltd., 575 F.3d 383,400 (4th Cir. 2009). Priority of use accrues to the individual or entity that first appropriates the mark for commercial gain. Id. Stated differently, the party asserting priority in a mark must be the first to use the mark in connection with the sale of goods or services, or, at a minimum, must demonstrate that it used the mark before the party against which it asserts its putative rights. Id.; see also Emergency One, Inc. v. Am. Fire Eagle Engine Co., 332 F.3d 264,267 (4th Cir. 2003) ("At common law, trademark ownership is acquired by actual use of the mark in a given market.").

As to the second half of the ownership inquiry, a mark proves valid and thus protectable only where the mark possesses sufficient distinctiveness to perform the quintessential trademark function: identification of its user as the source or origin of the marked product. Perini Corp. v. Perini Const, Inc., 915 F.2d 121,124 (4th Cir. 1990) ("Eligibility for protection depends upon the market's association between the particular mark and the goods or the business-----"); Anti-Monopoly, Inc. v. General Mills Fun Group, 611 F.2d 296, 304 (9th Cir. 1979) ("It is the source-denoting function which trademark laws protect, and nothing more."). The protectability component of trademark ownership speaks to the nature of the mark itself, asking whether the mark constitutes the sort eligible for the protections afforded by trademark status. This inquiry turns on a mark's capacity to create an immediate association in the minds of consumers between the mark and its user. In re Chem. Dynamics, Inc., 839 F.2d 1569, 1571 (Fed. Cir. 1988) (a mark proves worthy of protection where it "creates a separate and distinct commercial impression,


which thereby performs the trademark function of identifying the source of the merchandise to the consumers").

In the Fourth Circuit, as elsewhere, a mark's protectability is in part a function of its distinctiveness. Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455,464 (4th Cir. 1996) ("The protection accorded trademarks is directly related to the mark's distinctiveness."). Courts use the typology announced by Judge Friendly in Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir. 1976), to assess distinctiveness, separating marks into one of five categories. In declining order of distinctiveness, the Abercrombie typology categorizes marks as (1) arbitrary, (2) fanciful, (3) suggestive, (4) descriptive or (5) generic. OBX-Stock, Inc. v. Bicast, Inc., 558 F.3d 334, 340 (4th Cir. 2009) (applying the Abercrombie framework).

Arbitrary marks "are based on existing words used in ways unconnected with their common meaning, such as APPLE computer or SHELL gasoline." Id. Fanciful marks are created out of whole cloth for the express purpose of serving to identify a product or service, e.g., KODAK or EXXON. Id. Both arbitrary and fanciful marks are "inherently distinctive" and therefore presumptively protectable without any further showing from the party seeking trademark protection. Id.

Suggestive marks "connote, without describing, some quality, ingredient, or characteristic of the product." Sara Lee, 81 F.3d at 464. Well-known examples of suggestive marks include Coppertone, Orange Crush and Playboy. Id. Like arbitrary and fanciful marks, suggestive marks are inherently distinctive and presumptively protectable. Id.

Descriptive marks "'merely describe a function, use, characteristic, size, or intended purpose of the product,' such as YELLOW PAGES telephone directories and 5 MINUTE glue." OBX-Stock, Inc., 558 F.3d at 340 (quoting Sara Lee, 81 F.3d at 464). Descriptive marks prove


protectable only where they acquire a "secondary meaning" in the minds of the relevant consuming public. Pro-Concepts, LLC v. Resh, 2013 WL 5741542, at *6 (E.D. Va. Oct. 22, 2013). A mark acquires secondary meaning "if 'a substantial number of present or prospective customers understand the [mark] when used in connection with a business to refer to a particular person or business enterprise.'" Id. (quoting Perini, 915 F.2d at 125).

Finally, generic marks are "'the common name of a product' or 'the genus of which the particular product is a...

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