Federal Circuit Emphasizes Proper Application of the Totality of Circumstances Standard to Determine Likelihood of Confusion

July 2017

By: Sheri L. Gordon

The Federal Circuit’s May 24, 2017 decision in Joseph Phelps Vineyards, LLC v. Fairmont Holdings, LLC instructs that a likelihood of confusion analysis “requires considering all the relevant factors on a scale appropriate to their merits.” Slip op. at 2. More particularly, the Federal Circuit held that the “fame” factor in that analysis cannot be treated as “an all-or-nothing factor.” Id. Instead, the court explained, fame “warrants reasonable weight, among the totality of the circumstances.” Id. at 5.

In Joseph Phelps Vineyards, Fairmont held a 2012 registration for the mark ALEC BRADLEY STAR INSIGNIA for cigar and cigar products. Joseph Phelps Vineyards (“Vineyards”) had produced and sold wine under the INSIGNIA mark since 1978. Vineyards petitioned the Trademark Trial and Appeal Board (“TTAB”) for cancellation of the Fairmont registration, but the TTAB determined that there was no likelihood of confusion as to source between the two marks. In reaching its conclusion, the TTAB acknowledged that “it appears that Petitioner’s INSIGNIA branded wine has met with success in the marketplace,” but nevertheless was “not persuaded on this record that Petitioner’s mark is a famous mark.” Id. at 2.

On appeal, the Federal Circuit held that the TTAB’s likelihood of confusion analysis was improper, specifically with regard to the TTAB’s treatment of the “fame” factor. The court noted that “[t]he record shows extensive recognition and accolade for INSIGNIA brand wine,” including evidence that INSIGNIA wine had been served at the White House on various occasions. Id. at 3-5. Yet, the TTAB gave “no discernable weight” to the “fame” factor. Id. at 5.

According to the Federal Circuit, the TTAB erred in “in analyzing the ‘fame’ of INSIGNIA wine as an all-or-nothing factor, and discounting it entirely in reaching the conclusion of no likelihood of confusion as to source, contrary to law and precedent.” Id. at 2. The TTAB thus “did not properly apply the totality of the circumstances standard, which requires considering all the relevant factors on a scale appropriate to their merits.” Id. In explaining its holding, the Federal Circuit distinguished the role of “fame” in the likelihood of confusion analysis from the role of “fame” in a trademark dilution analysis:

The TTAB applied a legally incorrect standard in applying an all-or-nothing measure of “fame,” more akin to dilution analysis. “While dilution fame is an either/or proposition—fame either does or does not exist—likelihood of confusion fame ‘varies along a spectrum from very strong to very weak.’” [citation omitted.]

Id. at 3. Given the evidence of record, the Federal Circuit was “perplexed at the Board’s finding that INSIGNIA wine has no ‘fame.’” Id. at 5. The court vacated the TTAB decision and remanded for further proceedings. Id.

Judge Newman wrote a concurring opinion “to call attention to two additional issues that warrant review on remand” – namely, the “relatedness” of Vineyards’ and Fairmont’s goods, and the actual use of Fairmont’s registered mark. Slip op. Concurrence at 1-2. With regard to the “relatedness” of Vineyards’ and Fairmont’s goods, Judge Newman stated that:

Of course, cigars and wine are different. However, as noted in Hewlett-Packard Co. v. Packard Press, Inc., 281 F.3d 1261, 1267 (Fed. Cir. 2002), “[e]ven if the goods . . . are not identical, the consuming public may perceive them as related enough to cause confusion about the source or origin.”

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The Board treated relatedness as an all-or-nothing factor, although this factor should be analyzed along a sliding scale.

Slip op. Concurrence at 5 (citation omitted). Judge Newman also noted that the TTAB’s conclusion on the “relatedness” issue was not consistent with prior TTAB rulings. Id. at 6-7.

With regard to the actual use of Fairmont’s registered mark, Judge Newman stated that:

The Board erred in declining to consider “illustrations of the mark as actually used,” for precedent recognizes that such illustrations “may assist the T.T.A.B. in visualizing other forms in which the mark might appear.”

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Consideration of how the Fairmont registered mark is actually used, and viewed by the consumer, is part of the totality of the circumstances of likelihood of confusion and should be considered on remand.

Id. at 4-5 (citation omitted). Indeed, Judge Newman made clear that she “would ensure the readjudication of all the relevant factors in the Board’s further consideration of the question of likelihood of confusion.” Id. at 7