Five Years: Most Relevant Time Period for Considering Third Party Trademark Use, Federal Circuit Says

Converse filed a complaint at the International Trade Commission (ITC) seeking an order blocking the importation of several shoes that Converse alleged to infringe Converse’s trade dress rights in three design elements on the mid-sole of Converse’s All Star shoes.

Converse asserted trade dress rights in the “design of the two stripes on the midsole of the shoe, the design of the toe cap, the design of the multi-layered toe bumper featuring diamonds and line patterns, and the relative position of these elements to each other.”

Here, the design elements of the shoe are product design trade dress, for which the owner must show that these design elements have acquired distinctiveness in the relevant market place. If the owner fails to show acquired distinctiveness, then it does not have trademark rights to enforce.

Third party use of a mark is relevant to whether a trademark has acquired distinctiveness in the relevant market place. If many third parties use a mark, then it is less likely that this mark will be recognized in the marketplace as associated with one source of goods or services.

The defendants in the ITC proceeding asserted that the design elements had not acquired distinctiveness. They relied, in part, on evidence of third party designs. Some of those third party design usages were old.

The Federal Circuit said that the ITC erred by too heavily relying on prior uses long predating the first infringing uses and the date of registration in Converse, Inc. v. ITC, No. 2016-2467 (Fed. Cir. 2018). The court relied on Section 2(f) of the Lanham Act to find that the five year period prior to the relevant date was the most relevant time frame to consider third party use.

Generally a trademark owner must show acquired distinctiveness prior to the date when the first alleged infringement occurred by the other party. Therefore, the first use by the the other party is generally the relevant date (or the date of  registration, if a trademark registration is at issue).

The court said that “Consumers are more likely to remember and be impacted in their perceptions by third-party uses within five year and less likely with respect to older uses.” It continued that “uses older than five years should only be considered relevant if there is evidence that such uses were likely to have impacted consumers’ perceptions of the mark as of the relevant date.”

Limits on Use of Crowded Market Evidence to Show Weak Trademark Rights

AMIGOSDurrset Amigos Ltd (Durrset) filed a petition to cancel Amigo Meat Distributors’ (AMD) trademark registration on the mark AMIGOS FOODS for the services of wholesale meat products distributorship.

As a basis to cancel, Durrset asserted its common law mark AMIGOS FOODS and its registration for AMIGOS in a stylized form for “prepared tortillas, taco sauce, picante sauce (hot sauce) and taco shells” and for the services of “manufacturing and packaging food to the order and specification of others.”

The TTAB (Board) found that the parties’ marks and the parties’ goods were similar in Durrset Amigos, Ltd. v. Amigos Meat Distributors, L.P., No. 92060896 (TTAB 2017). AMD tried to save its registration by asserting that Durrset’s AMIGOS FOODS mark was extremely weak due to third party uses of AMIGOS marks in the “general area of food products.” But the TTAB found AMD’s evidence of third party use failed to demonstrate that Durrset’s mark was weak.

I’ve written previously about how third party use of similar marks can weaken rights in a trademark. The weaker a party’s rights in its mark are, the closer a defendant can come without causing confusion. The idea is that in a crowded market, if customers see many similar marks used on similar goods then customers will be conditioned to look closer to any differences in the marks, so confusion is less likely. But there are important limitations on this approach, as the AMIGOS case demonstrates.

1. Third party use should be for the same or similar services

AMD introduced 45 third party registrations and applications for marks that include AMIGO or AMGIOS for goods or services that AMD alleged were “somewhat related to food, such as food products, food distribution services, and restaurants.” AMD also introduced Internet search result showing over 90 restaurants with a name that includes the term AMIGOS.

The Board said, “the evidence falls short of showing extensive or voluminous registrations or use of AMIGOS marks coexisting for the same or similar services as those involved herein.” The board found that the third party use of the mark on food goods and restaurant services were of little relevance considering the services at issue in the cancelation proceeding.

The Board said that of all of the proposed third party uses, only two of the registrations covering retail grocery store services “are even arguably related to” AMD’s or Durrset’s services. And, only one third party use was in connection with the manufacture and packaging of food products.

In short, although AMD introduced a lot of third party use, most of it was irrelevant because it was not directed to services that were the same or similar as those at issue in the case.

2. When marks are identical, third party uses may be less effective

The Board distinguished two prior cases cited by AMD to support its argument that Durrset’s rights were weak. The Board said that parties’ marks in those cases were not identical, whereas in the present case, AMD’s and Durrset’s marks were identical, e.g. AMIGOS FOODS.

Therefore, when the parties marks are identical, it may be more difficult to rely on third party use to show weak or narrow rights and avoid confusion.