Addressing the application of the Sleekcraft likelihood-of-confusion factors in the context of a summary judgment motion, the US Court of Appeals for the Ninth Circuit reversed the district court’s grant of summary judgment, finding numerous genuine disputes of material fact in connection with use of a colored lips design on vodka bottles as a trademark. JL Beverage Company, LLC v. Jim Beam Brands Co. et al., Case No. 13-17382 (9th Cir., July 14, 2016) (Wallace, J).
In 2003, JL Beverage began using a lips logo on its Johnny Love Vodka bottles, with the lips colored to denote the flavor of the vodka (for example, green lips for apple-flavored vodka). JL Beverage registered its Johnny Love Vodka (& Design) mark in 2005. In 2011 Jim Beam began selling a line of flavored vodkas called Pucker Vodka. Jim Beam’s bottle also featured a lips design, colored to denote the vodka’s flavor. A former marketing employee of Jim Beam involved with the development of Pucker Vodka was apparently aware of JL Beverage and the Johnny Love Vodka brand. Prior to the launch of Pucker Vodka, Jim Beam’s legal counsel conducted a trademark search, which revealed JL Beverage’s Johnny Love Vodka (& Design) registration, as well as numerous other references to lips in connection with alcohol-related products.
JL Beverage sued Jim Beam for trademark infringement under both a forward and reverse confusion theory and sought a preliminary injunction, which the district court denied. Jim Beam later moved for summary judgment, which the court granted “for reasons articulated in the Order denying the Preliminary Injunction,” further stating that “no issues of material fact remain which could provide Plaintiff a basis for success on any of its claims.” JL Beverage appealed.
On appeal the Ninth Circuit reversed, explaining that the district court failed to apply the proper standard for deciding a summary judgment motion, as Jim Beam had the burden to demonstrate that no material facts were in dispute. In this case, Jim Beam did not dispute that some of the Sleekcraft factors favored a finding of a likelihood of confusion. With respect to disputed factors—such as the conceptual and commercial strength of the lips design mark, similarity of the parties’ marks, and Jim Beam’s intent in selecting the mark—the Ninth Circuit found that there were factual disputes that, when viewed in the light most favorable to JL Beverage, made summary judgment inappropriate.
Considering the conceptual strength of the lips design mark, the Court found that a reasonable fact-finder could view JL Beverage’s colored lips design as suggestive—entitling JL Beverage to a higher degree of protection—because a consumer must use their imagination to connect the lip color to the vodka flavor. While the record contained evidence of multiple uses of lips in connection with alcohol beverages, none of those uses coordinated color to flavor, and most of them did not apply to liquor products. As for the mark’s commercial strength, the Court observed that even if JL Beverage had a relatively weak market presence (and JL Beverage submitted evidence that indicated otherwise), a finding that the mark was commercially weak would support a finding of a likelihood of reverse confusion.
Given that JL Beverage’s and Jim Beam’s lip design marks bore many similarities, the Ninth Circuit concluded that the similarity of marks factor (often the most important factor in the likelihood-of-confusion analysis) presented genuine issues of material fact. Finally, according to the Court, there was a genuine dispute of material fact concerning Jim Beam’s intent in selecting the colored lips mark in light of (1) the trademark search report, (2) the US Patent and Trademark Office’s refusal to register Jim Beam’s application for its lip design mark because of the likelihood of confusion with JL Beverage’s Johnny Love Vodka (& Design) registration, and (3) prior knowledge of the Johnny Love Vodka brand by a Jim Beam employee involved with Pucker Vodka. For these reasons, the Court reversed the grant of summary judgment and remanded the case.