USDC W.D. Oklahoma, June 2, 2009

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  • In a reverse confusion case, district court finds that summary judgment is disfavored in trademark infringement cases and denies summary judgment to the national “senior user,” Disney, where plaintiff presented more than a scintilla of evidence its “Real Cars” mark was not abandoned and there was a likelihood of confusion with Disney’s “Cars” mark

The district court denied a motion for summary judgment by defendants Disney Enterprises, Inc. and Mattel, Inc. on plaintiff’s trademark infringement and unfair competition claims. Plaintiff CPP alleged that, in 1998, it obtained a federal trademark registration for “Real Cars” and a logo including that phrase superimposed over a chevron design. CPP contended that defendants infringed its registered trademark by producing, marketing and distributing toy cars bearing defendants’ 2006 trademark obtained in connection with the manufacture and distribution of items, including miniature automobile toys, related to the Disney motion picture Cars.

In defense of the trademark infringement claim, defendants first argued that CPP’s trademark registration was void ab initio because the mark was not in use prior to the date of CPP’s registration application. However, the court found that CPP’s mark became “incontestable” since its registration was in effect for five years without a challenge to its validity; therefore, it can only be challenged on specific grounds set forth in 15 U. S. C. § 1115(b), which does not include a void ab initio defense.

Second, defendants claimed that, even if CPP’s trademark was valid, it had been abandoned prior to defendants’ 2006 registration of its own mark. The fact that the mark had become “incontestable” did not preclude defendants from challenging it on this basis, as abandonment is one of the statutory defenses set forth in § 1115(b). Under the Lanham Act, a registered trademark may be abandoned where the owner discontinues use with the intent not to resume the same or where the conduct of the owner causes the mark to become a generic name. Because abandonment is “in the nature of a forfeiture,” courts have consistently held that the party asserting abandonment is required to “strictly prove” its claim. Here, the court concluded that material fact disputes on the issues of the period of non-use and the intent to continue use of its trademark preclude summary judgment on this issue. Although the court did not find CPP’s evidence substantial, it held it was sufficient to constitute more than a scintilla of evidence, thereby precluding summary judgment.

Third, defendants argued that there was no evidence of actual confusion or a likelihood of confusion by consumers regarding the origin of the parties’ respective products. The following factors are considered in determining whether there is a likelihood of confusion between two marks: (1) the degree of similarity between the marks; (2) the intent of the alleged infringer in adopting its mark; (3) evidence of actual confusion; (4) similarity of products and manner of marketing; (5) the degree of care likely to be exercised by purchasers; and (6) the strength or weakness of the marks.

In a reverse confusion case, where a smaller company is the “senior user” of its mark, and the larger national company obtaining a similar mark is the “junior user,” the relevant inquiry as to the last factor to be considered in determining whether there is a likelihood of confusion is whether the junior user’s mark has sufficient commercial strength to overwhelm the senior user’s mark, thus creating consumer confusion regarding the origin of the mark. “[T]he national ‘junior user’ cannot use its superior economic power to saturate the market with a mark confusingly similar to that of the small company.” The court noted that summary judgment is disfavored in trademark infringement cases. Again the court did not find CPP’s evidence substantial, but held it was sufficient to constitute more than a scintilla of evidence, thereby precluding summary judgment.

Lastly, the court denied defendants’ summary judgment motion on plaintiff’s unfair competition claim under § 43(a). Infringement of an unregistered mark is triggered by a use which is “likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association” of the junior user with the senior user. To prove its claim, CPP must show both that its mark is protectable and that defendants’ use of an identical or similar mark is likely to cause confusion among consumers. The court found that whether CPP can establish the requisite element of a likelihood of confusion between the parties’ marks presents a question of material fact on which summary judgment could not be granted.