The U.S. Court of Appeals for Federal Circuit affirmed a Trademark Trial and Appeal Board (TTAB) decision refusing registration of the University of South Carolina’s (South Carolina) “SC” design mark and granting summary judgment in favor of the University of Southern California (Southern Cal), while denying a counterclaim cancellation action filed by South Carolina attempting to cancel Southern Cal’s registration for its standard character “SC” mark. The University of South Carolina v. University of Southern California, Case No. 09-1064 (Fed. Cir., Jan. 19, 2010) (Wilken, Dist. J., sitting by designation) (nonprecedential).

South Carolina filed a trademark application for its “SC” logo, covering clothing goods such as hats, t-shirts, and uniforms. Southern Cal opposed South Carolina’s application, claiming a likelihood of confusion with its prior registrations for the “SC” block letter character mark and its “SC” design mark. South Carolina counterclaimed in an attempt to cancel the Southern Cal block letter registration under § 2(a) of the Lanham Act, claiming Southern Cal’s “SC” mark suggested a false association with the state of South Carolina.

The TTAB refused registration of South Carolina’s mark due to a likelihood of confusion with Southern Cal’s registrations based on several DuPont factors. The TTAB determined the marks were legally identical and would appear on the same classes of goods in the same channels of trade. It also found that consumers would exercise little care in making decisions to purchase such goods. South Carolina challenged the TTAB’s findings of similar trade channels and the degree of care in making purchases, noting the absence of evidence of any actual confusion.

The Court found that the goods covered by Southern Cal’s block letter registration in Classes 6, 18 and 24 (key rings, tote bags, blankets, etc.) were sold through “University authorized” trade channels and, as such, Southern Cal’s and South Carolina’s marks would likely appear on similar goods in similar channels of trade. It held that confusion was likely.

The Court also found no substantial evidence to support the fact that goods would be purchased by less sophisticated consumers such as “new or casual fans,” but determined this to be harmless error. The Court noted that the marks being legally identical and appearing on the same classes of goods in the same trade channels were factors which, on their own, would support a finding of likelihood of confusion.

Additionally, the Court agreed with the TTAB that without evidence showing the marks commingled within retailers for a significant length of time, the fact that there was no evidence of actual confusion weighed only slightly in favor of South Carolina. Thus, the Court found a likelihood of confusion between the marks and refused registration of South Carolina’s “SC” mark.

Cancellation Based on False Association

While the TTAB denied South Carolina’s cancellation counterclaim finding the university was not an agent of the state and had no standing to assert the § 2(a) claim, the Court held that the TTAB took an unreasonably limited view of standing and found that the university did have a direct commercial interest in the cancellation proceeding. However, the Court still affirmed the grant of summary judgment, finding that South Carolina failed to demonstrate a genuine issue of material fact as to whether Southern Cal’s “SC” mark was “unmistakably associated” with and “pointed uniquely” to the state so as to create a false association. Rather, the Court found that Southern Cal demonstrated evidence that the “SC” initials refer to at least 16 other universities and colleges aside from the state. Accordingly, the Court affirmed summary judgment against South Carolina.

Practice Note: While the Court technically only affirmed Southern Cal’s prior rights in the standard character “SC” mark in connection with its various enumerated goods and services, this decision appears to provide Southern Cal with grounds for future trademark infringement actions and/or dilution claims against any parties using the letters “SC,” simply by being the first to file an application for same. In light of the 16 other colleges and universities using the “SC” reference (as well as other non-academic entities potentially using same), this decision appears to have granted Southern Cal significant leverage in term of exploiting the “SC” letter combination.