The Fifth Circuit held recently, in Board Of Supervisors, et al. v. Smack Apparel Co., 550 F.3d 465 (2009), that the sale of T-shirts featuring universities’ school colors combined with references to games played by their sports teams was an infringement of the universities’ trademark rights in their colors.

The plaintiffs in the case were Louisiana State University, the University of Oklahoma, Ohio State University, the University of Southern California, and Collegiate Licensing Company, the official licensing agent for the schools. The defendant, Smack Apparel Company, had manufactured T-shirts targeted toward fans of the schools’ sports teams, which T-shirts displayed the universities’ school colors along with sayings such as “Got Seven? We Do! 7 Time National Champs”, a reference to Ohio State’s seven college football titles; and “Sweet as Sugar”, a reference to the 2004 Sugar Bowl game in New Orleans between the University of Oklahoma and Louisiana State.

Plaintiffs sued Smack for infringement of their unregistered trademarks in the universities’ distinctive color combinations, claiming that Smack’s shirts infringed their rights by combining these colors with references to events in which the universities participated. The Fifth Circuit upheld the lower court’s grant of summary judgment for the universities, holding that the universities had established ownership in legally protectible trademarks and that they had showed infringement by Smack by demonstrating a likelihood of confusion.

The court found that although the universities’ colors were not registered marks, they were protectible as trademarks because they had been in use for many years (in some cases, since the late 1800s) and, as a result of the universities’ use, had acquired secondary meaning. The court noted that the colors were “immediately recognizable” among those familiar with the universities. Having found that the marks were protectible, the court analyzed the applicable likelihood of confusion factors: (1) the strength of the mark allegedly infringed, (2) the similarity between the two marks, (3) the similarity of the products, (4) the identity of the retail outlets and purchasers, (5) the identity of the advertising media used, (6) the defendant’s intent, (7) evidence of actual confusion, and (8) the degree of care exercised by potential purchasers. The court found that the marks in question, having been in use for over 100 years, were strong. It also found “striking similarity” between Smack’s shirt designs and the plaintiffs’ licensed products. For example, Louisiana State’s licensed shirt designs contained the phrases “Ain’t It Sweet!” and proclaimed LSU as the national Sugar Bowl champion. They also featured LSU’s school colors, purple and gold. The corresponding Smack shirts used the same colors, and contained the phrases “2003 National Champions” and “Sweet as Sugar!” Shirts targeted toward fans of other universities likewise contained notable similarities to the universities’ licensed shirts. Therefore, the factors of similarity between the marks and similarity of the products were both found to weigh in favor of a likelihood of confusion.

Smack conceded that the fourth factor, the identity of retail outlets and purchasers, also weighed in favor of a likelihood of confusion because the universities’ licensed products were often sold wholesale to the same retailers who purchased Smack’s products. The fifth factor, the identity of advertising media, was found to be minimally probative. The sixth factor, the defendant’s intent, was found to weigh in favor of a likelihood of confusion because the defendant had admitted that it “used school colors and ‘other indicia’ with the intent of identifying the university plaintiffs as the subject of the message expressed in the shirt design.” The seventh factor, evidence of actual confusion, was not considered because the district court had not resolved whether there was sufficient evidence, and because it was not necessary in order to find a likelihood of confusion. Finally, the last factor, the degree of care exercised by potential purchasers, was held to weigh in favor of a likelihood of confusion, because the shirts at issue were relatively inexpensive items and would not likely be purchased with a particularly high degree of care by the consumer.

The court therefore found that a likelihood of confusion existed. It rejected Smack’s argument that consumers might not care whether the shirts were officially licensed holding that whether or not a consumer cares about official sponsorship is a different question from whether that consumer would likely believe the product is officially sponsored. The court also rejected Smack’s argument that the universities’ color schemes were functional and therefore did not qualify for protection under the Lanham Act. It found that the only function of the color schemes was to identify the universities, and therefore they served no function unrelated to trademark. Additionally, the court rejected Smack’s argument that its incorporating the universities’ colors in its T-shirts to identify the universities as the subject of the shirts was a nominative fair use. It noted that the right of fair use is limited, insofar as the use cannot be one that creates a likelihood of confusion.

The court also rejected Smack’s assertion of laches against LSU, stating that because Smack admitted it intentionally copied the plaintiffs’ color schemes, Smack’s bad faith precluded the assertion of laches. Furthermore, the court rejected Smack’s argument that the plaintiffs were not entitled to recover actual damages without evidence of actual confusion. The court held that it is settled in the Fifth Circuit that actual confusion is not a necessary prerequisite to an award of money damages.

Finally, despite Smack’s admission that it had intentionally copied the Universities’ color schemes for use on its shirts, the court did not award the Universities attorneys’ fees to the universities. In denying this relief, the court noted that the standard for attorneys’ fees under the Lanham Act is that they may be awarded in “exceptional cases,” meaning that the acts performed can be characterized as “malicious, fraudulent, deliberate or willful.” Smack’s intentional copying of the universities’ color schemes was not sufficient in this regard, since deliberate copying does not render a case per se exceptional. The court also noted that the case presented somewhat novel legal issues, which mitigated the bad faith question sufficiently to avoid an award of attorneys’ fees.