In a memorable scene from the 1998 Farrelly Brothers' comedy, There's Something About Mary, a hitchhiker explains to Ben Stiller his idea for a 7 Minute Abs workout video that would blow 8 Minute Abs "right out of the water." Sometimes life imitates art. In Innovation Ventures, LLC v. N.V.E., Inc., 694 F.3d 723(6th Cir. 2012), the creator of the 5-Hour ENERGY drink sued the creator of the 6 Hour POWER drink for trademark infringement and the defendant counterclaimed for false advertising and antitrust violations. The district court granted cross motions for summary judgment dismissing all three claims. The U.S. Court of Appeals, Sixth Circuit, in a wide-ranging decision, reversed the grant of summary judgment on the infringement and false advertising claims, but affirmed the district court's order with respect to the antitrust counterclaim.
The Sixth Circuit's decision provides a powerful lesson in the difficulty of defeating a trademark infringement case on summary judgment. Applying the Sixth Circuit's version of the Sleekcraft factors for likelihood of confusion, the district court had found three factors weighed in favor of the plaintiff, while four weighed in favor of the defendant. The court concluded that dissimilarity of the marks, combined with the descriptive nature of 5-hour ENERGY, defeated a showing of likelihood of confusion.
The Sixth Circuit disagreed. The court focused on conflicting testimony of the defendant's president and a former employee about the defendant's intent to copy the 5-hour ENERGY mark and a single email stating that the defendant was going to try to make a product like the 5-hour ENERGY shot. Although the Sixth Circuit expressed significant doubts about the strength of the plaintiff's evidence of intent, it noted that the district court wrongly discounted the plaintiff's survey evidence, and alleged instances of actual confusion. The court concluded: "This factually intensive issue is a close call and could, on a fair comparison of the evidence to date, be decided either way."
Hank Rearden, a self-made steel magnate, exemplifies integrity and self-reliance in Ayn Rand's 1957 novel Atlas Shrugged. The character also inspired the names of both the plaintiff's and the defendant's companies in Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, (9th Cir. 2012). Plaintiff's Rearden LLC is a startup incubator, while defendant's Rearden Commerce is a business concierge service, both located in the San Francisco Bay Area. Following cross motions for summary judgment, the district court granted the defendant's motion, holding no reasonable jury could find a likelihood of confusion.
The Ninth Circuit disagreed, holding that genuine issues of material fact precluded a grant of summary judgment. It found the mark connoted "a paragon of entrepreneurial success," a value suggestive for the plaintiff's incubation of start-up companies. Although the district court held the strength and similarity of the marks weighed only somewhat in the plaintiff's favor, the Ninth Circuit held that a reasonable jury could accord that factor significant weight. The Ninth Circuit further held that a reasonable jury could find a closer proximity of goods than the district court acknowledged, based on similar technology platforms offered for each company's customers and their appearance in the same publications and trade shows.
The Ninth Circuit also found the district court erred by failing to give weight to evidence of non-consumer confusion. Although the court cautioned against the plaintiff's attempt to show confusion by "non-purchasing consumers," it recognized that confusion by non-consumers could serve as a proxy for consumer confusion. Plaintiff's evidence of confusion among members of the trade, prospective employees, vendors, investors, auditors, and attorneys was sufficient to create a genuine issue of disputed fact.
More recently, the Ninth Circuit issued a terse memorandum disposition that held: "Summary judgment is generally disfavored in trademark litigation, because the nature of trademark case analysis is fact intensive." CELS Enters., Inc. v. Rock & Roll Religion, Inc., 2012 WL 3157150 (9th Cir. Aug. 6, 2012).
The Innovation Ventures and Rearden decisions do not generally claim to establish new law regarding the summary judgment standard for trademark litigation, but they are notable as two of the longest and most fully reasoned trademark decisions from the circuit courts this year. It appears at least the Sixth and the Ninth Circuits are attempting a course correction for district courts that may be veering away from the general aversion to summary judgment on issues of trademark confusion.