The US Court of Appeals for the 11th Circuit affirmed a district court’s finding that the mark GORILLA GYM, used by defendant for indoor pull-up bars and accessories, infringed the mark GORILLA PLAYSETS, long used by the plaintiff to sell outdoor children’s playsets, but held that the evidence of willful intent to infringe—which consisted solely of the fact that defendant continued to sell the products after receiving plaintiff’s complaint—was insufficient. PlayNation Play Systems, Inc. v. Velex Corporation, Case. No. 17-15226 (11th Cir. May 21, 2019) (Wilson, J).

PlayNation has sold children’s outdoor playground equipment, including swing sets and attachable rings, ropes and swings, under the trademark GORILLA PLAYSETS since 2002, and has three federal registrations for the mark that it registered in 2004 and 2014. Velex later began to sell doorway pull-up bars and attachable accessories for children under the mark GORILLA GYM. Velex secured a trademark registration in the same class as PlayNation’s registrations in 2014. PlayNation sued for trademark infringement. After the district court conducted a bench trial, it found that Velex’s mark infringed PlayNation’s mark, awarded PlayNation damages and ordered that Velex’s registration be cancelled. Velex appealed.

The 11th Circuit affirmed the district court’s finding of infringement. While the district court found that all the likelihood of confusion factors except the defendant’s intent weighed in favor of a likelihood of confusion, the 11th Circuit explained that the most important factors are the strength of the mark and evidence of actual confusion. It therefore focused its analysis on those factors. The Court noted that the mark GORILLA PLAYSETS was strong because it was suggestive, that PlayNation had widely advertised and promoted its products under the mark since 2002, that PlayNation’s mark was incontestable because it had been registered for more than five years with the US Patent and Trademark Office (PTO), and that there was little third-party use of similar marks for similar goods.

The 11th Circuit also found persuasive the evidence of actual confusion—which consisted of two consumers’ testimony that they had mistakenly contacted Velex for customer service assistance with playsets they had purchased from PlayNation. The Court rejected Velex’s argument that the testimony of two “careless and uninformed” consumers, who at trial confused the names of the two companies and could not remember which name was on the packaging and website they looked at before calling Velex for customer service, was unpersuasive. The Court observed that the likelihood of confusion analysis only requires that consumers be “reasonably prudent,” not “the most careful consumer, who diligently research[es] and meticulously examin[es] the inner and outer packing to determine the provenance of the product she purchased.” The Court found that the evidence was extremely persuasive because “[t]he customers PlayNation identified are ultimate consumers of the product, to which we give special weight.”

Finally, the 11th Circuit rejected Velex’s argument that the PTO’s decision to register Velex’s trademark in 2014 had any preclusive effect. PlayNation had not challenged Velex’s registration before the PTO and thus had not litigated the merits of likelihood of confusion. Finding that the district court similarly did not err with regard to the other likelihood of confusion factors, the Court affirmed the finding of infringement and cancellation of Velex’s trademark.

The 11th Circuit did, however, reverse the district court’s holding that PlayNation was entitled to an accounting of Velex’s profits. An accounting is appropriate only where the defendant’s conduct is willful, the defendant was unjustly enriched, or an accounting is necessary to deter future conduct. The district court’s award of an accounting was based solely on the first rationale: it held that Velex’s infringement was willful because Velex continued to sell GORILLA GYM products after being served with PlayNation’s complaint. In reversing, the 11th Circuit held as a matter of law that the mere sale of allegedly infringing products after being served with a complaint was insufficient to prove willfulness. It remanded the damages issue to the district court to determine if there was other evidence of willfulness or other justifications for awarding an accounting..

Practice Note: The testimony of even one or two confused “ultimate consumers” persuasively demonstrates actual confusion and therefore trademark infringement. A plaintiff is well-served to try to secure such testimony when possible.