Addressing the validity of, and likelihood of confusion between, two data-driven analytic software companies’ “Collective”-formative trademarks, the US Court of Appeals for the Second Circuit disagreed with the district court’s findings as to whether the marks in issue were suggestive rather than merely descriptive. Cross Commerce Media, Inc. v. Collective, Inc., Case No. 15-782 (2d Cir., Nov. 7, 2016) (Sack, J).

Collective, Inc., (CI) first contacted Cross Commerce Media (CCM) in 2011 regarding its concern over CCM’s “Collective[i]” trademark. CI owned federal trademark registrations for “Collective Network,” “Collective Video” and “C Collective The Audience Engine,” as well as the domain name www.collective.com. CI also claimed common law rights to the trademark “Collective.” Following failed negotiations, CI sent a demand letter in 2012, prompting CCM to file a declaratory judgment action seeking (1) a declaration that CI did not own trademark rights in “Collective,” (2) a declaration that CCM’s “Collective[i]” trademark did not infringe CI’s marks, and (3) an order compelling the US Patent and Trademark Office (PTO) to cancel or modify CI’s registered marks. CI counterclaimed, alleging that CCM’s “Collective[i]” mark (as well as its use of “Collective Intelligence” and “Collectivei”) infringed CI’s registered and unregistered trademarks.

The district court granted partial summary judgment finding that CI’s “Collective” mark was descriptive as a matter of law. The district court also granted summary judgment for CCM on CI’s counterclaim of infringement of the unregistered “Collective” mark, and dismissed CI’s counterclaim for infringement of “Collective,” concluding that CI did not have any rights in “Collective.” CCM then moved for (1) an order compelling cancellation of CI’s registered marks “Collective Network” and “Collective Video,” because they were merely descriptive and could not show secondary meaning, or, alternatively, because they had been abandoned, and (2) an order compelling the PTO to disclaim “Collective” within the mark “C Collective The Audience Engine.” After the district court awarded the remedies sought, CI appealed.

Holding that the “Collective” mark was suggestive, rather than descriptive as the district court had found, the Second Circuit emphasized that “[t]he difference between [descriptive and suggestive marks] lies in the immediacy of association—how quickly and easily consumers grasp the nature of the product from the information conveyed.” In this case, the Court found that “Collective” lacked the specificity that would enable consumers to immediately understand that CI provides data-driven marketing tools. The Second Circuit explained that the district court “mistakenly equated the fact of association (which does not distinguish between descriptive and suggestive marks) with immediacy of association (which does).” In finding that “Collective” was suggestive as a matter of law, the Second Circuit reversed the district court’s finding that the mark was descriptive and vacated the district court’s order dismissing CI’s counterclaim for infringement.

The Second Circuit also further vacated the summary judgment for CCM’s priority of use of the “Collective” mark in commerce and CI’s abandonment of its “Collective Network” and “Collective Video” marks, finding that there was a genuine issue of material fact for both issues. Finally, the Court vacated the grant of summary judgment as to infringement of CI’s registered marks, concluding that the district court did not employ the proper likelihood of confusion analysis.