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Attorneys

Trademark Infringement and the Importance of Establishing Likelihood of Confusion

January 3, 2008

Trademark Infringement and the Importance of Establishing Likelihood of Confusion

By James Kachmar

On December 28, 2007, the Ninth Circuit issued its opinion in the case titled Applied Information Sciences Corp. v. eBay, Inc., in which it clarified the plaintiff’s burden in a federally registered trademark infringement action. The Ninth Circuit’s opinion demonstrates the importance of a plaintiff in a trademark infringement claim being prepared to offer evidence of the likelihood of confusion in order to avoid dismissal of its trademark infringement claims.

Applied Information Sciences Corp. (“AIS”) is a specialized software vendor that applied in 1994 to register a trademark “SmartSearch”. In 1998, the U.S. Patent and Trademark Office issued AIS a registration for use of that mark on “computer software and instruction manuals sold together which allow the user to retrieve information from on-line services via phone line in the fields of agriculture and nutrition, books, chemistry, computers and electronics, education, law, medicine and biosciences, news, science and technology, social sciences and humanities.” AIS marketed a line of SmartSearch products from 1995 to 2004.

AIS claimed that eBay began using its SmartSearch mark without its consent in 2000 in violation of federal trademark and California unfair competition laws. eBay’s website displayed the words “Smart Search” as a link on its home page which allowed the user to utilize advance search options. AIS demanded that eBay pay a license fee or stop using the mark. eBay refused and AIS filed its trademark infringement claim against eBay in 2004. Both parties moved for summary judgment. The District Court granted eBay’s motion on the ground that it found that AIS did not have a valid protected interest in the mark.

The Ninth Circuit began by recognizing that AIS had to establish the following to prevail on its trademark infringement claim: (1) a valid, protectable trademark; and (2) eBay’s use of the mark in a manner likely to cause confusion. Thus, AIS first had to establish “whether the words used by a manufacturer in connection with his product are entitled to protection.” The Ninth Circuit recognized that AIS could satisfy this burden in one of three ways: (1) it has a federally registered mark in goods or services; (2) its mark is descriptive but has acquired a secondary meaning in the market; or (3) it has a suggestive mark which is inherently distinctive and protectable. AIS argued that its trademark was entitled to protection on the basis of its federal registration. Unlike the District Court, the Ninth Circuit agreed with AIS’ position.

The Ninth Circuit ruled that registration of a mark “on the principal register in the patent and trademark office constitutes prima facie evidence of the validity of the registered mark and of [the registrant’s] exclusive right to use the mark on the goods and services specified in the registration.” Without a registration, a plaintiff in a trademark infringement action would have to establish his right to the exclusive use of the mark in a common law infringement action. The Ninth Circuit concluded that AIS, by demonstrating that it held a federal registration, had made a prima facie showing that it held a valid protectable interest in the use of the SmartSearch mark.

The Ninth Circuit continued that “a registered trademark holder’s protectable interest is limited to those goods or services described in its registration.” Specifically, the Court recognized that the scope of validity and the scope of relief for infringement are not the same because “although the validity of a registered mark extends only to the list of goods or services, an owner’s remedies against confusion with its valid mark are not so circumscribed.” Thus, a trademark owner may only seek redress if another’s use of a registered mark on a different set of goods and services is likely to cause confusion with the owner’s use of the mark in connection with its registered goods.

The Ninth Circuit reiterated its holding in Interstellar Starship Services, Ltd. v. Epix Inc., 184 F.3d 1107 (9th Cir. 1999), in which it emphasized that a markholder’s rights to protect its interest in a registered mark were not limited to infringement actions against those using the mark in connection with the specified goods for services. In fact, the Court expressly rejected an argument that the plaintiff was required to show that the scope of its valid interests extended to the defendant’s use of the mark.

The Ninth Circuit recognized that a plaintiff trademark owner, upon establishing a valid protectable interest, could then proceed to the second prong of a trademark infringement analysis, the likelihood of confusion resulting from the defendant’s alleged infringing use. Once a plaintiff, such as AIS, had established a protectable interest by proving it is the owner of a registered trademark, it does not have the additional burden of showing that the defendants allegedly confusing use involves the same goods or services listed in the trademark registration.

Thus, the Ninth Circuit disagreed with the District Court’s analysis which found that AIS’ registration was limited to computer software and instruction manuals in the various fields listed in the registration. This led to the District Court’s erroneous conclusion that “because AIS’ federal registration did not include eBay’s use of the mark as `a hyperlink for its web based training service,’ AIS’ infringement action failed for a lack of a protectable interest.” The Ninth Circuit held that both eBay’s and the District Court’s reading of its previous decision in Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352 (9th Cir. 1985) was “questionable.”

The Ninth Circuit distinguished the Levi Strauss case from the present case by noting that in Levi Strauss the plaintiff was attempting to extend its own use of its registered mark to goods not specified in its federal registration. Specifically, Levi Strauss’ registered trademark was limited to pants pocket tabs but Levi Strauss was seeking to recover for infringement involving clothing pocket tabs generally. The Ninth Circuit concluded that this analysis was largely irrelevant in the present case because, having established a valid protectable interest by demonstrating its federal registration, AIS had discharged its burden of establishing the validity of the SmartSearch mark in connection with those goods listed in the registration. Thus, the sole question to address was the issue of the likelihood of confusion.

The Ninth Circuit held that AIS had failed, in opposing eBay’s motion for summary judgment, to produce any admissible evidence showing a likelihood of confusion or any evidence addressing any of the Sleekcraft [AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979)] factors required for a likelihood confusion analysis. On this sole basis, the Ninth Circuit affirmed summary judgment in favor of eBay.

The Ninth Circuit’s decision in the AIS case reaffirms the necessity and importance of a plaintiff in a trademark infringement claim being prepared to establish the likelihood of confusion to prevail. Although the plaintiff in AIS was able to demonstrate that it had a valid protectable interest, its failure to offer evidence as to the likelihood of confusion factor in opposing a summary judgment resulted in the Ninth Circuit affirming summary judgment in the defendant’s favor.