Federal Circuit to Coach: Your trademark isn't "famous" enough for federal anti-dilution law (at least, not on this record)

Posted by Charles Colman

On Tuesday, the Court of Appeals for the Federal Circuit gave Coach a nasty little slap in the face, in the form of this precedential decision.  But that slap was softened by several caveats that might have lessened the sting.  To put yourself in Coach's place, imagine being slapped by someone wearing an oven mitt.


This opinion was a long time in the making (and it's not even the end of the story...)  The ordeal began in 2004, when an educational services company called Triumph sought to register the trademark COACH (in plain-text, stylized, and design forms) with the USPTO in connection with the international classes for computer programs (IC 9) and instructional materials on paper (IC 16.) 


Here's the design component, if you're curious:




A "standard character" (i.e., plain-text) mark, by the way, looks like this:




Coach, the famous famously litigious purveyor of handbags, accessories, and other "accessible luxury products" (in the company's own words), opposed Triumph's applications on at least three bases: 1) that the registration, if allowed, would create a likelihood of confusion with Coach's registered marks; 2) that Triumph's mark would dilute Coach's marks; and 3) that "coach," in the educational context, is "merely descriptive," such that -- in the absence of secondary meaning (a/k/a "acquired distinctiveness," explained in this Supreme Court opinion) -- registration on the Principal Register would be improper.


The adversarial (a/k/a "litigation lite") process that happens when a party lodges an opposition transpired, and the dispute made its way to the Trademark Trial and Appeal Board ("TTAB"), the last administrative decisionmaker on trademark issues before one must seek redress in the federal courts.  The TTAB ruled in favor of Triumph on all dispositive issues, and Coach appealed to the Court of Appeals for the Federal Circuit ("CAFC" or "Federal Circuit"), an appellate court of limited jurisdiction about which patent and trademark prosecution attorneys (and a few other interested onlookers) tend to have very strong opinions.

 

On Tuesday, the Federal Circuit largely sided with Triumph, in a 44-page decision that the always-insightful TTABlog® called "one of the best trademark opinions to come out of the CAFC [the Court of Appeals for the Federal Circuit] in a long time."  How about we take a leisurely look at what the CAFC had to say?

 

First, the CAFC agreed with the TTAB (or at least, found "substantial evidence" to support the TTAB's finding -- the relevant test for review of factual findings in this setting) on certain key points: 


"[W]e find that substantial evidence supports the [Trademark Trial and Appeals] Board’s determination that Triumph’s COACH mark, when applied to educational materials, brings to mind someone who instructs students, while CSI’s COACH mark, when used in connection with luxury leather goods, including handbags, suitcases, and other travel items, brings to mind traveling by carriage."


This informed the Federal Circuit's de novo conclusion that there was no likelihood of confusion as to the source or affiliation of Triumph's and Coach's goods:

 

"We agree with the Board that these distinct commercial impressions outweigh the similarities in sound and appearance [between the marks at issue], particularly since . . . the parties’ goods are unrelated.  Although CSI’s COACH mark is famous for likelihood of confusion purposes, the unrelated nature of the parties’ goods and their different channels of trade weigh heavily against CSI. Absent overlap as to either factor, it is difficult to establish likelihood of confusion."

 

(You can bet this last sentence will be quoted again and again by parties whose trademark applications are opposed on likelihood of confusion grounds.)


But this conclusion isn't especially surprising, at least not to me, because the goods in question really are so different, and there is/was no indication that Triumph has ever attempted to "free-ride" on Coach's "goodwill" among consumers (to use terminology that pops up all the time in trademark opinions and resources... like my new book!  Have you bought it yet?)

 

What I found more surprising about the decision was the Federal Circuit's agreement with the TTAB that Coach's "dilution" basis for opposition failed because the COACH mark is not "famous" for purposes of federal anti-dilution law:


"The Board found that CSI could not succeed on its dilution claims because it failed to show that its COACH mark was famous for dilution purposes....  A threshold question in a federal dilution claim is whether the mark at issue is 'famous.' Under the TDRA, a mark is famous if it 'is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” 15 U.S.C. § 1125(c)(2)(A) ... Fame for likelihood of confusion and fame for dilution are distinct concepts, and dilution fame requires a more stringent showing.... It is well-established that dilution fame is difficult to prove.... To establish the requisite level of fame, the 'mark’s owner must demonstrate that the common or proper noun uses of the term and third-party uses of the mark are now eclipsed by the owner’s use of the mark.'  [The general public must] associate[] the term, at least initially, with the mark’s owner.' In other words, a famous mark is one that has become a “household name.' ... [T]he Board found that CSI’s evidence fell short of showing 'widespread recognition of opposer’s mark [by] the general population,' [and on this record, in light of certain evidentiary problems,] we agree with the Board that CSI failed to provide sufficient evidence of fame for dilution purposes."

 

Admittedly, Coach might not be the "household name" that Prada, Armani, and Chanel likely are.  (As a somewhat trained linguist, FWIW, I'd wager that this is probably due to Coach's selection of a short word mark that means various things in English -- including someone who, say, helps someone else to prepare for tests.)  But if Coach isn't sufficiently "famous" to qualify for federal anti-dilution protection, will any fashion brand whose trademark isn't a proper noun -- or at least arbitrary in light of the goods sold -- make the cut?

 

My guess: the Federal Circuit understands perfectly well that "Coach" is famous among the American public, but didn't want to derail Triumph's business... because it appeared to be the "good guy" in this story.  (Many wise men and women have said that all litigation is ultimately about telling a compelling story.)  Perhaps for this reason, the CAFC concluded its dilution analysis by throwing an important bone to Coach:

 

"Before moving on, we pause to emphasize the fact-specific nature of our holding today. While the burden to show fame in the dilution context is high – and higher than that for likelihood of confusion purposes – it is not insurmountable. We do not hold that [Coach] could never establish the requisite level of fame for dilution purposes. We hold only that, on the record presented to it, the Board had substantial support for its conclusion that CSI’s evidentiary showing was just too weak to do so here."


In other words... muster up better evidence next time, Coach, and things might just go your way.

 

The CAFC also softened the blow to Coach for reasons that I suspect have more to do with keeping trademark law under control than any party-specific rationale, by ruling that -- again, on the evidentiary record before the TTAB -- Triumph had not shown that the public associated its purported trademark with a company, rather than with the general meaning of the descriptive word "coach":


"The Board found that COACH is merely descriptive when used in connection with educational materials used to prepare students for standardized tests because it 'immediately conveys to purchasers the purpose of the materials.' ... Substantial evidence supports the Board’s decision that [Triumph's mark] is merely descriptive."

 

Still, "mere descriptiveness" can be overcome by a showing of "secondary meaning" through use in commerce, and the TTAB had found that Triumph had achieved this.  On this issue, however, the CAFC disagreed with the TTAB:

 

"To establish secondary meaning, or acquired distinctiveness, an applicant must show that 'in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself.' ... To determine whether a mark has acquired secondary meaning, courts consider: advertising expenditures and sales success; length and exclusivity of use; unsolicited media coverage; copying of the mark by the defendant; and consumer studies.... We conclude that the Board’s failure to consider all pre-decision third-party use of the term “coach” for educational materials undermines its secondary meaning analysis and requires remand so that the Board can assess the extent to which those titles might cut against a claim of 'substantially exclusive use.' ... Because the Board’s evidentiary errors call into question the validity of its secondary meaning analysis, we vacate the Board’s decision solely on its finding of acquired distinctiveness and remand for further proceedings."


Ah, the dreaded "remand" -- more adversarial proceedings, more legal fees, more stuff to do.  (If the legally inclined among you spotted a potential standing issue here, you're "spot" on -- the Federal Circuit addresses that in a portion of the opinion that I haven't summarized here... and which, in my view, leaves some important questions unanswered.)


For anyone interested in learning (more) about the opposition process at the U.S. Trademark office, or even trademark registration in general, this is an opinion worth reading in its entirety.  It systematically explains many important principles in trademark law, and (of particular use to practitioners) highlights certain evidentiary pitfalls in USPTO proceedings... all in a fairly concise 44 pages.  It might not be the joyride you'll find here, but it makes for a good read.


[This post is for entertainment and informational purposes only, and does not constitute legal advice or create an attorney-client relationship among any individuals or entities.  Any views expressed in this post and/or at the linked web pages are those of the writer on a particular date, and should not necessarily be attributed to this writer, his law firm, or its clients.]