Federal Circuit ruling emphasises influence of DuPont factors when evaluating similar marks

In Spireon Inc v Flex Ltd (22-1578; Fed Cir; 26 June 2023), the US Court of Appeals for the Federal Circuit remanded a TTAB decision, finding that the board:

• incorrectly analysed several DuPont factors – specifically in regard to third-party registration on similar goods;
• permitted the opposer to succeed without a showing of identical marks for goods used in the marketplace; and
• predicated its comparative analysis on the incorrect mark. 

The TTAB’s ruling

Spireon filed an application for the mark FL FLEX for use in connection with “[e]lectronic devices for tracking the locations of mobile assets in the nature of trailers, cargo containers, and transportation equipment using global positioning systems and cellular communication networks”. After the examining attorney approved the application, Flex opposed the registration on the grounds of priority and likelihood of confusion with its previously registered marks: FLEX, FLEX (stylised) and FLEX PULSE.

The TTAB sustained Flex’s opposition based on its analysis of the DuPont factors for evaluating likelihood of confusion. A total of 13 factors form the underlying factual findings upon which the legal conclusion of likelihood of confusion is made, and not all are relevant in every case.

In considering the first DuPont factor (similarity of the marks), the board addressed the strength of Flex’s marks, including their conceptual and commercial strength. It weighed five marks – FLEX (in three relevant commercial contexts), LOAD FLEX and VALUE FLEX – and concluded that the third-party evidence did not show Flex’s marks to be either conceptually weak or inherently distinctive.

The board then considered the similarity of the marks, analysing Spireon’s FL FLEX against FLEX, FLEX (stylised) and FLEX PLUS (which is not Flex’s actual mark, FLEX PULSE). It found the marks to be very similar and concluded that the first DuPont factor supported a finding of likelihood of confusion. The board also addressed three other DuPont factors that it considered relevant, but not others. Spireon appealed.

Federal Circuit sides with Spireon

The Federal Circuit reversed this judgment. The court found that the TTAB erred in its failure to consider the sixth DuPont factor, “[t]he number and nature of similar marks in use on similar goods”. This factor requires an evaluation of conceptual and commercial strength. Conceptual strength focuses on the degree to which a mark is descriptive in that it “directly and immediately convey[s] some knowledge of the characteristics of products”, whereas commercial strength focuses on the “marketplace recognition value of the mark”.

The Federal Circuit explained the relevance of third-party registrations and their bearing on a mark’s conceptual strength, noting that the board was wrong to assign a low probative value to 15 composite marks of record. The court further detailed that composite third-party marks are relevant for resolving the question of whether the “shared segment—in this case, ‘flex’—has a commonly understood” meaning in the pertinent field, and to the crowded nature of the field in which the ‘flex’ root is used. As it then explained, proof of use or non-use is material because the sixth DuPont factor only considers similar marks ‘in use’ on goods.

The Federal Circuit held that while Spireon bore the burden of producing evidence of relevant registrations, the onus was on Flex (as the opposer) to prove non-use of those third-party marks. It stated that:

This case presents the . . . question of whether the burden of showing non-use of identical marks for identical goods rests with the opposer. We think it necessarily does. Otherwise, the opposer would be able to dismiss the commercial significance of previously registered identical marks for identical goods where the opposer’s own mark should perhaps have not been granted registration in the first place.

Finally, the court ruled that the board erred in its analysis by mistakenly comparing Spireon’s mark FL FLEX to FLEX PLUS (which is not owned by Flex) instead of FLEX PULSE, one of Flex’s registered marks. It additionally instructed that on remand, the board should give weight to Spireon’s argument concerning the highly suggestive nature of ‘flex’ as being short for ‘flexible’.

Following its decision, the Federal Circuit remanded the case to the TTAB to reconsider likelihood of confusion, asserting:

On remand Flex should be given the opportunity to [show that the identical marks for identical goods were not used in the marketplace], given our clarification of the applicable law. If Flex fails to establish non-use, the commercial strength of the Flex marks must be considered weak as to Spireon’s non-identical mark.