TTAB insufficiently weighed likelihood-of-confusion factors in cancellation action, Federal Circuit rules

The US Court of Appeals for the Federal Circuit has addressed errors in the TTAB’s likelihood-of-confusion analysis of a cancellation action. The court vacated and remanded the action, holding that the board erred in failing to give sufficient weight to the first factor of the DuPont test – similarity of the marks – and in failing to consider the relevant evidence for the third factor – similarity of established trade channels (Naterra International Inc v Samah Bensalem, case 22/1872, 15 February 2024, Moore, Stoll, Cunningham, JJ).

Case background

In 2020, Naterra International filed a petition to cancel Samah Bensalem’s registration for BABIES’ MAGIC TEA for use in connection with “medicated tea for babies that treats colic and gas and helps babies sleep better”. The petition was based on likelihood of confusion with Naterra’s multiple registrations for BABY MAGIC in connection with infant toiletry products, such as lotion and baby shampoo.

The board denied Naterra’s petition, finding that it failed to prove a likelihood of confusion. The board found that while the first DuPont factor (similarity of the marks) weighed in Naterra’s favour, the second and third factors (similarity of the goods and similarity of established trade channels) did not. Further, the BABY MAGIC mark “fell somewhere in the middle” for factor five (fame of the prior mark).

On the other DuPont factors, the TTAB found the fourth (conditions of purchasing), sixth (number and nature of similar marks in use on similar goods), eighth (length of time and conditions of concurrent use without evidence of actual confusion), 10th (market interface between applicant and owner of a prior mark) and 12th (extent of potential confusion) factors to be neutral. Naterra appealed.

The appeal

Naterra argued “that substantial evidence does not support the Board’s finding that the similarity and nature of the goods (DuPont factor two) and trade channels (DuPont factor three) disfavor a likelihood of confusion”, and that the board failed to properly weigh the first and fifth factors.

Similarity of the marks

On appeal, Naterra asserted that the board should have weighed its finding that the marks were “more similar than dissimilar” in favour of a likelihood of confusion. The Federal Circuit agreed, citing its prior holding in Detroit Athletic, in which it held that similarity of the marks “weighs heavily in the confusion analysis” when the dominant portion of the marks is similar and the remaining portions do not have a source-identifying function.

Relatedness of the goods

The board rejected Naterra’s expert testimony that other so-called ‘umbrella’ baby brands also offered both infant skincare products and ingestible products, deeming it “unsupported by underlying evidence”. However, the Federal Circuit disagreed, stating that “testimony that third-party companies sell both types of goods is pertinent to the relatedness of the goods”. Nonetheless, since the court could not determine whether the board rejected the expert testimony for other reasons, it remanded the case for further consideration and explanation of the TTAB’s analysis on this point.

Similarity of trade channels

The board found that the third factor weighed against a likelihood of confusion, stating that it lacked the “persuasive evidence” necessary to “conclude that the trade channels are the same”. However, the Federal Circuit found that the board failed to address the relevant evidence – namely, Bensalem’s admission that the parties’ goods were sold in similar trade channels. The court also noted that the board “did not identify in its decision any evidence showing a lack of similarity in trade channels”.

Fame of the prior mark

Naterra did not contest the board’s findings with regard to the fame of its BABY MAGIC mark. Instead, Naterra argued that the board erred in failing to give the fame factor sufficient weight in its analysis. The Federal Circuit disagreed, noting that the board did not find BABY MAGIC to be famous; it instead described the mark as “somewhat conceptually weak” and not “commercially strong, let alone famous”. Accordingly, the court held that the TTAB did not err in failing to give this factor more weight.

Key takeaways

The Federal Circuit’s ruling indicates that all evidence should be thoroughly considered before distributing weight between factors of a likelihood-of-confusion test. A more rigorous approach will reduce the likelihood of a reversal and streamline cases in which the DuPont factors or a similar test is employed