'; What You Need to Know About Filing an Infringement Lawsuit for a Nontraditional Mark in the U.S. Court of Appeals for the Seventh Circuit

What You Need to Know About Filing an Infringement Lawsuit for a Nontraditional Mark in the U.S. Court of Appeals for the Seventh Circuit

October 1, 2017 INTA Bulletin

One of the projects for INTA’s Nontraditional Marks (NTM) Committee—United States Subcommittee is to analyze the treatment of NTMs in the court system. This article provides an analysis of the U.S. Court of Appeals for the Seventh Circuit, where former Chief Judge Richard Posner, an economics professor at the University of Chicago, presided and authored influential opinions on trademark law, including NTMs.

Analysis: The Seventh Circuit and Judge Posner

Generally, one may consider the Seventh Circuit pro-defendant in trademark cases, especially in cases involving NTMs. This tendency to be pro-defendant appears to have originated with former Chief Judge Posner, who authored articles regarding the relationship between economics and trademark law. See William M. Landes & Richard A. Posner, “Trademark Law: An Economic Perspective,” 30 J.L. & Econ. 265 (1987). Other writers have described Judge Posner’s view as one that sees trademark rights as “private” rather than “public.” David W. Barnes, “A New Economics of Trademarks,” 5 Nw. J. Tech. & Intell. Prop. 22, 50–53 (2006).

An example of Judge Posner’s view can be gleaned by a review of one of the leading Seventh Circuit cases discussing trademark infringement. In a 2-1 decision authored by Judge Posner, the Seventh Circuit reversed a trial court finding of likelihood of confusion in favor of the defendant. See Libman Co. v. Vining Indus., Inc., 69 F.3d 1360, 1364 (7th Cir. 1995). In this case, the mark consisted of a color scheme of vertical bands in contrasting color placed across the bristles of a broom. Id. at 1361. The defendant marketed its own competing brooms using a similar contrasting color motif. Id. While the marks were not readily visible on the heads of the broom when packaged for sale, the plaintiff was concerned about post-sale confusion. Id. at 1361‒62. The competing brooms were rarely sold through the same store, but Judge Posner acknowledged that they were sold through the same type of store. Id. at 1362. He also acknowledged that the products were directly competitive and inexpensive. Id. at 1362‒63.

Despite all of these factors in the plaintiff’s favor and the plaintiff’s “fetching narrative” that post-sale confusion may happen, the Seventh Circuit found that the plaintiff had not met the burden of proof in establishing a likelihood of confusion. Id. at 1361‒64. Judge Posner noted that there was no survey or evidence of actual confusion and said “a finding of likelihood of confusion can no more be based on pure conjecture or a fetching narrative alone than any other finding on an issue on which the proponent bears the burden of proof.” Id. at 1363.

So, despite close similarities in marks, identity of products, and channels of trade, and a low degree of customer care, the Seventh Circuit found the trial court’s finding of likelihood of confusion to be clearly erroneous. There was vigorous dissent and there has been at least one law review article criticizing this decision. See Lee Ann Tranford, “Creating Meaning Within A Gray Area: Redefining Likelihood of Confusion in Libman Co. v. Vining Industries, Inc.,” 26 Stetson L. Rev. 901 (1997).

Other interesting Seventh Circuit pro-defendant trade dress decisions that Judge Posner authored include Publications Int’l Ltd. v. Landoll Inc., 164 F.3d 337 (7th Cir. 1998) and Blau Plumbing, Inc. v. S.O.S. Fix-It Inc., 781 F.2d 604 (7th Cir. 1986). But see W.T. Rogers Company, Inc. v. Keene, 778 F.2d 334 (7th Cir. 1985) (where Posner reversed summary judgment in favor of the defendant based on a finding that the plaintiff’s trade dress was functional).

Carrying on Tradition: Judge Flaum

Posner’s successor as Chief Judge of the Seventh Circuit was Judge Joel Flaum. He may also be characterized as pro-defendant in trademark infringement cases, as evidenced by Sorensen v. WD-40 Company, 792 F.3d 712 (7th Cir. 2015), cert. denied, 136 S. Ct. 801 (2016) (see images below).

In that case, Judge Flaum upheld summary judgment for the defendant despite finding many of the likelihood of confusion factors favoring the plaintiff and errors by the district court. Interestingly, Judge Flaum upheld summary judgment despite Seventh Circuit precedent that motions for summary judgment, at least in traditional trademark infringement cases, must be approached with great caution. See AutoZone, Inc. v. Strick, 543 F.3d 923 (7th Cir. 2008).

District Court Response

This pro-defendant philosophy espoused by Judges Posner and Flaum has influenced the district court judges as well. For example, at the 2007 INTA Annual Meeting held in Chicago, three Northern District of Illinois federal judges were asked whether they believed a survey was necessary to find infringement if the majority of the factors of confusion favored a plaintiff in a trademark infringement case. All three judges said they did not believe they would find in favor of infringement for a plaintiff that could afford a survey and did not provide one absent significant actual confusion. Thus, while a survey is not listed as an element of proof by the Seventh Circuit, any well-heeled trademark plaintiff would be advised to obtain and submit an appropriate survey, at least absent counterfeiting or actual confusion.

Furthermore, if a plaintiff brings a trade dress action in the Seventh Circuit where the defendant may raise a defense of functionality, the plaintiff should again exercise caution. For example, a recent case discussing functionality affirmed summary judgment for the defendant. See Arlington Specialties, Inc. v. Urban Aid, Inc., 847 F.3d 415 (7th Cir. 2017) (see below).

In this case, the Seventh Circuit stated the following:

Functionality is a factual question …[,] but the bar for functionality is so low that it can often be decided as a matter of law, as in this case.

Representative cases from the district courts in the Seventh Circuit granting summary judgment to a defendant based on a claim of functionality include: LoggerHead Tools, LLC v. Sears Holding Corp., No. 12-CV-9033, 2016 WL 5112020 (N.D. Ill. 2016) and Speare Tools, Inc. v. Klein Tools, Inc., 113 U.S.P.Q2d 1800 (E.D. Wis. 2014).

In summary, it is believed that practitioners in the Seventh Circuit have found the courts skeptical of trademark infringement claims, especially in cases involving nontraditional trademarks. Further, summary judgment may be freely granted on claims involving functionality since the threshold for finding functionality is considered “low.”