Likelihood of Confusion Analysis by Fifth Circuit Provides Clarification

A recent opinion issued by the Fifth Circuit on December 3, 2020, provides helpful clarification on the key analysis common to all trademark, service mark, and trade dress infringement claims. In affirming a district court ruling of no likelihood of confusion and, therefore, denial of a request for preliminary injunction, the Court offers a closer analysis of a number of the “digits of confusion” considered in any likelihood of confusion analysis.

In Future Proof Brands, L.L.C. v. Molson Coors Beverage Co., et al., the Court re-examined a district court’s denial of a preliminary injunction in a trademark infringement case. Cause No. 20-50323 (5th Cir. Dec. 3, 2020).  Future Proof Brands (“Future Proof”) and Coors are competitors looking to capitalize on the hot new trend of “seltzer” beverages, which typically include carbonated water, alcohol, and in most cases fruit flavors. Both named their product after a variation of the term “fizzy.” Future Proof selected and registered its mark for “Brizzy;” not long after, Coors began marketing “Vizzy,” an amalgamation of “Vitamin C” and “fizzy.” While neither was first to the market with a variation of the term “fizzy,” Future Proof brought suit against Coors asserting claims of trademark infringement and seeking a preliminary injunction. 

Keeping in mind that a preliminary injunction is an “extraordinary remedy” and applying the clearly erroneous standard, the Fifth Circuit upheld the district court’s denial of a preliminary injunction based on the finding that Future Proof had failed to establish a likelihood of confusion.  On appeal, Future Proof contested the district court’s ruling on digits of confusion number one (type of mark), two (similarity of the marks), six (defendant’s intent), seven (evidence of actual confusion) and eight (degree of care used by potential purchasers). The Court considered each of these digits in turn. 

Digit of Confusion Number One – Type of Mark

Initially, Future Proof argued that the district court erred in classifying its mark as descriptive.  The Court agreed—classifying “Brizzy” as requiring some imagination and therefore suggestive rather than descriptive. But because it did not disagree with the district court’s overall conclusion as to the strength of the mark, the Court held this error insufficient to establish an abuse of discretion.  Future Proof also maintained that the district court should have weighed this first digit in favor of an injunction because formal registration of its mark with the USPTO is prima facie evidence of both validity and distinctiveness.  Here, the Court disagreed, noting that “the presumption of validity that attaches to a service mark is not relevant to the issue of infringement” apart from providing evidence that a mark is suggestive rather than descriptive.  Moreover, the classification of a mark as suggestive (and therefore inherently distinctiveness) is not sufficient, on its own, to establish the overall strength of a mark.

Besides the spectrum, the Court noted that the key inquiry in establishing the strength of a mark is standing in the marketplace.  For example, evidence of widespread third-party use of a mark tends to show weakness in that mark.  Having identified numerous third-party uses of the common root “izzy,” such as Malibu’s “FIZZY PINK LEMONADE,” and “FIZZY MANGO,” “IZZE,” “BIZZY” coffee, “FIZZY FOX” sparkling shrub, “FIZZY” sparkling water, and Hubble’s “FIZZY JUICE,” the Court concluded that “Brizzy” does not enjoy strong standing in the market, is weak, and the district court did not commit clear error in finding this digit weighed against an injunction.

Digit of Confusion Number Two – Similarity of the Marks

Next, Future Proof argued that in evaluating the similarity of the marks, the district court erred in considering product packaging and failed to consider the auditory similarities of “Brizzy” and “Vizzy.”  The Fifth Circuit disagreed, as courts must consider a mark in the context that a customer perceives it in the marketplace, which can include product packaging and labeling. Moreover, the Court concluded that the district court did consider the auditory similarity between “B” and “V” and determined it to be relevant to its evaluation. However, Fifth Circuit precedent provides that “[s]imilarity of sound … may be taken into account,” not that such similarity should be given a place of prominence in the analysis. On this basis, the Court concluded the district court did not err in finding that the second digit of confusion weight only marginally in favor of an injunction. 

Digit of Confusion Number Six – Defendant’s Intent

With regard to the sixth digit, Future Proof asserted that the district court did not properly weight this digit because it provided evidence that Coors and its executives were “keenly aware” of the “Brizzy” mark when Coors began marketing “Izzy.”  The Court responded by clarifying that “mere awareness of a senior user’s mark does not establish ... bad intent.”  Rather, courts typically look to whether the defendant intended to derive benefits from the reputation of the plaintiff, such as evidence that the defendant imitated packaging material or adopted similar distribution methods. Future Proof next asserted that the district court erred in weighing this digit in favor of an injunction, when it must be considered only neutral at worst.  Without resolving this issue, the Court held that even assuming arguendo that the district court had erred in this way, it would not be sufficient to tip the scales in favor of an abuse of discretion.  

Digit of Confusion Number Seven – Evidence of Actual Confusion

As part of its analysis of the seventh digit of confusion, the district court had concluded that evidence of distributor confusion was not sufficient because distributors are not consumers.  The Fifth Circuit agreed with Future Proof that the district court erred in reaching this conclusion, noting that “a plaintiff need not prove confusion in actual consumers where there is evidence of actual confusion on the part of distributors.”  This error by the district court was deemed immaterial, however, because the district court set aside that conclusion and determined that the single incident presented by Future Proof was not actual confusion that swayed consumer sales, but a fleeting “mix-up” with no demonstrated impact on consumers.  As Future Proof offered no evidence to the contrary, the Court found the district court did not err in finding that Future Proof failed to prove actual confusion.

Digit of Confusion Eight – Degree of Care by Potential Consumers

Finally, Future Proof contested the district court’s conclusion that the eighth digit had little relevance here.  The only evidence Future Proof submitted in support of “degree of care by potential consumers” was the price of their product -- $14.99 for a 12-pack.  Future Proof maintained that because of its low price, consumers would make a “quick decision” in purchasing.  The  Court acknowledged Fifth Circuit precedent that “where items are relatively inexpensive, a buyer may take less care in selecting the item,” but held that it has “never concluded that a low price is sufficient to establish an absence of care.” Id. at 19.  Thus, while Future Proof claimed consumers were not likely to exercise care in selecting hard seltzer due to its low price, it offered no affidavits, testimony, or other evidence in support of its position.  The Court, therefore, found no error on the part of the district court and upheld its ruling on this digit of confusion.

This opinion offers some welcome clarification of the likelihood of confusion analysis.  Of particular import is the Court’s distinction between the distinctiveness of a mark and the strength of a mark, and the separate evidence necessary to establish the two, as well as the inclusion of product packaging and labeling in evaluating the similarity of marks.  Practitioners should also take note of the Court’s analysis of actual confusion, specifically the necessity of demonstrating that any alleged confusion, though not necessarily coming from actual consumers, swayed purchasing decisions made by consumers.  Overall, attorneys and lower courts alike should take note of the various nuances in the law identified in this opinion, as well as the requisite level of proof necessary for each of these digits of confusion, in the likelihood of confusion analysis.

For more information on Trademark Infringement, see our Trademark Services and Industry Focused Legal Solutions pages.

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