Abstract:   Trademark disputes typically turn on whether a likelihood of confusion exists between two marks — but, in a case involving the use of two universities’ similar logos, an appeals court held that a lack of evidence of actual confusion isn’t necessarily the final word on the likelihood-of-confusion issue. The court looked at three factors relevant to whether a likelihood of confusion exists: 1) the similarity of trade channels, 2) the care consumers employ when purchasing the goods, and 3) the absence of evidence of actual confusion.

A GAME OF CONFUSION

Court addresses “likelihood” vs. “absence of actual”

Trademark disputes typically turn on whether a likelihood of confusion exists between two marks, so you might think an absence of actual confusion would settle the issue. In University of South Carolina v. University of Southern California, the Federal Circuit Court of Appeals held that a lack of evidence of actual confusion isn’t necessarily the final word on the likelihood-of-confusion issue.

THE WARMUPS

South Carolina filed a trademark application to register its baseball logo — an interlocking S and C — for use on clothing. Southern California opposed registration, arguing (among other things) that the South Carolina mark would create a likelihood of confusion with two of its own marks (one for “SC” in standard character form and one for an interlocking S and C). 

The Trademark Trial and Appeal Board (TTAB) refused registration of South Carolina’s mark, finding it would create a likelihood of confusion with the Southern California marks.

USC’S AT-BAT

On appeal, South Carolina challenged the TTAB’s decision regarding three factors relevant to whether a likelihood of confusion exists: 1) the similarity of trade channels, 2) the care consumers employ when purchasing the goods, and 3) the absence of evidence of actual confusion. Here’s how the university fared in this particular at-bat:

Strike one! The TTAB found that South Carolina’s and Southern California’s marks would appear on the same classes of goods in the same channels of trade. It therefore concluded that the channels-of-trade factor weighed in favor of finding a likelihood of confusion. The Federal Circuit agreed.

Strike two! As to the care consumers would use when purchasing the goods, the TTAB found that the goods would be subject to purchase by three types of consumers: The first category comprised those with a loyalty to and affinity for a particular school; such consumers would exercise a degree of care in making their purchases. But the TTAB found the other two groups — those purchasing the goods as gifts and “new or casual fans” — would exercise less care and, thus, be susceptible to confusion.

The Federal Circuit agreed with South Carolina that the TTAB’s conclusions regarding the latter groups were speculative and not supported by substantial evidence. But it held that the error was harmless because the TTAB had already found that the marks were legally identical and would appear on the same classes of goods in the same trade channels. These factors supported a finding of likelihood of confusion on their own.

Strike three! The TTAB found that the absence of evidence of actual confusion weighed only slightly in South Carolina’s favor. It gave the factor little weight because the schools were located on different coasts and participated in different athletic conferences, precluding any significant opportunity for actual confusion to have occurred. 

South Carolina argued that the absence of evidence of actual confusion created a strong inference that there was no likelihood of confusion. The Federal Circuit, however, held that the conditions under which no actual confusion had occurred rendered the absence largely insignificant to the analysis. 

AN EXHIBITION

The court affirmed the TTAB’s refusal of registration. While the decision was deemed not precedential, we are reminded that merely showing an absence of actual confusion won’t clinch the likelihood-of-confusion analysis.