June, 7th, 2017

By Michael J. Kosma

In Joseph Phelps Vineyards, LLC v. Fairmont Holdings, LLC, [2016-1089] (May 24, 2017), the Federal Circuit was “perplexed” by the TTAB’s finding that Phelp’s INSIGNIA wine has no “fame,” giving no discernable weight to this factor. In vacating the TTAB’s decision denying cancellation of Fairmont’s Reg. No. 4213619 on the mark ALEC BRADLEY STAR INSIGNIA for cigars the Federal Circuit held that fame in a likelihood of confusion analysis is not an all-or-nothing-factor, but should be analyzed along a sliding scale.

Phelps has produced and sold wines bearing the trademark INSIGNIA since 1978. In 2012, Fairmont Holdings, LLC received federal registration for the mark ALEC BRADLEY STAR INSIGNIA for cigars and cigar products. On Phelps’ petition for cancellation, the TTAB denied the petition, finding that:

while it appears that Petitioner’s INSIGNIA branded wine has met with success in the marketplace, we are not persuaded on this record that Petitioner’s mark is a famous mark.

The Federal Circuit was “perplexed” at the Board’s finding that INSIGNIA wine has no “fame,” giving no discernable weight to this factor. They held the TTAB applied an incorrect standard, for “fame” is determined from the viewpoint of consumers of like products. The record showed extensive recognition, accolade and appreciation by consumers and the wine market of Phelps’ INSIGNIA brand, including being selected as Wine Spectator’s Wine of the Year in 2005 and 1997, and being served at the White House on several occasions.

While the TTAB acknowledged: “Fame for confusion purposes arises as long as a significant portion of the relevant consuming public … recognizes the mark as a source indicator,” the TTAB applied a legally incorrect standard in applying an all-or-nothing measure of “fame,” more akin to dilution analysis. While dilution fame is all-or-nothing, likelihood of confusion fame varies along a spectrum from very strong to very weak.

Because of this error, the TTAB’s decision was vacated and remanded for redetermination of the merits of the cancellation petition.

Practice Point:

When a prior user’s mark is found to be famous, this plays a significant role in the likelihood of confusion analysis because famous marks enjoy a broad scope of protection. Therefore, since fame is a sliding scale with regard to likelihood of confusion, practitioners should provide an abundance of evidence relating to fame in opposition and cancellation proceedings.

Practitioners should also be mindful that “fame” alone is not enough and as Judge Newman stated in her concurring opinion the actual use of the marks and relatedness of the goods (wine vs. cigars) are important factors.

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