CAFC: no negative inference based on Nestlé's failure to produce survey evidence

In Midwestern Pet Foods Inc v Société des Produits Nestlé SA (Appeal 2011-1482, July 9 2012), the US Court of Appeals for the Federal Circuit has affirmed the Trademark Trial and Appeal Board (TTAB)’s denial of Midwestern Pet Foods Inc’s application to register the mark WAGGIN’ STRIPS for use in connection with edible pet treats. 

Midwestern had filed an intent-to-use application with the US Patent and Trademark Office seeking to register its mark. Société des Produits Nestlé SA had opposed, arguing, among other things, that there was a likelihood of confusion with its own mark, BEGGIN’ STRIPS, which had been in continuous use in connection with pet treats since 1988 and registered since 1989. Both the TTAB and the Federal Circuit agreed, noting that “substantial evidence” supported its finding of a likelihood of confusion between the two marks.

In sustaining Nestlé’s opposition, the TTAB concluded that, “because the goods are identical, the channels of trade and classes of purchasers are the same, and the marks are similar in appearance, sound, connotation and commercial impression”, there was a likelihood of consumer confusion between the two marks. However, the TTAB rejected Nestlé’s claim of trademark dilution, because Nestlé had not demonstrated that the BEGGIN’ STRIPS mark had the fame required to support a dilution claim. 

Midwestern’s arguments on appeal focused on three alleged errors on the part of the TTAB. First, Midwestern disputed the TTAB’s admission of Nestlé’s evidence of its advertising, sales and marketing activities related to the BEGGIN’ STRIPS mark, because Nestlé had not produced these documents during discovery. Second, Midwestern argued that the TTAB had erred in admitting evidence as to the fame of the BEGGIN’ STRIPS mark that postdated the date of filing of Midwestern’s WAGGIN’ STRIPS application. Third, Midwestern argued that the TTAB’s finding of a likelihood of confusion was not supported by the evidence. The Federal Circuit disagreed on all three points, finding that the TTAB had not committed reversible error.

With respect to the admission of evidence not produced in discovery, the Federal Circuit applied the TTAB’s procedures prior to the 2007 amendment requiring mandatory initial disclosures, since Nestlé had filed its opposition prior to the amendment. The Federal Circuit found that Nestlé was not obliged to produce the disputed documents in response to discovery requests to which it had objected as overbroad, absent a narrowing of those requests by Midwestern or a TTAB ruling that overturned Nestlé’s objections. Accordingly, the court held that Midwestern could not claim prejudice based on Nestlé’s failure to produce the disputed documents. 

The Federal Circuit upheld the TTAB’s admission of evidence of the fame of the BEGGIN’ STRIPS mark that postdated the filing of Midwestern’s application for WAGGIN’ STRIPS. The Federal Circuit explained that, contrary to Midwestern’s contention, evidence of post-application fame is relevant to the issue of whether there is a likelihood of confusion, notwithstanding the fact that the same evidence is not admissible with respect to the issue of dilution of the opponent’s mark under 15 USC §§ 1053 and 1125(c). Specifically, while a party asserting dilution in an opposition proceeding must establish that its mark was famous prior to the filing date of the opposed intent-to-use application, no such restriction applies to the admission of evidence of the strength of a mark for purposes of a likelihood of confusion analysis. The “stringent requirements” to establish a mark’s fame for dilution purposes do not apply to likelihood of confusion, where an opponent need only demonstrate that its mark has “acquired sufficient public recognition and renown to demonstrate that it is a strong mark”.

Finally, the Federal Circuit agreed with the TTAB as to the merits of Nestlé’s likelihood of confusion claim.  Midwestern argued that, because the TTAB found that Nestlé’s mark was not famous, it should have afforded the mark only a narrow scope of protection. The Federal Circuit disagreed, finding that the BEGGIN’ STRIPS mark had “enjoyed at least a high degree of recognition that has rendered the mark distinctive and strong and entitled to a broad level of protection”, noting that it had been in use since at least 1988, and that products bearing the mark have been extensively advertised, marketed and sold throughout the United States. 

The court further remarked on the confusing similarity of the marks themselves, since they are both standard character format marks with the same format, structure and syntax, and the fact that the two marks are used for identical goods. The Federal Circuit additionally supported the TTAB’s note that the third-party marks for similar goods cited by Midwestern were either for substantially different products or substantially different marks. Notably, the Federal Circuit found that the TTAB was not in error to fail to draw a negative inference based on Nestlé’s failure to introduce survey evidence in order to show a likelihood of confusion.

Natasha Sardesai Grant and Howard J Shire, Kenyon & Kenyon LLP, New York