Federal Circuit reverses TTAB's decision in tire manufacturers dispute

United States of America
In Bridgestone Americas Tire Operations LLC v Federal Corporation (2010-1376, March 16 2012), in a unanimous precedential decision, the US Court of Appeals for the Federal Circuit has ruled that Bridgestone Americas Tire Operations LLC, which owns the registered trademarks POTENZA and TURANZA for tires, could prevent its competitor, Federal Corporation, from registering MILANZA for tires.

The ruling is noteworthy to more than European motorcar enthusiasts, because it demonstrates the importance of pleading and arguing the proper legal standards before the US Trademark Trial and Appeal Board (TTAB) and the Federal Circuit.

Bridgestone, a tire company that traces its origins to Harvey Firestone in 1900, registered the mark POTENZA in 1984, claiming use on tires since 1981. Twenty years later, in 2004, it registered the mark TURANZA, claiming use on tires since 1991.

That same year (2004) its competitor, applicant Federal Corporation, based in Taiwan, filed an application for MILANZA, claiming that it intended to use the mark on tires.

Bridgestone opposed the application before the TTAB, arguing, with support of substantial sales and advertising figures, that its POTENZA and TURANZA marks are well-known in the United States, and that the applicant’s MILANZA mark, for use on identical goods, sold through the same channels of trade to the same sort of customers, would likely engender confusion among consumers as to their source. 

Bridgestone argued that the applicant, knowing of Bridgestone’s decades-long successful use of the Italian-sounding POTENZA and TURANZA marks, intentionally adopted an Italian-sounding, three-syllable mark ending with 'nza' in order to free-ride on its competitor’s goodwill. The applicant responded that it had coined the MILANZA mark to conjure up associations with Milan, Italy and appeal to owners of European cars. It further argued, somewhat incongruously, that the 'za' suffix was used to impart emphasis in Chinese. 

Despite the wealth of evidence supporting its opposition, Bridgestone made what proved to be a tactical misstep by claiming to own a 'family' of marks. A family of marks has a common characteristic that the consuming public recognises as indicating a common source (eg, McDonald’s, McMuffin and McNuggets). This requires proof of extensive use and advertising under the common 'family surname' to connect the common element with the common source in the public eye. It raises the hurdle of proof so high that an opponent may be unable to clear it. Bridgestone fell short.

The TTAB found that Bridgestone had failed to establish a family of 'nza' marks, since the vast majority of Bridgestone’s advertising featured the BRIDGESTONE mark in connection with a specific sub-brand, such as POTENZA and TURANZA. Further, there was nothing in the record indicating that Bridgestone’s “target customers” recognise the 'nza' suffix as pointing exclusively to Bridgestone. For this reason, the TTAB found, there was no family of marks, and any market strength that Bridgestone claimed in the two sub-brands was tied to the BRIDGESTONE mark. Moreover, the dominant portions of the subject marks - the first two syllables, 'milan', 'poten' and 'turan' - engendered different commercial impressions. The final syllable 'za' was too insignificant to render the marks confusingly similar. Therefore, the TTAB dismissed Bridgestone’s opposition.

On appeal to the Federal Circuit, Bridgestone wisely abandoned the 'family of marks' contention, choosing to rely instead on the standard 'likelihood of confusion' argument. The new approach worked. The Federal Circuit, disagreeing with the TTAB, found that the prolonged exclusive use of the POTENZA and TURANZA marks, their extensive use in marketing and the billions of dollars of tire sales bearing those marks showed their commercial strength. Identifying the tire manufacturer, Bridgestone, in the ads did not diminish this commercial strength.

Beyond that, the court evinced scepticism about the applicant’s rationale for choosing its strangely similar mark. As that court has long held, there was “no excuse for even approaching the well-known trademark of a competitor”. And so it reversed the TTAB and upheld Bridgestone’s opposition to registration of MILANZA.   

The case is both precedential and instructive. Even though ownership of two or more similar marks seems to bolster their strength, a would-be opponent should think long and hard before claiming that they constitute a family of marks. Such a claim raises the bar too high for most trademark owners, and may detract from an otherwise straightforward likelihood of confusion analysis. 

Further, even though the court’s decision is precedential, it is best not to read too much into it. At first glance, the court’s language looks sweeping:

Although the [opponent] bears the burden of coming forward with sufficient evidence, a new entrant presenting a new mark for registration has an obligation to avoid confusion with established marks in the same market...  There is a heavy burden to avoid consumer confusion as to products and their source.” 

Interpreted too broadly, this language might appear to shift the burden of proof to the applicant to disprove likelihood of confusion once the opponent meets its initial burden of production of evidence.

Read in the context of this case, though, the holding is more modest. In this case, the parties were competitors in the same market for over 50 years. Over the course of two decades, through extensive marketing and billions of dollars in sales, one competitor successfully established strong and well-known marks. The other competitor, undoubtedly aware of this success, chose from the universe of possible trademarks a mark with the same Italian sound, cadence, connotation and ending - a choice that it rationalised as a conflation of Italian and Chinese. Moreover, it intended to use this mark for the same goods, customers, channels of trade and prices. The court, sceptical of the rationalisation, did not shift the burden of proof. Rather, in view of the historical market interface between the parties (which is an established DuPont factor), it upheld a long-settled axiom: “A strong mark... casts a long shadow which competitors must avoid.”     

James L Bikoff, David K Heasley, Charles Chen and Judd Lauter, Silverberg Goldman & Bikoff LLP, Washington DC

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