HOT WHEELS summary judgment spins out in Ninth

In Jada Toys Inc v Mattel Inc, the US Court of Appeals for the Ninth Circuit has reversed and remanded a district court decision granting summary judgment in favour of Jada Toys Inc with respect to Mattel Inc's counterclaims for, among other things, infringement and dilution of its HOT WHEELS mark.

In April 2004 Jada filed suit against Mattel in the US District Court for the Central District of California, claiming Mattel's OLD SCHOOL and NEW SCHOOL lines of miniature toy vehicles infringed Jada's registered trademark OLD SKOOL used for similar products. Mattel counterclaimed for trademark infringement, trademark dilution and copyright infringement of its HOT WHEELS marks based on Jada's use of the mark HOT RIGZ. The Ninth Circuit's decision deals only with Mattel's counterclaims.

From 2001 to 2004, Jada produced a line of miniature trucks called HOT RIGZ and obtained a US trademark registration for the mark in 2002. Mattel has been marketing its HOT WHEELS line of toy vehicles, which includes small scale versions of big rig trucks, since 1968. In addition, Mattel owns various US trademark registrations for HOT WHEELS logos.

After both parties filed summary judgment motions, the district court ruled that Mattel had not infringed Jada's OLD SKOOL mark and that Jada had not infringed Mattel's HOT WHEELS mark. Mattel appealed the grant of summary judgment in favour of Jada on its HOT RIGZ counterclaims.

First, with respect to Mattel's trademark infringement claim, the Ninth Circuit held that the lower court had improperly applied the Ninth Circuit's likelihood of confusion test (known as the 'Sleekcraft test'). It explained that the district court erred in considering only the dissimilarity of the marks, at the expense of the other Sleekcraft factors. The Ninth Circuit did note that the Sleekcraft test is "pliant", in that some factors may be given more weight than others and that not all factors must necessarily be satisfied in any particular case. However, it rejected the district court's reliance on one single factor to the exclusion of other relevant factors, noting that:

"dissimilarity alone does not obviate the need to inquire into evidence of other important factors. Only upon such an inquiry may a court ensure that its judgment as to the likelihood of confusion is fully informed and without error."

The Ninth Circuit specifically mentioned that in the context of subjectively dissimilar marks, evidence of actual confusion and evidence defining the context in which the goods are sold are particularly relevant.

Next, in reversing the district court's ruling as to Mattel's trademark dilution claim, the Ninth Circuit found that a reasonable trier of fact could determine the marks to be nearly identical since they both:

• contain the word 'hot';
  
  
• employ a flame element;
  
  
• use similar colours; and
  
  
• have similar connotations.

Under these circumstances, the Ninth Circuit found that Mattel's evidence showing actual dilution created a genuine issue of material fact.

Finally, with respect to Mattel's copyright claim, the district court had ruled that since the marks were dissimilar, no reasonable trier of fact could find that they conveyed a similar expression. The Ninth Circuit found instead that the marks could be found objectively similar, reversing the district court on this issue as well.

Susan M Natland and Michael T Richmond, Knobbe Martens Olson & Bear LLP, Irvine