Nautilus hits the target in CROSSBOW Case

In Nautilus Group Inc v ICON Health and Fitness Inc, the US Court of Appeals for the Federal Circuit has upheld the decision of a district court to grant the plaintiff's motion for a preliminary injunction.

Nautilus Group Inc owns the registered and commercially successful BOWFLEX mark for its patented vertical rod resistance exercise machine. It registered BOWFLEX in 1986 and since 1992 has spent $233 million in promoting the machine resulting in sales of 780,000 units.

In 2002 ICON Health and Fitness Inc introduced its horizontally bending rod resistance exercise machine under the trademark CROSSBOW. Nautilus sued ICON for trademark infringement, claiming that CROSSBOW is confusingly similar to BOWFLEX. ICON claims that the Crossbow brand is derived from the resemblance to a medieval crossbow weapon that its machine takes while in use.

The US District Court for the Western District of Washington granted Nautilus's motion for preliminary injunction. Under Ninth Circuit law, a district court may grant a preliminary injunction in a trademark case when the plaintiff demonstrates "either (i) a combination of probable success on the merits and the possibility of irreparable injury, or (ii) the existence of serious questions going to the merits and that the balance of hardships tips sharply in [its] favour". Probable success on the merits requires a showing that the similarity of the marks, among other factors, has created a likelihood of confusion as to the source or origin of the goods. If a likelihood of confusion is found, irreparable injury to the plaintiff may be presumed.

The court applied the criteria set out in AMF Inc v Sleekcraft Boats (599 F2d 341, 348-49 (9th Cir 1979)) to analyze a likelihood of confusion, which include:

• the similarity of the marks;
  
  
• the relatedness or proximity of the two companies' products or services;
  
  
• the strength of the registered mark;
  
  
• the marketing channels used;
  
  
• the degree of care likely to be exercised by the purchaser in selecting goods;
  
  
• the alleged infringer's intent in selecting the mark;
  
  
• evidence of actual confusion; and
  
  
• the likelihood of expansion in product lines.

The court concluded that (i) the two marks were somewhat similar, but not necessarily confusing, and (ii) there was some evidence of actual confusion. It further found that ICON might have intentionally created potential confusion by adopting CROSSBOW as its trademark in an attempt to capitalize unfairly on Nautilus's successful marketing of the word 'bow' in the exercise equipment market. The court's analysis of these factors favoured Nautilus and demonstrated probable success on the merits.

ICON disagreed and requested a stay of the preliminary injunction pending the outcome of the appeal to the Federal Circuit.

On appeal, ICON made three arguments:

• the district court's failure to make a specific finding on whether any resulting likelihood of confusion was directly caused by the similarity of the marks amounted to reversible error;
  
  
• setting aside the marks' shared component (bow), the remainder of the marks (flex and cross) are entirely dissimilar so a claim of trademark infringement must fail; and
  
  
• if any likelihood of confusion does exist, it stems from (i) the similarity of the machines functional appearance (bending rods for resistance) that cannot be protected by trademark law, and/or (ii) Nautilus's longstanding dominance in this particular industry - not from any closeness of the CROSSBOW and BOWFLEX marks.

In affirming the district court's decision, the Federal Circuit held that:

• ICON's first argument was without support in the law;
  
  
• the marks must not be compared in part but in their entirety; and
  
  
• a diminished standard of similarity is applied when comparing the marks of closely related goods, as in this case.

It further ruled that there was no legal error in the district court's analysis that required reversal. The selection of a trademark by a junior user that incorporates a word from a direct competitor's commercially successful and established trademark may lead to a preliminary injunction of the junior user's new mark.

Brian E Banner, Banner & Witcoff Ltd, Washington DC