Cross Commerce Media, Inc. v. Collective, Inc.

841 F.3d 155, 2016 WL 6575071
Court of Appeals for the Second Circuit·Decided November 7, 2016·No. Docket No. 15-782·Published·Cited by 129 cases

Opinion

SACK, Circuit Judge:

This appeal arises from a dispute between software companies over several trademarks containing the word “collective.” Appellant Collective, Inc. (“Cl”), defendant and counter-claimant in the district court, owns the registered marks “Collective Network,” “Collective Video,” and “C Collective The Audience Engine,” a stylized mark in which the word “Collective” appears most prominently (together, the “registered marks”). Cl also asserts common-law rights in the unregistered mark “collective,” standing alone. Appellee Cross Commerce Media, Inc. (“CCM”), plaintiff and counter-defendant in.the district court, operates under the name “Collective[i].”1 Cl alleges that this name (and two variants) infringes its registered- and unregistered marks. CCM seeks a judgment to the contrary, along with a declaration that Cl holds no common-law rights in the unregistered mark “collective” and an order compelling the U.S. Patent and Trademark Office (“PTO”) to cancel or modify Cl’s registered marks.

In a series of three orders, the district court (Katherine B. Forrest, Judge) granted summary judgment to CCM on virtually all points in dispute and awarded attorney’s fees under the Lanham Act. We reverse those decisions in part, vacate them in part, and remand for further proceedings.

BACKGROUND

Cl provides data-driven analytic software that helps businesses select effective marketing opportunities on multiple electronic platforms, including “computers, smart phones, tablets and connected television.” Declaration of Joseph T. Apprendi, CEO and Co-Founder of Cl,' dated July 10, 2014, at 4-6 (App’x 559-61). It was incorporated as Collective Media, Inc. in 2007, and its name was changed to Collective, Inc. in 2012. From 2008 to 2011, the company registered the trademarks “Collective Network,” “Collective Video,” and “C Collective The Audience Engine.” During the same period, Cl acquired the domain name www.collective.com for its principal website and referred to itself in at least several instances as “Collective.”

CCM provides its own brand of data-driven analytic software. According to one of the company’s trademark registrations, the software aids companies in “deploying and analyzing marketing campaigns.” See CCM’s Statement of Undisputed Material Facts dated June 11, 2014, at 6 (App’x 588). The company was founded as Cross Commerce Media, Inc. in 2007, but it began to do business under the mark “Collective[i]” (and the related marks “Collective Intelligence” and Collectivei) in 2011.

In late 2011, Cl contacted CCM to express its concern that use of the mark [160]*160“Collective^]” in commerce would create confusion over the two companies because they operate in similar fields. After negotiations failed to solve the perceived problem, Cl sent CCM a cease-and-desist letter in late 2012 asserting CCM’s infringement of Cl’s trademarks, including the registered marks and the unregistered mark “collective.” In response, CCM filed this action in the United States District Court for the Southern District of New York in an effort to preempt an infringement lawsuit by Cl. CCM sought three remedies: a declaration that Cl did not own trademark rights to the unregistered mark “collective”; a declaration that the name “Collective[i]” did not infringe any of Cl’s registered or unregistered marks; and an order compelling the PTO to cancel or modify the registered marks. Cl, in turn, filed counterclaims under the Lanham Act alleging that CCM’s use of “Collective[i]”—along with “Collective Intelligence” and “Collectivei”—infringed Cl’s registered marks and the unregistered mark “collective.”2

The district court resolved the parties’ claims and counterclaims in a series of three orders. First, before the parties had completed discovery, CCM moved for partial summary judgment as to the inherent distinctiveness of the unregistered mark “collective.” Trademarks, whether registered or unregistered, are grouped for purposes of analysis into four categories of increasing inherent distinctiveness: generic, descriptive, suggestive, and arbitrary or fanciful. Bernard v. Commerce Drug Co., 964 F.2d 1338, 1340 (2d Cir. 1992). CCM sought a decision by the district court that the unregistered mark “collective,” as used by Cl, is descriptive as a matter of law. Cl countered that the mark is suggestive—or, alternatively, that a jury should decide the issue. In a March 24, 2014 order, the court, agreeing with CCM, classified the mark as descriptive. Cross Commerce Media, Inc. v. Collective, Inc., No. 13 Civ. 2754 (KBF), 2014 WL 1202939, at *5, 2014 U.S. Dist. LEXIS 38606, at *14-15 (S.D.N.Y. Mar. 24, 2014) (the “March Order”).

The March Order did not reject Cl’s counterclaim for infringement of the unregistered mark “collective” outright. By classifying the mark as descriptive, however, the order imposed a heightened evidentiary standard for establishing its entitlement to protection under federal trademark law. The Lanham Act affords protection to a descriptive mark only if the trademark holder can demonstrate that it has acquired secondary meaning in the marketplace—in other words, that the mark’s “primary significance” to relevant consumers “is to identify [the trademark holder as] the source of the product.” Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1041 (2d Cir. 1992) (internal quotation marks omitted). That showing “entails rigorous evidentiary requirements.” 20th Century Wear, Inc. v. Sanmark-Stardust, Inc., 815 F.2d 8, 10 (2d Cir. 1987) (internal quotation marks omitted). Had the mark instead been classified as suggestive, it would have received some degree of trademark protection even “without proof of secondary meaning.” McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126, 1132 (2d Cir. 1979), superseded on other grounds by Fed. R. Civ. P. 52(a).3

[161]*161Seeking to build on the March Order, CCM subsequently moved for summary judgment as to Cl’s counterclaim for infringement of the unregistered mark “collective,” on two grounds. First, CCM argued that Cl could not establish that the mark had acquired secondary meaning— which, as noted, would mean that it was not entitled to protection under the Lan-ham Act. Second, CCM contended that even if “collective” had acquired secondary meaning, Cl could not establish infringement because it had not used the mark in commerce (and acquired corresponding trademark rights) until after CCM had introduced its own marks. Cl arguéd in response that it had raised triable issues of fact as to both issues, precluding summary judgment. In an August 21, 2014 order, the district court again agreed with CCM, concluding that Cl had no protectable rights in the unregistered mark “collective” both because the mark lacked secondary meaning and because Cl had not used it in commerce before CCM introduced its marks. See Cross Commerce Media, Inc. v. Collective, Inc., No. 13-cv-2754 (KBF), 2014 WL 11343849, at *1, 12-14, 2014 U.S. Dist.

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Cross Commerce Media, Inc. v. Collective, Inc., 841 F.3d 155, 2016 WL 6575071 (2d Cir. 2016).

841 F.3d 155 (Cross Commerce Media, Inc. v. Collective, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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