In Re CHARGER VENTURES LLC

• Court: Court of Appeals for the Federal Circuit
• Decided: April 13, 2023
• Docket: 22-1094
• Status: Published

Opinion

Case: 22-1094 Document: 39 Page: 1 Filed: 04/13/2023

United States Court of Appeals for the Federal Circuit ______________________

IN RE: CHARGER VENTURES LLC, Appellant ______________________

2022-1094 ______________________

Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 88340651. ______________________

Decided: April 13, 2023 ______________________

WILLIAM D. DAY, William Day Law Group, Bethesda, MD, argued for appellant Charger Ventures LLC.

THOMAS L. CASAGRANDE, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, ar- gued for appellee Katherine K. Vidal. Also represented by CHRISTINA J. HIEBER, THOMAS W. KRAUSE, MONICA BARNES LATEEF, FARHEENA YASMEEN RASHEED, MEREDITH HOPE SCHOENFELD. ______________________

Before PROST, REYNA, and STARK, Circuit Judges. REYNA, Circuit Judge. Charger Ventures LLC appeals from a Trademark Trial and Appeal Board decision that denied registration of Charger’s trademark SPARK LIVING on grounds of Case: 22-1094 Document: 39 Page: 2 Filed: 04/13/2023

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likelihood of confusion with an earlier registered trade- mark, SPARK. On appeal, Charger challenges the Board’s likelihood of confusion determination. Because the Board’s determination is supported by substantial evidence, we af- firm. BACKGROUND Appellant Charger Ventures LLC (“Charger”) filed in- tent-to-use application No. 88,340,651 to register SPARK LIVING on the Principal Register in International Class 036 for leasing of real estate; real estate listing; real estate service, namely, rental property management. J.A. 22–27. The examining attorney refused registration under Trade- mark Act Section 2(d) of the Lanham Act, 15 U.S.C. § 1052(d), on grounds of a likelihood “to cause confusion, or to cause mistake, or to deceive with an earlier registered mark.” J.A. 30–32. The earlier registered mark, SPARK, was registered for “[r]eal estate services, namely, rental brokerage, leas- ing and management of commercial property, offices and office space.” Appellee’s Br. 2; J.A. 33. The examining at- torney noted that (1) “a comparison of the respective marks show[s] that they are comprised either in whole or signifi- cant part of the term ‘SPARK,’” J.A. 30, and (2) both marks are for real estate services, with “overlapping identifica- tions of leasing and rental management services,” J.A. 31. Charger then amended its description of services to only cover residential real estate services. J.A. 125. In the amendment, Charger asserted that the examining attorney failed to compare the marks in their entireties—SPARK (hereinafter, “registrant’s mark”) versus SPARK LIVING. J.A. 127–28. The examining attorney issued a new office action, re- quiring Charger to disclaim “LIVING” because “adding a term to a registered mark” or “[i]ncorporating the entirety of one mark within another does not obviate the similarity between the compared marks . . . nor does it overcome a Case: 22-1094 Document: 39 Page: 3 Filed: 04/13/2023

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likelihood of confusion.” J.A. 138. Thus, the examining at- torney found, the marks had similar sound, appearance, connotation and commercial impression and similarity in just one element of a mark, alone, is sufficient to find like- lihood of confusion. Id. Charger filed a response, dis- claimed the term “LIVING,” and again amended the description to “specifically” exclude commercial property and office space—the services of registrant’s mark. J.A. 200, 209–10. On July 13, 2020, the examining attorney is- sued a final office action maintaining the refusal. J.A. 290– 93. Charger appealed the refusal to the Trademark Trial and Appeal Board (“Board”) and filed a request to recon- sider the final office action, which stayed the appeal. Ap- pellant’s Br. 6. The Board denied the request and resumed the appeal. Id. The Board affirmed the refusal to register Charger’s mark after finding a likelihood of confusion. J.A. 2. BOARD DECISION The Trademark Act prohibits registration of a mark that “so resembles a registered mark as to be likely, when used on or in connection with the goods or services of the applicant, to cause confusion, mistake, or to deceive.” 15 U.S.C. § 1052(d) (also called Section 2(d)). To determine whether a likelihood of confusion exists under section 2(d), the Board considers the so-called DuPont factors in its analysis. In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 1361 (CCPA 1973) (reciting thirteen factors to be con- sidered, referred to as “DuPont factors”). In this case, the Board addressed five of the Dupont factors: (1) similarity or dissimilarity of the marks, (2) sim- ilarity of dissimilarity of the nature of the goods or services, (3) the similarity or dissimilarity of established, likely-to- continue trade channels, (4) the conditions under which and buyers to whom sales are made, and (5) strength of the mark (e.g., the number and nature of similar marks in use on similar goods). J.A. 2–19. The Board found that two of Case: 22-1094 Document: 39 Page: 4 Filed: 04/13/2023

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the factors were “key factors”: the similarity or dissimilar- ity of the marks as well as the goods or services. J.A. 3 (citing Federated Foods, Inc. v. Fort Howard Paper Co., 544 F.2d 1098, 1103 (CCPA 1976)). First, the Board considered the similarity or dissimi- larity of the services. J.A. 3–9. Noting that the services need not be “identical or even competitive” but merely “re- lated in some manner,” J.A. 3, the Board found that the examining attorney had submitted persuasive evidence of third-party registrations from the trademark search sys- tem, TESS, that showed that residential real estate ser- vices and commercial real estate services “may emanate from a single source under a single mark,” J.A. 4. The ex- amining attorney had submitted website evidence showing commercial and residential real estate services offered un- der the same or similar marks. Id. Noting that use-based third-party registrations alone are not evidence that the public is familiar with them, the Board found that this ev- idence has “some probative value” as they “suggest” that the services are related and can be offered under the same mark. Id. at 7. On this basis, the Board found that the third-party registrations and website evidence sufficiently showed relatedness of the services. Id. at 9. Second, the Board considered the trade channels. J.A. 9–11. The Board presumed that the services would be mar- keted in “all normal trade channels,” because neither Charger nor the registrant restricted their respective trade channels. Id. at 9. The Board considered the examining attorney’s Internet evidence that commercial and residen- tial real estate services can be offered by the same entity, either on different or the same website(s). Id. at 10. After assessing that evidence, the Board found “some overlap” in the commercial and residential trade channels. Id. at 11. Third, the Board considered the conditions of sale. J.A. 11. The Board acknowledged that the services offered are “not average consumer services” and that the purchaser Case: 22-1094 Document: 39 Page: 5 Filed: 04/13/2023

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would exercise elevated care due to the nature and cost of real estate services. Id. at 12 (citing Elec. Design & Sales Inc. v. Elec. Data Sys. Corp., 954 F.2d 713, 718 (Fed. Cir. 1992)). Nevertheless, the Board noted that “even careful or sophisticated purchasers are not immune from source confusion.” Id. (citing In re Rsch. Trading Corp., 793 F.2d 1276, 1279 (Fed. Cir. 1986)). Without assigning weight to the factor, the Board found that the “classes of consumers may overlap.” J.A. 11. Fourth, the Board considered the strengths of the marks. Id. at 12. Charger submitted a third-party regis- tration of the mark SPARK LABS to show that SPARK is conceptually weak, but the Board was unpersuaded. Id. at 13. Charger submitted a chart reflecting marketplace uses of the term SPARK in real estate services. Id. at 13–14. The Board ultimately found that the use-based evidence was “probative of commercial weakness” but noted that the term SPARK was not used alone in these examples. Id. at 14. So, while the evidence shows that there is “some com- mercial weakness,” the Board found that “even weak marks are entitled to protection.” Id. at 15 (citing King Candy Co. v. Eunice King’s Kitchen, Inc., 496 F.2d 1400, 1401 (CCPA 1974) (“Confusion is confusion. The likelihood thereof is to be avoided, as much between ‘weak’ marks as between ‘strong’ marks, or as between a ‘weak’ and a ‘strong’ mark.”)). The Board also found Charger’s next chart, which showed third-party registrations of different entities using similar registered marks in the real estate industry, not probative, as such evidence typically is before the Board. J.A. 16 (citing In re Joel Embiid, 2021 WL 2285576, at *17 (TTAB 2021)). The Board found some com- mercial weakness in the mark SPARK for real estate ser- vices. J.A. 15. Fifth, the Board considered the similarity or dissimi- larity of the marks. J.A. 17. Under this factor, the Board assessed the appearance, sound, connotation, and overall commercial impression of the marks—not in a side-by-side Case: 22-1094 Document: 39 Page: 6 Filed: 04/13/2023

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comparison—to determine whether the marks are suffi- ciently similar in their overall impression as to cause con- fusion. Id. (citing Palm Bay Imps. Inc. v. Veuve Clicquot Ponsardin Maison Fondee En 1772, 396 F.3d 1369, 1371– 72 (Fed. Cir. 2005); Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1368 (Fed. Cir. 2012)). The Board con- sidered the fact that both marks comprise the term SPARK. J.A. 17. It also noted that the term LIVING in Charger’s mark is both descriptive of real estate services and disclaimed, thereby making that term subordinate to SPARK and less significant. Id. (citing In re Detroit Ath- letic Co., 903 F.3d 1297, 1305 (Fed. Cir. 2018)). As the first term or word of Charger’s mark, SPARK is the portion the Board found most likely to be remembered by consumers. Id. at 18. It also noted that Charger’s mark “incorporates Registrant’s entire mark.” Id. (citing Presto Prods. Inc. v. Nice-Pak Prods., Inc., 1988 WL 252340, at * 3 (TTAB 1988); Coca-Cola Bottling Co. v. Seagram & Sons, Inc., 526 F.2d 556, 557 (CCPA 1975)). The Board found that SPARK LIVING is “overall very similar to SPARK” and that the differences between the marks “do not outweigh the strong similarities” when evaluated as a whole. Id. at 19. The Board found that consumers encountering Charger’s mark are likely to mistakenly believe that the mark represents a variation on the registered mark. Id. The Board concluded that, despite some commercial weakness in the term SPARK and sophistication of con- sumers, there was “insufficient evidence in the record” to overcome the “close similarity” of the marks and related- ness of the services. Id. Charger timely appealed. We have jurisdiction under 12 U.S.C. § 1295(a)(4)(B). DISCUSSION Likelihood of confusion is a question of law with under- lying factual inquiries based on the DuPont factors. Stra- tus Networks, Inc. v. UBTA-UBET Commc’s Inc., 955 F.3d Case: 22-1094 Document: 39 Page: 7 Filed: 04/13/2023

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994, 998 (Fed. Cir. 2020). We review the legal question of likelihood of confusion de novo. On-Line Careline, Inc. v. America Online, Inc., 229 F.3d 1080, 1084 (Fed. Cir. 2000). We review the Board’s weighing of the Dupont factors de novo, QuickTrip West, Inc. v. Weigel Stores, Inc., 984 F.3d 1031, 1034 (Fed. Cir. 2021), but we review the Board’s fac- tual findings on each Dupont factor for substantial evi- dence, Hylete LLC v. Hybrid Athletics, LLC, 931 F.3d 1170, 1173 (Fed. Cir. 2019). Substantial evidence is “more than a mere scintilla”—“it means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consolidated Edison Co. of New York v. N.L.R.B., 305 U.S. 197, 216–17 (1938). The possibility of drawing two inconsistent conclusions from the evidence does not prevent the Board’s findings from being supported by substantial evidence. Consolo v. Fed. Maritime Comm’n, 383 U.S. 607, 620 (1966). In any given case, different DuPont factors may play a dominant role and some factors may not be relevant to the analysis. Bose Corp. v. QSC Audio Prods., Inc., 293 F.3d 1367, 1370 (Fed. Cir. 2002). The Board is required to con- sider each factor for which it has evidence, but it can focus its analysis on dispositive factors. In re Dixie Restaurants, Inc., 105 F.3d 1405, 1406–07 (Fed. Cir. 1997). A single DuPont factor may, for example, be dispositive of the like- lihood of confusion analysis. Kellogg Co. v. Pack’em En- ters., Inc., 951 F.2d 330, 333 (Fed. Cir. 1991). The weight given to each factor depends on the circumstances of each case. Dixie Restaurants, Inc., 105 F.3d at 1407. Charger challenges each factual finding that the Board made on the DuPont factors. Appellee’s Br. 13. At bottom, Charger asks us to reweigh the evidence considered by the Board, which is not the role of this court. Stratus Networks, 955 F.3d at 998. We instead evaluate whether the evidence relied on by the Board is supported by substantial evi- dence. Henkel Corp. v. Procter & Gamble Co., 560 F.3d Case: 22-1094 Document: 39 Page: 8 Filed: 04/13/2023

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1286, 1290 (Fed. Cir. 2009). We find that the Board’s fac- tual findings here are supported by substantial evidence. First, Charger makes a series of arguments related to the Board’s comparison of the marks when it assessed the appearance, sound, connotation and commercial impres- sion. To Charger, the Board dissected its mark—which this court has prohibited doing—when it gave no meaning- ful weight to the term “LIVING.” Appellant’s Br. 20–21 (citing China Healthways Inst., Inc. v. Xiaoming Wang, 491 F.3d 1337, 1340 (Fed. Cir. 2007)). Charger argues that, if the Board had evaluated the marks in their entireties, it would not have found a likelihood of confusion, nor would it have denied registration based on its incorporation of an- other mark. Appellant’s Br. 21–22. In other words, keep- ing the mark as SPARK LIVING would arguably result in a different appearance, sound, and meaning. Id. at 23. Subsumed in this argument is Charger’s challenge to the allegedly improper weight allotted by the Board to SPARK because third-party use of the term should demonstrate weakness. Id. at 24. Appellee, the Director of the USPTO (hereinafter, “the Director”), notes that Charger disclaimed the word LIVING in its mark, thereby giving it less source-identify- ing significance and making it subordinate to the term SPARK. Appellee’s Br. 14 (“where terms are disclaimed, the disclaimer supplies ‘rational reasons for giving those terms less weight in the analysis’”) (citing Detroit Athletic, 903 F.3d at 1305). Disclaimer of a word in an application to register a mark has “no legal effect on the issue of likelihood of con- fusion” because the public is unaware what words have been disclaimed. In re Nat’l Data Corp., 753 F.2d 1056, 1059 (Fed. Cir. 1985); see also Shen Mfg. Co. v. Ritz Hotel Ltd., 393 F.3d 1238, 1243 (Fed. Cir. 2004). Thus, the Board must consider the mark in its entirety. Detroit Athletic, 903 F.3d at 1305 (citation omitted); see also QuikTrip West, Case: 22-1094 Document: 39 Page: 9 Filed: 04/13/2023

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984 F.3d at 1035. Here, as the Director points out, the Board explicitly compared the marks “in their entireties” and based its findings on the “overall commercial impres- sion engendered by the marks as a whole.” J.A. 17–19. So, while the Board must consider the disclaimed term, an ad- ditional word or component may technically differentiate a mark but do little to alleviate confusion. Detroit Athletic, 903 F.3d at 1304–05. We have previously found no error with the Board’s decision to focus on dominant portions of a mark. Id. at 1305. We find that the Board’s determina- tion on this factor is supported by substantial evidence. Second, Charger argues that the nature of the services described by the marks are distinct. The distinction be- tween residential property services (Charger’s mark) and commercial real estate services (registrant’s mark) are “substantially different.” Appellant’s Br. 25. Because reg- istrant’s mark is limited and cannot be amended to include residential services, Charger argues that it cannot gain protection outside of that limited description. Id. at 25–26. Charger asserts that nothing in the record suggests that the companies offering both residential and commercial services have limited themselves like the parties have here. Id. at 26–27. Relatedly, Charger argues that the trade channels significantly differ. Id. at 27. The Director contends that both Charger and regis- trant offer real estate property management and leasing services and the record shows “dozens of registrations” that cover both residential and commercial real estate services. Appellee’s Br. 17. As for trade channels, the Director ar- gues that the Board “properly found that neither the appli- cation nor the registration sets forth any limitation on the trade channels through which the services are offered, so the presumption applies.” Id. at 19. Because the record shows that companies are known to offer both residential and commercial services under the same mark and, often, on the same website, we find that substantial evidence sup- ports the Board’s finding on these factors. Case: 22-1094 Document: 39 Page: 10 Filed: 04/13/2023

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Third, Charger argues that the Board’s finding on the class of purchasers was improper because the consumers of Charger’s services are substantially different from regis- trant’s services. Appellant’s Br. 28–29. Charger argues that “[p]eople looking to buy a home or a condominium are likely to take their time and make an educated decision be- fore entering into these purchases because of the important impact these decisions can have on their lives . . .”. Id. at 29. The Director asserts that Charger fails to identify where, in the record, it has demonstrated that residential property owners are distinct consumers from commercial owners. Appellee’s Br. 21. Indeed, the Director argues that “people who seek commercial real estate services live some- where.” Id. (emphasis in original). As the Board explained, careful or sophisticated con- sumers are not immune from source confusion. J.A. 12 (cit- ing In re Rsch. and Trading Corp., 793 F.2d at 1279 (“That the relevant class of buyers may exercise care does not nec- essarily impose on that class the responsibility of distin- guishing between similar trademarks for similar goods.”)). Paired with the potential overlap of consumers, substantial evidence supports the Board’s determination on this factor. Fourth, as for the factor regarding the number and na- ture of similar marks in use on similar goods, Charger re- iterates its evidence of third-party use showing variations of the term SPARK in trademarks as evidence of weakness. Charger argues that weakness of the mark “is paramount in the likelihood of confusion analysis.” Appellant’s Br. 20. The Director argues that all marks on the principal regis- ter are presumed valid and distinctive and that even weak marks are entitled to protection. Appellee’s Br. 23 (citing Conde Nast Publ’ns, Inc. v. Miss Quality, Inc., 507 F.2d 1404, 1406 (CCPA 1975)). Here, the Board agreed that Charger’s evidence of third-party use was “probative” and that the term SPARK accordingly has “some” level of weakness in real estate Case: 22-1094 Document: 39 Page: 11 Filed: 04/13/2023

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services. J.A. 14–15. But it found such evidence was not enough to render it unprotectable. J.A. 16. We agree. In this case, Charger submitted one third-party registration as evidence that SPARK is conceptually weak, J.A. 13, and about twenty-four third-party uses of a SPARK-formative mark, J.A. 15. Other cases relied upon by the Board have included examples of third-party uses of a term that the Board ultimately found relevant to its determination of a likelihood of confusion. See Jack Wolfskin Ausrustung Fur Draussen GmbH & Co. KGAA v. New Millennium Sports, S.L.U., 797 F.3d 1363, 1373 n.2 (Fed. Cir. 2015) (finding that fourteen third-party uses and registrations were pro- bative of weakness); Juice Generation Inc. v. GS Enters. LLC, 794 F.3d 1334, 1337 n.1 (Fed. Cir. 2015) (finding twenty-six third-party uses or registrations incorporating the relevant phrase probative of weakness). Substantial evidence thus supports the Board’s determination on this factor. Furthermore, an “ex parte proceeding is not the proper forum” for a trademark applicant to launch an attack on a registered mark to try to narrow the scope of services de- scribed. Detroit Athletic, 903 F.3d at 1309. “The relevant inquiry in an ex parte proceeding focuses on the goods and services described in the application and registration.” Id. at 1307. Given that this is a proceeding between Charger and the PTO, the registrant of SPARK is not a party and cannot defend the validity of its trademark rights. Appel- lee’s Br. 23; see also In re Calgon Corp., 435 F.2d 596, 598 (CCPA 1971) (finding that a collateral attack on the valid- ity and ownership of a registration without seeking formal cancellation proceedings is improper in an ex parte pro- ceeding). A certificate of registration of a mark on the prin- cipal register is “prima facie evidence of [its] validity,” 15 U.S.C. § 1057(b), and the Board properly considered this when evaluating the registered mark’s potential weakness in an ex parte proceeding. Case: 22-1094 Document: 39 Page: 12 Filed: 04/13/2023

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Separately, Charger asserts that the Board failed to in- dicate the weight it accorded to the factors and, conse- quently, its analysis lacks substantial evidence. Appellant’s Br. 30. Assigning weight to the factors is typi- cally the Board practice. See, e.g., QuikTrip West, 984 F.3d at 1036–37 (“We finally turn to the Board’s weighing of the DuPont factors . . . Analysis of the DuPont factors consti- tutes a balancing test.”). While we review the Board’s weighing of the DuPont factors de novo, see QuikTrip West, 984 F.3d at 1035–37, it is important to our review that the Board itself weigh the DuPont factors used in its analysis and explain the results of that weighing. In order for this court to exercise its duty of review, and to do so meaning- fully, the Board must provide a reasonable explanation for its findings, explaining the weight it assigned to the rele- vant factors. SEC v. Chenery Corp., 318 U.S. 80, 94 (1943) (“[C]ourts cannot exercise their duty of review unless they are advised of the considerations underlying the action un- der review.”). We will, nevertheless, “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Here, the agency’s path may be reasonably discerned. Based on the record as a whole, there is sufficient evidence from its assessment of the relevant DuPont factors to sup- port the Board’s finding of a likelihood of confusion of Charger’s mark SPARK LIVING. Accordingly, we affirm. CONCLUSION We hold that the Board’s decision is supported by sub- stantial evidence. Accordingly, we affirm the Board’s re- fusal to register based on the determination of a likelihood of confusion. AFFIRMED COSTS No costs.