The US Court of Appeals for the Federal Circuit recently affirmed a decision by the Trademark Trial and Appeal Board (TTAB) dismissing an opposition filed by Coach Services, Inc. (CSI) against three federal trademark applications for COACH for use in connection with educational software and publications. See Coach Servs. Inc. v. Triumph Learning LLC, 101 U.S.P.Q.2d 1713 (Fed. Cir. 2012). In ruling that the renowned American handbag maker had failed to prove its claims of likelihood of confusion and dilution, the Federal Circuit found that CSI’s COACH mark was “famous” for the purposes of a likelihood of confusion analysis, but that the same evidence failed to establish the fame of CSI’s mark with respect to its dilution claim under the Trademark Dilution Revision Act of 2006 (TDRA). The court’s decision emphasized two important points, namely, that the burden of proving that a mark is famous is higher for dilution than it is for likelihood of confusion, and that evidence of a mark’s fame does not necessarily outweigh other applicable factors under a likelihood of confusion analysis.

The owner of the trademark application in question, Triumph Learning LLC (Triumph), publishes books and software for teachers and students to use in preparing for standardized tests. Following the 2001 passage of the No Child Left Behind Act, which requires all states to administer standardized tests to monitor students’ academic achievement, Triumph invested heavily in marketing and, in 2004, filed three use-based trademark applications for the COACH mark, claiming it had used the mark in connection with its products since at least 1986. After Triumph’s applications were published for opposition in 2005, CSI, which owns sixteen incontestable trademark registrations for the COACH mark in connection with a wide variety of luxury goods, filed notices of opposition on the grounds of likelihood of confusion and dilution. The TTAB ultimately dismissed CSI’s opposition in 2010, concluding that CSI had failed to prove either likelihood of confusion or dilution.

CSI appealed this ruling to the Federal Circuit, and on February 21, 2012, the court issued a ruling affirming, in large part, the TTAB’s decision. With respect to CSI’s likelihood of confusion claim, the court applied the multi-factor test established in In re E.I. DuPont de Nemours & Co., 476 F.2d 1357 (C.C.P.A. 1973), and concluded that the TTAB’s ruling was supported by substantial evidence, despite CSI’s success in showing that its mark was famous through evidence of use and promotion of the mark. Although noting that a famous mark is entitled to a wide scope of protection, the court emphasized that in this context, fame is a matter of degree and cannot, alone, establish a likelihood of confusion. After considering other applicable DuPont factors, namely, the similarity of the goods, the similarity of the marks in their entireties, and the channels of trade and classes of consumers, the court reasoned that the fame of CSI’s mark was outweighed by evidence that the respective goods were unrelated, that the marks had different meanings and distinct commercial impressions with respect to those goods, and that the channels of trade were distinct.

The Federal Circuit next considered CSI’s dilution claim and again concluded that the TTAB’s ruling—that is, that CSI’s evidence of fame was insufficient to establish a dilution claim—was supported by substantial evidence. Under the TDRA, whether the mark at issue is “famous” is a threshold question determined by considering four non-exclusive factors: (1) the nature of advertising and publicity of the mark; (2) the nature of sales of goods or service offered under the mark; (3) the extent of actual recognition of the mark; and (4) whether the mark is registered.

In applying this statutory framework, the court first distinguished dilution fame and likelihood-of-confusion fame by explaining that the former “is an either/or proposition” while the latter “is a matter of degree along a continuum”;  thus, the court reasoned, proving that a mark is famous for likelihood-of-confusion purposes does not automatically establish the fame of the mark for dilution purposes. The court then emphasized the “well-established” notion that dilution fame is difficult to prove—particularly where the mark is a common English word that has distinct meanings in different contexts— and ultimately concluded that the following evidence was insufficient to support the claim: (a) limited records of sales and advertising during a one-year period, occurring after the filing date of Triumph’s applications; (b) mere ownership of federal registrations; (c) unsolicited media attention referring to single CSI products among other fashion brands’ products and occurring after the filing date of Triumph’s applications; (d) joint-marketing efforts without proof of the success of those efforts; and (e) a brand-awareness study which the court reasoned was of “dubious probative value” due to certain deficiencies.

Well-known brands in any industry should be aware of the higher burden of establishing that a mark is famous for the purposes of proving trademark dilution, as well as the risk that an otherwise strong showing of fame may not be sufficient to carry a likelihood-of-confusion claim. Arent Fox will continue to monitor this case for further developments.