United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 09-2686
___________
Sensient Technologies Corporation; *
Sensient Flavors, LLC, *
*
Plaintiffs - Appellants, *
* Appeal from the United States
v. * District Court for the Eastern
* District of Missouri.
SensoryEffects Flavor Company, *
formerly known as SensoryFlavors, *
Inc.; Performance Chemicals & *
Ingredients Co.; Diehl Food *
Ingredients, Inc.; Highlander Partners, *
L.P., *
*
Defendants - Appellees, *
___________
Submitted: March 9, 2010
Filed: July 21, 2010
___________
Before BYE, ARNOLD, and COLLOTON, Circuit Judges.
___________
BYE, Circuit Judge.
Sensient Flavors appeals the district court's1 grant of summary judgment in
favor of SensoryEffects Flavor Company, formerly known as SensoryFlavors. On
1
The Honorable E. Richard Webber, United States District Judge for the Eastern
District of Missouri.
appeal, Sensient Flavors contends the district court erred in concluding the
SensoryFlavors mark was not "used in commerce" as defined by the Lanham Act, 15
U.S.C. § 1127. Sensient Flavors also asserts the district court erroneously held the
SensoryEffects Flavor Company name was not likely to cause confusion to customers.
Finally, Sensient Flavors argues the district court erred by holding its mark was
"relatively weak" and not entitled to protection under the Missouri dilution statute.
We affirm the district court's grant of summary judgment.
I
Sensient Technologies Corporation ("Sensient") sells flavor delivery systems
to its customers. Since 2000, Sensient has continuously used the trade name Sensient
Flavors, among its other trademarks. The mark appears on communications from
Sensient Flavors, including advertising and marketing materials, business cards,
letterheads and invoices.
Charles Nicolais, a former employee of Sensient Flavors' sister company
Sensient Colors, Inc., left the company to start his own business called Performance
Chemicals and Ingredients, LLC ("PCI"). In May 2006, PCI purchased substantially
all of the assets of Diehl Food Ingredients, Inc. ("Diehl"). In November 2006, PCI
also purchased substantially all of the assets, equipment, trademarks and trade names
of SensoryEffects, a business engaged in development, manufacture, and sales of
lipid-based flavor delivery systems. The prior owners of SensoryEffects had filed an
application for the registration of the SensoryEffects name and graphic in July 2004,
which was formally registered by the United States Patent and Trademark Office
("PTO") on July 3, 2007. PCI further expanded its operations in February 2008 by
acquiring Givaudan Flavors, Inc., the dairy flavor systems business within Givaudan
Flavors Corporation. As part of the purchase agreement, PCI was not permitted to use
the Givaudan Flavors trade name for more than sixty days after the purchase.
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After the purchase of Givaudan Flavors, Nicolais undertook the responsibility
of choosing a new name and brand for the business. Ultimately, the company decided
to use the name SensoryFlavors, Inc., building on the SensoryEffects trademark
already in use. As part of this process, SensoryFlavors modified the existing
SensoryEffects mark to design the new SensoryFlavors mark. The company's
attorneys informed Nicolais the SensoryFlavors name was available for use and
registration based on a search of PTO records and corporate names. However, the
parties dispute the knowledge Nicolais maintained regarding the existence of the
Sensient Flavors name at the time he was choosing the new name. Although he was
previously employed by Sensient Colors, Nicolais asserts he never worked for
Sensient's flavor group and therefore he was not aware of the Sensient Flavors mark
before the lawsuit was filed. Thus, he contends the Sensient Flavors name did not
cross his mind while choosing the SensoryFlavors name. Sensient Flavors disputes
Nicolais's assertion, noting that a document drafted by one of PCI's employees prior
to the purchase of the Givaudan business unit lists Sensient Flavors as one of
SensoryFlavors' primary competitors.
On the day the Givaudan purchase was finalized, SensoryFlavors sent an
announcement to contacts in the food ingredients industry featuring the
SensoryFlavors mark. SensoryFlavors and Givaudan also sent a media release
announcing the acquisition, which included the SensoryFlavors mark. SensoryFlavors
asserts it only gave two presentations to customers after acquiring Givaudan Flavors
on February 13, 2008, both of which occurred prior to the instant suit. Moreover,
SensoryFlavors contends no sales were made under the new mark, no packages were
sent bearing labels with the new mark, and no goods were transported under the new
mark. SensoryFlavors also constructed the website www.sensoryflavors.com,
although it states the website was "under construction" at all times and was
immediately deactivated when Sensient filed the instant suit.
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Shortly after Sensient filed the instant suit on March 10, 2008, the district court
entered a temporary restraining order against the use of the SensoryFlavors name.
SensoryFlavors subsequently changed its name to SensoryEffects Flavor Company,
d/b/a SensoryEffects Flavor Systems ("SensoryEffects"), building on the prior
SensoryEffects name already registered with the PTO. The company has continued
to sell products and operate under this name since the change.
Sensient amended its complaint to include the new SensoryEffects name.
According to Sensient, the two companies are direct competitors because they both
sell flavor delivery systems to food and food ingredient companies, although their
product offerings differ slightly. The initial contact with customers arises primarily
through telephone calls, which leads to appointments and meetings where the
company is able to present its products and services. In this sense, the ultimate sale
of products is the result of an ongoing collaborative process. Sensient's complaint
contained six counts, including federal trademark infringement, unfair competition,
false advertising, common law trademark infringement and unfair competition, and
trademark infringement and dilution under Missouri law.
The district court granted summary judgment on all counts in favor of
SensoryEffects and dismissed the case. The court held a permanent injunction on the
SensoryFlavors mark was not warranted because the mark had not been "used in
commerce." The court also held the new SensoryEffects name was not likely to cause
confusion to customers and Sensient was not entitled to protection under Missouri's
trademark dilution statute. Sensient timely appeals the district court's order.
I
The district court's grant of summary judgment is reviewed de novo, and we
apply the same standards as the district court. Frosty Treats Inc. v. Sony Computer
Ent. Am. Inc., 426 F.3d 1001, 1003 (8th Cir. 2005). Summary judgment is
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appropriate "if the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as a matter of
law." Fed. R. Civ. P. 56(c). A fact is material when it might affect the outcome of the
suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A. Whether the SensoryFlavors Name Was Used in Commerce
First, the parties dispute whether section 45 of the Lanham Act applies to
infringement cases. The Lanham Act imposes civil liability on "any person who. . .
without the consent of the registrant . . . use[s] in commerce any reproduction . . . or
colorable imitation of a registered mark." 15 U.S.C. § 1114(1)(a) (emphasis added).
Section 43(a) of the Act also imposes liability for "[a]ny person who, on or in
connection with any goods or services, or any container for goods, uses in commerce
any word, term, name, symbol, or device, or any combination thereof . . . which . . .
is likely to cause confusion . . . as to the origin, sponsorship, or approval of goods,
services, or commercial activities." 15 U.S.C. § 1125(a)(1)(A) (emphasis added).
Under section 45 of the Lanham Act, "use in commerce" is defined as follows:
The term "use in commerce" means the bona fide use of a mark in
the ordinary course of trade, and not made merely to reserve a right in a
mark. For purposes of this chapter, a mark shall be deemed to be in use
in commerce–
(1) on goods when–
(A) it is placed in any manner on the goods or their containers or the
displays associated therewith or on the tags or labels affixed thereto, or
if the nature of the goods makes such placement impracticable, then on
documents associated with the goods or their sale, and
(B) the goods are sold or transported in commerce, and
(2) on services when it is used or displayed in the sale or advertising of
services and the services are rendered in commerce, or the services are
rendered in more than one State or in the United States and a foreign
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country and the person rendering the services is engaged in commerce
in connection with the services.
15 U.S.C. § 1127.
In its brief, Sensient argues the press release, announcement, and two
presentations provided by SensoryFlavors, in addition to its website, were sufficient
to establish a question of fact regarding "use in commerce" of the mark under section
45. At oral argument, however, Sensient contradicted its argument by asserting for
the first time that section 45 does not apply in infringement cases, and rather is limited
in its application to the registration of trademarks. Sensient bases its contention
largely on dicta provided by the Second Circuit Court of Appeals in Rescuecom Corp.
v. Google, Inc., 562 F.3d 123, 128-29 (2d Cir. 2009), which involved an infringement
dispute over search terms used by a popular Internet search engine. Rescuecom held
Google's display, offer, and sale of the plaintiff's mark to advertising customers was
sufficiently alleged as "use in commerce" to avoid dismissal under Rule 12(b)(6) of
the Federal Rules of Civil Procedure. 562 F.3d at 130-31.
After reaching its conclusion, the Rescuecom court attached a lengthy appendix
analyzing whether section 45 applies in the infringement context. The court first
noted the statute begins with a "guarded and tentative" limitation that the definitions
provided under the statute apply "unless the contrary is plainly apparent from the
context." Id. at 132 (quoting 15 U.S.C. § 1127). The court then analyzed the 1988
amendment to the statute providing that "use in commerce" means the "bona fide use
of a mark in the ordinary course of trade." Id. at 132-33. According to the court, the
amendment made clear that section 45's definition of "use in commerce" applies only
to the registration of marks, not to infringement cases, because it is "inconceivable
that the statute could have intended to exempt infringers from liability because they
acted in bad faith." Id. The court believed this reading of the statute was confirmed
by a Congressional report accompanying the 1988 amendment, which "explained that
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the revised use in commerce definition is intended to apply to all aspects of the
trademark registration process, and that clearly, however, use of any type will
continue to be considered in an infringement action." Id. at 138 (citing S. Rep. 100-
515 100th Cong. at 45 (1988)) (internal quotation marks omitted).
Pursuant to the amended statutory language, Rescuecom envisioned two
possible interpretations of section 45 in infringement cases. The first interpretation
bars application of the entire definition of "use in commerce" in the infringement
context as a result of the new language in the first sentence relating to "bona fide use,"
as discussed above. Id. at 140. The second, and preferable interpretation would
continue to apply the remainder of the "use in commerce" definition relating to goods
and services in infringement cases, and simply disregard the "bona fide use" language
in such cases, which would be reserved for application only in the registration
context.2 Id. Ultimately, the court noted its discussion was dicta that did not affect
the result in the case, and it urged Congress to further clarify the statute. Id. at 140-41.
In this case, we express no view as to whether section 45's "use in commerce"
definition continues to properly apply in infringement cases. Compare 4 McCarthy
on Trademarks and Unfair Competition § 23:11.50 (4th ed.) ("The Lanham Act § 45
narrowing definition of what constitutes 'use in commerce' is just a relaxed remnant
of trademark law's once-hyper-technical 'affixation' requirement. This statutory
anachronism certainly was never intended to limit the scope of 'uses' that would
constitute infringement") with Margreth Barrett, Trademarks and Digital
2
The Rescuecom court believed the second approach was preferable in light of
prior Second Circuit case law that applied the second sentence of the "use in
commerce" definition relating to goods and services to infringement cases. While we
assume without holding the second sentence of the definition similarly applies in this
case, as discussed below, we note this circuit has also previously interpreted section
45 as requiring "use in commerce" as a prerequisite for infringement liability.
DaimlerChrysler AG v. Bloom, 315 F.3d 932, 936 (8th Cir. 2003).
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Technologies: "Use" on the Net, 13 No. 11 J. Internet L. 1, 9 (2010) ("[T]he Lanham
Act's legislative history makes it clear that Congress intended this statutory definition
[of section 45] to apply in the infringement context and to carry forward the
1905/1920 Acts' general 'affixation or other close association' requirement.'").
Although Sensient cites the Rescuecom case in its opening brief, it confines its
argument to whether SensoryFlavors' limited uses of the mark meet the definition of
"use in commerce" under section 45. Prior to oral argument, Sensient failed to
develop any argument that section 45 did not apply to an infringement case such as
the instant matter. See Cubillos v. Holder, 565 F.3d 1054, 1058 n.7 (8th Cir. 2009)
(citation omitted) (deeming an argument waived where the petitioner referenced an
argument in his opening brief, but failed to develop the argument). To the contrary,
Sensient explicitly concedes in its reply brief that the statute applies to infringement
cases. See Appellant's Reply Brief at 1 ("The parties agree that the Lanham Act
requires that a trademark be used in commerce before a finding of infringement can
be made."). Under these circumstances, we assume without holding that section 45
applies to infringement cases and we will proceed to determine whether
SensoryFlavors' use of its mark meets the definition of "use in commerce." See
Flowers v. Norris, 585 F.3d 413, 416 n. 2 (8th Cir. 2009) (limiting review under a
statute based on petitioner's concessions in his reply brief).
Applying the language of the statute, SensoryFlavors' goods must have been
"sold or transported in commerce," among other requirements. 15 U.S.C. § 1127. As
noted above, Sensient attempts to satisfy this requirement by pointing to
SensoryFlavors' efforts to advertise and market its goods through two customer
presentations, a press release, an announcement, and a website.
Sensient's argument conflates the distinction between goods and services
provided under section 45. Rescuecom and the other cases Sensient relies upon
involved an alleged infringer's services, not goods, and therefore the courts applied
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the separate definition provided above for determining whether the services were
"used in commerce." Rescuecom, 562 F.3d at 129 ("According to the Complaint,
Google uses and sells Rescuecom's mark 'in the sale of Google's advertising services
rendered in commerce.'") (emphasis added). Even in cases applying the services
definition, many courts have held mere advertising is not enough to constitute "use in
commerce" because "a mark is used in commerce only if it accompanies services
rendered in commerce." Int'l Bancorp, LLC v. Societe des Bains de Mer et du Cercle
des Estrangers a Monaco, 329 F.3d 359, 364 (4th Cir. 2003).
Sensient fails to show evidence of any sale or transport of any goods bearing
the SensoryFlavors mark. While Sensient suggests Nicolais did not know for certain
that no sales resulted from the two presentations, this assertion is weak at best because
the two companies which received the presentations did not become customers of
SensoryEffects subsequent to the name change. Binkley v. Entergy Operations, Inc.,
602 F.3d 928, 931 (8th Cir. 2010) ("In order to survive a motion for summary
judgment, the non-moving party must be able to show sufficient probative evidence
that would permit a finding in his favor on more than mere speculation, conjecture,
or fantasy") (citation omitted). Because there is no evidence demonstrating any sale
or transport of goods under the SensoryFlavors name, Sensient fails to establish a
triable issue of fact as to whether the goods were "used in commerce," and we affirm
the district court's grant of summary judgment on the SensoryFlavors mark.
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B. Whether the SensoryEffects Name is Likely to Cause Confusion
Sensient next challenges the district court's grant of summary judgment on the
SensoryEffects Flavor Systems mark. The district court held the SensoryEffects mark
was not likely to cause confusion to customers.3
The Eighth Circuit applies a six-factor test to determine whether there is a
likelihood of confusion, no part of which is dispositive standing alone:
(1) the strength of the owner's mark; (2) the similarity between the
owner's mark and the alleged infringer's mark; (3) the degree to which
the products compete with each other; (4) the alleged infringer's intent
to 'pass off' its goods as those of the trademark owner; (5) incidents of
actual confusion; and, (6) the type of product, its cost, and conditions of
purchase.
Frosty Treats, 426 F.3d at 1008. We do not apply any mathematical formula in
analyzing these factors; "rather, we use them at the summary judgment stage as a
guide to determine whether a reasonable jury could find a likelihood of confusion."
Id. We address each of these factors separately.
1. The Strength of the Owner's Mark
In analyzing the first factor, we have recognized a "strong and distinctive
trademark is entitled to greater protection than a weak or commonplace one." Id.
3
Sensient must show a likelihood of confusion as part of its Lanham Act claims
(Count I, Count II, and Count III), Everest Capital Ltd. v. Everest Funds Mgmt.,
L.L.C., 393 F.3d 755, 759 (8th Cir. 2005), its common law trademark infringement
and unfair competition claim, and its Missouri statutory trademark infringement claim
(Counts IV and V). WSM, Inc. v. Hilton, 724 F.2d 1320, 1331 (8th Cir. 1984);
R.S.Mo. 417.056(1).
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(citing SquirtCo. v. Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980)). Marks may
be characterized in four categories: generic, descriptive, suggestive, or arbitrary or
fanciful. Id. at 1004. On this spectrum, an arbitrary or fanciful mark is entitled to the
highest level of protection, while a generic mark is afforded no trademark protection.
Duluth News-Tribune, a Div. of Nw. Publ'n, Inc. v. Mesabi Pub. Co., 84 F.3d 1093,
1096 (8th Cir. 1996).
In this case, the district court determined Sensient was a fanciful word coined
to function as a trademark for the company. As a result, the court acknowledged
Sensient's mark was entitled to the broadest protection. However, the court also
concluded Sensient could not claim an exclusive right to the "Flavors" portion of the
Sensient Flavors name because "Flavors" is a generic term. Accordingly, the court
determined only the Sensient name was entitled to protection. On appeal, Sensient
agrees "Flavors" alone is not protectable, but it argues the Sensient Flavors mark must
be construed as a whole. SensoryEffects asserts courts have routinely refused to
protect generic portions of a trademark.
In making its determination, the district court noted SensoryEffects did not
object to its finding that the Sensient name was fanciful. Generally, we do not
consider arguments raised for the first time on appeal and a party may not assert
arguments not presented to the district court. Cole v. Intern. Union, United Auto.,
Aerospace & Agr. Implement Workers of Am., 533 F.3d 932, 936 (8th Cir. 2008). In
light of SensoryEffects' concession before the district court on this point, we need not
consider its arguments on appeal challenging the strength of Sensient Flavors' name.
Similarly, Sensient's argument questioning whether the district court properly
analyzed its mark is largely irrelevant because the court ultimately found in favor of
Sensient on the first factor. More importantly, the district court proceeded to compare
the composite Sensient Flavors mark to the SensoryEffects mark later in its analysis,
as demonstrated below. See, e.g., Sensient Tech. Corp. v. SensoryEffects Flavor Co.,
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636 F.Supp.2d 891, 900 (E.D. Mo. 2009) ("SensoryEffects Flavor Systems sounds
different than Sensient Flavors."). Thus, the district court did not err in concluding
the first factor favors Sensient.
2. The Similarity of the Owner's Mark and the Alleged Infringer's Mark
Under the second step, we must consider the similarity between the Sensient
Flavors and SensoryEffects Flavor Systems marks. Frosty Treats, 426 F.3d at 1008.
"Rather than consider the similarities between the component parts of the marks, we
must evaluate the impression that each mark in its entirety is likely to have on a
purchaser exercising the attention usually given by purchasers of such products."
Duluth News-Tribune, 84 F.3d at 1097. "The use of identical, even dominant, words
in common does not automatically mean that two marks are similar." Gen. Mills, Inc.
v. Kellogg Co., 824 F.2d 622, 627 (8th Cir. 1987). "We may consider the marks'
visual, aural, and definitional attributes and compare the trade dress of the products
in determining whether the total effect conveyed by the two marks is confusingly
similar." Luigino's, Inc. v. Stouffer Corp., 170 F.3d 827, 830 (8th Cir. 1999) (citing
Gen. Mills, 824 F.2d at 627).
The district court analyzed the evidence submitted by the parties related to the
sophistication of the customer base and the collaborative process by which the
products in the industry are sold. As a result of the sophisticated customers and the
long, interactive purchasing process, the court determined it was highly unlikely
buyers would confuse the marks, and thus the likelihood of confusion was diminished.
The court also noted there was a distinct auditory difference between the marks.
The court rejected Sensient's "initial interest confusion" argument, in which it
contended SensoryEffects was able to use Sensient's name to gain access to customers
and begin the collaborative process leading to sales, even if the customer's initial
confusion over the two companies' names dissipates during the process. The court
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noted this theory has never been adopted by the Eighth Circuit, and even if it was,
Sensient would still lose because it failed to show any evidence of customers
experiencing such a phenomenon. Not only did SensoryEffects Flavor Systems have
a distinct auditory difference from Sensient Flavors, the court held, but Sensient failed
to introduce evidence showing SensoryEffects attempted to lure away Sensient's
customer base by passing off its products as Sensient's.
On appeal, Sensient contends the district court correctly recited the "sight,
sound, and meaning" test to determine the similarity between the marks, see id., but
it erroneously considered the purchasing conditions and evidence of actual confusion
in assessing the similarity of the marks. Sensient asserts the court must independently
determine whether the marks appear and sound similar and evoke a similar meaning,
and then separately consider whether the purchasing conditions make those
similarities more or less critical. Sensient also urges this court to formally adopt the
"initial interest confusion" doctrine.
We first consider the sight, sound, and meaning argument. We have continually
held the use of identical dominant words does not automatically equate to similarity
between marks. See Frosty Treats, Inc., 426 F.3d at 1008-09 (distinguishing the
words "frosty treats" in the defendant's product from the plaintiff's "Frosty Treats"
mark where the mark and trade dress were visually distinct); Luigino's, 170 F.3d at
830-31 (concluding "Lean Cuisine" and "Lean 'N Tasty" are not confusingly similar);
Duluth News-Tribune, 84 F.3d at 1097 (determining "Duluth News-Tribune" and
"Saturday Daily News & Tribune" were distinct, despite the aural similarity between
the two marks); Gen. Mills, 824 F.2d at 627 (holding the district court did not err in
finding no confusing similarity between "Oatmeal Raisin Crisp" and "Apple Raisin
Crisp" because the marks were different enough to avoid customer confusion). In this
case, while each mark uses the word "flavors" and begins with the "sens" prefix, these
features are components of longer product names with different auditory and visual
depictions. See Everest Capital Ltd., 393 F.3d at 761 ("Though each mark uses the
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dominant word 'Everest,' that word is part of longer product names that employ
different fonts and graphics.").
First, there are significant visual differences between the marks. Sensient's
mark consists of blue capital lettering with a yellow wave slightly above the lettering.
The SensoryEffects mark, on the other hand, utilizes bold black lettering in different
typeface on two lines, with a multicolor swirl symbol to the left of the first line.
Based on these visual distinctions, the marks are sufficiently differentiated to prevent
customer confusion. See Luigino's, 170 F.3d at 831 ("The use of different colors and
typefaces, as well as the prominent display of the house marks convey perceptible
distinctions between the products.").
In its reply brief, Sensient contends the visual appearance of the marks is
irrelevant because the point of contact between the companies and the customers
generally occurs via telephone, and thus the auditory similarities should be given
priority. Sensient's suggestion to place particular emphasis on the verbal effect of the
marks is not without merit. See 4 McCarthy § 23:22 (4th ed.) ("Similarity of sound
may be particularly important when the goods are of the type frequently purchased by
verbal order."). However, we agree with the district court that the composite marks
maintain a distinct auditory difference. See Duluth News-Tribune, 84 F.3d at 1097
("Although the [Duluth News-Tribune and Saturday Daily News & Tribune] marks
are aurally similar, when pronounced in their entirety the word 'Saturday' and the
ampersand in defendants' paper make the two distinguishable.").
While Sensient correctly notes the purchasing conditions, confusion among
customers, and similarity between the marks are three separate factors considered by
the court in its analysis, our precedent is clear that we evaluate the impression the
entire mark is likely to have "on a purchaser exercising the attention usually given by
purchasers of such products." Id. See also Luigino's, 170 F.3d at 830-31 (analyzing
whether an ordinary consumer would be likely to be confused between the two
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marks). The parties agree the ordinary customer of their products is sophisticated and
any particular sale is the result of a long, collaborative process. Taking into
consideration the sophistication of the customers and the nature of the purchasing
process, the district court correctly determined the ordinary consumer would not find
the marks confusingly similar under the "sight, sound, and meaning" test.
Sensient further argues the district court erred in its application of the "initial
interest confusion" doctrine. According to Sensient, most courts now recognize the
doctrine, which arises when confusion creates an initial customer interest, even though
no actual sale may be finally completed due to the confusion. 4 McCarthy § 23:6 (4th
ed.). Sensient contends the doctrine "may be applied to a purchasing process that is
drawn out over a period of time," such as the collaborative buying process at issue
here. Id. However, those courts acknowledging the doctrine recognize that "[e]ven
if the marks are almost identical, initial interest confusion is not assumed and must be
proven by the evidence." Id.
We decline Sensient's invitation to adopt the "initial interest confusion" doctrine
in this case because, even if the doctrine applied generally in this circuit, it would not
apply in this case. Under the doctrine, courts look to factors such as product
relatedness and the level of care exercised by customers to determine whether initial
interest confusion exists. Checkpoint Sys., Inc. v. Check Point Software Techs., Inc.,
269 F.3d 270, 296 (3d Cir. 2001). Here, although the products are similar, the parties
agree the customers are sophisticated and exercise a relatively high degree of care in
making their purchasing decisions. This sophistication makes it less likely customers
will experience initial confusion, ultimately resulting in a benefit to the alleged
infringer. Id. at 296-97. As a result, the district court correctly rejected the
application of the doctrine under these facts. In sum, the district court did not err in
concluding the second factor weighs in favor of SensoryEffects.
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3. The Degree of Competition Between the Products
The third factor analyzes the degree of competition between products. Frosty
Treats, 426 F.3d at 1008. If the two companies' products are closely related,
confusion among customers is more likely. Davis v. Walt Disney Co., 430 F.3d 901,
904 (8th Cir. 2005). The district court determined the companies' product markets
differ slightly, but it ultimately held this factor weighed in favor of Sensient because
the parties are direct competitors selling flavor delivery systems to food and food
ingredient companies. Neither party disputes this holding on appeal, and accordingly
we conclude the district court was correct in its determination under the third factor,
which favors Sensient.
4. The Alleged Infringer's Intent to Pass Off its Goods as the Trademark
Owner's
The fourth factor analyzes whether the alleged infringer intended to pass off its
goods as the trademark owner's goods. Frosty Treats, 426 F.3d at 1008. While proof
of bad intent is not required for success in an infringement or unfair competition
claim, "the absence of such intent is a factor to be considered." Id. "Knowledge of
another's product and an intent to compete with that product is not . . . equivalent to
an intent by a new entrant to a market to mislead and to cause consumer confusion."
Luigino's, 170 F.3d at 831.
In considering this factor, the district court first acknowledged the temporary
restraining order it previously entered against SensoryFlavors, in which it noted
Nicolais's selection of the SensoryFlavors name after he was previously employed by
Sensient created a strong inference of his intent to confuse the public. However, the
court concluded the evidence produced after additional discovery did not support this
inference because Nicolais worked for a separate division while he was employed by
Sensient, and even if he maintained knowledge of the Sensient Flavors name, his
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knowledge did not equate with an intent to mislead. Rather, the court determined
SensoryEffects selected its name in order to capitalize its already-established mark
and the goodwill established under the Givaudan Flavors name.
Sensient asserts the court ignored evidence demonstrating SensoryEffects was
aware Sensient was a direct competitor prior to purchasing Givaudan Flavors and it
intentionally selected similar marks. Instead, Sensient argues the court relied on the
self-serving affidavit of Nicolais, who claimed he was unaware of the Sensient Flavors
mark. Sensient also argues SensoryEffects was obligated to move further away from
the Sensient Flavors name after the temporary restraining order was entered, such that
inserting "Effects" was insufficient to meet its obligation.
In determining whether SensoryEffects intended to pass off its goods as those
of Sensient's, we believe the analysis in Luigino's is instructive. In Luigino's, the
owners of the "Lean Cuisine" mark alleged that Luigino's intentionally adopted a
similar mark, "Lean 'N Tasty," to capitalize on the goodwill established under the
"Lean Cuisine" mark. Id. The evidence before the court demonstrated that Luigino's
rejected a consultant's advice to avoid the "Lean 'N Tasty" mark and it believed the
low-fat "Lean 'N Tasty" entrees might be comparable to "Lean Cuisine" entrees. Id.
Despite this evidence, this court determined there was no evidence Luigino's intended
to capitalize on the strong "Lean Cuisine" mark. Id. The court explained that
Luigino's chose the name "Lean 'N Tasty" because it wanted to avoid the word "light,"
it believed the word "low-fat" was overused, and because it did not agree with the
consultant's recommendation to avoid the word "lean." Id. According to the court,
the reference to "Lean Cuisine" only evinced an intent to compete with the product,
not an intent to infringe on the mark. Id. As a result, the court held there was no
genuine issue of material fact regarding predatory intent. Id.
Similarly, in General Mills, Inc., this court declined to find predatory intent on
the part of the owner of the "Oatmeal Raisin Crisp" mark, despite the owner's intent
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to compete with the "Apple Raisin Crisp" mark. 824 F.2d at 627. "Oatmeal Raisin
Crisp" went so far as to send promotional fliers to distributors encouraging them to
replace "Apple Raisin Crisp" with its product. Id. However, the court again
concluded that knowledge of another's product and an intent to compete with that
product does not equate to predatory intent. Id.
We believe the intent alleged by Sensient in this case is similar to the
allegations in Luigino's and General Mills, Inc. While the parties strongly dispute the
extent of Nicolais's knowledge of the Sensient Flavors name, our precedent
demonstrates any knowledge maintained by Nicolais is not dispositive of the inquiry
because knowledge of another's product and an intent to compete does not correspond
with an intent to mislead. Id. Sensient alleges the inference to be drawn from the
evidence is that Nicolais had an intent to confuse customers by using a name similar
to Sensient Flavors; however, there is no support in the record for this assertion other
than speculation.
Rather, the facts of this case are similar to Duluth News-Tribune, where the
court recognized the allegedly infringing name "Saturday Daily News & Tribune" was
a logical merger of the names "Daily News" and "Daily Tribune." 84 F.3d at 1097.
Here, the prior owners of SensoryEffects filed an application for registration of the
SensoryEffects name and graphic in July 2004, which was formally registered by the
PTO on July 3, 2007. After PCI acquired Givaudan Flavors, it was not permitted to
use the Givaudan Flavors name for more than sixty days after the purchase. As a
result, the company decided to combine the SensoryEffects and Givaudan Flavors
names to form SensoryFlavors. After this lawsuit was filed, the company changed its
name to SensoryEffects Flavor Systems, incorporating the full SensoryEffects name
that was already registered with the PTO. Under these circumstances, the district
court was not incorrect in concluding the SensoryEffects Flavor Systems name was
a logical combination of the previously-established SensoryEffects and Givaudan
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Flavors names. After a careful review of the record, we conclude no reasonable jury
could find in favor of Sensient on the fourth factor.
5. Incidents of Actual Confusion
Under the fifth factor, we examine the incidents of actual confusion. Frosty
Treats, 426 F.3d at 1008. Although such incidents are proof of the likelihood of
confusion, the plaintiff is not required to bring forth incidents of actual confusion to
succeed in an infringement case. SquirtCo., 628 F.2d at 1091. In analyzing this
factor, weight is given to "the number and extent of instances of actual confusion."
Duluth News-Tribune, 84 F.3d at 1098.
The district court held Sensient failed to produce any evidence of actual
confusion, which it noted was telling since the SensoryEffects name had been in use
at the time for approximately one year. As a result, the court concluded the fifth
factor weighed in favor of SensoryEffects.
Sensient contends it presented evidence detailing some customers' misguided
beliefs in phone calls and correspondence where the customers thought
SensoryFlavors was, in one way or another, Sensient Flavors. SensoryEffects
responds Kenneth Iwanusa, National Sales Manager for Sensient Flavors, testified he
knew of no lost sales, no injury to Sensient's reputation, and no incidents in which
SensoryEffects benefitted from any confusion between the two companies.
As an initial matter, it is questionable whether the statements contained in
Sensient's interrogatory responses purportedly establishing the customers' confusion
are admissible. See id. ("In evaluating the evidence at the summary judgment stage,
we consider only those responses that are supported by admissible evidence."). We
need not answer this question, however, because assuming the statements are
admissible, it is clear "even several isolated incidents of actual confusion that occur
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initially upon the creation of a potentially confusing mark are insufficient to establish
a genuine issue of material fact as to the likelihood of confusion." Id. Instead, we
"look to whether an appreciable number of ordinary purchasers are likely to be so
misled." Id. at 1099. This is not the case here, because the incidents described by
Sensient show only negligible confusion after SensoryFlavors was completing its
transition with Givaudan Flavors, which is insufficient to meet the burden under the
fifth factor.
More importantly, the district court correctly noted the alleged incidents of
confusion all related to the SensoryFlavors name, not the SensoryEffects name at issue
here. Sensient concedes this fact on appeal, but notes there still may be a likelihood
of confusion. Sensient's suggestion is without any support in the record, and as a
result, no reasonable factfinder could determine the fifth factor favors Sensient.
Therefore, the district court did not err in concluding the fifth factor favors
SensoryEffects.
6. The Type of Product, Its Cost, and Conditions of Purchase
Finally, the sixth factor examines the conditions of purchase and the degree of
care expected of customers. Frosty Treats, 426 F.3d at 1008. "In considering this
factor, we must stand in the shoes of the ordinary purchaser, buying under the
normally prevalent conditions of the market and giving the attention such purchasers
usually give in buying that class of goods." Luigino's, 170 F.3d at 831. This factor
is "more important in confusion-of-source cases where the degree of care that the
purchaser exercises in purchasing a product can eliminate the confusion that might
otherwise exist." Frosty Treats, Inc., 426 F.3d at 1010.
In this case, the district court concluded it was well-established the parties sell
their products to sophisticated customers after a collaborative process. As a result of
this process, the court held the likelihood of confusion was diminished, and this factor
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favored SensoryEffects. The parties do not dispute the conditions of purchase on
appeal, as each concedes they are competitors with sophisticated customers. As noted
in the analysis above, this factor is important in this case because it tends to mitigate
any potential confusion. Id. As a result of the parties' agreement, this factor could not
form the basis for a verdict in favor of Sensient, and the district court did not err in
concluding this factor weighs in favor of SensoryEffects.
Appropriateness of Summary Judgment
Our evaluation of the foregoing factors leads us to conclude no reasonable jury
could find a likelihood of confusion between Sensient's mark and the SensoryEffects
Flavor Company mark. "As courts have repeatedly noted, the ‘core element’ of
trademark infringement law is whether an alleged trademark infringer's use of a mark
creates a likelihood that the consuming public will be confused as to who makes what
product." Davis, 430 F.3d at 905 (citation and internal quotation marks omitted).
Under the circumstances, SensoryEffects's use of its mark does not create a likelihood
that the sophisticated customer base will be confused as to who makes what product.
As a result, we affirm the district court's grant of summary judgment.
C. Missouri's Anti-Dilution Statute
The district court also granted summary judgment in favor of SensoryEffects
on Count Six of Sensient's complaint alleging trademark dilution under Missouri law.
The statute provides for injunctive relief where there exists a "[l]ikelihood of injury
to business reputation or of dilution of the distinctive quality of a mark . . .
notwithstanding the absence of competition between the parties or the absence of
confusion as to the source of goods or services." Mo. Rev. Stat. § 417.061(1). "The
gravamen of a dilution complaint is that the defendant's continuing use of a mark
similar to the plaintiff's mark will inexorably have an adverse effect upon the value
of the plaintiff's mark, and that the plaintiff's mark will eventually be deprived of all
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distinctiveness." Frosty Treats, Inc., 426 F.3d at 1011 (citation omitted). To prevail
under the statute, Sensient "must show its mark or trademark was valid at common
law, that its mark is distinctive, and that defendants' use of its name created a
likelihood of dilution of the distinctive quality of plaintiff's mark." Cmty. of Christ
Copyright Corp. v. Devon Park Restoration, 683 F.Supp.2d 1006, 1017 (W.D. Mo.
2010).
The district court began its analysis by noting, as discussed above, Sensient is
a fanciful mark. The court proceeded to consider evidence of third party usage of
similar marks on similar goods. According to the court, SensoryEffects introduced
evidence showing another competitor in the market does business under the name
"Sensus Flavors," while another corporation uses the name "Symrise." The court
concluded, while the Sensient mark is fanciful, these third party uses demonstrate the
mark is relatively weak. The court determined Sensient failed to introduce evidence
showing its mark is distinctive, and as a result the mark was not entitled to protection
under the dilution statute.
Sensient asserts it was not required to introduce evidence showing its mark was
distinctive because its mark was already established as fanciful. Sensient points to its
open and continuous use of the mark since 2000 on its business cards, advertising and
marketing materials, and website. Sensient also contends the court erred because
nothing in the statute or case law requires courts to consider third party usage as part
of the dilution determination, especially where the mark at issue is fanciful. Even if
this inquiry were required, Sensient argues, the court's finding its mark was "relatively
weak" was not supported by the evidence in the record.
As an initial matter, we acknowledge this case is distinguishable from Steak n
Shake Co. v. Burger King Corp., 323 F.Supp.2d 983 (E.D. Mo. 2004), which the
district court cited in support for its holding. In Steak n Shake Co., the "steakburger"
mark was a generic term not entitled to protection, in contrast to the "Sensient" mark,
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which the district court already determined was a strong mark, as we also concluded
above. 323 F.Supp.2d at 994-95.
Regardless of this distinction, Sensient is unable to prevail on its trademark
dilution claim. Inherent in a dilution action under Missouri law is a showing of
similarity between the marks, which results in the dilution. See Frosty Treats, Inc.,
426 F.3d at 1011 ("Plaintiffs' Missouri-law dilution claim fails because the marks and
trade dress at issue are so dissimilar that it would be clearly erroneous to hold that
there was a likelihood of dilution."). See also Luigino's, Inc., 170 F.3d at 832 ("To
support an action for dilution by blurring, the marks must at least be similar enough
that a significant segment of the target group of customers sees the two marks as
essentially the same."). As discussed above, the Sensient Flavors and SensoryEffects
Flavor Systems marks are not sufficiently similar under the "sight, sound, and
meaning" test. While the "sight, sound, and meaning" test determined similarity for
purposes of assessing whether a likelihood of confusion existed, the same dissimilarity
prevents a finding of dilution under Missouri law. See Luigino's, 170 F.3d at 832-33
(holding the marks were dissimilar under the "sight, sound, and meaning" test such
that dilution did not occur because the customers did not see the marks as essentially
the same); Astra Pharm. Prod., Inc. v. Beckman Instruments, Inc., 718 F.2d 1201,
1210 (1st Cir. 1983) ("We have already noted that, while the Beckman analyzer and
Astra products may be in the same broad health care field, there is sufficient
dissimilarity to prevent confusion. For the same reasons, there is sufficient
dissimilarity to prevent dilution."). As a result, Sensient's dilution claim under
Missouri law fails because the marks are not sufficiently similar, and therefore there
is no likelihood of dilution between the marks.
For the foregoing reasons, we affirm the judgment of the district court.
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COLLOTON, Circuit Judge, concurring in the judgment in part and dissenting in part.
Applying the multiple factors identified in circuit precedent as bearing on the
likelihood of confusion in a trademark infringement or unfair competition case, see
Frosty Treats, Inc. v. Sony Computer Entm’t Am., Inc., 426 F.3d 1001, 1008 (8th Cir.
2005), I conclude that there are genuine issues of material fact that preclude summary
judgment on that ground. Because the district court dismissed claims advanced by
Sensient Technologies Corporation (“Sensient”) under the Lanham Act (Counts 1-3),
the Missouri common law (Count 4), and Mo. Rev. Stat. § 417.056(1) (Count 5),
based on its conclusion that there is no likelihood of confusion as a matter of law, I
would reverse the district court’s judgment in part and remand for further
proceedings.4
I agree with the court that a reasonable jury could find that Sensient has a
fanciful trademark in the name Sensient Flavors that is entitled to the highest level of
protection, and that Sensient Flavors and SensoryEffects Flavor Company are direct
competitors who sell flavor delivery systems to food companies. I disagree, however,
that no reasonable jury could find that other factors in the analysis favor Sensient.
On the question whether the alleged infringer intends to pass off its good as the
trademark owner’s goods, the circumstances of this case support a reasonable
inference in favor of Sensient. The president of the alleged infringer, Charles
Nicolais, is a former president of Sensient Colors, Inc., a sister company of Sensient
4
I concur in the judgment affirming the district court’s decision on the claims
relating to the SensoryFlavors mark. Ante, at 5-9. I also concur in the judgment
affirming the dismissal of Sensient’s claim under the Missouri anti-dilution statute,
Mo. Rev. Stat. § 417.061(1), because this is a dispute between competitors who sell
similar goods. See Luigino’s, Inc. v . Stouffer Corp., 170 F.3d 827, 833 (8th Cir.
1999); Viacom, Inc. v. Ingram Enters., Inc., 141 F.3d 886, 891 n.9 (8th Cir. 1998); 4
J. McCarthy, Trademarks and Unfair Competition § 24:74 (4th ed. 2010).
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Flavors. Shortly after Nicolais moved from Sensient to the defendant, the new
company selected the name “SensoryFlavors” to compete with “Sensient Flavors.”
This led the district court to find a “strong inference of Defendant’s intent to confuse
the public.” R. Doc. 21, at 7. After the district court preliminarily enjoined the
defendant from using the name “SensoryFlavors,” the company retreated to the name
“SensientEffects Flavor Company,” rejecting the suggestion of a company vice
president to omit the word “Flavor” from the official name and parent logo.
Appellants’ App. 275-76. Nicolais denied in an affidavit that he was aware that the
brand or trademark “Sensient Flavors” even existed, but Sensient discovered from the
defendant an internal document dated February 2008 that listed “Sensient Flavors” as
a “primary competitor” of the newly-named “SensoryFlavors, Inc.” Id. at 270. The
credibility of Mr. Nicolais is obviously a disputed issue for a jury.
Intent is proved by circumstantial evidence, and from these circumstances, a
reasonable jury could find that the defendant, having been rebuffed in its efforts to use
the name SensoryFlavors to generate confusion with Sensient Flavors, still intended
to confuse the public by shifting to the name of SensientEffects Flavor Company. To
be sure, we have said that “[k]nowledge of another’s product and an intent to compete
with that product” is not the same as intent to cause consumer confusion, Gen. Mills,
Inc. v. Kellogg Co., 824 F.2d 622, 627 (8th Cir. 1987), but this is not a garden-variety
“intent to compete” case. Sensient’s contention is that the defendant knew of the
“Sensient Flavors” mark and intentionally selected a very similar mark – first,
SensoryFlavors and then SensientEffects Flavor Company – in order to benefit from
confusion that would arise from the similarity of names. Particularly given the initial
effort by a former Sensient executive to use the name SensoryFlavors, a jury
reasonably could infer that the defendant’s choice of the fallback name was still
motivated in part by an intent to confuse consumers. See Beer Nuts, Inc. v. Clover
Club Foods Co., 805 F.2d 920, 927 (10th Cir. 1986) (“[D]eliberate adoption of a
similar mark may lead to an inference of intent to pass off goods as those of another,”
and “[t]he inference of intent is especially strong when the parties have had a prior
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relationship.”). The permissible inferences about the defendant’s intent weigh
strongly against summary judgment. See Eli Lilly & Co. v. Natural Answers, Inc., 233
F.3d 456, 465 (7th Cir. 2000) (“The fact that one actively pursues an objective greatly
increases the chances that the objective will be achieved,” and “[f]or this reason, a
defendant’s intent is an important factor, and can be weighed more heavily than other
factors.”) (internal quotations and citations omitted); Mobil Oil Corp. v. Pegasus
Petroleum Corp., 818 F.2d 254, 258 (2d Cir. 1987) (“Intentional copying gives rise
to a presumption of a likelihood of confusion.”).
On the question of similarity of the owner’s mark and the alleged infringer’s
mark, a reasonable jury also could find in favor of Sensient Flavors. The evidence
shows that the products at issue are marketed by telephone, so it is the similarity of
sound (not trade dress or logo) that is relevant. Sensient argues that SensoryEffects
is likely to cause “initial interest confusion” when it uses a similar-sounding name to
market its products to customers in “cold” telephone calls. The doctrine of “initial
interest confusion” – “infringement based upon confusion that creates initial customer
interest, even though no actual sale is finally completed as a result of the confusion”
– is widely accepted, see 4 J. McCarthy, Trademarks and Unfair Competition § 23:6
(4th ed. 2010), and SensoryEffects offers no convincing reason why this court should
not adopt it. In that context, the aural similarity of SENSient Flavors and
SENSoryEffects Flavor (with “Company” as an immaterial add-on) is sufficient for
a jury to weigh this factor in favor of the plaintiff. Of course, “the use of identical
dominant words does not automatically equate to similarity between marks,” ante, at
13 (emphasis added), but unlike the authorities cited by the court, Frosty Treats, Inc.,
426 F.3d at 1008-09; Luigino’s, Inc. v. Stouffer Corp., 170 F.3d 827, 831 (8th Cir.
1999); Duluth News-Tribune v. Mesabi Publ’g Co., 84 F.3d 1093, 1096 (8th Cir.
1996); Gen. Mills, Inc., 824 F.2d at 627, visual distinctions in trade dress do not
ameliorate the harm caused by confusingly similar names where auditory similarity
is the key issue. Cf. ante, at 14 (“Sensient’s suggestion to place particular emphasis
on the verbal effect of the marks is not without merit.”).
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That a company’s customers are sophisticated does not establish as a matter of
law that there is no likelihood of confusion. If the sophisticated oil traders in Mobil
Oil Corp., 818 F.2d 254, “might listen to a cold phone call from Pegasus Petroleum
. . . when otherwise he might not, because of the possibility that Pegasus Petroleum
is related to Mobil,” id. at 259, even though the possible relationship between those
entities required inferences based on knowledge of both Mobil’s mark and Greek
mythology, then a reasonable jury could reach a similar conclusion here. A
sophisticated purchaser of flavor delivery systems might take a cold call from a fast-
talking salesperson attempting to pitch a customer on behalf of “SENSoryeffects Flavor
Company” when the buyer is familiar with, or accustomed to dealing with, “SENSient
Flavors [Company].” Whether or not a sophisticated customer eventually would sort
out the difference, the doctrine of initial interest confusion prevents an infringer from
using another’s mark to gain “crucial credibility during the initial phases of a deal.”
Id. (emphasis added).
The court relies on Checkpoint Systems, Inc. v. Check Point Software
Technologies, Inc., 269 F.3d 270 (3d Cir. 2001), for the proposition that careful and
sophisticated customers make initial interest confusion less likely, ante, at 15, but
Checkpoint Systems considered findings made by a district court after a trial, and held
that the district court’s finding of no likelihood of confusion was not clearly
erroneous. Id. at 298. Checkpoint Systems did not hold that customer sophistication
justified summary judgment against claims of initial interest confusion. The court’s
discussion of initial interest resolved that “[i]ts significance will vary, and must be
determined on a case-by-case basis.” Id. at 297.
Given the issues of fact surrounding several elements of the analysis, the
absence of evidence of actual confusion on this record does not justify summary
judgment. The other factors – the strength of the Sensient Flavors mark, the high
degree of direct competition, the auditory similarity of the marks in a market
characterized by telephone sales, and the evidence of intent to confuse – are sufficient
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to support a finding that the defendant’s mark is likely to confuse. See Eli Lilly, 233
F.3d at 465-66 (holding that although there was no evidence of actual confusion, “the
other factors – especially the similarity of the marks, the strength of the [plaintiff’s]
mark, and [the defendant’s] intent to confuse – strongly support[ed] the district court’s
ultimate conclusion” to grant a preliminary injunction under the Lanham Act). The
court makes a reasonable argument that there is no likelihood of confusion, and a jury
may reach that conclusion after evaluating credibility and weighing the evidence, but
the record does not demonstrate as a matter of law that the court’s determination is the
only reasonable outcome.
For these reasons, I would reverse the grant of summary judgment on Counts
1-5 and remand for further proceedings.
______________________________
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