IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-50854
ENRIQUE BERNAT F., S.A.; S.A. CHUPA CHUPS,
Plaintiffs-Counter Defendants-Appellees,
v.
GUADALAJARA, INC.; ET AL.,
Defendants,
GUADALAJARA, INC., doing business as
Dulces Vero USA,
Defendant-Counter Claimant-Appellant.
_______________________________
Appeal from the United States District Court
for the Western District of Texas
_______________________________
April 18, 2000
Before REYNALDO G. GARZA, HIGGINBOTHAM, and BENAVIDES, Circuit
Judges.
BENAVIDES, Circuit Judge:
Appellant Guadalajara, Inc. d/b/a Dulces Vero USA (“Dulces
Vero”) appeals from the imposition of a preliminary injunction
forbidding it to sell its soft-serve frozen yogurt cone-shaped
lollipops under the mark “Chupa Gurts” in the United States. The
district court determined that Dulces Vero’s mark infringed the
mark “Chupa Chups,” held by appellees Enrique Bernat F., S.A. and
S.A. Chupa Chups (collectively “Chupa Chups”). Because we find
that the record below adequately demonstrated that the term
“chupa” is a generic Spanish word that designates “lollipop,” we
hold that the district court abused its discretion in finding a
likelihood of confusion between the marks “Chupa Chups” and
“Chupa Gurts.” We therefore vacate the district court’s judgment
and remand.
I. Factual and Procedural Background
Headquartered in Barcelona, Spain, Chupa Chups manufactures
and distributes lollipops in, among other places, the U.S. and
Mexico, under the mark “Chupa Chups.” Though Chupa Chups sells
27 flavors of lollipops, its best-sellers (accounting for 50% of
its U.S. sales) are five “ice cream flavored” lollipops that
contain milk.
Based in Mexico, Dulces Vero also produces lollipops for the
U.S. and Mexican market. Dulces Vero is renowned for crafting
lollipops in unusual shapes. One such effort is the subject of
this suit: a frozen yogurt-flavored lollipop shaped like a soft-
serve frozen yogurt cone sold under the name “Chupa Gurts.”
Dulces Vero, which has been selling “Chupa Gurts” in Mexico
for two years, introduced the product to the U.S. at the 1998 All
Candy Expo (“the Expo”) in Chicago. The appearance at the Expo
led to a mention of “Chupa Gurts” in The Manufacturing
Confectioner, an industry magazine, which, in turn, alerted Chupa
Chups to the existence of its similarly-named competitor. Chupa
Chups contacted Dulces Vero to ascertain whether it was selling
“Chupa Gurts” in the U.S. Dulces Vero replied that it was not,
though apparently independent distributors–many of whom own “mom
and pop” stores–were purchasing “Chupa Gurts” in Mexico for
2
resale in the U.S. Dissatisfied with this state of affairs,
Chupa Chups filed the instant suit.
After a hearing, the magistrate judge issued a report and
recommendation on June 16, 1999, advocating the granting of a
preliminary injunction barring Dulces Vero from selling or
marketing any candy or confectionary product under the name
“Chupa Gurts.” The district court adopted the magistrate’s
report on August 3, 1999.1
Dulces Vero timely filed this appeal.
II. Standard of Review
To obtain a preliminary injunction, a plaintiff must
establish: (1) a substantial likelihood of success on the merits;
(2) a substantial threat that it will suffer irreparable injury
absent the injunction; (3) that the threatened injury outweighs
any harm the injunction might cause the defendants; and (4) that
the injunction will not impair the public interest. See Sugar
Busters L.L.C. v. Brennan, 177 F.3d 258, 265 (5th Cir. 1999).
Because these four elements constitute mixed questions of fact
and law, we review the district court’s factual findings for
clear error, but we apply de novo review to its legal
1
Between June 16, 1999, when the magistrate issued his report
and recommendation, and August 3, 1999, when the district court
adopted it, the confectionary industry held the 1999 Expo.
Despite the fact that, at the time of the Expo, the report and
recommendation lacked the force of law (because it had not yet
been approved by the district court), Dulces Vero did not
showcase “Chupa Gurts” at the 1999 Expo because to do so would
have contravened the terms of the preliminary injunction the
magistrate recommended.
3
conclusions. See Sunbeam Prods., Inc. v. West Bend Co., 123 F.3d
246, 250 (5th Cir. 1997). We may only reverse the district
court’s ultimate decision to grant the injunction if we conclude
that it abused its discretion, though a decision based on
erroneous legal principles is subject to de novo review. See
Martin’s Herend Imports, Inc. v. Diamond & Gem Trading United
States of America Co., 195 F.3d 765, 772 (5th Cir. 1999).
III. Trademark Infringement
The parties agree that the controversy centers on the term
“chupa.” Dulces Vero claims the district court never conducted a
validity of the mark analysis2 and thereby failed to ascertain
2
The district court did err, as Dulces Vero alleges, by
failing to conduct a validity of the mark analysis before
proceeding to the likelihood of confusion inquiry. See Pebble
Beach Co. v. Tour 18 I, Ltd., 155 F.3d 526, 536-37 (5th Cir.
1998) (setting forth the two prong test for infringement: (1)
assess the validity of the mark, i.e. is it inherently
distinctive or has it acquired secondary meaning; and (2)
ascertain likelihood of confusion). Courts conduct the validity
analysis by classifying the mark as generic, descriptive,
suggestive, arbitrary or fanciful. See Pebble Beach Co. v. Tour
18 I, Ltd., 942 F. Supp. 1513, 1537 (S.D. Tex. 1986). Generic
marks, of course, receive no protection, and descriptive marks
must have secondary meaning to garner protection. Id. Here, the
district court, in assessing whether “Chupa Chups” was valid,
merely observed that Chupa Chups first registered the mark in
1966, and, after allowing it to lapse on April 7, 1997 for
failure to file the necessary affidavits for renewal, regained it
on November 24, 1998. Though a registered mark is entitled to a
presumption of validity, see 15 U.S.C. § 1057(b), this
presumption has never absolved the district court of its
responsibility to conduct an independent validity of the mark
analysis.
Nevertheless, as Chupa Chups emphasizes, the district court
did find the mark arbitrary in the likelihood of confusion
analysis when it examined the strength of the mark. Therefore,
the district court classified the mark during the wrong part of
the analysis. This constitutes reversible error because, as we
detail below, “chupa” is generic, and therefore, that likelihood
4
that the mark “chupa,” which corresponds to “lollipop” in
Spanish, is generic and unworthy of protection. Moreover, Dulces
Vero asserts that no likelihood of confusion exists between
“Chupa Gurts” and “Chupa Chups.”
Chupa Chups counters that the district court correctly held
“chupa” to be an arbitrary mark, and that consumers are likely to
confuse the two marks.
The parties agree that application of the doctrine of
foreign equivalents governs the outcome of this dispute. This
doctrine requires courts to translate foreign words into English
to test them for genericness or descriptiveness. See Pizzeria
Uno Corp. v. Temple, 747 F.2d 1522, 1531 (4th Cir. 1984); see
also 2 McCarthy on Trademarks and Unfair Competition, § 11:34, at
11-60. The act of translation, of course, can itself be an
imprecise task, as foreign words sometimes have no exact
equivalent in English; therefore, courts may rely on the “primary
and common translation” in determining English equivalency. 3
McCarthy, supra, § 23:38, at 23-85. Additionally, courts need
not concern themselves with words from obsolete, dead, or obscure
languages, see McCarthy, supra, at 11-60-11-60.1, because one
policy undergirding the doctrine is “the assumption that there
are (or someday will be) customers in the U.S. who speak that
foreign language.” Otokoyama Co. Ltd. v. Wine of Japan Import,
Inc., 175 F.3d 266, 270 (2d Cir. 1999). The other policy
of confusion analysis should have compared only the arbitrary
parts of the marks–i.e. “Chups” and “Gurts”–not “Chupa Chups” and
“Chupa Gurts.”
5
justification is one of international comity: because U.S.
companies would be hamstrung in international trade if foreign
countries granted trademark protection to generic English words,
the U.S. reciprocates and refuses trademark protection to generic
foreign words. See In re Le Sorbet, Inc., 228 U.S.P.Q. 27, 31
(T.T.A.B. 1985) (“The rationale of these protests [by the State
Department against registration of generic English words abroad]
is that registration of generic terms as trademarks would
interfere with the free flow of international trade in products
known by that generic term.”); 2 McCarthy, supra, § 12:41, at 12-
85. Though the doctrine of foreign equivalents is a well-
established precept of trademark law, no Fifth Circuit case has
heretofore applied it.
The first step in the analysis is translating the word
“chupa.” Though Dulces Vero elicited testimony from Chupa Chups’
representative, Victor Tresserras (“Tresserras”), a native
Spanish-speaker, that “chupa” translates as “lollipop” in Spanish
slang, the district court found that the primary meaning of the
word was “to lick” or “to suck.” This finding is not an abuse of
discretion because the district court should use the primary and
common translation of the word, and both parties agree that
“chupa” is a form of the verb “chupar,” meaning “to lick” or “to
suck.”
The analysis does not end here, however, because Dulces Vero
maintains that the verb meaning “to lick” or “to suck,” when used
as a noun, is nonetheless a generic designator of lollipops in
6
Spanish. Chupa Chups scoffs at this argument, claiming that
generic terms are always nouns that translate literally to mean
the general term for a product–i.e. “paleta” means “lollipop.”3
The cases, however, do not endow “generic” with quite so narrow a
definition. In Otokoyama Co., the defendants alleged that
“otokoyama” was the generic Japanese term for “sake.” The Second
Circuit agreed, even though “otokoyama” literally translated as
“man/mountain,” not “rice liquor.” See 175 F.3d at 268.
Similarly, in Burke v. Cassin, 45 Cal. 467, 476 (1873), the
California Supreme court held that “schnapps” was generic for
gin, despite the fact that its literal translation from German
meant “dram” or “drink.” And again, in Holland v. C. & A. Import
Corp., 8 F. Supp. 259 (D.N.Y. 1934), the court found “est est
est” to be the generic term for Montefiascone wine, even though
the term literally translates as “it is it is it is.” Therefore,
despite the fact that the lower court did not literally translate
it to mean “lollipop,” “chupa” could be generic if it has come to
signify lollipops in Spanish-speaking countries, like Mexico.
The evidence in the record suggests that “chupa” does
generically designate “lollipops.” Most significantly, Dulces
Vero presented evidence that two other products–aside from “Chupa
Chups” and “Chupa Gurts”–use the mark “chupa” on lollipops in
3
The Spanish word for “lollipop” is “paletas,” but this does
not foreclose “chupa” from functioning as an additional generic
term for lollipops, much as the word “sucker” in English is also
a generic term for a lollipop. See 2 McCarthy, supra, § 12:9, at
12-19 (“Any product may have many generic designations.”).
7
Mexico. These marks are “Chupadedo” and “Tutsi Chupa Pop,” the
latter having been licensed by Tootsie Roll Industries
(“Tootsie”). That other lollipops in Mexico use the term “chupa”
in their marks is a strong indication that the Spanish-speaking
Mexican population understands “chupa” to designate lollipops.
Moreover, Tresserras, who was Chupa Chups’ own represent-
ative, testified, “In certain regions ‘chupa’ is used to refer to
a lollipop or a sucker when used as a noun. When somebody goes
into a local candy shop and asks for a chupa, then it’ll be
understood more times than not that it’s a lollipop.” Dulces
Vero additionally submitted evidence that other derivations of
“chupar” also mean lollipop in different Spanish dialects: “chupa
chupa” means lollipop in southern South America4 and “chupatinos”
means “lollipop” in Argentina.
Chupa Chups itself encourages consumers to think of “chupa”
as a common word, not a trademark. The “Chupa Chups” wrapper
states “‘Chupa Chups’ means ‘to lick a lollipop’ in Spanish.”
While this phrase casts “chups,” not “chupa” as meaning
“lollipop,” the overall import of the wrapper is that “chupa”
functions as a common word, not a trademark.5
4
Specifically, this dialect is spoken in Argentina and
Uruguay. Chupa Chups argues that because this dialect is not
spoken in a single, Spanish-speaking country, the dialect is
irrelevant. Its argument must fail. The doctrine of foreign
equivalents does not require that the language or dialect be
spoken in a country as a whole. “A word may . . . be generic by
virtue of its association with a particular region, cultural
movement, or legend.” Otokoyama Co., 175 F.3d at 271.
5
Chupa Chups argues vigorously that it intended this phrase
as a slogan, like “Motts means fruit,” not as a literal
8
The district court relied heavily on the fact that Spanish-
English dictionaries did not seem to translate “chupa” as
“lollipop,” but “numerous terms have been found to be generic
despite their absence from the dictionary.” Liquid Controls
Corp. v. Liquid Control Corp., 802 F.2d 934, 937 (7th Cir. 1986).
This results from the fact that dictionary evidence is not
dispositive. “[T]here is likely to be a delay between a word’s
acceptance into common usage and its entry in a dictionary.
Dictionary entries also reflect lexicographical judgment and
editing which may distort a word’s meaning or importance.”
Berner Int’l Corp. v. Mars Sales Co., 987 F.2d 975, 983 (3d Cir.
1993). This latter point is particularly persuasive in the
context of a Spanish-English dictionary, where the editor’s
discretion extends not merely to the meaning of the English word,
but also to what its closest Spanish equivalent might be.
Because translation is itself such an interpretative task, the
absence in the record of an entry in a Spanish-English dictionary
that defines “chupa” as a “lollipop” is not controlling.
translation of its trademark. This is unpersuasive. The average
English-speaking consumer knows “Motts means fruit” is a slogan
because it identifies “Motts” as a trademark and understands the
phrase to mean that Motts uses fruit in its products.
Conversely, the average English-speaking consumer who does not
also speak Spanish will have no basis for realizing that the
slogan “‘Chupa Chups’ means ‘to lick a lollipop’ in Spanish,” is
a slogan, rather than a literal translation. Moreover, even
Spanish-speaking consumers might read the phrase literally
because “chupa” does mean “to lick.” That the Spanish-speaking
consumer would not recognize “chups” does not alter this analysis
because he might assume that “chups” is simply another derivation
of “chupar” meaning “lollipop” in a dialect with which he is
unfamiliar.
9
In addition to this evidence in the record demonstrating
that “chupa” is generic, the policies undergirding the doctrine
of foreign equivalents both strengthen that conclusion. The
first explanation for denying trademark protection to generic
foreign words is that Spanish-speakers in the U.S. will
understand “chupa” to be generic. This is particularly true on
these facts, where “Chupa Gurts” are now available in the U.S.
only in ethnic “mom-and-pop” stores that serve Spanish-speaking
consumers. In addition, Spanish is widely spoken in the U.S.,
particularly in Texas, where “Chupa Gurts” are being sold by
these independent distributors. The district court discounted
these facts, emphasizing that Dulces Vero’s ultimate goal was to
market “Chupa Gurts” more widely. Even a wider distribution,
however, will not change the fact that Spanish-speakers from
Mexico and parts of South America will understand “chupa” to be
the generic designator of “lollipop.” “No merchant may obtain
the exclusive right over a trademark designation if that
exclusivity would prevent competitors from designating a product
as what it is in the foreign language their customers know best.”
Otokoyama Co., 175 F.3d at 271.
Moreover, the policy of international comity has substantial
weight in this situation. If we permit Chupa Chups to monopolize
the term “chupa,” we will impede other Mexican candy makers’
ability to compete effectively in the U.S. lollipop market. Just
as we do not expect Mexico to interfere with Tootsie’s ability to
market its product in Mexico by granting trademark protection in
10
the word “pop” to another American confectioner, so we cannot
justify debilitating Dulces Vero’s attempts to market “Chupa
Gurts” in the United States by sanctioning Chupa Chups’ bid for
trademark protection in the word “chupa.”
For these reasons, we hold that “chupa” is a generic Spanish
word that designates “lollipop” or “sucker.” Because generic
terms cannot obtain trademark protection, the only part of Chupa
Chups’ mark that can garner trademark protection is “Chups.” The
district court therefore erred by conducting the likelihood of
confusion analysis with the marks “Chupa Chups” and “Chupa Gurts”
instead of “Chups” and “Gurts,” which are the only distinctive
parts of either of the parties’ marks. Thus, its assessment that
a likelihood of confusion existed between the two marks was in
error, and consequently, so was its determination that Chupa
Chups had shown a likelihood of success on the merits. The grant
of a preliminary injunction was therefore an abuse of discretion.
As a result of our disposition of this case, we need not
reach the questions of the amount of the bond or of whether the
trial court enjoined the proper parties.
IV. Conclusion
We hold that “chupa” is a generic term designating
“lollipop” in Spanish. We therefore conclude that the district
court abused its discretion when it found a likelihood of
confusion between the marks “Chupa Chups” and “Chupa Gurts.” For
this reason, we vacate the preliminary injunction and remand to
the district court for further proceedings.
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VACATED and REMANDED.
12