SWIPLit
Supreme Court Asked to Address Circuit Split: Should Trademark Strength be Treated as a Question of Fact or Law?
The Supreme Court has granted a petition for certiorari to determine whether trademark strength should be analyzed as a question of fact or law for purposes of determining likelihood of confusion.
RiseandShine Corporation (“Rise Brewing”) owns numerous federal trademark registrations that contain the term “RISE” in connection with canned coffee and tea products. On June 15, 2021, Rise Brewing sued Pepsico Inc. (“Pepsico”) in the Northern District of Illinois on grounds of federal and state trademark infringement after Pepsico began using the mark MTN DEW RISE ENERGY for canned energy drinks. Rise Brewing moved for a preliminary injunction to prevent Pepsico from using the MTN DEW RISE ENERGY mark in connection with energy drinks. The case was transferred to the U.S. District Court for the Southern District of New York, and the preliminary injunction was granted.
The United States Court of Appeals for the Second Circuit later vacated the injunction, finding it was legal error that “[t]he district court failed to note that the strong logical associations between ‘rise’ and coffee represent weakness and place the mark at the low end of the spectrum for suggestive marks.” The court also found confusion between the parties’ marks unlikely because when viewing the parties’ respective products, “the differences appear far more notable than the similarities.” The Second Circuit concluded that: (1) Rise Brewing’s RISE marks are weak and entitled to a narrow scope of protection because the term “RISE” is highly suggestive in connection with coffee; and (2) consumer confusion is unlikely because there is a crowded field of RISE marks and the parties’ respective uses of “RISE” differ sufficiently.
On remand, Pepsico moved for summary judgment. The district court granted the motion based on the Second Circuit’s findings that Rise Brewing’s RISE marks are inherently weak, lack sufficient acquired distinctiveness, and consumer confusion is unlikely. Rise Brewing appealed the decision, arguing that the district court erred in analyzing both the strength of its’ marks and the issue of likelihood of confusion as questions of law.
The Second Circuit disagreed on both counts. While it acknowledged that there had been “tension on this issue in our prior decisions,” the Second Circuit maintained that the inherent strength of a mark is a question of law. As to likelihood of confusion, Rise Brewing argued that, in Hana Financial, Inc. v. Hana Bank, the Supreme Court essentially overruled the Second Circuit in holding that likelihood of confusion should be treated as a question of fact. 574 U.S. 418 (2015). In Hana Financial, the Supreme Court held that “when a jury trial has been requested and when the facts do not warrant entry of summary judgment or judgment as a matter of law, the question whether tacking is warranted must be decided by a jury.” The Second Circuit disagreed and stated that, even after Hana Financial, it has continued to analyze likelihood of confusion as a question of law.
The Second Circuit noted that, although likelihood of confusion is analyzed under a legal standard, “it could be submitted to a jury if there were enough evidence for a reasonable jury to make the predicate findings to establish a likelihood of confusion.” However, in this case, the Second Circuit agreed with the district court’s findings that there were insufficient facts for the case to go to trial and affirmed the grant of summary judgment in finding no likelihood of confusion between the parties’ marks. The Supreme Court’s decision in this case could resolve the circuit split on this issue, as the Second Circuit remains the only circuit to analyze mark strength as a question of law.
