PlayNation Play Systems, Inc. v. Velex Corporation
Opinion
The parties to this appeal both chose a gorilla as the face of their respective brands. Litigation ensued. PlayNation Play Systems, Inc. sued Velex Corporation for trademark infringement. The district court conducted a bench trial and entered judgment for PlayNation. Velex now appeals, arguing that the district court erred in finding trademark infringement, awarding damages to PlayNation, and cancelling Velex's trademark registration. After careful review and with the benefit of oral argument, we affirm the district court's decisions on Velex's liability for trademark infringement and cancellation of Velex's trademark. We vacate and remand, however, on the district court's determination of damages based on Velex's willful infringement.
I. Factual Background
PlayNation has sold children's outdoor playground equipment, including swing sets and attachable swings, ropes, and rings, under its "Gorilla Playsets" brand since 2002. PlayNation owns three registered trademarks for Gorilla Playsets, two registered in 2004 and another in 2014. 1 Velex sells "Gorilla Gym" doorway pull-up bars and various attachable accessories for children, including swings, ropes, and rings, under its "Gorilla Gym" brand. Velex successfully registered a trademark for Gorilla Gym in 2014. 2 Both PlayNation and *1165 Velex's trademarks are registered in Class 28, the broad class of goods for games and other playthings.
II. Trademark Infringement
Velex first argues that the district court erred by concluding that consumers would likely be confused by Velex's use of the Gorilla Gym mark. In an appeal from a bench trial, we review a district court's conclusions of law de novo and its factual findings for clear error.
Tartell v. S. Fla. Sinus & Allergy Ctr., Inc.
,
Under the Lanham Act,
We review for clear error both a district court's ultimate decision on likelihood of confusion and its findings on each factor.
Frehling
,
A. Strength of PlayNation's Mark
"Classifying the type of mark Plaintiff has determines whether it is strong or weak. The stronger the mark, the greater the scope of protection accorded it, the weaker the mark, the less trademark protection it receives. There are four categories of marks: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary."
Frehling
,
The district court also reasoned that other factors increased the strength of PlayNation's mark.
See
Frehling
,
Second, the parties agree that PlayNation's mark has been registered with the Patent and Trademark Office for at least five years and is thus incontestable.
Frehling
,
Finally, the lack of extensive third-party use also strengthens PlayNation's mark.
Frehling
,
*1167 The district court did not clearly err in determining that PlayNation's Gorilla Playsets mark was strong.
B. Actual Confusion
"It is undisputed that evidence of actual confusion is the best evidence of a likelihood of confusion."
Frehling
,
The district court determined that the actual confusion factor weighed in favor of a likelihood of confusion. PlayNation produced two ultimate purchasers of PlayNation's Gorilla Playsets swing sets who contacted Velex for customer service. The consumers believed Velex manufactured both Gorilla Gym and Gorilla Playsets products. Consumers also posted on retail websites selling Gorilla Playsets swings and trapeze bars asking if those items work "with the Gorilla Gym indoors." Velex argues this evidence was insufficient to establish actual confusion because the two consumers were careless and uninformed. 4 Velex points to portions of the consumers' testimony in which they confuse the names of the two companies and misremember which name was on the packaging and website they looked at before calling Velex. Velex asserts that a prudent consumer would have examined the packaging, read the product warranty, or researched the product on the internet. Velex argues that had the consumers been so diligent, they would have discovered that PlayNation-not Velex-manufactured the product they purchased.
First, nothing in the actual confusion analysis requires the plaintiff to produce the most careful consumer, who diligently researched and meticulously examined the inner and outer packing to determine the provenance of the product she purchased. It only requires that the consumers be reasonably prudent. The district court found the consumers' testimony probative. That the district court made that determination even though the two witnesses confused the names of the two brands or failed to examine the packing before mistakenly calling Velex for help does not amount to clear error.
Second, the number of instances and the type of consumer also support the district court's actual confusion finding. The customers PlayNation identified are ultimate
*1168
consumers of the product, to which we give special weight. And the number of instances need not be large to be probative of confusion.
See
Safeway Stores
,
The district court thus did not clearly err in holding that the actual confusion factor weighed in favor of a likelihood of confusion.
C. Similarity of Marks
To determine if two marks are similar, the court "considers the overall impressions that the marks create, including the sound, appearance, and manner in which they are used."
Frehling
,
D. Similarity of Products, Retail Outlets, and Advertising
The district court did not clearly err in finding that the products, retail outlets, and advertising of PlayNation and Velex were sufficiently similar to weigh in favor of confusion. First, the products are highly similar. The test for similar products is "whether the products are the kind that the public attributes to a single source, not whether or not the purchasing public can readily distinguish between the products of the respective parties."
Frehling
,
Second, the retail outlets are similar. "This factor takes into consideration where, how, and to whom the parties' products are sold."
Frehling
,
Third, PlayNation and Velex engaged in similar advertising. "This factor looks to each party's method of advertising."
While there may be some evidence to support dissimilar products, retail outlets, and advertising, they are not enough to compel an alternative finding under clear error review.
These factors are not exclusive. Courts do not have to consider every factor in every case.
Swatch Watch, S.A. v. Taxor, Inc.
,
E. New Factors
Velex proposes two new factors the district court should have considered: first, that Velex had a valid federal trademark registration that covered the infringing products, and second, that PlayNation failed to produce survey evidence suggesting consumer confusion.
To support adoption of its first proposed factor, Velex argues that it ought to have the right to rely on decisions of the government-here, the Patent and Trademark Office (PTO). Velex relies on the Supreme Court's decision in
B&B Hardware, Inc. v. Hargis Indus., Inc.
, --- U.S. ----,
B&B Hardware
does not suggest that, absent a prior administrative finding, a district court deciding a trademark infringement action is bound-or even ought to be persuaded-by the PTO's registration of the defendant's mark.
It was similarly not clearly erroneous for the district court not to consider Velex's second proposed factor: lack of survey evidence. Lack of survey evidence does not weigh against the plaintiff when determining likelihood of confusion.
See
Frehling
,
The district court did not clearly err in holding that Velex infringed on PlayNation's trademark.
III. Remedies
Velex argues that the district court erred in fashioning a remedy in this case by first, awarding PlayNation damages based on an accounting of Velex's profits, and second, cancelling Velex's trademark registration. We review a district court's decision to grant relief, including cancelling a party's trademark registration, for abuse of discretion.
See
Planetary Motion, Inc. v. Techsplosion, Inc.
,
A. Damages
The Lanham Act allows a successful plaintiff to recover the defendant's profits.
The district court concluded that Velex willfully infringed on PlayNation's trademark based solely on Velex's continued sale of its Gorilla Gym products after it was served with PlayNation's complaint. The district court reasoned that PlayNation's complaint put Velex's on notice that it was allegedly infringing on PlayNation's trademark. But when it received PlayNation's complaint, Velex had a valid registered trademark on Gorilla Gym. PlayNation did not obtain a preliminary injunction, and at the time, no court had adjudicated whether Velex was infringing on PlayNation's trademark.
Under the district court's construction of willfulness, a valid trademark holder risks losing all of its profits if it does not immediately cease selling its trademarked product upon receiving a complaint indicating it may be violating the law. The district court determined that at the time Velex obtained its trademark, Velex did not intend to infringe on PlayNation's trademark. And from the time Velex obtained its trademark to the time the district court made its final determination, there was no further adjudication that Velex was infringing. This continued sale under the color of a valid federal trademark cannot alone establish willfulness.
See
cf.
Maltina Corp. v. Cawy Bottling Co., Inc.
,
*1171
There may have been other evidence of willfulness, but the district court did not rely on it in its decision. The district court also relied solely on the willfulness theory to support its accounting of profits. The other two theories for supporting an accounting of profits, deterrence and unjust enrichment, do not depend "upon a higher showing of culpability on the part of defendant, who is purposely using the trademark."
Burger King
,
B. Cancelling Trademark Registration
District courts have discretion to order the cancelation of a federal trademark registration in whole or in part.
If the "mark at issue has been on the federal Principal Register in registrant's name for less than five years, the mark may be cancelled if petitioner can prove that the registration should have been barred in the first instance under Lanham Act § 2."
Having concluded that Velex infringed on PlayNation's trademark, it was not an abuse of discretion for the district court to cancel Velex's trademark registration.
IV. Conclusion
The district court did not clearly err in holding that Velex infringed on PlayNation's trademark. The district court similarly did not err in canceling Velex's trademark registration on that basis. But the district court did abuse its discretion in holding that PlayNation was entitled to an accounting of Velex's profits due to willful infringement based solely on Velex's continued lawful use of its mark after Velex was served with the complaint in this action. As a result, we vacate the district court's judgment on that issue, and remand for further proceedings consistent with this opinion.
AFFIRMED IN PART, VACATED AND REMANDED IN PART.
PlayNation's mark:
Velex's mark:
We have held that "
in isolation
, evidence of promotion
efforts
is not sufficient to establish a mark's commercial strength because it tells us precious little about the efficacy of those efforts in creating marketplace recognition...."
Fla. Int'l Univ. Bd. of Trustees v. Fla. Nat'l Univ., Inc.
,
Velex argues that the two consumers calling the wrong phone number amounts to "initial interest confusion," a doctrine we have not yet accepted as actionable under the Lanham Act.
See
Suntree Tech., Inc. v. Ecosense Intern., Inc.
,
Reference
- Full Case Name
- PLAYNATION PLAY SYSTEMS, INC., D.B.A. Gorilla Playsets, Plaintiff-Appellee, v. VELEX CORPORATION, D.B.A. Gorilla Gym, Defendant - Appellant.
- Cited By
- 33 cases
- Status
- Published