16‐3037‐cv Joules Ltd. v. Macyʹs Merchandising Grp., Inc.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 21st day of June, two thousand seventeen.

PRESENT: RALPH K. WINTER, GUIDO CALABRESI, DENNY CHIN, Circuit Judges.

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JOULES LIMITED, Plaintiff‐Counter‐Defendant‐Appellant,

v. 16‐3037‐cv

MACYʹS MERCHANDISING GROUP, INC., Defendant‐Counter‐Claimant‐Appellee.

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FOR PLAINTIFF‐COUNTER‐ RACHEL JACQUES (C.J. Veverka, R. Parrish DEFENDANT‐APPELLANT: Freeman, on the brief), Maschoff Brennan, PLLC, Park City, Utah.

FOR DEFENDANT‐COUNTER‐ ANTHONY F. LO CICERO (Richard S. CLAIMANT‐APPELLEE: Mandaro, Reena Jain, on the brief), Amster, Rothstein & Ebenstein LLP, New York, New York.

Appeal from the United States District Court for the Southern District of

New York (Wood, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

Following a one‐day bench trial in this trademark infringement case,

plaintiff‐counter‐defendant‐appellant Joules Limited (ʺJoulesʺ) appeals from the district

courtʹs judgment entered August 5, 2016 in favor of defendant‐counter‐claimant‐

appellee Macyʹs Merchandising Group, Inc. (ʺMMGʺ). By opinion and order entered

August 2, 2016, the court granted MMGʹs request for a declaration that its MAISON

JULES mark did not infringe the JOULES mark. We assume the partiesʹ familiarity with

the underlying facts, procedural history, and issues on appeal.

BACKGROUND

Joules is an England‐based retailer, founded by Tom Joule, that sells

womenʹs clothing, shoes, and accessories to retailers in the United States. Joules owns

U.S. Trademark

which protects the use of the JOULES mark

in connection with womenʹs clothing, shoes, and accessories. The United States Patent

& Trademark Office (ʺUSPTOʺ) issued the registration in October 2009 without proof of

secondary meaning. Joules has used the mark in the marketplace since 2004 and on its

product tags, clothing labels, and websites, www.joules.com and www.joulesusa.com,

primarily in the stylized script shown below:

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S. App. 3.

MMG G is a New Y York‐based d subsidiary y of Macyʹss, Inc. (ʺMaccyʹsʺ), whicch

operatess departmen nt stores th hroughout tthe United SStates and sells produ ucts online aat

www.m macyʹs.com. MMG designed ʺMaiison Julesʺ aas a privatee brand linee of clothing g for

Macyʹs. MMG seleected the na ame ʺMaiso on Julesʺ (1)) to evoke aan associatio on with Freench

fashion, as ʺmaison nʺ means ʺh houseʺ in Frrench and iss used to reefer to Fren nch fashion

houses, and the popular Frencch film ʺJules and Jimʺʺ; (2) for thee dual‐gend der quality of

the nam me ʺJules,ʺ so o the brand d could expa and into m menʹs appareel; and (3) tto create an n

easily prronounceab ble name th hat was unliike the nam me of other Macyʹs braands targetiing

the samee consumerrs. After th he Maison Ju ules line lau unched in JJuly 2013, M MMG used the

MAISON N JULES m mark on product tags, cclothing lab bels, Macyʹss website, aand physicaal

objects in the Maiso on Jules secction in Macyʹs stores. MMG hass used the m mark in the

marketp place in thiss partially sscripted form m:

S. App. 8.

oules and M The Jo Maison Julees product llines targett similar audiences and d are

generallly sold at seeparate loca ations. Thee Joules linee targets wo omen consu umers betw ween

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the ages of twenty‐five and forty and the Maison Jules line targets women consumers

between the ages of eighteen and thirty. Both lines feature workplace‐ and weekend‐

appropriate clothing of comparable price and quality. Joules clothing is sold in retail

stores such as Nordstrom, and online at www.joulesusa.com and third‐party websites

such as www.amazon.com. No Joules products are sold in Macyʹs stores or at

www.macys.com. In contrast, Maison Jules clothing is sold almost exclusively in

Macyʹs stores and at www.macys.com. A small subset of Maison Jules products is sold

at third‐party websites such as www.amazon.com.

In 2012, MMG performed a trademark search for conflicting marks and

found a result for Joulesʹs U.K. website but not its U.S. website. MMG filed an intent‐to‐

use application and sought to register the MAISON JULES mark for use in connection

with womenʹs clothing and other goods. In early 2013, Joules sent cease‐and‐desist

letters to Macyʹs and MMG requesting withdrawal of the application. The USPTO

issued a statement that it found no conflicting marks that would bar registration of the

MAISON JULES mark and issued a notice of publication. Joules filed a Notice

Opposition and, in 2015, filed the complaint in this action.

On August 2, 2016, the district court held, after a bench trial, that there

was no likelihood of confusion between the JOULES and MAISON JULES marks. It

entered judgment for MMG. This appeal followed.

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DISCUSSION

ʺWhen reviewing a judgment following a bench trial, we review a district

courtʹs findings of facts for clear error and its conclusions of law de novo.ʺ Process Am.,

Inc. v. Cynergy Holdings, LLC,

(2d Cir. 2016). We will not find clear

error in the findings ʺ[w]here there are two permissible views of the evidence.ʺ

(alteration in original) (quoting Diesel Props S.R.L. v. Greystone Bus. Credit II LLC,

(2d Cir. 2011)).

A plaintiff asserting either a trademark infringement claim under federal

or New York law or a federal claim of unfair competition must establish a likelihood of

consumer confusion as to the source or sponsorship of defendantʹs products. 1‐800

Contacts, Inc. v. WhenU.Com, Inc.,

, 406‐07 (2d Cir. 2005) (federal trademark

infringement); EMI Catalogue Pʹship v. Hill, Holliday, Connors, Cosmopulos Inc.,

(2d Cir. 2000) (federal unfair competition); Std. & Poorʹs Corp. v. Commodity Exch.,

Inc.,

(2d Cir. 1982) (trademark infringement under federal and New

York law). We assess the likelihood of confusion under the Polaroid factors: (1) the

strength of plaintiffʹs mark, (2) the similarity of the two marks, (3) the competitive

proximity of the products, (4) the likelihood that plaintiff will ʺbridge the gapʺ and offer

a product like defendantʹs, (5) actual confusion between the products, (6) defendantʹs

good faith, (7) the comparable quality of defendantʹs product, and (8) purchaser

sophistication. Streetwise Maps, Inc. v. VanDam, Inc.,

(2d Cir. 1998)

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(quoting Polaroid Corp. v. Polarad Elecs. Corp.,

(2d Cir. 1961)). We

review the findings as to each factor for clear error and the balancing of the factors de

novo. Starbucks Corp. v. Wolfeʹs Borough Coffee, Inc.,

(2d Cir. 2009).

The district court found that the strength, similarity, competitive

proximity, actual confusion, and good faith factors favored MMG; the quality factor

favored Joules; and the likelihood of bridging the gap and sophistication factors were

neutral. It balanced the factors, held there was no likelihood of confusion, and

dismissed Joulesʹs claims. On appeal, Joules challenges its assessment of the

competitive proximity, actual confusion, strength, and similarity factors.

A. Competitive proximity

Competitive proximity ʺʹconcerns whether and to what extent the two

products compete with each otherʹ and ʹthe nature of the products themselves and the

structure of the relevant market.ʹʺ Morningside Grp. Ltd. v. Morningside Capital Grp.,

L.L.C.,

(2d Cir. 1999) (quoting Cadbury Beverages, Inc. v. Cott Corp.,

(2d Cir. 1996)). ʺAmong the considerations germane to the structure of the

market are the class of customers to whom the goods are sold, the manner in which the

products are advertised, and the channels through which the goods are sold.ʺ Cadbury,

.

The district court found that the competitive proximity factor weighed

ʺclearly in favor of MMG.ʺ S. App. 17. We do not agree. Both sets of products are sold

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in brick‐and‐mortar department stores (albeit not the same ones); sold online through

the partiesʹ respective websites; and, for a small subset of both products, sold online

through the same or similar third‐party websites. Both product lines target and are sold

to young women who seek work‐ and weekend‐appropriate clothing and who are likely

to visit both sets of sales locations. These considerations show competitive proximity

between the products, even if the vast majority of products are not sold side‐by‐side in

the same stores or on the same websites. See Patsyʹs Brand, Inc. v. I.O.B. Realty, Inc.,

, 218 (2d Cir. 2003) (finding competitive proximity, even though products were

sold in separate stores, because products appealed to same consumers, stores were

geographically close, and consumers were reasonably likely to visit both stores).

The different nature of the products, however, tempers the finding of

competitive proximity. Although both product lines feature clothing of comparable

quality and price, the court found that ʺa significant percentageʺ of Joules sales in the

United States are for rain boots and rainwear, the majority of large national retailers

carrying Joules products carry only their rain boots and rainwear, and there are no rain

boots or rainwear in the Maison Jules line. S. App. 17. This evidence indicated that a

significant portion of the Joules products sold are different in nature from the Maison

Jules products sold, a conclusion that weakens the finding of competitive proximity.

On balance, we conclude the competitive proximity factor weighs slightly

in Joulesʹs favor. Nonetheless, assuming the district court clearly erred in finding that

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the factor clearly favored MMG, as discussed below, we agree with its overall

conclusion as to the likelihood of confusion.

B. Actual confusion

Evidence of actual confusion is ʺconvincing evidence that confusion is

likely.ʺ Morningside,

. The court concluded that MMGʹs survey evidence

of confusion was more credible than Joulesʹs evidence and that the actual confusion

factor clearly favored MMG. This finding was not clearly erroneous.

ʺTo be probative, a survey must ʹhave been fairly prepared and its results

directed to the relevant issues.ʹʺ Sterling Drug, Inc. v. Bayer AG,

(2d Cir.

1994) (quoting Universal City Studios, Inc. v. Nintendo Co.,

(2d Cir.

1984)). Here, the court found Joulesʹs survey evidence flawed and its finding of 24.3%

confusion unpersuasive because (1) the line‐up method forced participants to consider

the marks in artificially close proximity; (2) the Maison Jules website shown to

participants had been scrubbed of all Macyʹs references and context; (3) the control

stimulus was too dissimilar to the Maison Jules website; and (4) participants were not

limited to potential Maison Jules consumers, see

(noting that where there is confusion

as to source of junior userʹs products, survey participants should be junior userʹs

consumers). The court found that MMGʹs survey evidence more closely replicated

market conditions and that its finding of no confusion was more reliable, because it did

not use the line‐up method, tested for both in‐store and online confusion, and corrected

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for errors arising from the low level of recognition of the JOULES mark in the

marketplace. Because there is evidentiary support for the courtʹs reading of the survey

evidence and because we will not ʺsecond‐guess the courtʹs credibility assessments,ʺ

Process Am.,

(quoting Diesel Props,

), we conclude there was

no clear error in the courtʹs analysis of the survey evidence.

Accordingly, it was not clearly erroneous for the district court to find that

the actual confusion factor weighed clearly in MMGʹs favor.

C. Strength of the JOULES mark

ʺThe strength of a mark is determined by its tendency to uniquely identify

the source of the product.ʺ Star Indus., Inc. v. Bacardi & Co.,

(2d Cir.

2005). ʺTo gauge a markʹs strength, we consider two factors: its inherent distinctiveness,

and its distinctiveness in the marketplace.ʺ Streetwise,

.

We agree with the district court that the strength factor weighs in MMGʹs

favor. First, the JOULES mark is inherently strong because the USPTO registered it

without proof of secondary meaning, so we presume ʺthat the mark is more than

merely descriptiveʺ and ʺis inherently distinctive.ʺ Lane Capital Mgmt., Inc. v. Lane

Capital Mgmt., Inc.,

(2d Cir. 1999). Second, there is evidence of the

markʹs weakness in the marketplace. Joulesʹs expert opined that only 16.2% of

participants in his survey, which targeted women between the ages of sixteen and

thirty‐five who had recently shopped for clothing, had seen, heard of, or purchased

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Joules products. Joules admitted that at least twelve other trademark registrations and

websites use ʺJulesʺ or a homophone to offer products for sale in the market for

womenʹs clothing. The court did not clearly err in finding that the commercial

weakness of the JOULES mark undercut its inherent strength. Thus, we find no clear

error in the finding that the strength factor favored MMG.

D. Similarity of marks

ʺIn assessing similarity, courts look to the overall impression created by

the logos and the context in which they are found and consider the totality of factors.ʺ

Star Indus.,

(quoting Gruner + Jahr USA Publʹg, a Div. of Gruner + Jahr

Printing & Publʹg Co. v. Meredith Corp.,

(2d Cir. 1993)). A side‐by‐

side comparison is a useful means of analyzing similarities in the respective designs, so

long as the focus is on the ultimate issue of the likelihood of consumer confusion. Louis

Vuitton Malletier v. Dooney & Bourke, Inc.,

(2d Cir. 2006).

The district court concluded that the JOULES mark and the composite

MAISON JULES mark were more dissimilar than similar. This finding was not clearly

erroneous. Although the marks share similarly stylized scripts, use similar spellings for

the words ʺJulesʺ and ʺJoules,ʺ and are not facially distinguishable in meaning,

consumers can nevertheless distinguish the composite MAISON JULES mark from the

JOULES mark based on (1) sound because the dissimilar word ʺmaisonʺ appears first in

the MAISON JULES mark, (2) the block‐text typeface for the word ʺmaisonʺ in the

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MAISON JULES mark, and (3) the differences in overall appearances when the marks

are considered in their full contexts. See Streetwise, 159 F.3d at 744‐45 (finding

dissimilarity because ʺ[w]hile the two names sound similar, the trademarks themselves

are not confusingly similar, given the context in which a purchaser sees them,ʺ and

identifying differences in product features, logos, dress colors, typefaces, font sizes, and

the number of words in each mark). Accordingly, the court did not clearly err in

finding the similarity factor favored MMG.

E. Balancing of factors

To summarize, four Polaroid factors (strength, similarity, actual confusion,

and good faith) favor MMG, two factors (competitive proximity and quality) favor

Joules, and two factors (likelihood of bridging the gap and purchaser sophistication) are

neutral. As discussed, the competitive proximity factor does not strongly favor Joules

due to differences in product nature, but the actual confusion factor clearly favors

MMG. Upon our de novo review of the balancing of factors, we agree with the district

court that the overall balance favors MMG and that Joules has therefore not

demonstrated a likelihood of consumer confusion.

We have considered Joulesʹs remaining arguments and find them to be

without merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

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