<em>Bad Elf, LLC v. Flex Ltd.</em>
No. 2022-1839, 2023 WL 5199483 (Fed. Cir. Aug. 14, 2023)
The Federal Circuit determined that the Trademark Trial and Appeal Board (“TTAB”) erred in its likelihood of confusion analysis and remanded a case to reconsider its application of the conceptual and commercial strength DuPont Factor in light of Spireon.
Bad Elf LLC’s filed an intent-to-use trademark application to register the mark “FLEX” for GPS and navigation-related goods in International Classes 9 and 39. Flex Ltd. opposed the registration. Flex argued that its registered marks, (“FLEX” and “FLEX PULSE”) for goods and services in classes 9 and 35, had priority, and Bad Elf’s proposed mark caused a likelihood of confusion to both of its marks in each respective class. Bad Elf submitted several third-party uses of marks containing the word “FLEX” at opposition proceedings, suggesting a commercial weakening of Flex’s marks. Additionally, Bad Elf submitted various third-party registrations for goods and services similar or identical to those incident to Flex’s marks to demonstrate a conceptual weakening of Flex’s mark for its claimed goods and services.
Bad Elf’s submission of third-party registrations was intended to establish the weak nature of Flex’s mark, because the existence of third-party registrations with a common element will factor into a court’s determination of an opposition mark’s conceptual and commercial strength. The strength of an opposition mark is considered as part of the DuPont factor analysis, which establishes whether there is an overall likelihood of confusion between a registration applicant and the opposition’s mark. Conceptual strength is an assessment of a mark’s inherent distinctiveness, while commercial strength gauges a mark’s recognition in the marketplace.
The TTAB found that Bad Elf’s evidence may have weakened the conceptual and commercial strength of Flex’s marks, nevertheless, the Board determined the mark was not weakened enough to weigh in favor of a probative weakness finding. The TTAB ultimately ruled in favor of Flex by holding there is an overall likelihood of confusion between the proposed and registered marks based upon the DuPont factors.
Bad Elf sought registration of the mark “FLEX” for GPS-related goods. Flex opposed registration of the mark for two reasons. Flex claimed its registered marks had priority, and Bad Elf’s proposed mark exhibited a likelihood of confusion with Flex’s marks. The TTAB ruled in favor of Flex at opposition proceedings, identifying a likelihood of confusion between both parties’ marks. Bad Elf appealed to the Federal Circuit Court of Appeals. After the Federal Circuit’s recent opinion in Spireon resolved similar issues, the Court ordered supplemental briefing of the bearing of Spireon on this dispute. The Federal Circuit was particularly concerned with the TTAB’s conception and conclusion of the opposition marks' commercial and conceptual strength. The parties duly submitted the supplemental briefing, and the Federal Circuit issued a mixed opinion by affirming the TTAB’s case evaluation in part while vacating and remanding in part due to not weighing the probative value of third-party registrations. With respect to the other relevant DuPont factors assessed in TTAB’s likelihood of confusion analysis the Federal Circuit affirmed.
Relying on its recent opinion in Spireon, the Federal Circuit determined that the TTAB’s evaluation of the likelihood of confusion between Flex’s “FLEX” mark and Bad Elf’s “FLEX” mark was inaccurate because of the insubstantial weight given to evidence suggesting the weakened strength of Flex’s marks. Spireon ruled that where an applicant can demonstrate third-party registrations with identical marks for identical goods or services as an opposer’s mark, the third-party registrations should be given “substantial weight” in the conceptual and commercial strength analyses for the opposer’s mark,unless the opposer can establish evidence of non-use of the third-party marks. In the instant case and Spireon, the applicant and the opposer’s marks are not identical, and the opposer did not prove non-use of the third-party registrations. Thus, the Court finds the commercial strength of the opposer’s marks is considered weak as to the applicant’s non-identical mark.
In this case, the Federal Circuit found that a third party registered an identical “FLEX” mark for goods related to software for logistics management, and Flex’s “FLEX” mark covered essentially identical services. After finding Flex’s mark identical to the third-party registration, the Court turned to question the identicality of Flex’s mark to Bad Elf’s “FLEX” mark in appearance and goods/services. The Court suggested that, under Spireon, Flex's mark's conceptual and commercial strength are substantially diluted because the services covered by both parties’ marks were “complementary. The Federal Circuit identified that the TTAB failed to give sufficient value to this diminishment in Flex’s mark’s strength in its strength analysis, even though the TTAB identified third-party registration evidence as having probative value in its strength analysis.
The Federal Circuit also held that the TTAB erred by finding a likelihood of confusion between Flex’s “FLEX PULSE” and Bad Elf’s “FLEX” mark, as the TTAB treated Flex’s “FLEX PULSE” mark the same as Flex’s “FLEX” mark in their strength analysis. The Court ruled that due to its conclusion in the strength analysis of the “FLEX” mark, the “FLEX PULSE” mark’s strength determination requires reconsideration. If Flex’s “FLEX PULSE” is also found to be a weak mark, it could have direct effects on the board’s finding of a likelihood of confusion between the Bad Elf “FLEX” and Flex’s “FLEX PULSE” marks.
Thus, the Federal Circuit ordered the TTAB to reconsider its approach to evaluating the strength of opposition marks, both conceptually and commercially, and the role of third-party registrations in determining the strength of opposition marks under the Du Pont likelihood of confusion factor-based analysis.