<em> Naterra Int’l, Inc. v. Bensalem </em>

2024 U.S. App. LEXIS 3531 (Fed. Cir. Feb. 15, 2024)

The Federal Circuit vacated the Trademark Trial and Appeal Board’s denial of Naterra’s cancellation petition because the Board erred in their decisions regarding the first and third DuPont factors.

Naterra International, Inc. petitioned for the cancellation of Samah Bensalem’s character mark registration, “Babies’ Magic Tea.” The Trademark Trial and Appeal Board (TTAB) denied the petition because it found that there was no likelihood of confusion between Naterra’s “Baby Magic” mark and Bensalem’s “Babies’ Magic Tea” mark.

“Babies’ Magic Tea” is the character mark that Bensalem owns for “medicated tea for babies that treats colic and gas and helps babies sleep better.” Naterra owns four registrations for the character mark “Baby Magic,” which covers numerous toiletry goods such as body powder, body oil, hair shampoo, skin lotion, and baby wipes. Naterra filed a petition for cancellation in June 2020 alleging that Bensalem’s “Babies’ Magic Tea” violated Section 2(d) of the Lanham Act, because they claim it would likely cause “confusion, mistake, or deception.” The TTAB used the DuPont factors to conduct its likelihood of confusion analysis and found that, after weighing all the relevant factors, Naterra failed to prove a likelihood of confusion.

Naterra appealed on two grounds. First, they claimed substantial evidence did not support the TTAB’s finding that DuPont factor two (similarity and nature of the goods) and DuPont factor three (trade channels) disfavor a likelihood of confusion. Second, Naterra believed that TTAB gave too much weight to DuPont factor one (similarity of the marks) and DuPont factor five (the fame of the “Baby Magic” mark) in its overall analysis. The Federal Circuit  first discussed DuPont factors two and three.

DuPont factor two looks at whether consumers view the “goods or services of the parties as related enough to cause confusion” as to the source of the goods or services. Naterra’s argument on appeal is that the TTAB failed to consider pertinent evidence that showed several companies sold baby products under the same mark when it concluded that Naterra and Bensalem’s products were not related. Naterra’s expert witness testified that there were several other examples of umbrella baby brand companies that sell both ingestible and skincare products, and Bensalem’s counsel admitted that the third-party evidence is relevant to the case. However, the TTAB rejected the expert testimony because it was unsupported by underlying evidence. The Court could not discern whether the TTAB properly evaluated the relevant evidence, including testimony that third-party companies sell both types of products, and remanded this issue to the TTAB for further consideration and explanation of its analysis.

The Federal Circuit agreed with Naterra’s argument regarding DuPont factor three, which considers the similarity of established trade channels. They found that the TTAB ignored Bensalem’s admission that the parties’ goods are sold in similar channels and did not identify any evidence that showed a lack of similarity in trade channels. Because of these issues, the Court held that a reasonable mind could not accept the evidence available as enough to support the TTAB’s findings, vacated the TTAB’s decision, and remanded for further proceedings.

Regarding Naterra’s claim that the TTAB giving too much weight to factors one and five, the Court both agreed and disagreed with Naterra’s arguments. In terms of the first factor, Naterra argued that the Board did not weigh the fact that the “Babies’ Magic” mark and “Baby Magic” mark looked and sounded almost the same and had the same connotation and commercial impression. The Court agreed and found that the TTAB erred in concluding that the first DuPont factor should weigh heavily in the confusion analysis. This issue was remanded to the TTAB to address this argument after considering all the relevant DuPont factors.

The Court disagreed with Naterra’s argument that the likelihood of confusion test should weigh the fifth factor more. Naterra based its argument on Recot, where the court found that when fame is present, it should be weighed more heavily. However, Recot does not apply here because in this case fame was not “unquestionably established,” so Court found that the TTAB did not err in failing to give greater weight to fame in the likelihood of confusion analysis.

Thus, the Court found that the TTAB erred in weighing the first DuPont factor, failed to address relevant evidence concerning the third DuPont factor, could not discern whether the TTAB addressed relevant evidence concerning the second DuPont factor, and vacated the TTAB’s decision was vacated for further remanded proceedings.