In Sunkist Growers, Inc. v. Interstate Distributors, Inc. (No. 24-1212), the Federal Circuit reversed the Trademark Trial and Appeal Board’s decision dismissing Sunkist’s opposition to Interstate Distributor’s (IDI) attempt to register the mark KIST in standard characters and in a stylized mark for soft drinks. The Federal Circuit disagreed with the board’s finding of no likelihood of confusion between IDI’s KIST mark and Sunkist’s various registered SUNKIST marks.
Board Decision
In October 2019, IDI filed an intent-to-use application to register KIST in standard characters and a related stylized mark for use with “[s]oft drinks, namely, sodas and sparkling water; concentrates and syrups for making soft drinks.” Sunkist opposed the registration based on a likelihood of confusion between IDI’s KIST marks and various SUNKIST registered marks owned by Sunkist.
The board dismissed Sunkist’s opposition. Analyzing the DuPont factors relevant to likelihood of confusion, the board concluded that although (1) similarity of the goods, (2) similarity of trade channels, (3) conditions of sale, and (4) strength of opposer’s mark all favored likelihood of confusion, the similarity of marks and the lack of evidence of actual confusion were determinative in finding no likelihood of confusion. With respect to similarity of the marks, the board focused on the different commercial impressions created by the marks. Specifically, the board found that the commercial impressions were different because Sunkist marketed SUNKIST marks with reference to a sun, while IDI marketed KIST marks with reference to a kiss.
Federal Circuit Decision
The Federal Circuit disagreed with the board’s conclusion regarding similarity of the marks. The court concluded that there was not substantial evidence to support the board’s underlying findings on the commercial impression of the marks. The board found that IDI marketed the KIST mark with reference to a kiss by relying on a marketing image showing the KIST mark next to a pair of lips. The Federal Circuit rejected that image as substantial evidence of a different commercial impression for several reasons: 1) the KIST mark was not a design mark that included the image of the lips; 2) not all of IDI’s marketing materials used the lips image; 3) the broader marketing presentation that the image came from had instances of the KIST mark used without the lips imagine; 4) that presentation did not emphasize the lips image, but instead emphasized different flavors; and 5) there was no evidence that marketing materials with the lips image were shown to consumers. With respect to the commercial impression of the SUNKIST mark, the Federal Circuit faulted the board for its focus on the sun design when the overwhelming majority of SUNKIST registrations submitted were standard character marks without the sun design and the record contained evidence of SUNKIST products marketed without the sun design. In light of the record, the court concluded that the board’s finding on the similarity of the marks was not supported by substantial evidence.
Having rejected the board’s conclusion on the similarity of the marks, the court then moved to the overall finding on likelihood of confusion. The only remaining factor weighing in favor of likelihood of confusion was no evidence of actual confusion. However, as the court noted, under its precedent, the failure to prove actual confusion was not dispositive. As a result, the court determined that there was a likelihood of confusion between IDI’s KIST mark and Sunkist’s SUNKIST mark and reversed the board’s decision dismissing the opposition.
Takeaways
The Federal Circuit’s decision illustrates that an applicant or mark owner should be wary of relying on unclaimed, sporadically used design elements to differentiate its mark from other pre-existing marks.