Sleekcraft Factors

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Sleekcraft Factors

A famous Ninth Circuit case from 1979, AMF, Inc v Sleekcraft Boats, created a set of trademark infringement factors known as the Sleekcraft Factors or the Sleekcraft Test.

Misuse of a trademark can damage the reputation of a company in consumers’ eyes, and this can be hard to come back from.   This is why courts have a set of issues they consider when deciding on infringement cases.

Sleekcraft Test

It’s worth noting that trademarks can be confused in a variety of ways. If two brand names are visually dissimilar but sound the same, for instance, a likelihood of confusion can still exist (e.g. Nike vs Nye Key). There’s also no need for actual confusion to be proven. Even if no consumer has claimed that they mistook a brand for another, the possibility that it is likely to occur is enough for a finding of infringement.

AMF Inc. v. Sleekcraft Boats

In the case of AMF Inc. v. Sleekcraft Boats, two boat manufacturers disputed whether trademark infringement was occurring. AMF offered a boat under the trademark “Slickcraft,” so when Sleekcraft began selling competing products, the situation ended up in district court. Even though the two trademarks seem very similar, the judge decided a likelihood of confusion didn’t exist.

Upon appeal, however, the Ninth Circuit found that a likelihood of confusion did exist and set out eight factors that should be considered in every case.  The Ninth Circuit covers California and many other western states.  The following are each of the 8 Sleekcraft Factors, but it’s not necessary for every factor to apply for a finding of trademark infringement.

Sleekcraft Factors

1. Similarity of the trademarks: Are there actual similarities between the trademarks (e.g. appearance, sound, etc.)?
2. Strength of the trademark: Has the senior trademark established strength in the market? Is it fanciful, arbitrary, suggestive or descriptive?
3. Proximity of the goods/services: Are the trademarks in use on competing products? Are the products related but not in direct competition?
4. Evidence of actual confusion: Does evidence exist that consumers have actually confused the products?
5. Marketing channels used: Do the products share similar channels of trade? Courts could even take into account each products’ placement in stores.
6. Customer degree of care: How much caution do ordinary consumers exercise in making purchasing decisions?
7. Intent of defendant: Does is appear that the alleged infringer was trying to create a likelihood of confusion?
8. Likelihood of market expansion: Could the brands in question expand into overlapping markets? An eventual expansion could create new competition and result in consumer confusion.

Just as not all factors are required for a finding of trademark infringement, a single factor also cannot be the sole consideration.

Trademark Infringement Factors

Lacking a Supreme Court mandate on one set of trademark infringement factors, each judicial circuit is capable of creating their own tests to judge a likelihood of confusion. Because of this, not every court utilizes the eight-factor Sleekcraft test. The Federal Circuit, for instance, utilizes the Dupont Factors when examining a case.

In the case of In re E.I. du Pont de Nemours & Co, DuPont appealed a decision from the Trademark Trial and Appeal Board (TTAB) which denied its trademark application for the RALLY trademark. DuPont’s product was an automobile cleaning agent, but a RALLY trademark already existed for an all-purpose detergent.  Even though the TTAB had initially fought against the registration, the court found no likelihood of confusion.  During the case the court set forth a 13-factor test to determine trademark infringement.

The DuPont Factors

1. The similarity or dissimilarity of the trademarks in their entireties as to appearance, sound, connotation, and commercial impression.
2. The similarity and nature of the goods and services.
3. The similarity or dissimilarity of established, likely-to-continue trade channels.
4. The conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing.
5. The fame of the prior trademark.
6. The number and nature of similar trademarks in use on similar goods and services.
7. The nature and extent of any actual confusion.
8. The length of time during and the conditions under which there has been concurrent use without evidence of actual confusion.
9. The variety of goods and services on which a trademark is or is not used.
10. The market interface between the applicant and the owner of a prior trademark.
11. The extent to which applicant has a right to exclude others from use of its trademark on its goods.
12. The extent of potential confusion.
13. Any other established fact probative of the effect of use.

While not every factor must be considered for a finding of trademark infringement, the Federal Circuit has mandated that all relevant factors be considered.  For more information, please see our page about the Dupont factors.

Trademark Cease and Desist

When a brand owner believes that their registered trademark is being infringed upon, they have the right to sue in federal court. In most cases, however, this isn’t the first step. Litigation can be timely and expensive, so initial reactions are typically less extreme.  As such, a trademark cease and desist letter is a typical first step in dealing with trademark infringement issues.

There are about 4,000 trademark lawsuits filed yearly, but statistics show that fewer than three percent of legal disputes end up in court. These numbers give us an indication of just how many cases cease and desist letters keep out of the federal system yearly.

A cease and desist letter will serve as evidence that the infringer was aware of their misconduct. If they continue their actions upon receipt, the consequences they face in court will likely be amplified. Fortunately, most cease and desist letters end the matter entirely. If someone is infringing upon a trademark, the smart thing for them to do is immediately end their actions. Unfortunately, it doesn’t always work out this way.

Trademark Litigation

If you believe another party’s behavior constitutes infringement and they refuse to cease the actions, trademark litigation may be the only option. This is especially the case if the infringer outright refuses to cease an infringement. When a trademark lawsuit makes its way to court, judges typically focus on injunctive relief. This is essentially a court order for all infringing activities to end. On occasion, a preliminary injunction may be issued prior to the trial.  For more information, see our trademark litigation page.

Trademark Infringement Defenses

If you are on the receiving end of a cease and desist letter, a denial that consumers are likely to be confused is the most common defense.  Below are some other common defenses.

Doctrine of Laches

This is one of many equitable defenses – meaning misconduct may have occurred but is excused due to the claimant’s delay in taking action. Even if the defendant did engage in infringement, they might not be held liable if the complainant knew about the situation and failed to sue in a timely manner. Waiting too long may wrongfully prejudice the defendant.

Unclean Hands

This defense is another that may apply even if infringement can be proven. If it’s shown that the complainant engaged in improper, dishonest or fraudulent behavior – in relation to the litigation or their trademark – a court may opt to not hold the defendant liable.

Estoppel

If an infringer had a reasonable belief that a trademark owner would not assert their rights, the court might not hold them liable. This misinterpretation must be linked directly to the trademark owner’s actions. Prior failures to assert IP rights, for instance, may end up helping the defendant during any litigation.

Fair Use Doctrine

Even if a slogan, logo or other trademark is federally protected, there are instances when it can be used without permission. An obvious example is parody, for instance, which may fall under fair use. Trademarked items can even be used in advertising – though only as much as necessary – for product comparisons.

Collateral Use

Anyone involved in the manufacture-to-sales process can also use trademarked terms if they’re describing or promoting components of their own products. Mentioning a branded processor that’s part of a computer model you sell, for instance, would qualify as collateral use.

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