Rights Holder Loses Suit, Registered Marks After Failing to Show Secondary Meaning

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The registration of “Lovely Skin” as a trademark for a skin product was in error because the mark is merely descriptive and had not acquired secondary meaning at the time of its registration, the U.S. District Court for the District of Nebraska held Oct. 3 (Lovely Skin Inc. v. Ishtar Skin Care Products, D. Neb., No. 8:10-cv-00087-LES-TDT, 10/3/12).

The registrant failed to meet its burden of proving that the marks had achieved secondary meaning when they were initially registered under Section 1052(f) of the Lanham Act, 15 U.S.C §1052(f), the court said. Accordingly, the court cancelled the marks. Because the marks were cancelled, the court also denied the registrant's Lanham Act and state law claims for trademark infringement, unfair competition, false designation of origin, and deceptive trade practices.

PTO Registers Marks Under Section 1052(f).

Lovely Skin Inc. received a registration for LovelySkin in 2005, and for lovelyskin.com in 2007. Both marks were registered under 15 U.S.C. §1052(f), which allows for registration of a mark that has acquired distinctiveness.

Prior to the issuance of these registrations, the Patent and Trademark Office had denied identical applications in 1999 and 2000, based on determinations that both marks were “merely descriptive.”

Since its incorporation in 2003, Lovely Skin has sold skin care products on its website, lovelyskin.com.

Ishtar Skin Care Products LLC also sells skin care products on its own website, livelyskin.com. Ishtar is based in Porter Ranch, Calif., and has used the website to market it products since 2005.

In 2010, Lovely Skin filed a lawsuit alleging trademark infringement under 15 U.S.C. §1141(1), false designation of origin under 15 U.S.C. §1124(a), and injury to business reputation. Lovely Skin demanded a jury trial in its complaint.

In Ishtar's response, it asserted seven affirmative defenses and also brought two counterclaims seeking a cancellation of the Lovely Skin marks.

The court in February denied the parties' dueling motions for summary judgment (29 PTD, 2/14/12). The court then held a bench trial from July 18-23.

Focus Turns From Unclean Hands to Secondary Meaning.


In its February order, the court suggested that Ishtar's unclean hands affirmative defense, based on Lovely Skins's purchase of Ishtar's marks as advertising keywords, may have some merit. The court, however, did not address that argument in its instant motion. It instead focused on Ishtar's argument that Lovely Skin's marks had not acquired distinctiveness when they were registered.

A mark registered under Section 1052(f) is presumed to have acquired distinctiveness at the time of registration, Judge Lyle E. Strom explained. Quoting Cold War Museum Inc. v. Cold War Air Museum Inc., 586 F.3d 1352, 1356 92 USPQ2d 1626 (Fed. Cir. 2009) (214 PTD, 11/9/09), the court said that a party seeking to cancel a Section 1052(f) registered mark “must produce sufficient evidence for the Board to conclude, in view of the entire record in the cancellation proceeding, that the party has rebutted the mark's presumption of acquired distinctiveness by a preponderance of the evidence.”

PTO Record Thin on Acquired Distinctiveness.

Ishtar thus needed to demonstrate that the Lovely Skin mark had not acquired secondary meaning as of September 20, 2005, and that the Lovelyskin.com mark had not acquired secondary meaning as of June 19, 2007. In order to do so, it attempted to refute Lovely Skin's evidence of acquired distinctiveness that had been introduced when the marks were initially registered. It turned out that this was not in fact a difficult task.

“The 'record evidence' is this case is limited,” the court said. It noted that in both applications to the PTO Lovely Skin claimed that the marks had “acquired distinctiveness through substantially exclusive and continuous use in commerce for at least the five years” before the Section 1052(f) applications. However, “Lovely Skin did not submit any additional evidence to the USPTO regarding its claims of acquired distinctiveness or substantially exclusive and continuous use,” the court noted.

Conversely, Ishtar was able to introduce evidence of at least three other parties using the term “lovely skin” in commerce during the relevant time period. Accordingly, the court determined that Ishtar had successfully rebutted the presumption of distinctiveness and had established a “prima facie showing of invalidity.”

Lovely Skin Unable to Show Secondary Meaning.

The burden thus shifted to Lovely Skin to defend the registrations by showing that the marks had acquired secondary meaning at the time of their registrations.

Lovely Skin did not present customer surveys or any other direct evidence of secondary meaning, although it did hire an expert to conduct a “distinctiveness study.” The court was unimpressed with the results of the study.

“Despite the fact that Lovely Skin freely admits that its marks are descriptive, not suggestive, and despite the fact that this Court has found as a matter of law that the Lovely Skin Marks are descriptive, not suggestive, [the expert] was undeterred in offering his opinion that LOVELYSKIN is 'a suggestive trademark' … , and thereby (inherently) distinctive.”

The court also dismissed testimony proffered by a public relations consultant who was hired by Lovely Skin in 2010. Because the relevant time period was between 2000 and 2005 for the Lovely Skin mark, and between 2002 and 2007 for the lovelyskin.com mark, the consultant's testimony was unpersuasive on the issue of whether marks had acquired secondary meaning at the time of their registration, the court said.

Sales Uptick Doesn't Prove Secondary Meaning.

Lovely Skin's final argument was that an increase in sales of Lovely Skin products during the relevant time period provided circumstantial evidence of secondary meaning. The court disagreed.

“Lovely Skin did not provide any evidence that the increased sales were the result of, or that the advertising sales produced, a recognition in the public of the Lovely Skin Marks,” the court said.

Moreover, it noted that Lovely Skin's marketing in fact places more emphasis on the brand names of the products the company sells rather than on the Lovely Skin mark. For instance, it noted that Lovely Skin has purchased over 10,000 advertising keywords, but the vast majority of those words relate to Lovely Skin's brands, whereas just a handful of them are for variations on the Lovely Skin mark. “It follows that many of Lovely Skin's customers may well search for the brand name of a particular product without ever noticing the mark of the seller, Lovely Skin,” the court said.

No Likelihood of Confusion.

After discounting all of Lovely Skin's secondary meaning evidence, the court conducted a likelihood of confusion analysis between the two marks. The court pointed out that likelihood of confusion is typically an issue of infringement, not validity, but “Actual confusion, or, according to some courts, the likelihood of confusion can be an indicium of secondary meaning.” The court therefore applied the confusion factors outlined by the U.S. Court of Appeals for the Eight Circuit in SquirtCo. v. Seven-Up Co., 628 F.2d 1086, 207 USPQ 897 (8th Cir. 1980).

The first factor, the conceptual strength of Lovely Skin's mark, weighed against a finding of secondary meaning because despite being registered, the marks “are descriptive from the point of view of the Lanham Act and, if they had acquired secondary meaning, it would be in the weakest possible conceptual category of a protectable mark,” the court said.

The marks are also not commercially strong, the court said. The court reiterated its conclusion that Lovely Skin's advertising costs were not directly tied to promoting the marks, but rather tied to promoting brands sold under the broad Lovely Skin umbrella.

The remaining factors demonstrated that there was no likelihood of confusion. Notably, the court found that while the marks only differed by one letter, that one letter imports different meaning to the respective marks. “The definitions of the words 'lovely' and 'lively' are, of course, different,” the court said. Thus, “while the marks are surely similar, they are not 'identical,' which might otherwise afford a weak mark more protection,” the court said.

The court also found that the lack of actual confusion weighed against Lovely Skin. On this issue, the only evidence Lovely Skin introduced was of a customer who intended to send an email to cathy@lovelyskin.com but instead sent the email to cathy@livelyskin.com. The court determined that this was not evidence of actual confusion but rather merely a typographical error.

On the whole, the court determined that there was no likelihood of confusion. As a result, the court said that Lovely Skin failed to meet its burden of demonstrating that the marks had acquired secondary meaning at the time of registration. “Because the Lovely Skin Marks had not acquired distinctiveness by the dates of their registration, their registration under 15 U.S.C. § 1052(f) shall be cancelled,” the court said.

After ordering that the registrations be cancelled, the court dismissed all of Lovely Skin's claims dependent on its trademarks being registered.

Lovely Skin was represented by Benjamin M. Belmont of Brodkey, Cuddingham, Omaha, Neb. Ishtar was represented by Nicholas N. Clatterbuck of Kutak Rock, Omaha.

By Tamlin H. Bason  

Opinion at http://pub.bna.com/ptcj/1000087Oct0312.pdf


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