Herbko International, Inc. v. Kappa Books, Inc.

Citations: 308 F.3d 1156; 64 U.S.P.Q. 2d (BNA) 1375; 2002 U.S. App. LEXIS 18064; 2002 WL 2003133Docket: 02-1047

Court: Court of Appeals for the Federal Circuit; September 3, 2002; Federal Appellate Court

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The U.S. Court of Appeals for the Federal Circuit reversed a Trademark Trial and Appeal Board (TTAB) decision that canceled Herbko International, Inc.'s registered trademark CROSSWORD COMPANION and design for its crossword puzzle system. The TTAB had found in favor of Kappa Books, Inc., citing Kappa's prior use of the mark and a likelihood of confusion. Herbko, which sells the Crossword Companion Roll-A-Puzzle® System, filed an intent-to-use application in June 1994, claiming first use in commerce on September 22, 1994, and later obtained trademark registration. Kappa, which publishes crossword puzzle books under the same name, first used CROSSWORD COMPANION in 1993 and shipped over a million copies of its book by late 1993. Kappa sought cancellation of Herbko's mark in June 1997, claiming priority of use and likelihood of confusion. The Board initially ruled that Kappa’s earlier use constituted a valid trademark use, granting summary judgment to Kappa, but the appellate court found that the Board erred in its determination of Kappa's proprietary rights, leading to the reversal of the cancellation of Herbko's trademark.

Herbko appealed to the court under 28 U.S.C. 1295(a)(4) (2000), contending that Kappa's use of the mark as a book title is descriptive, and that Kappa lacks priority without evidence of public association with a single source prior to Herbko's ITU filing date. Kappa countered that its use in a book series establishes priority through trademark law's analogous use theory and argued that the inherent distinctiveness rule for single book titles does not apply to its crossword puzzle books. The court reviews the Board's summary judgment de novo, assessing if there are genuine material fact issues and whether the moving party is entitled to judgment as a matter of law, while favoring reasonable inferences for the non-movant.

A person believing they will be harmed by a mark's registration can petition for cancellation under 15 U.S.C. 1064 (2000), needing to demonstrate standing and valid grounds for such action. Standing necessitates a "real interest," typically satisfied by a direct commercial interest. In this case, Kappa's substantial commercial engagement with the CROSSWORD COMPANION mark, evidenced by over a million books shipped to WalMart before Herbko's ITU application and subsequent shipments, establishes its standing to pursue cancellation. Kappa is not considered a "mere intermeddler." A valid ground for cancellation includes likelihood of confusion under section 2(d) of the Lanham Act, requiring the petitioner to prove priority and potential confusion due to registration of the mark.

To establish priority for a trademark, the petitioner must demonstrate proprietary rights in the mark that suggest a likelihood of confusion, as outlined in Otto Roth Co. v. Universal Foods Corp. Proprietary rights can stem from various sources, including prior registrations, trademark or service mark use, trade name usage, or any use that sufficiently establishes such rights. Importantly, for a prior use to be considered "analogous" and create proprietary rights, it must foster a recognizable association between the mark and the petitioner's goods in the minds of consumers, though direct proof of this association is not strictly required. However, the activities leading to this association must significantly influence the purchasing public.

The Board determined that Kappa's initial use of the CROSSWORD COMPANION mark in 1993 constituted analogous use, continuing with the release of a second book in 1995, thus conferring proprietary rights from the series' inception. This decision imposes only a reasonable timeliness requirement for establishing proprietary rights. However, this ruling contradicts established precedent, which necessitates not only timeliness but also that Kappa must have used the mark in a way that is likely to create public association with its goods. Furthermore, it is established that titles of single books cannot serve as trademarks, nor can they be registered, meaning a single book's title cannot create a legal association with its publisher. Therefore, proprietary rights for a book series title can only revert to the first volume if a second volume is published in a timely manner and establishes the necessary public association, which cannot be met by the publication of just one book.

Kappa failed to present evidence of a second volume before Herbko's 1994 ITU application, necessitating reliance on the 1993 sales of its first CROSSWORD COMPANION volume to establish an association between the mark and its puzzle books. Kappa sold over a million copies of this volume to WalMart in 1993, but these sales alone are inadequate to demonstrate the necessary source-identifying association, as established precedent dictates that a single work cannot serve as a source identifier. Kappa's argument that the term "crossword puzzle book" is a generic descriptor, allowing the CROSSWORD COMPANION title to serve as a source identifier, does not hold, as previous rulings, particularly in Cooper, indicate that single book titles identify the work itself rather than its source. The court in Cooper clarified that while series names can indicate a common source for multiple works, single titles do not perform this function and are instead seen as descriptive. This precedent classifies single book titles as either inherently descriptive or generic, further supporting the conclusion that they cannot inherently serve as trademarks.

Trademark rights in the title of a single book are limited, particularly after the expiration of the book's copyright. Once copyright expires, others may reproduce the work and use the title, which contradicts the notion of exclusive trademark rights in that title. For instance, after the copyright for "Gone with the Wind" expires, publishers could use the title or create alternative titles, indicating that proprietary rights in single book titles are restricted to support the unrestricted use policy post-copyright expiration.

The court's previous rulings assert that single book titles do not inherently identify a source or origin, leading to the conclusion that there are no proprietary rights for such titles. Consequently, the Board incorrectly determined that Kappa had established sufficient proprietary rights to prioritize the CROSSWORD COMPANION mark.

On the matter of likelihood of confusion regarding trademark registration, the PTO can deny registration if a mark closely resembles a registered mark and is likely to confuse consumers. This determination is legally assessed based on factual findings and employs factors from the In re E.I. DuPont DeNemours case. The analysis emphasizes the overall similarity of the marks, taking into account their appearance, sound, connotation, and commercial impression. It is important to note that evidence of actual confusion is not required to establish a likelihood of confusion. The predominant inquiry focuses on the similarity or dissimilarity of the marks in their entirety, while also allowing for the consideration of dominant features of the marks.

The Board determined that the word portion of Herbko's mark is indistinguishable from Kappa's mark in both appearance and sound, and both convey an association with crossword puzzles. The only distinguishing feature of Herbko's mark is its design, which presents the words CROSSWORD COMPANION in a two-row grid format, resembling a crossword puzzle. However, this design merely reinforces the association with crossword puzzles rather than providing a separate impression. As a result, consumers are likely to prioritize the words over the design when interpreting the mark.

The Board also highlighted the relevance of the "similarity or dissimilarity and nature of the goods" under the DuPont factors, noting that even if the goods are not identical, they can still be closely related enough to confuse consumers. Herbko's goods, a crossword puzzle system, and Kappa's crossword puzzle books, while differing in format, both involve crossword puzzles printed on paper. The Board concluded that consumers would likely assume that both products originate from the same source, regardless of the format—whether a scrolling device or a book—emphasizing the substantial similarity of the products.

Two key factors support finding a likelihood of confusion between the trademarks: the channels of trade and the sophistication of purchasers. Goods and services are presumed to travel in the same channels of trade to similar purchasers unless restricted. Both parties distribute their products through similarly priced department stores, with Kappa selling its books at WalMart and Herbko at K-Mart and Marshalls, indicating an overlap in trade channels and target consumers. None of the other DuPont factors counter Herbko's argument against confusion. The court concludes that the Board correctly identified a likelihood of confusion, as consumers may believe the goods originate from the same source. Despite the similarity of the marks, Kappa did not establish priority for the CROSSWORD COMPANION mark because a single volume does not confer proprietary rights. Therefore, the court reverses the summary judgment for Kappa. Each party will bear its own costs. The PTO previously rejected Kappa's application to register CROSSWORD COMPANION due to the likelihood of confusion with Herbko's mark.