Cross Commerce Media, Inc. v. Collective, Inc., No. 15-782 (2d Cir. 2016)
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CI owns the registered marks ʺCollective Network,ʺ ʺCollective Video,ʺ and ʺC Collective The Audience Engine,ʺ a stylized mark in which the word ʺCollectiveʺ appears most prominently. CCM operates under the name ʺCollective[i].ʺ This appeal arises from the software companies' dispute over trademarks containing the word "collective." In a series of three orders, the district court granted summary judgment to CCM on virtually all points in dispute and awarded attorneyʹs fees under the Lanham Act, 15 U.S.C. 1051 et seq. The court reversed or vacated all contested portions of the March Order, August Order, and December Order because: (1) the unregistered mark ʺcollectiveʺ is suggestive, not descriptive; (2) there is a genuine dispute of material fact as to whether CI used the unregistered mark ʺcollectiveʺ in commerce before CCM introduced its allegedly infringing marks; (3) the district court prematurely granted summary judgment as to CIʹs counterclaim for infringement of the registered marks, an action that neither party requested and the district court did not explain; and (4) there is a genuine dispute of material fact as to whether CI abandoned its registered marks ʺCollective Networkʺ and ʺCollective Video.ʺ Accordingly, the court reversed in part, vacated in part, and remanded for further proceedings.
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15 782 Cross Commerce Media, Inc. v. Collective, Inc. 1 2 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT 3 August Term, 2015 4 (Argued: February 10, 2016 Decided: November 7, 2016) 5 Docket No. 15 782 6 7 8 Cross Commerce Media, Inc., Plaintiff—Counter Defendant—Appellee, 9 v. 10 11 12 Collective, Inc., Defendant—Counter Claimant—Appellant. 13 14 15 Before: KEARSE, POOLER, and SACK, Circuit Judges. Collective, Inc. and Cross Commerce Media, Inc., two companies that 16 provide data driven analytic software to businesses, dispute whether several of 17 Collective s trademarks are valid and, if so, have been infringed by Cross 18 Commerce Media s marks. In a series of decisions, the United States District 19 Court for the Southern District of New York (Katherine B. Forrest, Judge) granted 20 summary judgment for Cross Commerce Media and awarded it attorney s fees 21 under the Lanham Act. We reverse those decisions in part, vacate them in part, 22 and remand for further proceedings. REVERSED in part, VACATED in part, and REMANDED. 1 2 3 4 5 6 MARK G. MATUSCHAK (Vinita Ferrera and Martin E. Gilmore, on the brief), Wilmer Cutler Pickering Hale and Dorr, LLP, Boston, MA and New York, NY, for Defendant—Counter Claimant—Appellant. 7 8 9 10 11 12 13 14 JAMES M. BOLLINGER (Timothy P. Heaton, Puja Patel Lea, and Lindsay Mitchell Henner, on the brief), Troutman Sanders LLP, New York, NY and Atlanta, Georgia; J. Mark Lane and Sharon M. Sash, on the brief, Lane Sash & Larrabee LLP, White Plains, NY, for Plaintiff—Counter Defendant—Appellee. 15 SACK, Circuit Judge: This appeal arises from a dispute between software companies over 16 17 several trademarks containing the word collective. Appellant Collective, Inc. 18 ( CI ), defendant and counter claimant in the district court, owns the registered 19 marks Collective Network, Collective Video, and C Collective The Audience 20 Engine, a stylized mark in which the word Collective appears most 21 prominently (together, the registered marks ). CI also asserts common law 22 rights in the unregistered mark collective, standing alone. Appellee Cross 23 Commerce Media, Inc. ( CCM ), plaintiff and counter defendant in the district 2 1 court, operates under the name Collective[i]. 1 CI alleges that this name (and 2 two variants) infringes its registered and unregistered marks. CCM seeks a 3 judgment to the contrary, along with a declaration that CI holds no common law 4 rights in the unregistered mark collective and an order compelling the U.S. 5 Patent and Trademark Office ( PTO ) to cancel or modify CI s registered marks. In a series of three orders, the district court (Katherine B. Forrest, Judge) 6 7 granted summary judgment to CCM on virtually all points in dispute and 8 awarded attorney s fees under the Lanham Act. We reverse those decisions in 9 part, vacate them in part, and remand for further proceedings. 10 BACKGROUND 11 CI provides data driven analytic software that helps businesses select 12 effective marketing opportunities on multiple electronic platforms, including 13 computers, smart phones, tablets and connected television. Declaration of 14 Joseph T. Apprendi, CEO and Co Founder of CI, dated July 10, 2014, at 4 6 15 (App x 559 61). It was incorporated as Collective Media, Inc. in 2007, and its 16 name was changed to Collective, Inc. in 2012. From 2008 to 2011, the company The bracketed letter i is part of the name. The brackets are not, as they often are in other contexts, an indication of editing by the Court. 1 3 1 registered the trademarks Collective Network, Collective Video, and C 2 Collective The Audience Engine. During the same period, CI acquired the 3 domain name www.collective.com for its principal website and referred to itself 4 in at least several instances as Collective. 5 CCM provides its own brand of data driven analytic software. According 6 to one of the company s trademark registrations, the software aids companies in 7 deploying and analyzing marketing campaigns. See CCM s Statement of 8 Undisputed Material Facts dated June 11, 2014, at 6 (App x 588). The company 9 was founded as Cross Commerce Media, Inc. in 2007, but it began to do business 10 under the mark Collective[i] (and the related marks Collective Intelligence 11 and Collectivei) in 2011. In late 2011, CI contacted CCM to express its concern that use of the mark 12 13 Collective[i] in commerce would create confusion over the two companies 14 because they operate in similar fields. After negotiations failed to solve the 15 perceived problem, CI sent CCM a cease and desist letter in late 2012 asserting 16 CCM s infringement of CI s trademarks, including the registered marks and the 17 unregistered mark collective. In response, CCM filed this action in the United 18 States District Court for the Southern District of New York in an effort to 4 1 preempt an infringement lawsuit by CI. CCM sought three remedies: a 2 declaration that CI did not own trademark rights to the unregistered mark 3 collective ; a declaration that the name Collective[i] did not infringe any of CI s 4 registered or unregistered marks; and an order compelling the PTO to cancel or 5 modify the registered marks. CI, in turn, filed counterclaims under the Lanham 6 Act alleging that CCM s use of Collective[i] — along with Collective 7 Intelligence and Collectivei — infringed CI s registered marks and the 8 unregistered mark collective. 2 The district court resolved the parties claims and counterclaims in a series 9 10 of three orders. First, before the parties had completed discovery, CCM moved 11 for partial summary judgment as to the inherent distinctiveness of the 12 unregistered mark collective. Trademarks, whether registered or unregistered, 13 are grouped for purposes of analysis into four categories of increasing inherent 14 distinctiveness: generic, descriptive, suggestive, and arbitrary or fanciful. 15 Bernard v. Commerce Drug Co., 964 F.2d 1338, 1340 (2d Cir. 1992). CCM sought a 16 decision by the district court that the unregistered mark collective, as used by 17 CI, is descriptive as a matter of law. CI countered that the mark is suggestive — CI also filed a counterclaim for unfair competition under New York common law, but that counterclaim was later dismissed with prejudice by stipulation of the parties. 2 5 1 or, alternatively, that a jury should decide the issue. In a March 24, 2014 order, 2 the court, agreeing with CCM, classified the mark as descriptive. Cross Commerce 3 Media, Inc. v. Collective, Inc., No. 13 Civ. 2754 (KBF), 2014 WL 1202939, at *5, 2014 4 U.S. Dist. LEXIS 38606, at *14 15 (S.D.N.Y. Mar. 24, 2014) (the March Order ). 5 The March Order did not reject CI s counterclaim for infringement of the 6 unregistered mark collective outright. By classifying the mark as descriptive, 7 however, the order imposed a heightened evidentiary standard for establishing 8 its entitlement to protection under federal trademark law. The Lanham Act 9 affords protection to a descriptive mark only if the trademark holder can 10 demonstrate that it has acquired secondary meaning in the marketplace — in 11 other words, that the mark s primary significance to relevant consumers is to 12 identify [the trademark holder as] the source of the product. Bristol Myers 13 Squibb Co. v. McNeil P.P.C., Inc., 973 F.2d 1033, 1041 (2d Cir. 1992) (internal 14 quotation marks omitted). That showing entails rigorous evidentiary 15 requirements. 20th Century Wear, Inc. v. Sanmark Stardust, Inc., 815 F.2d 8, 10 (2d 16 Cir. 1987) (internal quotation marks omitted). Had the mark instead been 17 classified as suggestive, it would have received some degree of trademark 18 protection even without proof of secondary meaning. McGregor Doniger Inc. v. 6 1 Drizzle Inc., 599 F.2d 1126, 1132 (2d Cir. 1979), superseded on other grounds by Fed. 2 R. Civ. P. 52(a).3 3 Seeking to build on the March Order, CCM subsequently moved for 4 summary judgment as to CI s counterclaim for infringement of the unregistered 5 mark collective, on two grounds. First, CCM argued that CI could not establish 6 that the mark had acquired secondary meaning — which, as noted, would mean 7 that it was not entitled to protection under the Lanham Act. Second, CCM 8 contended that even if collective had acquired secondary meaning, CI could not 9 establish infringement because it had not used the mark in commerce (and 10 acquired corresponding trademark rights) until after CCM had introduced its 11 own marks. CI argued in response that it had raised triable issues of fact as to 12 both issues, precluding summary judgment. In an August 21, 2014 order, the 13 district court again agreed with CCM, concluding that CI had no protectable 14 rights in the unregistered mark collective both because the mark lacked 15 secondary meaning and because CI had not used it in commerce before CCM Proof of secondary meaning may nonetheless be relevant when determining whether a suggestive mark has been infringed: Courts may view evidence concerning the origin indicating significance of a mark in the marketplace as relevant to and probative of the strength of a mark and hence useful in assessing the likelihood of confusion. McGregor Doniger, 599 F.2d at 1132. 3 7 1 introduced its marks. See Cross Commerce Media, Inc. v. Collective, Inc., No. 13 cv 2 2754 (KBF), 2014 WL 11343849, at *1, 12 14, 2014 U.S. Dist. LEXIS 117244, at *2, 3 32 38 (S.D.N.Y. Aug. 21, 2014) (the August Order ). The court therefore 4 dismissed CI s counterclaim for infringement of the unregistered mark 5 collective. Surprisingly, we think, the August Order also dismissed CI s distinct 6 7 counterclaim for infringement of the registered marks. CCM s memorandum of 8 law in support of its summary judgment motion had advanced no argument 9 regarding that counterclaim. The memorandum mentioned the registered marks 10 only to argue that their validity (which CCM assumed for the sake of argument) 11 would not buttress CI s claim that the distinct, unregistered mark collective was 12 protectable. In keeping with the cabined nature of CCM s memorandum, CI s 13 opposition papers focused exclusively on the counterclaim for infringement of 14 the unregistered mark collective, mentioning the registered marks only to 15 contend that their validity would, in fact, buttress that counterclaim. The district 16 court did not analyze the counterclaim for infringement of the registered marks 17 but nonetheless ruled that the counterclaim failed as a matter of law. 8 1 Having prevailed on CI s counterclaims for infringement, CCM moved for 2 several remedies: (1) an order compelling the PTO to cancel the registered marks 3 Collective Network and Collective Video, either because they were 4 descriptive and lacked secondary meaning or because CI had abandoned them; 5 (2) an order compelling the PTO to disclaim the term collective within the 6 registered mark C Collective The Audience Engine because it is not 7 independently entitled to trademark protection; (3) attorney s fees under the 8 Lanham Act; and (4) sanctions under various federal rules for abuse of the 9 discovery process. In a December 16, 2014 order, the district court granted 10 summary judgment for CCM on the issue of abandonment and awarded all of its 11 requested remedies except for sanctions, which the court deemed duplicative of 12 attorney s fees under the Lanham Act. See Cross Commerce Media, Inc. v. Collective, 13 Inc., No. 13 cv 2754 (KBF), 2014 WL 7323419, at *1, 2014 U.S. Dist. LEXIS 177176, 14 at *2 (S.D.N.Y. Dec. 16, 2014) (the December Order ). CI timely appealed the portions of the district court s three orders that 15 16 dismissed its counterclaims and granted CCM s requested remedies. 17 9 DISCUSSION 1 We review a district court s grant of summary judgment de novo, 2 3 construing the evidence in the light most favorable to the non moving party and 4 drawing all reasonable inferences in its favor. SCR Joint Venture L.P. v. 5 Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009) (internal quotation marks omitted). 6 We will affirm only if there is no genuine dispute as to any material fact and the 7 movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). An 8 issue of fact is genuine and material if the evidence is such that a reasonable jury 9 could return a verdict for the nonmoving party. See SCR, 559 F.3d at 137. After applying that standard of review to the voluminous record in this 10 11 case, we reverse or vacate all contested portions of the March Order, August 12 Order, and December Order. We do so on four grounds. First, in our view the 13 unregistered mark collective is suggestive, not descriptive. Second, there is a 14 genuine dispute of material fact as to whether CI used the unregistered mark 15 collective in commerce before CCM introduced its allegedly infringing marks. 16 Third, the district court prematurely granted summary judgment as to CI s 17 counterclaim for infringement of the registered marks, an action that neither 18 party requested and the district court did not explain. Finally, there is a genuine 10 1 dispute of material fact as to whether CI abandoned its registered marks 2 Collective Network and Collective Video. We therefore remand the case for a 3 new round of summary judgment proceedings should either party choose to 4 pursue them. 5 I. Inherent Distinctiveness 6 A trademark s inherent distinctiveness is a fact intensive issue. It must be 7 evaluated in relation to the particular goods [to which the mark is attached], the 8 context in which it is being used, and the possible significance that the term 9 would have to the average purchaser of the goods because of the manner of its 10 use or intended use. Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 11 1378 (Fed. Cir. 2012) (internal quotation marks omitted). Applying that 12 contextual approach, we conclude that CI s use of the mark collective is 13 suggestive as a matter of law, and that the district court committed clear error in 14 concluding otherwise. See Bristol Myers Squibb, 973 F.2d at 1040 ( We will 15 substitute our own judgment [as to inherent distinctiveness] . . . if the district 16 court s determination is clearly erroneous. ). Both descriptive and suggestive marks convey information about, and thus 17 18 are associated with, the product to which they are attached. The difference 11 1 between them lies in the immediacy of association — how quickly and easily 2 consumers grasp the nature of the product from the information conveyed. A 3 descriptive mark communicates an immediate idea of the ingredients, qualities 4 or characteristics of the goods, Bernard, 964 F.2d at 1341 (quoting Abercrombie & 5 Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 11 (2d Cir. 1976) (Friendly, J.)), while a 6 suggestive mark requires consumers to employ imagination, thought and 7 perception to reach a conclusion as to the nature of goods, Time, Inc. v. Petersen 8 Publ g Co. L.L.C., 173 F.3d 113, 118 (2d Cir. 1999) (internal quotation marks 9 omitted). Thus, [i]f the mental leap between the word and the product s 10 attributes is not almost instantaneous, this strongly indicates suggestiveness, not 11 direct descriptiveness. 2 J. Thomas McCarthy, McCarthy on Trademarks and 12 Unfair Competition § 11:67 (4th ed.). To determine the immediacy of association between a mark and a product, 13 14 we generally consider how specifically and exclusively the mark describes the 15 product. A descriptive mark, we have said, is one that conjure[s] up the image 16 of the precise good with which it is associated. Playtex Prods., Inc. v. Ga. Pac. 17 Corp., 390 F.3d 158, 164 (2d Cir. 2004), superseded by statute on other grounds as 18 recognized in Starbucks Corp. v. Wolfe s Borough Coffee, Inc., 588 F.3d 97, 107 08 (2d 12 1 Cir. 2009). A suggestive mark, by contrast, is ordinarily one that describes an 2 attribute of the product but could plausibly describe a wide variety of [other] 3 products as well. Id. In other words, the meaning of a descriptive mark is 4 narrowly tailored to its associated product, such that it calls that product 5 immediately to mind. The meaning of a suggestive mark typically evokes an 6 array of goods, which means that consumers must make an additional mental 7 effort to identify the associated product in particular. 8 Thus, in Playtex, we affirmed the district court s conclusion that the mark 9 Wet Ones, used for moist towelettes, was suggestive rather than descriptive. 10 We reasoned that the mark evoked qualities (dampness and one by one usage) 11 that towelettes shared with a wide range of goods, which made it relatively 12 difficult for consumers to divine the nature of the particular product at issue 13 from the mark alone. See id. Similarly, we decided in Hasbro, Inc. v. Lanard Toys, 14 Ltd., 858 F.2d 70 (2d Cir. 1988), that the mark GUNG HO, used for a marine 15 action figure, was suggestive because it described elements of the personality 16 attributed to the [action figure], as well as other toys, without describing the 17 particular [action figure] itself or its differentiating qualities, id. at 75 (emphases 18 added). By contrast, we have classified the mark Sportscreme, used for an 13 1 analgesic rub designed for athletes, as descriptive because it specifically conjured 2 a cream useful in connection with sports. Thompson Med. Co. v. Pfizer Inc., 753 3 F.2d 208, 216 (2d Cir. 1985). Applying the same analytic framework here, we conclude that the mark 4 5 collective is only suggestive of CI s products. As the district court noted, 6 Merriam Webster s online dictionary defines the adjective collective as: 7 denoting a number of persons or things considered as one group or whole ; 8 formed by collecting: aggregated ; and of, relating to, or being a group of 9 individuals. Collective, Merriam Webster Online Dictionary, 10 http://www.merriam webster.com/dictionary/collective (last visited Aug. 9, 11 2016), [https://perma.cc/YU2F Q3JT]; see March Order, 2014 WL 1202939, at *5, 12 2014 U.S. Dist. LEXIS 38606, at *14.4 The same dictionary defines the noun 13 collective as a collective body: group or a cooperative unit or organization. 14 Collective, Merriam Webster, supra. The author of this opinion has noted elsewhere his general[] reticen[ce] to invoke dictionary definitions, at least in contexts perhaps unforeseen by their writers. Mastrovincenzo v. City of New York, 435 F.3d 78, 107 (2d Cir. 2006) (Sack, J., concurring in part and dissenting in part). As the district court pointed out, however, the use of dictionaries for the purpose of deciding whether a trademark is descriptive is permissible. See March Order, 2014 WL 1202939, at *5, 2014 U.S. Dist. LEXIS 38606, at *13 (citing Coach Servs., 668 F.3d at 1378). Moreover, it seems to us that these definitions of collective are reasonable and relatively uncontroversial. The district court therefore properly relied on them in the March Order, and we follow suit. 4 14 After reviewing the record, we find three plausible associations between 1 2 those definitions and CI s products. First, CI asserts that it is able to analyze vast 3 amounts of data in order to help clients identify effective marketing 4 opportunities, a service that could be described as collective in nature — or, 5 perhaps, producing a collective of relevant data. Second, CI points to its 6 capacity to identify marketing opportunities across multiple electronic devices, 7 which could be framed as offering consumers a collective of marketing 8 platforms. And third, in the most general sense, the company s software works 9 to aggregate advertising opportunities and present them, as a collective, to 10 users. 11 These associations lack the specificity that would enable an average 12 consumer to intuit the nature of CI s business from the collective mark, at least 13 absent considerable imaginative effort (or luck). As in Playtex and Hasbro, the 14 mark has comparably strong associations with a range of distinct enterprises that 15 offer unrelated goods, including software, to consumers: Search engines and 16 investment advisers seek to aid their clients by analyzing collectives of data; 17 health insurers and banks serve clients across a collective of platforms; and real 18 estate brokers and online ticket exchanges could be said to offer a collective of 15 1 options for their clients to consider. Indeed, the word collective might even 2 bring to mind businesses that could themselves be called collectives, such as 3 collective farms or collective grocery stores. When encountering CI s use of the 4 term collective for the first time, therefore, the average consumer does not, in 5 our view, have a compelling reason to conclude that the company provides data 6 driven marketing tools. Conjuring the image of CI s software in particular, 7 rather than other goods or services that the word collective might be used to 8 describe, demands a substantial mental leap. For that reason, we conclude that 9 collective is a suggestive mark in this context. In reaching a contrary conclusion, the district court did not adequately 10 11 evaluate the mental leap between the mark collective and CI s products. After 12 reciting several of the dictionary definitions set forth above, the court observed: 13 This is precisely the manner in which [CI] uses the word; it is an advertising 14 network that offers a collection or collective of advertising opportunities. March 15 Order, 2014 WL 1202939, at *5, 2014 U.S. Dist. LEXIS 38606, at *14. Based on that 16 observation alone, the court then concluded that [t]he word collective thus 17 literally describes an immediate idea of the ingredients, qualities or 18 characteristics of [CI] s product. Id. (quoting Bristol Myers Squibb, 973 F.2d at 16 1 1040). In doing so, the court mistakenly equated the fact of association (which 2 does not distinguish between descriptive and suggestive marks) with immediacy 3 of association (which does). The word collective in CI s marks provides a clue 4 as to the nature of CI s products. But the critical inquiry, which the court did not 5 reach, is how easily consumers would deduce the nature of CI s products from 6 collective alone. 7 The district court suggested that its decision was reinforced by two 8 additional considerations: the frequency with which third parties have used the 9 word collective in their names, and the PTO s prior treatment of various 10 trademark applications containing that word. See id., 2014 WL 1202939, at *5, 11 2014 U.S. Dist. LEXIS 38606, at *14 15. To be sure, such considerations may, in 12 some circumstances, inform a court s evaluation of inherent distinctiveness. In 13 this case, however, the available evidence regarding third party usage is 14 indeterminate, while the PTO s prior practice indicates that collective is a 15 suggestive mark. 16 As a general matter, information about how third parties have used a mark 17 in commerce may shed light on its inherent distinctiveness in several ways. First, 18 we have recognized that a mark is more likely to be descriptive, rather than 17 1 suggestive, if [a]ccording [it] trademark exclusivity . . . would inhibit 2 competitors from using descriptions of their competing products. TCPIP 3 Holding Co. v. Haar Commc ns, Inc., 244 F.3d 88, 93 94 (2d Cir. 2001); see also 4 PaperCutter, Inc. v. Fay s Drug Co., 900 F.2d 558, 563 (2d Cir. 1990) (noting that the 5 distinction between descriptive and suggestive terms may be sharpened by 6 evaluation of . . . the potential impact on competitors of the appropriation of the 7 term as a trademark by a particular seller ). Information about how rival third 8 parties have used a mark could be instructive in that regard: Consistent usage by 9 competitors might indicate that it is a vital descriptive tool in the industry, while 10 minimal usage might suggest the contrary. Additionally, as we have observed, a 11 mark is more likely to be suggestive, rather than descriptive, if its meaning 12 evokes a wide range of products. See Playtex, 390 F.3d at 164. Information about 13 how third parties in unrelated industries have used a mark could bear on that 14 issue: Widespread usage by different types of businesses might indicate that it 15 calls to mind a variety of products, while minimal usage might imply otherwise. 16 Here, the district court cited three statistics regarding third party usage of 17 the collective mark: (1) [t]he word collective is used in the name of over 7,000 18 businesses in 45 states ; (2) [t]here are over 25,000 Internet domain names that 18 1 contain the word collective ; and (3) more than a dozen companies in the 2 digital advertising and marketing field . . . also use the word collective. March 3 Order, 2014 WL 1202939, at *5, 2014 U.S. Dist. LEXIS 38606, at *14 15. These 4 statistics do not, in our view, provide enough information to be probative of the 5 mark s inherent distinctiveness. It is unclear to what extent the first two numbers 6 pertain to CI s competitors (in which case widespread use might indicate that 7 collective is descriptive) or third parties in unrelated industries (in which case 8 widespread use might indicate that collective is suggestive). The third statistic 9 is somewhat more narrowly drawn, inasmuch as it relates only to companies 10 involved with digital marketing. Even so, however, it is not limited to 11 companies that produce software similar to CI s. And in any event, the fact that 12 a dozen digital marketing companies have used the word collective is a 13 numerator without a denominator: A dozen companies could be a significant 14 portion of the digital marketing field (which might indicate that collective is a 15 vital descriptive tool in the industry) or a tiny sliver (which might indicate that 16 competitors need not rely on collective to describe their products). Overall, 17 therefore, the cited evidence of third party usage carries little weight regarding 18 the inherent distinctiveness of collective in this case. 19 1 The PTO s prior treatment of trademark applications may inform a court s 2 analysis of inherent descriptiveness in a different way. Before deciding whether 3 to grant an application, the agency determines the inherent distinctiveness of the 4 mark at issue — and, in many instances, its constituent parts. Because the 5 agency has developed expertise in trademarks, courts accord great weight to its 6 conclusions. Murphy Door Bed Co. v. Interior Sleep Sys., Inc., 874 F.2d 95, 101 (2d 7 Cir. 1989). Thus, if the PTO has previously classified the particular mark before 8 the court as either descriptive or suggestive, the court will generally follow suit 9 absent compelling grounds for disagreement. See, e.g., PaperCutter, 900 F.2d at 10 563 ( [T]he decision of the [PTO] to register a mark without requiring proof of 11 secondary meaning affords a rebuttable presumption that the mark is more than 12 merely descriptive. (quoting McGregor Doniger, 599 F.2d at 1132)). And even 13 where the PTO has not previously considered the particular mark at issue, courts 14 may draw a measure of guidance from the way the agency has classified 15 analogous marks. See, e.g., Real News Project, Inc. v. Indep. World Television, Inc., 16 No. 06 Civ. 4322 (GEL), 2008 WL 2229830, at *10 13 & n.17, 2008 U.S. Dist. LEXIS 17 41457, at *30 43 & n.17 (S.D.N.Y. May 27, 2008) (classifying the plaintiff s use of 18 the mark REAL NEWS as descriptive and noting that the PTO s classification of 20 1 similar marks incorporating the term real as descriptive confirm[ed] the 2 Court s analysis ). The district court cited one statistic about the PTO s prior practice: The 3 4 agency has either required disclaimer of the use of the word collective as being 5 descriptive or rejected the application entirely on the same basis in 186 6 instances. March Order, 2014 WL 1202939, at *5, 2014 U.S. Dist. LEXIS 38606, at 7 *15. Again, we are not convinced that this statistic is probative of inherent 8 distinctiveness. It pertains to all uses of the word collective — not solely those 9 analogous to CI s use of the word, where the PTO s analysis would be of import. 10 And in any event, the figure is another numerator without a denominator. As 11 we understand the record, the PTO has required disclaimer of the word 12 collective because it is descriptive, or rejected applications for the same reason, 13 186 times out of 534 — approximately thirty five percent of the time. App x 81. It 14 is therefore far from clear that the PTO routinely classifies collective as a 15 descriptive mark in any context, let alone the context relevant to this case. In our view, the district court seems to have overlooked a more probative 16 17 fact about the PTO s prior practice: Although each of CI s registered marks 18 contains the word collective, the PTO did not disclaim that word as descriptive 21 1 — or, as far as we can tell from the record, require a showing of secondary 2 meaning — in any instance. That fact bolsters CI s argument that the mark 3 should be classified as more than merely descriptive. PaperCutter, 900 F.2d at 4 563 (internal quotation marks omitted). We therefore reverse the portion of the March Order that concluded, as a 5 6 matter of law, that collective is a descriptive mark. Although CI bore the 7 burden of proving collective was suggestive, see Nola Spice Designs, L.L.C. v. 8 Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015) (noting that where the 9 moving party has pointed to the absence of evidence to prove a fact material to 10 an issue on which the opposing party has the burden of proof at trial, the 11 opposing party has the burden of demonstrating by competent summary 12 judgment proof that there is an issue of material fact warranting trial (internal 13 quotation marks omitted)); Reese Publ g Co. v. Hampton Int l Commc ns, Inc., 620 14 F.2d 7, 11 (2d Cir. 1980) (concluding that where the mark is not registered, the 15 burden is on the proponent to prove that its mark is a valid trademark ), we 16 think that the relevant evidence already in the record when CCM moved for 17 partial summary judgment—including the dictionary definitions of collective, 18 the nature of CI s business, and the PTO s prior decisions regarding the 22 1 registered marks—uniformly supports the classification of collective as a 2 suggestive mark. CI was not obligated to submit still more evidence to prevail 3 on the issue.5 Instead, we conclude that collective is a suggestive mark, which 4 means it is entitled to some degree of trademark protection even absent proof of 5 secondary meaning. See McGregor Doniger, 599 F.2d at 1132. For that reason, we 6 also vacate the portion of the August Order that dismissed CI s counterclaim for 7 infringement of the unregistered mark collective based on CI s purported 8 failure to show secondary meaning, along with the portion of the December 9 Order that compelled the PTO to disclaim the word collective in C Collective 10 The Audience Engine. After issuing the March Order, the district court noted that it had classified collective as a descriptive mark in part because CI failed to submit any marketing materials, survey research, or even an affidavit supporting suggestiveness. December Order, 2014 WL 7323419, at *1, 2014 U.S. Dist. LEXIS 177176, at *3; see also August Order, 2014 WL 11343849, at *11 n.10, 2014 U.S. Dist. LEXIS 117244, at *31 32 n.10 (reflecting similar reasoning). We have trouble following that rationale. CI moved to stay adjudication of the mark s inherent distinctiveness until after its expert had the opportunity to perform survey research into, among other things, the factual issues relevant to . . . inherent . . . distinctiveness. Declaration of Eric J. Andalman in Support of CI s Fed. R. Civ. P. 56(d) Motion to Continue or Defer CCM s Motion for Partial Summary Judgment at ¶ 8, Cross Commerce Media, Inc. v. Collective, Inc., No. 13 cv 2754 (S.D.N.Y. Jan. 21, 2014), ECF No. 41. The district court denied CI s request. We thus fail to see how CI could subsequently be faulted for failing to submit relevant survey research. 5 23 Finally, we note that when CCM moved for summary judgment as to CI s 1 2 counterclaim for infringement of the unregistered mark collective, it 3 presumably chose its arguments in light of the district court s classification of the 4 mark collective as descriptive. We direct the district court, on remand, to give 5 CCM a reasonable opportunity to re file for summary judgment as to this 6 counterclaim in light of our decision that the mark is suggestive. And, of course, 7 the district court may reopen discovery to the extent it deems necessary or 8 advisable. 9 II. CI s Use of Collective In Commerce In addition to its rulings regarding inherent distinctiveness and secondary 10 11 meaning, the district court concluded that CI s counterclaim for infringement of 12 the unregistered mark collective failed as a matter of law for an independent 13 reason: CI had not used the mark in commerce until after CCM introduced its 14 own marks. If that were so, CI would have possessed no rights that CCM could 15 infringe, thus dooming its counterclaim. See Hana Fin., Inc. v. Hana Bank, 135 S. 16 Ct. 907, 909 (2015) ( Rights in a trademark are determined by the date of the 17 mark s first use in commerce. ). But the record contains colorable evidence that 18 CI began using collective continually in commerce well before CCM employed 24 1 its allegedly infringing marks in 2011. This evidence precludes summary 2 judgment on the issue. A mark is used in commerce when it is employed to identify . . . goods or 3 4 services sold to consumers in a given market. ITC Ltd. v. Punchgini, Inc., 482 5 F.3d 135, 147 (2d Cir.), cert. denied, 552 U.S. 827 (2007). CI introduced the domain 6 name www.collective.com for its principal website in late 2008. That website 7 appears to have been commercial in nature: The record indicates that it 8 described CI s products and sought to explain what set[] [the company] apart 9 from its competitors. App x 1095 96. And soon after the site went live, CI 10 purchased several stand alone advertisements that directed consumers to 11 collective.com for more information about the company. See App x 1125 27. 12 Taken together, this evidence tends to establish that CI put its domain name, 13 which features the stand alone mark collective, to continuous commercial use 14 beginning sometime before 2011. Although the district court correctly noted that 15 the use of a phrase in a domain name does not necessarily mean that it is being 16 used as a mark in commerce, August Order, 2014 WL 11343849, at *13, 2014 U.S. 17 Dist. LEXIS 117244, at *35 36 (citing TCPIP Holding Co., 244 F.3d at 104), the court 18 erred in finding that, other than the use of collective in its domain name and 25 1 email addresses, CI had failed to bring forth additional evidence that it used 2 the mark in its marketing materials, id. CI also used a capitalized version of the 3 mark, Collective, to refer to itself on its website, see App x 1095, and in its 4 advertising, see App x 1125 27. Those references could reasonably be considered 5 additional commercial uses of the mark. We therefore think that CI has raised a 6 genuine issue of material fact as to whether it began using collective in 7 commerce before CCM introduced its allegedly infringing marks, and we vacate 8 the portion of the August Order that concluded otherwise. 9 III. CI s Counterclaim for Infringement of the Registered Marks As we have noted, the district court dismissed CI s distinct counterclaim 10 11 for infringement of the registered marks without a thorough explanation. In this 12 Circuit, claims for infringement must be analyzed under a two prong test that 13 looks first to whether the allegedly infringed mark is entitled to protection, and 14 second to whether use of the allegedly infringing mark is likely to cause 15 consumers confusion as to the origin or sponsorship of the products to which it 16 is attached. Virgin Enters. Ltd. v. Nawab, 335 F.3d 141, 146 (2d Cir. 2003). The 17 likelihood of confusion must be analyzed with reference to the eight factors first 18 articulated in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961), 26 1 one of which is the degree of similarity between the two marks, id. This 2 framework has not been applied to CI s counterclaim for infringement of the 3 registered marks. CCM never moved for summary judgment as to protectability 4 or likelihood of confusion. 5 The district court may instead have concluded that CCM did not infringe 6 the registered marks solely because it did not use them verbatim. In the March 7 Order, the court observed: There is no allegation in this case that CCM has used 8 any of the [registered marks]. Rather, the issue before this Court is whether [CI] 9 has a right to exclude CCM from use of the word collective in its mark. March 10 Order, 2014 WL 1202939, at *2, 2014 U.S. Dist. LEXIS 38606, at *5. Later, in the 11 August Order, the court reiterated: The key merits question in this litigation is 12 whether CI has a protectable mark in the single word collective. August Order, 13 2014 WL 11343849, at *11, 2014 U.S. Dist. LEXIS 117244, at *31. These passages 14 suggest that, in the district court s view, the differences between CI s registered 15 marks and CCM s allegedly infringing mark were fatal to CI s counterclaim for 16 infringement of the registered marks. We are unable to square any such 17 conclusion with our case law. Although differences among the marks are 18 relevant to one of the eight Polaroid factors — the degree of similarity between 27 1 the marks — they are not independently dispositive of CI s counterclaim. 2 Because the district court has not yet performed the more comprehensive legal 3 analysis outlined above, we vacate the grant of summary judgment as to the 4 registered marks. In light of the above quoted passage from the August Order, we think that 5 6 CCM may have understood the district court to suggest that CI s counterclaim 7 for infringement of the registered marks had effectively been dismissed. Indeed, 8 after the district court issued the August Order, CCM moved for cancellation of 9 two of the registered marks, a remedy eventually granted in the December 10 Order.6 CCM may have decided, on the basis of this understanding, to advance 11 further summary judgment arguments only as to the counterclaim for 12 infringement of the unregistered mark collective. To avoid undue prejudice, 13 we direct the district court, on remand, to permit CCM a reasonable opportunity 14 to move for summary judgment as to the counterclaim for infringement of the In response, CI argued that cancellation would be inappropriate because the district court had dismissed all counterclaims for infringement without addressing the validity of the registrations, which meant that its rulings had mooted any justiciable interest in cancellation of the registrations. App x 1422. On appeal, CCM characterizes CI s argument on this point as a waiver of its counterclaim for infringement of the registered marks. We disagree. CI argued that the district court s prior rulings had not analyzed the validity of its trademark registrations. The company did not disclaim its contention that CCM had infringed those registrations. 6 28 1 registered marks. Again, the district court may re open discovery to the extent it 2 deems necessary or advisable. 3 IV. Cancellation of Registered Marks After granting summary judgment for CCM on CI s counterclaims, the 4 5 district court found that CI had abandoned the marks Collective Network and 6 Collective Video and, based on that abandonment, ordered the PTO to cancel 7 the corresponding registrations. See 15 U.S.C. § 1064(3) (authorizing petitions for 8 cancellation on ground of abandonment); id. § 1119 (empowering district courts 9 to compel cancellation). To determine that a trademark or trade name is 10 abandoned, two elements must be satisfied: non use of the name by the legal 11 owner and no intent by that person or entity to resume use in the reasonably 12 foreseeable future. Stetson v. Howard D. Wolf & Assocs., 955 F.2d 847, 850 (2d Cir. 13 1992) (citing Silverman v. CBS Inc., 870 F.2d 40, 45 (2d Cir. 1989)). The district 14 court concluded that CCM had satisfied both elements, as a matter of law,7 15 because the undisputed evidence reveal[ed] that CI has not used the marks The district court construed CCM s motion for cancellation as one for summary judgment, although it was not styled as such. See December Order, 2014 WL 7323419, at *2, 2014 U.S. Dist. LEXIS 177176, at *4 5. 7 29 1 Collective Video or Collective Network in commerce. December Order, 2014 2 WL 7323419, at *2, 2014 U.S. Dist. LEXIS 177176, at *5. We disagree. In our view, a reasonable factfinder could conclude that CI has made 3 4 extensive commercial use of both Collective Network and Collective Video. 5 CI s vice president and creative director, Britta Hoskins, stated in a declaration 6 that the company had continuously and extensively used, advertised, and 7 promoted its services using the . . . trademarks COLLECTIVE NETWORK and 8 COLLECTIVE VIDEO from February 2011 to October 2014. Declaration of Britta 9 Hoskins dated October 6, 2014, at 1 2 (App x 1428 29). To support that assertion, 10 Hoskins attached several exhibits to her declaration: (1) a 2014 screenshot of a 11 page on CI s website with the heading Collective Network and text describing 12 the company s services, including a paragraph titled Why You Should Work 13 With Us, see id. at 2 & Ex. A (App x 1429, 1433) (capitalization removed); (2) a 14 2013 screenshot of a page on CI s website that describes the advantages of the 15 Collective Video experience, see id. at 3 & Ex. C (App x 1430, 1438); (3) an 16 excerpt from CI s standard slide deck that it uses to respond to prospective 17 client[s], which lists the features of Collective Video, see id. at 3 & Ex. B (App x 18 1430, 1436); and (4) several stand alone advertisements for Collective Video 30 1 that were created and distributed in 2011 or 2012, see id. at 3 & Ex. D F (App x 2 1430, 1440, 1442, 1444). Taken together, this evidence could support a finding 3 that CI used the two marks in commerce for several years before this lawsuit was 4 commenced. In concluding otherwise, the district court noted that another CI employee, 5 6 Aman Verjee, gave markedly different testimony about the company s use of 7 Collective Network and Collective Video. Speaking as CI s corporate 8 representative under Federal Rule of Civil Procedure 30(b)(6), Verjee stated that 9 he was not aware of any commercial use of either mark. See May 29, 2014 10 Deposition of Aman Verjee, at 103:17 104:15, 105:13 18 (App x 1402:17 1403:15, 11 1404:13 18). In the district court s view, this testimony was decisive because it 12 was the only relevant evidence in the record: As CI has offered no evidence 13 supporting a specific use of the marks in commerce, the court reasoned, there is 14 no evidence counter to that of its own corporate designee on this topic, Aman 15 Verjee, who testified of no known use. December Order, 2014 WL 7323419, at *2 16 n.1, 2014 U.S. Dist. LEXIS 177176, at *5 6 n.1. As we have noted, we find 17 Hoskins affidavit and corresponding exhibits to constitute such evidence, 18 thereby creating a genuine issue of material fact on the issue of commercial use 31 1 sufficient to defeat CCM s motion to cancel CI s trademark registrations. 2 Accordingly, we vacate the district court s December Order finding that CI had 3 abandoned the marks Collective Network and Collective Video, and vacate 4 the district court s subsequent cancellation order to the PTO. 5 V. Attorney s Fees In light of the foregoing, we also vacate the December Order s award of 6 7 attorney s fees. The Lanham Act authorizes such fees for the prevailing party in 8 exceptional cases. 15 U.S.C. § 1117(a). Because neither party has yet prevailed, 9 the district court s award was at best premature. CONCLUSION 10 For the foregoing reasons, we REVERSE the district court s orders in part, 11 12 VACATE them in part, and REMAND for further proceedings. 32
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