IP Law Daily Consumers not likely to be confused by airline’s use of bus maker’s mark
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Wednesday, September 4, 2019

Consumers not likely to be confused by airline’s use of bus maker’s mark

By Pamela C. Maloney, J.D.

A regional airline’s unintentional use of a trademark that was similar to the mark owned by a major bus manufacturer was unlikely to cause confusion among consumers.

The federal district court in Seattle has found that the unintentional use of similar marks by a bus manufacturer that owned the senior mark and a regional airline was not likely to cause consumer confusion because the companies’ goods and services were unrelated beyond a generic affiliation with the transportation industry, and there was no overlap in customer base or marketing channels. The district court granted the regional airline’s motion for summary judgment on the bus manufacturer’s federal infringement and state dilution claims. The district court also granted summary judgment on the bus manufacturer’s unjust enrichment claim because there was no evidence that use of the trademark conferred a benefit on the airline (New Flyer Industries Canada ULC v. Rugby Aviation, LLC, September 3, 2019, Lasnik, R.).

New Flyer Industries Canada ULC and its subsidiary, New Flyer of America, Inc. ("New Flyer"), make up the largest bus manufacturer and parts distributor in North America. In 2004, New Flyer registered a logo for use on buses that was comprised of two concentric circles centered between two "wings" consisting of three feathers each. At that time, color was not claimed as a feature. The black and white logo was registered again in late 2015 and mid-2017. In 2017, New Flyer also applied for protection of its mark with the colors orange and blue, again for use on its buses. The logo usually was accompanied by the housemark "NEW FLYER," or the mark "BUILT TO RELY ON," but occasionally the logo was used without those marks.

San Juan Airlines, a small regional airline that flew passengers to the San Juan Islands and surrounding areas and offered charter flights throughout Puget Sound and to Vancouver Island, used a logo which was very similar to New Flyer’s logo. San Juan Airline’s logo was used with the housemark "SAN JUAN AIRLINES" and appeared in the color orange to match the color of the airline’s planes. New Flyer filed claims against San Juan for (1) trademark infringement and dilution under the Lanham Act and common law; (2) false designation of origin and unfair competition under the Lanham Act; (3) unfair trade practice under Washington’s Consumer Protection Act; and (4) unjust enrichment. San Juan Airlines moved for summary judgment on all claims.

Likelihood of confusion. Although both companies operated within the same geographic area in the state of Washington, their goods and services were related only in that they fell within a broadly conceived category of transportation industry. Thus, the goods and services offered did not appear to be related for purposes of a trademark analysis, the court concluded.

Geographically speaking, New Flyer did not do any business in the San Juan Islands, nor did it supply buses in that area. In terms of industry, San Juan Airlines sold airline tickets over the telephone directly to individual or companies located within 30 miles of the airport out of which it operated. In contrast, New Flyer supplied buses to transit agencies by means of a highly regulated bid process. Despite the finding that customer confusion based on related goods and services was not likely, the court went on to analyze the factors used to determine consumer confusion in cases involving related goods and services.

New Flyer’s senior mark was not arbitrary or fanciful, nor was it descriptive. Instead, it was a suggestive mark that was "presumptively" weak. As such, it could be strengthened by extensive advertising, the length of its exclusive use, or public recognition. New Flyer had used various forms of "wing" trademarks since 1945 and the logo at issue had been adopted in 2004. The logo appeared on substantially all of New Flyer’s advertisements and was displayed in literature at trade shows. According to the court, the Ninth Circuit had rejected the argument that extensive advertising automatically transformed a suggestive mark into a strong one and, therefore, because the good and services were not closely related, the strength of the mark factor weighed only slightly in favor of New Flyer.

The "similarity of marks" factor also weighed in New Flyer’s favor. Although both companies generally used their housemark along with the logo, which reduced the likelihood of confusion, the housemarks were not present with every use of the logos.

However, the proximity of goods, evidence of actual confusion, marketing channels, types of goods and degree of care, intent, and possibility of expansion factors all weighed in favor of the airline. The goods and services, while related to the transportation industry, were not used for similar purposes and the parties did not compete for an overlapping audience. The lack of overlapping audience also spoke to the lack of confusion caused by convergent marketing channels, as did the fact that the two companies used different advertising and sales methods and channels, did not attend the same trade shows, and had very different price ranges.

Although some evidence of actual confusion could be inferred from the fact that the two companies operated in the same industry, New Flyer had conceded that it had not found any instances of actual confusion. New Flyer also conceded that it had no plans to expand into the manufacture of airplanes, while San Juan Airlines indicated that it had no plans to expand to service municipal bus customers or otherwise compete with New Flyer. Finally, there was no evidence that the airline had a conscious knowledge of New Flyer’s mark and knowingly had designed a similar logo.

Trademark dilution. To prevail on its trademark dilution claim, New Flyer was required to show that: (1) its mark was famous and distinctive; (2) the airline was making use of the mark in commerce; (3) the airline’s use began after the mark became famous; and (4) the airline’s use of the mark was likely to cause dilution by blurring or by "tarnishment." However, New Flyer’s allegations concerning the number of buses it had sold, its dominance of the bus manufacturing industry, its advertising, and its social media presence did not support a reasonable inference that the mark was widely recognized by the general consuming public of the United States. Thus, the airline was entitled to summary judgment on the trademark dilution claim.

Unjust enrichment. Similarly, New Flyer introduced no evidence to show that the airline had capitalized on the public’s familiarity with New Flyer and its carefully acquired goodwill to support a claim of unjust enrichment. More than one-half of the airlines’ customers were regular flyers who had been flying with the airline even before it adopted the logo at issue. Finding no evidence of a benefit being conferred by New Flyer on the airline, the court granted the airline’s motion for summary judgment on the unjust enrichment claim.

This case is No. 2:18-CV-299-RSL.

Attorneys: John S. Artz (Dickinson Wright PLLC) for New Flyer Industries Canada ULC and New Flyer of America, Inc. Jessica L. Goldman (Summit Law Group) for Rugby Aviation LLC d/b/a San Juan Airlines.

Companies: New Flyer Industries Canada ULC; New Flyer of America, Inc.; Rugby Aviation LLC d/b/a San Juan Airlines

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