By Brian Craig, J.D.
The Ninth Circuit followed other circuits in holding that a counterfeiting claim requires likelihood of confusion.
No reasonable jury could find that Farmacy Beauty’s cosmetic product sold under the mark EYE DEW was a counterfeit of EYE DEW products sold by competitor Arcona, Inc., the U.S. Court of Appeals for the Ninth Circuit has held. In affirming the district court’s grant of summary judgment in favor of Farmacy Beauty, the Ninth Circuit held that a trademark counterfeit claim under Section 34(d) of the Lanham Act requires a showing of likelihood of confusion. Apart from the "EYE DEW" term, the Ninth Circuit found that the competing beauty products look nothing like each and a reasonable consumer would not be confused (Arcona, Inc. v. Farmacy Beauty, LLC, October 1, 2020, Lee, K.).
Arcona owns the registered trademark "EYE DEW" for skincare products. Arcona sued Farmacy Beauty for counterfeiting based on Farmacy Beauty’s use of the trademarked term "EYE DEW" relating to skincare products. Arcona sued Farmacy asserting claims of (1) trademark counterfeiting, (2) trademark infringement, (3) unfair competition under Section 43(a) of the Lanham Act, (4) unfair competition under California state law, and (5) unfair competition under California common law. At Arcona’s request, the district court dismissed with prejudice the trademark infringement and unfair competition claims. The district court granted partial summary judgment for Farmacy on the counterfeiting claim concluding that a reasonable consumer would not confuse Farmacy’s skincare product with Arcona’s product. Faramcy appealed.
Trademark counterfeiting. The Ninth Circuit held that a trademark counterfeit claim under Section 34(d) of the Lanham Act requires a showing of likelihood of confusion. The plain language in 15 U.S.C. § 1114(1)(a) shows that "likely to cause confusion" is a requirement for a counterfeiting claim. Previously, the Ninth Circuit had not directly addressed whether likelihood of confusion is required in the context of a counterfeit claim, perhaps because consumer confusion is generally not in dispute in most counterfeit cases. Section 1114 addresses both trademark infringement and counterfeit claims. The Ninth Circuit has repeatedly held that the plain language of Section 1114 requires a likelihood of confusion for a trademark infringement claim. Other circuits, including the Fifth Circuit and Second Circuit, have also read the statutory provisions to require a likelihood of confusion for a counterfeiting claim. Therefore, Farmacy is liable for counterfeiting only if Farmacy’s use of Arcona’s mark is likely to confuse consumers.
No presumption. The Ninth Circuit declined to presume consumer confusion because the products are not identical. Farmacy argued that the court should presume a likelihood of confusion because Farmacy’s "EYE DEW" statement is allegedly identical to Arcona’s mark. But even assuming the marks are identical, there may be no presumption of consumer confusion if the products themselves are not identical. Put another way, a court must review the product as a whole in determining whether an allegedly counterfeit product will likely cause confusion. Thus, the court refused to presume consumer confusion.
Lack of consumer confusion. Finally, the panel ruled that the district court properly granted summary judgment because there is no genuine dispute of material fact about the likelihood of consumer confusion between the two products. A court should not myopically focus on only the alleged counterfeit marks to the exclusion of the entire product or even common sense. Here, while the products do compete in the same space and same geographic area, there are significant differences between the two products, and the marks should be considered in their entirety and as they appear in the marketplace.
The appeals court agreed with the district court that no reasonable consumer would be confused by the two products because the packaging, size, color, shape, and all other attributes—other than the term "EYE DEW"—are not remotely similar. Farmacy presented evidence that other companies use the phrase "EYE DEW" in the beauty industry. This underscores that the "EYE DEW" mark is not so unique or strong. Furthermore, Arcona presented no evidence that Farmacy’s use of the mark "EYE DEW" was intentional.
Accordingly, the Ninth Circuit affirmed the district court’s grant of summary of summary.
This case is No. 19-55586.
Attorneys: R. Joseph Trojan (Trojan Law Offices) for Arcona, Inc. Colin Fraser (Greenberg Traurig LLP) for Farmacy Beauty, LLC.
Companies: Arcona, Inc.; Farmacy Beauty, LLC
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