By Cheryl Beise, J.D.
The federal district court in Grand Rapids, Michigan, did not err in ruling on summary judgment that United Parcel Service’s use of "UPS Order Link" for an online merchant shipping application did not infringe the prior registered mark "OrderLink," used by Michigan logistics company Progressive Distribution Services ("Progressive") in connection with order fulfillment services, the U.S. Court of Appeals in Cincinnati has held in a 2-1 panel decision. The record established that the most relevant likelihood of confusion factors—including the similarity of marks and the strength of the plaintiff’s mark—favored UPS. The district court was not obliged to accord any deference to a USPTO examining attorney’s nonbinding preliminary determination that, if registered, UPS’s "UPS Order Link" mark would likely cause confusion with the Progressive’s mark. In response to Circuit Judge Guy’s partially dissenting opinion, the majority emphasized that it has "never distinguished between reverse or forward confusion claims in analyzing the strength of the mark factor" (Progressive Distribution Services, Inc. v. United Parcel Service, Inc., May 3, 2017, Clay, E.).
Located in Western Michigan, Progressive has provided logistical services to local businesses since 1984. Progressive's OrderLink service permits its customers to setup a website to facilitate online shipping and handling of products. In September 2004, Progressive obtained federal registration for ORDERLINK. In 2013, UPS began using the mark "UPS OrderLink" for a shipping application offered to UPS’s existing Amazon and eBay merchant customers. UPS filed an application to register UPS OrderLink, but the USPTO trademark examining attorney preliminary determined that the mark would cause confusion with Progressive’s mark. UPS abandoned its application, but continued to use the mark.
In February 2014, Progressive sent UPS a cease-and-desist letter demanding that it cease using "UPS OrderLink." UPS offered to negotiate a settlement, but Progressive chose to file suit against UPS and affiliated entities, asserting claims for trademark infringement, unfair competition, and violations of Michigan’s Consumer Protection Act (MCPA). A few months later, UPS changed the name of "UPS OrderLink" service to "Ship Marketplace Orders." On May 16, 2016, the district court granted summary judgment to UPS, finding that there was there is no likelihood of confusion between the parties’ marks. The court dismissed Progressive’s MCPA claim because UPS’s OrderLink service was used for business or commercial purposes, not personal purposes. Progressive appealed the likelihood of confusion finding.
USPTO proceeding. On appeal, Progressive first argued that the district court erred by not deferring to the trademark examining attorney’s preliminary finding that UPS’s applied-for mark "UPS OrderLink" was likely to cause confusion with Progressive’s mark. The Sixth Circuit disagreed. The appeals court reaffirmed a previous decision and expressly concurred in similar rulings by the Third and Ninth Circuits, all holding that a district court does not need to accord any weight to a USPTO determination when the USPTO did not consider the same evidence that was subsequently placed in front of the district court. In the ex parte proceeding before the USPTO, UPS presented no evidence to the examiner regarding the manner in which the two marks were actually used in the marketplace and therefore, the examiner’s analysis was incomplete, the court said. The district court did not err in according no deference to the examiner’s nonbinding, preliminary finding.
Likelihood of Confusion
Like the district court, the appeals court conducted a likelihood of confusion analysis that considered the first seven of the eight Frisch confusion factors: (1) the similarity of the parties’ marks; (2) the strength of the ORDERLINK mark; (3) the relatedness of the parties’ goods or services; (4) evidence of actual confusion; (5) the marketing channels used; (6) the likely degree of purchaser care; (7) UPS’s intent in selecting "UPS OrderLink" as the name of its shipping application; and (8) the likelihood that one of the parties would expand its product lines.
Similarity of marks. The district court determined that the parties’ marks were not similar, despite the common term ORDERLINK. The appeals court agreed that the parties’ use of different colors and fonts, the inclusion of UPS’s house mark in the "UPS OrderLink," as well as the addition of UPS shield and brown and gold colors, sufficed to distinguish the parties’ marks, as they actually appeared in commerce in the marketplace. This important factor favored UPS.
Strength of plaintiff’s mark. The district court found that Progressive’s OrderLink mark was conceptually weak, despite having achieved incontestable status, because it described the function it serves—processing its clients’ orders through final fulfillment. The Sixth Circuit agreed that the strength of Progressive’s mark was rebutted by substantial evidence of third-party use of similar marks for services in the order processing industry.
The district court also found that Progressive failed to establish commercial strength—recognition of the mark in the marketplace—because the record was "devoid of any evidence that Progressive’s advertising efforts have translated into marketplace recognition." Progressive, and the dissent, argued that the district court erred in its analysis by failing to recognize the distinction between a forward and reverse confusion claim. The Sixth Circuit disagreed. "[W]hile certain circuits have adopted a different test for claims of forward and reverse confusion, the Sixth Circuit is not one of them," the court said, adding that it has "never distinguished between reverse or forward confusion claims in analyzing the strength of the mark factor." Based on the evidence Progressive put forth, no reasonable juror could conclude that its mark maintained a strong commercial presence in the market. This factor favored UPS.
Similarity of services. The appeals court agreed with the district court’s conclusion that this factor was neutral because the parties’ services did not directly compete. While both services operated in a similar broad industry—shipping and order fulfillment—Progressive all but conceded that the services were not competitive. Progressive’s service cost a substantial amount of money and required at least a two-year contract, whereas UPS’s OrderLink service was free of charges, did not come with a binding commitment, and was only available to existing eBay or Amazon customers.
Balancing the factors. Of the remaining relevant Frisch factors, three favored UPS (actual confusion, marketing channels, and purchaser care) and one was neutral (UPS’s intent). None of the likelihood of confusion factors favored Progressive. Therefore, the balance of factors strongly favored UPS. Summary judgment in favor of UPS was affirmed.
Opinion concurring in part and dissenting in part. Circuit Judge Ralph B. Guy, Jr., filed a separate opinion mostly concurring in the majority opinion, but with the exception of majority’s failure to recognize the analytical error committed by the district court in conflating forward and reverse confusion. "The distinction between forward and reverse confusion is important because in applying the first Frisch factor, the strength of plaintiff’s mark, a conclusion that the mark is weak supports a claim for reverse confusion. In fact, it is the very foundation of reverse confusion," Judge Guy wrote.
According to Judge Guy, the district court erred by applying the forward-confusion analysis and concluding that Progressive’s weak mark weighed against a finding of likelihood of confusion. While this factor may not alter the district court’s finding of no likelihood of confusion—particularly given other factors strongly favoring UPS. Nevertheless, Judge Guy would remand the matter to the district court "to reconsider summary judgment in light of the weakness of Progressive’s mark compared to the commercial strength of UPS’s mark."
The case is No. 16-1830.
Attorneys: Michael Owen Fawaz (Howard & Howard Attorneys PLLC) for Progressive Distribution Services, Inc. Laura Craver Miller (Kilpatrick Townsend & Stockton LLP) for United Parcel Service, Inc. [Ohio], United Parcel Service of America, Inc. and United Parcel Service, Inc.
Companies: Progressive Distribution Services, Inc.; United Parcel Service, Inc. [Ohio]; United Parcel Service of America, Inc.; United Parcel Service, Inc.
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