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The touchstone of liability for trademark infringement is whether the defendant's use of the disputed mark is likely to cause confusion among consumers regarding the origin of the goods offered by the parties. In determining whether a likelihood of confusion exists, a court will typically weigh the following eight factors: (1) strength of the senior mark; (2) relatedness of the goods or services; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7) the intent of defendant in selecting the mark; and (8) likelihood of expansion of the product lines. But the likelihood of confusion analysis also involves a preliminary question: whether the defendants are using the challenged mark in a way that identifies the source of their goods. If they are not, then the mark is being used in a "non-trademark way" and trademark infringement laws, along with the eight-factor analysis, do not even apply. Where there is no likelihood of confusion as to the source of the products, it is unnecessary for the district court to examine the eight factors traditionally used to determine likelihood of confusion between two source-signifying marks.
Plaintiff Hensley Manufacturing, Inc. alleged that it purchased the trailer hitch business of James Hensley as a going concern. Plaintiff marketed and sold the trailer hitch under the name "Hensley Arrow" or "Arrow." Plaintiff also registered a trademark for the name "Hensley" as well as the "Hensley Arrow" graphic design. Plaintiff alleged that these trademarks have become widely known and respected in the marketplace for trailers and recreational vehicles, or "RVs." In 2007, plaintiff split with the inventor. Subsequently, the inventor designed a new trailer hitch and licensed the new design to defendant Prop ride, Inc., plaintiff’s competitor. Defendant began marketing the hitch as the "Prop ride Pivot Point Projection Hitch," or "3P Hitch." In 2008, plaintiff sued Prop ride, its founder Shawn Woodruff, and the inventor (collectively, “defendants”), asserting, inter alia, a claim for trademark infringement under the Lanham Act. Defendants filed separate motions to dismiss the complaint, and plaintiff filed its own motion for a preliminary injunction. The district court granted defendants' motions to dismiss, holding that Prop ride’s use of the inventor’s name fell under the fair use exception to trademark infringement claims. On appeal, plaintiff argued that the complaint adequately stated a claim for trademark infringement.
Did the plaintiff’s complaint adequately state a claim for trademark infringement?
The appellate court determined that the trademark infringement claims failed because the advertisements did not create a likelihood of consumer confusion regarding the source of the competitor's products since, inter alia, they identified the inventor as the designer of the new hitch, stated that he was no longer affiliated with the plaintiff, and clearly identify the competitor as the seller. Moreover, the court held that the affirmative defense of fair use applied to bar the trademark infringement claims since the complaint and attached exhibits showed that the competitor's uses of the inventor's name were descriptive.