Law School Case Brief
Innovation Ventures, LLC v. N.V.E., Inc. - 694 F.3d 723 (6th Cir. 2012)
In determining whether a likelihood of confusion exists, the U.S. Court of Appeals for the Sixth Circuit considers the following factors: (1) the strength of the plaintiff's mark, (2) the relatedness of the goods or services offered by the plaintiff and the defendant, (3) the similarity of the marks, (4) any evidence of actual confusion, (5) the marketing channels used by the parties, (6) the probable degree of purchaser care and sophistication, (7) the defendant's intent in selecting its mark, and (8) the likelihood of either party expanding its product line using the marks. While not all of the factors are relevant in every case, the ultimate question remains whether relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way.
An energy drink producer sued its competitor alleging that defendant infringed its trademark in violation of the Lanham Act. The energy drink producer created the "5-hour ENERGY" energy shot while its competitor created the "6 Hour POWER" energy shot. The competitor counterclaimed that a recall notice issued by plaintiff constituted false advertising in violation of the Lanham Act and anti-competitive conduct in violation of the Sherman Act. The U.S. District Court for the Eastern District of Michigan dismissed all three claims on summary judgment and both parties appealed.
Did the district court err in granting the summary judgment for the plaintiff's trademark infringement claim and the competitor’s Sherman Act anti-competition claim?
Yes, for the trademark infringement claim; no, for the Sherman Act anti-competition claim.
The Court held that summary judgment was improperly granted on plaintiff's trademark-infringement claim. According to the Court, the nature of plaintiff's mark shared a closer kinship with those marks previously designated as suggestive than those labeled merely descriptive because of the inferential reasoning necessary for a consumer to discern that the "5-hour ENERGY" mark related to an energy shot. The connection between "5-hour" and "ENERGY" is "not so obvious that a consumer seeing [5-hour ENERGY] in isolation would know that the term refers to "an energy shot rather than, for example, a battery for electronics, an exercise program, a backup generator, or a snack for endurance sports. The Court posited that connecting the mark "5-hour ENERGY" with the energy-shot product requires imagination and perception to determine the nature of the goods. Thus, the Court concluded that the mark was protectable. However, the factors for deciding the likelihood of confusion were so evenly balanced that precedent counseled against granting summary judgment. As for defendant's false advertising claim, the Court ruled that it was based on a recall notice sent by plaintiff to retailers stating that a judge had enjoined sales of "6-hour" energy shots. The language of the notice teetered on the cusp between ambiguity and literal falsity in two main respects—descriptive and grammatical. There was a genuine dispute as to whether it was misleading and tended to deceive its intended audience. Also, defendant's damages evidence was sufficient to survive summary judgment. Finally, the Court ruled that the recall notice did not support a Sherman Act anti-competition violation since defendant was able to easily counter the allegedly false information.
Access the full text case
Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class