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Trademark law awards trademark protection to various categories of words, terms, and phrases if consumers rely on those marks to identify and distinguish one company's goods or services from those of others. Marks are classified into five categories of increasing distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. Generally, trademark law does not allow sellers to register marks for terms that are generic or descriptive of products or services. This rule prevents sellers from branding their product with a name or term that the public uses to identify the category of items. An exception to this general rule is that descriptive terms are protectable as a trademark if they have developed secondary meaning. But a descriptive term only acquires a secondary meaning after most consumers think of the term as the name of the product instead of as descriptive of the product. Conversely, the law affords automatic protection to suggestive, arbitrary, and fanciful terms, which are inherently distinctive. The line between descriptiveness and suggestiveness can be difficult to draw.
SportFuel, a Chicago-based sports nutrition and wellness consulting firm, held two registered trademarks for "SportFuel." In 2016, Gatorade registered the trademark "Gatorade The Sports Fuel Company" with the United States Patent and Trademark Office ("PTO"). SportFuel filed suit against Gatorade, alleging trademark infringement, unfair competition, and false designation of origin in violation of the Lanham Act (15 U.S.C. § 1125(a)). The district court granted Gatorade’s motion for summary judgment after finding that SportFuel failed to produce evidence that demonstrated a factual dispute on any of the three elements of Gatorade's fair use defense. SportFuel appealed.
Under the circumstances, was summary judgment properly granted to Gatorade?
The Court held that summary judgment was properly granted to Gatorade in an infringement action brought by a nutrition company "SportFuel", claiming violations of its trademark after Gatorade rebranded itself with the slogan, "Gatorade The Sports Fuel Company", because the record did not show that Gatorade used the term "Sports Fuel" as a source indicator where the individual packaging and displays featured its house mark and logo more prominently, it rarely used the term directly on product packaging, the slogan primarily appeared almost as a subtitle to the house mark, and the term was used descriptively, rather than suggestively. The Court further held that Gatorade also used the slogan fairly and in good faith as bad faith was not demonstrated by its knowledge of the mark, continued use, or lack of documentation related to its approval of the slogan.