Have you heard of the theory of “trademark neutralization?” It was developed by the European Union (EU) General Court and the European Union Court of Justice (“CJEU”) in 2006 (Case No. C-361/04 (ECJ Jan. 12, 2005)) holding PICASSO/PICARO not confusingly similar and was followed in Case C-206/04 (ECJ Mar. 23 2006) holding SIR/ZIRH not confusingly similar. Essentially, the theory is that aural similarity of trademarks may be neutralized by obvious visual or conceptual differences. When the theory is applied, a finding of non-confusing similarity of marks arises. Might the theory be adopted in the U.S.?

Background of the theory and the lack of uniform application in the European Union.

Despite the EU’s harmonization of European trademark law, national courts do not necessarily apply the theory of trademark neutralization. For example, in a decision dated April 21, 2009 (Case 24 W (pat) 37/08), the marks XXERO and ZERO were found confusingly similar by the German Federal Patent Court because of their aural similarity. In that case, the court followed the caselaw of the German Federal Supreme Court, which permits a finding of a likelihood of confusion on either aural, visual or conceptual similarity alone. In a November 8, 2011 decision, the German Patent Court also found EAGLE and EAGLET (in stylized form) confusingly similar (Case 27 W (pat) 602/10), holding the marks were very similar aurally and somewhat conceptually similar. The court also warned that excessive extension of neutralization of similarities would restrict the protection of trademarks.

In 2014 the German Federal Patent Court followed the law of the XXERO/ZERO case and upheld an opposition where the owner of the mark CINNOVEX opposed registration of the mark SINUVEX, for identical goods and services. (30 W (pat) 43/12). In that case, the court held that aural similarity alone was sufficient, looking at how the opposer’s mark was most likely pronounced in Germany as “TSIN-NO-VEX” and the applicant’s mark was pronounced “SI-NU-VEX.” The court also stated that it did not follow the EU doctrine of “trademark neutralization.”

The German Federal Supreme Court (Bundesgerichsthof) issued a decision on July 12, 2018 involving the marks “combit” and “Commit” (File No. I ZR 74/17) which addressed the issue of when the theory of trademark neutralization may be applied. Reversing an appellate court, the Court held that the theory was applicable only when one of the marks had a clear and definite meaning which is easily understood by the relevant purchasing group; the Court differed with the appellate court’s reasoning that “commit” had a clear and specific meaning for the defendant’s professional service automation software (referred to as “commit CRM”), because “commit” had multiple meanings.

Is the theory of “trademark neutralization” likely to be applied in the U.S.?

In the U.S., there are number of factors that are applied in determining a likelihood of confusion.

In USPTO opposition and cancellation proceedings, the factors appearing in In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973) apply, which are:

1. The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression.
2. The similarity or dissimilarity and nature of the goods . . . described in an application or registration or in connection with which a prior mark is in use.
3. The similarity or dissimilarity of established, likely-to-continue trade channels.
4. The conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing.
5. The fame of the prior mark.
6. The number and nature of similar marks in use on similar goods.
7. The nature and extent of any actual confusion.
8. The length of time during and the conditions under which there has been concurrent use without evidence of actual confusion.
9. The variety of goods on which a mark is or is not used.
10. The market interface between the applicant and the owner of a prior mark.
11. The extent to which applicant has a right to exclude others from use of its mark on its goods.
12. The extent of potential confusion.
13. Any other established fact probative of the effect of use.

Courts also use similar analyses. For example, courts in the Second Circuit, apply the likelihood of confusion factors to be considered from Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961), which are:

1. The strength of the registered mark.
2. The similarity between the registered mark and the mark used by the alleged infringer.
3. The allegedly infringing product’s competitive proximity to the registered owner’s product.
4. The likelihood that the registered owner will bridge the gap to enter the same market as the alleged infringer.
5. Actual confusion on the part of purchasers;
6. The alleged infringer’s good faith;
7. The quality of the alleged infringer’s product.
8. The sophistication of the buyers in the relevant market.

As interesting as the theory of trademark neutralization may be, it likely will not be applicable in U.S. proceedings in view of the numerous likelihood of confusion factors a trier of fact will consider.