ARCONA, INC., a California corporation, Plaintiff-Appellant, v. FARMACY BEAUTY, LLC, a New Jersey limited liability company; DAVID C. CHUNG, an individual; MARK VEEDER, an individual, Defendants-Appellees.
No. 19-55586
United States Court of Appeals for the Ninth Circuit
October 1, 2020
D.C. No. 2:17-cv-07058-ODW-JPR. Appeal from the United States District Court for the Central District of California, Otis D. Wright II, District Judge, Presiding. Argued and Submitted June 5, 2020, Pasadena, California. Before: Kenneth K. Lee and Patrick J. Bumatay, Circuit Judges, and Donald W. Molloy, District Judge.
Opinion by Judge Lee
Trademark
The panel affirmed the district court’s grant of summary judgment in favor of Farmacy Beauty, LLC, in a trademark counterfeiting action brought by Arcona, Inc.
Arcona alleged counterfeiting based on Farmacy’s use of the trademarked term “EYE DEW” on its skincare products. The district court granted summary judgment on the ground that a reasonable consumer would not confuse Farmacy’s skincare product with Arcona’s because their respective packaging featured different shapes, design schemes, text, and colors.
Agreeing with other circuits, the panel held that the plain language of the Lanham Act,
R. Joseph Trojan (argued), Dylan C. Dang, and Francis Z. Wong, Trojan Law Offices, Beverly Hills, California, for Plaintiff-Appellant.
Colin Fraser (argued), Greenberg Traurig LLP, Irvine, California; Jeffrey K. Joyner, Greenberg Traurig LLP, Los Angeles, California; for Defendants-Appellees.
OPINION
LEE, Circuit Judge:
Arcona, Inc. sued Farmacy Beauty for counterfeiting based on the use of the trademarked term “EYE DEW” on its skincare products. But apart from that term, these two companies’ beauty products look nothing like each other, as their respective packaging features different shapes, design schemes, text, and colors. The district court granted summary judgment for Farmacy, ruling that a reasonable consumer would not confuse Farmacy’s skincare product with Arcona’s. The key question presented is whether a trademark counterfeiting claim requires a likelihood of confusion. We hold that the plain language of the statute requires a likelihood of confusion for a counterfeit claim. We thus affirm the grant of summary judgment.
BACKGROUND
In March 2015, Plaintiff-Appellant Arcona, Inc. registered the trademark “EYE DEW” for its skincare products. The trademarked phrase “consists of standard characters without claim to any particular font, style, size, or color.” Arcona’s EYE DEW product is an eye cream in a
In 2014, Defendant-Appellee Farmacy Beauty began developing a line of skincare products, including an eye cream. Farmacy named the eye cream “EYE DEW” after a copywriter said that the name was likely available based on “an initial online search and uspto.gov trademark lookup.” Farmacy’s EYE DEW product (pictured below) comes in a short, wide, white jar, along with a squarish outer box. The product features the phrase “EYE DEW” and the Farmacy house mark on both its jar and outer box. In 2015, Farmacy began selling EYE DEW in the United States at Sephora.
In August 2016, Arcona sent Farmacy a cease-and-desist letter informing Farmacy of its “EYE DEW” trademark and demanding that Farmacy stop selling its product. The record suggests that Farmacy had never heard of Arcona and was surprised to receive the letter. The parties unsuccessfully tried to resolve the matter.
In September 2017, Arcona sued Farmacy asserting claims of (1) trademark counterfeiting, (2) trademark infringement, (3) unfair competition under Section 43(a) of the Lanham Act, (4) unfair competition under California state law, and (5) unfair competition under California common law. At Arcona’s request, the district court dismissed with prejudice the trademark infringement and unfair competition claims.
The district court granted partial summary judgment for Farmacy on the counterfeiting claim. The court reasoned that the only similarity between the two products was the phrase “EYE DEW.” The court also found that Arcona “present[ed] no evidence that the Farmacy house mark on the product, the dissimilar packaging, and the product itself [did] not nullify [Arcona]’s counterfeiting claim.” It further held that it was “implausible that a consumer viewing [Farmacy’s] EYE DEW product would be tricked into believing that product is actually one of [Arcona’s] EYE DEW products.”
STANDARD OF REVIEW
We review a district court’s grant of summary judgment de novo. Devereaux v. Abbey, 263 F.3d 1070, 1074 (9th Cir. 2001) (en banc). The moving party is entitled to summary judgment upon a showing that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. See
ANALYSIS
I. Under the Lanham Act, Farmacy is liable for counterfeiting only if Farmacy’s use of Arcona’s mark is likely to confuse consumers.
Arcona’s complaint against Farmacy lists “Violation of Trademark Counterfeiting Act of 1984” as its first cause-of-action. The Trademark Counterfeiting Act of 1984 criminalizes the trafficking of counterfeit trademark goods.
Arcona argues that it need not show a likelihood of confusion to pursue its trademark counterfeiting claim. The “starting point for interpreting a statute is the language of the
Here,
Perhaps recognizing that the two products look little like each other, Arcona argues that a counterfeiting claim does not require a likelihood of confusion. It points to two statutory provisions establishing various remedies for counterfeiting that do not mention “likelihood of confusion.” First,
Several of our decisions have followed the plain meaning of Section 1114 and have required a likelihood of confusion for claims under that section. For example, in Westinghouse Elec. Corp. v. Gen. Circuit Breaker & Elec. Supply, Inc.
More recently, we held that “to invoke § 1117’s special civil monetary remedies against counterfeiting,” a plaintiff must establish, among other things, that the counterfeit mark “was likely to confuse or deceive.” Idaho Potato Comm‘n v. G & T Terminal Packaging, Inc., 425 F.3d 708, 721 (9th Cir. 2005) (finding defendant’s unlicensed use of plaintiff’s certification mark constituted counterfeiting because it was likely to cause confusion). We required a likelihood of confusion, even though Section 1117’s civil monetary remedies provision does not itself explicitly mention it and instead refers to Section 1114, which does.
Other circuits also read the statutory provisions to require a likelihood of confusion for a counterfeiting claim. See Springboards to Educ., Inc. v. Houston Indep. Sch. Dist., 912 F.3d 805, 818 (5th Cir. 2019) (“Likelihood of confusion is also an element of counterfeiting.”); Kelly-Brown v. Winfrey, 717 F.3d 295, 315 (2d Cir. 2013) (dismissing counterfeiting claim after describing the marks and concluding that consumers would not be confused).
We thus hold that a counterfeit claim requires a showing of likelihood of confusion under Section 1114.
Arcona makes the alternative argument that the court should presume a likelihood of confusion because Farmacy’s “EYE DEW” statement is allegedly identical to Arcona’s mark. But even assuming the marks are identical, there may be no presumption of consumer confusion if the products themselves are not identical. Put another way, a court must review the product as a whole in determining whether an allegedly counterfeit product will likely cause confusion.
Arcona relies heavily on a trademark infringement case, Brookfield Communications, Inc. v. West Coast Entertainment Corp., which in dicta stated in “light of the virtual identity of marks, if they were used with identical products or services, likelihood of confusion would follow as a matter of course.” 174 F.3d 1036, 1056 (9th Cir. 1999) (emphasis added) (ruling that there was no presumption of confusion because MovieBuff software was not the same product service as moviebuff.com website); see also Stone Creek Inc., 875 F.3d at 432 (indicating “identical marks paired with identical goods can be case-dispositive” in a case involving an “exact replica” of a competitor’s logo on the same sofa (emphasis added)).
Here, the products at issue are not identical, as evident by a comparison of the Arcona and Farmacy products. So Brookfield‘s dicta has no bearing on this case. The question then becomes: Is there a factual dispute about the likelihood of confusion so that Arcona’s counterfeiting claim can survive summary judgment?
Finally, Arcona argues that the district court erred in comparing the products as a whole in ruling that there is no likelihood of consumer confusion. The district court, according to Arcona, should have limited its analysis to the identical marks (“EYE DEW”) only — without looking at the entire product — in assessing consumer confusion.
This court has never adopted the rigid approach advanced by Arcona. To the contrary, this court noted that even “where there is precise identity of a complainant’s and an alleged infringer’s mark, there may be no consumer confusion” if, for example, “the alleged infringer is in a different geographic area or in a wholly different industry.” Brookfield, 174 F.3d at 1055 (addressing trademark infringement claims and discussing cases in which companies or products had the same names, but there was no confusion because they competed in different geographic areas or industries). A court should not myopically focus on only the alleged counterfeit marks to the exclusion of the entire product or even common sense.4 Here, while the products do compete in the same space and same geographic area, there are significant differences between the two products, and the marks should be “considered in their entirety and as they appear in the marketplace.” Id. at 1054 (internal quotation marks omitted).
Further, it is implausible that a consumer would be deceived because the products had their respective housemarks (“Farmacy” vs. “Arcona”) prominently on the packaging. Arcona does not present evidence to dispute this, but states in a conclusory fashion that “[c]onsumers would have no way of knowing” that Arcona did not sponsor Farmacy’s product. In trademark infringement cases, the “use of a housemark can reduce the likelihood of confusion.” AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 351 (9th Cir. 1979), abrogated in part on other grounds by Mattel, Inc. v. Walking Mtn. Prods., 353 F.3d 792, 810 (9th Cir. 2003); see also Pignons S.A. de Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 487 (1st Cir. 1981) (“[O]therwise similar marks are not likely to be confused where used in conjunction with the clearly displayed name and/or logo of the manufacturer”).
Courts — at least in the trademark infringement context — have also considered a third party’s use of the mark in assessing likelihood of confusion. See Springboards, 912 F.3d at 815, 817 (recognizing that third parties used similar and identical marks, and finding no reasonable jury could find a likelihood of confusion); cf. M2 Software, Inc., v. Madacy Entm‘t, 421 F.3d 1073, 1088 (9th Cir. 2005) (affirming summary judgment on trademark infringement claim and reasoning that “[u]se of similar marks by third-
Finally, there is no evidence that Farmacy’s use of the mark “EYE DEW” was intentional. It submitted evidence that the term “EYE DEW” was meant to describe its product and was not an intentional copying of Arcona’s trademark. Arcona does not dispute this evidence, but instead states without citation that Farmacy “cannot feign ignorance” of the mark because Arcona has been selling EYE DEW for over 18 years. Despite Arcona’s “general, conclusory allegations of ‘willfulness,’” it has produced no evidence that Farmacy intentionally copied its mark. See Pignons, 657 F.2d at 491 (finding no evidence of intent in a trademark infringement case). In addition, Farmacy’s dissimilar packaging and rampant use of its housemark “flatly belie[s] any such notion.” See id.
In sum, the district court properly found that there is no genuine issue of material fact that Farmacy’s use of the “EYE DEW” mark would not likely cause consumer confusion.
CONCLUSION
To sustain a trademark counterfeiting claim, a plaintiff must show a likelihood of confusion. The two products, when viewed in their entirety, do not remotely resemble each other. The district court’s decision granting summary judgment for Farmacy is AFFIRMED.