REX REAL ESTATE I, L.P. v. REX REAL ESTATE EXCHANGE, INCORPORATED
No. 22-50405
United States Court of Appeals, Fifth Circuit
September 6, 2023
Before RICHMAN, Chief Judge, and HAYNES and GRAVES, Circuit Judges.
JAMES E. GRAVES, JR., Circuit Judge:
Plaintiff Rex Real Estate I, L.P. sued Defendant Rex Real Estate Exchange for trademark infringement. The district court granted Defendant‘s motion for judgment as a matter of law after Plaintiff rested its case, and Plaintiff now appeals. A reasonable jury could not find in favor of Plaintiff‘s Section 32(1) claim, but it could find in favor of Plaintiff‘s Section 43(a) claim. Therefore, we AFFIRM in part, REVERSE in part, and REMAND for further proceedings.
I. BACKGROUND
a. Factual Background
Plaintiff is a real estate company founded by Rex and Sherese Glendenning that “specializes in the acquisition and sale of commercial, investment and development properties, both large and small, in the North Texas growth corridor.” Plaintiff only brokers real estate in the state of Texas, but it has clients throughout the United States and in other countries.
Plaintiff has used three trademarks throughout its existence: “REX,” “REX Real Estate,” and a logo showing a crown alongside the words “REX Real Estate” (“crown mark“). On January 13, 2015, the U.S. Patent and Trademark Office (“USPTO“) accepted Plaintiff‘s registration of the crown mark. According to Plaintiff‘s submission, the mark‘s first use in commerce was January 1, 1987. Plaintiff filed a federal trademark registration for the “REX” mark in June 2018, claiming its first use in commerce was December 31, 1987. Finally, it filed a federal trademark registration for the “Rex Real Estate” mark without the crown in June 2018, claiming its first use in commerce was December 31, 1990.
According to its website, Plaintiff has developed “a diverse portfolio of retail, office, industrial and mixed-used properties throughout Texas, [and] REX Real Estate and founder Rex Glendenning have closed hundreds of millions of dollars in investment transactions for private and institutional investors.” Plaintiff has also brokered some residential real estate. At trial, Mrs. Glendenning identified two instances where the business sold single family homes. One of those homes was sold to the Glendennings’ daughter and son-in-law, Matthew Kiran, who is also a long-time sales agent for Plaintiff. Plaintiff‘s residential listings from 2009 to 2022 include three properties identified as single-family residences sold to individual buyers and six properties identified as residences with acreage sold to individual buyers. Three of these sales involved parties related to Plaintiff or its employees: one was the sale of Mrs. Glendenning‘s parents’ home, one was a sale to Kiran‘s son, and the other was the aforementioned sale to the Glendennings’ daughter and Kiran. The vast majority of Plaintiff‘s “residential” listings from 2009 to 2022 were investment properties sold to corporate entities. These transactions averaged over 238 acres and over $6 million per sale.
Defendant Rex Exchange offers an online platform for homeowners and homebuyers to transact the sale of single-family homes. It uses artificial intelligence and other data-based technology to match likely buyers with homes. It started in 2015 in California, and it is now headquartered in Austin, Texas. Its business is designed to “help home buyers and sellers avoid excessive costs associated with the traditional real estate agent-based model.” It operates in twenty-five cities in fifteen states, and it first expanded into Austin in 2018. Defendant‘s historical average sales price of a home in Texas is approximately $365,000, and the average lot size is 0.38 acres.
Defendant‘s CEO, Jack Ryan, testified that he came up with the name Rex Exchange in 2012 or 2013 to “mimic” the idea of the New York Stock Exchange but make it residential. He first learned of
In Texas, Defendant advertised in print and radio advertisements under the name “Rex.” It promoted its expansion into Dallas using the names “Rex” and “REX Real Estate,” and it has used a logo with the words “REX Real Estate” on its website and promotional materials.
b. Procedural Background
Plaintiff sued Defendant for trademark infringement, trademark dilution, and unfair competition under federal and state law. After engaging in discovery, the parties cross-moved for summary judgment. The magistrate judge issued a report recommending that the district court deny both motions. The magistrate judge noted there were still genuine disputes of material fact as to: (1) whether Plaintiff‘s marks have acquired secondary meaning, (2) whether consumer confusion was probable, and (3) whether Defendant holds priority of use through the Rex mark it acquired from Azavea. Both parties filed objections, but the district cоurt adopted the report in full.
The jury trial commenced on April 8, 2022. At trial, Plaintiff only pressed its trademark infringement claims. It called seven witnesses: (1) Sherese Glendenning; (2) Matthew Kiran; (3) Jack Ryan; (4) Robert Cheetham (by deposition); (5) Danielle Gervasi; (6) Rex Glendenning; and (7) Jeffery Stec. The district court admitted 521 exhibits into evidence.
When Plaintiff rested its case on April 12, 2022, Defendant orally moved for judgment as a matter of law. Defendant argued that Plaintiff failed to meet its burden in three ways: (1) proof of legally protectable trademark rights; (2) proof of a likelihood of confusion caused by Defendant‘s use of its “Rex” trademarks; and (3) proof of actual damages attributable to the alleged infringement of Plaintiff‘s marks.
The following day, the district court orally granted Defendant‘s Rule 50 motion. The court then asked for supplemental briefing on the motion it had granted. After Plaintiff and Defendant submitted their supplemental briefs, the district court issued a written order granting the mоtion on May 18, 2022. It later entered final judgment in favor of Defendant, and Plaintiff timely appealed. Plaintiff only appeals the judgment against its federal infringement claims under the Lanham Act.
II. STANDARD OF REVIEW
We review de novo a district court‘s grant of judgment as a matter of law, applying the same legal standard it used. Foreman v. Babcock & Wilcox Co., 117 F.3d 800, 804 (5th Cir. 1997). Judgment as a matter of law is proper when “there is no legally sufficient evidentiary basis for a reasonable jury to have found for that party with respect to that issue.”
III. DISCUSSION
Plaintiff alleges trademark infringement in violation of Sections 32(1) and 43(a) of the Lanham Act, which are codified as
a. Statutory Standing
Defеndant first argues we should affirm the district court‘s judgment because Plaintiff has failed to show that it owns the marks. Whether a plaintiff has a sufficient interest in a mark to sue under the Lanham Act is a question of statutory standing. “Unlike Article III standing, statutory standing is not jurisdictional. Instead, it asks the merits question of whether or not a particular cause of action authorizes an injured plaintiff to sue.” Simmons v. UBS Fin. Servs., Inc., 972 F.3d 664, 666 (5th Cir. 2020) (citation and internal quotation marks omitted). We apply the same standard of review to statutory standing as we do to the elements of the cause of action. HCB Fin. Corp. v. McPherson, 8 F.4th 335, 339 (5th Cir. 2021).
A claimant has “statutory standing” if its claim “fall[s] within the zone of interests protected by” the statute. Allen v. Wright, 468 U.S. 737, 751 (1984). Section 32(1) protects registered trademarks and provides a cause of action against any person who “use[s] in commerce any ... imitation of a registered mark ... likely to cause confusion, or to cause mistake, or to deceive.”
On the other hand, Section 43(a) protects unregistered trademarks and provides a cause of action to “any person who
Section 43(a) does not require a plaintiff to establish ownership of a trademark as an element of its cause of action. Belmora L.L.C. v. Bayer Consumer Care AG, 819 F.3d 697, 706 (4th Cir. 2016) (“Significantly, the plain language of § 43(a) does not require that a plaintiff possess or have used a trademark in U.S. commerce as an element of the causе of action.“). Accordingly, Defendant‘s challenge to Plaintiff‘s ownership applies only to Plaintiff‘s infringement claim under Section 32(1).
“Rights in a trademark are determined by the date of the mark‘s first use in commerce. The party who first uses a mark in commerce is said to have priority over other users.” Hana Fin., Inc. v. Hana Bank, 574 U.S. 418, 419 (2015); Blue Bell, Inc. v. Farah Mfg. Co., Inc., 508 F.2d 1260, 1264-65 (5th Cir. 1975) (“Ownership of a mark ‘requires a combination of both appropriation and use in trade.‘“). Plaintiff argues that “the Glendennings have wholly controlled use of the marks from the start-first as sole proprietors, then as sole directors of Rex Real Estate, Inc., and now as 49 percent owners each of the limited partnership (with the other 2 percent owned by the corporation).” But according to the evidence submitted by Plaintiff, Rex Glendenning first used the three marks in commerce between 1987 and 1990 as a sole proprietor. Under Texas law, a sole proprietorship is one and the same as the person who is the proprietor. Ideal Lease Serv., Inc. v. Amoco Prod. Co., 662 S.W.2d 951, 952 (Tex. 1983). Thus, Mr. Glendenning became the original owner of the marks when he first used them in commerce many years before Plaintiff was formed.
Plaintiff claims the Lanham Act permitted it to register the marks because “an applicant seeking to register a trademark may benefit from its use by a related company.”
Under the Lanham Act, assignments of marks that have already been federally registered must be in writing.
At trial, Plaintiff failed to produce any evidence that Mr. Glendenning assigned his rights in the marks to Plaintiff. In one exchange, Defendant‘s counsel asked Mrs. Glendenning, “There‘s never been a time when you and your husband transferred any individual rights you might have had to any trademark to the limited partnership, correct?” to which she responded, “I don‘t understand that question.” After some clarification, Defendant‘s counsel asked the question again, and Mrs. Glendenning responded, “I apologize, but I truly do not understand the question. Rex and I own the trademarks and Rex Real Estate I is our limited partnership.” There was no other testimony regarding the assignment of the marks at trial.
No reasonable jury could conclude that these statements amount to clear and uncontrаdictory testimony that Rex Glendenning assigned his rights in the marks to Plaintiff. Accordingly, we affirm the district court‘s judgment as a matter of law as to Plaintiff‘s Section 32(1) claim for any alleged infringement of the marks after they were federally registered. Foreman, 117 F.3d at 804 (Our affirmance can be upon grounds not relied upon by the district court). However, Defendant‘s ownership challenge does not apply to Plaintiff‘s claim under Section 43(a) for infringement of any marks before they were federally registered. We proceed to analyze the judgment as to that claim.
b. Protectable Marks
For the first prong of its claim, Plaintiff must show that the marks are legally protectable. Streamline, 851 F.3d at 450. Plaintiff makes three arguments to that effect: (1) the crown logo is incontestable; (2) each of the three marks are inherently distinctive; and (3) each of the three marks have developed secondary meaning. Since we find a reasonable jury could conclude that the marks are inherently distinctive, we pretermit addressing the other two arguments.
Based on the evidence submitted, the district court concluded that no reasonable jury could find that the marks are anything other than personal name marks. Plaintiff claims this was error and that its three marks are at least suggestive because it presented evidence that the marks refer not merely to Rex Glendenning but also to the Latin translation of “rex” as “king.”
Marks are classified along a spectrum in order of increasing distinctiveness: (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). Word marks that are suggestive, arbitrary, or fanciful are inherently distinctive. Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210-11 (2000). A generic term refers to the class of which a good is a member. Xtreme Lashes, L.L.C. v. Xtended Beauty, Inc., 576 F.3d 221, 227 (5th Cir. 2009). A descriptive term provides an attribute or quality of a good. Id. A suggestive term suggests, but does not describe, an attribute of the good; it requires the consumer to exercise his or her imagination to apply the trademark to the good. Id. This court prefers to “hav[e] a jury decide thе issue of the categorization of a mark.” Streamline, 851 F.3d at 453. Although judgment as a matter of law “is rarely appropriate” on the factual question of categorization, Xtreme Lashes, 576 F.3d at 232, we may affirm such a judgment where the record compels it. Amazing Spaces, 608 F.3d at 234.
Under the Lanham Act, a mark that is “primarily merely a surname” is not registerable in the absence of secondary meaning.
In concluding that the marks are nothing more than personal name marks, the district court relied on Mr. Glendenning‘s affidavit that Plaintiff submitted to the USPTO when it sought to cancel Defendant‘s trademarks. In his declaration, he stated that “[a]mong consumers in the real estate industry, the name ‘REX’ has become synonymous with REX and Rex Glendenning as the exclusive source of the REX Real Estate Services, with Rex Glendenning as an individual being uniquely identified and recognized by consumers both in Texas and nationally as the founder of REX and REX Real Estate Services.” At trial, Mr. Glendenning confirmed the statements made in his declaration. But Mr. Glendenning also stated, “I believe in my deposition, I also stated that we also named -- put the crown over Rex because of the Latin meaning of king and -- but yes I don‘t deny that my name‘s Rex and that it means king in Latin and we adopted it as the name of our company.” At this point, Defendant‘s counsel had Mr. Glendenning turn to a page in his deposition where the following exchange occurred:
Q. (BY MR. FLYNN) And I‘ll -- when you made the decision to adopt the name Rex Real Estate, why did you make that decision?
A. Because I‘m Rex, and I‘m in the real estate business. And it‘s my mark and we think it‘s an excellent one and we decided to run with it the last three decades. The real Rex.
Defendant‘s counsel then asked, “When you made the decision to adopt the name Rex Real Estate, you did it because you‘re
Plaintiff argues that the district court erred by relying on Mr. Glendenning‘s affidavit because it looked only to what the company intended for the mark, not how consumers perceive it. But Mr. Glendenning‘s declaration does not merely speak for himself or the company-he claimed that the name Rex has become synonymous with him as a person and founder of the company to consumers in the real estate industry. Plaintiff did not submit аny evidence showing that the relevant consuming public associates the Rex marks with their purported Latin meaning. Nevertheless, it submitted evidence that Defendant views its marks by their Latin translation. While Defendant is not necessarily a member of the “purchasing public,” the fact that some party outside of Plaintiff recognizes the Latin translation support its claims that the marks could be inherently distinctive. While there was strong evidence that the marks are perceived by the public as primarily a personal name, the record does not compel that conclusion. Amazing Spaces, 608 F.3d at 234. The district court erred by deciding as a matter of law that Plaintiff‘s marks are not inherently distinctive.
c. Likelihood of Confusion
The second prong- “likelihood of confusion” - requires Plaintiff to show that Defendants’ use of the “Rex” marks “create[d] a likelihood of confusion in the minds of potential consumers as to the source, affiliation, or sponsorship.” Springboards To Educ., Inc. v. Houston Indep. Sch. Dist., 912 F.3d 805, 811-12 (5th Cir. 2019) (quoting Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188, 193 (5th Cir. 1998)). To evaluate whether there is а likelihood of confusion, we use a non-exhaustive list of factors known as the “digits of confusion.” Xtreme Lashes, 576 F.3d at 227. The digits are: “(1) the type of trademark; (2) mark similarity; (3) product similarity; (4) outlet and purchaser identity; (5) advertising media identity; (6) defendant‘s intent; (7) actual confusion; and (8) care exercised by potential purchasers.” Id. “No digit is dispositive, and the digits may weigh differently from case to case, ‘depending on the particular facts and circumstances involved.‘” Id. (citation omitted). “In addition to the digits of confusion, the particular context in which the mark appears must receive special emphasis.” Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 485-86 (5th Cir. 2004). “While likelihood of confusion is typically a question of fact, summary judgment is proper if the ‘record compels the conclusion that the movant is entitled to judgment as a matter of law.‘” Xtreme Lashes, 576 F.3d at 227 (citation omitted); see also Springboards, 912 F.3d at 818 (affirming grant of summary judgment because “the great weight of the digits suggests there is no likelihood of confusion.“); Perry v. H. J. Heinz Co. Brands, L.L.C., 994 F.3d 466, 473 (5th Cir. 2021) (affirming grant of summary judgment on likelihood of confusion). We address each digit in turn.
“‘Type of trademark’ refers to the strength of the senior mark.” Xtreme Lashes, 576 F.3d at 227. “We analyze two factors in determining the strength of a mark: (1) the mark‘s position along the distinctiveness spectrum, and (2) ‘the standing of the mark in the marketplace.‘” Springboards, 912 F.3d at 814 (citation omitted). The first factor refers to the five categories of increasing distinctiveness that marks generally fall into. Xtreme Lashes, 576 F.3d at 227. As discussed above, Plaintiff has presented sufficient evidence for a reasonable jury to conclude that the marks are at least suggestive.
The second factor is “the standing of the mark in the marketplace.” Springboards, 912 F.3d at 814 (internal quotation marks and citation omitted). Here, the district court found that the marks had low standing because many other entities in Texas have “Rex” names, and some of those businesses are involved in real estate. Plaintiff challenges the district court‘s reliance on third-party usage in other industries, but “[a]ll third-party use of a mark, not just use in the same industry as a plaintiff, may bе relevant to whether a plaintiff‘s mark is strong or weak.” Bd. of Supervisors for La. State Univ. Agric. & Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 479 (5th Cir. 2008). Still, third-party usage is especially relevant when it falls within the same industry or category of services. Springboards, 912 F.3d at 815 (numerous third-party literacy programs using language similar or nearly identical to plaintiff‘s marks “suggests that consumers will not associate the junior mark‘s use with the senior mark user“); Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Ass‘n, 651 F.2d 311, 316 (5th Cir. 1981) (A significant number of other Florida financial institutions using “Sun” in their names lessened the standing of the mark). “[T]he key is whether the third-party use diminishes in the public‘s mind the association of the mark with the plaintiff.” Smack Apparel, 550 F.3d at 479.
Defendant claims there are hundreds of entities using “Rex” in their business name, including in real estate. It follows this assertion with ranges of citations to over 1000 pages in the record on appeal, and it does not specify which pages in these ranges show other “Rex” entities involved in Texas real estate. We have noted that “it is not the function of the Court of Appeals to comb the record for possible error, but rather it is counsel‘s rеsponsibility to point out distinctly and specifically the precise matters complained of, with appropriate citations to the page or pages in the record where the matters appear.” United States v. Martinez-Mercado, 888 F.2d 1484, 1492 (5th Cir. 1989). The same goes for the Appellee-we will not go on a fishing expedition in search of evidence to support Defendant‘s argument. While there are many other entities named “Rex” in Texas, Defendant has not satisfactorily pointed us to evidence of other Texas businesses using the term “Rex” in real estate. Furthermore, the jury saw proof that only Plaintiff and Defendant appear in the first page of results in a Google search for “Rex Real Estate Texas.” Plaintiff also asserts that the numerous calls it received from confused consumers who heard Defendant‘s advertisements shows that the marks have strong standing in the marketplace because it could mean that the callers assumed that Plaintiff was the sole source of the advertising. This is a plausible inference for a jury to make. Taken together and in the light most favorable to the Plaintiff, a reasonable jury could find that this factor weighs in favor of Plaintiff.
ii. Mark similarity.
The degree of similarity between marks “is determined by comparing
The district court concluded that the crown logo and one of Defendant‘s logos are visually distinct because they use different fonts, colors, and design elements. However, these two logos contain the same words, “Rex Real Estate,” in a similar configuration. Plaintiff also submitted evidence that Defendant has advertised itself as “Rex Real Estate” and “Rex.” A reasonable jury could find these marks similar enough to confuse their оrigin. Xtreme Lashes, 576 F.3d at 228.
iii & iv. Product similarity and identity of purchasers.
“The greater the similarity between the products and services, the greater the likelihood of confusion.” Exxon Corp. v. Texas Motor Exch. of Houston, Inc., 628 F.2d 500, 505 (5th Cir. 1980). Likewise, “[d]issimilarities between the retail outlets for and the predominant consumers of plaintiff‘s and defendants’ goods lessen the possibility of confusion, mistake, or deception.” Id. (quotation marks and citation omitted). “When products or services are noncompeting, the confusion at issue is one of sponsorship, affiliation, or connection.” Elvis Presley Enters., 141 F.3d at 202. “The danger of affiliation or sponsorship confusion increases when the junior user‘s services are in a market that is one into which the senior user would naturally expand... The actual intent of the senior user to expand is not particularly probative of whether the junior user‘s market is one into which the senior user would naturally expand... Consumer perception is the controlling factor.” Id. “If consumers believe, even though falsely, that the natural tendency of producers of the type of goods marketed by the prior user is to expand into the market for the type of goods marketed by the subsequent user, confusion may be likely.” Id. (citation omitted).
Plaintiff argues that it and Defendant offer similar services because both offer “real estate brokerage services,” both “firms have brokered deals for various types of properties,” and “both regard the same companies as their direct competitors.”
As discussed above, Plaintiff presented at most nine recorded instances where it was involved in the sale of single-family homes to individual buyers between 2009 and 2022. However, Plaintiff closes thousands of real estate deals, including almost four-hundred deals in 2015 alone. Even the vast majority of its “residential” listings were sold to corporate entities. On the other hand, Defendant exclusively focuses on selling single family homes to homebuyers who are seeking a home to live in. Clearly, Plaintiff and Defendant oрerate in different corners of the real estate market and cater to different sets of prospective customers. While Plaintiff and Defendant may both regard Sotheby‘s, Coldwell Banker, and Redfin as competitors, Plaintiff‘s expert testified that these companies sell both residential and commercial real estate. Thus, Plaintiff primarily competes with their commercial listings while Defendant primarily competes with their residential listings, and this does not support Plaintiff‘s argument that both companies provide the same services.
Plaintiff rarely brokers single-family homes, and there is no indication that it intends to expand into this market. But its actual intent to expand into this
v. Advertising media identity.
For this factor, we look to the “similarity between the parties’ advertising campaigns. The greater the similarity in the campaigns, the greater the likelihood of confusion.” Exxon, 628 F.2d at 506.
Plaintiff‘s and Defendant‘s divergent advertising identities reflect their divergent business practices. Plaintiff spends 86% of its annual advertising budget on leasing its corporate suite at AT&T Stadium for entertaining clients. It also hosts an annual dove hunt for both existing and prospective clients. Matthew Kiran, Plaintiff‘s long-time sales agent, testified that Plaintiff focuses its business on face-to-face interactions: “you‘ll hear a lot of stuff about high tech and algorithms and matching this and that. We‘re high touch. We want to do business face-to-face, people-to-people. That‘s what we do. And so, our business is diffеrent from the internet computer thing.” Mr. Glendenning testified that Plaintiff does not use digital marketing. By contrast, Mr. Ryan testified that Defendant‘s business model is “direct to consumer with internet ... we‘re very much a digital relationship.” Accordingly, Defendant focuses on targeting potential consumers with online advertisements. While both companies use signage, print advertisements, and radio spots to a limited extent, the lions’ share of Plaintiff‘s advertising expenses go to entertaining its clients in person while the lions’ share of Defendant‘s advertising expenses go to targeting potential customers online. No reasonable jury could find that this factor weighs in Plaintiff‘s favor.
vi. Defendant‘s intent.
The district court found no evidence that Defendant intentionally used the Rex mark because of Plaintiff‘s business. Plaintiff does not challenge this finding, but it does challenge the district court‘s conclusion that this factor weighs against it. Plaintiff is correct. “If there is no evidence of intent to confuse, then this factor is nеutral.” Viacom Int‘l v. IJR Cap. Invs., L.L.C., 891 F.3d 178, 195 (5th Cir. 2018). This factor does not weigh in favor of either party.
vii. Actual confusion.
“Actual confusion need not be proven,” but it is “the best evidence of a likelihood of confusion.” Xtreme Lashes, 576 F.3d at 229. “A plaintiff may show actual confusion using anecdotal instances of consumer confusion, systematic consumer surveys, or both.” Streamline, 851 F.3d at 457 (citation omitted). A plaintiff alleging infringement must show that the defendant‘s use of marks, “as opposed to some other source, caused a likelihood of confusion.” Scott Fetzer, 381 F.3d at 487.
In this appeal, Plaintiff relies only on anecdotal instances of confusion. Plaintiff presents instances of people who inadvertently contacted one party while looking to do business with or contact the other. It also presents evidence of people confused about whether Plaintiff is affiliated with Defendant. Relying principally on our decision in Elvis Presley Enterprises, it argues that these instances are sufficient to show actual confusion even if they did not result
More recently, this court has held that plaintiffs must show instances of confusion resulting in swayed customer purchases. Future Proof Brands, L.L.C. v. Molson Coors Beverage Co., 982 F.3d 280, 297 (5th Cir. 2020) (plaintiff failed to show actual confusion because it “provide[d] no evidence that that confusion ‘swayed consumer purchases.‘“); Streamline, 851 F.3d at 457 (evidence of actual confusion “must show that ‘[t]he confusion was caused by the trademarks employed and it swayed consumer purchases.‘“). However, this requirement conflicts with some of our earlier cases. For instance, in World Carpets, the plaintiff was a wholesale distributor of carpets who sued a group of Texas carpet retailers. World Carpets, Inc. v. Dick Littrell‘s New World Carpets, 438 F.2d 482, 484 (5th Cir. 1971). While plaintiff “found it economically advantageous to refrain from participating in any retail activity in order to retain the good will of its indeрendent retail customers,” the defendant‘s use of a similar mark led plaintiff‘s own retailers to complain to plaintiff because they believed it had entered the retail market. Id. Considering evidence that the plaintiff‘s customers were confused as to whether plaintiff had entered the retail market, we affirmed the district court‘s directed verdict on a likelihood of confusion. Id. at 489. While there was evidence that its own customers were confused as to the defendant‘s affiliation with plaintiff, there was no proof that this confusion swayed customer purchases. Further, proof of confusion on the part of ultimate purchasers is not required. Fuji Photo Film Co. v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591, 597 (5th Cir. 1985) (“the trial court appears to have believed that only actual confusion on the part of ultimate purchasers was relevant, and for this reason to have discounted the evidence (and its own findings) of actual confusion on the part of distributors and trade show visitors. This was error as well.“). In Elvis Presley Enterprises, we explicitly noted that “[i]nfringement can be based upon confusion that creates initial consumer interest, even though no actual sale is finally completed as a result of the confusion.” 141 F.3d at 204. Accordingly, to the extent our more recent cases require proof of swayed customer purchases, our prior holdings control. Arnold v. U.S. Dep‘t of Interior, 213 F.3d 193, 196 n.4 (5th Cir. 2000) (“[U]nder the rule of orderliness, to the extent that a more recent case contradicts an older case, the newer language has no effect.“).
Still, we must determine what weight to assign the instances that Plaintiff has submitted. Plaintiff relies on Xtreme Lashes for the proposition that “very little proof of actual confusion [is] necessary to prove the likelihood of confusion.” 576 F.3d at 229. It also cites Streamline where we explained that likelihood of confusion “can be supported by testimony of a single known incident of actual confusion.” 851 F.3d at 457 (citing La. World Exposition, Inc. v. Logue, 746 F.2d 1033, 1041 (5th Cir. 1984)). However, the plaintiff in Louisiana World Exposition submitted testimony from a customer who purchased one of
In Domino‘s Pizza, we reversed the district court‘s holding that there was a likelihood of confusion between plaintiff‘s “Domino” mark and defendant‘s “Domino‘s Pizza” mark. Amstar Corp. v. Domino‘s Pizza, Inc., 615 F.2d 252, 255 (5th Cir. 1980). In that case, the plaintiff presented evidence that two people had inquired about whether defendant was related to plaintiff. “In view of the fact that both plaintiff‘s and defendants’ sales currently run into the millions of dollars each year, these isolated instances of actual confusion are insufficient to sustain a finding of likelihood of confusion.” Id. at 263. Thus, isolated instances of confusion about the affiliation of two companies that do not result in redirected business are not enough to sustain a finding of actual confusion. Additionally, proof of actuаl confusion not involving swayed customer purchases should be weighed against the parties’ total volume of sales.
In Sun Banks, we reversed a district court‘s finding of a likelihood of confusion between the marks of plaintiff, Sun Banks of Florida, and defendant, Sun Federal Savings and Loan Association. Sun Banks of Fla., Inc., 651 F.2d at 313. For evidence of actual confusion, the plaintiff‘s president requested that employees report incidents of confusion stemming from the defendant‘s use of the word “Sun” in its name. Id. at 319. Less than fifteen incidents were reported over a three-year period, and none were contacts by “a potential customer considering whether to transact business with one or the other of the parties.” Id. The plaintiff also produced four witnesses who had inquired whether the two companies were related, but “in each instance there is no indication that the inquiry was made by a potential customer concerning the transaction of business.” Id. “Althоugh the record contains several isolated instances of uncertainty whether there was a connection between the two businesses, in light of the number of transactions conducted and the extent of the parties’ advertising, the amount of past confusion is negligible.” Id. In addition to reaffirming that instances of uncertainty about affiliation or connection can be weighed against each company‘s volume of business as a whole, Sun Banks instructs that we also look to the volume of each company‘s advertising. Additionally, actual confusion has more weight if it is a potential customer considering whether to transact business with one or the other.
In Armco, we affirmed the trial court‘s finding of a likelihood of confusion. Armco, Inc. v. Armco Burglar Alarm Co., 693 F.2d 1155, 1156 (5th Cir. 1982). In that case, plaintiff provided evidence that one of its employees received phone calls once a month from people trying to reach defendant, and two other employeеs who had received one phone call each from people trying to reach the defendant. Id. at 1160. There, we distinguished Domino‘s Pizza and Sun Banks because the evidence of actual confusion was “thin” in those cases. Id. Citing an Eleventh Circuit case analyzing Fifth Circuit case law, we explained that our “precedents give varying weight to evidence of actual confusion, depending on whether it is short-lived confusion by individuals casually acquainted with a business or lasting confusion by actual customers.” Id. at n.11 (citing Safeway Stores, Inc. v. Safeway Discount Drugs, 675 F.2d 1160, 1166-1167 (11th Cir. 1982)). The two companies provided different products to different customers, so there was no possibility that the misdirected phone calls could divert sales away from the plaintiff. Nevertheless, we credited this evidence in affirming the lower court‘s finding of likelihood of confusion on clear error review. Id. at 1160.
In Elvis Presley Enterprises, we held that “[i]nfringement can be based upon confusion that creates initial consumer interest, even though no actual sale is finally completed as a result of the confusion.” Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188, 204 (5th Cir. 1998) (citing 3 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 23:6 (4th ed. 1997)). Initial confusion, even if it is “later dissipated by further inspection of the goods, services, or premises ... is relevant to a determination of a likelihood of confusion.” Id. (citations omitted). Such confusion “gives the junior user credibility during the early stages of a transaction and can possibly bar the senior user from consideration by the consumer once the confusion is dissipated.” Id. In that case, Elvis Presley Enterprises (“EPE“), the assignee and registrant of all trademarks, copyrights, and publicity rights belonging to the Elvis Presley estate, sued the owner of a Houston bar called “the Velvet Elvis.” Id. at 191. EPE presented the testimony of various witnesses who “initially thought the Defendants’ bar was a place that was associated with Elvis Presley and that it might have Elvis merchandise for sale.” Id. at 204. After entering, each witness had no doubt the bar was not affiliated with Elvis in any way. Id. Concluding that this kind of initial interest confusion was still relevant, we observed the following:
Despite the confusion being dissipated, this initial-interest confusion is beneficial to the Defendants because it brings patrons in the door; indeed, it brought at least one of EPE‘s witnesses into the bar. Once in the door, the confusion has succeeded because some patrons may stay, despite realizing that the bar has no relationship with EPE. This initial-interest confusion is even more significant because the Defendants’ bar sometimes charges a cover charge for entry, which allows the Defendants to benefit from initial-interest confusion before it can be dissipated by entry into the bar.
Id. at 204. Unlike Sun Banks, these instances involved potential customers of plaintiff because they were interested in official Elvis merchandise, but they walked in defendant‘s door because they were confused as to affiliation.
With these decisions to guide our analysis, we turn to the evidence in this case. Plaintiff points to two instances of people who inadvertently contacted Defendant while looking to do business with or contact Plaintiff. On September 13, 2018, one person sent Defendant a chat message on their website stating, “I need REX Glendenning email or phone number.” Defendant‘s chat agent responded, “We currently don‘t have anyone with that name at this company.” On June 14, 2019, another person sent a chat message inquiring about a property stating, “You have your signs up in Prosper and areas around there for large parcels of land,” but the chat agent responded, “Sorry, we do not sell land and we are not in the Dallas area.” In both of those cases, people intending to contact Plaintiff inadvertently contacted Defendant. In each case, the person inquiring clearly intended to contact or transact business with Plaintiff. Thus, unlike the initial interest confusion in Elvis Presley, this confusion did not present the possibility of garnering the Defendant business before or after it was dissipatеd.
Plaintiff‘s anecdotal proof of confusion does not involve swayed customer purchases or initial interest confusion that can result in swayed business. It also does not involve “potential customer[s] considering whether to transact business with one or the other of the parties.” Sun Banks, 651 F.2d at 319. But it has presented instances of potential customers of each respective company mistakenly contacting the other. Armco, 693 F.2d at 1160. These instances are relevant, but their weight is lessened by Plaintiff‘s and Defendant‘s high volume of business and extensive advertising. Sun Banks, 651 F.2d at 319. Nevertheless, because Plaintiff has presented some relevant evidence of actual confusion, a reasonable jury could conclude that this digit weighs in its favor.
viii. Degree of care exercised by potential purchasers.
For the final digit, we determine the degree of care by looking to both the kind of goods or services offered and the kind of purchasers. “Where items are relatively inexpensive, a buyer may take less care in selecting the itеm, thereby increasing the risk of confusion . . . However, a high price tag alone does not negate other [digits of confusion], especially if the goods or marks are similar.” Streamline, 851 F.3d at 458 (internal quotation marks and citations omitted). “[P]rofessional and institutional” purchasers “are virtually certain to be informed, deliberative buyers.” Oreck Corp. v. U.S. Floor Sys., Inc., 803 F.2d 166, 173 (5th Cir. 1986).
Plaintiff relies on the Trademark Trial and Appeal Board‘s conclusion that “average homeowners do not use a high degree of care in selecting their broker.” Real Est. One, Inc. v. Real Est. 100 Enterprises Corp., 212 U.S.P.Q. 957, 1981 WL 40478, at *3 (T.T.A.B. 1981). That case involved two real estate brokerage companies that were “primarily directed to residential listings and sales.” Id. Even if Defendant‘s customers do not use a high degree of care in selecting their broker for single-family homes, Plaintiff‘s customers are not average homebuyers or homeowners-they are by and large corporate entities and wealthy individuals investing in commercial and residential real estate. Such customers are “virtually certain to be informed, deliberative buyers.” Oreck, 803 F.2d at 173; accord Int‘l Council of Shopping Centers, Inc. v. RECONCRE, L.L.C., 2021 WL 148387, at *5 (D.D.C. Jan. 14, 2021) (“it is hard to deny that commercial real estate market participants are, by and large, sophisticated consumers.“). Plaintiff‘s potential customers exercise a high degree of care, so no reasonable jury could find that this digit weighs in favor of Plaintiff.
ix. Weighing the Digits
Since a reasonable jury could conclude that some of these factors, including
d. Damages
Plaintiff also challenges the district court‘s holding on damages for corrective advertising and reasonable royalties. Since we remand for a new trial, we need not address those issues.
IV. CONCLUSION
No reasonable jury could conclude that Plaintiff owned the marks, so we affirm the district court‘s judgment as a matter of law as to Plaintiff‘s Section 32(1) claim for alleged infringement of the marks after federal registration. However, taking the evidence in the light most favorable to Plaintiff and “leaving credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts to the jury,” a reasonable jury could find in favor of Plaintiff‘s claim under Section 43(a) for infringement of the marks before they were federally registered. We AFFIRM in part, REVERSE in part, and REMAND for further proceedings.