Lead Opinion
OPINION
Sabinsa Corporation appeals the District Court’s judgment in favor of Creative Compounds, LLC, on Sabinsa’s trademark infringement and unfair competition claims. The District Court found that there was no likelihood of confusion between Sabinsa’s mark, ForsLean, and Creative Compounds’s mark, Forsthin, both of which refer to Coleus forskohlii extract, an ingredient used in weight management products. Because the District Court erred in its findings on the Lapp factors and its ultimate finding on likelihood of confusion, we will reverse the judgment. Further, because the undisputed facts weigh heavily in favor of Sabinsa so that any reasonable fact finder, weighing the Lapp factors properly, would find that Sabinsa had demonstrated a likelihood of confusion, we conclude that there is no need to remand for a re-weighing by the District Court of the Lapp factors. We therefore remand this case for entry of judgment in favor of Sabinsa.
I. Background
The following facts are undisputed.
Forskohlin is an extract derived from the roots of the plant Coleus forskohlii, a member of the mint family, found primarily in India. It is manufactured by harvesting and drying the Coleus forskohlii root and then extracting the forskohlin into a highly-concentrated slurry. The slurry is then combined with inactive ingredients to make various concentrations, which are sold in powder form.
In 2003, a severe drought struck India and affected Sabinsa’s supply of forskohlin. As a result, Sabinsa both worked to keep its customers interested in ForsLean and spent significant resources helping farmers in India cultivate Coleus forskohlii to ensure a continued supply in the future. Forskohlin was available again in the spring of 2004, in part due to Sabinsa’s efforts. Sabinsa thereafter created the “ForsLean promise,” a commitment to its customers to ensure the supply of forskohlin in the future.
Creative Compounds is also an ingredient supplier to the nutraceutical industry although it operates with only seven employees, none of whom is a scientist or Ph.D., and it conducts no research and development. Creative Compounds began selling forskohlin at the end of 2002. It did not, however, adopt the trade name Forsthin for its product until the spring of 2004 — just as Sabinsa’s supply problems were coming to an end. Though there is no indication that Creative Compounds ever had a problem with supply associated with the drought in India, it heavily promoted “The Return of Coleus” as it introduced its new Forsthin brand: “Not long ago, Coleus was one of the most powerful options in stimulant-free weight loss. That was until raw material shortages and low-quality extracts made maintaining a Coleus formula a nightmare. Those days are over.” Creative Compounds made very few sales of forskohlin in 2002, 2003, and 2004, but sold more than 1000 kilograms in 2005, nearly 600 kilograms in 2006, and nearly 700 kilograms in 2007.
Sabinsa sent a cease-and-desist letter to Creative Compounds in the summer of 2004, soon after the latter began using the name Forsthin. Within a week and without contacting Sabinsa, Creative Compounds filed a declaratory judgment action in the United States District Court for the District of Missouri. Sabinsa then filed this suit, and the Missouri suit was dismissed in favor of this one.
Sabinsa’s Complaint alleged five claims, all of which required that it prove both its ownership of a valid and legally protectable trademark and a likelihood of confusion caused by Creative Compounds’s use of the mark Forsthin. E.T. Browne Drug Co. v. Cococare Prods., Inc.,
On June 16, 2008, after a bench trial, the District Court read into the record an oral
II. Standard of Review
We exercise plenary review over the District Court’s legal conclusions regarding the Lanham Act. See Checkpoint Sys., Inc. v. Check Point Software Techs., Inc.,
Pursuant to Federal Rule of Civil Procedure 52, a trial court must make clear factual findings to support its conclusions. 9 Wright & Miller, Federal Practice & Procedure § 2574, at 690. Rule 52 is not satisfied “by the statement of the ultimate fact without the subordinate factual foundations for it which also must be the subject of specific findings.” O’Neill v. United States,
III. The District Court’s Likelihood of Confusion Analysis
“To prove likelihood of confusion, plaintiffs must show that consumers viewing the mark would probably assume the product or service it represents is associated with the source of a different product or service identified by a similar mark.” Checkpoint Sys.,
(1) the degree of similarity between the owner’s mark and the alleged infringing mark;
(2) the strength of the owner’s mark;
(3) the price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase;
(4) the length of time the defendant has used the mark without evidence of actual confusion arising;
(5) the intent of the defendant in adopting the mark;
(6) the evidence of actual confusion;
(7) whether the goods, though not competing, are marketed through the same channels of trade and advertised through the same media;
(8) the extent to which the targets of the parties’ sales efforts are the same;
(9) the relationship of the goods in the minds of consumers because of similarity of functions; and
(10) other factors suggesting the consuming public might expect the prior owner to manufacture a product in the defendant’s market or that he is likely to expand into that market.
In Kos, a trademark case involving the marks “ADVICOR” and “ALTOCOR,” we reversed a district court’s likelihood of confusion decision because it had erred in its analysis of mark similarity, overemphasized customer sophistication, applied the wrong standards regarding intent, and ignored several other relevant Lapp factors. Id. at 711-12. The same district judge made similar errors here. In finding that there was no likelihood of confusion between ForsLean and Forsthin, the District Court engaged in detailed analysis of only three of the relevant Lapp factors and failed to discuss much of the evidence presented by Sabinsa. The District Court then asserted, “This Court is not going to comment on all of the testimony offered at trial. Suffice it to say, I am satisfied that the testimony taken as a whole amply supports the Court’s decision.” However, while it is true that a district court may find that “certain of the Lapp factors are inapplicable or unhelpful in a particular case,” the court must still “explain its choice not to employ those factors.” See A & H Sportswear,
Typically, when a district court fails adequately to support its findings, we merely remand for a re-weighing of the applicable factors. Where the facts are largely undisputed, however, “ hve need not remand’ if application of the correct standard could support only one conclusion.” Kos,
IV. The Individual Lapp Factors
A. Similarity of Marks (Lapp Factor One)
“The single most important factor in determining likelihood of confusion is mark similarity.” A & PL Sportswear,
The District Court found that this factor favors Creative Compounds, asserting that, beyond the shared letters “fors,” ForsLean and Forsthin have “no other similarity.” The court’s reasoning, however, contains clear errors. First, for its visual analysis, the District Court focused on minute differences in the products’ logos while ignoring evidence that both marks are often used in plain text without the surrounding graphics.
Likewise, in analyzing the “connotative differences” between ForsLean and Forsthin, the District Court ignored evidence and failed to make sufficient subordinate findings. The court stated that it “accepts Defendant’s arguments that a different commercial impression is made by the word ‘lean’ versus ‘thin’ ” and that “[t]hin would convey to the consumer ... weight loss, whereas lean would convey a lean body type.” As an initial matter, again the District Court erred by comparing “lean” and “thin” rather than ForsLean and Forsthin. See Fisons Horticulture,
In sum, the District Court clearly erred in failing to find that this factor favors Sabinsa.
B. Strength of Mark (Lapp Factor Two)
To determine the strength of the mark, courts look to (1) the inherent fea
Courts classify the distinctiveness or conceptual strength of a mark as either (1) generic, like “Diet Chocolate Fudge Soda”; (2) descriptive, like “Security Center”; (3) suggestive, like “Coppertone”; or (4) arbitrary or fanciful, like “Kodak.” Id. Arbitrary or fanciful marks use terms that neither describe nor suggest anything about the product. Id. Suggestive marks require consumer “imagination, thought, or perception” to determine what the product is. Id. Descriptive marks “forthwith convey[] an immediate idea of the ingredients, qualities or characteristics of the goods.” Id. Generic marks “function as the common descriptive name of a product class.” Id.
The District Court acknowledged that the “Fors” in ForsLean and Forsthin “is apparently an abbreviation of the generic term of the product, Coleus forskohlii.” It then concluded that “[fors] is not a mere arbitrary term, but, rather, a prefix used by each party combined with either the word ‘lean’ or ‘thin.’ ” Never, however, did the court assign a classification for the ForsLean mark; rather, in evaluating the mark’s strength, the court merely stated:
Defendant argues that Plaintiffs mark is conceptually weak because it is highly suggestive. Sabinsa argues that its mark is commercially strong based on its advertising efforts, press mentions and its receipt of two industry awards regarding its product. However, testimony at trial reflected the parties’ sophisticated target customers were aware of both parties’ marks and that there is no confusion. This factor does not support Plaintiffs position.
This analysis amounts to legal error, and it culminated in a clearly erroneous finding.
First, it does not follow that because Sabinsa and then Creative Compounds used “fors” as an abbreviation for Coleus forskohlii, the term is conceptually weak. As Sabinsa points out, the “V” in V-8 stands for “vegetable” and the “8” stands for the fact that the juice has eight vegetables, but V-8 is still an arbitrary term. See Fisons Horticulture,
Second, beyond its brief discussion of the abbreviation “fors,” the District Court did not analyze either the conceptual or commercial strength of ForsLean. Instead, as set forth above, it described the parties’ arguments and then reiterated its finding that there had been no confusion between the two companies among its “sophisticated customers.” Actual confusion and the sophistication of a party’s customers, however, are different prongs of the Lapp test and were “impermissibly conflated” by the District Court. See Kos,
Once again, because the facts underlying the strength analysis are manifest and undisputed, we will review the facts and law to determine whether they compel a particular result. Sabinsa argues that ForsLean is arbitrary or suggestive, while Creative Compounds argues that it is a descriptive mark because it combines a description of the product (“fors”) with its intended application (“lean”). While “lean” is certainly a generic term, “fors” is not yet one. The parties to this case are the only two that use “fors” as an abbreviation for forskohlin, and while ForsLean is not a term that was created completely out of whole cloth, it certainly requires consumer “imagination, thought, or perception” to determine the nature of the product. See A & H Sportswear,
C. Purchasers’ Care and Sophistication (Lapp Factor Three)
“When consumers exercise heightened care in evaluating the relevant products before making purchasing decisions, courts have found there is not a strong likelihood of confusion. Where the relevant products are expensive, or the buyer class consists of sophisticated or professional purchasers, courts have generally not found Lanham Act violations.” Checkpoint Sys.,
Under the heading “[p]rice and customer sophistication,” the District Court found that “the product is expensive and the customers are sophisticated purchasers who purchase the product after careful thought and analysis---- Usually, the customers are repeat customers. These customers exercise a high level of care, and, therefore, eliminates [sic] the likelihood of confusion.” The District Court also noted that “these products are not sold over the counter” and that “both parties’ customers regularly ask technical questions about the scientific and safety merits of the product prior to purchase.” The court thus concluded that this factor favors Creative Compounds. The court further weighed this factor heavily in its ultimate conclusion that there is no likelihood of confusion.
The District Court’s reasoning inappropriately treats the products’ direct buyers — here, the manufacturers of nutraceuticals — as the only relevant consumers. In Kos, we criticized the parties and the district court for treating medical professionals as the only relevant consumers of pharmaceuticals, noting that “drugs are increasingly marketed directly to potential patients through, for example, ‘ask-your-doctor-about-Brand-X’ style advertising.” See Kos,
Once again, the facts are undisputed. Though the price of forskohlin to suppliers is relatively high, the nutraceuticals that contain forskohlin are clearly affordable to most interested consumers. Further, the sales process is as quick as a trip to the check-out counter. In addition, nutraceuticals, unlike pharmaceuticals, require no consultation with a professional and may often be impulse purchases. Moreover, there was no showing that consumers of nutraceuticals are highly sophisticated. Accordingly, this factor weighs in favor of Sabinsa.
D. Length of Time Without Confusion (Lapp Factor Four)/Evidence of Actual Confusion (Lapp Factor Six)
Evidence of actual confusion is frequently difficult to find. See Checkpoint Sys.,
E. Intent of the Defendant in Adopting the Mark (Lapp Factor Five)
Evidence of a defendant’s intent is not a prerequisite for finding a Lanham Act violation; such evidence, however, weighs heavily in favor of finding a likelihood of confusion. See Id. at 286. In evaluating this factor, courts must look at whether the defendant chose the mark to intentionally confuse consumers, and thereby capitalize on the senior user’s goodwill, and whether the defendant gave adequate care to investigating its proposed mark. See Eos.,
The District Court did not mention specific evidence regarding Creative Compounds’s good or bad intent; rather, the court found that “there is nothing in the record to suggest that Creative Compounds attempted to pass off its goods as Sabinsa’s. In fact, the evidence is to the contrary: Creative Compounds has made efforts to distinguish itself and its Forsthin product from Sabinsa.” The record belies these conclusions. In fact, far from there being “nothing in the record to suggest” bad intent, there was ample evidence that Creative Compounds attempted
The District Court was, of course, permitted to credit or discredit certain pieces of testimony and weigh them accordingly. But in stating that there was “nothing in the record to suggest” Creative Compounds’s bad intent, the District Court failed even to acknowledge the existence of contradictory evidence. Accordingly, its conclusory finding that this factor favors Creative Compounds is clearly erroneous.
Sabinsa argues that the District Court failed to apply the proper standards governing intent and that Creative Compounds’s behavior in choosing a mark so similar to ForsLean should at least be considered reckless, rendering it sufficient to weigh this factor in Sabinsa’s favor. In Kos, we held that the defendant’s adoption of the ALTOCOR mark, after Kos had successfully used the ADVICOR mark for similar goods and with notice of its objections, was sufficient to weigh this factor in favor of Kos. See
F. Whether the Goods are Marketed Through the Same Channels of Trade and Advertised in the Same Media (Lapp Factor Seven)/Extent to Which Targets of the Parties’ Sales Efforts are the Same (Lapp Factor Eight)
“The greater the similarity in advertising and marketing campaigns, the greater the likelihood of confusion.” Checkpoint Sys.,
The District Court did not key its oral findings to these factors, but nonetheless noted that the parties were “competitors.” In any event, it is undisputed that the parties sell the same product through
G. Relationship of the Goods in the Minds of Consumers (Lapp Factor Nine)
When ruling on this factor, a court should look at “how similar, or closely related, the products are.” Kos.,
The District Court made no findings as to this factor, but it is undisputed that the products are physically identical. Creative Compounds argues, as it did with respect to mark similarity, that Forsthin is a “weight loss” product while ForsLean is a “lean body mass” product. This argument is misplaced because the products are physically identical and both are marketed as weight management products. Creative Compounds further argues that buyers purchase the products directly from them sources and that “they are necessarily aware” that ForsLean and Forsthin are sold by separate companies. Customer sophistication, however, is Lapp factor three. Lapp factor nine focuses not on consumer sophistication but on the products themselves, since the determination is whether consumers may see them as related. See Kos,
H. Other Facts Suggesting the Public Might Expect the Prior Owner to Manufacture Both Products (Lapp Factor Ten)
In making this final determination under the Lapp test, courts should “look at the nature of the products or the relevant market, the practices of other companies in the relevant fields, any other circumstances that bear on whether consumers might reasonably expect both products to have the same source.” Kos,
V. Weighing the Lapp Factors
The most important factors, mark similarity and mark strength, favor Sabinsa. ForsLean and Forsthin are similar in appearance and meaning, and ForsLean is entitled to broad protection because it is a strong mark both conceptually and commercially. Moreover, ForsLean and Forsthin are physically identical, they are marketed to the same customers in the same ways, and the products’ ultimate consumers do not exercise a particularly high level of care and sophistication when purchasing nutraceuticals. Accordingly, fac
There is a factual dispute concerning Creative Compounds’s intent in creating its mark. Even assuming that the District Court would completely discredit the evidence of bad intent, however, it would be clear error to allow the factors in favor of Creative Compounds to outweigh Sabinsa’s strong showing on mark similarity and the remaining factors. We have repeatedly held that neither intent nor actual confusion are prerequisites to a finding of likelihood of confusion. See Checkpoint Sys.,
As we did in Kos, we have carefully considered whether to direct the District Court on remand to re-weigh the Lapp factors in light of the proper legal standards. We conclude once again “that doing so would serve no useful purpose ... [and] waste judicial resources.” See Kos,
VI. Conclusion
For the foregoing reasons, we will reverse the judgment in favor of Creative Compounds and remand this case for entry of judgment in favor of Sabinsa and for other proceedings not inconsistent with this opinion.
Notes
. The nutraceutical industry provides ingredients for suppliers, manufacturers, and marketers of nutritional supplements.
. Even the District Court's comparison of the logos appears misguided. The "ordinary customer” is supposed to have "only general recollection” of one mark when encountering the second. See Fisons Horticulture,
Concurrence Opinion
concurring.
I join Judge Roth’s excellent opinion in full, and write separately only to emphasize two unusual features of this case. First, Sabinsa offered no evidence of actual confusion, a factor that we have previously described as “highly probative” in this context. Checkpoint Sys. v. Check Point Software Techs., Inc.,
Second, the District Court concluded that the “consumers who purchase[d] these products [we]re sophisticated users in the business of marketing and/or manufacturing dietary supplements.” Indeed, the record suggests that the parties’ primary targets were the manufacturers of retail