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Court schools trademark holder: Nearly identical trademark doesn’t infringe
Judicial findings regarding trademark infringement tend to turn largely on the similarity — or dissimilarity — of the two marks at issue. But significant similarity is no guarantee that a trademark holder will prevail in court. Case in point: The U.S. Court of Appeals for the Tenth Circuit upheld a lower court’s noninfringement judgment in a dispute involving two almost identical education-related marks.
The ABCs of the case
M Welles and Associates, Inc., has provided classes, seminars and certification workshops since 1992, mostly in the project management professional space. It primarily targets professionals across a range of industries. The company advertises extensively on social media, Google and via email.
Welles operates under the brand “EDWEL,” derived from the names of its founders as well as the phrase “education done well.” Welles registered the mark EDWEL in 2016 for, generally, training and educational services in the fields of project and product management.
When it established its Internet presence in 1998, the company secured several domain names: Edwel.com, Edwel.net, Edwelprograms.com, Edwel.org and Edwel.co. Its primary website was at Edwel.com. The company subsequently secured several additional domain names using “Edwell” because it was close to “Edwel.”
Edwell is a nonprofit organization unrelated to Welles that’s dedicated to improving schoolwide mental health and well-being. It launched during the COVID-19 pandemic. The organization adopted the mark EDWELL to mean “to be an educator and be well.” Using the domain name Edwell.org, it partners with K-12 public schools to coach teachers on improving or maintaining their mental health.
Welles learned about Edwell from a potential customer who called asking about classes at a high school. It issued a cease-and-desist letter after discovering Edwell’s website. Edwell rebranded to the “Educator Wellness Project” and transitioned to similar domain names. But it soon transitioned back to its previous mark and domain, prompting the infringement lawsuit.
A magistrate judge ruled in Edwell’s favor, finding that Welles failed to show a likelihood of confusion between its mark and Edwell’s mark — an essential element of trademark infringement. Welles appealed.
A failed argument
Among other things, Welles argued that the judge erred in finding no likelihood of confusion. The Tenth Circuit considers six nonexclusive factors to determine whether two marks are likely to cause confusion:
- The degree of similarity between the marks, including the marks’ appearance, pronunciation, suggestion and manner of display,
- The strength or weakness of the plaintiff’s mark,
- The intent of the alleged infringer in adopting its mark,
- Similarities and differences of the parties’ goods, services and marketing strategies,
- The degree of care likely to be exercised by purchasers of the goods or services involved, and
- Evidence of actual confusion, if any.
The judge found that the first two factors weighed in Welles’ favor, and neither party disputed these findings on appeal. The appellate court therefore focused on the remaining factors and concluded that they all favored Edwell.
It found the fact that prospective purchasers were likely to conduct substantial due diligence before signing on to a program “particularly probative to the overall likelihood of confusion” issue. As it has in previous cases, the Tenth Circuit concluded that consumers are unlikely to be confused when they’re likely to spend a lot of time and energy researching a service.
The court also found that the parties compete in different markets. The plaintiff markets to universities, large companies and individuals seeking to further their business careers. In contrast, the defendant exclusively targets teachers. These “substantial differences” between the services offered by the two companies supported the magistrate judge’s determination that they occupy different markets.
A lesson in confusion
The court’s analysis of evidence of actual confusion is also worth noting. It found that the single phone call that the plaintiff received was “just one anecdotal instance of what might be actual confusion.” Isolated, anecdotal instances of actual confusion, the court said, may be disregarded in the confusion analysis.
Sidebar: Court rejects proposed presumption of confusion
The plaintiff in M Welles (see main article) also argued that the U.S. Court of Appeals for the Tenth Circuit should adopt a presumption of likelihood of confusion when two entities in “generally related fields” use nearly identical marks online and in web addresses. It contended that such a presumption would further the national protection of trademarks.
As the appeals court noted, though, the plaintiff cited no case where a court has ever adopted this presumption. And, the court said, “there is a good reason no case like this exists.” It explained that the current likelihood-of-confusion test covers the “similarity between the marks” and the “similarities and differences of the parties’ goods, services and marketing strategies” factors (see main article).
A presumption would create a bifurcated analysis under which a plaintiff must prove only those factors to shift the burden to the defendant to disprove likelihood of confusion with evidence related to the other factors. The Tenth Circuit concluded that this would contradict its long-standing rule that the party alleging infringement must prove likelihood of confusion.
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