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Coach Escorted Off The Court

By Tal Basis [March 14th, 2012] 

Coach Handbag

On February 21, the Court of Appeals for the Federal Circuit made yet another influential holding. You may want to sit down, because this will come as a shocker to our readers who are immersed in both the legal and fashion worlds- the court held that Coach, the luxurious leather American handbag brand, is not “famous.”

The story begins in 2004 when Triumph Services, a company that sells test prep educational materials under the name “Coach,” sought to register “Coach” with the USPTO. Naturally, Coach opposed Triumph’s application. Their opposition was heard in front of the Trademark Trial and Appeal Board (TTAB) where Coach claimed that Triumph’s registration application should fail on three counts: 1) that the registration, if allowed, would create a likelihood of confusion with Coach’s registered mark; 2) That Triumph’s mark would dilute Coach’s mark; and 3) that “COACH” in the educational context is “merely descriptive” therefore lacking any sort of secondary meaning to have established proper distinctiveness.

The TTAB rejected all three of Coach’s claims and in turn the luxury brand appealed to the Court of Appeals of the Federal Circuit. At the Appellate level, Coach’s did not bring home the gold either. Before we continue to analyze the Federal Circuits decision, it is important to note that although Coach did not bring home the gold; they did not go home entirely empty handed. The court did not find in favor of Coach on their likelihood of confusion, or the dilution claim, but the court did vacate the TTAB’s decision solely on its finding of acquired distinctiveness and remanded the claim for further proceedings.

Agreeing with the TTAB, the Federal Circuit rejected Coach’s likelihood of confusion claim on the grounds that a consumer would not be confused as to product source when both companies operate in such distinct markets and offer products that are diverse from on other. As The Law of Fashion points out, the court stated, “Although Coach’s COACH mark is famous for likelihood of confusion purposes, the unrelated nature of the parties’ goods and their different channels of trade weigh heavily against Coach. Absent overlap as to either factor, it is difficult to establish likelihood of confusion.”

Now onto the really interesting part: Coach’s rejected dilution claim. A dilution claim is often brought hand in hand with a likelihood of confusion claim, when the mark at issue is considered to be “famous.” In essence, the holder of a famous mark will claim that the opposed mark is likely to blur or tarnish the famous mark even in the absence of potential consumer confusion. The ultimate question, and where Coach was sure to think they would receive a favorable judgment, is whether the mark at issue is “famous.” The Lanham Act states that a mark is famous if it is “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner…the general public must associate [the mark] at least initially, with the marks owner. In other words, a famous mark is one that has become a household name.”

Coach presented six sets of facts to establish that its mark is famous under the heightened dilution standard. Coach presented 1) sales and advertising figures for years 2000-2008; 2) its 16 federal trademark registrations on the mark; 3) extensive unsolicited media attention referring to the mark; 4) joint marketing efforts for the mark; 5) two Second Circuit decisions finding the Coach hand-tag, which features the COACH mark, to be famous; and 6) Coach’s internal brand awareness survey showing extensive awareness among 18-24 year old consumers. On the one hand, like the The Law Of Fashion points out, “COACH” may not be a household name the way other high end fashion brands are, but that is likely due to Coach’s selection of a word mark that means various things in English. On the other, the Court of Appeals held that Coach’s mark is not famous in the dilution sense, and reasoned that “Coach fell short of showing widespread recognition of their mark by the general consuming public AND…in light of certain evidentiary problems; we agree with the TTAB that Coach failed to provide sufficient evidence of frame for dilution purposes.”

What evidentiary problems you ask? It turns out the Federal Circuit rejected Coach’s sales and advertising figures because they had not been properly authenticated and admitted as evidence before the TTAB. Although it seems as if Coach lost on a technicality, the court admits to the fact-specific nature of their holding. The court states, “We do not hold that Coach could never establish the requisite level of fame for dilution purposes. We hold only that on the record presented to it, the Board had substantial support for its conclusion that Coach’s evidentiary showing was just too weak to do so here.”

At the end of the third quarter, Coach threw down a red flag to challenge the TTAB’s decision. The Federal Circuit reviewed the claims, analyzed the different positions and like any referee would do, looked for indisputable evidence to overturn the TTAB’s call. At the end of the second quarter, the court essentially held that the “TTAB’s decision stands” and that in this very particular case, Coach’s mark is not considered to be famous enough to qualify for dilution protection. So yes, Coach lost on their important claim to the underdog, but next time, Coach will be sure not to lose on “technical foul.”

 

 

 

 

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