Filed: Apr. 14, 2020
Latest Update: Apr. 14, 2020
Summary: Case: 19-1351 Document: 42 Page: 1 Filed: 04/14/2020 United States Court of Appeals for the Federal Circuit _ STRATUS NETWORKS, INC., Appellant v. UBTA-UBET COMMUNICATIONS INC., Appellee _ 2019-1351 _ Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 91214143. _ Decided: April 14, 2020 _ JOSHUA JONES, The Law Office of Joshua G. Jones, Austin, TX, argued for appellant. MATTHEW BARLOW, Workman Nydegger, Salt Lake City, UT, argued for appellee. Also
Summary: Case: 19-1351 Document: 42 Page: 1 Filed: 04/14/2020 United States Court of Appeals for the Federal Circuit _ STRATUS NETWORKS, INC., Appellant v. UBTA-UBET COMMUNICATIONS INC., Appellee _ 2019-1351 _ Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 91214143. _ Decided: April 14, 2020 _ JOSHUA JONES, The Law Office of Joshua G. Jones, Austin, TX, argued for appellant. MATTHEW BARLOW, Workman Nydegger, Salt Lake City, UT, argued for appellee. Also ..
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Case: 19-1351 Document: 42 Page: 1 Filed: 04/14/2020
United States Court of Appeals
for the Federal Circuit
______________________
STRATUS NETWORKS, INC.,
Appellant
v.
UBTA-UBET COMMUNICATIONS INC.,
Appellee
______________________
2019-1351
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board in No.
91214143.
______________________
Decided: April 14, 2020
______________________
JOSHUA JONES, The Law Office of Joshua G. Jones,
Austin, TX, argued for appellant.
MATTHEW BARLOW, Workman Nydegger, Salt Lake
City, UT, argued for appellee. Also represented by JOHN C.
STRINGHAM, DAVID R. TODD, THOMAS R. VUKSINICK.
______________________
Before LOURIE, MOORE, and REYNA, Circuit Judges.
Case: 19-1351 Document: 42 Page: 2 Filed: 04/14/2020
2 STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
INC.
REYNA, Circuit Judge.
Stratus Networks, Inc., appeals from a Trademark
Trial and Appeal Board decision that denied registration of
Stratus’s trademark on grounds of a likelihood of confusion
with a trademark registered to UBTA-UBET Communica-
tions, Inc. On appeal, Stratus challenges the Board’s like-
lihood of confusion determination. Because the Board’s
determination is supported by substantial evidence and is
not otherwise legally erroneous, we affirm.
BACKGROUND
Stratus Networks, Inc., (“Stratus”) is a facilities-based
telecommunications provider. J.A. 891. On August 15,
2012, Stratus filed U.S. Trademark Application
No. 85/704,533, seeking to register the mark shown below
(“the STRATUS mark”).
UBTA is also a telecommunications provider. J.A. 791.
UBTA owns Trademark Registration No. 4,049,700 for the
mark shown below (“the STRATA mark”).
On December 20, 2013, UBTA opposed registration of
the STRATUS mark on grounds of a likelihood of confusion
with UBTA’s STRATA mark. J.A. 99. On October 29, 2018,
Case: 19-1351 Document: 42 Page: 3 Filed: 04/14/2020
STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS 3
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the Board found a likelihood of confusion and refused reg-
istration of the STRATUS mark. 1
Board Decision
The Board considers the so-called “DuPont factors”
when assessing the likelihood of confusion. In re E.I.
DuPont DeNemours & Co., 476 F.2d 1357, 1361 (C.C.P.A.
1973). In the present case, the Board concluded that six of
the thirteen DuPont factors were relevant to UBTA’s oppo-
sition. J.A. 10. 2 In sum, the Board determined that two
factors “weigh heavily in favor” of finding a likelihood of
confusion, one factor “weighs in favor” of finding a likeli-
hood of confusion, two factors are neutral, and one factor
weighs “slightly” against finding a likelihood of confusion.
Id. at 3–27. We discuss the Board’s finding on each factor
in turn.
The Board found that the first DuPont factor—similar-
ity of the parties’ marks—“weighs in favor” of finding a
likelihood of confusion. J.A. 22–24. The Board analyzed
the trademarks in Stratus’s application and UBTA’s regis-
tration and concluded that the marks are similar in ap-
pearance and sound. The Board relied on dictionary
definitions of the terms “stratus” and “strata” to evaluate
1 UBTA’s opposition also asserted a likelihood of con-
fusion with UBTA’s federally registered “STRATA” word
mark (“the Word Mark”). After the Board concluded that
there was a likelihood of confusion with respect to the
STRATA mark, it determined that it was “unnecessary to
consider [UBTA’s] other pleaded registration.” J.A. 11.
2 The Board did not consider DuPont factors five
(fame), seven (nature of actual confusion), nine (variety of
goods), ten (market interface), eleven (applicant’s right to
exclude), twelve (potential confusion), or thirteen (effect of
use). On appeal, no party contends that the Board should
have considered any of these additional factors.
Case: 19-1351 Document: 42 Page: 4 Filed: 04/14/2020
4 STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
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similarities in the connotation of each mark. Id. The Board
found that the terms “differ somewhat in meaning” but
found little evidence that relevant consumers would signif-
icantly recognize the different meanings. J.A. 23–24. The
Board concluded that, on balance, the “marks convey over-
all commercial impressions that are more similar than dis-
similar.” J.A. 24.
The Board found that the second DuPont factor—simi-
larity of the parties’ services—“weighs heavily in favor” of
finding a likelihood of confusion. J.A. 13–16. The Board
relied on the description of services in Stratus’s application
and UBTA’s registration, and the unrebutted declaration
testimony of UBTA’s marketing specialist, Mr. Rasmussen.
J.A. 13. Mr. Rasmussen testified that each of the services
listed in the STRATA mark registration corresponded with
services listed in the STRATUS mark application. J.A. 13–
15. Based on that evidence, the Board determined that
UBTA’s “telephone services encompass certain of Appli-
cant’s more specifically identified voice communication ser-
vices and are legally equivalent thereto.” J.A. 15.
The Board found that the third DuPont factor—simi-
larity of trade channels—also “weighs heavily in favor” of
finding a likelihood of confusion. J.A. 16. The Board ex-
plained that its finding of legal equivalence between the
parties’ services gives rise to a presumption that the ser-
vices “move in the same channels of trade and are offered
to the same classes of consumers.” Id. The Board noted
that Stratus failed to rebut that presumption.
Id.
The Board concluded that the fourth DuPont factor—
consumer sophistication—was neutral or weighed
“slightly” against finding a likelihood of confusion. J.A. 26.
The Board considered testimony from Mr. Kevin Morgan,
Stratus’s CEO. Mr. Morgan testified that Stratus sold cus-
tomized services to businesses at customized prices and
that the average cost of Stratus’s services was $130,000.
J.A. 25; J.A. 891. In support of his testimony, Stratus
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provided a revenue document that showed the average con-
tracted revenue for each of Status’s accounts. J.A. 891,
893–920. UBTA challenged Mr. Morgan’s testimony as un-
supported because the revenue document was “unintelligi-
ble” and lacked foundation. Opposition No. 91214143, 85
TTABVUE 25–27. The Board explained that even with the
support of the revenue document, Mr. Morgan’s testimony
on consumer sophistication was insufficient to weigh in fa-
vor of finding no likelihood of confusion in this case.
J.A. 25. “Even if we accept” Mr. Morgan’s testimony, the
Board explained, “the legal identity in part of the services
and similarity of the marks outweigh any sophisticated
purchasing decision.”
Id.
The Board found that the sixth DuPont factor—
strength of the opposer’s mark—was neutral to finding a
likelihood of confusion. J.A. 21. The Board relied on
UBTA’s registration and dictionary definitions of “strata”
to assess the distinctiveness of the STRATA mark. J.A. 20.
The Board found that the mark is “arbitrary or, at most,
slightly suggestive of [UBTA’s] services in that it connotes
levels or divisions in an organized telecommunications sys-
tem.”
Id. The Board also considered evidence submitted
by Stratus showing third-party use, including five third-
party registrations and five screenshots of third-party web-
sites. J.A. 17–20. The Board found that the majority of
third-party use was unrelated to the relevant industry:
only one website and one trademark registration involved
services relating to telecommunications.
Id. The Board
also found that “all of the [third-party] marks differ in ap-
pearance, sound, meaning, and commercial impression”
from the STRATA mark. J.A. 20. On balance, the Board
found that the “dictionary and third-party use and regis-
tration evidence,” was “insufficient to diminish the scope of
protection to be afforded the [STRATA mark].” J.A. 22.
The Board found that the eighth DuPont factor—
length of time during and conditions under which there has
been concurrent use without evidence of actual confusion—
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6 STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
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was neutral to finding a likelihood of confusion. Although
the Board found no evidence of actual confusion, the evi-
dence showed the parties’ respective marks were not con-
currently used in the same geographic space during the
relevant times: UBTA offered services in Utah, Wyoming,
Colorado, and Texas, while Stratus offered services in Illi-
nois and Missouri. J.A. 803, 891. As a result, the Board
found this factor to be neutral.
In sum, the Board concluded that Stratus’s “modest ev-
idence of the sophistication of consumers and weakness of
[the STRATA mark] is insufficient to overcome our findings
with regard to the first, second, and third [DuPont] fac-
tors.” J.A. 27. Accordingly, the Board held that UBTA had
shown by a preponderance of the evidence that Stratus’s
mark is “likely to cause consumer confusion when used in
association with its services.” Id.
Stratus timely appealed. We have jurisdiction under
28 U.S.C. § 1295(a)(4)(B).
ANALYSIS
The Lanham Act bars the registration of trademarks
that are likely to cause confusion with a registered mark.
15 U.S.C. § 1052. The owner of a registered mark who be-
lieves they may be damaged by a trademark application
may commence an opposition proceeding: an adversarial,
inter partes proceeding before the Trademark Trial and Ap-
peal Board. Id. at § 1063; see also In re I.AM.Symbolic,
LLC,
866 F.3d 1315, 1328 (Fed. Cir. 2017).
In opposition proceedings, the opposer has the burden
of proving a likelihood of confusion by a preponderance of
the evidence. Cunningham v. Laser Golf Corp., 222 F.3d
943, 951 (Fed. Cir. 2000). The Board analyzes likelihood of
confusion based on the DuPont factors. In re E.I. DuPont
DeNemours, 476 F.2d at 1361. Not all DuPont factors are
relevant in each case, and the weight afforded to each fac-
tor depends on the circumstances. In re Dixie Restaurants,
Case: 19-1351 Document: 42 Page: 7 Filed: 04/14/2020
STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS 7
INC.
Inc.,
105 F.3d 1405, 1406–07 (Fed. Cir. 1997). Any single
factor may control a particular case.
Id.
Likelihood of confusion is a question of law based on
underlying findings of fact. Hylete LLC v. Hybrid Athletics,
LLC,
931 F.3d 1170, 1173 (Fed. Cir. 2019). We review the
Board’s fact findings on each DuPont factor for substantial
evidence.
Id. For example, “the question of the similarity
between two marks and the relatedness of goods are factual
determinations.” Swagway, LLC v. Int’l Trade Comm’n,
934 F.3d 1332, 1338 (Fed. Cir. 2019). Substantial evidence
is such relevant evidence that a reasonable mind would ac-
cept as adequate to support a conclusion.
Hylete, 931 F.3d
at 1173.
I. Substantial Evidence
Stratus challenges a number of the Board’s factual
findings on individual DuPont factors. In general, Stra-
tus’s arguments effectively ask us to reweigh the evidence
considered by the Board. That is not the role of this court.
Instead, we evaluate whether the Board’s factual findings
for each considered DuPont factor are supported by sub-
stantial evidence. Henkel Corp. v. Procter & Gamble Co.,
560 F.3d 1286, 1290 (Fed. Cir. 2009). We conclude that
they are.
As noted above, the Board based its decision for each of
the DuPont factors it considered on record evidence. For
example, the Board’s finding on the similarity of the marks
is based on dictionary definitions of the relevant terms,
J.A. 789, J.A. 1001–1011, and on the marks themselves, as
set forth in Stratus’s application and UBTA’s registration,
J.A. 39, J.A. 753. The Board’s finding on the similarity of
services and the similarity of trade channels is based on
the services identified in Stratus’s application and UBTA’s
registration, J.A. 79, J.A. 753, as well as the unrebutted
declaration testimony of UBTA’s Marketing and Public Re-
lations Manager, Mr. Rasmussen, J.A. 798–804. The
Board’s finding on the strength of UBTA’s mark is based
Case: 19-1351 Document: 42 Page: 8 Filed: 04/14/2020
8 STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
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on dictionary definitions of the relevant terms, J.A. 789,
J.A. 1001–1011, and third-party registrations and web-
sites, J.A. 941–954, J.A. 1013–1021. The Board’s finding
on actual confusion is supported by testimony from Stra-
tus’s CEO, Kevin Morgan, J.A. 890–891, and testimony
from Mr. Rasmussen, J.A. 803. We conclude that a reason-
able mind would accept this record evidence as adequate to
support the Board’s conclusions. As such, we hold that the
Board’s decision as a whole is supported by substantial ev-
idence. Hylete, 931 F.3d at 1173. We are not persuaded by
Status’s arguments to the contrary.
Stratus argues that the record evidence supports a dif-
ferent conclusion than that reached by the Board. For ex-
ample, Stratus contends that (i) the marks are not similar
in appearance because “there is no S in the STRATUS De-
sign Mark orb, . . . [only] the tail of the S cuts through the
orb”; (ii) the Board focuses too much on the fact that the
marks are similar in sound; and (iii) the Board focuses too
little attention on the marks’ different connotations, that
“stratus” refers to a type of cloud while “strata” refers to
layers of rocks. Appellant Br. 10, 12; Reply Br. 4. None of
these arguments demonstrate that the Board’s finding
lacks substantial evidence. Even if Stratus were correct
that different conclusions may reasonably be drawn from
the evidence in record, we must sustain the Board’s deci-
sion as supported by the substantial evidence outlined
above. See Real Foods Pty Ltd. v. Frito-Lay N. Am., Inc.,
906 F.3d 965, 971 (Fed. Cir. 2018) (“The TTAB’s findings
may be supported by substantial evidence even if two in-
consistent conclusions can be drawn from the evidence.”).
We affirm the Board’s determination to bar registration
of Stratus’s STRATUS mark on grounds of a likelihood of
confusion with UBTA’s STRATA mark.
II. Legal Error
Stratus separately argues that the Board committed le-
gal error when considering the DuPont factors related to
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STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS 9
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consumer sophistication and actual confusion. E.g., Appel-
lant Br. 24.
A. Consumer Sophistication
Stratus argues that the Board “did not properly con-
sider” the consumer sophistication factor when it evaluated
the likelihood of confusion. Reply Br. 2; Appellant Br. 24.
Specifically, Stratus argues that the Board “made no ex-
press finding as to this factor and instead simply quoted
case law that even sophisticated customers are not immune
from confusion.” Reply Br. 10. Stratus asserts that, as a
result, the Board “improperly discounted” the factor when
rendering its likelihood of confusion determination. Appel-
lant Br. 24. We disagree.
While the Board is required to consider each DuPont
factor for which it has evidence, the Board “may focus its
analysis on dispositive factors, such as similarity of the
marks and relatedness of the goods.” Han Beauty, Inc. v.
Alberto-Culver Co., 236 F.3d 1333, 1336 (Fed. Cir. 2001);
see also Oakville Hills Cellar, Inc. v. Georgallis Holdings,
LLC,
826 F.3d 1376, 1379 (Fed. Cir. 2016); In re Dixie Res-
taurants, 105 F.3d at 1407 (“We see no error in the
[B]oard’s decision to focus on the DuPont factors it deemed
dispositive.”).
Contrary to Stratus’s argument, the Board did not hold
that the consumer sophistication factor can never outweigh
the “similarity of the marks” and “similarity of the ser-
vices” factors. Rather, the Board determined that “even
careful purchasers are likely to be confused by similar
marks used in connection with services that are, in part,
legally identical.” J.A. 25 (citing In re Research & Trading
Corp., 793 F.2d 1276, 1279 (Fed. Cir. 1986)). While it is
preferable for the Board to make explicit findings about
each relevant DuPont factor, the absence of explicit find-
ings on a given factor does not give rise to reversible error
where the record demonstrates that the Board considered
that factor and the corresponding arguments and evidence.
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10 STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
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Han Beauty, 236 F.3d at 1338 (finding no error because,
“while the Board did not make explicit findings about the
strength of the [opposer’s mark], the Board’s opinion re-
veals that the Board considered this factor”); Weiss Assocs.,
Inc. v. HRL Assocs., Inc.,
902 F.2d 1546, 1548 (Fed. Cir.
1990). The parties’ extensive arguments to the Board on
the consumer sophistication factor and the Board’s final
written decision demonstrate that the Board sufficiently
considered the consumer sophistication factor. E.g., J.A.
25; Opposition No. 91214143, 84 TTABVUE 45–47; 85
TTABVUE 25–27; 86 TTABVUE 27–30. We find no legal
error in the Board’s decision concerning consumer sophis-
tication.
B. Actual Confusion
Stratus argues that the Board legally erred in its deci-
sion on actual confusion. Stratus argues that the parties’
marks have “coexisted for over six years with not one ex-
ample of actual confusion.” Appellant Br. 24. This fact,
Stratus explains, combined with the Board’s finding that
the parties’ trade channels overlap, requires a determina-
tion that the lack of actual confusion weighs heavily
against a likelihood of confusion. Id. We disagree.
Although the Board found no evidence of actual confu-
sion, the Board explained that it also considered “the
length of time during and conditions under which there has
been concurrent use.” J.A. 26. The record shows that, alt-
hough the parties offer similar services in similar trade
channels, the parties’ services did not geographically over-
lap. J.A. 803, 891. As a result, the record indicates that no
consumers were exposed to both trademarks during the rel-
evant time periods, further reducing the significance of the
absence of actual confusion. See In re Majestic Distilling
Co.,
315 F.3d 1311, 1317 (Fed. Cir. 2003). We find no legal
error in the Board’s finding concerning the actual confusion
factor.
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CONCLUSION
We have considered Stratus’s other arguments and
find them unpersuasive. We affirm the Board’s determina-
tion that UBTA showed a likelihood of confusion by a pre-
ponderance of the evidence.
AFFIRMED
