CAFC Vacates TTAB Decision Over Inconsistent Application of DuPont Factors

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Thursday issued a precedential decision in Apex Bank v. CC Serve Corp., affirming-in-part, vacating-in-part, and remanding a decision of the Trademark Trial and Appeal Board (TTAB) refusing registration of the marks  ASPIRE BANK

The opinion, authored by Circuit Judge Hughes, with Chief Judge Moore and Circuit Judge Cunningham joining, held that the TTAB correctly found the parties’ services highly similar under the second DuPont factor but erred in applying an inconsistent and overly narrow standard when analyzing third-party marks under the sixth DuPont factor.

The appeal originates from trademark opposition proceedings initiated by CC Serve Corp. to challenge Apex Bank’s intent-to-use applications for the word and design marks ASPIRE BANK for banking and financing services. In its final decision, the TTAB sustained CC Serve’s opposition under Section 2(d) of the Lanham Act, finding that consumer confusion was likely between Apex’s proposed marks and CC Serve’s existing registration for ASPIRE in connection with credit card services.

The Board’s analysis focused on three of the 13 DuPont factors, concluding that the first factor, concerning similarity of marks, and the second factor, concerning similarity of services, weighed in favor of CC Serve, and that the sixth factor, pertaining to the number and nature of similar marks in use on similar goods, did not weigh in favor of Apex.

CC Serve Corp., which owns a 1998 registration for the mark ASPIRE for credit card services, argued that Apex’s proposed ASPIRE BANK marks would create consumer confusion. Apex Bank, a retail bank chartered in Tennessee, does not offer credit cards and intended to use the ASPIRE BANK marks for a new internet banking venture.

On appeal, the Federal Circuit affirmed the Board’s analysis of the second DuPont factor, agreeing that the parties’ services are highly similar. The court noted that the Board properly determined that “because the dictionary definitions for ‘banking,’ ‘bank,’ and ‘finance’ encompass extending credit or providing funds through the issuance of credit cards, Apex and CC Serve’s services are ‘legally identical, in part.’”

As to the sixth factor, the Board had restricted its consideration of third-party marks to only those used specifically “for credit card services and deemed the marks using ASPIRE for other services to be ‘essentially irrelevant.’” The court held this approach to be legally flawed, explaining that the sixth factor requires consideration of similar marks on similar goods, not identical goods.

The court found the Board’s definition of similarity to be too narrow, as the services are highly similar and partially legally identical under the second DuPont factor, explaining that the Board must apply the same standard of similarity as when analyzing the other factors. The CAFC said it saw “no reason to impose a different and more stringent legal standard for similarity under the sixth DuPont factor.”

The Federal Circuit also vacated and remanded the Board’s analysis of the first DuPont factor, which addresses the similarity of the marks themselves in terms of appearance, sound, connotation, and commercial impression. Due to its determination under the sixth factor, the CAFC similarly vacated the Board’s analysis “because reconsideration of the sixth DuPont factor may result in a different determination of the mark’s commercial strength or weakness and affect the overall commercial impression..”