Argument Recap

Last week, the Federal Circuit heard oral argument in Bureau National Interprofessionnel Du Cognac v. Cologne & Cognac Entertainment, a trademark case that attracted an amicus brief. In this case, the Federal Circuit is reviewing a judgment of the Trademark Trial and Appeal Board. As explained by the appellants, Bureau National Interprofessionnel Du Cognac and Institut National Des Appellations D’Origine, “[i]n a two-to-one split decision, the Board held registrable a mark prominently incorporating without permission the certification mark COGNAC, holding that the mark (combining the phrase COLOGNE & COGNAC ENTERTAINMENT and a design featuring, inter alia, a bottle of COGNAC), if used for hip-hop music and production services, was not likely to cause confusion or dilution.” Judges Lourie, Clevenger, and Hughes heard the argument. This is our argument recap.

Peter M. Brody argued for the appellants. He began by insisting that the Board used the incorrect legal standard regarding “the most important likelihood of confusion factors.”  A judge, however, suggested that the two marks do not look alike. Brody responded by explaining that the word “cognac” was the dominant element of the appellee’s mark.

A judge then made sure that the two main issues in the case concerned whether the Board measured the commercial success of the relevant mark correctly, and whether the Board was correct in saying there must be evidence of considerable consumer knowledge of the mode of manufacture or certification. Brody agreed before turning to the latter issue, arguing that the consumer needs only to be aware of a regional certification mark’s “regional significance and the exclusive connection between that region and the goods.” One judge clarified that the Board had required the appellants to prove that an actual consumer knows about France’s system of making and certifying cognac rather than the famousness of the Cognac region.

Turning back to the first main issue, a judge asked Brody to identify the right way to assess commercial impact when two marks “travel together.” Brody explained that there is a two step analysis, which first examines whether there was independent evidence of the fame of the certification mark by itself. Once this independent evidence has been established, he argued, one must then consider the evidence of the co-branded sales and advertising. Brody finished by pointing out that the fame of the mark can be measured based on the advertising, publicity, and sales made by third parties as well as the mark owner.

James Klobucar argued for Cologne & Cognac Entertainment. He began by explaining that he was only asking for the court to uphold the Board’s decision, not change the law in any way. One judge pointed out that the Board seemed to rely heavily on the fact that the appellants did not show enough about the certification process itself and just relied on the fame of cognac as coming from the region. Klobucar explained that just because the region is famous does not mean that the mark is famous. He went on to argue that the real question is whether the fame of the region extends legally to the trademark.

A judge then asked whether requiring consumer knowledge of either the method of production or the method of certification to prove fame would be legal error. Klobucar conceded that if the Board “required the knowledge of the production methods and the certification methods,” then it would have been legal error. 

Turning back to the first main issue, one judge asked Klobucar, “How do you decide how much of the commercial success goes to the certification mark as opposed to the brand mark?” The judge highlighted that the Board applied a presumption “that the commercial success lies with the brand unless the holder of the certification mark demonstrates to the contrary.” Klobucar explained that this was the correct test because the decision maker must view products as they are viewed by the consumer, who primarily sees the brand mark as opposed to the certification mark.

A judge then turned to the similarity of goods and services factor. He suggested that only an association between the two markets was required. Klobucar agreed but argued the appellants failed to show this association. He characterized their argument as showing a connection between the hip-hop industry and the certified liquor producing companies, but not with the appellants themselves. In response, a judge indicated that “[t]he inner mixture between the rap music industry and the cognac industry is undeniable.” Klobucar disagreed, however, arguing that, while there was some crossover between the two industries, “some celebrities who are involved” with both industries does not create the required association.

In rebuttal, a judge asked Brody if anything else needed to be addressed on remand for the case to be decided properly. Brody responded that the definition of “relevant consumer” was important for similarities of goods and channels and fame factors.

We will continue monitoring this case and report on any developments.