David Lilenfeld Blog The intellectual property blog of David Lilenfeld

30Jan/160

“Clearly Canadian” – Likelihood of Confusion – Similarity of Marketing Channels

By David Lilenfeld on January 30, 2016

2.  Marketing channels

Here, there is evidence that both companies market and sell their beverages over the Internet through their own websites, third party retail sites, and Facebook. (See Zarrow Dep. at 51:24-52:5; Cargle Dep. at 83:21-25; Khan Dep. at 46:12-19; 91:15-92: 95:8-15.) Yet, “[g]iven the broad use of the Internet today, the same could be said for countless companies.” Playboy Enterprises, Inc. v. Netscape Commc'ns Corp., 354 F.3d 1020, 1028 (9th Cir. 2004). “Some use of the Internet for marketing . . . does not alone and as a matter of law constitute overlapping marketing channels.” Entrepreneur Media, Inc., 279 F.3d at 1151.

The parties hotly contest whether the two products would typically be stored in the same shelves, aisles, or general areas of a retail store. (See Mot. at 22 (contending that Clearly Kombucha must be located in the refrigerated section); Supp. Resp. (Dkt. # 94) at 10-11 (contending that Clearly Kombucha appears on warm shelves).) Because the court  must weigh the facts in the light most favorable to Clearly Food, the court assumes for the purposes of this motion that retail stores would choose to display Clearly Kombucha products near Clearly Canadian products more often than not, which weighs in favor of finding of likelihood of confusion. (See Billick Decl. Ex. I (restocking notes from 2013 showing that retail stores stocked Clearly Kombucha on warm shelves and next to bottled  water products such as Perrier, Smart Water, Vitamin Water, Evian, and Fiji, as well as next to flavored beverages such as Snapple and Sobe), Ex. J.) The significance of the potential adjacent storage, however, is blunted by the fact that Clearly Canadian is not currently sold in any brick and mortar retail stores. Clearly Food has recently engaged a sales and marketing company to market Clearly Canadian “to the top twenty-five grocery store chains across the United States,” and expects that Clearly Canadian will be sold in unspecified grocery stores in 2015. (2d Khan Decl. ¶¶ 3, 5.) However, it remains unclear     whether Clearly Canadian will be sold in similar retail stores as Clearly Kombucha, or in the same geographic region as Clearly Kombucha, in the near or intermediate future.  (See Zarrow Dep. at 27:21-28 (explaining that Clearly Kombucha was sold in limited

In sum, a reasonable jury could not find that the parties’ current marketing  channels “overlap to any significant degree.” See Entrepreneur Media, Inc., 279 F.3d at 1151. Future overlap, although possible, is speculative, and the minor existing overlap in Internet use is insignificant because the “shared use of a ubiquitous marketing channel does not shed much light on the likelihood of consumer confusion,” Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1151 (9th Cir. 2011). Therefore, the court finds that this factor merits little weight in the likelihood of confusion analysis, and what weight it does merit benefits Top Shelf. Id.

3.  Relatedness of the goods

“Related goods are generally more likely than unrelated goods to confuse the public as to the producers of the goods.” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1207 (9th Cir. 2000). “Related goods are those products which would be reasonably thought by the buying public to come from the same source if sold under the same mark.” Entrepreneur Media, Inc., 279 F.3d at 1147. The Ninth Circuit applies “a sliding scale approach as to the weight that relatedness will carry dependent upon the strength of the trademark holder’s mark.” Entrepreneur Media, Inc., 279 F.3d at 1147.

Clearly Food identifies the following undisputed similarities between the two products. To begin with the obvious, Clearly Canadian and Clearly Kombucha are single-serve, bottled beverages. (See Ledden Decl. Ex. 21.) Moreover, both products are  “sparkling” (carbonated) beverages, and are marketed as such. (See Dkt. # 47-4 (2014 presentation to Clearly Canadian investors); Billick Decl. (Dkt. # 95) Ex. A (a December,  2010 “Gourment California Foods Product Brief” identifying Clearly Kombucha’s “core position” as a “lightly sparkling” beverage), Ex. B (2009 business plan to market Top Shelf Kombucha as “the world’s first luxury sparkling elixir”), Ex. C (October 2013 email from Ms. Zarrow to a potential distributor describing Clearly Kombucha as a “sparkling, fermented, nonalcoholic tea”), Ex. D (2013 business plan describing Clearly Kombucha as a “sparkling fermented tea”), Ex. E, Ex. F at 3, Ex. G (“Brand Ambassador” handbook instructing marketers demonstrating Clearly Kombucha in retail stores to “[a]sk EVERY person that walks by if they would like a sample of  ‘sparkling tea’” unless the person already had kombucha in his or her cart).) Additionally, both products are “clear” beverages, and are marketed as such. (See Cargle Dep. (Dkt. # 57-3)

Finally, both products are perceived as healthy alternatives to other carbonated beverages, such as soda, and marketed as such. (See Ledden Decl. Ex. 8 (“2007 Survey”); Dkt. # 47-4 (2014 presentation to Clearly Canadian investors); 2012 Bus. Plan; Billick Decl. Ex. D (Clearly Kombucha 2013 business plan) at 9), Ex. E (notes from a Clearly Kombucha marketing demonstration).

Top Shelf points out that Clearly Kombucha differs from Clearly Canadian in that it is a flavored fermented tea rather than flavored water. (See Mot. at 22.) Top Shelf attempts to further distinguish the products by emphasizing the affirmative health benefits allegedly associated with kombucha, as well as the fact that Top Shelf targets a “niche” health-conscious demographic. (See Mot. at 21-23.) However, “the relatedness of each company’s prime directive isn’t relevant.” Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1056 (9th Cir. 1999). Rather, “the focus is on whether the consuming public is likely somehow to associate [the alleged infringer’s]  products with [the mark owner].” Id.see also Am. Int’l Group, Inc. v. Am. Int’l Bank, 926 F.2d 829, 832 (9th Cir. 1991).

Viewing the evidence in the light most favorable to Clearly Food, the court concludes that a jury could reasonably find that the consuming public is likely to associate the Clearly Kombucha product with the Clearly Canadian brand. The thrust of  Top Shelf’s argument is that the two brands do not directly compete for customers. But  even if a jury concluded that the two brands do not directly compete, a jury could still  reasonably find that the similarity of their products—namely, clear, sparkling, single-serve beverages—would likely result in consumer confusion between the brands and products. See American Int’l Group, Inc., 926 F.2d at 832 (concluding that although the parties were not direct competitors, customer confusion could result in light of the similarities between the financial services offered by the parties). Therefore, for summary judgment purposes, this factor weighs in Clearly Food’s favor.

Comments (0) Trackbacks (0)

No comments yet.


Leave a comment


*

No trackbacks yet.


Go to top ↑
-->