Federal Circuit Clarifies Dupont Factor In Trademark Case Between Apex Bank And CC Serve
ASPIRE BANK trademark dispute highlights key issues in likelihood of confusion analysis
In a precedential decision issued recently, the U.S. Court of Appeals for the Federal Circuit provided important clarification regarding the proper application of the DuPont factors in trademark opposition proceedings. In Apex Bank v. CC Serve Corp., the court affirmed-in-part, vacated-in-part, and remanded a decision of the Trademark Trial and Appeal Board, emphasizing a more consistent standard for evaluating the sixth DuPont factor.
Dispute Over “ASPIRE BANK”
The case arose from opposition proceedings initiated by CC Serve Corp. against Apex Bank’s intent-to-use trademark applications for the marks ASPIRE BANK, both in word and design forms, designated for banking and financial services. CC Serve, which holds a longstanding registration for the mark ASPIRE in connection with credit card services, alleged a likelihood of consumer confusion under Section 2(d) of the Lanham Act.
The TTAB sustained the opposition, concluding that consumer confusion was indeed likely between Apex’s proposed marks and CC Serve’s existing registration. The Board’s conclusion was primarily based on three DuPont factors:
Similarity of the marks (first factor),
Similarity of the services (second factor), and
The number and nature of similar marks in use on similar goods (sixth factor)
Federal Circuit’s Analysis and Holding
Affirmation of Similarity of Services (Second DuPont Factor)
The Federal Circuit upheld the TTAB’s findings with respect to the second DuPont factor, affirming that Apex Bank’s services are legally identical in part to those of CC Serve. Although Apex Bank is a retail bank not currently offering credit cards, its proposed services—encompassing banking and financing—were found to legally overlap with the extension of credit inherent in credit card services.
The court endorsed the TTAB’s reliance on dictionary definitions for “banking,” “bank,” and “finance,” which encompass credit-related services. Accordingly, the court agreed that the services offered by both parties were “highly similar” and, in some respects, “legally identical.”
Vacatur of Narrow Interpretation of Third-Party Use (Sixth DuPont Factor)
The court took issue, however, with the TTAB’s interpretation of the sixth DuPont factor, which assesses the extent of third-party use of similar marks on similar goods or services. The Board had limited its analysis exclusively to marks used in connection with credit card services, disregarding marks that included “ASPIRE” for other forms of financial services.
The Federal Circuit held this interpretation to be too narrow and inconsistent with the legal standard. The opinion emphasized that the sixth factor requires consideration of similar marks on similar goods, not identical goods. Given that the Board had already determined the services to be highly similar under the second DuPont factor, it was improper to apply a more stringent threshold in the context of third-party usage.
In rejecting the TTAB’s restrictive approach, the CAFC noted that it “saw no reason to impose a different and more stringent legal standard for similarity under the sixth DuPont factor,” reiterating the need for consistency across the multi-factor analysis.
Remand of the First DuPont Factor Analysis
The court also vacated the TTAB’s findings under the first DuPont factor, which examines the similarity of the marks themselves in appearance, sound, connotation, and commercial impression. The Federal Circuit reasoned that the Board’s flawed sixth factor analysis may have unduly influenced its evaluation of the commercial strength or weakness of CC Serve’s mark.
Accordingly, the court remanded the case for reconsideration, emphasizing that a revised understanding of the marketplace usage of similar marks could affect how the ASPIRE BANK marks are perceived relative to the existing ASPIRE mark.
Legal and Commercial Implications
This decision underscores the importance of a balanced and consistent application of the DuPont factors in trademark opposition cases. The Federal Circuit’s critique of the TTAB’s overly narrow approach serves as a reminder that the strength or weakness of a mark in the marketplace must be assessed in light of all relevant uses—not solely those that are identical in form or function.
For brand owners and trademark practitioners, this ruling reinforces the significance of third-party usage evidence in shaping the commercial impression of a mark. The decision also highlights how closely intertwined the DuPont factors can be, with one factor’s misapplication potentially skewing the analysis of others.
The Federal Circuit’s decision in Apex Bank v. CC Serve Corp. offers a nuanced interpretation of trademark law, affirming the need for consistency and breadth in evaluating likelihood of confusion. By remanding the case for a revised analysis under the first and sixth DuPont factors, the court has provided valuable guidance on how to properly assess similarity and marketplace dynamics in trademark disputes.