Practice Areas

Print PDF

Reverse confusion claim over trademark logo doesn’t make the cut

February 27, 2024
April May 2024 Cantor Colburn IP Newsletter

A party in a trademark infringement case can seek a preliminary injunction to block the opposing party’s use of a mark during litigation. The outcome can provide a window into whether the party should expect to prevail at trial. In one recent case, however, a trademark owner asserting a reverse confusion theory of infringement received a discouraging result.

Too many chefs

Home Chef creates and delivers meal kits to customers for home cooking. Its “HC Home Mark” is protected by five federal trademark registrations, including two for the word mark “HC Home” accompanied by the design mark “Home Chef Home Logo.” The mark looks like the outline of a house, with five sides and a black fork and knife inside the house. The company has spent more than $450 million on marketing and advertising with its marks and achieved more than $1 billion in annual sales.

Grubhub is a leading online food ordering and delivery marketplace. It owns numerous trademark registrations for its name and stylized variations.

In 2021, Grubhub was acquired by Just Eat (JET). The “JET House Mark” looks like a solid black house, with five sides, a chimney, and a white fork and knife inside.

JET adopted the “Grubhub House Logo,” which combined the GRUBHUB word mark with the JET House Mark, in July 2021. Grubhub invested millions of dollars in rebranding and processed more than 72 million orders under the logo.

After receiving a cease-and-desist letter from Home Chef, Grubhub sought a declaratory judgment that its logo didn’t infringe Home Chef’s trademarks. In response, Home Chef requested a preliminary injunction to stop Grubhub from using the logo. The trial court denied Home Chef’s request, prompting an appeal.

Missing ingredients

To obtain a preliminary injunction, a party must show that it’s likely to win the underlying case, among other things. On appeal, the U.S. Court of Appeals for the Seventh Circuit focused on whether Home Chef was likely to prevail on its reverse confusion claim on why the Grubhub House Logo infringed the HC Home Chef Logo.

Reverse confusion occurs when a large junior user (here, Grubhub) saturates the market with a trademark similar or identical to that of a smaller, senior user (Home Chef), thereby overwhelming the senior user’s mark and causing consumers to mistakenly believe that the senior user’s products or services are actually those of the junior user.

To evaluate a reverse confusion claim, the court generally considers seven nondispositive factors:

  1. Similarity of the marks in appearance and suggestion,
  2. Similarity of the products,
  3. The area and manner of concurrent use,
  4. The degree of care likely to be exercised by consumers,
  5. The strength of the senior user’s mark,
  6. Existence of actual confusion, and
  7. The defendant’s intent to “palm off” its product as that of another.

Home Chef challenged the trial court’s finding that the first, sixth and seventh factors weighed against a finding of likelihood of confusion. The appeals court wasn’t convinced.

When analyzing the similarity of the marks, the Seventh Circuit pointed out that Grubhub’s house design wasn’t virtually identical to the Home Chef house design or used to promote virtually identical products and services. And the evidence that Grubhub had, or would, so overwhelm the market that consumers would associate Home Chef’s mark with Grubhub’s was “sparse.”

Actual confusion, the court said, isn’t essential for a finding of likelihood of confusion, but it’s “entitled to substantial weight” where present. Home Chef submitted an anonymous tweet showing the logos side-by-side and noting the similarity. It also presented a Facebook message it had received asking whether the company had merged with Grubhub. The appellate court found the lower court hadn’t clearly erred when it attributed little weight to this evidence — especially in the face of Grubhub’s contradictory consumer survey evidence.

As to intent, the appeals court found the factor mostly irrelevant to reverse confusion claims because the accused party isn’t trying to palm off its products as another’s. So, while the trial court did err by determining this factor weighed against a likelihood of confusion, the factor was at best neutral and therefore of little value to the analysis.

Don’t put a fork in it yet

Although the Seventh Circuit affirmed the trial court’s ruling that Home Chef didn’t show a likelihood of success with its reverse confusion theory, only the preliminary injunction was denied. The underlying case could still go to trial.

Sidebar:   Forward confusion theory likely to fail, too

The U.S. Court of Appeals for the Seventh Circuit in the Grubhub case (see main article) reviewed the trial court’s finding that the defendant was unlikely to succeed in establishing a likelihood of “forward confusion” caused by the junior trademark owner’s mark. Forward confusion occurs when consumers mistakenly believe the products or services of a junior user come from the same source or are somehow connected to a senior user’s products or services.

Like the trial court, though, the Seventh Circuit found the defendant didn’t make a sufficiently strong showing that the forward confusion theory would succeed at trial. Based on the evidence, the appeals court didn’t see how consumers interacting with the Grubhub House Logo could reasonably believe that they were engaging with Home Chef. It particularly emphasized that the logo prominently featured Grubhub’s own brand name.

© 2024

View Document(s):