This is an update to our previous blog (available here) regarding Sovereign Miliary Hospitaller Order of Saint John of Jerusalem of Rhodes and of Malta v. The Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, the Ecumenical Order, No. 14-14251 (11th Cir. 2015). In the second appeal, the 11th Circuit reversed the District Court’s judgment against the Sovereign Order on claims of infringement under the Lanham Act and state law claims due to error. (Opinion Available Here).
The 11th Circuit found that on remand the District Court had erred in considering several of the factors for likelihood of confusion, incorrectly assessed the Florida Priory’s defenses of prior use and misinterpreted the 11th Circuit’s decision in the first appeal when it denied Sovereign Order’s motion to supplement the record. For the same reasons, the District Court also erred in considering the Sovereign Order’s claims under state law.
As for the first factor, strength of the mark, the 11th Circuit found that the District Court correctly determined that the Sovereign Order’s incontestable marks are presumptively strong; however the Florida Priory’s defenses of prior use under sections 1115(b)(5) and (b)(6) do not defeat this presumption because the Lanham Act expressly limits the effect of those defenses. As for the contestable marks, the District Court erred because the strength of a mark does not turn on its component of words in a vacuum, but instead the relationship between the name and the service or good it describes. Second, the District Court misunderstood what matters when considering third party use. Use of parts of the Sovereign Order’s word marks is not persuasive evidence of third party use.
As for the second factor, similarity of the marks, the 11th Circuit found that there are both similarities and differences, therefore, this factor does not meaningfully tip the scales one way or the other. The fourth and fifth factor merge, similarity of sales and advertising methods. The District Court erred, because the fundraising and methods and target donors of the organizations overlap significantly. As for the sixth factor, defendant’s intent, the District Court erred in relying on testimony of a non-expert for finding prior use in documents dated in 1908, 1911, 1956 and 1958.
As for the final factor, evidence of actual confusion, the District Court erred by considering the representations that the Sovereign Order made in 2002 to the Patent and Trademark Office, because those statements were about the Delaware organization’s collective membership marks and therefore irrelevant to the service marks. The District Court also erred by denying the Sovereign Order’s motion to supplement based on its misreading of the previous decision.
The 11th Circuit also found that the District Court erred by treating section 1115(b)(5) and (b)(6) (prior use) as complete defenses to infringement, when in fact the defenses only lower the presumption of validity afforded to incontestable marks.
On remand, the 11th Circuit advised the District Court to reconsider the strength of the Sovereign Order’s contestable marks, the similarity of the parties’ sales and advertising methods, the Florida Priory’s intent and the evidence of actual confusion. The District Court also needs to decide whether or how to supplement the record. The 11th Circuit concluded that reassignment was not warranted at this time.