Trademark Confusability and the Sleekcraft Test
The Ninth Circuit’s recent reversal of a district court’s dismissal of Trader Joe’s trademark infringement case underscores the complexities of trademark law, particularly in assessing confusability. The case, involving Trader Joe’s United, a labor union, highlights how courts evaluate whether a mark’s use by a third party creates a likelihood of confusion with a registered trademark.
Trademark Confusability and the Sleekcraft Test
The appellate court applied the Ninth Circuit’s eight-factor Sleekcraft test, a framework used to determine whether a consumer is likely to confuse a mark’s source. The first three factors - strength of the mark, proximity of the goods, and similarity of the marks - were pivotal in this case.
Strength of the Mark
Trader Joe’s mark, a well-known grocery brand, was undisputedly strong. Courts often favor established brands in such analyses, as their distinctiveness reduces the likelihood of confusion.
Proximity of the Goods
The district court had argued that tote bags were the only shared product type, but the Ninth, Circuit clarified that proximity is not limited to direct competition. Instead, it hinges on whether consumers are likely to associate the products. Given Trader Joe’s tote bags’ viral popularity, the court found that customers could reasonably mistake the union’s merchandise for the retailer’s.
Similarity of the Marks
Both parties used identical visual elements: red color, stylized fonts, and concentric circles. The court emphasized that the issue was not the use of the name itself but the commercial use of the mark on merchandise. The union’s raised fist symbol, while potentially expressive, did not sufficiently distinguish the marks in the eyes of the court.
The remaining factors - marketing channels, type of goods, consumer care, actual confusion, intent, and likelihood of expansion - were deemed neutral. However, the first three factors’ favor toward Trader Joe’s led the court to conclude the district court erred in dismissing the case.
The Labor Law Dimension
The case also raised questions under labor law, specifically the Norris-LaGuardia Act, which limits courts’ ability to issue injunctive relief in labor disputes. The district court had argued the case stemmed from a labor conflict, but the Ninth Circuit found it premature to determine jurisdiction. Neither party had sought injunctive relief, and Trader Joe’s had not yet established its claims. The court noted that the timing of the lawsuit and its connection to a National Labor Relations Board filing remained unresolved.
Implications for Businesses
For businesses, this decision reinforces the importance of proactive trademark monitoring. Confusability is not limited to direct competitors, even indirect associations can lead to legal action. Companies must balance brand protection with the risk of litigation, particularly when third parties use their marks in commercial contexts.
The case also underscores that dismissing trademark claims at the pleading stage is rare. Courts typically require more evidence of confusion before dismissing a case, especially when the plaintiff’s mark is strong and the defendant’s use is commercial.
IP Defender is a trademark monitoring service that helps businesses protect their intellectual property by monitoring national trademark databases for conflicts and infringements. With IP Defender’s monitoring service covering 50+ countries, including the EU, USA, and Australia, companies can stay ahead of potential conflicts and ensure their brands remain distinct in a crowded marketplace.
As the union faces renewed litigation, the case serves as a reminder for businesses navigating trademark disputes. Legal strategies must account for both trademark law’s nuances and the broader implications of commercial use, particularly in contexts where labor and brand identity intersect.