Case: 20-30418 Document: 00515817174 Page: 1 Date Filed: 04/12/2021
`
`United States Court of Appeals
`for the Fifth Circuit
`
`
`No. 20-30418
`
`
`
`United States Court of Appeals
`Fifth Circuit
`
`FILED
`April 12, 2021
`
`Lyle W. Cayce
`Clerk
`
`Dennis Perry,
`
`
`
`
`Plaintiff—Appellant,
`
`versus
`
`
`H. J. Heinz Company Brands, L.L.C.; Kraft Heinz Foods
`Company,
`
`
`Defendants—Appellees.
`
`
`
`
`Appeal from the United States District Court
`for the Eastern District of Louisiana
`USDC No. 2:19-CV-280
`
`
`
`Before Owen, Chief Judge, and Graves and Ho, Circuit Judges.
`James E. Graves, Jr., Circuit Judge:
`
`Mr. Dennis Perry makes Metchup, which depending on the batch is a
`blend of either Walmart-brand mayonnaise and ketchup or Walmart-brand
`mustard and ketchup. Mr. Perry sells Metchup exclusively from the lobby of
`a nine-room motel adjacent to his used-car dealership in Lacombe, Louisiana.
`He has registered Metchup as an incontestable trademark. Though he had
`big plans for Metchup, sales have been slow. Since 2010, Mr. Perry has
`produced only 50 to 60 bottles of Metchup, which resulted in sales of around
`$170 and profits of around $50. He owns www.metchup.com but has never
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 2 Date Filed: 04/12/2021
`
`No. 20-30418
`
`sold Metchup online. For better or worse, the market is not covered in
`Metchup.
`
`Along comes Heinz. It makes Mayochup, which is solely a blend of
`mayonnaise and ketchup. To promote Mayochup’s United States launch,
`Heinz held an online naming contest where fans proposed names. A fan
`submitted Metchup, and Heinz posted a mock-up bottle bearing the name
`Metchup on its website alongside mock-up bottles for the other proposed
`names. Heinz never sold a product labeled Metchup.
`
`When Mr. Perry discovered Mayochup and Heinz’s use of Metchup
`in advertising, he sued Heinz for trademark infringement. The district court
`dismissed Mr. Perry’s claims because it found that there was no likelihood of
`confusion between Mayochup and Metchup and no confusion caused by
`Heinz’s fleeting use of Metchup in advertising. It also canceled Mr. Perry’s
`trademark registration after concluding that he had failed to prove that he had
`made lawful, non-de minimis use of the Metchup mark in commerce.
`
`We agree that there is little chance that a consumer would confuse Mr.
`Perry’s Metchup with Heinz’s Mayochup or be confused by Heinz’s use of
`Metchup in advertising, so we affirm the district court’s dismissal of Mr.
`Perry’s claims against Heinz. But because Mr. Perry sold some Metchup and
`testified that he hoped to sell more, a finder of fact should determine whether
`his incontestable trademark should be deemed abandoned and canceled.
`Consequently, we vacate the district court’s cancelation of Mr. Perry’s
`trademark and remand for further proceedings on Heinz’s counterclaim.
`
`I.
`
`Heinz began selling Mayochup in the Middle East in 2016. It decided
`to bring this convenient, yet perhaps gratuitous, mixture to the United States
`in 2018. To promote its blends of ketchup and ranch (“Kranch”),
`mayonnaise and mustard (“Mayomust”), mayonnaise and barbecue sauce
`
`2
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 3 Date Filed: 04/12/2021
`
`No. 20-30418
`
`(“Mayocue”), and mayonnaise and ketchup, it staged a publicity stunt. To
`get customers used to the uncanny sauce blends, Heinz turned to the Internet
`and asked its fans to propose names for its concoctions.
`
`The promotion was a hit. Heinz received over ninety proposed names
`for its mayonnaise and ketchup blend, including Saucy McSauceface, an
`apparent nod to Boaty McBoatface, the name the Internet proposed for a
`British research ship.1 But the submissions were not all so fanciful and
`included more suggestive names like Metchup. At the end of the campaign,
`Heinz posted mock-up bottles bearing the proposed names on its website.
`Heinz never sold bottles with Saucy McSauceface or Metchup on them. It
`was all for advertising purposes only.
`
`Before posting the mock-up bottles, Heinz had its in-house lawyers
`run a trademark search, which turned up a trademark registration for
`Metchup. Turns out, Heinz was not the first to grapple with both the problem
`of having to contemplate ratios and the inconvenience of having to use two
`bottles when preparing a burger.
`
`Mr. Perry, who operates the nine-room Star Hotel and an adjoining
`used-car lot in Lacombe, Louisiana, had years ago decided to solve these
`issues and share his love of mayonnaise blended with ketchup (and
`occasionally mustard) with others. Mr. Perry says he first had the idea to
`make a blended sauce called Metchup sometime in 2000. But it took a while
`for him to get around to producing it.
`
`In addition to used car sales and motel management, he “dabbled in”
`the buying and selling of domain names. At one time, he owned as many as
`1,400 domain names that he hoped to sell for a profit. In 2007, Mr. Perry
`purchased
`the
`domain
`names
`for www.metchup.com
`and
`
`
`
`1 Katie Rogers, Boaty McBoatface: What You Get When You Let the Internet Decide, N.Y.
`Times, March 21, 2016, https://www.nytimes.com/2016/03/22/world/europe/boaty-
`mcboatface-what-you-get-when-you-let-the-internet-decide.html.
`
`3
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 4 Date Filed: 04/12/2021
`
`No. 20-30418
`
`www.metchup.uk.co and applied to register Metchup as a trademark with the
`United States Patent and Trademark Office.
`
`Mr. Perry began making Metchup for public consumption sometime
`in 2010 or 2011. He made it by blending Walmart-brand mayonnaise and
`ketchup together in his home kitchen, funneling the small batches into plastic
`bottles, and labeling them with a printed label. He sold the first bottle of
`Metchup to his mother and put the rest up for sale in the lobby of the Star
`Motel.
`
`Sales in hand, Mr. Perry submitted a photograph to the PTO, which
`then issued him a trademark registration for the name Metchup in 2011. He
`renewed the trademark registration in 2017 (submitting the same photo he
`submitted in his first application), and the PTO declared the mark
`incontestable in 2018.
`
`Mr. Perry had high hopes for Metchup, writing in one notebook that
`he wanted to sell two million bottles, but Metchup was neither an online
`sensation nor a brick-and-mortar success. Over the years, Mr. Perry has sold
`only small quantities of Metchup exclusively at the Star Motel. Though Mr.
`Perry sold Metchup to motel guests traveling through “from all over the
`place,” he has only thirty-four documented sales. And while he insists he sold
`a few more bottles than that, any dispute over sales figures is immaterial
`because he has made at most nine or ten six-bottle batches of Metchup. He
`thought about contacting a bottle producer to expand his operation but never
`did.
`
`While Mr. Perry owned metchup.com, he never sold Metchup online.
`The domain name linked to a Facebook page with pictures of Metchup
`bottles on it, but there was no way to purchase Metchup through the page
`and no clear indication that Metchup was actually for sale. There were so few
`signs that a product called Metchup was for sale that one could see how
`Heinz’s in-house trademark research team found Mr. Perry’s registration but
`
`4
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 5 Date Filed: 04/12/2021
`
`No. 20-30418
`
`concluded that the trademark was not in use. The markets were not exactly
`covered in Metchup.
`
`After the naming contest and the mock-up Metchup bottle, Heinz
`released Mayochup for sale in the United States. Mr. Perry’s son-in-law
`discovered Mayochup at the grocery and let Mr. Perry know. Mr. Perry then
`went online and discovered that not only had Heinz released its own
`mayonnaise and ketchup blend but that it had also used the name Metchup
`in its promotional efforts.
`
`Mr. Perry hired a lawyer and sued Heinz for trademark infringement,
`trademark counterfeiting, false designation of origin, and for violations of
`various Louisiana trademark laws. Heinz filed a counterclaim to have Mr.
`Perry’s Metchup trademark registration canceled for abandonment or non-
`use.
`
`After speaking with counsel, Mr. Perry sent samples of Metchup to
`national grocery chains in Florida and a store in New Orleans in hopes of
`expanding Metchup’s market footprint. But Mr. Perry never heard anything
`back. His lawsuit against Heinz fared no better than his expansion efforts.
`After discovery, Heinz filed a motion for summary judgment. The district
`court granted the motion in full and dismissed all of Mr. Perry’s claims and
`canceled his trademark registration for Metchup because it deemed the
`trademark abandoned.
`
`II.
`
`The panel reviews the grant of summary judgment de novo. Xtreme
`Lashes, LLC v. Xtended Beauty, Inc., 576 F.3d 221, 226 (5th Cir. 2009). All of
`Mr. Perry’s claims require him to show ownership of a valid trademark and
`that Heinz used the mark or a similar mark in a way that created a likelihood
`of confusion. Id. at 226–27; 15 U.S.C. §§ 1114(1)(a)-(b), 1116(d), 1117;
`1125(a); La. Rev. Stat. § 51:222, 222.1.
`
`Under the Lanham Act, Mr. Perry’s certificate of registration for his
`Metchup
`trademark
`is prima
`facie
`evidence of
`its validity.
`
`5
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 6 Date Filed: 04/12/2021
`
`No. 20-30418
`
`15 U.S.C. §§ 1057(b), 1115(a). The PTO found that Mr. Perry’s Metchup
`mark had achieved incontestable status because it had been registered and
`used in commerce for over five years. 15 U.S.C. § 1065; see also American Rice,
`Inc. v. Prod. Rice Mill, Inc., 518 F.3d 321, 330 (5th Cir. 2008). Once a mark
`becomes incontestable, its federal registration constitutes conclusive evidence
`of its validity, subject only to the defenses enumerated in section 1115 of the
`Lanham Act, which includes the defense of abandonment. 15 U.S.C. §
`1115(a); § 1115(b)(2), § 1065(4) (emphasis added). See also American Rice, 518
`F.3d at 330.
`
`Mr. Perry has conclusive evidence that he owns a valid trademark and
`has shown that Heinz has used both the Metchup trademark and the
`Mayochup name in commerce. Heinz after all used the Metchup mark in
`conjunction with its advertising campaign and sells Mayochup, an ostensibly
`similar product, in groceries nationwide. So we set the issues of ownership,
`use, and abandonment aside for a moment to first address whether Heinz
`used the Metchup trademark and Mayochup name in a way that likely
`confused consumers as to the source, sponsorship, or affiliation of the
`blended sauces at issue. Xtreme Lashes, 576 F.3d at 226. “Likelihood of
`confusion” requires more than a mere possibility; Mr. Perry must show a
`probability of confusion. Id.
`
`When deciding whether the use was confusing, courts rely on a non-
`exhaustive set of factors called digits of confusion, which include: (1) the type
`of trademark, (2) mark similarity, (3) product similarity, (4) outlet and
`purchaser identity, (5) advertising media identity, (6) defendant’s intent, (7)
`care exercised by potential purchasers, and (8) actual confusion. Id. at 227.
`
`A few factors weigh in Mr. Perry’s favor. Setting aside production
`methods, the products are similar. Selling for around $5.00 per bottle, both
`are inexpensive. The low price perhaps suggests that potential purchasers are
`less likely to exercise care when buying. But then again, people are discerning
`with regard to condiments and resolute in their preferences (e.g., Heinz
`
`6
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 7 Date Filed: 04/12/2021
`
`No. 20-30418
`
`ketchup versus Hunt’s ketchup). Lastly, Heinz used the exact word Metchup
`on a mock-up bottle in online advertising.
`
`But trademarked words cannot be isolated from the labels on which
`they appear, and these labels and bottles look nothing alike.
`
`
`
`
`
`
`
`
`
`Sun-Maid Raisin Growers of Cal v. Sunaid Food Prods., Inc., 356 F.2d 467, 469
`(5th Cir. 1966); see also Future Proof Brands, L.L.C. v. Molson Coors Beverage
`Co., 982 F.3d 280, 287–88 (5th Cir. 2020) (noting differences in packaging).
`The products’ distinguishable packaging mitigates against Heinz’s use of the
`word Metchup because the packaging differences make confusion less likely.
`
`The type of mark weighs in Heinz’s favor. Trademarks are evaluated
`on a spectrum. Descriptive and suggestive marks are considered weaker than
`marks that are arbitrary and fanciful, which are marks that bear almost no
`relationship to the products to which they are applied (e.g., Saucy
`McSauceface). Future Proof Brands, 982 F.3d at 289–292 (comparing types
`of trademarks). Metchup is a suggestive trademark because while it requires
`a little imagination to draw a conclusion about the goods, the mash-up of a
`name relates to the names of the two sauces that form the blend. See id. at
`291.
`
`7
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 8 Date Filed: 04/12/2021
`
`No. 20-30418
`
`Both Mr. Perry and Heinz are selling to potential condiment
`purchasers. But they have to date targeted different segments of this market.
`Mr. Perry has limited his sales efforts to the travelers staying at his nine-room
`motel in Lacombe, Louisiana, and to visitors to his used car lot. The small
`motel and the adjoining used car lot are not the first place condiment
`purchasers go for ketchup and mayonnaise in any form. Moreover, Mr. Perry
`has neither sold Metchup online nor shipped orders of Metchup. He has
`made only minimal efforts to expand his distribution. And when he did
`attempt to expand, his efforts involved, not approaching local restaurants,
`stores, or farmer’s markets, but sending unsolicited samples to national
`grocery chains in Florida and a hot sauce store in New Orleans.
`
`Mr. Perry markets his products to the guests at his nine-room motel,
`Heinz to the shoppers at most every grocery and to online customers through
`an extensive web store. Sensibly speaking, Mr. Perry has no presence in
`Heinz’s market and Heinz no presence in his. This is not to say that Mr.
`Perry would not have trademark rights should he choose to expand. It is,
`however, saying that as the products were situated at the time Heinz used the
`name Metchup on a mock-up label, and as Heinz’s Mayochup currently
`stands in relationship to Mr. Perry’s Metchup, there was, and is, no market
`overlap.
`
`Mr. Perry does not buy print ads, issue coupons, enter his sauce into
`contests, or advertise Metchup on signage. Mr. Perry, however, contends
`that both he and Heinz marketed their products on the Internet. True, but
`Mr. Perry’s online presence was limited to a Facebook page with pictures of
`Metchup bottles on it. Unlike Heinz, he has never used the Internet for sales
`or large-scale advertising. While Heinz knew Mr. Perry had registered the
`Metchup mark, the lack of advertising and established market goodwill makes
`it easy to see how it concluded that the mark was no longer in use. So, the
`digits of outlet and purchaser identity, advertising media identity, and
`defendant’s intent all weigh in favor of Heinz.
`
`8
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 9 Date Filed: 04/12/2021
`
`No. 20-30418
`
`Finally, there is the question of actual confusion. While it need not be
`proven, actual confusion is “the best evidence of a likelihood of confusion.”
`Xtreme Lashes, 576 F.3d at 229. The district court relied almost exclusively
`on the lack of actual confusion when it dismissed Mr. Perry’s claims. Indeed,
`nothing in the record shows that any consumer actually got confused by
`Heinz’s use of Metchup on a mock-up bottle or confused Heinz’s Mayochup
`with Mr. Perry’s Metchup. After all, Heinz never sold a product named
`Metchup and there is no evidence that Heinz’s Mayochup and Mr. Perry’s
`Metchup have ever competed for sales.
`
`Mr. Perry introduced expert testimony from Dr. Lucy L. Henke, a
`marketing professor with a doctorate in communication studies. She said that
`the typical consumer would confuse Mayochup and Metchup due to visual
`and auditory similarities between the two names. Dr. Henke pointed out that
`the words only differ by three letters and noted that Twitter users asked
`Heinz about the pronunciation of Mayochup, “Is it pronounced May-o-chup
`or Metchup?”
`
`But asking questions about pronunciation does not show that the
`Twitter users were actually confusing Heinz’s Mayochup with Mr. Perry’s
`Metchup. Confusion about how to pronounce the product’s name does not
`show actual confusion as to its source, sponsorship, or affiliation.
`
`More importantly, Dr. Henke neither presented consumer survey
`data nor provided an analysis of such data. Her testimony amounts to her
`personal opinion on the topic of actual confusion and does not address
`evidence where potential consumers were asked to offer their opinions or
`tested to see if they actually got, or were, confused by either Heinz’s use of
`the name Metchup in advertising or by it selling Mayochup. Thus, Dr.
`Henke’s testimony provides no evidence of actual confusion.
`
`“Incontestable status does not make a weak mark strong.” Oreck Corp.
`v. U.S. Floor Sys., Inc., 803 F.2d 166, 171 (5th Cir. 1986). Mr. Perry’s
`incontestable mark means that he has rights to use the mark nationwide, but
`
`9
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 10 Date Filed: 04/12/2021
`
`No. 20-30418
`
`it does not automatically mean that another’s use of the mark constitutes
`infringement. This is not a strict liability situation, and in the end, Mr.
`Perry’s Metchup mark is simply too weak for there to be a likelihood of
`confusion on these facts.
`
`It would be a coincidence to ever encounter both Mayochup and
`Metchup in the market, much less get confused about the affiliation,
`sponsorship, or origin of the two products. Accordingly, no reasonable jury
`could conclude that Heinz’s use of Metchup in advertising or the sale of its
`own product, Mayochup, created a likelihood of confusion. We therefore
`affirm the district court’s decision to dismiss Mr. Perry’s claims against
`Heinz.
`
`III.
`
`While the lack of a probability of confusion spoils all of Mr. Perry’s
`claims, it does not have the same ruinous effect on Mr. Perry’s ownership of
`the Metchup trademark. The district court granted summary judgement on
`Heinz’s counterclaim for trademark cancelation because it found that Mr.
`Perry had, as a matter of law, abandoned his incontestable trademark for
`Metchup.
`
`Abandonment may be a defense even against a party possessing an
`incontestable mark. 15 U.S.C. § 1115(b)(2). But a party claiming that a
`trademark has been intentionally abandoned bears a heavy burden. Kentucky
`Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 387 (5th Cir.
`1977) (citing American Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619, 625 (5th
`Cir. 1963)). “Abandonment is in the nature of a forfeiture” and requires
`satisfying the “burden of strict proof applicable in forfeiture cases.”
`American Foods, 312 F.2d at 624–25. Courts have equated the requirement
`for strict proof to the burden of providing clear and convincing evidence. 3 J.
`Thomas McCarthy, McCarthy on Trademarks and
`Unfair Competition § 17:12 (5th ed. 2021).
`
`10
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 11 Date Filed: 04/12/2021
`
`No. 20-30418
`
`The Lanham Act provides that “[a] mark shall be deemed to be
`‘abandoned’ . . . [w]hen its use has been discontinued with intent not to
`resume such use. Intent not to resume may be inferred from the
`circumstances. Nonuse for 3 consecutive years shall be prima facie evidence
`of abandonment.” 15 U.S.C. § 1127; see also Exxon Corp. v. Oxxford Clothes,
`Inc., 109 F.3d 1070, 1078–79 (5th Cir. 1997). “Use” for purposes of the
`Lanham Act equates to “use in commerce.” See 15 U.S.C. § 1127. The act
`further defines “use” as “the bona fide use of such mark made in the
`ordinary course of trade, and not made merely to reserve a right in a
`mark.” Id. Section 1127 appears to impose two requirements—use in
`commerce and bona fide use or use not merely to reserve a right.
`
`The district court first found that Mr. Perry had abandoned his
`trademark because “[he] [ ] failed to produce any evidence to show any sales
`of METCHUP-branded products outside of Louisiana or to non-Louisiana
`residents.” But this conclusion that Mr. Perry never used his mark in
`commerce because he cannot prove sales outside of Louisiana conflicts with
`recent Commerce Clause jurisprudence and misplaces the burden of proof.
`
`“Because one need not direct goods across state lines for Congress to
`regulate the activity under the Commerce Clause, there is likewise no such
`per se condition for satisfying the Lanham Act’s ‘use in commerce’
`requirement.” Christian Faith Fellowship Church v. adidas AG, 841 F.3d 986,
`995 (Fed. Cir. 2016). In Christian Faith Fellowship, the Trademark Trial and
`Appeal Board concluded that two sales totaling $38 to two out-of-state
`residents were de minimis and therefore not sales in commerce. Id. at 987–88.
`The Federal Circuit overturned the decision. Id. A brief study of modern
`Commerce Clause cases reveals that seemingly de minimis intrastate
`activities can influence interstate commerce, be regulated by Congress, and
`thus count as uses in commerce for purposes of the Lanham Act. See id. at
`991–92 (citing Gonzales v. Raich, 545 U.S. 1, 6–8 (2005)).
`
`But what may be most concerning is that the district court misplaced
`the burden of proof. Mr. Perry testified that he sold Metchup to motel guests
`
`11
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 12 Date Filed: 04/12/2021
`
`No. 20-30418
`
`who come from “all over the place.” Heinz has the burden to prove
`otherwise by presenting strict proof, and it has neither put forth evidence that
`discredits Mr. Perry’s testimony nor has it shown why the reasoning from
`Christian Faith Fellowship would fail to apply here.
`
`The district court’s flawed use-in-commerce reasoning and the
`misplacement of the burden of proof are not the only obstacles preventing us
`from affirming its grant of summary judgment on Heinz’s counterclaim. The
`district court also reasoned that Mr. Perry had failed to make “lawful, non-
`de minimis use” of the Metchup mark. Heinz insists that Mr. Perry’s use was
`unlawful because he failed to comply with state and federal food labelling
`regulations when he omitted required information from the Metchup labels.
`But this court has not adopted the unlawful use doctrine—the doctrine that
`failing to abide by all laws and regulations can turn what would otherwise
`constitute “use” into “non-use.” See FN Herstal SA v. Clyde Armory Inc.,
`838 F.3d 1071, 1086–88 (11th Cir. 2016) (discussing the history and
`application of the unlawful use doctrine); see also 3 J. Thomas
`McCarthy, McCarthy on Trademarks and Unfair
`Competition § 17:12 (5th ed. 2021). We see no reason to adopt the
`doctrine here.
`
`Abandonment generally requires a complete discontinuance of the
`trademark’s use and even minor or sporadic good faith uses of a mark will
`defeat the defense of abandonment. Electro Source, LLC v. Brandess–Kalt–
`Aetna Group, Inc., 458 F.3d 931, 938 (9th Cir. 2006) (“Even a single instance
`of use is sufficient against a claim of abandonment of a mark if such use is
`made in good faith.”) (internal citation omitted). See also NetJets Inc. v.
`IntelliJet Grp., LLC, 602 F. App’x 242, 245–46 (6th Cir. 2015) (concluding
`that reasonable jury could find two sales of software license bona fide use);
`Cumulus Media, Inc. v. Clear Channel Communs., Inc., 304 F.3d 1167, 1173–74
`(11th Cir. 2002) (“[E]vidence of [the owner’s] use of [the mark] . . . was
`limited, consisting largely of a logo on a billboard, some business cards, and a
`few promotional materials, but it was sufficient to enable the trial court to
`
`12
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 13 Date Filed: 04/12/2021
`
`No. 20-30418
`
`reject [the defendant’s] abandonment defense.”). But see Emergency One, Inc.
`v. American FireEagle, Ltd., 228 F.3d 531 (4th Cir. 2000) (“One recycled
`American Eagle truck with an AMERICAN EAGLE nameplate over the
`course of three years is no more than token use which, standing alone, is
`legally insufficient to disprove abandonment.”).
`
`Heinz cannot show that Mr. Perry abandoned the mark due to
`complete nonuse. True, Mr. Perry neither sold (only 34 documented sales)
`nor made (only 60 bottles produced) much Metchup. And we did find in
`Exxon Corp. v. Humble Exploration Co., Inc., 965 F.2d 96 (5th Cir. 1983), that
`seemingly similar sporadic and de minimis use could serve as grounds for
`registration cancellation.
`
`But Humble addressed what could be called de minimis use in the
`context of a trademark maintenance program where Exxon made only token
`or sporadic use of its retired Humble Oil name to reserve rights to the
`trademark. 965 F.2d at 99–101. For example, Exxon packaged products
`adorned with both Exxon and Humble labels and shipped the goods to
`customers. Id. Humble built upon an earlier Second Circuit decision where
`the court found that token defensive use was insufficient to obtain
`enforceable rights in a trademark. La Societe Anonyme des Parfums le Galion v.
`Jean Patou, Inc., 495 F.2d 1265, 1273–74 (2d Cir. 1974). In Le Galion, Jean
`Patou had registered a trademark in the United States and sold a small
`amount of perfume under the trademarked name to keep Le Galion from
`selling a competing product. Id. at 1274.
`
`Humble and Le Galion concern behavior that the Lanham Act
`specifically prohibits. In fact, the Seventh Circuit has cabined cases like Le
`Galion and Humble to situations involving a trademark maintenance program
`or defensive trademark use, implying that de minimis sales and use alone are
`insufficient to show abandonment. See S.C. Johnson & Son, Inc. v.
`
`Nutraceutical Corp., 835 F.3d 660, 668–70 (7th Cir. 2016). Again, the
`
`Lanham Act’s framework imposes two requirements—use in commerce and
`bona fide use or use not merely to reserve a right.
`
`13
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 14 Date Filed: 04/12/2021
`
`No. 20-30418
`
`These requirements have nothing to do with a threshold use or sales
`requirement, nor do they imply that trademark rights, however weak, will
`vanish if sales are slow. In fact, sales are “not the sine qua non of trademark
`use.” Blue Bell, Inc. v. Farah Mfg. Co., Inc., 508 F.2d 1260, 1267 (5th Cir.
`1975). So, considering the Lanham Act’s requirements and the more
`prevalent view that even minor good-faith use can forestall abandonment, de
`minimis sales and sporadic use alone are not enough to warrant a conclusion
`that Mr. Perry has not made “use” of the mark in a way that qualifies as
`“use” under the Lanham Act.
`
`That said, Heinz has created an issue of fact as to whether Mr. Perry’s
`use of the Metchup mark was bona fide use or whether he was simply making
`sporadic use of the mark to maintain his trademark rights. Mr. Perry has a
`history of acquiring domain names with no intention of using them and with
`hopes of selling them for a profit. This “domain squatting” is akin to a
`trademark maintenance program. And evidence suggests that Mr. Perry
`might have been doing something similar with the Metchup trademark.
`
`Mr. Perry made next to no effort to grow the sales of Metchup. He
`never registered his trademark in Louisiana, never attempted to sell Metchup
`in local stores, restaurants, or farmer’s markets; never attempted to increase
`production or improve packaging; and never attempted to sell the product
`online or advertise where the product could be purchased online. His only
`attempts to get Metchup into stores came when he sent unsolicited samples
`to national groceries and to a store in New Orleans after he found out Heinz
`was selling a similar product and had used the name Metchup in its
`marketing. At the time of his deposition, Mr. Perry had no Metchup on hand.
`Thus a reasonable jury could infer that Mr. Perry’s registration and use of
`the trademark was something other than a sincere, good-faith business effort
`and something more like a trap that Heinz unwittingly fell into.
`
`But if that inference is to be made, it should be made by a finder of fact
`because “summary judgment is rarely proper when an issue of intent is
`involved.” Guillory v. Domtar Indus. Inc. v. John Deere Co., 95 F.3d 1320, 1326
`
`14
`
`

`

`Case: 20-30418 Document: 00515817174 Page: 15 Date Filed: 04/12/2021
`
`No. 20-30418
`
`(5th Cir. 1996). Heinz has a heavy burden, and the absence of definitive proof
`of a trademark maintenance program like the one in Humble requires an
`examination of Mr. Perry’s intent and credibility to determine whether his
`use of the Metchup mark was bona fide use. After all, Mr. Perry had hoped
`to sell millions of bottles and testified that he contemplated expanding
`production and improving packaging. Consequently, his efforts could also be
`seen as a foundering business venture rather than a trademark trap. We
`therefore vacate the district court’s grant of summary judgment on Heinz’s
`cancelation counterclaim and remand the case to the district court for further
`proceedings to address whether Mr. Perry made bona fide use of the
`Metchup mark.
`
`IV.
`
`We AFFIRM in part and VACATE in part and REMAND for
`further proceedings on Heinz’s counterclaim and the issue of abandonment.
`
`15
`
`