Case: 20-30418 Document: 00515837264 Page: 1 Date Filed: 04/26/2021
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`CASE NO. 20-30418
`
`UNITED STATES COURT OF APPEALS
`FOR THE FIFTH CIRCUIT
`
`DENNIS PERRY,
`PLAINTIFF – APPELLANT
`
`V.
`
`H.J. HEINZ COMPANY BRANDS LLC AND
`KRAFT HEINZ FOODS COMPANY,
`DEFENDANTS – APPELLEES
`
`ON APPEAL FROM THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF LOUISIANA
`HON. GREG GERARD GUIDRY
`CASE NO. 2:19-CV-00280
`
`APPELLANT’S PETITION FOR REHEARING EN BANC
`
`Brad E. Harrigan (Bar No. 29592)
`Kenneth L. Tolar (Bar No. 22641)
`TOLAR HARRIGAN & MORRIS LLC
`1055 St. Charles Avenue, Suite 208
`New Orleans, LA 70130
`Telephone: (504) 571-5317
`Facsimile: (504) 571-5437
`bharrigan@nolaipa.com
`ktolar@nolaipa.com
`
`
`
`CASE NO. 20-30418
`
`UNITED STATES COURT OF APPEALS
`FOR THE FIFTH CIRCUIT
`
`DENNIS PERRY,
`PLAINTIFF – APPELLANT
`
`V.
`
`H.J. HEINZ COMPANY BRANDS LLC AND
`KRAFT HEINZ FOODS COMPANY,
`DEFENDANTS – APPELLEES
`
`ON APPEAL FROM THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF LOUISIANA
`HON. GREG GERARD GUIDRY
`CASE NO. 2:19-CV-00280
`
`APPELLANT’S PETITION FOR REHEARING EN BANC
`
`Brad E. Harrigan (Bar No. 29592)
`Kenneth L. Tolar (Bar No. 22641)
`TOLAR HARRIGAN & MORRIS LLC
`1055 St. Charles Avenue, Suite 208
`New Orleans, LA 70130
`Telephone: (504) 571-5317
`Facsimile: (504) 571-5437
`bharrigan@nolaipa.com
`ktolar@nolaipa.com
`
`
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`Case: 20-30418 Document: 00515837264 Page: 2 Date Filed: 04/26/2021
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`CERTIFICATE OF INTERESTED PERSONS
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`The undersigned counsel of record certifies that the following listed
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`persons and entities as described in the fourth sentence of Rule 28.2.1
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`have an interest in the outcome of this case. These representations are
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`made in order that the judges of this court may evaluate possible
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`disqualification or recusal.
`
`A. Parties:
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`1. Dennis Perry
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`2. H.J. Heinz Company Brands LLC (“Heinz Brands”) is a
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`wholly owned subsidiary of The Kraft Heinz Company, a publicly held
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`Delaware corporation traded as KHC on the NASDAQ. Berkshire
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`Hathaway, Inc. owns more than ten percent of the stock of The Kraft
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`Heinz Company.
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`3. Kraft Heinz Foods Company is a wholly owned subsidiary of
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`The Kraft Heinz Company, a publicly held Delaware corporation traded
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`as KHC on the NASDAQ. Berkshire Hathaway, Inc. owns more than ten
`
`percent of the stock of The Kraft Heinz Company.
`
`ii
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`B. Counsel:
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`1.
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`Brad E. Harrigan and Kenneth L. Tolar of TOLAR HARRIGAN
`
`& MORRIS LLC for the Plaintiff, Dennis Perry.
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`C. Tracy Zurzolo Quinn, L. Bradley Hancock, and Ashley Kristi
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`Soppet of HOLLAND & KNIGHT LLP for the Defendants, H.J. Heinz
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`Company Brands LLC and Kraft Heinz Foods Company.
`
`/s/Brad E. Harrigan
`Brad E. Harrigan (Bar No. 29592)
`Attorney of Record for Dennis Perry
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`iii
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`RULE 35(b)(1) STATEMENT
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`The questions presented by this petition satisfy the criteria of
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`Federal Rule of Appellate Procedure 35(b)(1) insofar as the Panel’s
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`decision conflicts with well-established Fifth Circuit precedent, as well
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`as controlling law from the United States Supreme Court.
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`The instant petition requests rehearing en banc of the Panel’s
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`decision affirming summary judgment dismissing Appellant’s trademark
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`claims where the Panel acknowledged that Appellee was using identical
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`and confusingly similar trademarks in connection with the sale of
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`identical goods.
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`This Circuit has routinely held that whether likelihood of confusion
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`exists between two trademarks is a question of fact. See, e.g., Viacom Int’l
`
`v. IJR Capital Investments, L.L.C., 891 F.3d 178, 192 (5th Cir. 2018)
`
`(“Likelihood of confusion is a question of fact.”); Soc’y of Fin. Examiners
`
`v. Nat’l Ass’n of Certified Fraud Examiners Inc., 41 F.3d 223, 224 (5th
`
`Cir. 1995); Great Am. Rest. Co. v. Domino’s Pizza LLC, 348 F. App’x 907,
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`909 (5th Cir. 2009). However, in contravention of well-established Fifth
`
`Circuit precedent that the inherently factual inquiry for likelihood of
`
`confusion is inappropriate for summary judgment, the Panel affirmed the
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`iv
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`dismissal of all of Appellant’s trademark claims against Appellee. In
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`reaching this decision, the Panel determined that several of the “digits of
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`confusion” used in the likelihood of confusion analysis weighed in
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`Appellant’s favor, yet nevertheless substituted its judgement for that of
`
`the jury in finding that Appellee’s use of identical and confusingly similar
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`marks in connection with identical products could not, as a matter of law,
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`amount to trademark infringement or counterfeiting.
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`Further, the Panel was obliged to construe all the evidence and
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`draw all reasonable inferences therefrom in the light most favorable to
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`the nonmoving party. See, e.g., Xtreme Lashes, LLC, 576 F.3d 221, 226
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`(5th Cir. 2009). Nevertheless, the Panel weighed the evidence presented
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`on each issue to make factual determinations on several of the factors.
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`The Panel even made a factual determination as to Appellee’s intent,
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`despite Supreme Court precedent stating that it is inappropriate to weigh
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`intent on summary judgment. See, e.g., Hardin v. Pitney-Bowes Incorp.,
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`451 U.S. 1008, 1008, 101 S. Ct. 2345, 2346, 68 L. Ed. 2d 861 (1981) (“It
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`has long been established that it is inappropriate to resolve issues of
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`credibility, motive, and intent on motions for summary judgment.”)
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`v
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`If the Panel intended to overrule established Fifth Circuit
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`precedent on likelihood of confusion and upend trademark law, then this
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`should only be done following en banc review.
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`vi
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`TABLE OF CONTENTS
`
`CERTIFICATE OF INTERESTED PERSONS ........................................ ii
`RULE 35(b)(1) STATEMENT .................................................................. iv
`TABLE OF AUTHORITIES ...................................................................viii
`STATEMENT OF THE ISSUES PRESENTED ....................................... 1
`STATEMENT OF THE DISPOSITION OF THE CASE .......................... 3
`STATEMENT OF FACTS FOR REHEARING ......................................... 4
`ARGUMENT ............................................................................................. 6
`I.
`The Panel erred in its likelihood of confusion analysis by making
`multiple findings of fact and weighing the evidence on summary
`judgment against Mr. Perry. ............................................................ 6
`a.
`First Digit: “Type of Mark” ..................................................... 9
`b.
`Second Digit: “Mark Similarity” ........................................... 10
`c.
`Third Digit: “Product Similarity”.......................................... 12
`d.
`Fourth Digit: “Outlet and Purchaser Identity” .................... 13
`e.
`Fifth Digit: “Advertising Media Identity” ............................. 14
`f.
`Sixth Digit: “Defendant’s Intent” .......................................... 16
`g.
`Seventh Digit: “Care Exercised by Potential Purchasers” ... 18
`h.
`Eight Digit: “Actual Confusion” ............................................ 18
`CONCLUSION ........................................................................................ 19
`CERTIFICATE OF SERVICE ................................................................. 21
`CERTIFICATE OF COMPLIANCE ........................................................ 22
`
`vii
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`TABLE OF AUTHORITIES
`
`Cases
`Capital Films Corp. v. Charles Fries Productions, Inc. 628 F.2d 387 (5th
`Cir. 1980) ................................................................................................. 14
`Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188 (5th Cir. 1998)
` ........................................................................................................... 11, 18
`Future Proof Brands, LLC v. Molson Coors Beverage Co., 982 F.3d 280
`(5th Cir. 2020) ........................................................................................... 12
`Great Am. Rest. Co. v. Domino’s Pizza LLC, 348 F. App’x 907 (5th Cir.
`2009) ..................................................................................................... iv, 7
`Han Beauty, Inc. v. Alberto-Culver Co., 236 F.3d 1333 (Fed. Cir. 2001) 8
`Hardin v. Pitney-Bowes Incorp., 451 U.S. 1008, 101 S. Ct. 2345 (1981) . v,
`16
`Herbko Int’l, Inc. v. Kappa Books, Inc., 308 F.3d 1156 (Fed. Cir. 2002) . 8
`Moore Bus. Forms, Inc. v. Ryu, 960 F.2d 486 (5th Cir. 1992) ................ 10
`Soc’y of Fin. Examiners v. Nat’l Ass’n of Certified Fraud Examiners Inc.,
`41 F.3d 223 (5th Cir. 1995) .................................................................. iv, 7
`Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Ass'n, 651 F.2d 311 (5th
`Cir. 1981) ................................................................................................. 10
`Sun-Maid Raisin Growers of Cal v. Sunaid Food Prods., Inc., 356 F.2d
`467 (5th Cir. 1966) .................................................................................... 12
`Viacom Int’l v. IJR Capital Investments, L.L.C., 891 F.3d 178 (5th Cir.
`2018) ..................................................................................................... iv, 6
`World Carpets, Inc. v. Dick Littrell’s New World Carpets, 438 F.2d 482
`(5th Cir. 1971) ......................................................................................... 19
`
`viii
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`Statutes
`15 U.S.C. § 1051 ........................................................................................ 3
`Treatises
`J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition
`§ 23:115 (4th ed. 2011) ............................................................................ 17
`
`ix
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`Case: 20-30418 Document: 00515837264 Page: 10 Date Filed: 04/26/2021
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`TO THE HONORABLE COURT OF APPEALS:
`
`Pursuant to Federal Rule of Appellate Procedure 35, Plaintiff-
`
`Appellant, Dennis Perry, respectfully submits this petition for rehearing
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`en banc of the decision in Perry v. H.J. Heinz Company Brands, et al., No.
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`20-30418, decided April 12, 2021, by the Hon. Chief Judge Owen and the
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`Hon. Graves and Ho (the “Panel”).
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`STATEMENT OF THE ISSUES PRESENTED
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`Can competitors now freely use each other’s registered trademarks,
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`so long as they make the product labels sufficiently distinct?
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`In its decision, the Panel held that Mr. Perry owned a valid federal
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`trademark registration for “METCHUP” for use in connection with a
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`ketchup and mayonnaise condiment sauce. The Panel further found that
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`H.J. Heinz Company Brands LLC and Kraft Heinz Foods Company
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`(collectively, “Heinz”) used the marks “METCHUP” and “MAYOCHUP”
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`to advertise its own competing ketchup and mayonnaise condiment
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`sauce. However, despite the identical use of a federally registered mark
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`in connection with identical products, the Panel affirmed the trial court’s
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`ruling on summary judgment dismissing Mr. Perry’s trademark claims
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`against Heinz. Specifically, after weighing the “digits of confusion” for
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`1
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`trademark infringement and finding that “a few factors weigh in Mr.
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`Perry’s favor,” the Panel held that “no reasonable jury could conclude
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`that Heinz’s use of Metchup in advertising or the sale of its own product,
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`Mayochup, created a likelihood of confusion.” (Op. at 10).
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`The Fifth Circuit has routinely held that likelihood of confusion is
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`a “fact-intensive” inquiry inappropriate for summary judgment. This
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`Court has further held that “no single factor is dispositive, and a finding
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`of a likelihood of confusion need not be supported by a majority of the
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`factors.” Regardless, the Panel made multiple findings of fact on the
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`“digits of confusion” and weighed conflicting evidence on summary
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`judgment against Mr. Perry. If the Panel intended to overrule established
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`Fifth Circuit precedent on likelihood of confusion, then this should only
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`be done following en banc review.
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`The immediate questions for consideration on rehearing are:
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`1)
`
`Did the Panel err in making factual determinations and
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`weighing conflicting evidence against the non-moving party on summary
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`judgment to find that no reasonable jury could conclude that the use of
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`an identical and a confusingly similar mark in connection with the sale
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`of identical products created a likelihood of confusion, particularly where
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`2
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`the Panel acknowledged that several of the “digits of confusion” for
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`trademark infringement weighed in Mr. Perry’s favor?
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`2)
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`Did the Panel err in finding that Heinz’s use of an identical
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`mark in connection with the sale of identical products cannot, as a matter
`
`of law, amount to trademark counterfeiting if the product packaging
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`looks different?
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`STATEMENT OF THE DISPOSITION OF THE CASE
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`Perry sued Heinz for trademark infringement, false designation of
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`origin, and counterfeiting under the Lanham Act, 15 U.S.C. § 1051, et
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`seq., and related state law claims for trademark infringement, dilution,
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`and unfair competition. (ROA.252).
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`Notwithstanding ample evidence and testimony concerning Heinz’s
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`infringing use of “METCHUP” and “MAYOCHUP,” the district court
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`granted summary judgment to Heinz on all of Perry’s claims. First, based
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`solely on the purported lack of evidence for a single “digit of confusion,”
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`the court held that Perry could not establish a likelihood of confusion.
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`Next, even though Perry had nearly a decade of bona fide third-party
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`sales to out-of-state consumers and out-of-state transfers of his goods, the
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`court held Perry had not made use of his mark in “interstate commerce.”
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`3
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`Lastly, the court held that Perry had “abandoned” his trademark because
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`he failed to meet some unspecified minimum sales threshold, despite
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`making continuous use of his mark every year since the mark was
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`registered. (ROA.2669).
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`On appeal, the Panel reversed the district court’s grant of summary
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`judgment
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`cancelling Perry’s
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`incontestable
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`federal
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`trademark
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`registration, holding that Perry had made bona fide use of his mark in
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`commerce and that Heinz could not meet its burden of proof on the
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`factual issues presented in its counterclaim for cancellation. However,
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`the Panel affirmed the district court’s ruling granting summary
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`judgment on Perry’s claims against Heinz, finding that, although “a few
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`[of the likelihood of confusion] factors weigh in Mr. Perry’s favor,” “no
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`reasonable jury could conclude that Heinz’s use of Metchup in advertising
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`or the sale of its own product, Mayochup, created a likelihood of
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`confusion.” (Op. at 6 and 10).
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`STATEMENT OF FACTS FOR REHEARING
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`Appellant, Dennis Perry, is an entrepreneur who created and sold
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`a mayonnaise and ketchup condiment sauce under the trademark
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`“METCHUP.” Since at least as early as August 15, 2010, Perry has
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`4
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`manufactured, bottled, and sold his “METCHUP” brand condiment
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`sauces within the United States. (ROA.2324). Furthermore, Perry has
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`advertised his “METCHUP” brand condiment sauces for nearly a decade,
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`including at his domain name, www.metchup.com, which he purchased
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`on June 13, 2007. (ROA.2329-30; ROA.2457). On June 15, 2007, Perry
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`applied to register his “METCHUP” trademark with the United States
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`Patent & Trademark Office (“USPTO”). (ROA.2322). The USPTO
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`subsequently issued a certificate of registration for his mark on February
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`15, 2011. (Id.)
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`In 2018, Heinz created and branded a competing mayonnaise and
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`ketchup condiment sauce which it advertised using Perry’s registered
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`trademark “METCHUP” and which it sold under the confusingly similar
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`mark “MAYOCHUP.” Beneath large, bold letters bearing the words
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`“Heinz Metchup,” Heinz’s website included a full-page photograph of a
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`mockup of a Heinz condiment bottle bearing the trademark
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`“METCHUP,” as depicted below:
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`5
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`(ROA.2325-26; ROA.2337-38).
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`In its opinion, the Panel found that “Mr. Perry has conclusive
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`evidence that he owns a valid trademark and has shown that Heinz has
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`used both the Metchup trademark and the Mayochup name in
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`commerce.” (Op. at 6). However, after evaluating the “digits of confusion”
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`for trademark infringement and finding that “a few factors” weigh in
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`Perry’s favor and other factors weighed in Heinz’s favor, the Panel
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`affirmed the district court’s ruling dismissing all of Perry’s claims.
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`ARGUMENT
`
`I.
`
`The Panel erred in its likelihood of confusion analysis by
`making multiple findings of fact and weighing the evidence
`on summary judgment against Mr. Perry.
`
`This Circuit has routinely held that whether likelihood of confusion
`
`exists between two marks is a question of fact. See, e.g., Viacom Int’l v.
`
`IJR Capital Investments, L.L.C., 891 F.3d 178, 192 (5th Cir. 2018)
`
`6
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`
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`(“Likelihood of confusion is a question of fact.”); Soc’y of Fin.
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`Examiners v. Nat’l Ass’n of Certified Fraud Examiners Inc., 41 F.3d 223,
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`224 (5th Cir. 1995) (“Reviewing the district court’s grant of summary
`
`judgment [on likelihood of confusion] de novo, this court determines that
`
`these fact-intensive inquiries cannot be conducted properly
`
`without a trial.”); Great Am. Rest. Co. v. Domino’s Pizza LLC, 348 F.
`
`App’x 907, 909 (5th Cir. 2009) (vacating grant of summary judgment on
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`likelihood of confusion, noting that use of similar trademark in
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`connection with similar goods created a “factual issue”
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`precluding summary judgment).
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`When deciding whether a trademark use is confusing, courts rely
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`on a non-exhaustive set of factors called the “digits of confusion,” which
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`include: (1) the type of trademark, (2) mark similarity, (3) product
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`similarity, (4) outlet and purchaser identity, (5) advertising media
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`identity, (6) defendant’s intent, (7) care exercised by potential
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`purchasers, and (8) actual confusion. (Op. at 6). Although all factors are
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`to be considered, the factors are not all given equal weight. The key
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`factors in any likelihood are the similarly of the marks and the
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`similarity of the goods. See, e.g., Herbko Int’l, Inc. v. Kappa Books, Inc.,
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`7
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`308 F.3d 1156, 1164–65 (Fed. Cir. 2002) (“The likelihood of confusion
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`analysis considers all [likelihood of confusion] factors for which there is
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`record evidence but “may focus ... on dispositive factors, such as
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`similarity of the marks and relatedness of the goods.’”); Han Beauty, Inc.
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`v. Alberto-Culver Co., 236 F.3d 1333, 1336 (Fed. Cir. 2001).
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`Mr. Perry offered evidence in support of every factor but the last –
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`actual confusion. Nevertheless, and despite longstanding Fifth Circuit
`
`precedent that the inherently factual inquiry for likelihood of confusion
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`is inappropriate for summary judgment, the Panel affirmed the dismissal
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`all of Perry’s claims against Heinz. In reaching this decision, the Panel
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`determined that several of the digits of confusion weighed in each party’s
`
`favor, yet nevertheless substituted its judgement for that of the jury in
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`finding that Heinz’s use of “METCHUP” and/or “MAYOCHUP” was not
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`confusingly similar to Perry’s federal “METCHUP” registration when
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`applied to identical goods. Specifically, the Panel held that “Heinz used
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`the exact word Metchup on a mock-up bottle in online advertising”
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`(second digit: mark similarity), the “products are similar” (third digit:
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`product similarity), and the “low price perhaps suggests that potential
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`8
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`purchasers are less likely to exercise care when buying” (seventh digit:
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`care exercised by potential purchasers. (Op. at 6-7).
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`Further, the Panel was obliged to construe all the evidence and
`
`draw all reasonable inferences therefrom in the light most favorable to
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`the nonmoving party. See, e.g., Xtreme Lashes, LLC, 576 F.3d 221, 226
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`(5th Cir. 2009). Nevertheless, and as noted in the following sections, the
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`Panel weighed the evidence presented on each issue to make factual
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`determinations on several of the factors, giving Heinz the benefit of the
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`doubt on these issues instead of viewing the facts in the light most
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`favorable to Mr. Perry.
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`a.
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`First Digit: “Type of Mark”
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`The Panel held that the first digit of confusion, “type of mark,”
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`weighed in Heinz’s favor. Specifically, the Panel held that “[t]rademarks
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`are evaluated on a spectrum,” Perry’s “Metchup is a suggestive mark,”
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`and “suggestive marks are considered weaker than marks that are
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`arbitrary and fanciful….” (Op. at 7).
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`However, just because suggestive marks are weaker than arbitrary
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`and fanciful marks does not mean that they are “weak” for trademark
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`purposes. Suggestive marks are inherently stronger than descriptive
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`9
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`marks and, unlike descriptive marks, are strong enough for protection
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`without proof of secondary meaning. See, e.g., Sun Banks of Fla., Inc. v.
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`Sun Fed. Sav. & Loan Ass'n, 651 F.2d 311, 315 (5th Cir. 1981). The Fifth
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`Circuit has previously held that suggestive trademarks are “sufficiently
`
`strong” and have weighed this factor in favor of the plaintiff. See, e.g.,
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`Moore Bus. Forms, Inc. v. Ryu, 960 F.2d 486, 490 (5th Cir. 1992).
`
`The Panel therefore erred in finding that this factor weighed in
`
`Heinz’s favor. At worst, the Panel should have held that this factor
`
`weighed in neither party’s favor.
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`b.
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`Second Digit: “Mark Similarity”
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`In identifying the factors that weighed in Mr. Perry’s favor, the
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`Panel held that “Heinz used the exact word Metchup on a mock-up bottle
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`in online advertising.” (Op. at 7). However, the Panel then stated that
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`“trademarked words cannot be isolated from the labels on which they
`
`appear, and these labels and bottles look nothing alike.” (Op. at 7). The
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`Panel went on to note that “the products’ distinguishable packaging
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`mitigates against Heinz’s use of the word Metchup because the packaging
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`differences make confusion less likely.” Id. Though unclear, the Panel
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`10
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`appears to indicate that it may have ultimately weighed this factor
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`against Mr. Perry.
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`Although it is true that product labels should be taken into
`
`consideration, the Panel appears to have elevated the products’ trade
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`dress over the use of the actual trademarks. The Panel’s overreliance on
`
`product packaging opens the door for competitors to freely use one
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`another’s trademarks, so long as they also use different colors, fonts, and
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`styles in their packaging. If trademark law can be skirted as easily as
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`changing the color and shape of product packaging, then why have
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`registered word marks at all? The similarity of competing marks requires
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`consideration of the marks’ appearance, sound, and meaning. Elvis
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`Presley Enterprises, Inc. v. Capece, 141 F.3d 188, 201 (5th Cir. 1998). Here,
`
`the Panel stopped the analysis at “appearance.” Moreover, the Panel
`
`made a clear factual determination in finding that the “labels and bottles
`
`look nothing alike.” Considering that the trademarks themselves are the
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`most predominant aspects of the respective bottles, a jury could
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`reasonably reach the conclusion that this factor weighs in Mr. Perry’s
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`favor.
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`11
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`In support of this decision, the Panel cited to this Court’s decisions
`
`in Sun-Maid and Future Proof Brands to show that differences in
`
`packaging can help obviate confusion. See Sun-Maid Raisin Growers of
`
`Cal v. Sunaid Food Prods., Inc., 356 F.2d 467, 469 (5th Cir. 1966); Future
`
`Proof Brands, LLC v. Molson Coors Beverage Co., 982 F.3d 280, 287-88
`
`(5th Cir. 2020). However, the issue of likelihood of confusion in Sun-Maid
`
`was resolved against confusion following a bench trial on the merits.
`
`Future Proof Brands concerned the denial of a preliminary injunction
`
`with dissimilar marks and which was reviewed for abuse of discretion.
`
`Neither case involved the dismissal of the plaintiffs’ claims for likelihood
`
`of confusion on summary judgment. Here, however, the Panel substituted
`
`its findings for those of the fact-finder and determined, as a matter of
`
`law, that no reasonable jury could find confusion between identical
`
`trademarks used in connection with identical products if there are
`
`differences in the product packaging. This is contrary to clearly
`
`established Fifth Circuit precedent.
`
`c.
`
`Third Digit: “Product Similarity”
`
`The Panel held that this factor weighed in Mr. Perry’s favor, noting
`
`that “setting aside production methods, the products are similar.”
`
`12
`
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`Case: 20-30418 Document: 00515837264 Page: 22 Date Filed: 04/26/2021
`
`d.
`
`Fourth Digit: “Outlet and Purchaser Identity”
`
`Next, the Court held that “[b]oth Mr. Perry and Heinz are selling to
`
`potential condiment purchasers.” (Op. at 8). However, although the Panel
`
`noted that the parties were selling to the same types of purchasers, the
`
`Panel then relied on the fact that Perry is not currently selling his
`
`products in grocery stores or online to find that the parties “have to date
`
`targeted different segments of this market.” (Op. at 8). This amounts to
`
`an arbitrary distinction between “condiment purchasers.” More
`
`importantly, it is a factual finding that is plainly improper for summary
`
`judgment.
`
`The Panel relied on the fact that Heinz beat Mr. Perry to grocery
`
`store shelves as a basis for finding that the junior user of a confusingly
`
`similar mark has not committed trademark infringement as a matter of
`
`law. However, since Mr. Perry’s federal trademark registration does not
`
`limit his channels of trade, such a finding opens the door for both
`
`products being situated next to each other on store shelves in the future.
`
`This was the basis for Perry’s claim for “reverse trademark confusion.”
`
`Reverse confusion occurs when a large junior user, such as Heinz,
`
`saturates the market with a trademark similar or identical to that of a
`
`13
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`
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`Case: 20-30418 Document: 00515837264 Page: 23 Date Filed: 04/26/2021
`
`smaller, senior user, such as Mr. Perry. In such a case, the senior user is
`
`damaged because the public starts to assume that the senior user’s
`
`products are really the junior user’s, that the former has become
`
`somehow connected with the latter, or that the senior’s user product is a
`
`knock off. See, e.g., Capital Films Corp. v. Charles Fries Productions, Inc.
`
`628 F.2d 387, 394 (5th Cir. 1980). In this case, reverse confusion will cause
`
`consumers to assume that Mr. Perry is a licensee of Heinz or that he is
`
`the actual infringer.
`
`At bottom, the identity of the purchasers weighed in Mr. Perry’s
`
`favor while the identity of retail outlets arguably weighed in Heinz’s
`
`favor. However, the Panel improperly weighed the evidence against Mr.
`
`Perry to reach the factual conclusion that the identity of the retail outlets
`
`and purchasers were sufficiently distinct so as to obviate confusion.
`
`e.
`
`Fifth Digit: “Advertising Media Identity”
`
`With respect to the fifth digit of confusion, the Panel correctly noted
`
`that both parties “marketed their products on the Internet.” (Op. at 8).
`
`However, the Panel (incorrectly)1 noted that “Mr. Perry’s online presence
`
`1 Perry advertised his “METCHUP” products at his website
`www.metchup.com (ROA.975), on his Facebook business page (ROA.975;
`
`14
`
`
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`Case: 20-30418 Document: 00515837264 Page: 24 Date Filed: 04/26/2021
`
`was limited to a Facebook page with pictures of Metchup bottles on it.”
`
`Id. The Panel then noted that “unlike Heinz, [Perry] has never used the
`
`internet for sales or large-scale advertising.” Consequently, the Panel
`
`held that the advertising media identity weighed in Heinz’s favor.
`
`In reaching this conclusion, the Panel improperly weighed the
`
`evidence in Heinz’s favor. Further, the Panel’s decision to cite Perry’s
`
`lack of internet sales against him on this issue conflates the fifth digit
`
`(“advertising media identity”) with the fourth digit (“identity of retail
`
`outlets”). This digit concerned advertising, and on this point, the Panel
`
`acknowledged that both parties advertised their goods via the internet.
`
`Moreover, the fact that one party engages in “large scale” advertising
`
`does not mean that the digit weighs in Heinz’s favor – particularly where
`
`there was no evidence presented of Heinz’s advertising expenditures or
`
`the scope of its reach.
`
`Once again, the Panel improperly weighed the evidence against
`
`Perry and made a factual determination that this digit weighed in
`
`Heinz’s favor, in clear contravention of Fifth Circuit precedent.
`
`ROA.1118-1126), and on two other websites owned by Perry (ROA.2188-
`2208).
`
`15
`
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`Case: 20-30418 Document: 00515837264 Page: 25 Date Filed: 04/26/2021
`
`f.
`
`Sixth Digit: “Defendant’s Intent”
`
`The Panel next made a factual determination as to Heinz’s intent,
`
`despite Supreme Court and Fifth Circuit precedent stating that it is
`
`inappropriate to weigh intent on summary judgment. See, e.g., Hardin v.
`
`Pitney-Bowes Incorp., 451 U.S. 1008, 1008, 101 S. Ct. 2345, 2346, 68 L.
`
`Ed. 2d 861 (1981) (“It has long been established that it
`
`is inappropriate to resolve
`
`issues of credibility, motive,
`
`and intent on motions for summary judgment.”)
`
`Perry offered evidence that Heinz knew about Perry’s federal
`
`registration prior to adopting both “METCHUP” and “MAYOCHUP” to
`
`advertise and sell their own competing products. Specifically, Perry
`
`submitted evidence that Heinz’s in-house legal department discovered
`
`the existence of Perry’s trademark registration prior to launching its
`
`products or using Perry’s trademark registration. (ROA.1128; ROA.1134-
`
`35). As noted in a leading trademark treatise, “a wrongful intent can
`
`sometimes be inferred where the junior user knew of the senior
`
`user’s closely similar mark used on similar goods or services, had
`
`freedom to choose any mark, and ‘just happened’ to choose a
`
`16
`
`
`
`Case: 20-30418 Document: 00515837264 Page: 26 Date Filed: 04/26/2021
`
`mark confusingly similar to plaintiff’s mark.” J. Thomas McCarthy,
`
`McCarthy on Trademarks and Unfair Competition § 23:115 (4th ed. 2011)
`
`However, in making its ruling that the “defendant’s intent” weighed
`
`in Heinz’s favor, the Panel brushed aside all of Perry’s evidence. Instead,
`
`the Panel held that, “[w]hile 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.” (Op. at 8). But Heinz never concluded or even argued that it believed
`
`Perry’s mark was “no longer in use.” Instead, Heinz expressly stated that
`
`“[a]fter evaluating the search results, which included Perry’s METCHUP
`
`registration, Kraft Heinz’s counsel determined that MAYOCHUP was
`
`sufficiently distinct from other marks reported in the search and advised
`
`the business team that they could proceed to
`
`launch Heinz
`
`MAYOCHUP.” (Heinz Br. at 39). Heinz’s argument wasn’t that it
`
`believed Perry had discontinued use – a belief which could have been
`
`easily refuted by simply visiting www.metchup.com – instead, Heinz’s
`
`argument is that it believed that its use was sufficiently distinct from
`
`Perry’s use.
`
`17
`
`
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`Case: 20-30418 Document: 00515837264 Page: 27 Date Filed: 04/26/2021
`
`Instead of drawing all reasonable inferences in favor of Mr. Perry,
`
`the Panel inexplicably gave Heinz the benefit of the doubt on a clear
`
`question of fact. This digit of confusion should have weighed in favor of
`
`Perry.
`
`g.
`
`Seventh Digit: “Care Exercised by Potential Purchasers”
`
`The Panel weighed this factor in favor of Mr. Perry, noting that the
`
`“low price perhaps suggests that potential purchasers are less likely to
`
`exercise care when buying.” (Op. at 6).
`
`h.
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`Eight Digit: “Actual Confusion”
`
`Perry conceded that the final digit of confusion, “actual confusion,”
`
`weighed in Heinz’s favor with respect to Heinz’s use of “METHCUP,” as
`
`Perry did not introduce evidence on this digit. However, the Fifth Circuit
`
`has repeatedly held that evidence
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