Addressing the likelihood of confusion for competing marks used in connection with financial services, the US Court of Appeals for the First Circuit largely reversed the district court's finding that the defendant's use of various marks containing the word ORIENTAL did not infringe the plaintiff's rights in its family of ORIENTAL marks. Oriental Financial Group, Inc. v. Cooperativa de Ahorro Y Crédito Oriental, Case No. 15-1009 (1st Cir., Aug. 3, 2016) (Lipez, J).
Factually and procedurally, the case has a lengthy history. Oriental Financial Group (Oriental Group) started in eastern Puerto Rico and later expanded throughout the island. It has used the word mark ORIENTAL to market its financial services since 1964 and uses ORIENTAL in several of its service marks and trademarks. Cooperativa de Ahorro Y Crédito Oriental began using the word mark COOP ORIENTAL to market its financial services in 1995. Until 2008, Cooperativa maintained a few branches that were confined to eastern Puerto Rico and engaged in minimal advertising. In 2008, Cooperativa began expanding across the island, started an advertising campaign, and eventually adopted a new logo and trade dress that was similar to Oriental Group's branding. Several incidents of consumer confusion followed, and Oriental Group sued Cooperativa in 2010 for service mark and trade dress infringement under 15 USC § 1125(a).
After a bench trial, the district court held that Cooperativa's new logo and trade dress were infringing, but permitted Cooperativa to continue to use the COOP ORIENTAL word mark. Oriental Group sought to amend the district court's injunction, but the district court denied that request.
On appeal, the First Circuit remanded and ordered the district court to assess whether Cooperativa's use of COOP ORIENTAL and similar marks caused a likelihood of confusion with Oriental Group's ORIENTAL mark. On remand, the district court found that there was no likelihood of confusion caused by Cooperativa's use of the word marks COOP ORIENTAL, COOPERATIVA ORIENTAL, ORIENTAL POP and CLUB DE ORIENTALITO. Oriental Group again appealed. Reviewing for clear error, the First Circuit held that the district court erred with respect to Cooperativa's use of COOP ORIENTAL, COOPERATIVA ORIENTAL and ORIENTAL POP, but found no clear error with respect to CLUB DE ORIENTALITO.
The First Circuit concluded that COOP ORIENTAL, COOPERATIVA ORIENTAL and ORIENTAL POP were indisputably similar to Oriental Group's family of ORIENTAL marks. The Court criticized the district court's use of judicial notice to find that consumers in Puerto Rico understand that for-profit entities such as Oriental Group are prohibited from using the word "cooperativa" or "coop" in their name (and credit unions like Cooperativa must use those words in their names). In other words, the district court found—without any evidentiary support—that a consumer would see "Coop" or "Cooperativa" in Cooperativa's marks and understand that Cooperativa legally could not be affiliated with Oriental Group. The Court found this use of judicial notice highly problematic because "public perception of a mark is central to any trademark dispute."
The First Circuit also disagreed with the district court's determination that the use of COOP and COOPERATIVA in Cooperativa's ORIENTAL marks served to dispel any confusion with Oriental Group because those terms were descriptive of Cooperativa's credit-union services. The fact that Oriental Group used a family of ORIENTAL marks further supported a finding of likelihood of confusion, as the Court found that consumers are likely to mistakenly believe that COOP ORIENTAL and COOPERATIVA ORIENTAL are part of that family of marks. Because of the strong similarities of COOP ORIENTAL, COOPERATIVA ORIENTAL and ORIENTAL POP to Oriental Group's ORIENTAL family of marks, the Court reversed the district court's finding that there was no likelihood of confusion with respect to these marks.
Practice Note: Much can be written about what went wrong in this case, including Cooperativa's failure to argue on appeal that Oriental Group's unregistered ORIENTAL marks were not entitled to protection (oriental means "eastern" in English and Spanish) and Oriental Group allowing Cooperativa's applications for ORIENTAL marks to register while this case was pending. Trademark owners should remember that brands must be protected and enforced on multiple fronts—in federal courts and at the US Patent and Trademark Office.
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