The IP Law Blog Focusing on legal trends in data security, cloud computing, data privacy, and anything E

Bridging the Gap in Cases of Trademark Infringement

Posted in Trademark Law

By: Scott Hervey

Often in trademark cases, the goods or services at issue are either exactly the same, related or complementary.  In cases where the goods are non-competitive or not related, often that will be the end of the inquiry into likelihood of confusion.  However, in the case of non-competitive goods, infringement can be found where a junior user began using a mark for such goods before the senior user where the senior user is able to show it is likely that it will enter into this market.  Courts refer to this as “bridging the gap.” Some courts examine this under the framework of the senior user’s interest in preserving avenues of expansion and entering into related fields.   Other courts look at it as a question of whether it was likely that a senior user would enter into a different product market currently occupied by a junior user.  Either way, in certain cases it can be a crucial factor in determining likelihood of confusion.

The test of trademark infringement under state, federal, and common law is whether there will be a likelihood of confusion.  In the 9th Circuit, to determine whether there is a likelihood of confusion, a court will engage in an analysis of the eight factor test set forth in the seminal case of AMF Inc. v. Sleekcraft Boats.  Those factors are the,(1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product lines, sometimes also referred to as “bridging the gap.” Some Sleekcraft factors, such as the first three, tend to get more attention and are considered more important than the others.   However, in trademark cases dealing with noncompeting goods, courts will look at the “bridging the gap” factor to determine whether it is likely that that trademark owner will expand its line of trademark products to include the type of product being sold by the defendant.

So, how does a plaintiff establish that it has a legitimate business interest in expanding the use of its mark to the new line of product then being sold by the defendant?   The possibility of expansion can not be merely theoretical; their must be a solid plan in place or action taken which shows that expansion will occur in the very near future.  In M2 Software, Inc. v. Madacy Entertainment, the 9th Circuit stated that there needs to be a “strong possibility of expansion into competing markets.” 

In M2 Software the court was to consider whether Madacy’s use of the trademark M2 ENTERTAINMENT for a record label that sold full-priced CDs featuring a line of sports-related music infringed M2 Software’s M2 trademark for computer software featuring business management applications for the film and music industries.

Since 1994, M2 Software maintained and licensed database software used for processing and managing data of major record companies’ musical works.   In addition to providing database products and music content administration services to major record companies, a small portion of M2 Software was devoted to music production.  M2 Software sold a small line of interactive music on CDs and other media.  These music products bore the M2, M2 Interactive, or M2 Music marks and were offered for sale on M2 Software’s internet website and via Amazon. 

Madacy was a recording and distribution company that specialized in low-price collections of recorded music.  Madacy licensed the music it distributed from other companies, such as BMG Music.  In 1999, Madacy created a new division named M2 Entertainment.   The new division would use M2 Entertainment as the trademark for full-priced CDs featuring a line of sports-related music tied to local professional sports teams.   Madacy filed an “intent-to-use” trademark application with the USPTO for its M2 Entertainment mark in August 1999.  

Although both parties distributed music, the court found compelling the fact that the music differed by genre – acid jazz as compared to sports music.  M2 Software argued that it was likely that it would bridge the gap and begin distributing mainstream music.  The district court held (and the 9th Circuit agreed)  that M2 Software’s sale of no more than 215 CDs over a ten-year period  undermined its claim that there was a strong possibility of it expanding into competing markets.  The evidence showed it was doubtful that M2 Software would bridge the gap and expand into general retail distribution of music CDs. 

In determining the likelihood of “bridging the gap” courts also look at whether the relevant consumer might find it natural for one company to sell products in both markets.  In Hormel Foods v. Jim Henson Productions the 2nd Circuit examined this element in reviewing the district court’s denial of Hormel Food’s permanent injunction against Jim Henson that would have precluded the use of the character “Spa’am” in Henson’s film “Muppet Treasure Island” and on associated merchandise.  The 2nd Circuit found that there was no evidence the consumers would find it natural that Hormel, the manufacturer of SPAM, would expand into the field of puppet entertainment and its attendant merchandising.