Descriptive Words in Otherwise Identical Marks Do Not Avoid Likelihood of Confusion

Overview

The Trademark Trial and Appeal Board affirmed a refusal to register the mark UPSIDE CAPITAL HOLDINGS for various real estate-related financial and investment services. This case underscores the high hurdle applicants face when attempting to register a mark that incorporates a previously registered mark as its dominant element, particularly when the respective identifications of services are broad enough to overlap in the marketplace.

Background

The Applicant filed an application seeking to register the mark UPSIDE CAPITAL HOLDINGS in standard characters for “Real estate investment advisory services; Financial and investment services, namely, real estate asset and real estate investment acquisition services, real estate consultation services, real estate advisory services, and real estate development services” in International Class 36. "CAPITAL HOLDINGS" was disclaimed.

The Trademark Examining Attorney refused registration under Section 2(d) based on a likelihood of confusion with the standard-character mark UPSIDE. The cited registration encompassed a variety of services, but the refusal focused specifically on Class 36 services identified as “Financial affairs and monetary affairs, namely, financial information, management and analysis services” and “information, advisory and consultancy services relating to” those services.

After a final refusal, the Applicant appealed to the Board.

How the Board Analyzed the DuPont Factors

DuPont #6: Number and Nature of Similar Marks in Use on Similar Services

The Applicant contended that the term "UPSIDE" was commercially weak and widely adopted in the financial and investment sectors. To support this, the Applicant submitted ten third-party registrations of UPSIDE-formative marks.

The Examining Attorney objected to several of these submissions, noting that one registration has been cancelled, and many of the remaining registrations were owned by the same entities or covered services that were not intrinsically similar to those in the cited registration.

The Board agreed, finding that the Applicant’s evidence was less impactful than it first appeared. Out of the active registrations, only two involved services similar to those under the cited mark. The Board stated that two registrations were insufficient to prove that the word "UPSIDE" had a well-recognized descriptive or suggestive meaning that would weaken its conceptual strength.

Ultimately, the Board found the cited mark to be inherently distinctive and entitled to a normal scope of protection, rendering this factor neutral.

DuPont #1: Similarity of the Marks

The Board compared the marks UPSIDE and UPSIDE CAPITAL HOLDINGS in their entireties as to appearance, sound, connotation, and commercial impression. The Board first identified the dominant portion of the Applicant’s mark, concluding that "UPSIDE" was the most significant element. This was based on the fact that "UPSIDE" is the first word in the mark and the Applicant had disclaimed "CAPITAL HOLDINGS," thereby conceding those words lacked source-identifying significance.

In terms of appearance, the Board examined the specimen of use, which showed "UPSIDE" in large white capital letters positioned above the words "CAPITAL HOLDINGS" in much smaller letters. The Board observed that this visual presentation emphasized the similarity between the marks by highlighting the dominant word "UPSIDE."

Regarding sound, the Board referenced the consumer tendency to shorten marks due to haste or economy of words. It found it highly likely that consumers would drop the descriptive phrase "CAPITAL HOLDINGS" when speaking, making the marks identical in sound if both were verbalized as "Upside." Even if the full mark were spoken, the Board noted that the aural differences would likely be heard as an extended version of the registrant's mark.

Regarding connotation, the Applicant argued that its mark conveyed a sophisticated, institutional meaning, while the cited mark suggested modern, consumer-facing automotive services. The Board rejected this, noting that "argument of counsel is no substitute for evidence." Taking judicial notice of dictionary definitions, the Board found that "upside" suggests an upward trend or potential prosperity in both marks. Consequently, the Board determined the marks were quite similar, and this factor strongly supported a likelihood of confusion.

DuPont #2: Similarity of the Services

The second DuPont factor required the Board to consider whether the consuming public would perceive the services as related enough to cause confusion about their source. The Examining Attorney argued that the services were related regardless of the specific fields in which they were actually used. To support this, the Examining Attorney provided evidence from seven third-party websites showing that single entities commonly provide both real estate advisory services and general financial management services under the same mark.

The Board noted that the cited registration for UPSIDE was broad and not limited to the automotive industry, as the Applicant had claimed. Because the registration covered "financial information, management and analysis services" without restriction, the Board assumed these services could be rendered to consumers in the real estate industry as well. The Board concluded that the third-party evidence was sufficient to show that the services were related, supporting a likelihood of confusion.

DuPont #3: Similarity of the Channels of Trade

The Applicant argued that its services were marketed through business-to-business channels and financial networks, whereas the registrant allegedly used online automotive platforms.

The Board found these arguments unpersuasive because the identifications of services in both the application and the cited registration contained no restrictions or limitations regarding trade channels or classes of consumers. The Board evaluated the trade channels specified in the application and the registration rather than how they might exist in the "real world." The Board assumed that the services move in all usual channels of trade and are available to all potential classes of consumers. Furthermore, the evidence of third-party websites showing companies providing both sets of services under a single mark reinforced the conclusion that the trade channels overlap. This factor also supported a likelihood of confusion.

DuPont #4: Conditions of Sale and Sophistication of Purchasers

The Applicant argued that the fourth DuPont factor weighed against a likelihood of confusion because its clients were sophisticated investors engaged in high-stakes, multimillion-dollar transactions. The Applicant described a deliberate and informed decision-making process involving legal and tax advisors.

The Board rejected this focus on the Applicant's "current activities," citing Stone Lion Capital Partners, L.P. v. Lion Capital LLP. The Board explained that because the application's identification of services was broad and did not require high-dollar investments or sophisticated consumers, it must consider all potential investors, including ordinary consumers with money to invest. The Board held that even if the services encompassed sophisticated investors, the decision must be based on the "least sophisticated potential purchasers." The Board found that while ordinary consumers might exercise care in financial decisions, they are not immune from source confusion when similar marks are used for related services. This factor was deemed neutral.

Board’s Decision

The Board affirmed the Examining Attorney's refusal to register the mark UPSIDE CAPITAL HOLDINGS under Section 2(d) of the Trademark Act.

One minor detail in this decision I found particularly interesting: the Board actually examined the specimen to see how the Applicant's mark was being used. This extra step is not required in a 2(d) analysis, as the Applicant's mark is a standard character mark that can be displayed in any font or style. However, the fact that the actual visual arrangement supported the Board's finding that "UPSIDE" was the dominant feature certainly didn't help the Applicant's case.