2
Jun/14

No Reverse Dilution by Nike in FUELBAND Case


Fuelband_Volt

NB: This decision is dated March 20. Plaintiff has now withdrawn its case.

This is a somewhat typical fact pattern – a small company owns a not-so-unique mark. A large company appends its famous housemark to the weaker term.

Plaintiff here owns a federal registration for FUEL for apparel. It has had a low but constant level of revenue since 1992. It shares the register with many FUEL-variants. It runs into enforcement problems often and has even litigated several times, resulting in coexistence agreements (see more below).

Nike adopted the NIKE+FUELBAND trademark for a wearable electronic device to measure various fitness metrics (although NIKE did use FUEL without the NIKE mark, there doesn’t seem to have been extensive trademark use by Nike of FUEL per se). The product is sold primarily if not exclusively in Nike and Apple stores.

Nike prevails at summary judgment. The mark FUEL wasn’t all that strong. The NIKE mark and the -BAND element diminished confusion (but see cases that hold that appending a housemark doesn’t alleviate confusion). Nike sold its products in a walled garden of Nike and Apple stores.

Bonus aggravation for Plaintiff: Nike alleged that Plaintiff’s various consent agreements were naked licenses (and, if that allegation was proven, the mark could be deemed abandoned). In the world there are license agreement, consent agreements and fake agreements that are deemed to be naked licenses (agreements that are somewhat deceptively refer to as license agreements but licensor exercises no true quality control over licensee). The decision does a pretty good job of clearly defining these situations and indicating why Plaintiff’s coexistence agreements were not naked licenses. I think this is just an instance of Nike playing a full-court press.

In summary, it is hard to imagine someone buying a NIKE+FUELBAND mistakingly thinking that the product was connected to Plaintiff. It is also hard to imagine someone buying Plaintiff’s FUEL apparel thinking that it was somehow connected to Nike.

To the extent that Plaintiff is damaged by Nike, it might be that the already weak FUEL mark is pushed further toward not functioning as a brand, as a result of Nike’s appropriation of the term. In a way, that can be referred to as reverse dilution. However, FUEL is not a famous mark, and reverse dilution is not actionable under the Lanham act.

fuel v nike.pdf

Comments are closed.