Summary
holding the intent factor weighed in favor of confusion as the defendant was "unquestionably aware" of the plaintiff's rights as they made initial trademark research that uncovered the plaintiff's registration, that the defendant had actual knowledge of the plaintiff's rights through the cease and desist letter they received, and that despite all of this the defendant "continued unabated" in rolling out its beauty products
Summary of this case from San Diego Comic Convention v. Dan Farr Prods.Opinion
Case No. CV 12–10269 ABC PJWX.
2013-03-11
BOLDFACE LICENSING + BRANDING, Plaintiff, v. BY LEE TILLETT, INC., Defendant.
Andrew D. Sedlock, Jennifer K. Craft, Gordon Silver, Las Vegas, NV, Nina D. Boyajian, Susan L. Heller, Wendy M. Mantell, Greenberg Traurig LLP, Los Angeles, CA, for Plaintiff. Elliot Brandt Gipson, Fayer Gipson LLP, Minh Zhen Marko Kuo, Gregory Alan Fayer, Fayer Gipson LLP, Los Angeles, CA, Lauren Heatwole McCorvie, McCorvie Law Firm PA, Orlando, FL, for Defendant.
Andrew D. Sedlock, Jennifer K. Craft, Gordon Silver, Las Vegas, NV, Nina D. Boyajian, Susan L. Heller, Wendy M. Mantell, Greenberg Traurig LLP, Los Angeles, CA, for Plaintiff. Elliot Brandt Gipson, Fayer Gipson LLP, Minh Zhen Marko Kuo, Gregory Alan Fayer, Fayer Gipson LLP, Los Angeles, CA, Lauren Heatwole McCorvie, McCorvie Law Firm PA, Orlando, FL, for Defendant.
ORDER RE: DEFENDANT'S MOTION FOR A PRELIMINARY INJUNCTION
AUDREY B. COLLINS, District Judge.
Pending before the Court is Defendant and Counterclaimant By Lee Tillett, Inc.'s (“Tillett's”) motion for a preliminary injunction, filed on February 11, 2013. (Docket No. 30.) Plaintiff and Counterdefendant Boldface Licensing + Branding (“Boldface”) opposed on February 19 and Tillett replied on February 25. The Court heard oral argument on Monday, March 11, 2013. For the reasons below, the motion is GRANTED.
BACKGROUND
The Court has reviewed the parties' objections to evidence and to the extent those objections are inconsistent with the Court's ruling, they are OVERRULED. The Court GRANTS both parties' requests for judicial notice.
This case is the second of two trademark lawsuits involving Boldface's nationwide rollout of a cosmetics line under the mark KHROMA BEAUTY BY KOURTNEY, KIM AND KHLOE, which is affiliated with the celebrity Kardashian sisters—Kourtney, Kim, and Khloe. By way of this motion, Tillett seeks to enjoin Boldface's use of the mark on its cosmetics throughout the United States, believing that the product launch has caused and will cause substantial consumer confusion with its federally registered KROMA mark for cosmetics. Similar issues were raised in the other lawsuit filed by a Los Angeles-based makeup studio using marks incorporating the word “Chroma” (the “Chroma case”). See Chroma Makeup Studio LLC v. Boldface Group Inc., No. CV 12–9893 ABC (PJWx) (C.D.Cal., filed Nov. 19, 2012). The Court denied a preliminary injunction in the Chroma case because, although the plaintiff demonstrated that it owned valid common law rights in trademarks that were likely infringed, that it would be irreparablyharmed by Boldface's product rollout, and that the public interest was served by an injunction, the balance of hardships tipped strongly against an injunction. The plaintiff there had only common law rights in an unregistered mark, which were limited in scope, and Boldface would have been injured far beyond the rights the plaintiff had established had it been enjoined even in the limited area where the plaintiff's rights were protected. However, in this case, Tillett has a federally registered trademark, which significantly changes the Court's balancing and ultimately justifies issuing the injunction in this case.
Tillett is a Florida-based company that sells beauty services and all-natural cosmetics under the trademark KROMA in the United States and the United Kingdom. (Tillett Decl. ¶ 3.) Tillett has used the KROMA mark in connection with cosmetics continuously since 2004, and the cost of its products range from $19 to over $100. ( Id. ¶¶ 6, 8.) Since 2008, Tillett has sold on average $200,000 annually in KROMA products domestically, and has sold about $1 million in products in the U.K. ( Id. ¶¶ 13–14.) Those sales occur online and in stores in Florida, California, New York, New Jersey, Hawaii, South Carolina, Pennsylvania, and Connecticut, as well as in the U.K. ( Id. ¶¶ 17–19.) Tillett has promoted and advertised KROMA products throughout the United States, and, as part of accelerated efforts starting in 2009, its products have been featured on the Oscars and Emmys, in Fashion Week events in New York and Miami, at high-profile entertainment and fashion events around the world, and in nationally televised shows and events. ( Id. ¶¶ 25–31.)
Tillett's marks have varied over the years, but have always included the work KROMA. (Tillett Decl. ¶ 7.) Examples of Tillett's products appear in Appendix 1 to this Order.
Tillett filed a federal trademark application for the KROMA mark on cosmetics on November 12, 2010. The U.S. Patent and Trademark Office (“USPTO”) issued Registration No. 4079066 for the KROMA mark on January 3, 2012. (Tillett's Request for Judicial Notice (“RJN”), Ex. A.)
Before this lawsuit, Tillett claims to have had prior interactions with Kim Kardashian's representatives regarding KROMA products, although Kim Kardashian claims she was unaware of any of these interactions and that she never authorized her representatives to act as agents for her vis-a-vis Tillett. ( Compare Tillett Decl. ¶¶ 32–35, Ex. D, with Kardashian Decl. ¶¶ 2–6.) For example, in May 2010, Tillett and a public relations and celebrity licensing company called TLK Fusion discussed possible product placement for KROMA products in the reality television show called The Spin Room, on which Kim Kardashian was named as a producer. (Tillett Decl. ¶ 36, Exs. D, E.) Tillett and TLK Fusion also discussed the possibility of aligning KROMA products with a product line from Kim Kardashian. ( Id. ¶¶ 37–38, Ex. F.) Tillett also sent Kim Kardashian a gift basket of KROMA products at TLK Fusion's request. ( Id. ¶ 39.) Tillett and TLK Fusion never reached any agreement regarding the KROMA products. ( Id. ¶ 40.)
Tillett mistakenly identified the show as The SPINdustry, but Boldface explains that the show was called The Spin Room and “The SPINdustry” was the title of the first episode. (Kardashian Decl. ¶ 2.)
Boldface was founded by two women in April 2012 as a “celebrity cosmetics and beauty licensing company” with a business model to design, develop, and market cosmetics and beauty-related goods. (Ostoya Decl. ¶¶ 3, 6.) Before forming the company, in October 2011 the founders of Boldface were approached by the Kardashians to submit a proposal to jointly develop a beauty and cosmetics line affiliated with the Kardashian sisters. ( Id. ¶ 8.) The founders spent six months researching and developing the products, during which time they came up with the brand name KHROMA BEAUTY, among others. ( Id.) Boldface then entered a licensing agreement with the Kardashians' companies to use their names and likenesses in connection with the development, manufacture, promotion, and sale of cosmetics, beauty products, and other related goods that would be marketed in connection with the Kardashians' names and likenesses. ( Id. ¶¶ 9–10.) During this period, Boldface claims not to have known about any prior interactions between Tillett and TLK Fusion or any representative of the Kardashians. ( Id. ¶ 13.)
Before presenting possible brand names to the Kardashians, Boldface used an attorney to conduct a trademark search. ( Id. ¶ 14.) The search yielded dozens of uses of the word “chroma” and certain variants in International Class 3 (which covers cosmetics and beauty products), and in light of this, Boldface concluded that the public was using the word “chroma” and its variants to denote “color.” ( Id. ¶¶ 14–15.) After presenting three possible brand names, Boldface and the Kardashians gravitated toward the mark KHROMA BEAUTY, although they also discussed using KARDASHIAN KHROMA. ( Id. ¶ 11.)
In June 2012, Boldface filed two trademark applications with the PTO for the marks “KHROMA BEAUTY BY KOURTNEY, KIM AND KHLOE” and “KARDASHIAN KHROMA,” Serial Nos. 85/646521 and 85/642342, covering “personal care products including cosmetics, body and beauty care products” in International Class 3. (Tillett's RJN, Exs. C, E.) At this point, through news reports Tillett became aware of Boldface's intent to use the word “Khroma” in connection with cosmetics, and sent Boldface a brief cease-and-desist letter on June 28, 2012, requesting a response within two weeks. (Tillett Decl. ¶¶ 41–42; Ostoya Decl. ¶ 25, Ex. A.) Boldface responded three weeks later in an email, on July 18, 2012, denying infringement, but not inviting any further response from Tillett. (Ostoya Decl. ¶ 26, Ex. B.) Tillett did not, in fact, respond to the email, and did not correspond again with Boldface until October 2012. ( Id. ¶¶ 27, 29.)
In claimed reliance on Tillett's silence following its July 18 email, Boldface moved forward with the KHROMA BEAUTY product launch by, for example, putting products and packaging into production in August, inking deals with retail partners by September, and moving forward with press launches in September and October 2012. ( Id. ¶ 28.) Boldface claims that, had Tillett responded to its July 18 email before it had moved forward in August, “Boldface could have changed the name without suffering serious harm.” ( Id. ¶ 31.) Amidst this activity, on September 26, 2012, the PTO issued office actions for both of Boldface's trademark applications initially refusing registration because, inter alia, Boldface's marks create likely confusion with Tillett's registration for KROMA on cosmetics. (Tillett's RJN, Ex. D.) This prompted Tillett to send another—and much more detailed—cease-and-desist letter to Boldface on October 26, 2012. (Ostoya Decl. ¶ 29, Ex. C.) Tillett explains that it was unaware of Boldface's activities related to the KHROMA BEAUTY products during this time and, in fact, had no reason to know about the activities because Boldface's federal applications were for intent to use the marks in the future. (Tillett Supp. Decl. ¶ 6.)
Boldface has six months from the date of those actions to respond.
Boldface claims that, by the time it received the October letter, it could no longer viably change the name of the KHROMA BEAUTY products, so the parties engaged in settlement discussions. (Ostoya Decl. ¶ 30.) Those discussions obviously proved unsuccessful, and Tillett ended them on November 27, 2012. ( Id.) Boldface thereafter filed this declaratory judgment action on November 30, 2012. (Docket No. 1.) In the meantime, the plaintiff in the Chroma case filed a motion for a preliminary injunction on December 5, 2012, and the Court denied it on January 23, 2013. Because it raised similar issues, Tillett waited for the resolution of that motion before meeting-and-conferring and filing the pending motion on February 11, 2013.
In parallel with these events and up through February 2013, Boldface indeed moved forward with its product rollout and expects that by the end of March 2013, KHROMA BEAUTY products will be in 5,321 stores in 48 states. (Ostoya Decl. ¶ 37.) The products are priced between $6.49 and $19.99. ( Id. ¶ 22.) Currently, the products can be found in the following retail stores: Ulta, Sears, CVS, Fred Meyer, HEB, Burlington, and Walgreens Puerto Rico, including on those retailers' websites. ( Id. ¶ 17.) By this month, the products will also be available in Duane Reade stores. ( Id.) The products are also currently available on amazon.com and drugstore.com, including its alternate website, beauty.com ( id. ¶ 18), and starting in April 2013, the products will also be sold on Boldface's website devoted to the products, khromabeauty.com ( id. ¶ 20). Boldface is also in discussions with (and has received some orders from) international distributors, including in the European Union, Australia, Canada, and Japan. ( Id. ¶ 19.) Boldface claims it could have rolled out higher-end (and higher-priced) products, but it chose to create cosmetics for the mass market at accessible prices, which would more likely reach the Kardashians' fan base. ( Id. ¶¶ 23–24.)
Examples of Boldface's products are in Appendix 2 to this Order.
Based on orders already placed, Boldface expects substantial sales through December 2013. ( Id. ¶ 34.) Boldface has already shipped a substantial amount of the KHROMA BEAUTY products to retailers, along with displays it has paid to manufacture; it holds more products in its warehouse and on order; and it is taking orders for more products to ensure shipments are on time. ( Id. ¶¶ 35–37, 42.) Because those orders were placed before this lawsuit was filed, Boldface claims it will incur prohibitive storage costs if it is enjoined from selling those products pending resolution of this case. ( Id. ¶ 43.) Boldface has also rolled out an extensive advertising campaign through June 2013, primarily in print beauty and celebrity magazines; if an injunction issues, Boldface claims it will lose a portion of the money already spent and may breach its contracts with its retail partners. ( Id. ¶ 40.)
Because Boldface has filed its revenue figures and other financial information under seal, the Court will not set forth the exact figures in this Order, nor are the exact figures necessary to the resolution of this motion.
On the other hand, Tillett claims that, as a result of the rollout of the KHROMA BEAUTY products, it has experienced a significant impact on its business. For example, Tillett identifies 10 instances of purported consumer confusion over its and Boldface's products. (Tillett Decl. ¶¶ 48–58, Ex. G–O.) Tillett's U.K. distributor has also experienced purported instances of confusion. (Willey Decl. ¶¶ 9–13.) Tillett was notified of some of these alleged instances of confusion after emailing its clients and colleagues on February 5, 2013, stating that if they “express how [they] feel about this name trademark infringement and consumer confusion in an email form it would be of GREAT help. For instance, how do you feel about our name being copied and/or would you think a customer would be confused if our line was to be on ULTA shelves too?” (Tillett Decl. ¶ 53, Ex. N.) Moreover, Tillett's U.K. distributor believes that a retail department store chain called Debenhams passed on distribution based upon confusion with the KHROMA BEAUTY products, although the only evidence of this is an email declining the distribution with the subject line “KHROMA Beauty,” when the chain's representative actually meant KROMA Makeup. ( Id. ¶¶ 59–60; Willey Decl., Ex. B.) Tillett had been planning to use the Debenhams' deal to leverage similar deals with U.S. retailers. (Tillett Decl. ¶ 62.)
More generally, Tillett fears that its business will be irreparably harmed from Boldface's national product rollout. Tillett markets the KROMA products as all-natural, which is good for sensitive skin, and customers with sensitive skin might be placed at risk if they mistakenly purchase KHROMA BEAUTY products instead. (Tillett Decl. ¶¶ 63–64.) Further, Tillett claims that sales have dropped 25% since the launch of KHROMA BEAUTY products and that securing major retailers would be impossible in light of consumer confusion. ( Id. ¶¶ 65–67.) In short, Tillett believes its business would be destroyed by the continued presence of the KHROMA BEAUTY products in the marketplace. ( Id. ¶ 68.)
Boldface filed this lawsuit to obtain a declaration that the KHROMA BEAUTY products do not infringe Tillett's mark, and Tillett counterclaimed for trademark infringement and false designation of origin under the Lanham Act, 15 U.S.C. §§ 1114(1)(a) and 1125(a), trademark infringement under Cal. Bus. & Prof.Code § 14200, and unfair competition under Cal. Bus. & Prof.Code § 17200. Tillett now moves for a preliminary injunction based upon all of these claims, although it focuses on its Lanham Act claims, conceding that the analysis is the same under sections 14200 and 17200. (Mot. 7 n. 2.)
Tillett named the Kardashians' individual companies in its counterclaims, but did not direct the motion against those counterdefendants. It believes—and the Court agrees—that any injunction against Boldface would effectively block all infringing activity by all of the counterdefendants.
LEGAL STANDARD
“A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of hardships tips in his favor, and that an injunction is in the public interest.” Winter v. Natural Res. Defense Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008); Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 877 (9th Cir.2009). This recitation of the requirements for a preliminary injunction did not completely erase the Ninth Circuit's “sliding scale” approach, which provided that “the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another.” Vanguard Outdoor, LLC v. City of Los Angeles, 648 F.3d 737, 739 (9th Cir.2011).
“In one version of the ‘sliding scale,’ a preliminary injunction could issue where the likelihood of success is such that serious questions going to the merits were raised and the balance of hardships tips sharply in [plaintiff's] favor.” Id. at 740 (internal quotation marks omitted; brackets in original). This “serious questions” test survived Winter.Id. Therefore, “serious questions going to the merits and a hardship balance that tips sharply in the plaintiff's favor can support issuance of an injunction, so long as the plaintiff also shows a likelihood of irreparable injury and that the injunction is in the public interest.” Id. (internal quotation marks omitted).
DISCUSSION
A. Likelihood of Success on the Merits
In order to show trademark infringement under the Lanham Act, the plaintiff must demonstrate that the defendant is “using a mark confusingly similar to a valid, protectable trademark” owned by the plaintiff. Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1046 (9th Cir.1999).
1. Validity
To be valid, a trademark must be “distinctive.” Zobmondo Entm't, LLC v. Falls Media, LLC, 602 F.3d 1108, 1113 (9th Cir.2010). Marks are generally classified in one of five categories of distinctiveness: (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful. Id. “Suggestive, arbitrary, and fanciful marks are considered ‘inherently distinctive’ and are automatically entitled to federal trademark protection because ‘their intrinsic nature serves to identify a particular source of a product.’ ” Id. Generic marks are never entitled to trademark protection and descriptive marks may become protected if they have acquired “secondary meaning,” that is, “acquired distinctiveness ‘as used on or in connection with the [trademark owner's] goods in commerce.’ ” Id.
Federal registration of a trademark creates a presumption that the mark is valid, and where the PTO registers a mark without proof of secondary meaning, “the presumption is that the mark is inherently distinctive.” Id. at 1113–14. This shifts the burden to the alleged infringer to demonstrate that the mark is not protectable. Id. at 1114. Here, Boldface has not challenged the validity of Tillett's registration of the KROMA trademark, which was registered on the Principal Register without proof of secondary meaning, so at this stage the Court assumes it is inherently distinctive and valid.
2. Likelihood of Confusion
The touchstone of a Lanham Act claim is the likelihood of consumer confusion, which “requires the factfinder to determine whether a ‘reasonably prudent consumer in the marketplace is likely to be confused as to the origin of the good or service bearing one of the marks.’ ” Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 630 (9th Cir.2005). Likelihood of confusion is determined by evaluating the familiar factors outlined in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir.1979): (1) strength of the marks; (2) relatedness of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels; (6) degree of consumer care; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines. Surfvivor, 406 F.3d at 631. “[T]his eight-factor test for likelihood of confusion is pliant,” so the “relative importance of each individual factor will be case-specific” and even a “subset of the factors” could demonstrate likely confusion. Brookfield, 174 F.3d at 1054.
Although this case implicates both “forward” and “reverse” confusion, it appears to be primarily focused on reverse confusion, given that Tillett's overarching concern is that the KHROMA BEAUTY products will overcome Tillett's business. (See, e.g., Mot. 2.) The difference between forward and reverse confusion turns on how consumers are potentially deceived as to source: “Forward confusion occurs when customers believe that goods bearing the junior mark came from, or were sponsored by, the senior mark holder,” whereas “reverse confusion occurs when consumers dealing with the senior mark holder believe that they are doing business with the junior one.” Surfvivor, 406 F.3d at 630 (citing Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129–30 & n. 5 (9th Cir.1998)). Claims of reverse confusion “protect the small senior user from losing control over its identity in ‘the rising tide of publicity associated with the junior mark.’ ” Walter v. Mattel, Inc., 210 F.3d 1108, 1110 (9th Cir.2000). For reverse confusion, the first three Sleekcraft factors are “pivotal.” Dreamwerks, 142 F.3d at 1130.
a. Similarity of the Marks
“ ‘The more similar the marks in terms of appearance, sound, and meaning, the greater the likelihood of confusion.’ ” Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1150 (9th Cir.2011). In evaluating appearance, sound, and meaning, the Court follows three “axioms”: “first, the marks must be considered in their entirety and as they appear in the marketplace; second, similarity is adjudged in terms of appearance, sound, and meaning; and third, similarities are weighed more heavily than differences.” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1206 (9th Cir.2000).
Sound and Meaning. Neither “kroma” nor “khroma” have any meaning in English, but Tillett claims without dispute that they are both derived from the word “chroma,” which is the Greek word for “color.” Moreover, the words “kroma” and “khroma” sound identical, despite the different spelling. See Surfvivor, 406 F.3d at 633 (treating “survivor” and “surfvivor” as phonetically “nearly identical”). These two subfactors weigh in favor of finding likely confusion.
Sight. As the marks are used in the marketplace, they often appear nearly identical to consumers. The heart of both parties' marks are, in fact, the words KHROMA and KROMA, which appear prominently on the parties' products in all capital letters in a similar font:
IMAGE
Further, despite Boldface's registrations and its claim that it “always” uses the complete mark of KHROMA BEAUTY BY KOURTNEY, KIM AND KHLOE in advertising and on its products (Ostoya Decl. ¶ 16), the words “KHROMA” and “KHROMA BEAUTY” often appear in the marketplace alone, apart from the Kardashians' names. For example:
As Tillett points out, Boldface is not even using the actual mark KHROMA BEAUTY BY KOURTNEY, KIM AND KHLOE on its products; instead, the actual use is “KOURTNEY KIM KHLOE KHROMA BEAUTY.”
• On Boldface's Facebook and Twitter pages, Boldface calls the product line “Khroma Beauty”; magazines coveringthe product launch call it “Khroma Beauty”; and a search of Twitter messages (called “tweets”) reveals that the users frequently call the product line “Khroma Beauty.” (Kuo Decl. ¶¶ 2–5, Exs. A–C.)
• The KHROMA BEAUTY false eyelashes product bears the word KHROMA alone on the packaging. (Gipson Supp. Decl. ¶ 6, Ex. A.)
• Boldface's two websites for the KHROMA BEAUTY products are www. khromabeauty. com (United States) and www. khromabeauty. eu (U.K.). (Gipson Decl. ¶¶ 6–8.)
• On websites selling the KHROMA BEAUTY products like Ulta.com, the products are identified only as “Khroma Beauty” products and the additional words on the packaging are frequently illegible. ( Id., Ex. I.)
Perhaps most telling, Boldface includes a “TM” symbol on its product packaging next to the word KHROMA, rather than at the end of the entire phrase, conveying the message that the prominent word KHROMA is Boldface's trademark.
In some reverse confusion cases, the addition of a “house mark” may aggravate, rather than mitigate, confusion by enhancing the risk that consumers would associate the plaintiff's products with the defendant. See Glow Indus., Inc. v. Lopez, 252 F.Supp.2d 962, 995 (C.D.Cal.2002). At this stage, though, there is no specific evidence to suggest that consumers would more likely associate Tillett's products with Boldface because the Kardashians' names and images appear on Boldface's products. This evidence is unnecessary because the similarity factor weighs strongly in favor of likely confusion even without it. But see Cohn v. Petsmart, Inc., 281 F.3d 837, 842 (9th Cir.2002) (per curiam) (noting in reverse confusion case that the “emphasis on [ ] housemarks ‘has the potential to reduce or eliminate likelihood of confusion.’ ”).
In the Chroma case, the Court suggested that the plaintiff's focus on only the words KHROMA and CHROMA improperly attempted to strip away other portions of the parties' marks, contrary to the Ninth Circuit's dictate to look at the marks as a whole and as they appear in the marketplace. See GoTo.com, 202 F.3d at 1206. In that case, though, the record was not nearly as strong as it is here to demonstrate that Boldface's mark frequently appears simply as KHROMA or KHROMA BEAUTY.
Moreover, both parties' marks are derivative of the word “chroma,” but both have replaced the “C” with a “K.” While Tillett also eliminated the “H,” that variant of one letter is insignificant in this case, especially because the parties varied the word “chroma” in almost exactly the same way. See Dreamwerks, 142 F.3d at 1131 (expressing doubt that “substituting one vowel for another and capitalizing a middle consonant dispels the similarity between the marks.”) Thus, the visual similarity factor weighs strongly in favor of likely confusion.
b. Relatedness of the Goods
Under this factor, parties need not be direct competitors, but the goods must be “reasonably thought by the buying public to come from the same source if sold under the same mark.” Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1212 (9th Cir.2012) (internal quotation marks omitted). To be related, the goods may be “complementary”; “sold to the same class of purchasers”; or “similar in use and function.” Sleekcraft, 599 F.2d at 350. The ultimate question is whether customers are “ ‘likely to associate’ the two product lines.” Surfvivor, 406 F.3d at 633.
In this case, the parties both sell cosmetics, and in fact, some of their products are identical, such as blush, compacts, gloss, lip kits, foundation, eye shadow, and bronzer. The Ninth Circuit has found far more disparate products and services sufficiently related to support finding likely confusion. See, e.g., Dreamwerks, 142 F.3d at 1131 (making movies and promoting sci-fi merchandise); Brookfield, 174 F.3d at 1056 (website providing entertainment information and website primarily renting and selling video tapes); Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 155 (9th Cir.1963) (beer and whisky); see also Gerawan Farming, Inc. v. Prima Bella Produce, Inc., No. CV F 10–0148 LJO JLT, 2011 WL 3348056, at *19 (E.D.Cal. Aug. 2, 2011) (corn and stone fruit/grapes). Although Tillett offers its products at a somewhat higher price point than Boldface's products and does not sell products to mass retailers, these differences are insignificant in this case. See Glow Indus., Inc. v. Lopez, 252 F.Supp.2d 962, 993 (C.D.Cal.2002) (finding “lotion, shower gel, and fragrance products” related and rejecting argument that products were unrelated because one was a “niche” product and the other was sold in mass-market retailers).
Boldface argues that this factor weighs less heavily in favor of finding likely confusion when “advertisements are clearly labeled or consumers exercise a high degree of care” in purchasing cosmetics, “because rather than being misled, the consumer would merely be confronted with choices among similar products.” Network Automation, 638 F.3d at 1150. While this might have applied in the Chroma case to lessen confusion there, it does not mitigate confusion here. On this record, Boldface's products are not so “clearly labeled” to dispel confusion, and, because the marks are so similar, even purchasers of high-end cosmetics exercising great care in their purchasing decisions could easily be confused. A consumer might visit Ulta.com, for example, and see Boldface's products marked prominently with the words KHROMA or KHROMA BEAUTY, and either overlook the additional “H,” or simply believe that Tillett had varied its name slightly. Under the circumstances here, this factor weighs strongly in favor of likely confusion.
c. Strength of the Mark
“ ‘The stronger a mark—meaning the more likely it is to be remembered and associated in the public mind with the mark's owner—the greater the protection it is accorded by the trademark laws.’ ” Network Automation, 638 F.3d at 1149. In assessing a mark's strength, the Court must analyze both its “conceptual” and “commercial” strength. Id. Conceptual strength involves classifying the mark on the spectrum of distinctiveness, while commercial strength is based on “ ‘actual marketplace recognition,’ ” including advertising expenditures. Id.; see also Glow, 252 F.Supp.2d at 989 (noting that commercial strength is evaluated in light of “any advertising or marketing campaign by the junior user that has resulted in ‘a saturation in the public awareness of the junior user's mark.’ ”). In reverse confusion cases, the Court evaluates the conceptual strength of the senior user, but for commercial strength, “the focus is on the relative strengths of the marks so as to gauge the ability of the junior user's marks to overcome the senior user's mark.” Visible Sys. Corp. v. Unisys Corp., 551 F.3d 65, 74 (1st Cir.2008).
As to the parties' comparative commercial strength, Tillett's KROMA mark has some commercial strength, but Boldface's marks are far stronger and could easily overwhelm Tillett's efforts. Since 2008, Tillett has sold on average $200,000 annually in KROMA products domestically, including in stores in Florida, California, New York, New Jersey, Hawaii, South Carolina, Pennsylvania, and Connecticut. Tillett does not provide context for these sales, so there is no way to gauge how much strength those sales created in the cosmetics industry generally, or even in the high-end cosmetics market specifically. See Glow, 252 F.Supp.2d at 983 (“ ‘Whether a volume of sales is significant will vary with the product and the market. The numbers that result in ... relief in one case may not be significant in another.’ ” (ellipsis in original)). Tillett has also promoted and advertised KROMA products throughout the United States; and its products have been featured on the Oscars and Emmys, in Fashion Week events in New York and Miami, at high-profile entertainment and fashion events around the world, and in nationally televised shows and events. Given this exposure, there is at least a fair chance that consumers of high-end cosmetics would recognize Tillett's KROMA products.
The Court agrees with Boldface that Tillett's overseas sales and promotional activities do not demonstrate whether domestic purchasers recognize Tillett's mark in the United States. See5 J. Thomas McCarthy, McCarthy On Trademarks & Unfair Competition § 29:2 (4th ed. 2013) (“In many situations, the foreign activities of a party are not relevant evidence in a trademark dispute concerning U.S. rights.”).
Compared to these efforts, though, Boldface's commercial strength far surpasses Tillett's. Boldface's marks are backed by the Kardashian's nationwide fame, and Boldface's product line has received extensive nationwide media coverage, has been shown to millions of viewers on an episode of the Kardashians' reality television show, has been promoted on each of the Kardashian sisters' websites and social media pages, and in the national press. The products are now in 5,321 stores in 48 states, and by April 2013 the products will be available on Boldface's website. And this is just Boldface's initial launch. Boldface's “ability to saturate the marketplace creates a potential that consumers will assume that [Tillett's] mark refers to [Boldface], and thus perceive that the businesses are somehow associated.” Cohn v. Petsmart, Inc., 281 F.3d 837, 842 (9th Cir.2002) (per curiam).
As for conceptual strength, Boldface has not challenged the presumption of inherent distinctiveness created by Tillett's federal registration. Even so, a federally registered mark is not automatically considered conceptually strong. See Miss World (UK) Ltd. v. Mrs. Am. Pageants, Inc., 856 F.2d 1445, 1448–49 (9th Cir.1988). Tillett has not argued that its KROMA mark is arbitrary or fanciful, so the Court assumes for the purpose of this motion that Tillett's mark is suggestive. As a result, “unlike arbitrary or fanciful marks which are typically strong, suggestive marks are presumptively weak.” Brookfield, 174 F.3d at 1058.
In the Chroma case, the Court analyzed the distinctiveness of plaintiff's marks incorporating the word “chroma” and concluded that they were suggestive. For those same reasons, the Court would likely conclude that Tillett's mark is suggestive here. But because Boldface has not attacked the validity of Tillett's registration and Tillett has not argued that the KROMA mark is arbitrary or fanciful, the Court assumes without analysis that Tillett's mark is suggestive.
Boldface attempts to further weaken Tillett's KROMA mark by demonstrating that it exists in a “crowded field” of uses of similar marks on similar products. “[A] mark which is hemmed in on all sides by similar marks on similar goods cannot be very ‘distinctive.’ It is merely one of a crowd of marks. In such a crowd, customers will not likely be confused between any two of the crowd and may have learned to carefully pick out one from the other.” Miss World, 856 F.2d at 1449 (internal quotation marks omitted); see also Glow, 252 F.Supp.2d at 990–91 (finding suggestive mark weak because it “competes in an exceedingly crowded field of beauty products using the word ‘glow’ in some manner as a trade name or trademark”).
Boldface argues that Tillett's KROMA mark is weak because there are “dozens” of third-party PTO registrations and applications incorporating the word “chroma” and its phonetic equivalents in the PTO's International Class 3 goods, some of which Boldface listed in its response to Tillett's June 2012 cease-and-desist letter. (Ostoya Decl., Ex. B; see also Boldface's RJN, Ex. 2 (including over 300 pages of PTO search results).) In the Chroma case, the Court relied on third-party registrations and applications incorporating the word “chroma” on cosmetics and beauty products to find the plaintiff's mark conceptually weak.
Upon further research and briefing from the parties in this case, the Court is now convinced that these third-party registrations are not probative of conceptual weakness without evidence that the marks were actually used in commerce and viewed by consumers. See, e.g.,2 J. Thomas McCarthy, McCarthy On Trademarks & Unfair Competition § 11:89 (4th ed. 2013) (hereafter McCarthy) (“The mere citation of third party registrations is not proof of third party uses for the purpose of showing a crowded field and relative weakness” because “[t]hird party registrations are not evidence of use ‘so as to have conditioned the mind of prospective purchasers.’ ” (emphasis in original)); see also Olde Tyme Foods, Inc. v. Roundy's, Inc., 961 F.2d 200, 203–04 (Fed.Cir.1992) (“Much of the undisputed record evidence relates to third party registrations, which admittedly are given little weight but which nevertheless are relevant when evaluating likelihood of confusion. As to strength of the mark, however, registration evidence may not be given any weight.” (emphasis in original)); Scarves by Vera, Inc. v. Todo Imports Ltd., 544 F.2d 1167, 1173 (2d Cir.1976) (“The significance of third-party trademarks depends wholly upon their usage. Defendant introduced no evidence that these trademarks were actually used by third parties, that they were well promoted or that they were recognized by consumers.”); AMF Inc. v. Am. Leisure Prods., Inc., 474 F.2d 1403, 1406 (C.C.P.A.1973) (“The existence of [third-party] registrations is not evidence of what happens in the market place or that customers are familiar with them[.]”); Teledyne Techs., Inc. v. W. Skyways, Inc., 78 U.S.P.Q.2d 1203, 2006 WL 337553, at *4 (T.T.A.B.2006) (“[Third party] registrations are not evidence that the marks are in use, much less that purchasers are familiar with them.”), aff'd208 Fed.Appx. 886, 889–90 (Fed.Cir.2006) (unpublished disposition). Because Boldface has offered no evidence to show that any of the marks reflected in the registrations and applications were in fact used in commerce, this evidence does not show that Tillett's KROMA mark is weakened because it is used in a “crowded field” of similar marks on similar goods.
It also appears that some of these registrations have expired or have been cancelled due to non-use, and some of the applications have “intent to use” status only. By their nature, those applications and canceled registrations cannot be proof that those marks are used in the marketplace and viewed by consumers.
Boldface has also identified other uses of the word “kroma” in the marketplace in connection with beauty services, such as “Kroma Kolor Laboratories,” “Kroma Salon,” “Salon Kroma of Cary,” and “Kroma Hair Design.” (Drapeau Decl., Ex. B.) Unlike PTO registrations and applications, these marks appear to be names of businesses used in the marketplace and likely have been viewed by consumers. Even so, they have little probative value in assessing uses of the word “kroma” to establish a “crowded field” for cosmetics: “Kroma Kolor Laboratories” appears to manufacture hair color, not cosmetics; and the other businesses appear to be hair salons, although one indicates it also provides make-up services. This evidence does not show that the field of cosmetics is so crowded with marks similar to Tillett's KROMA mark that the strength of Tillett's mark is weakened.
Even if Boldface's evidence of a “crowded field” weakened the conceptual strength of Tillett's KROMA mark, this factor is significantly less important here where the parties' marks are so similar and the goods on which the marks appear are nearly identical. See Brookfield, 174 F.3d at 1058–59 (“Because the products involved are closely related and [the defendant's trademark] is nearly identical to [the plaintiff's] trademark, the strength of the mark is of diminished importance in the likelihood of confusion analysis.”) (citing McCarthy, § 11:76 (“Whether a mark is weak or not is of little importance where the conflicting mark is almost identical and the goods are closely related.”)); see also GoTo.com, 202 F.3d at 1208 (relying on Brookfield and McCarthy for same).
In the end, the parties' comparative commercial strength favors finding likely confusion, and the conceptual strength of Tillett's KROMA mark is neutral.
d. Actual Confusion
Although not required, “ ‘actual confusion among significant numbers of consumers provides strong support for the likelihood of confusion.’ ” Network Automation, 638 F.3d at 1151. Boldface claims that it has not received a single indication of confusion from its distributors, its retailers, or the press. (Ostoya Decl. ¶ 33.) In contrast, Tillett claims that commenters on social media and news sites regularly confuse the parties' marks (Tillett Decl. ¶ 47; Gipson Decl., Ex. L), and Tillett cites 10 purported instances of actual confusion in the United States (Tillett Decl. ¶¶ 48–58). Of these examples, eight show actual consumer confusion (all errors in original):
Tillett cites other instances of actual confusion in the U.K., but again, this evidence is not relevant to the likelihood of confusion analysis. See supra, n. 16.
• An August 7, 2012, message from the owner of Lovelo Beauty LLC: Beauty Writer/Blogger, who wrote, “I have also heard that Kim K. and sisters are coming out with a line at the end of the year called Khroma ... is this related to you?” (Tillett Decl. ¶ 48, Ex. G.)
• An October 29, 2012 telephone call from a customer who said she was on the internet and was looking at the Kardashians' cosmetics line, but then saw Tillett's online presence, and called to ask if it was affiliated with the Kardashians. ( Id. ¶ 50.)
The Court rejects Boldface's argument that this instance of confusion should be disregarded as simply a “misdirected” phone call.
• A January 20, 2013, email from a client stating, “I was confused when I was in Ulta and wondered why you would change the spelling of your name.” ( Id. ¶ 52, Ex. J.)
• A February 10, 2013, email from a client stating, “During the holidays while passing through Sears, I saw a makeup display saying Khroma. I was so excited to see Lee's make up in the major department stores. As I got closer to the display it read Khroma Beauty by the Kardashian sisters. I was taken aback by how easy it was for the Kardashian's to infringe on Lee's trademark. I was so upset I even took a picture with my phone and sent it to Lee. Since then a few of my friends think that Less sold her company to the Kardashi [a]n's. My friends know that I have been going to Kroma for years and when they too saw it in the stores they thought it was Lee's brand just under the Kardashi[a]n's name. This is a wrong that needs to be made right.” ( Id. ¶ 54, Ex. K.)
• A February 5, 2013, email from a colleague stating, “As a colleague of yours I was shocked when I saw the Kardashian KHROMA Makeup line that was coming out into the market place ... At first glance I thought it was yours the font looks the same, how deceiving was that. When I worked for you I remember that you went to California to meet with the Kardashian's Public Relation Group at their request. I first thought that maybe you had sold them the rights to your company and makeup line. I could not believe that you would do that since you worked so hard developing, marketing of such a fantastic line. I'm sure you will prevail when everything is presented through your legal representatives.” ( Id. ¶ 55, Ex. L.)
• A February 5, 2013 email from a client stating, “I received a catalog in the mail from ULTA, featuring ‘KHROMA’ makeup line. I first thought this was your makeup line ‘KROMA,’ the name was almost identical as was the pronunciation of your brand. It was confusing, especially because the cheap prices listed on the ULTA catalog didn't seem to match your higher quality product price. I can see this causing a lot of confusion, even the style of the name ‘KHROMA’ is basically identical to yours.” ( Id. ¶ 56, Ex. M.)
• A February 5, 2013, email from a client stating, “I did, in fact, see something in a magazine for Khroma. Made me do a double take realizing this is NOT my favorite make-up product! I do believe it is ‘too close’ and actually resent another company using such a similar name.” ( Id. ¶ 57, Ex. N.)
• A February 7, 2013, email from a client stating, “When I have needed to make an appointment, I have become confused. Many times I Google the web for Kroma makeup. When I did this, I was provided with IMAGE