Sensient Technologies Corp. v. SensoryEffects Flavor Co.
613 F.3d 754, 96 U.S.P.Q. 2d (BNA) 1164, 2010 U.S. App. LEXIS 14964 (2010)
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Rule of Law:
For trademark infringement claims involving goods under the Lanham Act, mere advertising and marketing efforts do not constitute "use in commerce" without an actual sale or transport of goods bearing the mark. Furthermore, a likelihood of confusion is unlikely to be found between two marks, even those used by direct competitors, when the marks are sufficiently distinct visually and aurally, and the relevant consumers are sophisticated and exercise a high degree of care in purchasing.
Facts:
- Sensient Technologies Corporation has continuously used the trade name 'Sensient Flavors' since 2000 in the flavor delivery systems market.
- Charles Nicolais, a former employee of a Sensient sister company, started a new business, PCI.
- In 2006, PCI acquired a business named SensoryEffects, which owned a registered trademark for the 'SensoryEffects' name and graphic.
- In 2008, PCI acquired Givaudan Flavors and, needing a new name, chose 'SensoryFlavors, Inc.'
- PCI, as 'SensoryFlavors,' sent out a media release and an announcement, and gave two customer presentations, but made no sales and transported no goods under the 'SensoryFlavors' mark.
- After Sensient filed a lawsuit, PCI changed its name to 'SensoryEffects Flavor Company' and began operating under this name.
- Both companies are direct competitors that sell complex flavor delivery systems to sophisticated food and food ingredient companies through a long, collaborative sales process.
Procedural Posture:
- Sensient Flavors filed a lawsuit against SensoryFlavors, Inc. in the U.S. District Court for the Eastern District of Missouri, alleging trademark infringement and related claims.
- The district court granted Sensient's request for a temporary restraining order, prohibiting the use of the 'SensoryFlavors' name.
- Following the order, the defendant changed its name to SensoryEffects Flavor Company.
- Sensient amended its complaint to add claims against the new name, 'SensoryEffects Flavor Company.'
- The district court granted summary judgment in favor of SensoryEffects on all counts, dismissing the case.
- Sensient Flavors (appellant) appealed the district court's grant of summary judgment to the U.S. Court of Appeals for the Eighth Circuit.
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Issue:
Does the name 'SensoryEffects Flavor Company' create a likelihood of confusion with the 'Sensient Flavors' trademark, thereby constituting trademark infringement under the Lanham Act when both companies sell to sophisticated customers?
Opinions:
Majority - Bye, J.
No, the name 'SensoryEffects Flavor Company' does not create a likelihood of confusion with the 'Sensient Flavors' trademark. Applying the six-factor test for likelihood of confusion, the court found that while Sensient's mark is strong and the parties are direct competitors, these factors are outweighed by the lack of similarity between the marks, the absence of bad intent, no evidence of actual confusion, and the sophistication of the customers. The court determined that the marks have significant visual and auditory differences. Crucially, the high degree of care exercised by sophisticated purchasers in a collaborative, lengthy sales process makes confusion highly unlikely. The court also declined to adopt the 'initial interest confusion' doctrine in this case, reasoning that customer sophistication mitigates such confusion.
Concurring-in-part-and-dissenting-in-part - Colloton, J.
Yes, a reasonable jury could find that the name 'SensoryEffects Flavor Company' creates a likelihood of confusion with the 'Sensient Flavors' trademark. Summary judgment was inappropriate because genuine issues of material fact exist, particularly regarding the infringer's intent and the similarity of the marks. The circumstances surrounding the name choice, including the founder's history with Sensient and internal documents listing Sensient as a competitor, could support an inference of bad intent. Furthermore, the court should have adopted the 'initial interest confusion' doctrine, which is relevant where products are marketed by telephone and auditory similarity is key. Sophisticated customers are not immune to initial interest confusion that allows a competitor to get a foot in the door.
Analysis:
This case reinforces the principle that customer sophistication is a critical factor in the likelihood of confusion analysis, capable of outweighing other factors like the strength of the senior mark and direct competition. The court's refusal to adopt the 'initial interest confusion' doctrine in a market with highly sophisticated buyers signals that the doctrine's applicability may be limited in business-to-business contexts involving complex products and long sales cycles. The decision provides a clear example of how dissimilarities in sight and sound can defeat an infringement claim, even when two names share a prefix and a generic term ('Sens' and 'Flavors'). It serves as a strong precedent for defendants in infringement cases who can demonstrate a high level of care and expertise among their customer base.
