Written by: Nicholas Holmes

The Trademark Act Section 2(d) bars registration of an applied-for mark that is so similar to a registered mark that it is likely consumers would be confused, mistaken, or deceived as to the commercial source of the goods and/or services of the parties. Likelihood of confusion is determined on a case-by-case basis by applying and considering a set of factors outlined in the case In re E. I. du Pont de Nemours & Co., otherwise known as the “du Pont factors.” These factors include the similarity between the compared marks, the relatedness of the compared goods and/or services, the sophistication of the relevant purchasers, the parties’ advertising and channels of trade, and the extent to which actual confusion has occurred. This list is just a small view into the analysis that is performed by courts when determining if confusion is likely between two marks.

Michael Welles and Associates, Inc., (hereinafter “Welles”) the plaintiff in this case, has a registered trademark for the mark “EDWEL,” registered in connection with “[t]raining, mentoring, and tutoring services in the fields of project management and product management; Educational services, namely, conducting classes, seminars, workshops in the fields of project management and product management.” The mark registered in 2016 and has been continuously used since 1992 for the above services. Edwell Inc., (hereinafter “Edwell”) the defendant in this case, adopted the mark “EDWELL” when it began providing schoolwide mental health and well-being services during the COVID-19 pandemic.

Welles learned about Edwell in late July 2021 when Michael Welles received a call from a potential customer asking about classes at Denver North High School. Since the company does not offer services to any Denver public school, Michael Welles did a Google search to see why this potential customer may have called. This research led to Michael Welles discovering Edwell, which appeared to be the company partnered with Denver North High School. Welles issued a cease-and-desist letter to Edwell in October 2021 after discovering its website. After a short stint in rebranding, Edwell soon transitioned back to its previous mark and domain name. Welles filed suit against Edwell on December 13, 2021, alleging trademark infringement and unfair competition under the Lanham Act.

The lower court entered final judgment in favor of defendant Edwell. On May 31, the Tenth Circuit affirmed the lower court’s ruling that the mark “EDWELL” was not likely to cause consumer confusion when compared to the mark “EDWEL.” The Tenth Circuit found the lower court applied the correct legal standards for likelihood of confusion and the majority panel concluded that there was no erroneous application of this legal standard.

Welles also argued that the court should adopt a “presumption of likelihood of confusion” when two entities “use nearly identical marks online and web addresses in generally related fields.” But the 10th Circuit found the company cited no case where a court had ever adopted that presumption. The panel instead cited a longstanding rule that “[t]he party alleging infringement has the burden of proving likelihood of confusion.”

The Tenth Circuit considered each of the six likelihood of confusion factors analyzed by the lower court and concluded that the magistrate judge did not clearly err in any of its findings. The factors are the degree of similarity between the marks; strength or weakness of the plaintiff’s mark; intent of the alleged infringer; similarities and differences of the goods, services, and marketing; degree of care exercised by purchasers; and evidence of actual confusion. As such, Welles failed to show that any of the magistrate judge’s findings were clearly erroneous. According to the Tenth Circuit, only two of the six factors favored a finding of confusion. In this case, these two factors were not enough to demonstrate clear error in the magistrate judge’s ultimate finding of no likelihood of confusion. 

Circuit Judge Timothy Tymkovich dissented, alleging that the lower court misapplied the following likelihood of confusion factors: (1) the similarity of the services, (2) the intent of the alleged infringer in adopting the mark, and (3) the degree of care likely to be exercised by the purchasers. Judge Tymkovich suggested that the court wrongly determined that the dissimilarities in services weighed heavily in the defendant’s favor simply because the services were not in clear, direct competition with one another and the majority’s decision left us in the same place where we started: confused.

This case is a good example that even near-identical marks used in connection with arguably similar goods and/or services can be found non-infringing. Although the similarities of the relevant marks and the relatedness of the goods and/or services are key considerations in a likelihood of confusion analysis, it is nonetheless important to consider all relevant du Pont factors that apply to your case.

The case is M Welles and Assocs. Inc. v. Edwell, Inc., — F.4th —-, No. 22-1248, 2023 WL 3731018 (10th Cir. May 31, 2023). The opinion is available here.