In the Tenth Circuit, the following six factors are considered when determining the potential for confusion:

1. the level of care likely to be exercised by purchasers,
2. the strength or weakness of the senior mark,
3. the degree of similarity between the marks,
4. the intent of the alleged infringer in adopting its mark,
5. the similarity of products and manner of marketing, and
6. the evidence of actual confusion.

See Sally Beauty Co. v. Beautyco, Inc., 304 F.3d 964, 972 (10th Cir. 2002).

Similarity of the marks is ordinarily considered the most important factor. Hornady Mfg. Co. v. Doubletap, Inc., 746 F.3d 995, 1001 (10th Cir. 2014); King of the Mountain Sports, Inc. v. Chrysler Corp., 185 F.3d 1084, 1091 (10th Cir. 1999) (“The similarity of the marks is the ‘first and most important factor.'”).

But no single factor is dispositive, and the “importance of any particular factor in a specific case can depend on a variety of circumstances, including the force of another factor.” Water Pik, Inc. v. Med-Sys., Inc., 726 F.3d 1136, 1143 (10th Cir. 2013).

Elevate v. Elevations, Credit Unions

The Tenth Circuit recently applied these factors in considering whether there was a likelihood of confusion in a trademark dispute between two credit unions: “Elevate Federal Credit Union” and “Elevations Credit Union.” The Tenth Circuit affirmed District of Utah's grant of summary judgment in favor of Elevate. Elevate Federal Credit Union v. Elevations Credit Union, No. 22-4029, 2023 WL 3330119, __ F.4th __ (10th Cir. May 10, 2023).

Exercising Great Care

On appeal, the Tenth Circuit found that consumers generally exercise great care when choosing a credit union. Versa Prods. Co. v. Bifold Co. (Mfg.), 50 F.3d 189, 204 (3d Cir. 1995) (“The more important the use of a product, the more care that must be exercised in its selection.”).

          Consumers ordinarily use great care when selecting their banking services. See First Nat. Bank in Sioux Falls v. First Nat. Bank, S.D., 153 F.3d 885, 889 (8th Cir. 1998) (“[C]onsumers tend to exercise a relatively high degree of care in selecting banking services.”); Peoples Fed. Sav. Bank v. People's United Bank, 672 F.3d 1, 14 (1st Cir. 2012) (upholding the district court's conclusion that “customers would not likely be confused between the banks because banking customers ordinarily gather information before choosing a bank and make their decision based on substantive factors (other than a bank's name)” (internal quotation marks omitted)).

Suggestive But Diluted

Also, while ELEVATIONS was found to be a suggestive mark, “extensive third-party use of a component of a disputed term [can] undermine[] the strength of the term as a whole.” Water Pik, 726 F.3d at 1152; see also First Sav. Bank, F.S.B. v. First Bank Sys., Inc., 101 F.3d 645, 654 (10th Cir. 1996) (“[W]e recognize[] the well-established principle that extensive third-party use of the disputed term indicates that the term itself deserves only weak protection.”). “The greater the number of identical or more or less similar marks already in use on different kinds of goods, the less is the likelihood of confusion between any two specific uses of the weak mark.” First Sav. Bank, 101 F.3d at 654. In addition to the disputed terms themselves, the frequency of use of their root terms by others is also considered. See Future Proof Brands, L.L.C. v. Molson Coors Beverage Co., 982 F.3d 280, 293–94 (5th Cir. 2020) (considering the frequency of third-party use based on the root used in the branding of a product).

Here, in addition to Colorado's database for businesses showing 157 companies using the term “Elevations,” many more used “Elevation” and “Elevate.” And the Utah business entity database had 6 results for Elevations, 169 results for Elevation, and 763 results for Elevate. Moreover, at least 19 other financial institutions used the root term “Elevat-”.

Three Small Counties in Utah

In assessing commercial strength of the marks, the Court considers the relevant market, which is where the alleged confusion would arise. See Brennan's, Inc. v. Brennan's Rest., LLC, 360 F.3d 125, 132 (2d Cir. 2004) (considering “distinctiveness in the relevant market”). The Court further considers whether the marks had “stimulated” sales. Water Pik, 726 F.3d at 1154–55.

Here, Elevate ties its membership to three small counties in northern Utah, whereas Elevations concentrates its marketing in Colorado and presented no evidence tying its marks to consumers in Elevate's three Utah counties.

No Intent to Infringe

The Court also found that Elevate did not intend to benefit from Elevations' reputation when adopting the mark, noting that Elevate had consulted with an attorney and obtained regulatory approval from the National Credit Union Administration for Elevate's name.

Similar Services, Dissimilar Marketing

The Court found that Elevations and Elevate offer virtually identical services as credit unions, but differ in how they market these services. Parties don't compete when they “operate[] in distinctly different markets” and contact “very different people in their marketing efforts.” Heartsprings, Inc. v. Heartspring, Inc., 143 F.3d 550, 557 (10th Cir. 1998).

          Because Elevations and Elevate pursue sales in different regions, the markets are distinct. Given these distinctions, any similarities in products or marks are unlikely to confuse potential consumers. See John R. Thompson Co. v. Holloway, 366 F.2d 108, 114 (5th Cir. 1966) (“Where the unauthorized use of a conflicting mark is confined to a distinct and geographically separate market by the junior user, there may be no present likelihood of public confusion.”).

Here, the two credit unions had distinctly different membership requirements.

Elevate restricted membership in the credit union to individuals tied to three small counties in Utah.

Elevations required that a person either have recognized ties to Colorado, or make a donation to Elevations' foundation that is based in Colorado.

Elevations' marketing thus targets Colorado, and Elevate targets three rural counties in Utah.

The Court concluded that the markets do not overlap.

De Minimis Actual Confusion

While evidence of actual confusion is not required in order to prevail in a trademark infringement action, the Tenth Circuit will give it great weight because “it's often the best evidence of a likelihood of confusion.” King of the Mountain Sports, Inc. v. Chrysler Corp., 185 F.3d 1084, 1092 (10th Cir. 1999). But “isolated instances of actual confusion [may] be de minimis.” Id. (alteration in original) (quoting Universal Money Ctrs., Inc. v. Am. Tel. & Tel. Co., 22 F.3d 1527, 1535 (10th Cir. 1994)). “De minimis evidence of actual confusion does not establish the existence of a genuine issue of material fact regarding likelihood of confusion.” Universal Money Ctrs., 22 F.3d at 1535.

Here, the Court found the five examples of actual confusion in the record to be de minimis. See King of the Mountain Sports, 185 F.3d at 1092–93 (treating seven examples of actual confusion as de minimis).

          The examples of actual confusion must be assessed against “thebackground of the number of opportunities for confusion before one can make an informed decision as to the weight to be given the evidence.” 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 23:14 (5th ed. Supp. 2023) (“If there is a very large volume of contacts or transactions which could give rise to confusion and there is only a handful of instances of actual confusion, the evidence of actual confusion may receive relatively little weight.”); see also Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Ass'n, 651 F.2d 311, 319 (5th Cir. 1981) (“Although the record contains several isolated instances of uncertainty whether there was a connection between the two businesses, in light of the number of transactions conducted and the extent of the parties' advertising, the amount of past confusion is negligible.”).

          The parties co-existed for 18 months, and Elevations gets more than 10,000 loan applications every year. So 5 examples of confusion do little to suggest actual confusion.

          To the contrary, the small number of mistakes would suggest recognition of the distinction between the two credit unions. Each credit union limits its membership, and a loan requires an application and an underwriting process. So when actual confusion exists, it would likely be documented. As a result, the small number of mistakes weighs against a likelihood of confusion. See Water Pik, Inc. v. Med-Sys., Inc., 726 F.3d 1136, 1151 (10th Cir. 2013) (healthcare products); Hornady Mfg. Co. v. Doubletap, Inc., 746 F.3d 995, 1006 (10th Cir. 2014) (ammunition for firearms); Heartsprings, Inc. v. Heartspring, Inc., 143 F.3d 550, 557–58 (10th Cir. 1998) (educational facility and materials).

Facts “Largely Undisputed”

The Court noted that the potential for confusion turns here on historical facts that are largely undisputed.

Some of those facts, shorn of context, would ordinarily suggest a likelihood of confusion. For example, both entities are credit unions and their marks bear some similarities. But Elevations has elsewhere acknowledged that consumers generally exercise considerable care when making decisions about money or finances, and the two credit unions operate in distinct markets and differ in their restrictions on membership.

Thus, the Court affirmed summary judgment because “no reasonable juror could find likelihood of confusion based on the careful attention from consumers, the weakness of Elevations' marks in Elevate's three counties, the lack of Elevate's intent to benefit from Elevations' reputation, the marketing differences, and the de minimis examples of actual confusion.”

The attorneys at Thomas P. Howard, LLC litigate trademark cases nationwide including in Colorado.