World Champ Tech, LLC v. Peloton Interactive, Inc.

The Lanham Act prohibits use of a trademark when such use is “likely to cause confusion, or to cause mistake, or to deceive.” 15 U.S.C, §1114(1)(a); see also §§1052(d), 1125(a). This federal likely confusion standard is implemented by the circuit courts under variable “nonexclusive” factor tests that, in practice, are in tension with summary judgment standards. Most lower courts, including in this case, impermissibly weigh evidence to determine which party is likely to succeed on each confusion factor before weighing these judgments again in deciding likely confusion. This approach leads courts to apply “rules of thumb” that contain embedded judgments about likely confusion that, under the summary judgment standard, should be left to the jury. For example, the Ninth Circuit held that the similarity factor favored Peloton Interactive, Inc. because it used its house mark with World Champ Tech, LLC’s otherwise identical mark. This effectively eliminated—as a matter of law—the inference that the district court made on the same record that Peloton’s use of its house mark aggravates likely confusion (an inference that the majority of circuits recognize). To preserve the right to a jury consistent with this Court’s summary judgment rules, the likely confusion factors must be treated on summary judgment as an evidentiary guide, not a factor scorecard. The question presented, accordingly, is whether lower courts must, to comply with the summary judgment standard, avoid a factor-by-factor analysis that balances competing evidence and the weight to be given likely confusion factors.