Catch A Tiger By The Tail: Guarding Trademarks As Your Business Expands

While White and Williams can’t guarantee that a predatory tiger won’t spring from the commercial underbrush to threaten a client’s treasured trademark, some preventive legal medicine can help avoid an unfortunate surprise attack. One prescription is to plan carefully when you use your existing trademark in a new business sector.

Tony the Tiger illustrates the point. In 1952, the Kellogg Company began using the cartoon character Tony the Tiger on its boxes of Frosted Flakes. Kellogg federally registered the tiger as its trademark in the classification of food products. In 1964, Exxon Mobil (then Standard Oil) started using a different cartoon tiger for promotion of its gasoline products. (Remember the slogan, “put a tiger in your tank”?) Exxon registered its tiger in the category of petroleum products.

Roughly thirty years of peaceful coexistence of the two tigers followed, but the tigers were expensive. Between 1952 and 1995, Kellogg spent more than $1 billion promoting Frosted Flakes with Tony’s image, while generating $5.3 billion in gross U.S. sales. Exxon Mobil and its predecessors spent over $100 million in advertising to promote its tiger and associated petroleum products. Then in 1992, Exxon began using its tiger to promote its new product line: the sale of foods and beverages. The new convenience stores were named “Tiger Marts.”

Unfortunately for Exxon, it had never expanded its federal trademark registration beyond the category of petroleum products. Kellogg filed suit claiming trademark infringement, trademark dilution, and seeking an injunction prohibiting the further use of the Exxon tiger. Exxon responded that Kellogg knew of its use of the tiger trademark with food sales and had acquiesced in it. Kellogg contended that Exxon’s encroachment was a slow progression that had not given rise to actionable confusion until recently.

Initially, Kellogg lost, but its claims were later reinstated by the Sixth Circuit Court of Appeals. That Court noted that under federal trademark law (the Lanham Act), the touchstone of liability is whether one party’s use of a disputed trademark is likely to cause confusion among consumers about the origin of goods offered by the parties. The Appeals Court found that the “progressive encroachment” analysis turned on the likelihood of consumer confusion resulting from one party’s moving into the same or similar market area as the other party. Exxon asked the United States Supreme Court to take the case and clarify inconsistencies among the Circuit Courts. Late in 2000, however, the Supreme Court denied certiorari, allowing the Sixth Circuit decision to stand.

The message from the Kellogg case is clear: check that your intellectual property registrations conform to your actual business practice. Also, when preparing to expand into a new field, check whether your existing trademark might tread on the rights of other companies in that field using similar marketing tools. If it appears that it might, then you should consider whether your trademark means enough to try to use it in the new field. A consultation with experienced counsel may help you determine whether your use would trigger market confusion. Also, there may be potential claims of trademark abandonment or dilution by the others who use trademarks similar to yours. Gauge the other trademark holder’s willingness to litigate and learn the track record of similar claims in the likely judicial forum. You may well be able to safely use your existing trademark in new ventures, but you won’t know if you don’t do your homework.

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