Florida Virtual School v. K12, Inc., 2024 WL 22039, No: 6:20-cv-2354-GAP-EJK
(M.D. Fla. Jan. 2, 2024)
Some interesting comments on when individual instances of “confusion”
don’t count, as well as their relevance to evaluating out-of-court social media
etc. statements as evidence of confusion.
In 2011, Plaintiff sued defendants for using the marks “Florida
Virtual Academy/Program” and the associated acronyms, “FLVA/P.” The parties
settled in 2015; defendants agreed to cease their use of those marks and to
avoid the words “Florida” and “Virtual” together in a mark. The agreement
listed four examples of prohibited marks as well as acceptable marks, but did
not require defendants to use the acceptable examples. In 2019, defendants launched
the “Florida Online School,” abbreviated “FLOS.” About a year later, plaintiff
demanded that defendants stop using that too, which they did, but plaintiff
sued anyway, seeking (by the time of trial) an injunction and disgorgement.
Plaintiff has seven registered trademarks involving Florida
Virtual School or FLVS; two of the registrations are incontestable.
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| registrations with graphical elements |
The “Florida Online School” mark included an image of a
Florida panther.
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| blurry panther mark |
Strength: Plaintiff’s marks at issue were all highly descriptive. Acknowledging
that the Eleventh Circuit has said that circuit precedent is probably wrong
about this, the court accorded artificial strength to the incontestable ones,
in the form of secondary meaning, but then—also following circuit precedent—suggested
that this presumption of strength was easily rebutted with real marketplace
evidence. And defendants did rebut it—all the marks were commercially weak. (Also,
the incontestability was procured under “dubious circumstances”; although
defendants’ cancellation counterclaim was precluded by the prior settlement
agreement, the plaintiff admitted that it made at least one material
misrepresentation to the PTO in its registration application, and there was evidence
of further misrepresentations “in its effort to establish secondary meaning and
overcome the initial rejection of its application for these marks.”)
The evidence of weakness was substantial:
Apart from the geographic,
descriptive nature of its marks, Plaintiff’s own internal materials tend to
illustrate their inherent weaknesses. While multiple witnesses testified as to
Plaintiff’s significant marketing and advertising efforts, that alone is not
indicative of strength. Plaintiff’s Director of Marketing … testified that
changing a logo and using it in different ways “can dilute a brand” in the same
breath as she acknowledged that, in only twenty-five years of existence,
Plaintiff has changed its logo six times. [Another witness] discussed a nearly
$5 million effort to rebrand Plaintiff’s global operations as recently as 2020.
… Plaintiff argues that “Florida
consumers consistently recognize FLVS significantly more than they recognize
K12 and other[s].” However, upon review, the survey Plaintiff cites shows that
its superiority is marginal—often within ten percentage points ….
In a 2018 survey of parents with
school-aged children that Plaintiff commissioned while researching its brand
effectiveness, its mark had only 15% more awareness than Defendants’ mark and,
moreover, only 30% of respondents recognized Plaintiff’s brand, even when
prompted. Similarly, in a 2020 commissioned survey, without prompting, only 1%
of respondents could name Plaintiff as an online education provider. While
Plaintiff’s full-name marks garnered around 36% awareness among prospective
families, the acronym marks had less than 15% awareness among prospective and
current families. Indeed, in an internal marketing presentation from January 4,
2022, Plaintiff itself used words like,
“plain…bored…uninspired…nondescript…[and] sterile” to describe the brand
identity of its acronyms. This is strong evidence of the commercial weakness of
these marks.
Also, Florida county school districts often incorporate the
phrase “VIRTUAL SCHOOL” into the brand for their online educational offerings,
in partnership with both plaintiff and defendant. A plaintiff witness testified
that these school districts are “using their county name[s] to distinguish
[themselves] from us or anyone else,” e.g., the Broward Virtual School, which
weakened the mark. “Though use of a mark by licensees supports its strength,
the use of Plaintiff’s hybrid marks throughout Florida’s 67 counties to cover
services that are actually provided by both Plaintiff and Defendants weakens
Plaintiff’s marks significantly.” The court thought it was ridiculous to argue
that “Virtual” & “School” together were not infringing, while “Florida”
& “School” together were. “Though some of these third-party users operate
as Plaintiff’s franchise partners, the fact that these franchise relationships
also allow Defendants to provide substantial services (e.g. an entire
elementary school program) under the same marks significantly undercuts the
strength of Plaintiff’s marks.”
Plaintiff also failed to provide evidence of actual
confusion. There’s a lot of general confusion about online education, and about
the fact that, in order to provide their services, plaintiffs have to associate
with public school districts, which are overseen by the Florida DOE, of which
defendant is a subagency.
But trademark confusion? No. The only live evidence of
actual confusion was the testimony of two parents who mistakenly enrolled their
children with Defendants’ Florida Online School. But the initial testimony that
the names were confusing “readily disintegrated under live cross examination.”
One witness “testified on multiple occasions that her confusion stemmed from
her misconception that there was only one online education provider available
to her.” And it was plaintiff’s own delay in assigning a teacher that led her
to switch back to a brick and mortar school. The other, who was vision-impaired,
testified that she enrolled one of her sons with defendants’ Florida Online
School, “not realizing the schedule, and then immediately realized that wasn’t
the right thing for us as a family and put him into [Plaintiff’s school].” Her “repetitive
emphasis on her son’s need for a flexible schedule as the reason for
unenrolling him undercut[] the relevance of that guided testimony.”
Given how the supposed evidence of confusion deteriorated
under cross-examination, the court also mostly rejected twenty-one emails from
the parties’ employees, parents, students, and other third parties. (Portions
were likely admissible as party statements.) For purposes of trial, the emails
were not trustworthy evidence of confusion, even as state of mind: “Was the
author really confused? What was the nature of the confusion? Who caused the
confusion? Was Plaintiff harmed by the confusion? The answers to these
questions require cross-examination.” The court pointed to the fact that the
two live witnesses’ emails could support an inference of confusion, but upon
cross-examination, “it became clear that the source of confusion was not
Defendants’ name.” Thus, these out-of-court statements weren’t reliable. “[I]f anything, they support the fact that
online educational service providers exist in a muddled marketplace replete
with generically and descriptively named participants.”
In this context—seeking millions of dollars of disgorgement—the
absence of confusion evidence, including survey evidence, weighed heavily
against finding likely confusion, especially given that potentially millions of
consumers were exposed to the alleged infringement over two years, which was
plenty of time for any such evidence to emerge.
Intent: The Eleventh Circuit says: “If it can be shown that
a defendant adopted a plaintiff’s mark with the intention of deriving a benefit
from the plaintiff’s business reputation, this fact alone may be enough to
justify the inference that there is confusing similarity.” This requires a
“conscious intent to capitalize on [its] business reputation, w[ere]
intentionally blind, or otherwise manifested improper intent in adopting [the
Florida Online School] name and acronym.”
Plaintiff’s “strongest evidence” of intent was that defendants
continue to use the words, “Florida online school,” on their website — “contending,
incredibly, that any use of those words in any context constitutes trademark
usage. It was not enough that Defendants completely rebranded their entire
online school; Plaintiff now insists that Defendants—who operate an online
school in Florida—must not use those words anywhere on their websites.” No.
Although defendants did change some website language during trial, the court’s
review found that this just reflected “ill- informed, non-attorney employees
scrambling to avoid the swinging arms of a bully rather than any kind of
concerted effort to alter evidence.” Non-trademark usage of the words “Florida
online school” was ultimately irrelevant to the analysis.
“The complete dearth of evidence of any ill intent on behalf
of Defendants is enhanced by their testimony that the Florida Online School
name was never of particular importance …—they simply chose a descriptive name
that was not on the list of marks prohibited by the Settlement Agreement.” And,
when plaintiff complained in August of 2020—one year after the school had begun
operations as Florida Online School—defendants began “instantly” working with its
contracted school district to change the name. “The fact that it took in excess
of one year to accomplish a complete rebranding of a school name, including
updating email addresses and all school literature, is not unreasonable.”
Ultimately, there was no evidence of intent to trade on
plaintiff’s good will, weighing strongly against infringement.
Mark similarity: Textual similarity in a crowded field with
a limited number of descriptive terms wasn’t probative, and the visual elements
were very distinct.
Consumer sophistication: “Though the expense associated with
a college education is largely absent from these providers, the nature and
importance of a parent’s choice of where to educate their child is comparable
to that decision. The fact that Plaintiff presented two individuals who
experienced confusion with this marketplace—one of whom freely admitted that
she undertook no research while the other plainly changed her mind based on
scheduling concerns unrelated to any mark confusion—does not suggest that the
thousands of other customers of these parties are not sophisticated.”
Similarity of services slightly favored plaintiff; the trade
channels were similar, but defendants’ customers weren’t individual parents and
students, but rather a school district. And they targeted school districts in
their marketing. Plaintiff focuses on parents and students. Defendants market
only their K12 brand nationally. “Indeed, any parent who stumbles onto the
Florida Online School website would be unable to enroll and would be directed
to the main K12 website if they were interested in enrollment.”
Balancing: Defendants win.
from Blogger http://tushnet.blogspot.com/2024/01/where-cross-examination-exposes-lack-of.html
Rebecca Tushnet 