M Welles and Associates, Inc. v. Edwell, Inc.
No. 22-1248. 5/31/2023. D.Colo. Judge Ebel. Trademark Infringement—Unfair Competition—Likelihood of Confusion Factors—Motion to Supplement Appellate Record.
May 31, 2023
M Welles and Associates, Inc. (Welles) provides classes, seminars, and certification workshops on project management. It operates under the brand name EDWEL, which is also its registered mark. Welles used Edwel.com as its primary website, but it later secured the additional domain names Edwell.com, Edwell.net, Edwellprograms.com, and Edwell.co. Edwell, Inc. (Edwell) is a nonprofit organization dedicated to improving mental health and well-being in schools that uses the mark EDWELL and the domain name Edwell.org. When Welles discovered Edwell’s website, it issued a cease-and-desist letter to Edwell and subsequently sued Edwell, alleging trademark infringement and unfair competition under the Lanham Act. Following discovery on the preliminary injunction, the magistrate judge held a hearing where representative witnesses of both parties testified. After this hearing, the magistrate judge denied the preliminary injunction. The parties thereafter consented to consolidate the preliminary injunction hearing into a trial on the merits pursuant to Federal Rule of Civil Procedure 65(a)(2). The magistrate judge then entered final judgment in favor of Edwell.
As a preliminary matter on appeal, the Tenth Circuit considered Welles’s motion to supplement the appellate record with a declaration from Mr. Welles stating that, after the hearing, he received two emails from a school employee referring to EDWELL in its request for wellness coaching, which Welles does not offer. However, the proposed declaration does not aim to correct a misrepresentation and does not demonstrate mootness, raise a new issue, or bear on the Tenth Circuit’s subject matter jurisdiction. Therefore, the Tenth Circuit denied the motion because Welles failed to identify a legitimate basis for supplementation.
On appeal, Welles argued that the magistrate judge used an erroneous legal standard when analyzing the likelihood of consumer confusion. However, the magistrate judge cited the proper legal standard—that “very similar marks may not generate confusion as to the source of the products where the products are very different or relatively expensive”—and appropriately considered the consumers’ degree of care, the similarity or dissimilarity of the parties’ services, and evidence of actual confusion.
Welles also requested that the Tenth Circuit adopt a presumption of confusion for cases such as this where entities “use nearly identical marks online and web addresses in generally related fields.” The Tenth Circuit declined to adopt this presumption because there is no law or precedent requiring the presumption, and it saw no reason to do so.
Lastly, Welles argued that the magistrate judge clearly erred in finding no likelihood of confusion. Courts consider six factors when determining whether two marks are likely to cause confusion: (1) the similarity between the marks, including their appearance, pronunciation, suggestion, and manner of display; (2) the strength or weakness of plaintiff’s mark; (3) the alleged infringer’s intent in adopting its mark; (4) the similarities and differences among the parties’ goods, services, and marketing strategies; (5) the degree of care likely to be exercised by purchasers of the goods or services involved; and (6) any evidence of actual confusion. Here, while the marks at issue are undoubtedly similar, the magistrate judge properly found that consumers are unlikely to be confused by the marks because Edwell never intended to copy Welles’s mark, the parties operate in different markets, consumers are likely to exercise a high degree of care in selecting the parties’ services, and there is almost no evidence of actual confusion. Only the first two of the six factors favor a finding of confusion, which is not enough to demonstrate clear error in the magistrate judge’s ultimate finding of no likelihood of confusion.
The order was affirmed.