I called out the 11th Circuit last year for faulty reasoning in a restaurant trademark dispute, and now, it appears, they’ve botched another trademark case. It was a dispute between a manufacturer of night vision goggles and its sales/distribution partner, and the issue was proof of secondary meaning.
In Knights Armament Co. v. Optical Sys. Tech. Inc., No. 09-14480 (11th Cir. Sept. 2, 2011), OTSI developed and manufactured the product to sell to the US military. It partnered with another company (KAC) that has a lot of experience marketing to the military. OTSI came up with the trademarks UNIVERSAL NIGHT SIGHT and UNS. KAC’s contracts with the government touted the products under these marks. After selling a bunch of OTSI’s goggles to the military, KAC began developing a competing goggles under the marks KNIGHTSCOPE, UNIVERSAL KNIGHTSCOPE and UKS.
Finding that OTSI owned the marks UNIVERSAL NIGHT SIGHT and UNS, but that the marks were descriptive, the court attempted to determine whether the marks had developed secondary meaning. Affirming the district court’s “no” decision, the 11th Circuit said that no secondary meaning could have developed because “there was no indication [in the government contracts] that the UNS/Universal Nightsight mark belonged to OTSI, and not KAC, [so] consumers had no reason to associate OTSI’s mark with its product, and not KAC.”
It seems to me that this reasoning is at odds with the principle that, for secondary meaning to exist, consumers need not associate the mark with a specific company, but only with a single source, even if the source is anonymous. Thus, the 11th Circuit asked and answered the wrong question: whether OTSI made it clear to the military that these were its trademarks. The right question was whether the government associated the marks with a single source—any single source (even if that was the distributor, KAC). It seems like the answer here would have been “yes”—but because the court framed its analysis around the wrong question, the facts referenced in the opinion don’t permit that question to be answered with absolute certainty. But whatever the facts relevant to that question were, they would almost certainly have to viewed through the lens of the principle that, as between a distributor of a product (a licensee) and the manufacturer (the licensor), the manufacturer owns the rights in the mark it selected.
I wonder if the parties properly briefed this issue. Trademark law can get pretty arcane, and if a party's lawyers aren't very familiar with it, issues can be missed, courts can be led astray, and decisions can be framed incorrectly. In patent cases, clients and general litigators generally know to call in specialists. In trademark cases, not so much.