IP Law Daily, TRADEMARK—10th Cir.: No likelihood of confusion between ELEVATE and ELEVATIONS for credit unions in different markets, (May 11, 2023)

By Anne H. Gibson, J.D., LL.M.

Tenth Circuit held that high level of consumer care and different geographic markets made confusion unlikely.

In a trademark infringement dispute between Utah-based Elevate Federal Credit Union and Colorado-based Elevations Credit Union, no likelihood of confusion resulted from the defendant’s use of the mark, the U.S. Court of Appeals for the Tenth Circuit has held. Although both businesses are credit unions and both marks begin with the same root word, the court found that the level of care exercised by consumers and the distinct geographic markets and restrictions on membership favor a finding of no likelihood of confusion. The court also affirmed the district court’s exclusion of certain expert witness evidence. The district court’s grant of summary judgment was thus affirmed (Elevate Federal Credit Union v. Elevations Credit Union, May 10, 2023, Bacharach, R.).

Elevate Federal Credit Union (Elevate) is a federally chartered credit union that operates in three small northern Utah counties and has three branches. Its membership is restricted to those with ties to the three counties. It was previously named Box Elder Credit Union. Over several months in 2018, the credit union engaged in a process of brainstorming, researching, and creating a new name and brand, including researching possible conflicts through internet browser searches, searches with the USPTO, and inquiries with the National Credit Union Administration (NCUA). It eventually settled on the name ELEVATE, which NCUA approved.

Elevations Credit Union (Elevations) is a state-chartered credit union in Colorado, with no branches or operations outside of that state, though it does have members who live in other states, including Utah. Its membership is restricted to those with ties to Colorado. It is the owner of the service marks “ELEVATIONS” and “ELEVATIONS CREDIT UNION,” the first of which was registered in 2006. Elevations sent a cease-and-desist letter to Elevate after it changed its name and rebranded and the current litigation followed, with the parties seeking summary judgment. The district court, after excluding certain expert witness testimony, found there was no likelihood of confusion and granted summary judgment in favor of Elevate. Elevations appealed.

Exclusion of expert testimony. The Tenth Circuit first reviewed the district court’s exclusion of the expert witness evidence for abuse of discretion. The expert’s testimony was based on the results of a survey that had its basis in internet searches, but Elevations only provided the relevant information about two of the searches used, not all of them. “The district court could reasonably view the two examples as inadequate to reflect the facts or data that [the expert] had considered.” The Tenth Circuit thus found that the district court had not abused its discretion in excluding the evidence.

Likelihood of confusion. The court then turned to the likelihood of confusion analysis, which it reviewed de novo. There were six factors to be considered: “1) the level of care likely to be exercised by purchasers, 2) the strength or weakness of the senior mark, 3) the degree of similarity between the marks, 4) the intent of the alleged infringer in adopting its mark, 5) the similarity of products and manner of marketing, and 6) the evidence of actual confusion.”

Level of care. The court first examined the level of care that consumers were likely to exercise. It determined that consumers seeking banking services “ordinarily use great care.” In fact, in a separate case, Elevations itself argued that consumers take “great care” in these decisions and that in such a context “a consumer is unlikely to assume that similar but not identical marks indicate the same source or origin of the services in question.” In addition, the court noted that credit unions have geographic membership restrictions that consumers must carefully consider. The court thus found that this factor weighed heavily against the likelihood of confusion.

Strength of the mark. In examining the strength of Elevations’ marks, the court focused on the need to determine the strength of the mark “in the relevant market.” Although the court found that Elevations’ marks were “suggestive” and thus in the middle of the range of conceptual strength, that strength was diluted by the large number of third-party marks using the “elevat-” root. Additionally, Elevations did not advertise in the three Utah counties where Elevate operates. The court consequently found that the ELEVATIONS marks lacked commercial strength in those locations, and this factor thus also weighed against a likelihood of confusion.

Similarity of the marks. The court next turned to the similarity between the ELEVATIONS and ELEVATE marks, including their logos. The court found that the marks do not sound the same. Despite sharing the same root term, the court found that the difference in the number of syllables and where the emphasis was placed meant that “the marks sound different.” Further, it found that although the marks “do bear similarities in meaning,” the fact that one was a verb and one a noun with different precise meanings were also important differences.

The logos of the two companies share the same colors and use similar block fonts. However, the court found that the differences, such as the use of upper and lower case versus all-caps, the use of italics, and the differences between the graphics, took precedence.

The court noted that it “generally weigh[s] the similarities more heavily than the differences” and that “a reasonable juror could find the marks similar.” However, it found that “[t]he significance of the similarities fades away when we consider the careful attention to financial decisions, the differing membership restrictions for Elevate and Elevations, and the weakness of Elevations’ marks in Elevate’s three rural counties.” Thus, the court found that those other factors caused this factor not to weigh in favor of a likelihood of confusion.

Intent of alleged infringer. The court looked at whether Elevate had an intention to “derive benefit from the reputation or goodwill” of Elevations. On the contrary, the court found that Elevate had put in a great deal of effort to ensure that it was not infringing on Elevations’ marks. It spent months researching, consulted with lawyers, the USPTO, and the National Credit Union Administration, and received approval from the latter. The court meanwhile found Elevations’ proffered evidence to the contrary unconvincing. “Without evidence that Elevate intended to benefit from Elevations’ reputation, this factor weighs against a likelihood of confusion.”

Similarity of the products and manner of marketing. The court acknowledged that Elevate and Elevations “offer virtually identical services as credit unions” and that this “would ordinarily suggest a likelihood of confusion.” However, the geographic limitations of their marketing affected the analysis. “The parties don’t compete when they ‘operate[] in distinctly different markets’ and contact ‘very different people in their marketing efforts,’” the court noted, citing precedent. It found that to be the case here, because Elevate only advertises in the three counties in Utah in which it operates, while Elevations markets its product in Colorado and in relation to the University of Colorado alumni network and sporting events.

Further, the court found the likelihood that consumers would be confused would be even smaller than normal “because the marketing differences stem from distinct membership requirements for the two credit unions.” Although Elevations argued that their markets overlap, due to a number of its customers resident in Utah, and a number of Elevate customers resident in Colorado, the court dismissed these limited exceptions. The court thus found that while the similarity of the products weighed in favor of a likelihood of confusion, the differences in marketing weighed against it.

Actual confusion. Finally, the court considered five instances of actual confusion. These were not contested by Elevate. However, the court noted that “[d]e minimis evidence of actual confusion does not establish the existence of a genuine issue of material fact regarding likelihood of confusion.” The court found that five examples of confusion, out of the large number of actual and potential customers of the two businesses, showed that this was de minimis and did not weigh in favor of a likelihood of confusion.

“In our view,” the court concluded, “no reasonable juror could find likelihood of confusion based on the careful attention from consumers, the weakness of Elevations’ marks in Elevate’s three counties, the lack of Elevate’s intent to benefit from Elevations’ reputation, the marketing differences, and the de minimis examples of actual confusion.” The district court’s grant of summary judgment for Elevate was affirmed.

The Case is No. 22-4029.

Attorneys: Nicole M. Deforge (Salt Lake City) for Elevate Federal Credit Union. Timothy P. Getzoff (Holland & Hart LLP) for Elevations Credit Union.

Companies: Elevate Federal Credit Union; Elevations Credit Union

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