Southern California stymies South Carolina in logo dispute

The athletic teams at the University of South Carolina and the University of Southern California share little in common: They sit on opposite coasts, play in separate conferences the SEC and PAC-10 and boast two different regional fan bases.
Thanks to a recent ruling from the U.S. Court of Appeals for the Federal Circuit, the Gamecocks and Trojans won’t be sharing a federally registered “SC” trademark, either.
In a non-precedential opinion, the circuit court upheld a Trademark Trial and Appeals Board’s decision to refuse South Carolina the registration of its interlocked “SC” baseball logo and to grant summary judgment against the school on its counterclaim for cancellation of an “SC” trademark registration held by Southern California since 1990.
According to the opinion, the registration of South Carolina’s “SC” would have created a likelihood of confusion with Southern California’s registered “SC,” and there was no showing that “SC” was in any way uniquely associated with the school or state of South Carolina.
“What was interesting about the case was that there were a lot of arguments by South Carolina that, ‘South Carolina is SC.’ It’s been a state for a long time, a lot longer than the University of Southern California has been a university, and there’s a lot of usages of SC around the state, like the postal code, signage and monuments, that show that SC is South Carolina,” said Los Angeles attorney Scott Edelman, who represented Southern California in the case.
“The opinion rejects all of those arguments and distinguishes between trademark usage versus non-trademark usage. All of those kinds of uses had nothing to do with the identification of the mark in connection with the sale of goods and services,” Edelman told Lawyers Weekly.
Although disappointed with the ruling, an attorney for South Carolina said it would not stop the school from continuing to use the logo (mainly by its baseball and softball teams) or from taking legal action to prevent impermissible use by anyone else.
Infringement doesn’t flow from being denied a federal trademark, Greenville attorney Neil Jones said, and South Carolina can still rely on its common-law trademark rights.
“If we have a counterfeit ‘SC’ baseball logo usage by someone, the university will certainly look into enforcing its rights and maintaining its own trademark protection,” said Jones, who is representing the school with Ashley Summer and John McElwaine.
“It just won’t currently have the backbone of a federal trademark registration.”
According to Jones, the school is also considering whether to appeal to the U.S. Supreme Court. It would have until mid-April to file a petition for writ of certiorari.
Hardball
For many years, South Carolina and Southern California have been in a concurrent use agreement that allows both schools to use the initials “USC,” Jones said.
Such agreements are usually reached where parties who own similar trademarks decide that there is not likely any risk of confusion between their uses of the marks or at least within certain geographic areas.
Under their agreement, Southern California enjoys the “USC” trademark in every state west of the Mississippi River and Hawaii, and South Carolina holds it in states to the east as well as Alaska.
The use of “SC,” however, has been a different story.
The rift between the two schools began in 1997, shortly after South Carolina sought registration of its “SC” baseball logo for use on hats, uniforms, T-shirts and shorts.
According to Jones, there are undeniably perks to gaining the federal trademark registration, including the right to sue in federal court and seek treble damages, attorney fees and $100,000 in statutory damages for infringement.
For instance, Jones said that several logos used by South Carolina’s athletic teams are federally registered marks, including the block “C” logo with a gamecock at its center that adorns the helmets of the school’s football team.
“There is no requirement that you apply for a federal trademark in order to prevent or sue someone for trademark infringement in order to enforce your common-law rights,” he said. “And you can still get into federal court using your common-law rights.
“But it’s much easier to have a federal trademark registration in place to have your ticket into federal court and to get all of the statutory rights that go with it.”
Southern Cal-ifornia, however, decided to play hardball when it came to South Carolina’s bid to register “SC,” claiming the California school’s 1990 registrations for its standard character mark “SC” and diagonally interlocked “SC” had priority, and that registration of the mark would create a likelihood of confusion among consumers.
It’s not the first and only time Southern California has taken such action. In fact, a case against Santa Clara College over its use of an interlocked “SC” logo was stayed pending the result of Southern California’s dispute with South Carolina.
Likelihood of confusion
The battle worked its way to the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office, which held in favor of the California school after applying the factors from the seminal 1973 case, Application of E.I. DuPont DeNemours & Co., 476 F.2d 1357, which is used to determine whether a mark would cause confusion.
In January, the Federal Circuit upheld that ruling in an opinion written by U.S. District Judge Claudia Wilken.
On appeal, South Carolina had conceded that the two schools’ “SC” marks were legally identical and could appear on the same types of goods such as clothing, key chains, backpacks or towels but it challenged the board’s decision on three other factors.
South Carolina claimed that goods bearing the “SC” logo wouldn’t likely appear in the same markets, or “channels of trade,” and that the two marks would not likely cause confusion among unsavvy consumers, such as those buying gifts for family who weren’t otherwise loyal, knowledgeable fans.
The school also argued that significant weight should have been given to the fact that there wasn’t enough evidence of any actual confusion among consumers.
“The products weren’t sold side by side, and they didn’t have the opportunity to be confused,” Jones said. “That was a fairly large issue. It was an issue Southern Cal admitted.”
The appeals panel, however, affirmed the board’s decision that the two logos could likely appear in the same “university-authorized” markets.
And although the panel disagreed with the board’s finding that confusion could arise among unsavvy consumers breaking potential consumers into categories was purely speculation, the panel said it did not find that factor to be decisive.
“[T]he board found that the marks were legally identical and would appear on the same classes of goods in the same trade channels,” Wilken wrote for the panel. “These factors, on their own, support a finding of likelihood of confusion.”
Jones, the attorney for South Carolina, disagreed, saying that holding did not give proper consideration to all of the other DuPont factors.
“The Federal Circuit said that once they are legally equivalent, all other factors go out the door,” Jones said.
Not ‘unmistakably associated’
In addition to denying South Carolina its registration of the “SC” logo, the panel also rejected the school’s bid to cancel Southern California’s trademark registration.
The panel held that South Carolina had failed to show that the challenged mark, “SC,” was “unmistakably associated with the school, or whether the initials “SC” pointed uniquely to the state.
The opinion pointed out that several other entities besides the state of South Carolina represent themselves as “SC,” including 16 other colleges and universities.