The Very Hungry Caterpillar: Is Caterpillar Going Too Far To Protect Its Trademarks?

A thousand years from now, the legends will say that cats invented the internet as part of their plan. Of course, sophisticated scholars will snort, scoff and explain, “Actually, cats only invented the meme.”

If that is funny, it’s mostly because of the ubiquity of cats in 21st century culture. Domesticated felines have been a dominant, widely-recognized force on the internet. My evaluation of the Caterpillar v Cat & Cloud trademark dispute is that it shows how the internet affects trademark strategies (a break from the persistent and well-established analysis of how the internet has affected copyright strategies). I think it also raises an interesting, esoteric question about truncated marks and interpretation of meaning.

I think Caterpillar has two problems: 1) Cat is a really terrible mark in a cat-crazed culture, 2) The truncated mark foists cat troubles on them

Caterpillar’s Trademarks

It’s important to protect trademarks. Trademarks, arguably more so than other IP, have a way of slipping away if you leave them unattended. Copyrights and patents eventually expire, but trademarks last as long as they are used, maintained, and defended. A trademark can become generic, or it can be slowly encroached on in ways that make it harder to defend later. Caterpillar understands the importance of trademark vigilance, and has initiated at least two major trademark proceedings in the last few years, following a significant number of new trademark registrations in 2015. (See CAT Registrations: 4804263-275. All filed in 2014 and issued in 2015.)

PetraCat, An Energy Services Company

In April 2015, Caterpillar and PetraCat argued before the Trademark Trial and Appeals Board (TTAB) on the question of whether PetraCat’s trademark was too close to Caterpillar’s trademark. Caterpillar opposed the registration of PetraCat’s mark out of concern that consumers would be confused by the similarity of the marks. It was an interesting question with reasonable arguments from both sides, but the TTAB ultimately concluded that there was enough similarity to be concerned about consumer confusion.

 

Cat & Cloud, a Coffee Shoppe

In August 2018, Caterpillar filed a cancellation proceeding against Cat & Cloud, a coffee shop based in Santa Cruz, CA. The easy criticism to make is that there is no likelihood of confusion between the goods or services of these companies, but that criticism would be misguided. Trademarks are registered with the USPTO according to categories (called “classes”). Caterpillar is not concerned about the use of trademarks with respect to providing beverages; Caterpillar is concerned about the class of goods that the two companies share: shoes, hats, t-shirts, and other merchandise. This at least establishes some overlap about which there is even fathomable confusion or contention—but is Caterpillar reasonable for pursuing a cancellation proceeding?

 

When discussing any trademark dispute, two subjects are virtually unavoidable: the strength of the marks and the likelihood of confusion.

 

Trademark Strength: Ranking Your Advertising Department’s Imagination

Trademark strength (or distinctiveness) can be thought of as existing along a spectrum that runs from “weak” on one end and “strong” on the other.

Fanciful – When you make up a word that has no other meaning in the language (Xerox, Frisbee)

Arbitrary – When you pick a word that already exists and has a meaning, but has nothing to do with your goods or services (Apple, for a computer company)

Suggestive – When you use words that are related to your goods or services, but don’t quite describe them.

Descriptive – When your trademark more or less describes your goods or services.

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Generic (no protection) – When your trademark is the word everyone uses for your product, and then you lose trademark protection because the language has claimed your trademark as its own. This happens most tragically when a fanciful mark dominates the market too well. Aspirin is the seminal example of a trademark lost to genericism. Xerox corporation fights this risk, as does Google. Marks frequently at risk for this include Band-Aid, Frisbee, Velcro, and anything that everyone you know calls by its trademark name even when referring to the general good or service.

So, how do we rate these marks?

I would argue that Caterpillar’s full mark is descriptive, as it describes a style of tread-and-wheel movement for heavy machinery. (I could also see the argument that Caterpillar is a suggestive mark, because it could be said to suggest to the mind the slow and steady motion of a grub… but I’m not entirely convinced.) On the other hand, the mark “CAT” is… well, truncated. It wouldn’t even be part of Caterpillar’s trademark portfolio if it weren’t for the fact that it’s just the first three letters of the word “caterpillar.”  But “cats,” conceptually, have nothing to do with Caterpillar’s business.

And this is where Caterpillar’s problems start.

Caterpillar is not interested in aligning their branding with felines- Caterpillar is interested in the first three letters of their company name. As a mark, it’s arbitrary (insofar as cats have no conceptual relationship with bulldozers or cranes—though maybe there’s a long-shot argument that cats sometimes dig, and some of Caterpillar’s machines dig). But it’s only an arbitrary mark if Caterpillar can claim the feline meaning of “cat.” The recurring question that determines a lot about Caterpillar’s mark is what the mark actually means.

Here’s the most interesting question in this dispute that I’d like to see the USPTO answer: when a truncated mark happens to spell a new word that has no common meaning with the original mark, does the truncated mark adopt the meaning(s) connected with the truncated mark as though that mark was not a truncated mark? To put that in context: does Caterpillar’s “CAT” mark mean “a feline” or does it mean “short for caterpillar”? If Caterpillar can claim the new meaning, this could elevate their mark strength from “Suggestive/Descriptive” to “Arbitrary.”

On the other hand, “Cat & Cloud” is either arbitrary (because neither cats nor clouds have anything to do with coffee) or suggestive (because cuddly cats and cloudy, overcast whether evoke an image that seems more complete with a warm cup of tea or coffee). If it is suggestive, it is one of the most abstractly suggestive marks I’ve seen. If it is arbitrary, it is one of the more thematically-attuned marks I’ve seen.

 

Likelihood of Confusion: The Quintessence of Trademark Disputes

Almost every trademark dispute comes down to an examination of the likelihood of consumer confusion.

The Likelihood of Confusion Factors Are:

Relatedness of Goods or Services

Similarity of Marks

Similarity In Appearance

Similarity In Sound

Similarity In Meaning

Design Marks

Likely to Deceive

The actual goods and services of these two companies are far apart. However, the subject matter at issue is the merchandise that is ancillary to both businesses. As far as the trademark analysis is concerned, a shoe is a shoe, and a t-shirt is a t-shirt, so the goods are considered related for the purposes of this analysis. I think there is still some argument to be made for Cat & Cloud that the shoes themselves might be very distinguishable (as I understand it, Caterpillar shoes tend to be steel-toed boots designed for rough construction work, while Cat & Cloud makes lighter-wear, everyday walking shoes). A significant distinction between shoes might be enough to argue that there is less likelihood of confusion.

The marks display a weak similarity. Both marks contain the word “cat,” though the shortness and commonplace nature of the word make this barely noteworthy. The inclusion of a substantive element with “Cat” is sufficient to establish the marks as dissimilar. This also addresses questions regarding similarity in sound and in meaning.

Similarity in appearance only seems plausible if the words “& cloud” are significantly smaller than the word “Cat” in the mark of the defendant. Furthermore, to address the design elements, Caterpillar has carefully cultivated a stylized typeface and design that is distinct and recognizable and, to my understanding, this has not been remotely imitated by Cat & Cloud.

To the factor of similarity in meaning: this is sufficiently addressed in my analysis regarding mark similarity, but I think there is an additional point to be made. Given the context of the trademark “CAT” for the company Caterpillar, it is not clear on its face that the plaintiff’s truncated mark is actually intended to mean or signify a member of the taxonomic family felidae. I don’t think this matters much because of the dissimilarity of the marks, but I am not convinced that there is actually any similarity in meaning. I bring this up because I think it points to the central, recurring problem for Caterpillar’s trademark.

Finally, it seems profoundly unlikely that either mark will serve to deceive consumers. It is truly difficult to imagine a serious scenario in which a consumer seeks out a hat or t-shirt sporting the trademark of one company and mistakenly purchases a product from the other company.

 

Bonus Find: Google Hints at a Huge Branding Problem for Caterpillar

While researching for this blog post, Google offered me additional helpful information regarding other inquiries about Caterpillar, Inc. Google indicates that the number one question that average users have about Caterpillar is whether it is also Cat:

 

Caterpillar problem

 

That is a huge problem. That is a failure of branding. That is the “Where’s the Beef?” advertisement all over again. (An enormously popular advertisement, yet consumers failed to correctly identify the advertisement with the correct brand, product, or company.) Maybe Caterpillar is scrambling to bat down other trademarks in the hopes that consumers will know who they are if they are the only company left with a cat-related trademark.

This is a bitterly ironic discovery. This lack of brand understanding isn’t Cat & Cloud’s fault. It isn’t anyone fault besides Caterpillar’s. If consumers don’t connect a trademark to a company, it doesn’t matter how thoroughly that company defends the trademark. Caterpillar doesn’t have a likelihood of confusion problem with competitors or other companies outside of their industry. Caterpillar has a likelihood of confusion problem with itself. Maybe marketing should work on reconciling the “CAT” and the “Caterpillar” before the company invests in aggressive trademark protection.

Perhaps this confusion is the effect of Caterpillar’s own identity crisis: Is this a Caterpillar company or is this a Cat company? Caterpillar might resolve a lot of its problems if it picked one animal and stuck to it. Perhaps Caterpillar set itself up for an IP portfolio headache by stretching its trademarks as far as its goods when it decided to become a clothing and heavy machinery company that is known as two completely different kinds of animals.

 

The Charitable Interpretation

Despite the bad press Caterpillar is getting, I think there is an empathetic viewpoint: Caterpillar is actually in a very weak position, and they are compensating with an aggressive strategy. “CAT” is actually a sub-optimal trademark, and Caterpillar feels stuck with it.

Caterpillar has two facts against them:

1) Their truncated mark spells “cat”

2) Cats are exceptional popular, wide-spread, well-liked, and generally excellent subjects for brands

I don’t think Caterpillar ever wanted to be a cat company; they didn’t name their company after anything remotely feline. The irony is that Caterpillar probably doesn’t want to be defending “cat” as a trademark — after all, the company never really picked it. Caterpillar is unlucky to have a truncated mark that happens to spell “CAT,” and the company is concerned about how difficult that mark is to protect. After careful consideration, the company has decided that their best chance at protecting their truncated mark is to aggressively seek out trademarks that involve the word “CAT” and pursue actions against those trademark holders.

Caterpillar seems to be leaning into the hand they’ve been dealt: the company applied for two more trademark registrations last August that incorporate some honeycomb design into the mark (Serial numbers 88080972 and 88080934). I think we’ll know that Caterpillar has gone too far if the company pursues actions against other companies that make any use of honeycomb lattice designs in their logos, marks, such as Post Foods (for their Honeycomb cereal) or the American Beekeeping Federation.

 

Conclusion: Can’t Own Every “Cat”

The troubling fact for Caterpillar’s IP management is that their truncated mark happens to be an entirely different English word—an extremely common, extremely brand-able (because of the American fondness for cats) English word.

This accidentally expands the range of what Caterpillar has to consider when thinking about IP protection. It turns out that Americans like cats, and associating with something positive is a classic brand-building technique. So a lot of companies are prone to incorporating felines into their branding. This shouldn’t have anything to do with a company named after a butterfly larva, but trademarks are more about language than they are about zoology.

There are 2459 results for live marks in the USPTO Trademark Database with the word “CAT.” Caterpillar can’t deny IP ownership of every “cat.” But Caterpillar can’t idly sit by and let their trademark fade into oblivion because cats got a popularity boost from social media.

The central battle in IP is defining the boundaries of ownership (this is what it has in common with other types of property law). Caterpillar surely understands that no single company can own every instance or usage of the word “CAT.” But Caterpillar just as surely understands its risks: that a mark like “CAT” is extremely difficult to protect, and is likely to become a weak mark without constant vigilance.

There are strategic reasons for defending IP aggressively. But somewhere, there is a line between an aggressive defense and an offensive offense. Although Caterpillar’s strategy is understandable, there has to be a limit to a trademark portfolio. If Caterpillar hasn’t crossed that line with its cancellation action against Cat & Cloud, it surely must be getting very close.

 

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I have to include the caveat that there may be more to this particular case than is apparent. Research on open litigation is challenging. Seemingly insignificant or unimportant details can completely alter the course of a legal analysis. As always, nothing in this post constitutes legal advice and is for educational purposes only.

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Fun Fact: Caterpillar owns the second oldest “Cat” mark in the TESS database.

Second oldest CAT mark: 0564272, issued Sept 1952

Oldest Mark: TOMCAT:  0552420, issued Dec 1951.

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Bonus Background Trademark Knowledge: Two Types of Proceedings

What is an Opposition?

An opposition proceeding is when one party applies for a trademark, the USPTO says, “If anyone doesn’t think we should approve this trademark, speak now or … well, file a cancellation proceeding later.” An opposition is another party speaking up just before a trademark is granted.

Trademark owners sometimes file oppositions that sound egregious. But filing an opposition is sometimes just a way of announcing that you care about your trademark; in some of the more outlandish cases, the opposing party doesn’t really expect the USPTO to deny the application—the opposing party is just establishing a record. Other times, the opposing party really does think that there is a legitimate concern with the applicant’s trademark. The proceeding between Caterpillar, Inc. and PetraCat was an opposition proceeding (and as a result, PetaCat was not granted a registration for their trademark).

 

What is a Cancellation?

After the USPTO has approved an application and given a certificate of registration to a trademark holder, sometimes another party realizes that there is some reason that the trademark registration should be cancelled. A cancellation is different from an opposition in the fact that the defendant has already received a trademark registration. This gives a little bit more of a presumption of legitimacy to the defendant than the applicant has in an opposition proceeding. The proceeding between Caterpillar and Cat & Cloud is a cancellation proceeding.

 

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