In Sorensen v. WD-40 Company, the Seventh Circuit affirmed the district court’s finding that the use of the term “inhibitor” for a rust-inhibitor product was not trademark infringement and constituted a descriptive fair use.  In 1997, Jeffrey Sorensen (“Sorensen”) founded a company called Van Patten Industries and began selling rust preventative products under the name “THE INHIBITOR.”  The products contain a substance known as a volatile corrosion inhibitor (“VCI”) which prevents corrosion by creating a chemical barrier on materials that repels moisture and water. Sorensen claimed two trademarks related to his line of products: (1) the word mark “THE INHIBITOR”; and (2) a common law trademark in a crosshair design, consisting of a black crosshair symbol over an orange background, with a different black symbol in each quadrant of the crosshair.

WD-40 is a well-known producer of multipurpose lubricant spray. Its primary product carries a trademark consisting of a yellow shield barring the name “WD-40” in blue characters.  In late 2011, WD-40 introduced a sub brand called the WD-40 Specialist product line. With one exception, each product in the line came in metal aerosol spray bottles with the WD-40 shield above the trademarked “SPECIALIST” mark. Below that was the specific product’s name as well as a crosshair design. One product—the Long-Term Corrosion Inhibitor—featured a crosshair made of a gray cross over a burnt orange background, with a black circle perimeter and a different silver-black symbol in each quadrant of the crosshair. The Long-Term Corrosion Inhibitor also contained VCI and was meant to inhibit rust for a long period of time.

Sorensen filed a lawsuit against WD-40 with respect to the Long-Term Corrosion Inhibitor product, alleging trademark infringement of his “THE INHIBITOR” word mark; false designation of origin with respect to WD-40’s use of a crosshair mark, both standing alone and in combination with the word “inhibitor” and related state claims under Illinois common law and the Illinois Uniform Deceptive Trade Practices Act. The Northern District of Illinois granted summary judgment in favor of WD-40 on all counts.

• First, the court held that WD-40’s use of the word “inhibitor” on its Long-Term Corrosion Inhibitor Product was a descriptive fair use of the term.
• Second, the district court held that there were no genuine issues of material fact as to whether WD-40’s use of its crosshair mark was confusingly similar to Sorensen’s crosshair mark.
• Finally, because all of the state law claims required Sorensen to demonstrate a likelihood of confusion, WD-40 was entitled to summary judgment on those claims as well.

On appeal, the Seventh Circuit affirmed. Under 15 U.S.C § 1115(b)(4), a defendant in a trademark infringement action may invoke a fair use defense by demonstrating that the alleged infringement “is a use, other than as a mark…which is descriptive of and used fairly and in good faith only to describe the goods or services of such party.” To prevail on a fair use defense, a defendant must show that (1) it did not use the mark as a trademark; (2) the use is descriptive of its goods or services; and (3) it used the mark fairly and in good faith. The Seventh Circuit disagreed with most of the district court’s analysis with respect to the first factor. The district court found that the word “inhibitor” did not function as a source indicator because the Long-Term Corrosion Inhibitor bottle also displayed the famous WD-40 shield mark, which served as a source indicator for customers. The Circuit Court found this reasoning was incorrect because it rested on the premise that a given product could only contain one indicator of source, a premise that was contradicted by the fact that WD-40’s product contained at least three registered trademarks. The fact that the WD-40 shield served as a source indicator did not mean that the word “inhibitor” did not also serve to indicate the product’s source.  The Court also disagreed with the district court’s conclusion that the term “inhibitor” was a non-trademark use because other competing products in the market also used the word “inhibitor” to describe its products. The use of a term by other sellers of similar goods is an indicia of the descriptiveness of the term, not whether it is being used in a non-trademark manner.

Despite those criticisms, the Seventh Circuit ultimately agreed that WD-40’s use of the word “inhibitor” was a non-trademark use. Compared to other features in the bottle’s design, the word “inhibitor” was much less prominent or noticeable. It was also much smaller than the stylized and colored word “Specialist” and the colorful crosshair mark. Finally, the word “inhibitor” – which was written in relatively small, white type – was less attention-grabbing than even the word “Corrosion,” which was larger and colored in orange. Due to the word’s small size, plain color, and non-privileged placement on the bottle the Court found that “inhibitor” was not an attention getting symbol and did not function as a source indicator.

Next, the Court affirmed the finding that the term “indicator” described a characteristic of the product. The word “inhibitor” following the word “corrosion” described a characteristic of WD-40’s product, which contained VCI and was meant to inhibit corrosion for a long period of time. Multiple competing products made by third parties also used the word “inhibitor” to describe their products.  Finally, the Court found that WD-40 had used the term “inhibitor” in good faith. Sorensen argued that WD-40 had knowledge of Sorensen, his products and his “THE INHIBITOR” word mark when it named its product, which allegedly was evidence that WD-40 had included the word “inhibitor” in a bad faith attempt to take business from Sorensen. Although the Court acknowledged that there were WD-40 documents that specifically referred Sorensen and his mark, a party’s mere knowledge of a competitor’s mark is insufficient to establish bad faith. A plaintiff must point to something more that suggests subjective bad faith which Sorensen failed to do.  The allegation that WD-40 failed to conduct a trademark search prior to using the word “inhibitor” on its product was insufficient to raise an issue of material fact with respect to bad faith. If WD-40 believed that it was not using the term “inhibitor” as a trademark, it had no reason to conduct a trademark search. Moreover, Sorensen’s argument that WD-40 failed to undertake a trademark search was inconsistent with his argument that WD-40 knew about his mark and decided to copy it anyway.

The Court also affirmed summary judgment with respect to Sorensen’s claim that WD-40’s use of a crosshair logo on its Specialist products infringed upon Sorensen’s common law crosshair trademark because there was no likelihood of confusion between the marks under the seven factor test used by the Seventh Circuit. With respect to the first factor – similarity of the marks –  the Court found that the marks were dissimilar. The WD-40 bottles were primarily black and silver, with a large yellow WD-40 shield and a bright yellow cap. In contrast, the packaging of Sorensen’s product was primarily orange, yellow-orange and black.  The appearances of the crosshairs were also different. WD-40’s silver and burnt orange crosshair created a different impression than Sorensen’s bright orange and black crosshair. Finally, WD-40’s use of its well know shield mark on the product was a strong indicator that there was no likelihood of confusion. If the holder of a strong mark puts its mark on one of its products, consumers would correctly surmise the source of the product.

The Seventh Circuit reversed the district court’s finding with respect to the second factor, similarity between the products. Two of the products at issue – Sorensen’s V80 VCI blend and WD-40’s Long-Term Corrosion Inhibitor – were functionally identical. The third factor – area and manner of concurrent use – provided little support for Sorensen according to the Court. There was no concrete evidence that WD-40’s products and Sorensen’s products had ever been sold next to each other, nor was there any evidence that the parties targeted the same consumers or advertised in the same channels. The fact that the parties both sold products in the same store was only weak support for Sorensen.  The fourth factor – degree of care exercised by consumers –weighed in favor of Sorensen. The products at issue were inexpensive and could be characterized as impulse purchases. Relevant consumers were unlikely to exercise a great deal of care.

The fifth factor – strength of the mark – weighed against Sorensen. Sorensen failed to offer a consumer survey or testimony regarding public awareness of the mark and also failed to provide any sales data of products bearing the mark. Sorensen had also inconsistently used the mark – sometimes the crosshair had symbols in each quadrant, sometimes the quadrants were empty and many times there was no crosshair at all, but rather a bull’s eye – which weighed against a finding of strength. Sorensen conceded that he had no evidence of actual confusion, the sixth factor in the analysis. Finally, the seventh factor – bad faith intent – also weighed against Sorensen. Although, as noted above, there was evidence that WD-40 was aware of Sorensen’s crosshair mark, there was no evidence that WD-40 attempted to pass off its products as Sorensen’s. Further, the fact that the WD-40 shield appeared on the Specialist products tended to suggest a lack of bad faith. WD-40 would not include its well-known mark if it were attempting to confuse consumers into thinking that the product was not produced by WD-40 but rather by Sorensen.

In sum, although a few of the likelihood of confusion factors provided support for Sorensen, it was not enough to create a genuine dispute of material fact. The three most important factors – a similarity of the marks, bad faith intent and evidence of actual confusion – were in WD-40’s favor. The Court noted that the dissimilarity of the marks was particularly important: because the Court concluded that no consumer would think that the marks were similar, there was little chance that consumers would be confused.

Sorensen is an interesting and careful analysis of fair use in the Lanham Act context, and an outer boundary of summary judgment on likely confusion, with some factors in favor of each party.