Case: 19-1351     Document: 42    Page: 1    Filed: 04/14/2020




   United States Court of Appeals
       for the Federal Circuit
                   ______________________

                STRATUS NETWORKS, INC.,
                       Appellant

                             v.

        UBTA-UBET COMMUNICATIONS INC.,
                      Appellee
               ______________________

                         2019-1351
                   ______________________

     Appeal from the United States Patent and Trademark
 Office, Trademark Trial and Appeal Board in No.
 91214143.
                  ______________________

                   Decided: April 14, 2020
                   ______________________

    JOSHUA JONES, The Law Office of Joshua G. Jones,
 Austin, TX, argued for appellant.

     MATTHEW BARLOW, Workman Nydegger, Salt Lake
 City, UT, argued for appellee. Also represented by JOHN C.
 STRINGHAM, DAVID R. TODD, THOMAS R. VUKSINICK.
                  ______________________

      Before LOURIE, MOORE, and REYNA, Circuit Judges.
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 2     STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
                                                      INC.


 REYNA, Circuit Judge.
     Stratus Networks, Inc., appeals from a Trademark
 Trial and Appeal Board decision that denied registration of
 Stratus’s trademark on grounds of a likelihood of confusion
 with a trademark registered to UBTA-UBET Communica-
 tions, Inc. On appeal, Stratus challenges the Board’s like-
 lihood of confusion determination. Because the Board’s
 determination is supported by substantial evidence and is
 not otherwise legally erroneous, we affirm.
                         BACKGROUND
     Stratus Networks, Inc., (“Stratus”) is a facilities-based
 telecommunications provider. J.A. 891. On August 15,
 2012, Stratus filed U.S. Trademark Application
 No. 85/704,533, seeking to register the mark shown below
 (“the STRATUS mark”).




    UBTA is also a telecommunications provider. J.A. 791.
 UBTA owns Trademark Registration No. 4,049,700 for the
 mark shown below (“the STRATA mark”).




     On December 20, 2013, UBTA opposed registration of
 the STRATUS mark on grounds of a likelihood of confusion
 with UBTA’s STRATA mark. J.A. 99. On October 29, 2018,
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 INC.


 the Board found a likelihood of confusion and refused reg-
 istration of the STRATUS mark. 1
                       Board Decision
      The Board considers the so-called “DuPont factors”
 when assessing the likelihood of confusion. In re E.I.
 DuPont DeNemours & Co., 476 F.2d 1357, 1361 (C.C.P.A.
 1973). In the present case, the Board concluded that six of
 the thirteen DuPont factors were relevant to UBTA’s oppo-
 sition. J.A. 10. 2 In sum, the Board determined that two
 factors “weigh heavily in favor” of finding a likelihood of
 confusion, one factor “weighs in favor” of finding a likeli-
 hood of confusion, two factors are neutral, and one factor
 weighs “slightly” against finding a likelihood of confusion.
 Id. at 3–27. We discuss the Board’s finding on each factor
 in turn.
     The Board found that the first DuPont factor—similar-
 ity of the parties’ marks—“weighs in favor” of finding a
 likelihood of confusion. J.A. 22–24. The Board analyzed
 the trademarks in Stratus’s application and UBTA’s regis-
 tration and concluded that the marks are similar in ap-
 pearance and sound. The Board relied on dictionary
 definitions of the terms “stratus” and “strata” to evaluate



     1   UBTA’s opposition also asserted a likelihood of con-
 fusion with UBTA’s federally registered “STRATA” word
 mark (“the Word Mark”). After the Board concluded that
 there was a likelihood of confusion with respect to the
 STRATA mark, it determined that it was “unnecessary to
 consider [UBTA’s] other pleaded registration.” J.A. 11.
     2   The Board did not consider DuPont factors five
 (fame), seven (nature of actual confusion), nine (variety of
 goods), ten (market interface), eleven (applicant’s right to
 exclude), twelve (potential confusion), or thirteen (effect of
 use). On appeal, no party contends that the Board should
 have considered any of these additional factors.
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 4     STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
                                                      INC.


 similarities in the connotation of each mark. Id. The Board
 found that the terms “differ somewhat in meaning” but
 found little evidence that relevant consumers would signif-
 icantly recognize the different meanings. J.A. 23–24. The
 Board concluded that, on balance, the “marks convey over-
 all commercial impressions that are more similar than dis-
 similar.” J.A. 24.
      The Board found that the second DuPont factor—simi-
 larity of the parties’ services—“weighs heavily in favor” of
 finding a likelihood of confusion. J.A. 13–16. The Board
 relied on the description of services in Stratus’s application
 and UBTA’s registration, and the unrebutted declaration
 testimony of UBTA’s marketing specialist, Mr. Rasmussen.
 J.A. 13. Mr. Rasmussen testified that each of the services
 listed in the STRATA mark registration corresponded with
 services listed in the STRATUS mark application. J.A. 13–
 15. Based on that evidence, the Board determined that
 UBTA’s “telephone services encompass certain of Appli-
 cant’s more specifically identified voice communication ser-
 vices and are legally equivalent thereto.” J.A. 15.
     The Board found that the third DuPont factor—simi-
 larity of trade channels—also “weighs heavily in favor” of
 finding a likelihood of confusion. J.A. 16. The Board ex-
 plained that its finding of legal equivalence between the
 parties’ services gives rise to a presumption that the ser-
 vices “move in the same channels of trade and are offered
 to the same classes of consumers.” Id. The Board noted
 that Stratus failed to rebut that presumption. Id.
      The Board concluded that the fourth DuPont factor—
 consumer sophistication—was neutral or weighed
 “slightly” against finding a likelihood of confusion. J.A. 26.
 The Board considered testimony from Mr. Kevin Morgan,
 Stratus’s CEO. Mr. Morgan testified that Stratus sold cus-
 tomized services to businesses at customized prices and
 that the average cost of Stratus’s services was $130,000.
 J.A. 25; J.A. 891. In support of his testimony, Stratus
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 provided a revenue document that showed the average con-
 tracted revenue for each of Status’s accounts. J.A. 891,
 893–920. UBTA challenged Mr. Morgan’s testimony as un-
 supported because the revenue document was “unintelligi-
 ble” and lacked foundation. Opposition No. 91214143, 85
 TTABVUE 25–27. The Board explained that even with the
 support of the revenue document, Mr. Morgan’s testimony
 on consumer sophistication was insufficient to weigh in fa-
 vor of finding no likelihood of confusion in this case.
 J.A. 25. “Even if we accept” Mr. Morgan’s testimony, the
 Board explained, “the legal identity in part of the services
 and similarity of the marks outweigh any sophisticated
 purchasing decision.” Id.
     The Board found that the sixth DuPont factor—
 strength of the opposer’s mark—was neutral to finding a
 likelihood of confusion. J.A. 21. The Board relied on
 UBTA’s registration and dictionary definitions of “strata”
 to assess the distinctiveness of the STRATA mark. J.A. 20.
 The Board found that the mark is “arbitrary or, at most,
 slightly suggestive of [UBTA’s] services in that it connotes
 levels or divisions in an organized telecommunications sys-
 tem.” Id. The Board also considered evidence submitted
 by Stratus showing third-party use, including five third-
 party registrations and five screenshots of third-party web-
 sites. J.A. 17–20. The Board found that the majority of
 third-party use was unrelated to the relevant industry:
 only one website and one trademark registration involved
 services relating to telecommunications. Id. The Board
 also found that “all of the [third-party] marks differ in ap-
 pearance, sound, meaning, and commercial impression”
 from the STRATA mark. J.A. 20. On balance, the Board
 found that the “dictionary and third-party use and regis-
 tration evidence,” was “insufficient to diminish the scope of
 protection to be afforded the [STRATA mark].” J.A. 22.
     The Board found that the eighth DuPont factor—
 length of time during and conditions under which there has
 been concurrent use without evidence of actual confusion—
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 6     STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
                                                      INC.


 was neutral to finding a likelihood of confusion. Although
 the Board found no evidence of actual confusion, the evi-
 dence showed the parties’ respective marks were not con-
 currently used in the same geographic space during the
 relevant times: UBTA offered services in Utah, Wyoming,
 Colorado, and Texas, while Stratus offered services in Illi-
 nois and Missouri. J.A. 803, 891. As a result, the Board
 found this factor to be neutral.
     In sum, the Board concluded that Stratus’s “modest ev-
 idence of the sophistication of consumers and weakness of
 [the STRATA mark] is insufficient to overcome our findings
 with regard to the first, second, and third [DuPont] fac-
 tors.” J.A. 27. Accordingly, the Board held that UBTA had
 shown by a preponderance of the evidence that Stratus’s
 mark is “likely to cause consumer confusion when used in
 association with its services.” Id.
     Stratus timely appealed. We have jurisdiction under
 28 U.S.C. § 1295(a)(4)(B).
                          ANALYSIS
     The Lanham Act bars the registration of trademarks
 that are likely to cause confusion with a registered mark.
 15 U.S.C. § 1052. The owner of a registered mark who be-
 lieves they may be damaged by a trademark application
 may commence an opposition proceeding: an adversarial,
 inter partes proceeding before the Trademark Trial and Ap-
 peal Board. Id. at § 1063; see also In re I.AM.Symbolic,
 LLC, 866 F.3d 1315, 1328 (Fed. Cir. 2017).
     In opposition proceedings, the opposer has the burden
 of proving a likelihood of confusion by a preponderance of
 the evidence. Cunningham v. Laser Golf Corp., 222 F.3d
 943, 951 (Fed. Cir. 2000). The Board analyzes likelihood of
 confusion based on the DuPont factors. In re E.I. DuPont
 DeNemours, 476 F.2d at 1361. Not all DuPont factors are
 relevant in each case, and the weight afforded to each fac-
 tor depends on the circumstances. In re Dixie Restaurants,
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 INC.


 Inc., 105 F.3d 1405, 1406–07 (Fed. Cir. 1997). Any single
 factor may control a particular case. Id.
     Likelihood of confusion is a question of law based on
 underlying findings of fact. Hylete LLC v. Hybrid Athletics,
 LLC, 931 F.3d 1170, 1173 (Fed. Cir. 2019). We review the
 Board’s fact findings on each DuPont factor for substantial
 evidence. Id. For example, “the question of the similarity
 between two marks and the relatedness of goods are factual
 determinations.” Swagway, LLC v. Int’l Trade Comm’n,
 934 F.3d 1332, 1338 (Fed. Cir. 2019). Substantial evidence
 is such relevant evidence that a reasonable mind would ac-
 cept as adequate to support a conclusion. Hylete, 931 F.3d
 at 1173.
                  I. Substantial Evidence
     Stratus challenges a number of the Board’s factual
 findings on individual DuPont factors. In general, Stra-
 tus’s arguments effectively ask us to reweigh the evidence
 considered by the Board. That is not the role of this court.
 Instead, we evaluate whether the Board’s factual findings
 for each considered DuPont factor are supported by sub-
 stantial evidence. Henkel Corp. v. Procter & Gamble Co.,
 560 F.3d 1286, 1290 (Fed. Cir. 2009). We conclude that
 they are.
     As noted above, the Board based its decision for each of
 the DuPont factors it considered on record evidence. For
 example, the Board’s finding on the similarity of the marks
 is based on dictionary definitions of the relevant terms,
 J.A. 789, J.A. 1001–1011, and on the marks themselves, as
 set forth in Stratus’s application and UBTA’s registration,
 J.A. 39, J.A. 753. The Board’s finding on the similarity of
 services and the similarity of trade channels is based on
 the services identified in Stratus’s application and UBTA’s
 registration, J.A. 79, J.A. 753, as well as the unrebutted
 declaration testimony of UBTA’s Marketing and Public Re-
 lations Manager, Mr. Rasmussen, J.A. 798–804. The
 Board’s finding on the strength of UBTA’s mark is based
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 8     STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
                                                      INC.


 on dictionary definitions of the relevant terms, J.A. 789,
 J.A. 1001–1011, and third-party registrations and web-
 sites, J.A. 941–954, J.A. 1013–1021. The Board’s finding
 on actual confusion is supported by testimony from Stra-
 tus’s CEO, Kevin Morgan, J.A. 890–891, and testimony
 from Mr. Rasmussen, J.A. 803. We conclude that a reason-
 able mind would accept this record evidence as adequate to
 support the Board’s conclusions. As such, we hold that the
 Board’s decision as a whole is supported by substantial ev-
 idence. Hylete, 931 F.3d at 1173. We are not persuaded by
 Status’s arguments to the contrary.
      Stratus argues that the record evidence supports a dif-
 ferent conclusion than that reached by the Board. For ex-
 ample, Stratus contends that (i) the marks are not similar
 in appearance because “there is no S in the STRATUS De-
 sign Mark orb, . . . [only] the tail of the S cuts through the
 orb”; (ii) the Board focuses too much on the fact that the
 marks are similar in sound; and (iii) the Board focuses too
 little attention on the marks’ different connotations, that
 “stratus” refers to a type of cloud while “strata” refers to
 layers of rocks. Appellant Br. 10, 12; Reply Br. 4. None of
 these arguments demonstrate that the Board’s finding
 lacks substantial evidence. Even if Stratus were correct
 that different conclusions may reasonably be drawn from
 the evidence in record, we must sustain the Board’s deci-
 sion as supported by the substantial evidence outlined
 above. See Real Foods Pty Ltd. v. Frito-Lay N. Am., Inc.,
 906 F.3d 965, 971 (Fed. Cir. 2018) (“The TTAB’s findings
 may be supported by substantial evidence even if two in-
 consistent conclusions can be drawn from the evidence.”).
     We affirm the Board’s determination to bar registration
 of Stratus’s STRATUS mark on grounds of a likelihood of
 confusion with UBTA’s STRATA mark.
                       II. Legal Error
     Stratus separately argues that the Board committed le-
 gal error when considering the DuPont factors related to
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 INC.


 consumer sophistication and actual confusion. E.g., Appel-
 lant Br. 24.
                A. Consumer Sophistication
     Stratus argues that the Board “did not properly con-
 sider” the consumer sophistication factor when it evaluated
 the likelihood of confusion. Reply Br. 2; Appellant Br. 24.
 Specifically, Stratus argues that the Board “made no ex-
 press finding as to this factor and instead simply quoted
 case law that even sophisticated customers are not immune
 from confusion.” Reply Br. 10. Stratus asserts that, as a
 result, the Board “improperly discounted” the factor when
 rendering its likelihood of confusion determination. Appel-
 lant Br. 24. We disagree.
     While the Board is required to consider each DuPont
 factor for which it has evidence, the Board “may focus its
 analysis on dispositive factors, such as similarity of the
 marks and relatedness of the goods.” Han Beauty, Inc. v.
 Alberto-Culver Co., 236 F.3d 1333, 1336 (Fed. Cir. 2001);
 see also Oakville Hills Cellar, Inc. v. Georgallis Holdings,
 LLC, 826 F.3d 1376, 1379 (Fed. Cir. 2016); In re Dixie Res-
 taurants, 105 F.3d at 1407 (“We see no error in the
 [B]oard’s decision to focus on the DuPont factors it deemed
 dispositive.”).
     Contrary to Stratus’s argument, the Board did not hold
 that the consumer sophistication factor can never outweigh
 the “similarity of the marks” and “similarity of the ser-
 vices” factors. Rather, the Board determined that “even
 careful purchasers are likely to be confused by similar
 marks used in connection with services that are, in part,
 legally identical.” J.A. 25 (citing In re Research & Trading
 Corp., 793 F.2d 1276, 1279 (Fed. Cir. 1986)). While it is
 preferable for the Board to make explicit findings about
 each relevant DuPont factor, the absence of explicit find-
 ings on a given factor does not give rise to reversible error
 where the record demonstrates that the Board considered
 that factor and the corresponding arguments and evidence.
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 10    STRATUS NETWORKS, INC. v. UBTA-UBET COMMUNICATIONS
                                                      INC.


 Han Beauty, 236 F.3d at 1338 (finding no error because,
 “while the Board did not make explicit findings about the
 strength of the [opposer’s mark], the Board’s opinion re-
 veals that the Board considered this factor”); Weiss Assocs.,
 Inc. v. HRL Assocs., Inc., 902 F.2d 1546, 1548 (Fed. Cir.
 1990). The parties’ extensive arguments to the Board on
 the consumer sophistication factor and the Board’s final
 written decision demonstrate that the Board sufficiently
 considered the consumer sophistication factor. E.g., J.A.
 25; Opposition No. 91214143, 84 TTABVUE 45–47; 85
 TTABVUE 25–27; 86 TTABVUE 27–30. We find no legal
 error in the Board’s decision concerning consumer sophis-
 tication.
                    B. Actual Confusion
     Stratus argues that the Board legally erred in its deci-
 sion on actual confusion. Stratus argues that the parties’
 marks have “coexisted for over six years with not one ex-
 ample of actual confusion.” Appellant Br. 24. This fact,
 Stratus explains, combined with the Board’s finding that
 the parties’ trade channels overlap, requires a determina-
 tion that the lack of actual confusion weighs heavily
 against a likelihood of confusion. Id. We disagree.
     Although the Board found no evidence of actual confu-
 sion, the Board explained that it also considered “the
 length of time during and conditions under which there has
 been concurrent use.” J.A. 26. The record shows that, alt-
 hough the parties offer similar services in similar trade
 channels, the parties’ services did not geographically over-
 lap. J.A. 803, 891. As a result, the record indicates that no
 consumers were exposed to both trademarks during the rel-
 evant time periods, further reducing the significance of the
 absence of actual confusion. See In re Majestic Distilling
 Co., 315 F.3d 1311, 1317 (Fed. Cir. 2003). We find no legal
 error in the Board’s finding concerning the actual confusion
 factor.
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                       CONCLUSION
     We have considered Stratus’s other arguments and
 find them unpersuasive. We affirm the Board’s determina-
 tion that UBTA showed a likelihood of confusion by a pre-
 ponderance of the evidence.
                       AFFIRMED
