Case: 21-1575 Document: 48 Page: 1 Filed: 12/17/2021
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
SKY INTERNATIONAL AG,
Appellant
v.
SKY CINEMAS LLC,
Appellee
______________________
2021-1575
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board in No.
91223952.
______________________
Decided: December 17, 2021
______________________
JACQUELINE LESSER, Baker & Hostetler LLP,
Philadelphia, PA, argued for appellant. Also represented
by LISA BOLLINGER GEHMAN; MARK HARRELL TIDMAN,
Washington, DC.
BAXTER W. BANOWSKY, Banowsky & Levine PC, Dallas,
TX, argued for appellee.
______________________
Before TARANTO, BRYSON, and STOLL, Circuit Judges.
Case: 21-1575 Document: 48 Page: 2 Filed: 12/17/2021
2 SKY INTERNATIONAL AG v. SKY CINEMAS LLC
BRYSON, Circuit Judge.
Appellant Sky International AG opposed a trademark
application filed by appellee Sky Cinemas LLC due to Sky
International’s prior registration of several similar marks.
The Trademark Trial and Appeal Board found in favor of
Sky Cinemas on the opposition, finding no likelihood of
confusion between Sky International’s marks and Sky
Cinema’s mark. We affirm.
I
In 2014, Sky Cinemas filed an application to register
the mark SKY CINEMAS for “movie theaters.” Several
months later, Sky International opposed the registration of
the SKY CINEMAS mark, claiming a likelihood of
confusion with several of Sky International’s marks
containing the word “SKY.” 1 In its counterclaims, Sky
Cinemas asserted that several of Sky International’s
pleaded registrations were filed without a bona fide intent
to use. Sky Cinemas later alleged that some of Sky
International’s marks had been abandoned through non-
use. Sky International replied in part by limiting its
pleaded registrations to cover only the goods and services
for which there was actual use.
On July 21, 2020, the Board ruled on Sky
International’s claims, finding that there was no likelihood
of confusion between Sky Cinemas’ mark and Sky
International’s U.S. registrations. The Board therefore
allowed Sky Cinemas’ application to move forward. J.A.
80. The Board elected not to rule on Sky Cinemas’
counterclaims at that time, but instead directed Sky
Cinemas to elect whether it wished to pursue the
remaining counterclaims. Id.
1 A full list of Sky International’s pleaded
registrations can be found at J.A. 26–27.
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SKY INTERNATIONAL AG v. SKY CINEMAS LLC 3
Sky Cinemas indicated that it wished to pursue the
counterclaims. As a result, in an order issued on November
19, 2020, the Board significantly reduced the scope of Sky’s
registrations. Sky Int’l AG v. Sky Cinemas LLC, No.
91223952,
2020 WL 6887759, at *9–11 (T.T.A.B. Nov. 19,
2020).
In its July 2020 order analyzing Sky International’s
likelihood-of-confusion claim, the Board focused its
analysis on two of Sky International’s marks, which we
refer to as the “standard character registrations”:
• SKY NEWS for “broadcasting and
transmission of news programmes by
satellite, television, and radio” and “news
agency services, namely, gathering and
dissemination of news; news reporting
services” (Registration No. 2932761); and
• SKY NEWS for “television and radio news
reporting services; production of radio and
television news programmes” (Registration
No. 2912783).
J.A. 38. The Board focused its review on those two marks
because it concluded that they were “more similar to [Sky
Cinemas’] mark SKY CINEMAS” than Sky International’s
other marks.
Id. The Board noted that because those two
registrations were standard character marks, they were
“devoid of potentially distinguishing graphical elements.”
Id. Additionally, the Board found that “the recitation of
services [in the standard character registrations] is no less
similar to [Sky Cinemas’] services than the services in any
of the other pleaded registrations.” J.A. 39. 2
2 The standard character registrations were not
included in Sky Cinemas’ counterclaims for lack of bona
Case: 21-1575 Document: 48 Page: 4 Filed: 12/17/2021
4 SKY INTERNATIONAL AG v. SKY CINEMAS LLC
The Board conducted its likelihood-of-confusion
analysis using the DuPont factors that the Board
traditionally uses when addressing whether a likelihood of
confusion exists. See In re E.I. DuPont De Nemours & Co.,
476 F.2d 1357, 1361 (C.C.P.A. 1973). In evaluating those
factors, the Board found that the marks are “more similar
than they are dissimilar,” and that “the classes of
consumers are the same.” J.A. 80. The Board also found,
however, that “the services are not related, nor are they
offered through the same trade channels,” and that Sky
International has not shown that Sky Cinemas’ movie
theaters are within Sky International’s “natural area of
expansion.”
Id. The Board determined that, on balance,
the factors indicated that Sky Cinemas’ mark “was not
likely to cause confusion” with Sky International’s
registrations.
Id.
II
Sky International raises three issues on appeal. First,
Sky International argues that the Board impermissibly
bifurcated the proceedings before it when it decided Sky
International’s claim before deciding Sky Cinemas’
counterclaims. Second, Sky International argues that the
Board erred in considering only the standard character
registrations in its likelihood-of-confusion analysis. Third,
Sky International argues that the Board’s finding that
movie theaters are outside of Sky International’s natural
zone of expansion is unsupported by substantial evidence.
A
With respect to Sky International’s claim that the
Board impermissibly bifurcated the case, we disagree with
the premise that the case was bifurcated. And in any
event, the Board’s choice to consider the counterclaims
fide intent to use and non-use abandonment. See Sky Int’l,
2020 WL 6887759, at *1.
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SKY INTERNATIONAL AG v. SKY CINEMAS LLC 5
separately from the opposition was not the source of the
prejudice that Sky International alleges it suffered from
the Board’s treatment of the case.
In cases that are bifurcated, courts or agencies
typically complete the proceedings as to one issue before
moving on to address a second issue in the case. See, e.g.,
Robert Bosch, LLC v. Pylon Mfg. Corp.,
719 F.3d 1305, 1308
(Fed. Cir. 2013) (hearing an appeal on patent infringement
while damages discovery and trial were yet to occur);
AT&T Mobility LLC v. Thomann, No. 91218108,
2020 WL
730362, at *3 (T.T.A.B. Feb. 10, 2020) (allowing for
discovery and trial on standing and then, if necessary,
discovery and trial on other issues). Here, by contrast, all
of the evidence on both Sky International’s claims and Sky
Cinemas’ counterclaims was before the Board at the time
it issued its July order. Moreover, the Board addressed the
counterclaims in its July order to the extent that those
counterclaims were resolved by Sky International’s
adjustments to its recitations of goods and services. See
J.A. 37–38 (ruling in part on the counterclaims); J.A. 5780–
5896 (briefing on both the opposition and the
counterclaims). Disposition of the remaining counterclaim
issues was simply postponed until the November order.
Because the Board merely addressed the issues in two
different orders, this case was not bifurcated as that term
is normally understood.
Sky International argues that the Board erred by
“expressly limit[ing] its review and analysis” to the two
standard character registrations. Appellant’s Br. 12. Sky
International suggests that a statement made by the Board
after it issued its July order indicates that the Board did
not review the full record when it considered whether a
likelihood of confusion existed. Specifically, before ruling
on Sky Cinemas’ counterclaims the Board instructed the
parties to cite to specific evidence supporting each
allegation of use or non-use and noted that it would “not
attempt to guess which piece of evidence supports which
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6 SKY INTERNATIONAL AG v. SKY CINEMAS LLC
allegation.” J.A. 5995. Sky International asserts that
“[h]ad the Board reviewed the complete record, it would
have concluded that the record supported a likelihood of
confusion.” Appellant’s Br. 15. However, the Board’s
statements appear to be limited to the issue of use, and we
see nothing to suggest that the Board did not consider the
entire record when assessing the likelihood-of-confusion
issue.
The Board’s decision to rule on Sky Cinemas’
counterclaims separately from the opposition thus did not
prejudice Sky International. The real claim of prejudice
that Sky International asserts appears to be that the Board
should have focused on a third registration in its likelihood
of confusion analysis, and that if the Board had done so, it
might have reached a different result. See Appellant’s Br.
13–14. We address that claim in the following section.
B
In challenging the Board’s finding as to the likelihood
of confusion, Sky International argues that, in addition to
the two Sky International registrations the Board
considered, the Board should have considered Registration
No. 4771128 (“the ’128 Registration”) for . We
agree that the Board should have considered the ’128
Registration, but we conclude that the error was harmless.
The ’128 Registration recites many services,
including:
• “broadcasting and/or transmission of radio
and/or television programs and/or films”;
• “streaming delivery of video on demand
streams to viewers”; and
• “production and distribution of sports, news,
entertainment videos.”
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SKY INTERNATIONAL AG v. SKY CINEMAS LLC 7
Sky Int’l,
2020 WL 6887759, at *11–12. 3 The Board chose
not to focus on the ’128 Registration in evaluating the
likelihood of confusion for two reasons: (1) because the ’128
Registration contained “potentially distinguishing
graphical elements,” and (2) because the recitations of
services for the standard character registrations were “no
less similar than” that for the ’128 Registration. J.A. 38–
39.
The Board was incorrect to conclude that the services
in the standard character registrations were “no less
similar” than those in the ’128 Registration. See J.A. 39.
The standard character registrations are directed mainly
at broadcasting, reporting, and dissemination of news. The
’128 Registration, by contrast, covers services that include
broadcasting, production, and distribution of films, as well
as video streaming services. Production and distribution
of films are services that have more in common with
operating movie theaters than do news reporting and
dissemination. The Board therefore should not have
disregarded the ’128 Registration on the ground that the
services set forth in the two block letter registrations were
“no less similar” to operating movie theaters than those in
the ’128 Registration. See
id.
That error was harmless, however, in light of the
Board’s evaluation of whether movie theaters were within
Sky International’s natural zone of expansion. The Board’s
analysis of that question focused heavily on whether movie
3 A full recitation of the services covered by the ’128
Registration can be found at Sky Int’l,
2020 WL 6887759,
at *11–12. The parties agree that those services, which
remained in the ’128 Registration after the Board’s
November order, are the operative services for purposes of
this appeal. See Oral Argument at 3:05–6:04, 24:47–25:28,
https://oralarguments.cafc.uscourts.gov/default.aspx?fl=21
-1575_12092021.mp3.
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8 SKY INTERNATIONAL AG v. SKY CINEMAS LLC
theaters would be in the natural zone of expansion of a
company that engages in “motion picture production and
distribution.” See J.A. 70–74. The standard character
registrations do not recite any services that can be read to
include motion picture production or distribution. Those
services, however, are present in the ’128 Registration. In
other words, the Board considered the services recited in
the ’128 Registration when it evaluated whether Sky
International’s natural zone of expansion includes movie
theaters, despite its statement that it was only considering
the standard character registrations.
As a general matter, the “natural zone of expansion”
doctrine grants a senior user of a mark superior rights as
to “any goods or services which purchasers might
reasonably expect to emanate from it in the normal
expansion of its business under the mark.” Mason Eng’g &
Design Corp. v. Mateson Chem. Corp.,
225 U.S.P.Q. 956,
962 (T.T.A.B. 1985).
The Board found that operating movie theaters was not
within Sky International’s natural zone of expansion. As
discussed below, that finding is supported by substantial
evidence. Because the Board found that operating movie
theaters would not be within the natural zone of expansion
for a company that produces and distributes films, it would
have been illogical for the Board to conclude that the film
production and distribution services listed in the ’128
Registration are similar to operating movie theaters for
purposes of the likelihood-of-confusion analysis. The
Board’s error in failing to consider the ’128 Registration on
the likelihood-of-confusion issue is therefore harmless. 4
4 We reach this conclusion without considering the
impact of the potentially distinguishing visual
characteristics of the mark in the ’128 Registration. We
note, however, that if the Board had explicitly considered
Case: 21-1575 Document: 48 Page: 9 Filed: 12/17/2021
SKY INTERNATIONAL AG v. SKY CINEMAS LLC 9
C
Sky International’s final argument is that the Board’s
finding as to the natural zone of expansion for Sky
International’s services was unsupported by substantial
evidence. We disagree.
Sky International first contends that the Board
incorrectly applied a timing requirement in its analysis of
Sky International’s natural zone of expansion. The
determination of a natural zone of expansion must be
“made on the basis of circumstances prevailing at the time
when the subsequent user first began to do business under
its mark.” Mason, 225 U.S.P.Q. at 962. Sky International
argues that the Board erred by requiring “evidence of a
consumer expectation of . . . expansion by the date of [Sky
Cinemas’] filing.” Appellant’s Br. 26. But the Board
adopted no such requirement. To the contrary, the Board
specifically found that “[e]ven if we measure from the time
of [Sky Cinemas’] actual opening of its theaters in January
2018, rather than [the application filing date], the result
would be the same.” J.A. 69. The Board therefore did not
commit an error with regard to the time period for its
natural zone of expansion analysis.
Sky International next argues that in view of the
record evidence the Board should have concluded that
movie theaters were within Sky International’s natural
zone of expansion. The Board evaluated the likelihood that
Sky International could “bridge the gap” between its
services and the operation of movie theaters in view of four
factors:
the ’128 Registration, the stylized nature of that mark, as
compared to the standard character registrations, may
have cut against Sky International with regard to the
similarity of the marks.
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10 SKY INTERNATIONAL AG v. SKY CINEMAS LLC
• “Whether the operation of movie theaters is
a distinct departure from those services Sky
International has performed under its
marks”;
• “Whether the nature and purpose of movie
theaters and movie/film production are
similar”;
• “Whether the channels of trade and classes
of customers for the two areas of business
are the same”; and
• “Whether other companies have expanded
from one area to the other.”
J.A. 70–73 (adapting the factors from Mason, 225
U.S.P.Q.2d at 962).
As to the first factor, the Board found that “a motion
picture production company” would be unlikely to “go into
the business of operating a movie theater without
significant new technology or know-how.” J.A. 70. Sky
International appears to suggest that because modern
movie theaters “show films without projectors, using
digital content that is streamed onto screens,” Sky
International has the basic know-how to operate a movie
theater. Appellant’s Br. 29, 31–32. Sky Cinemas, however,
presented evidence that Sky International’s services do not
“employ[] any digital projection technology at all.”
Appellee’s Br. 35. Sky Cinemas also pointed to numerous
services involved in operating a movie theater that Sky
International does not offer, such as “food and beverage
services,” “large auditoriums with luxury seating,” and
“wall-to-wall curved screens.” Id. Substantial evidence
supports the Board’s finding on that factor.
As to the second factor, the Board found that “while the
purpose of each company’s services is similar, the nature of
each is dissimilar.” J.A. 71. Specifically, the Board
observed that “production, distribution, and exhibition are
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SKY INTERNATIONAL AG v. SKY CINEMAS LLC 11
different phases in the process of creating and bringing
content” to customers, and therefore “the point at which
each company links into the distribution channel differs.”
Id. Sky Cinemas points to record evidence suggesting that
“film distributors license films to movie theaters to exhibit”
and that “theaters offer a ‘night out’ experience” different
from that offered by streaming services. Appellee’s Br. 36;
see also J.A. 3862, 3869. The Board’s finding as to the
second factor is likewise supported by substantial evidence.
As to the third factor, the Board found that there is an
overlap of customers and direct competition between Sky
Cinemas’ and Sky International’s services. The Board thus
found that factor weighed in Sky International’s favor.
As to the fourth factor, the Board found that “there is
no record evidence showing that companies that produce
films or distribute films over users’ personal devices have
expanded to owning or running movie theaters.” J.A. 73–
74. The only evidence relevant to this factor that Sky offers
on appeal is that Sky International has movie theater
facilities in the United Kingdom. Appellant’s Br. 29; see
also J.A. 2604, 3506–3507, 5909. The Board excluded
evidence of Sky International’s use outside the United
States, however, and Sky International does not challenge
that exclusion on appeal. J.A. 26 n.2.
Sky International cites two TTAB cases in which the
Board found a likelihood of confusion to exist for types of
services generally similar to those at issue here. See In re
Live Nation Worldwide, Inc., No. 87240723,
2018 WL
2357291, at *1–2 (T.T.A.B. May 9, 2018); In re Olympia
Ent., Inc., No. 76277821,
2008 WL 885951, at *5–7
(T.T.A.B. Mar. 28, 2008). Both of those cases are
distinguishable from this case, however.
In Live Nation, the Board found “live entertainment
events” services to be confusingly similar to services under
a registered mark for “motion picture theaters.”
2018 WL
2357291, at *1–2. In that case, the evidence showed that
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12 SKY INTERNATIONAL AG v. SKY CINEMAS LLC
movie theaters host live entertainment events in the same
venue, which demonstrated to the Board that confusion as
to the source of the respective services was likely.
Id. at
*3. Here, by contrast, Sky International has not
demonstrated that businesses offering news reporting, film
production, or video streaming services also operate movie
theaters.
In Olympia, the Board found an application for live
entertainment productions such as “plays, musicals, . . .
[and] concerts” to be confusingly similar to a registrant’s
series of marks including services such as “entertainment
services in the nature of live musical, dramatic and
comedic performances.”
2008 WL 885951, at *5–7. The
registrant also owned marks for production and
distribution of movies, as in this case, but the Board’s
decision rested primarily on the fact that “essentially
identical” services (musical and dramatic performances)
were claimed in both the application and the issued
registration. See
id. at *5.
We therefore hold that substantial evidence supports
the Board’s finding that operating movie theaters is not
within Sky International’s natural zone of expansion. And
because the Board’s natural zone of expansion analysis is
supported by substantial evidence, we hold that the
Board’s failure to explicitly consider the ’128 Registration
was harmless error. We therefore uphold the Board’s
rejection of Sky International’s opposition to Sky Cinemas’
application.
AFFIRMED
