The Caterpillar that outdid the Puma

If you were given the following Jeopardy question: "a company known for its CAT trademark, found on footwear", would your response be: "What is Caterpillar?"

Because Caterpillar is in the business of mining and construction equipment, it’s an unlikely choice. That is probably what Puma SE (Puma) thought when Caterpillar Inc. (Caterpillar) opposed Puma's application for registration of its proposed mark — "procat", in association with footwear and headgear. But now, following the decision from the Federal Court of Appeal (Puma SE v Caterpillar Inc., 2023 FCA 4) it is Caterpillar, and not Puma, that continues to hold the rights to a "cat" trademark for footwear.

History of the case

In 2012, the athletic-accessories brand Puma applied for trademark protection over the word "procat", a sub-brand for youth sporting accessories, for use in association with accessories that included sports and casual footwear. Unfortunately for Puma, Caterpillar already had a line of work and sport footwear, which they had branded with the word "CAT" and had been selling on the Canadian market since 1994. Caterpillar opposed Puma’s application. The Trademarks Opposition Board rejected Caterpillar's opposition, but Caterpillar appealed the Board’s decision and won.

When trademarks are confusing

Caterpillar appealed to the Federal Court on several grounds, but the most crucial and ultimately successful ground, involved the confusion analysis. Section 6(5) of the Trademarks Act gives a list of factors that a court considers when determining whether a mark is confusing with another mark. Trademark protection serves the public interest by assuring consumers that they are buying from the source from whom they think they are buying. If the trademarks of two different sources are very similar, the typical consumer (one who is in a hurry and with an imperfect memory) won’t know which of the two sources they are buying from. Or consumers may not realize there are two different sources — they may be familiar with an established mark and then believe goods or services associated with a confusingly similar mark have the same source as the established mark. One aspect of the confusion analysis is the inherent distinctiveness of a trademark. If a trademark lacks distinctiveness, consumers likely won’t associate the trademark with the seller. Caterpillar opposed Puma’s trademark "procat" because it wasn’t distinctive, and because it was too similar to Caterpillar's own trademark "CAT".

"Wait a minute", you may be thinking, "is there actually a risk that someone, going to the store for metal-toed work boots will get confused by the trademark and leave with children’s soccer cleats instead? Aren’t they catering to different demographics?" While the above scenario seems unlikely, from the very beginning, both Puma and Caterpillar agreed there might be overlap in both their channels of trade and their consumer base. So, ultimately, the analysis came down to i) the inherent distinctiveness of the applied-for mark, "procat", and the extent to which it is known, ii) the degree of resemblance between "procat" and Caterpillar's registered trademark, "CAT", and iii) the surrounding circumstances weighing in favour or against a finding of confusion.

Ultimately, Puma failed to meet the test of distinctiveness. To be distinctive, a mark needs to be either inherently distinctive, like a made-up word (e.g., Kleenex), or the mark must have acquired distinctiveness through use in the market where it is, or will be, registered. The Federal Court found "procat" lacked distinctiveness. While it is a made-up word, the first part — "pro", predominantly means either "in favour of" or "professional" and is a suggestive or laudatory prefix. A mark's suggestive or laudatory elements of do not distinguish it from other trademarks. The remaining part of Puma's mark — "cat", is the more striking feature. However, it is indistinguishable from the trademark "CAT", which Caterpillar has been using on footwear in Canada since 1994.

Now, there is more than one way to skin a cat. Puma could have demonstrated its mark had acquired distinctiveness, through its use in the Canadian market. Again, Puma failed. The gear Puma sold in Canada under the sub-brand "procat" included water bottles, hairbands and soccer balls. But the evidence was clear, or rather, there was clearly no evidence, that "procat" footwear had ever been sold on more than a trivial level. Without proof of sales, Puma had no claim to acquired distinctiveness.

Puma appealed the Federal Court decision and lost. Again. When there are issues of fact on appeal, the standard to overturn a trial level decision is very high; there must be "palpable or overriding error". Puma was unable to demonstrate such a level of error in the decision making. So, unless Puma decides to appeal to the Supreme Court of Canada, Puma "procat" footwear will not be making its debut in Canada anytime soon.

Takeaway

This decision ultimately came down to Puma’s lack of evidence that its mark served to distinguish its goods from those of Caterpillar, and Caterpillar’s surprisingly strong and long-standing brand presence in the Canadian footwear scene. Puma tried to rely on its other, better-known "jumping cat" design, which being a picture rather than a word mark, turned out to be irrelevant to the confusion analysis. Puma also tried to rely on "procat"’s brand recognition in the USA, but with Canada being a different market, that failed as well. The standard of palpable or overriding error on appeal is a high bar.

And so, that is the story of how a caterpillar outdid a puma. The final lesson, one Puma has learned the hard way, is an important one for any brand owner trying to protect its marks: beware of the power of prior registration and longstanding use of a similar mark — and for Puma specifically, beware of cats in unexpected places.