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Applying the doctrine of foreign equivalents for the first time, the Fifth Circuit U.S. Court of Appeals ruled April 17 that a Texas court erred in finding a likelihood of confusion between the marks “Chupa Chups” and “Chupa Gurts” ( Enrique Bernat, S.A., et al. v. Guadalajara Inc., et al ., No. 99-50854, 5th Cir.). The court vacated a preliminary injunction entered by U.S. Judge Hipolito F. Garcia of the Western District of Texas prohibiting Guadalajara Inc., doing business as Dulces Vero USA (Dulces Vero), a company based in Mexico, from selling its soft-serve frozen yogurt cone-shaped lollipops under the mark Chupa Gurts in the United States. The panel held that the evidence submitted to the lower court “adequately demonstrated that the term ‘chupa’ is a generic Spanish word that designates ‘lollipop.’” The ruling came in a trademark infringement action filed by Chupa Chups, a company headquartered in Spain which manufactures and distributes lollipops in 27 flavors, including five “ice cream flavored” varieties that contain milk. After a hearing, a magistrate judge issued a report and recommendation in favor of the entry of an injunction against Dulces Vero’s use of the mark. Judge Garcia adopted the report and recommendation in August 1999. On appeal, Dulces Vero argued that the lower court erred in failing to conduct a trademark validity analysis and in failing to conclude that the word “chupa” is generic and unworthy of protection. Chupa Chups argued, on the other hand, that the lower court properly found “chupa” arbitrary in nature. ABUSE OF DISCRETION Reversing and remanding, the Fifth Circuit held that application of the doctrine of foreign equivalents reveals that “‘chupa’ is a generic Spanish word that designates ‘lollipop’ or ‘sucker,’” and that the lower court abused its discretion in finding a likelihood of confusion between the marks “Chupa Chups” and “Chupa Gurts.” Under the doctrine of foreign equivalents, a court must translate foreign words into English to test them for genericness or descriptiveness. While the word “chupa” is a form of the verb “chupar,” meaning “to lick” or “to suck,” the panel said, evidence in the record suggest that the word “generically designates” lollipops. The court noted that two other products use the mark “chupa” on their lollipops in Mexico. Moreover, the court said, a Chupa Chups representative testified that the word translates as lollipop in Spanish slang and the Chupa Chups wrapper states “‘Chupa Chups’ means ‘to lick a lollipop’ in Spanish.” UNDERLYING POLICIES Further, the court said, the policies underlying the doctrine of foreign equivalents strengthen the conclusion that the term is generic. “The first explanation for denying trademark protection to foreign words is that Spanish-speakers in the U.S. will understand ‘chupa’ to be generic,” the court said. “This is particularly true on these facts, where ‘Chupa Gurts’ are now available in the U.S. only in ethnic ‘mom-and-pop’ stores that serve Spanish-speaking consumers.” In addition, the panel said, the policy of international comity favors a finding that the mark is not protectable. “If we permit Chupa Chups to monopolize the term ‘chupa,’ we will impede other Mexican candy makers’ ability to compete effectively in the U.S. lollipop market,” the court said. Chupa Chups is represented by Michael A. Pollard of Baker & McKenzie in Chicago and Richard M. Butler of Soules & Wallace in San Antonio. Dulces Vero is represented by Chester J. Makowski of Royston, Rayzor, Vickery & Williams in Houston and Gregory V. Novak of Royston, Rayzor, Vickery, Novak & Druce in San Antonio. � Copyright 2000 Mealey Publications, Inc.

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