• Court Rejects Fair Isaac’s Post-Trial Motions after Jury Finds for Defendant CRAs in Trademark Case Related to "300-850" Scoring Model
  • July 29, 2010 | Author: Erik Grohmann
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Fair Isaac Corp. v. Experian Info. Solutions, Inc., 2010 U.S. Dist. LEXIS 45323 (D. Minn. May 10, 2010)

    Facts: Plaintiffs Fair Isaac Corporation and myFICO Consumer Services, Inc. (“Fair Isaac”) asserted claims against multiple defendants including Experian, Trans Union, Vantage Score Solutions, LLC and others for antitrust violations, trademark infringement of its “300-850” trademarks, as well as unfair competition, deceptive trade practices, false advertising, passing off, breach of contract, interference with contract, and misappropriation of trade secrets claims. After Fair Isaac abandoned its claims for misappropriation of trade secrets, the Court granted summary judgment in favor of Defendants on Fair Isaac’s antitrust, breach of contract, interference with contract and false advertising claims. The remaining trademark-related claims, as well as Defendants’ counter-claim for fraud on the United States Patent and Trademark office (“PTO”) proceeded to trial, where the jury returned a verdict in favor of Defendants, finding that Fair Isaac’s “300-850” trademarks, which the Court previously ruled were “descriptive,” had not acquired secondary meaning. The jury’s verdict was a wholesale unambiguous rejection of Fair Isaac’s central theory of the case -- that one can legitimately claim trademark protection in the numerical range for credit scores. The jury also found in favor of Defendants’ counter-claim for fraud on the PTO. The parties subsequently filed multiple post-trial motions, including Fair Isaac’s Motion for Judgment as a Matter of Law, a New Trial, or Detailed Findings, which was denied, and Defendants’ Motion to Amend the Judgment to Order Cancellation of Trademark Registration, which was granted.

    • Fraud. Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material representations of fact in connection with his application. The Court concluded that sufficient evidence existed in the record to support the jury’s verdict of fraud on the PTO. The jury was shown evidence that when Fair Isaac represented to the PTO that “300-850” is the credit scoring scale only for Fair Isaac’s credit bureau-based risk products and not for other credit bureau-based risk products that competitors develop, the Court determined that: 1) such representation was false because competitors sold credit bureau-based risk products that did in fact use the same or nearly the same, scoring range; and, 2) Fair Isaac knew these competitors sold such products. Accordingly, Fair Isaac’s Motion for a Judgment as a matter of law or a new trial regarding the fraud claim on the PTO was denied.
    • Trademark. In the summary judgment ruling, the Court concluded that the term “300-850” was merely descriptive and, thus, entitled to trademark protection only if it had acquired secondary meaning. Fair Isaac argued that the categorization of a trademark is ordinarily a factual determination and the Court’s ruling erroneously stripped the jury of its fact-finding role. The Court recognized that whether a mark is merely descriptive as opposed to suggestive or arbitrary is typically a question of fact. Nevertheless, Appellate Courts, including the Eighth Circuit, have affirmed decisions by district courts that a term is, as a matter of law, generic or merely descriptive as opposed to suggestive. Accordingly, the categorization of “300-850” as descriptive was appropriately resolved on summary judgment. 
    • Trademark. “Secondary meaning” is established by showing that through long and exclusive use and the sale of the user’s goods, the mark has become so associated to the public mind with such goods that the mark serves to identify the source of the goods and to distinguish them from those of others. Fair Isaac argued that the jury’s finding that “300-850” had not acquired secondary meaning was contrary to the great and overwhelming weight of the evidence. However, considerable amount of evidence supported the jury’s verdict, including evidence that Fair Isaac’s marketing and advertising efforts focused more prominently on Fair Isaac’s other trademarks, and when “300-850” was mentioned in advertisements, the term was used in a descriptive manner rather than as a trademark. In addition, the lack of evidence regarding secondary meaning supported the jury’s verdict. Both sides identified evidence in the record in support of their positions. The Court accepted that the jury resolved the evidentiary conflict in favor of Defendants and cannot disturb the weight the jury afforded to the evidence. 
    • Trademark. Defendants moved for the Court to amend the Judgment to include an Order that directs the PTO to cancel Fair Isaac’s “300-850” trademark registration in light of the jury’s: 1) finding that “300-850” had not acquired secondary meaning; and, 2) verdict on Defendant’s counter-claim for fraud on the PTO. A Court may order cancellation under 15 U.S.C. §1119 when a trademark at issue in the action is found invalid because it is descriptive and has not acquired secondary meaning. The Court agreed with Defendants that ordering cancellation would further judicial economy, conserve resources, and allow Appellate review of the Court’s ruling in a single appeal. Accordingly, Defendants’ Motion to Amend the Judgment to Order Cancellation of Fair Isaac’s trademark registration was granted.