If SI brought this case no judge would sanction them under Rule 11. If SI filed suit they should not win, in my opinion. However, a trademark infringement claim by SI would be "supported by law or a reasonable extension of the law" as required by Rule 11.
A filing of opposition to the SparkFun's application would not be very surprising.
The point of the following exercise is to show the required elements for trademark infringement and plausible arguments for SI. There are counters to every aspect of my likelihood of confusion analysis. However, I would be shocked if a court said the claim was so frivolous as warrant the extreme measure of Rule 11 sanctions.
Trademark infringment requires 3 factors. (If you want the long complicated statutory version see 15 USC 1114.)
1. Owning a Mark
2. The Mark must be valid.
3. The 3rd party's use (in commerce) in connection with goods or services is likely to cause confusion.
SI clearly meets 1, likely meets 2, and SparkFun uses its potential mark in commerce connected with goods and services.
The only question would be whether SparkFun's mark would likely cause confusion.
The test for likelihood of confusion varies some by circuit but some form of these factors are generally used. They are the ones used by the 9th circuit. A plaintiff does not need to prove all 8 and Courts apply varying degrees of weight to each element.
1. Strength of the mark
Examined by length of time in use, the marks distinctiveness and how well known the mark is.
-"Sparc" has been registered for 20 years and seems known worldwide to purchasers.
2. Proximity of the goods
Sometimes physical proximity, but usually how similar the goods are to each other.
- The goods can be classified as integrated computer circuit and circuit boards.
3. Similarity of the marks
Some courts have held that logo and typeface is only one consideration. Sound, meaning and impression can be examined as well. Example "Kokeup" for a soft drink was found to infringe on Coca-cola's "Coke" mark.
-The marks sound the same or similar enough.
4. Evidence of actual confusion
Direct testimony is helpful as are surveys. Usually a confusion rate of %15 is good enough to satisfy this element and I heard of cases accepting as low as 8.5%.
-SI would likely have to conduct a survey among the relevant group. This factor does not need to be proven, but courts are generally more willing to find infringement upon a showing a actual confusion.
5. Marketing channels used
-Both companies use the Internet, maybe ads in similar or the same magazines. They probably also use other similar channels for marketing that I don't know about.
6. Type of goods and the degree of care likely to be exercised by the purchaser.
-Purchasers of microprocessors are likely relatively discerning and so this element would be in SparkFun's favor. But courts have held the this element is examined compared to the least savvy purchaser of the goods so SI would have room to argue.
7. Defendant's intent in selecting the mark.
-SparkFun almost certainly acted in good faith when selecting its mark. However, this element is never decisive and usually pertains to what remedy the plaintiff can seek.
8. Likelihood of expansion of the product lines.
-I have no idea if SI plans to sell the same sort of good that SparkFun sells. However, SI can frame the goods as "computer hardware including integrated circuits and circuit boards" and claim SI is already involved in the same product line.
In sum, SI has plausible arguments for 6 of the 8 factors for likelihood of confusion off the top of my head. As a result, an infringement claim by SI would not be seen as frivolous.
All this being said, I doubt SI would actually take this to court. C&D letters are easy write and cheap to send. A decision to file a complaint in Federal Court and then litigate it are significantly more difficult and expensive.
Claiming rights to SparkFun's domain name is far-fetched. Additionally, SI's counsel are being bastards by sending this letter instead of merely filing an objection to SparkFun's pending registration.
Disclaimer: I am a law student and not licensed to practice law anywhere. This is not legal advice. The lack of citations is due to my trademark casebook not being with me.
