## Facts

- Beer Nuts, Inc. sold sweetened, salted nuts under the registered trademark BEER NUTS; the mark became incontestable under 15 U.S.C. § 1065.
- Clover Club Foods Co. previously distributed BEER NUTS in several states, then later marketed competing sweetened, salted peanuts.
- After initially selling a third-party product, Clover Club adopted the name BREW NUTS for its own peanuts, using an “overflowing stein” graphic and also displaying its CLOVER CLUB house mark.
- Both products were inexpensive snack foods sold in similar-sized cellophane packages and marketed through similar channels.
- Beer Nuts sued for trademark infringement and unfair competition, alleging likely confusion; Clover Club counterclaimed seeking to invalidate BEER NUTS as generic or fraudulently registered.
- After remand from an earlier appeal requiring a multi-factor confusion analysis (rather than relying only on side-by-side package comparison), the district court again found no likelihood of confusion and rejected Clover Club’s validity challenge.

## Issues

1. Whether Clover Club’s use of BREW NUTS for sweetened, salted peanuts was likely to confuse consumers as to source, sponsorship, or affiliation with BEER NUTS under a multi-factor test.
2. Whether the BEER NUTS registration was invalid (including on theories of genericness or fraudulent procurement) despite its incontestable status.

## Decision

- The court affirmed the judgment for Clover Club on Beer Nuts’ infringement and unfair-competition claims.
- The court held the district court’s finding of no likelihood of confusion was not clearly erroneous under the required multi-factor analysis.
- The court affirmed rejection of Clover Club’s counterclaim and left the BEER NUTS registration intact as valid and incontestable.

## Legal Principles

- Likelihood of confusion is a question of fact reviewed on appeal for clear error.
- A proper confusion analysis considers multiple factors, including strength of the mark, similarity of marks and overall commercial impression, proximity of products and marketing channels, evidence of actual confusion, defendant’s intent, and consumer care.
- Similarities in sound, theme, packaging, and marketing do not require a finding of likely confusion if the overall marketplace presentation and other factors support the contrary finding.
- Evidence of actual confusion is highly probative but not required; weak, isolated, or inconclusive evidence may be given little weight, and a substantial absence of confusion during concurrent use may weigh against confusion.
- An incontestable federal registration limits available validity challenges; the party seeking cancellation bears the burden to prove recognized grounds such as genericness or fraud.

## Conclusion

The Tenth Circuit upheld the district court’s post-remand factual determinations that BREW NUTS was not likely to be confused with BEER NUTS in the marketplace and that Clover Club failed to prove grounds to invalidate the incontestable BEER NUTS registration.


Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920 (10th Cir. 1986)