Opinion
Civil No. 00-325(DSD/JMM).
October 9, 2001
Allen W. Hinderaker, Esq. and Merchant and Gould, Minneapolis, MN and Russell S. Ponessa, Esq., Brian J. Slovut, Esq. and Hinshaw Culbertson, Minneapolis, MN, counsel for plaintiffs.
Elliot S. Kaplan, Esq., Randall Tietjen, Esq., Thomas C. Mahlum, Esq. and Robins, Kaplan, Miller Ciresi, Minneapolis, MN, counsel for defendants.
ORDER
This matter is before the court on the parties' cross-motions for summary judgment. Based upon a review of the file, record and proceedings herein, and for the reasons stated, the court grants defendants' motion.
BACKGROUND
Plaintiff DaimlerChrysler AG ("DaimlerChrysler") is the owner of the federally registered trademarks MERCEDES and MERCEDES-BENZ, and plaintiff Mercedes-Benz USA, Inc. ("Mercedes-Benz") is the exclusive licensee of those trademarks in the United States. Pursuant to the Lanham Act, plaintiffs sued defendants Donald Bloom and MBZ Communications ("MBZ") for trademark infringement, unfair competition, false designation of origin, and dilution of trademarks based upon defendants' alleged use of the telephone number 1-800-637-2333, one mnemonic translation of which is 1-800-MERCEDE(S). In their amended complaint, plaintiffs also include related state-law claims under the Deceptive Trade Practices Act, Minn. Stat. § 325D.44 et seq. (2000), the Unlawful Trade Practices Act, Minn. Stat. § 325D.09 et seq. (2000), and the Minnesota dilution statute, Minn. Stat. § 333.285 (2000), as well as common law unfair competition.
Defendant Donald Bloom formed MBZ in 1994 and continues to direct and control the company's activities. Defendant MBZ licenses the telephone number 1-800-637-2333 to Mercedes-Benz dealers. For a fee, MBZ allows these dealers to use "the telephone number 1-800-637-2333 and/or its mnemonic translation" in specific area codes. All calls to 1-800-637-2333 originating within a specified area code are automatically routed to the dealership that acquired the right to the number in that area code. In addition to providing call-routing and billing services, MBZ also provides its customers with an analysis of calling patterns within their specified area codes.
Calls to 1-800-MERCEDE(S) that originate from area codes that have not been assigned to specific dealerships are routed to MBZ's office in Owatonna, Minnesota. MBZ also receives calls placed to 1-888-MERCEDE(S), 1-877-MERCEDE(S), 1-866-MERCEDE(S), 1-800-4MERCED(ES), 1-877-4MERCED(ES), and 1-888-4MERCED(ES). Defendants have not licensed any of these other numbers. Defendants acknowledge that some of the calls received in Owatonna, Minnesota are from consumers intending to reach the Mercedes-Benz Client Assistance Center. (Def.'s Mem. Supp. Mot. Summ. J. at 2.) At the Client Assistance Center, Mercedes customers are able to receive a number of services by calling 1-800-FOR-MERCEDES, toll-free. Some Mercedes-Benz customers mistakenly call 1-800-637-2333, or 1-800-MERCEDE(S), when trying to reach this center.
While both parties agree that since October 2000 MBZ has told callers trying to reach Mercedes-Benz that they have reached the wrong number, parties dispute how MBZ employees responded to those consumers who mistakenly called 1-800-637-2333 prior to October 2000. Plaintiffs allege that MBZ employees attempted to direct callers to dealers with whom it had entered into agreements. Defendants deny this allegation. Plaintiffs also allege that defendants' employees told confused callers that they had reached Mercedes-Benz and took orders from consumers calling to purchase Mercedes-Benz merchandise from the Mercedes-Benz catalogue.
Although MBZ receives many calls to 1-800-637-2333, MBZ does not advertise or promote this number or its mnemonic translation to consumers. (Bloom Aff. at ¶ 21; Malhum Aff. at Ex. 5, p. 39 (Juron depo.)). Some MBZ clients, all of whom are authorized Mercedes-Benz dealers, independently advertise this number and its mnemonic translation. (Bloom Aff. at ¶ 21; Malhum Aff. at Ex. 5, p. 31-32 (Juron depo.)). Plaintiffs have never informed these clients that they object to such advertising or otherwise sought to prevent them from using this number. (Malhum Aff. at Ex. 1, p. 42 (Kelly depo.)). Yet, plaintiffs do seek to enjoin defendants' use of this number in their summary judgment motion. As will be discussed, the court denies plaintiffs' motion and grants defendants' motion for summary judgment.
DISCUSSION
I. Standard for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In order for the moving party to prevail, it must demonstrate to the court that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed.R.Civ.P. 56(c)). A fact is material only when its resolution affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party. See id. at 252.
On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. See id. at 255. The nonmoving party, however, may not rest upon mere denials or allegations in the pleadings, but must set forth specific facts sufficient to raise a genuine issue for trial. See Celotex, 477 U.S. at 324. Moreover, if a plaintiff cannot support each essential element of its claim, summary judgment must be granted because a complete failure of proof regarding an essential element necessarily renders all other facts immaterial. Id. at 322-23.
II. The Lanham Act
Plaintiffs contend that defendants violate the Lanham Act by their "use" of the MERCEDES and MERCEDES-BENZ trademarks. Plaintiffs claim that defendants use plaintiffs' trademark by licensing 1-800-MERCEDES to others, by receiving thousands of calls per month placed to the number from consumers who intend to reach Mercedes-Benz, by receiving calls from consumers who intend to reach an authorized Mercedes-Benz dealership, and by having accepted orders in the past for Mercedes-Benz merchandise placed to 1-800-MERCEDES. The court finds, however, that defendants did not use plaintiffs' trademarks MERCEDES and MERCEDES-BENZ. The court therefore concludes that defendants did not violate the Lanham Act.
To constitute a Lanham Act violation, defendants must use plaintiffs' trademark or a misleading representation of it. Holiday Inns, Inc. v. 800 Reservation, Inc., 86 F.3d 619, 626 (6th Cir. 1996) ("defendants' use of a protected mark or their use of a misleading representation is a prerequisite to the finding of a Lanham Act violation."), cert. denied 519 U.S. 1093 (1997); Miss Dig Sys., Inc. v. Power Plus Eng'g, Inc., 944 F. Supp. 600, 602 (E.D.Mich. 1996) (stating that the court must first make a finding that defendant made an actual use of plaintiff's trademark before the court reaches the question of "likelihood of confusion"); U-Haul Int'l Inc. v. Kresch, 35 U.S.P.Q.2d 1317, 1319 (E.D.Mich. 1994) ("plaintiff must show that defendants used plaintiff's trademark, or a copy, reproduction, counterfeit or colorable imitation, in connection with the sale or advertising of their goods.").
The language of the Lanham Act requires "use" in order to be liable for trademark infringement, false designation of origin, or dilution. Section 32 of the Lanham Act, related to infringement, forbids the "use in commerce [of] any reproduction . . . or colorable imitation of a registered mark in connection with the sale . . . or advertising of any goods or services . . . which . . . is likely to cause confusion." 15 U.S.C. § 1114(1)(a) (emphasis added). Section 43(a) of the Lanham Act, related to false designation of origin, creates a cause of action against a party who "uses in commerce any word, term, name . . . or any false designation of origin . . . or false or misleading representation of fact, which . . . is likely to cause confusion." 15 U.S.C. § 1125(a)(1) (emphasis added). Section 43(a), which relates to dilution, only prohibits "another person's commercial use in commerce of a mark [of another]." 15 U.S.C. § 1125(c) (emphasis added).
Mere use of a telephone number, without the active promotion or advertising of the corresponding mnemonic trademark name, does not constitute "use" of plaintiffs' trademark under the Lanham Act. Cline v. 1-888-Plumbing Group, Inc., 146 F. Supp.2d 351, 370 (S.D.N.Y. 2001) ("merely placing into operation a toll-free telephone number, without active promotion or advertising of the corresponding mnemonic, does not constitute infringement . . . ."); see also Holiday Inns, 86 F.3d at 624 (concluding that defendants did not use the plaintiff's trademark because defendants engaged in only minimal advertisement of their travel agency and never promoted a vanity number); Miss Dig Sys., 944 F. Supp. at 604-05 ("the controlling factor is simply whether the defendant promotes itself using an alphanumeric translation of its telephone number that incorporates and displays plaintiff's trademark.").
In Holiday Inns, Holiday Inns, Inc. filed a Lanham Act suit against defending travel agents, alleging that defendants infringed upon Holiday Inns' trademark telephone number, 1-800-HOLIDAY. Holiday Inns, Inc. v. 800 Reservation, Inc., 86 F.3d at 620. Defendants received calls to 1-800-H0[zero]LIDAY when potential Holiday Inns' customers misdialed Holiday Inns' number by substituting a zero for the letter "O." Id. at 620. The defendants admitted that their "sole purpose" in choosing the number 1-800-H0[zero]LIDAY was to intercept those misdialed calls. Id. at 621. Nevertheless, the Sixth Circuit held that the defendants did not violate the Lanham Act because they did not actually "use" Holiday Inns' trademark. Id. at 625. In reaching this decision, the court emphasized that defending travel agents never promoted the telephone number 1-800-H0[zero]LIDAY. Id. at 623-24.
The court reached a similar result in Miss Dig Sys., Inc. v. Power Plus Eng'g, Inc., 944 F. Supp. 600 (E.D.Mich. 1996). The court held that
a defendant who adopts a telephone number which permits it to intercept calls intended for the plaintiff's alphanumeric telephone number is not liable for trademark infringement or unfair competition under the Lanham Act if that defendant merely acquires and uses the telephone number and never undertakes any promotion of an alphanumeric translation of that number that incorporates and displays the plaintiff's trademark.
Id. at 604. Based on this holding, the court granted summary judgment against the plaintiff's Lanham Act claims because the court found that the defendants never advertised the allegedly infringing vanity number. Id. at 605; see also U-Haul Int'l Inc. v. Kresch, 35 U.S.P.Q.2d 1317, 1319 (E.D.Mich. 1994) (finding that former U-Haul dealer could not be enjoined under Lanham Act for using the number corresponding to 1-800-GO-U-HALL because the dealer never directly use the alpha-numeric translation in promoting its business.).
Here, the court finds that defendants never used plaintiffs' trademark. Similar to the defendants in Holiday Inns, the court recognizes that defendants Bloom and MBZ intercepted calls from consumers intending to contact Mercedes-Benz. No evidence, however, suggests that defendants ever used the trademark by advertising or promoting the number 1-800-637-2333. The court is aware that this number's only value to the defendants is its alpha-numeric translation, 1-800-MERCEDE(S). Nevertheless, the court concludes that merely receiving calls to this number, despite its mnemonic translation, does not constitute use of plaintiffs' trademark.
While the fact that defendants licensed the number and/or its mnemonic translation troubles the court, licensing alone is insufficient to invoke the protection of the Lanham Act. See Cline v. 1-888-Plumbing Group, Inc., 146 F. Supp.2d at 371 (explaining defendant's plans to license a vanity number and suggesting that a key aspect of use under the Lanham Act is whether defendants promoted the vanity number). If the court were to hold that licensing alone constituted use under the Lanham Act, then the Act would be invoked in so many situations with mnemonically suggestive telephone numbers that the Act would greatly infringe upon the free use of such numbers.
Because defendants did not use the plaintiffs' trademark, the court concludes that defendants did not violate the Lanham Act. Specifically, plaintiffs' claims of trademark infringement and unfair competition, false designation of origin, and dilution fail because, under the Lanham Act, each of these claim requires "use" of plaintiffs' trademark or a misleading representation of it and defendants' did not engage in such "use."
III. State Law Claims
The analysis applicable to the plaintiffs' Lanham Act claims is equally applicable to their state-law claims. See Med. Graphics Corp. v. Sensormedics Corp., 872 F. Supp. 643, 649 (D. Minn. 1994) (stating that the Minnesota district courts have found that "the Minnesota Deceptive Trade Practices Act mirrors the Lanham Act" and have applied the same analysis to both claims under both Acts); DeRosier v. 5931 Bus. Trust, 870 F. Supp. 941, 947-48 n. 8 (D.Minn. 1994) (applying the same analysis to claims under the Lanham Act and the Minnesota Deceptive Trade Practices Act); Alternative Pioneering Sys., Inc. v. Direct Innovative Prod., 822 F. Supp. 1437, 1441-42 (D.Minn. 1993) (applying the same analysis to claims under the Lanham Act, the Minnesota Deceptive Trade Practices Act, Minnesota Unlawful Trade Practices Act); Minn. Stat. § 333.285(a) (2000) (requiring defendants' commercial "use" of plaintiffs mark or trade name). As a result, plaintiffs' state law claims fail for the same reason that plaintiffs' federal claims fail: defendants did not use plaintiffs' trademarks.
Plaintiffs' acknowledge that the court should apply the same analysis to plaintiffs' state law claims as to their federal claims. (Pl.s' Mem. Supp. Mot. Summ. J. at 14.) As a result, the court does not engage in an independent analysis of plaintiffs' state law claims. Instead, the court applies its analysis of plaintiffs' federal claims to their state-law claims.
CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that:
1. Plaintiffs' motion for summary judgment is denied;
2. Defendants' motion for summary judgment is granted and plaintiffs' claims are dismissed with prejudice.
LET JUDGMENT BE ENTERED ACCORDINGLY.