Opinion
Case No.: CV-02-7134 CAS (AJWx)
July 7, 2003
(1) PLAINTIFF'S/COUNTERCLAIMANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
I. BACKGROUND
Plaintiff and counterdefendant Hispanic Broadcasting Corp. ("HBC") initiated the instant action on September 12, 2002, asserting claims for trademark infringement and dilution under the Lanham Act and other related state law claims against defendant and counterclaimant Educational Media Foundation ("EMF") in connection with EMF's use of HBC's trademark and service mark K-LOVE (the "mark").
The K-LOVE mark has been used continuously by HBC and its predecessors-in interest since 1974. HBC's Statement of Uncontroverted Facts ("HBC's SUF") ¶ 27; EMF's Statement of Genuine Issues ("EMF's SGI") ¶ 27. PSA Broadcasting, Inc. which adopted and began using the mark in 1974 on radio station KEZM (now KLVE) in Los Angeles, sold the mark and the station to K-Love Radio Broadcasting, Inc. in 1975. HBC's SUF ¶¶ 1-2; EMF's SGI ¶¶ 1-2. In 1985, H W Communications purchased the Los Angeles station and the mark, and registered the mark as California Service Mark Registration Number 27, 817 on August 13, 1986. HBC's SUF ¶¶ 7-9, EMF's SGI ¶¶ 7-9. It is undisputed that radio stations KLVE in Los Angeles, and KLVQ in San Diego are using the term "K-LOVE" as a trademark pursuant to a license from HBC. EMF's SGI ¶¶ 1-25. In addition, EMF does not dispute that HBC has used the K-LOVE mark on Internet web pages devoted to KLVE and KLVQ listeners since 1999. HBC's SUF ¶ 26; EMF's SGI ¶ 26.
EMF is engaged in the business of providing radio broadcasting services and has used the K-LOVE mark to identify a Christian ministry that EMF disseminates nationwide by radio broadcasting, satellite feed, and the Internet. HBC's SUF ¶¶ 28-29; EMF's SGI ¶¶ 28-29. Radio station KLVJ in Julian, California carries EMF's nationwide ministry and is identified by the K-LOVE mark. HBC's SUF ¶ 29; EMF's SGI ¶ 29. EMF originally adopted the K-LOVE mark in 1988. HBC's SUF ¶ 33; EMF's SGI ¶ 33.
HBC's complaint alleges the following claims for relief against EMF: (1) trademark infringement under the Lanham Act, (2) common law trademark infringement, (3) common law unfair competition, (4) trademark dilution under the Lanham Act, (5) trademark infringement under Cal. Bus. Prof. Code § 14335, (6) trademark dilution under Cal. Bus. Prof. Code § 14330, (7) counterfeiting under Cal. Bus. Prof. Code § 14320, and (8) unfair competition under Cal. Bus. Prof. Code § 17000, et seq.
On October 10, 2002, EMF filed a counterclaim alleging the following: (1) declaration of rights, (2) false designation of origin, (3) federal dilution, (4) common law unfair competition, (5) violation of Cal. Bus. Prof. Code § 14330, and (6) cancellation of HBC's California registration of the mark under Cal. Bus. Prof. Code § 14281. By an order dated December 6, 2002, the Court granted a motion by HBC to dismiss EMF's sixth counterclaim seeking cancellation of HBC's California registration of the mark under Cal. Bus. Prof. Code § 14281. EMF filed a first amended answer to the complaint and amended counterclaims ("FAACC") on January 3, 2003, asserting the same first five claims that were asserted in its original counterclaim.
HBC filed the instant motion for partial summary judgment on July 28, 2003.
II. LEGAL STANDARD FOR SUMMARY JUDGMENT
Summary judgment is appropriate where "there is no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party has the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each cause of action upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
If the moving party has sustained its burden, the nonmoving party must then identify specific facts, drawn from materials on file, that demonstrate that there is a dispute as to material facts on the elements that the moving party has contested. See Fed.R.Civ.P. 56(c). The nonmoving party must not simply rely on the pleadings and must do more than make "conclusory allegations [in] an affidavit." Lujan v. National Wildlife Fed'n, 497 U.S. 871, 888 (1990). See also Celotex Corp., 477 U.S. at 324. Summary judgment must be granted for the moving party if the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. See also Abromson v. American Pacific Corp., 114 F.3d 898, 902 (9th Cir. 1997).
In light of the facts presented by the nonmoving party, along with any undisputed facts, the Court must decide whether the moving party is entitled to judgment as a matter of law. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 631 n. 3 (9th Cir. 1987). When deciding a motion for summary judgment, "the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted);Valley Nat'l Bank of Ariz. v. A.E. Rouse Co., 121 F.3d 1332, 1335 (9th Cir. 1997). Summary judgment for the moving party is proper when a rational trier of fact would not be able to find for the nonmoving party on the claims at issue. See Matsushita, 475 U.S. at 587.
III. ANALYSIS
"`Likelihood of confusion' is the basic test for both common law trademark infringement and federal statutory trademark infringement."Dr. Suess Enterprises v. Penguin Books USA, Inc., 109 F.3d 1394, 1403 (9th Cir. 1997), citing 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 23.01[l] (rev. ed. 1994). The same likelihood of confusion standard applies to common law and California state law trademark infringement and unfair competition claims. See Thane Intl., Inc. v. Trek Bicycle Corp., 305 F.3d 894, 901 n. 3 (9th Cir. 2002).
"The eight-factor Sleekcraft test is used in the Ninth Circuit to analyze the likelihood of confusion question in all trademark infringement cases, both competitive and non-competitive. The eight factors are as follows: (1) the strength of the mark; (2) the proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; (8) likelihood of expansion of the product lines."Dr. Suess Enterprises, 109 F.3d at 1404, citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). "There are at least three types of proof of likelihood of confusion: (1) survey evidence; (2) evidence of actual confusion; and (3) an argument based on an inference arising from a judicial comparison of the conflicting marks themselves and the context of their use in the marketplace." Dr. Suess Enterprises, 109 F.3d at 1404. While the Sleekcraft factors are considered in reaching a decision on the issue of likelihood of confusion, "no mechanistic formula or list can set forth in advance the variety of elements that comprise the market context from which the likelihood of confusion must be determined." Dr. Suess Enterprises, 109 F.3d at 1404.
"The ultimate question of likelihood of confusion is predominantly factual in nature, as is each factor within the Sleekcraft likelihood of confusion test." Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1140 (9th Cir. 2002), citing Went v. Host International, Inc., 125 F.3d 806, 809-10 (9th Cir. 1997). "Because of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena." Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1140 (9th Cir. 2002), citing Interstellar Starship Services, Ltd, v. Epix, Inc., 184 F.3d 1107, 1109 (9th Cir. 1999); Levi Strauss Co. v. Blue Bell, Inc., 778 F.2d 1352, 1356 n. 5 (9th Cir. 1985).
HBC seeks summary adjudication of its claims for: (1) trademark infringement under the Lanham Act; (2) common law trademark infringement; (3) trademark infringement under Cal. Bus. Prof. Code § 14335; (4) common law unfair competition; and (5) unfair competition under Cal. Bus. Prof. Code § 17000, et seq., as well as EMF's related infringement and unfair competition counterclaims. Mot. at 1. HBC contends that it can establish ownership of the trademark at issue, use by EMF without authorization of a colorable imitation of HBC's mark in connection with the sale or advertising of EMF's goods and services, and that such a use of the mark is likely to cause confusion. Mot. at 5, citing Discovery Communications. Inc. v. Animal Planet, Inc., 172 F. Supp.2d 1282, 1288 (C.D. Cal. 2001).
HBC argues that the K-LOVE mark has been used continuously by HBC and its predecessors-in-interest since 1974, and that it has registered the K-LOVE mark with the State of California. HBC's Mot. at 11. HBC contends that the California Registration obtained by HBC in 1986 gave EMF at least constructive notice of its alleged ownership of the mark at the time EMF adopted and began using the K-LOVE designation in 1988. From these facts, HBC asserts that EMF was precluded from acquiring any rights in the mark. Mot. at 12.
HBC also contends that EMF's unauthorized use of the K-LOVE mark on station KLVJ and over the Internet is likely to cause confusion among customers. Mot. at 13. HBC argues that seven of the eight Sleekcraft factors indicate a likelihood of confusion. In particular, HBC contends that:
(1) HBC's K-LOVE mark is a strong mark, because HBC and its predecessor have extensively advertised and used the mark in Los Angeles for over 28 years and in San Diego for the past five years.
(2) The HBC mark and the EMF mark are virtually identical because both marks sound the same to radio listeners.
(3) Both EMF and HBC use their marks in connection with radio and programming services.
(4) EMF adopted the K-LOVE mark with at least constructive notice of HBC's California Registration,
(5) EMF's use of the K-LOVE mark has caused actual confusion evidenced by electronic mail messages sent to EMF from listeners attempting to contact HBC's Los Angeles station, calls to HBC's San Diego station from listeners attempting to contact EMF's KLVJ station, and a mistaken visit by a pastor to HBC's San Diego station.
(6) EMF and HBC use the K-LOVE mark in the same marketing channels because the broadcast coverage areas of EMF's radio station and HBC's San Diego station overlap at a level officially recognized by the Federal Communications Commission ("FCC"), and the broadcasts of EMF's radio station and HBC's Los Angeles station overlap at a level sufficient to be audible, although not at a level recognized by the FCC. In addition EMF's use of K-LOVE over the Internet overlaps directly with HBC's use, and searches using Internet search engines result in links to HBC's stations, and EMF's "www.klove.com" Internet website.
(7) The degree of care likely to be exercised by the ordinary purchaser is low because radio listeners have no financial stake in choosing a radio station, and radio listeners are unsophisticated consumers.See Mot. at 14-23. HBC argues that the eighth Sleekcraft factor, likelihood of expansion into other markets, is unimportant because the parties already compete to a significant extent. Mot. at 22, citingBrookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1060 (9th Cir. 1999). Therefore, HBC contends that an analysis of the Sleekcraft factors support of a finding of a likelihood of confusion as a matter of law. Mot. at 23.
EMF responds that a genuine issue of fact exists as to who has the superior claim of rights to the K-LOVE mark in the San Diego market. EMF contends that it is the national "senior user" of the mark, with rights dating back to 1955, by virtue of an August 1997 assignment from radio station KLOV in Colorado. See Opp. at 8, citing Merone Decl., Ex. M. EMF argues that because it is the national "senior user" of the K-LOVE mark, and it began using the mark in the San Diego radio market in 1995, three years before HBC began using the mark in connection with the San Diego radio station, its rights in San Diego are absolute. In the alternative, EMF contends that even if it is not the national "senior user" of the mark, it nonetheless has superior rights to use the K-LOVE mark in San Diego by virtue of its first use in that market, absence of bad faith in adopting the mark, and the fact that San Diego would not have been considered to be within the natural zone of expansion for a Los Angeles-based radio station in 1995 because prior to deregulation, Los Angeles and San Diego were treated as separate radio markets. Opp. at 8-11, applying the Tea Rose-Rectanus doctrine announced in Hanover Star Milling Co. v. Metcalf, 420 U.S. 403 (1916) and United Drug Co. v. Theodore Rectanus, Co., 248 U.S. 90 (1918).
HBC argues that the August 1997 Agreement purporting to convey the right to use the FCC call sign KLOV-FM outside the Fort-Collins/ Loveland, Colorado area from Krause Broadcasting to EMF, and a September 2, 2003, Assignment nunc pro tunc purporting to modify the 1997 conveyance are inadmissible as hearsay, improperly authenticated, and that admission of the Assignment nunc pro tune would violate the parol evidence rule. See Reply at 14; HBC's Evidentiary Objections and Motion to Strike Declarations and Exhibits Offered by EMF. HBC argues further that EMF has offered no evidence that Krause Broadcasting ever owned national protection of its mark, and therefore EMF could not have received such rights from Krause. Reply at 16.
HBC contends that the Tea Rose-Rectanus doctrine requires that the junior user adopt the mark in good faith in an area remote to the senior user, and that San Diego is not a "remote" market vis-a-vis Los Angeles for purposes of analysis under the Tea Rose-Rectanus doctrine. Reply at 17, citing Bright Beginnings, Inc. v. Care Comm., Inc., 30 U.S.P.Q.2d 1712, 1714 (C.D. Cal. 1994).
In addition, EMF argues that a genuine issue of fact also precludes the Court from finding a likelihood of confusion as a matter of law. EMF contends that, in trademark cases involving radio stations, a proper likelihood of consumer confusion analysis should focus on advertisers who pay the stations to broadcast commercial messages, and not listeners. Opp. at 15, citing Walt-West Ent., Inc. v. Gannett Co., 695 F.2d 1050, 1061 (7th Cir. 1982). EMF argues that because HBC's stations have no religious affiliation and do not accept pledges, and EMF does not accept paid advertising, there is no possibility of confusion among radio advertisers. Opp. at 15.
EMF argues in the alternative that even if the likelihood of confusion analysis were to focus on potential listeners, there is little likelihood of confusion among the listening public, primarily because EMF uses its K-LOVE mark to identify its ministry which airs gospel messages in English over commercial-free listener-supported radio stations, and HBC uses its K-LOVE mark to promote Spanish-language entertainment programming broadcasted over two commercial radio stations. Opp. at 16, 17. EMF also points to a survey conducted by Gary Ford, a professor at American University, in which 150 potential listeners of HBC's radios stations and 100 potential listeners of EMF's radio station were contacted, in which "not a single respondent who had a heard of an English-language K-LOVE [sic] thought it was affiliated with a Spanish-language K-LOVE [sic], and vice-versa." Opp. at 20, citing Ford Decl. ¶¶ 6-11.
HBC objects to the admissibility of EMF's survey evidence on grounds that the Ford Declaration fails to lay a foundation demonstrating a reliable methodology required for expert testimony by Kumho Tire Co. v. Carmichael, 536 U.S. 137 (1991). See HBC's Evid. Objs. at 3. HBC also contends that Dr. Ford's expert opinion is incomplete, and therefore lacks the necessary foundation for reliability. Id. at 2.
EMF contends that an application of the Sleekcraft factors shows an absence of potential confusion, arguing that:
(1) HBC's K-LOVE mark is not strong in San Diego, and evidence that the mark is well known among potential Spanish-language listeners in Los Angeles is irrelevant.
(2) HBC and EMF do not compete, because their respective stations target different listeners.
(3) The HBC mark and the EMF mark differ when encountered in context.
(4) Because the phrase "actual confusion" refers to a mistaken belief as to the source of a party's services (i.e. proof that consumers have knowingly contacted HBC or EMF communicating their belief that one entity is affiliated with the other party's operations)there is no evidence of actual confusion.
(5) The parties use different marketing channels because EMF markets itself primarily at Christian-centered community events, through Christian newspapers and publications, and by word-of-mouth, while HBC promotes its San Diego station through secular events, Spanish-language publications, and secular, rather than Christian media.
(6) While radio station listeners may exercise a low degree of care in choosing a radio station, a casual listener would notice differences between an English-language ministry and a Spanish-language secular station.
(7) EMF adopted the K-LOVE mark in good faith.
(8) There is no likelihood of product line expansion, because EMF has no plans to operate a Spanish-language station, and HBC has no plans to operate an English-language Christian ministry.See Opp. at 20-24. Therefore, EMF contends that likelihood of confusion cannot be demonstrated as a matter of law.
The Court concludes that genuine issues of fact exist as to whether a likelihood of confusion exists under the test set forth in Sleekcraft, See, e.g., Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1140 (9th Cir. 2002) stating: "Because of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena." In particular, the Court notes that HBC and EMF dispute the critical issues of the similarity of marketing channels used by the parties, and the proximity of the marks in the marketplace. See, e.g., EMF's SGI ¶ If citing Merone Decl., Ex, WW, 35-37, 39, 54-55 (Deposition of Lloyd Parker), Ex. 00, 47, 92 (Deposition of Andy Ramirez), Ex. MM, 15-20 (Deposition of Peter Moore). Likewise, the "type of goods and degree of care to be exercised by the purchaser" inquiry is intensely factual in nature, and can only be determined by resolving the factual dispute over whether the purchasers whose potential confusion is to be analyzed by the Court are advertisers, donors, frequent listeners or potential listeners.
At oral argument, HBC argued that in Entrepreneur Media, the Ninth Circuit sustained the district court's grant of summary judgment, despite concluding that not all Sleekcraft factors pointed in the same direction. However, the court in Entrepreneur Media also stated: "[T]he resolution of one factor will likely influence the outcome and relative importance of other factors . . . We do not decide whether confusion is likely by considering mechanically the number of Sleekcraft factors that weigh in favor of either party, or by giving the same weight to a particular factor from case to case." Entrepreneur Media, 279 F.3d at 1141. Because the Court finds a genuine issue of fact as to many of theSleekcraft factors, the Court cannot conclude that a likelihood of consumer confusion exists as a matter of law. In particular, the use of similar marketing channels is critical to an analysis of the effect that EMF's and HBC's Internet marketing activities have on the likelihood of confusion. See, e.g., Brookfield Communications, Inc. v. West Coast Entertainment Corporation, 174 F.3d 1036, 1055 (9th Cir. 1999).
HBC objects to records from government websites, and other Internet websites as improperly authenticated and as hearsay. See Evid. Objs. 8-10. HBC's objections are overruled. As EMF argues, "printouts" of the www.k-love.com and www.kluv.com website, and other similar sites are not hearsay, because EMF does not intend to introduce the contents of the sites for the truth of the matter asserted therein, but rather to provide a snapshot of services advertised over the Internet. See Merone Decl., Exs. D-H, J, L, BB, EE-GG; EMF's Opp. to Evid. Objs. at 5. Other exhibits which consist of records from government websites, such as the FCC website, are self-authenticating. See Merone Decl., Exs. A, B, I, N, R; EMF's Opp. to Evid. Objs. at 4; Fed R. Evid. 902(5). The Court notes that HBC does not object to the deposition testimony attached to the Merone declaration.
A genuine issue also exists regarding the question of which party has a superior claim of rights in the K-LOVE mark in the San Diego market. Without reaching the issue of whether EMF can be considered the national senior user of the mark by virtue of the 1997 Agreement with Krause Broadcasting and the 2003 Assignment nunc pro tune, the Court concludes that the question of whether EMF would have superior rights as a local junior user under the Tea Rose-Rectanus doctrine raises multiple genuine issues of fact. "A clear majority of the cases applying the common law Tea Rose-Rectanus doctrine hold that in order to prove the defense, the junior user must prove both of two elements: (1) its first use was in "good faith' and (2) its first use was in a `remote area.'" 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 26.4 (rev. ed. 2003), citing Thrifty Rent-A-Car System, Inc., 639 F. Supp. 750 (D. Mass. 1986), aff'd, 831 F.2d 1177 (1st Cir. 1987). EMF cites evidence indicating that at the time it adopted the K-LOVE mark in 1988, it did not know that three other radio stations also called themselves K-LOVE. See Merone Decl., Ex. HH, 113-14, 166-67, 172. The issue of whether EMF's first use was in a "remote area" also turns on genuine issues of fact. "A `remote' territory is one where, at the critical date of the junior user's first use, the senior user's mark was not known by customers in that territory, such that no one would have been confused as to the source . . . The `remoteness' enquiry is therefore an issue of the territorial dimension of the likelihood of confusion." 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 26.4 (rev. ed. 2003). Therefore, for the same reasons that the likelihood of confusion analysis turns on disputed factual issues, the issue of whether EMF's first use was in a "remote area" cannot be decided on a motion for summary judgment.
Because the Court does not reach the question of whether EMF is the national senior user of the mark, it need not address the effect of the 1997 Agreement with Krause Broadcasting and the 2003 Assignment, and the Court need not address HBC's objections to the admissibility of these agreements as improperly authenticated, hearsay, or inadmissible pursuant to the parol evidence rule. The Court notes that HBC argues its California Registration provides HBC with the exclusive right to use the K-LOVE mark "at least throughout the entire state of California." Mot. at 9. However, EMF argues that the California Registration constitutes prima facie evidence of ownership of the mark, but not the exclusive right to use the mark throughout the state, unlike a federal trademark registration. Opp. at 13; compare 15 U.S.C. § 1115(a) with Cal. Bus. Prof. Code § 14241. The Court concludes that HBC's rights in the K-LOVE mark extend throughout the area in which it has established senior common law rights.
HBC's argument that EMF's constructive knowledge of its California Registration is sufficient to prove that EMF's first use was in not in `good faith' as a matter of law is untenable. The case law emphasizes that, at the very least, actual knowledge is necessary to defeat a good faith defense. See 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 26.9 (rev. ed. 2003). Indeed, the Tenth Circuit has even held that "[w]hile a subsequent user's adoption of a mark with knowledge of another's use can certainly support an inference of bad faith, . . . mere knowledge should not foreclose further inquiry." GTE Corp., v. Williams, 904 F.2d 536 (10th Cir. 1990), cert denied. 498 U.S. 998 (1990). At oral argument, HBC argued that EMF had actual knowledge of HBC's mark when it began using the K-LOVE mark in Los Angeles, however, HBC cited no such evidence in its motion, in which it argued: "EMF's conduct begs an inference that it knew of, yet ignored, HBC's K-LOVE mark and its California Registration when adopting and beginning use of the infringing K-LOVE mark. HBC expects that further evidence of EMF's intent will come to light as discovery progresses." Mot. at 17, 18. In light of the evidence cited by EMF stating that it had no actual knowledge of HBC's use of the mark, and HBC's failure to cite any evidence of actual knowledge in its motion, the Court finds that the question of whether HBC had actual knowledge presents a genuine issue of fact which cannot be resolved on this motion.
IV. CONCLUSION
As set forth above, HBC's motion for partial summary judgment is DENIED. In light of the Court's analysis, HBC's remaining evidentiary objections and motion to strike are denied as moot. EMF's request that sanctions be entered against HBC is; also denied.
At oral argument, HBC argued that the Court should find that HBC's Statement of Uncontroverted Facts, ¶¶ 1-27, 36 and 38 were not disputed by EMF and therefore must be established. However, the Court notes that EMF only stated that it did not challenge HBC's SUF ¶¶ 1-27, 36 and 38 "for purposes of the present motion only," because these facts are irrelevant to the disposition of the motion. Because this is not an unequivocal concession, the Court declines to establish these facts as undisputed.
IT IS SO ORDERED.