Opinion
Civil No. 03-3625 (DWF/SRN).
September 2, 2004
Denise S. Rahne, Esq., Michael V. Ciresi, Esq., Raymond B. Eby, Esq., Thomas C. Mahlum, Esq., and Jan M. Conlin, Esq., Robins Kaplan Miller Ciresi, Minneapolis, Minnesota; and Eric D. Paulsrud, Esq., Leonard Street and Deinard, Minneapolis, MN, Counsel for Plaintiff and Counter-Defendant.
Allen W. Hinderaker, Esq., Douglas J. Williams, Esq., John A. Clifford, Esq., William F. McIntyre, Jr., Esq., and William D. Schultz, Esq., Merchant Gould, Minneapolis, Minnesota, counsel for Defendant and Counter-Claimant.
MEMORANDUM OPINION AND ORDER
Introduction
The above-entitled matter came on for hearing before the undersigned United States District Judge on June 25, 2004, pursuant to Plaintiff Northwest Airlines, Inc.'s (the "Airline") motion for partial summary judgment and Defendant NWA Federal Credit Union's (the "Credit Union") motion for summary judgment and motion to exclude plaintiff's expert report and testimony of Jeffery Stitt. For the reasons outlined below, the motions for summary judgment are both granted in part and denied in part. The motion to exclude plaintiff's expert report and testimony of Jeffery Stitt is denied.
Background
The Airline was founded in 1926 as Northwest-Airways, and reincorporated in 1934 as Northwest Airlines. Today, the Airline is the world's fourth largest airline. The Credit Union was chartered under Minnesota law in 1938 as Northwest Airlines Employee Credit Union. In 1988, the Credit Union's name was changed to NWA Federal Credit Union. Until recently, the Credit Union's membership has been limited to past or present employees of the Airline, its affiliated companies, and their families.Although the Airline and the Credit Union have always been distinct and separate corporate entities, the two enjoyed a mutually beneficial relationship and association with one another over the years. The Credit Union was given the exclusive opportunity to market its services to the Airline's employees and to lease office facilities on the Airline's property. The Airline was paid for the space leased by the Credit Union and was granted an advantageous payroll float benefit.
Over the years, the Airline and the Credit Union have developed and used several trademarks. The Airline asserts that its marks include the terms "Northwest," "NWA," and "Wings." The Airline also asserts that its airplanes' livery (the color scheme on the airplanes), its marketing materials, the compass logo, and photos of its employees in the Airline's uniforms are its trademarks. The Credit Union asserts that its marks include "NWA Federal Credit Union," "Wings Financial Federal Credit Union," and the four-tail and reverse red tail logos.
In 1996, the Credit Union applied for a federal trademark registration for the term "NWA Federal Credit Union." On February 11, 1997, the United States Patent and Trademark Office issued U.S. Federal Trademark Registration No. 2,037,228 to the Credit Union.
Beginning in 1998, the Credit Union developed a strategy to align itself more closely with the Airline. As part of its efforts, the Credit Union developed the reverse red tail logo. The reverse red tail logo is essentially the tail of an airplane in the color red with the Airline's compass logo displayed prominently on the tail. Before making use of the reverse red tail logo, the Credit Union's Board of Directors presented the logo to the Airline. The Airline did not object to the use of the reverse red tail logo by the Credit Union.
Over the years, the Airline provided the Credit Union with samples of its marks. The Airline also provided the Credit Union with standards and guidelines concerning the use of these marks. For its part, the Credit Union has consulted with the Airline regarding the use of the marks.
After a series of events that adversely affected the Airline's financial condition, the Airline conducted a financial review of its business. As a result of this review, the Airline renegotiated many of its business agreements. On March 19, 2003, the Airline sent a letter to the Credit Union outlining proposed changes to the parties' relationship.
The Airline requested a royalty of 8% of the Credit Union's profits for the continued right to use the Airline's marks and for exclusive access to the Airline's employees and facilities. The Credit Union rejected the Airline's proposal. On July 10, 2003, the Airline notified the Credit Union that it should cease using all of the Airline's marks. On July 28, 2003, the Airline sent the Credit Union a second letter demanding that the Credit Union refrain from using its marks. The Credit Union continues to use the Airline's alleged marks to this day.
In addition to the Credit Union's continued use of the marks, the Airline claims that the Credit Union has asserted its ownership of the mark "NWA" in the realm of financial services. Specifically, on May 28, 2003, the Credit Union sent a letter to U.S. Bank, a longtime licensee of the Airline's marks, stating that the continued use of the marks by the licensee would result in a "likelihood of confusion in the marketplace" and would carry adverse consequences for both the Credit Union and the licensee.
On November 26, 2003, the National Credit Union Administration ("NCUA") approved the Credit Union's request to expand the field of its membership to include all employees in the United States air transportation industry. Based on its expanded field of membership, the Credit Union's Board of Directors decided to change the Credit Union's name to "Wings Financial Federal Credit Union." However, the Credit Union will market itself to the employees of the Airline as "NWA Federal Credit Union, a division of Wings Financial Credit Union." The Airline asserts it planned on using the term "Wings" as the name of its alliance with several other international airlines.
Discussion
I. Motion to Exclude Plaintiff's Expert Report and Testimony of Jeffrey Stitt
The Airline hired a market researcher, Jeffery Stitt, to conduct a consumer survey. Stitt surveyed 83 people from three different populations as part of his study. After conducting the survey and examining the results, Stitt concluded that a likelihood of confusion exists among the public surrounding the marks of the Airline and those of the Credit Union.
The Credit Union moves the Court to preclude the testimony of Stitt pursuant to Federal Rules of Evidence 104, 402, 403 and 702. Specifically, the Credit Union asserts that Stitt is not a qualified expert, that his survey samples the wrong universe, uses biased, leading, and repetitive questions, fails to determine why those questioned responded to questions in a certain way, fails to replicate market conditions, uses an inadequate sample size, fails to use a control group, and is not validated. Based on these reasons, the Credit Union contends that Stitt's survey has no probative value and should not be admitted.
Before accepting the testimony of an expert witness, the trial court is charged with a "gatekeeper" function of determining whether an opinion is based upon sound, reliable theory, or whether it constitutes rank speculation. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 589-90 (1993). In Daubert, the United States Supreme Court imposed an obligation upon trial court judges to ensure that scientific testimony is not only relevant, but also reliable under the Rules of Evidence. See id. at 579. In doing so, the Court can consider: (1) whether the theory or technique can be and has been tested; (2) whether the theory or technique has been subjected to peer review and publication; (3) the known rate of potential error; and (4) whether the theory has been generally accepted. See id. at 593-594. The purpose of these requirements "is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Kuhmo Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999).
In Kuhmo Tire, the Supreme Court determined, "the trial judge must have considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable. Id. That is to say, a trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony. See id. The objective of that requirement is to ensure the reliability and relevancy of expert testimony. See id. at 152.
Subject to proper foundation being laid, and in light of the Federal Rules of Evidence and Daubert, the Court finds that Stitt is a qualified survey expert. Stitt is a trained social scientist with 20 years of experience in the marketing communications industry. Stitt serves as president of Platform Marketing, Inc. where he designs, administers, and analyzes market research for companies. In addition, Stitt has experience providing testimony at trials and depositions in this district.
The Court has reviewed the consumer survey prepared by Stitt and finds that it meets the legal test for admissibility. The Court finds that the survey has probative value as to the issue of consumer confusion and that the arguments of the parties regarding the survey can be "borne out on cross-examination, with credibility determinations and weighing of evidence left to the trier of fact." Minnesota Specialty Crops, Inc. v. Minnesota Wild Hockey Club, LP, 2002 WL 1763999, *3 (D. Minn. July 26, 2002) (citing J. Thomas McCarthy, 5 McCarthy on Trademarks § 32:178 (4th Ed.)). Accordingly, the Court denies the Credit Union's motion to exclude plaintiff's expert report and testimony of Jeffery Stitt.
While the Court does not accept the Credit Union's invitation to reject Stitt's consumer survey, the Court does not agree with all aspects of the methodology of the survey or the interpretation given to the survey results by Stitt. In particular, the Court finds that the format of the questions, if not leading, certainly suggested to the respondents the "correct" answer to some of the questions being asked. The Court also finds that some of the questions asked had little probative value. Nonetheless, the Court finds that those same questions would do little to prejudice the Credit Union's position. In light of these findings, the Court will give the survey results and their interpretation less weight when considering the issues before it on the motions for summary judgment.
II. Motions for Summary Judgment
A. Standard of Review
Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). The court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. See Enter. Bank v. Magna Bank of Missouri, 92 F.3d 743, 747 (8th Cir. 1996). However, as the Supreme Court has stated, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy, and inexpensive determination of every action.'" Celotex Corp v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed.R.Civ.P. 1).
The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. See Enter. Bank, 92 F.3d at 747. The nonmoving party must demonstrate the existence of specific facts in the record that create a genuine issue for trial. See Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials, but must set forth specific facts showing that there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Krenik, 47 F.3d at 957.
A. Lanham Act Claim
Part of the purpose of the Lanham Act is to protect individuals engaged in commerce from unfair competition. See United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1179 (8th Cir. 1998). To prevail on a claim brought pursuant to the Lanham Act, the plaintiff must prove: (1) that its use of the mark is entitled to protection; and (2) that the defendant's use of the mark or like marks is likely to confuse consumers as to the source of the product. See Hubbard Feeds, Inc. v. Animal Feed Supplement, Inc., 182 F.3d 598, 601 (8th Cir. 1999). In cases where the defendant's previous use of the mark occurred with the plaintiff's permission, the plaintiff must also prove that the defendant's current use of the mark is unauthorized. See United States Jaycees v. Philadelphia Jaycees, 639 F.2d 134, 137 (3rd Cir. 1981).
1. Validity, Ownership, and Protectability of the Marks
The Airline asserts in its papers that it owns the following marks: "NWA," the livery of its planes, the compass logo, "Wings," and the uniforms of its employees. However, neither the Airline, nor the Credit Union provided the Court with any legal support regarding the Airline's alleged ownership rights in the uniforms of its employees. As a result, the Court declines to rule on the issue.
The Airline has used the mark "NWA" since at least June 30, 1943. The "NWA" mark was incorporated into the Airline's first logo in 1946 and has been used in a variety of ways over the years. The Airline registered the mark in 2001. The Airline has also registered the livery of its planes (federal registration granted in 2001), the compass logo (federal registration granted in 1990), and the mark "Wings" (federal registration granted in 2002). Based on the Airline's use and registration of the marks, the Court finds that the Airline has a protectable interest in each of the marks.
2. Unauthorized Use
The Airline asserts that the Credit Union used the marks pursuant to an implied license with the Airline. An implied license "arises out of the objective conduct of the parties, which a reasonable person would regard as indicating that an agreement has been reached." Birthright v. Birthright Inc., 827 F. Supp. 1114, 1134 (D.N.J. 1993) (citation omitted). Permission to use the marks along with the exercise of reasonable control over such use can lead to the conclusion that an implied license existed even where no written agreement was made. See Villanova Univ. v. Villanova Alumni Educ. Found., Inc., 123 F. Supp. 2d 293, 307 (E.D. Pa. 2000) (citing United States Jaycees, 639 F.2d at 140).
The Airline contends that its conduct and that of the Credit Union demonstrate the existence of an implied license. The Airline asserts that over the course of its relationship with the Credit Union, the Credit Union sought permission on numerous occasions from the Airline to use the Airline's marks. The Airline also asserts that it exercised reasonable control over the use of its marks by providing the Credit Union with samples of its marks and with guidelines regarding their use.
The Credit Union asserts that it could not have licensed the marks from the Airline because the Credit Union independently developed the name "NWA Federal Credit Union," the reverse red tail logo, and its marketing materials. The Credit Union asserts that it never sought the Airline's approval to use any of the marks, but only provided the Airline with an opportunity to review the marks in the "spirit of partnership." (Defendant's Memorandum of Law in Opposition to Plaintiff's Motion for Partial Summary Judgment at 24.) The Credit Union asserts that even if the Court were to find an implied license existed, the Airline did not exercise reasonable control over the use of its marks.
The Court finds the existence of an implied license between the Airline and the Credit Union with regard to the use of the reverse red tail logo and the livery of the Airline's planes as presented in the Credit Union's marketing materials. The evidence presented by the Airline refutes the Credit Union's claim that it merely presented its logo and other marks to the Airline for review. Instead, the evidence shows that the individuals in charge of marketing at the Credit Union were aware that the Credit Union needed the Airline's approval to use the Airline's compass logo and the livery of the Airline's planes in marketing materials.
The Court finds that a genuine issue of material fact exists as to whether an implied license existed with regard to the "NWA" mark. Although the Airline presented evidence that the Credit Union approached the Airline regarding the name change of the Credit Union in 1988, the facts are in dispute as to the manner of discussions that took place between the two entities at that time. The Court finds that no evidence has been presented that the "Wings" mark was used pursuant to an implied license.
The Court also finds that the Airline exercised reasonable control over the use of the compass logo and livery marks. The Airline provided samples of the marks to the Credit Union so that the marks would meet the Airline's guidelines for use. In addition, the Airline produced written guidelines for the use of the marks that were provided to the Credit Union. The Credit Union personnel were aware of these guidelines and the record contains evidence of numerous instances where the Credit Union personnel contacted the individual at the Airline responsible for the marks to determine whether a specific use was in compliance with the guidelines.
An implied license is terminable at the will of the licensor. See Birthright, 827 F. Supp. at 1135. Once a license to use a trademark has been terminated, use of the formerly licensed mark constitutes infringement. See United States Jaycees, 639 F.2d at 143. In this case, the Airline terminated the implied license with the Credit Union via a letter sent to the Credit Union's counsel on July 28, 2003. Thus, the Credit Union's continued use of the reverse red tail logo and the livery of the Airline's planes as presented in the Credit Union's marketing materials is unauthorized.
3. Likelihood of Confusion
To prevail under the Lanham Act, a plaintiff must prove that the defendant's use of a mark creates a likelihood of confusion, deception, or mistake. See General Mills, Inc. v. Kellogg Co., 824 F.2d 622, 626 (8th Cir. 1987). The unauthorized use of a mark by a former licensee "presents a particular danger of confusion to the public." Villanova Univ., 123 F. Supp. 2d at 309 (quoting J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 25:31). In such cases, several courts have held that "continued use by one whose trademark license has been canceled satisfies the likelihood of confusion test and constitutes trademark infringement." Burger King Corp. v. Mason, 710 F.2d 1480, 1493 (11th Cir. 1983); see also U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185, 1190 (6th Cir. 1997); United States Jaycees, 639 F.2d at 143.
The test for determining whether a likelihood of confusion exists does not hinge on one factor, but requires a court to consider several factors, including: (1) the strength of the trademarks; (2) the similarity between the plaintiff's and defendant's marks; (3) the competitive proximity of the parties' products; (4) the alleged infringer's intent to confuse the public; (5) the evidence of actual confusion; and (6) the degree of care reasonably expected of the potential customers. See SquirtCo. v. Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980).
This Court found that the Credit Union's use of the reverse red tail logo and the livery of the Airline's planes as presented in the Credit Union's marketing materials was pursuant to an implied license. The Court has also found that the continued use of those marks is unauthorized. As a result, the Court presumes that a likelihood of confusion exists with regard to the use of those marks.
The Court was prepared to consider whether a likelihood of confusion existed with regard to the Credit Union's use of the marks "NWA" and "Wings," but the parties have chosen to direct the vast majority of their discussion solely to the "NWA" mark. Therefore, the Court declines to rule as to whether confusion is likely to occur as a result of the Credit Union's use of the "Wings" mark.
a. Strength of the Marks
The Airline asserts that "NWA" is a distinctive mark that has gained secondary meaning in the market and that it is entitled to a wide scope of protection. The Credit Union, on the other hand, contends that the "NWA" mark is weak and has been used by a number of third parties unrelated to the Airline over the years. The Credit Union also asserts that any strength that the "NWA" mark has is limited to the field of transportation and travel services.
The Court finds that the "NWA" mark is a strong mark entitled to a wide scope of protection in the field of transportation and travel services, but that its use over the years by third parties unrelated to the Airline has weakened it in the general marketplace. As a result, the Court finds that this factor weighs in favor of neither party.
b. Similarity of the Marks
The Airline asserts that the Credit Union merely combined its mark "NWA" with the generic phrase "Federal Credit Union" to come up with its name. The Credit Union contends that adding the phrase "Federal Credit Union" to the "NWA" mark creates a distinct new mark that conveys an entirely different commercial impression.
The Credit Union's name, NWA Federal Credit Union, differs from the Airline's "NWA" mark only by the inclusion of the generic phrase "Federal Credit Union." In addition, the Credit Union's name is used in conjunction with several marks that the Court has already found to be infringing the marks of the Airline. Based on these facts, the Court finds that this factor weighs in favor of the Airline.
c. Competitive Proximity of the Parties' Products
The Airline asserts that it operates in the same commercial realm as the Credit Union through the licensing of its marks to U.S. Bank. The Airline contends that the likelihood of confusion is exacerbated because of the close geographic proximity of the Credit Union's facilities to the airports in which the Airline operates. The Credit Union asserts that it and the Airline provide dissimilar services.
The Credit Union is correct in stating that the core businesses of itself and the Airline are not in proximity to one another. However, the Airline's licensing of its mark to U.S. Bank places the parties' marks in close proximity to one another in the realm of financial services. The Court finds this factor weighs in favor of the Airline.
d. Intent to Confuse the Public
The Airline asserts that the Credit Union clearly intended to confuse the public by using the "NWA" mark. The Airline asserts that the Credit Union attempted to strengthen the perceived association between itself and the Airline by adopting the Airline's marks. In contrast, the Credit Union asserts that the Airline has produced no evidence showing that the Credit Union intended to confuse the public. Instead, the Credit Union asserts that its name only acknowledges a truthful association between the Credit Union and its membership.
The Airline asserts that the Credit Union adopted its marks to confuse the public regarding the relationship between the Credit Union and the Airline. However, the inclusion of "NWA" in the Credit Union's name came many years before the relationship between the Airline and the Credit Union deteriorated such that the affiliation between the two was terminated. Based on the evidence presented, the Court finds that this factor weighs in favor of neither party.
e. Evidence of Actual Confusion
The Airline asserts that considerable evidence of actual confusion exists regarding the Credit Union's use of the "NWA" mark. In addition, the Airline contends that the Stitt survey results demonstrate confusion in the marketplace. The Credit Union continues to assert that the Stitt survey is flawed and has no probative value. The Credit Union also points out that several of the Airline's employees responsible for the use of the Airline's marks were unaware of any actual confusion in the marketplace.
The Court finds that insufficient evidence of actual confusion has been presented. The Airline cites only to a few instances of actual confusion. As previously stated, the Court has concerns regarding the Stitt survey and the appropriate interpretation to be given its results. As a result, the Court finds that this factor weighs in favor of neither party.
f. Degree of Care Expected of Customers
The Airline asserts that the similarity of the marks makes it likely that even an extremely careful purchaser could be confused. The Airline also asserts that the prior association between itself and the Credit Union makes it highly unlikely that a customer could overcome the confusion resulting from the Credit Union's continued use of the marks. The Credit Union asserts that potential customers exercise a high degree of care in selecting a financial services provider.
The Court finds that potential customers of the Credit Union, or any financial service provider for that matter, are less likely than the average consumer to be confused regarding the source of the goods and services they are purchasing. The Court finds this to be the case even more so with credit unions because membership is limited only to a certain class of individuals. Therefore, the Court finds that this factor weighs in favor of the Credit Union.
After reviewing the evidence presented and the relevant factors, the Court finds that a genuine issue of material fact exists as to whether consumers are likely to be confused regarding the Credit Union's use of the "NWA" mark in its name. While the Airline makes a strong case in favor of such a finding, the evidence presented at this time does not convince the Court that a likelihood of confusion exists as a matter of law.
4. Affirmative Defense
The Credit Union claims that the Airline acquiesced to its use of the "NWA" mark. The defense of acquiescence requires proof of three elements: (1) that the Airline actively represented that it would not assert a right or a claim; (2) that the delay between the Airline's active representation and assertion of its right or claim was not excusable; and (3) that the delay caused the Credit Union undue prejudice. See Minnesota Specialty Crops, 2002 WL 1763999 at 11.
The Court finds that the Airline did not acquiesce to the continued use of the "NWA" mark by the Credit Union. As previously discussed, this Court found that summary judgment was not appropriate on the issue of whether an implied license existed with regard to the use of the "NWA" mark. If the fact finder were to find such a license existed, the defense of acquiescence would not even be available to the Credit Union. However, the Court need not consider such issues as the Credit Union has failed to present evidence that proves any of the elements of the defense.
5. Injunctive Relief
The Lanham Act grants the district court the "power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable." 15 U.S.C. § 1116(a). In this case, the Airline seeks a permanent injunction barring the Credit Union from using any of the marks at issue. The Court has already held that the Credit Union has violated, and will continue to violate, the Lanham Act by the use of the reverse red tail logo and images of the livery of the Airline's planes. As a predicate to that finding, the Court found that the Credit Union's use of those marks causes a strong likelihood of confusion among the public.
The object of the Lanham Act is to protect the public and the mark. A permanent injunction in furtherance of these goals is justified where a likelihood of confusion arises from a defendant's use of a mark. See United States Jaycees, 639 F.2d at 142. In light of this Court's decision regarding the Credit Union's violation of the Lanham Act, the Court finds that a permanent injunction fulfills the Lanham Act's purposes. Thus, the Credit Union is permanently enjoined from using the reverse red tail logo and images of the livery of the Airline's planes.
B. Federal and State Dilution Claims
The Credit Union has moved for summary judgment on the Airline's dilution claims brought pursuant to the Federal Trademark Dilution Act ("FTDA") and the Minnesota state anti-dilution statute. In order to show dilution, the Airline must show: (1) its marks are famous; (2) its marks are distinctive; (3) the Credit Union's use is a commercial use in commerce; (4) the use occurred after the Airline's marks became famous; and (5) the use caused dilution of the distinctive quality of the Airline's marks. See Northland Ins. Companies v. Blaylock, 115 F. Supp. 2d 1108, 1122 (D. Minn. 2000) (citing OBH, Inc. v. Spotlight Magazine, Inc., 86 F. Supp. 2d 176, 192 (W.D.N.Y. 2000)).
The Credit Union asserts that the Airline failed to prove that its marks are famous, had become famous before the Credit Union's first use of the marks, or that the Airline's marks are distinctive. The Credit Union also asserts that the Airline failed to produce any evidence that establishes actual dilution of the Airline's marks. The Airline counters that the record establishes that all of the marks at issue in this case are famous and distinctive. The Airline also contends that the Stitt survey results establish that consumers were confused regarding the source of the Credit Union's credit cards and those of U.S. Bank, a licensee of the Airline.
The Court finds that genuine issues of material fact exist with regard to the Airline's state and federal dilution claims. The focus of the Credit Union's argument is on whether the Airline has established actual dilution of its marks. As previously stated, the Court does not agree with all of the interpretations given to the Stitt survey results but finds that the consumer survey results can be interpreted as evidence of actual dilution. Accordingly, the Court denies summary judgment on the Airline's state and federal dilution claims.
C. Cybersquatting Claim
The Credit Union has moved for summary judgment on the Airline's claim brought pursuant to the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d)(1)(A). The ACPA is meant to protect "consumers and American businesses, to promote the growth of online commerce, and to provide clarity in the law for trademark owners by prohibiting the bad-faith and abusive registration of distinctive marks as Internet domain names with the intent to profit from the goodwill associated with such marks — a practice commonly referred to as 'cybersquatting.'" Northland Ins. Co., 115 F. Supp. 2d at 1123 (quoting Sporty's Farm L.L.C. v. Sportsman's Mkt., Inc., 202 F.3d 489, 495 (2d Cir. 2000)). The ACPA prohibits trafficking or using a domain name that is "identical or confusingly similar to" another's famous or distinctive marks. See 15 U.S.C. § 1125(d)(1)(A). The ACPA requires that a plaintiff prove the domain registrant had a bad faith intent to profit from a protected mark. See id.; see also Northland Ins. Co., 115 F. Supp. 2d at 1108.
The Court finds that the Credit Union is entitled to summary judgment on the Airline's ACPA claim. The Credit Union does not fit the cybersquatter profile, i.e., an individual registering multiple domain names and attempting to sell them to the highest bidder. See id. at 1124. Instead, the Credit Union registered domain names (nwafcu.org, nwafcu.com, and nwafcu.net) that corresponded to the name of its legitimate business. The Court finds that the Airline has failed to establish evidence of bad faith intent on the part of the Credit Union in registering the domain names. Even if the Court were to find some bad faith intent by the Credit Union to profit from the mark, the Court questions whether the use of the letters "NWAFCU" in a domain name would be confusingly similar to the "NWA" mark. Thus, the Court grants the Credit Union's motion for summary judgment as to the Airline's ACPA claim.
D. Tortious Interference Claim
The Credit Union has moved for summary judgment on the Airline's tortious interference claim. The elements of a tortious interference claim are: (1) the existence of a valid business expectancy; (2) defendant's knowledge of that expectancy; (3) intentional and improper interference by defendant caused a disruption or termination of the business expectancy; and (4) the disruption or termination was the proximate cause of plaintiff's damages. See Constr. Mgmt. Inspection, Inc. v. Caprock Communs. Corp., 301 F.3d 939, 941 (8th Cir. 2002).
The Airline asserts two bases for its tortious interference claim. First, the Airline asserts that the Credit Union sent a letter to U.S. Bank Chairman Jerry Grundhofer threatening legal action against U.S. Bank for use of the "NWA" mark. Second, the Airline asserts that the Credit Union interfered with the Airline's attempts to license its marks to a competing credit union, US Federal. The Credit Union contends that the Airline suffered no damages as a result of its contact with U.S. Bank.
The Court finds that ruling on the Credit Union's motion regarding this claim would be premature at this time. The Airline asserts that discovery has not been completed concerning its attempts to license its marks to US Federal. The Court agrees and reserves its right to rule on this motion in the future when discovery has concluded.
Conclusion
The Court hopes that the parties will consider the long and mutually beneficial relationship between the Airline and the Credit Union and will negotiate reasonably an amicable resolution of this dispute before a public trial is necessary. As the parties may already be aware, Chief Magistrate Judge Jonathan Lebedoff is available to assist in the negotiation of a settlement should the parties find such services to be helpful. If the Court may be of assistance in this matter, the parties should contact Lowell Lindquist, Calendar Clerk for Judge Donovan W. Frank, at 651-848-1296, or Mary Lenner, Calendar Clerk for Chief Magistrate Judge Jonathan Lebedoff, at 612-664-5120.
For the reasons stated, IT IS HEREBY ORDERED:
1. Plaintiff Northwest Airline Inc.'s Motion for Partial Summary Judgment (Doc. No. 52) is GRANTED IN PART and DENIED IN PART, as follows:
a. Plaintiff Northwest Airline Inc.'s Motion for Summary Judgment as to Counts 1 and 2 of the Amended Complaint is GRANTED regarding Defendant NWA Federal Credit Union's use of the reverse red tail logo and images of Plaintiff Northwest Airline Inc.'s planes' livery. Defendant NWA Federal Credit Union shall cease using the reverse red tail logo and images of Plaintiff Northwest Airline Inc.'s planes' livery within 90 days of the entry of this Order.
b. Northwest Airline Inc.'s Motion for Summary Judgment as to Counts 1 and 2 of the Amended Complaint is DENIED regarding Defendant NWA Federal Credit Union's use of the following marks: "NWA," "Wings," and images of the Airline's employees in its uniforms.
2. Defendant NWA Federal Credit Union's Motion for Summary Judgment (Doc. No. 62) is GRANTED IN PART and DENIED IN PART, as follows:
a. Defendant NWA Federal Credit Union's Motion for Summary Judgment is GRANTED as to Count 10 of the Amended Complaint.
b. Defendant NWA Federal Credit Union's Motion for Summary Judgment is DENIED as to all other counts of the Amended Complaint.
3. Defendant NWA Federal Credit Union's Motion to Exclude Plaintiff's Expert Report and Testimony of Jeffery Stitt (Doc. No. 57) is DENIED.