Civil Action No. SA-98-CA-1176-PM
January 10, 2000.
Pursuant to the consent of the parties filed on May 17 and May 18, 1999, the Court enters the following Order in connection with the parties' respective motions for summary judgment and related pleadings.
Docket nos. 37 and 38.
The Court has jurisdiction over plaintiff's service mark infringement claims and defendant's counterclaim for cancellation of plaintiff's service mark. 28 U.S.C. § 1331, 1332, 1338(a); 15 U.S.C. § 1121. The Court has supplemental jurisdiction over plaintiff's state law claim of dilution. 28 U.S.C. § 1367. Personal jurisdiction and venue have not been challenged and are proper. 28 U.S.C. § 1391(b) and (c).
II. PROCEDURAL HISTORY
This case concerns claims of alleged service mark infringement and dilution. On December 23, 1998, plaintiff, Amicus Communications, L.P. (hereinafter "plaintiff" or "Amicus" or "ACLP") filed its lawsuit under 5 U.S.C. § 1114 and 1125, Tex.Bus.Com. Code § 16.29 and the common law. Plaintiff asserts that defendant, Hewlett-Packard Co., Inc. (hereinafter "defendant" or "Hewlett-Packard" or "HP") uses the product name "PAVILION" in order to produce, market and sell its line of personal computers which feature software and design features to ease access to the internet and thereby infringes and dilutes ACLP's federally registered trademark PAVILION. ACLP uses the PAVILION mark in association with its provision of on-line communication services to affinity groups over the internet. ACLP claims HP's alleged illegal use of the PAVILION mark has resulted in damages and a likelihood of further damage and injury through declining sales, loss of good will and profits, and ACLP's loss of control over its own mark by reverse confusion. Pursuant to its verified original complaint, plaintiff seeks preliminary and permanent injunctive relief and damages. HP filed its answer on February 1, 1999.
Service marks are registered in the same manner and with the same effect as are trademarks, 15 U.S.C. § 1053. For purposes of determining infringement, there is no difference between a trade mark and a service mark. Park `N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 191 n. 1, 105 S.Ct. 658 (1985) (Lanham Act); Star Financial Services, Inc. v. AASTAR Mortgage Corp., 89 F.3d 5, 39 U.S. P.Q.2d 1556 (1st Cir. 1996); Lawfinders Associates, Inc. v. Legal Research Center, Inc., 65 F. Supp.2d 414, 425 (N.D. Tex. 1999).
Docket no. 1 at 1, 16-19.
Id. at 5.
Id. at 19-20.
Docket no. 4.
On May 17, 1999 the Court held a hearing on ACLP' motion for preliminary injunction. Prior to the hearing, each side filed affidavits, declarations, deposition excerpts and briefs. On May 17, the Court heard arguments from the parties as to their respective positions on the propriety of preliminary injunctive relief. Following the hearing, the Court entered a schedule to govern the parties' respective submission of additional matters to the Court and, with the concurrence of the parties, provided that any hearing to consider ACLP's testimony regarding, most particularly, likelihood of confusion would be held on Thursday, May 27, 1999, following the Court's review of the evidentiary submissions of the parties. At the May 27, 1999 evidentiary hearing, two witnesses, Bernard Lane and Dennis Passovoy, testified for ACLP. The parties agreed to confer regarding testimony from a third witness and, on June 7, 1999, ACLP tendered the deposition testimony of Dr. Joseph Picken, completing the evidence on the preliminary injunction. On June 11, 1999, the Court entered its Findings of Fact and Conclusions of Law which denied ACLP's request for a preliminary injunction.
Docket no. 10.
May 27, 1999 hearing, plaintiff's Exhibits 34 and 35.
On July 15, 1999 the Court granted HP's motion to amend its answer to include a counterclaim for cancellation of ACLP's service mark. HP filed its amended answer and counterclaim for cancellation on July 22, 1999. ACLP filed its answer to the counterclaim on August 5, 1999.
Docket no. 74.
Docket no. 76.
Docket no. 79.
Following the expiration of pre-trial discovery, both sides filed motions for summary judgment and related pleadings. Specifically, ACLP filed a motion for partial summary judgment seeking dismissal of HP's counterclaim for cancellation, a statement of undisputed facts and exhibits in support. HP has filed a response in opposition, a statement of undisputed facts, and objections to ACLP's evidence, to which plaintiff has replied. HP has filed a cross-motion for summary judgment seeking cancellation of ACLP's registration and dismissal of the complaint, a statement of undisputed facts and three declarations in support (Dr. Glazer, Ms. Ellis and Ms. Hurst). ACLP has filed a response to HP's motion with exhibits in support, a motion to strike the declaration of Dr. Glazer and a Rule 56(f) motion for continuance in order to depose Dr. Glazer, to which HP has replied. HP has filed combined motions for partial summary judgment on the issue of tacking and on the third count of the complaint alleging a violation of the Texas anti-dilution statute, supported by the three-volume declaration of Mr. Frankel and a statement of undisputed facts. ACLP has filed a response with exhibits in support, to which HP has replied. HP has filed a combined motion for partial summary judgment on plaintiff's claims for monetary recovery, motion to strike the jury demand or, alternatively, motion to strike plaintiff's demand for attorney's fees, along with a statement of undisputed facts. Plaintiff has filed a response with exhibits in support, to which HP has replied. Finally, HP has moved to strike the declaration of Professor Lemley submitted in the consolidated exhibits in response to defendant's motions for summary judgment and in reply to ACLP's own motion for summary judgment to which plaintiff has responded. This Order addresses the pending motions for summary judgment and related pleadings.
Docket no. 82.
Docket no. 91.
Docket no. 93.
Docket no. 94.
Docket no. 103.
Docket no. 91.
Docket no. 95.
Docket no. 96.
Docket no. 103. ACLP filed consolidated exhibits in support of its reply to HP's cross-motion for summary judgment and in support of its response to HP's motions for partial summary judgment on the issue of tacking, the anti-dilution statute, monetary recovery and HP's motions to strike plaintiff's jury demand or, alternatively, request for attorney's fees. These consolidated exhibits were filed without receiving a separate docket number.
Docket nos. 106 and 107, respectively.
Docket no. 110 (opposition to Rule 56(f) statement) and docket no. 112 (reply).
Docket no. 87.
Docket no. 90. Two of the three volumes of this declaration were filed as sealed.
Docket no. 88.
Docket no. 104.
Docket no. 109.
Docket no. 85.
Docket no. 86.
Docket no. 105.
Docket no. 113.
Docket nos. 111 and 119, respectively.
1. Should ACLP's motion for partial summary judgment to dismiss HP's counterclaim for cancellation of ACLP's service mark be granted?
2. Should HP's objections to ACLP's evidence in support of ACLP's motion for partial summary judgment seeking the dismissal of HP's counterclaim be sustained?
3. Should HP's cross-motion for summary judgment seeking cancellation of ACLP's service mark registration and dismissal of ACLP's complaint be granted?
4. Should ACLP's objections to HP's evidence in support of HP's motion for summary judgment seeking cancellation of ACLP's service mark be sustained?
5. Should HP's combined motion for partial summary judgment on the issue of tacking and the dismissal of the third claim in ACLP's complaint alleging dilution be granted?
6. Should HP's combined motion for partial summary judgment on ACLP's claims for money damages and attorney's fees, motion to strike the jury demand and motion for partial summary judgment on the defense of laches be granted?
Unless otherwise noted, only undisputed facts are relied upon in making the decisions on the pending summary judgment motions. As noted by the citations in the footnotes, additional facts, taken from the preliminary factual findings contained in the Order denying the preliminary injunction, are included for purposes of continuity but are not considered in deciding the summary judgment motions unless they are undisputed in the summary judgment proof.
ACLP filed its intent to use (ITU) application for a United States Trademark registration for the mark PAVILION on August 2, 1994. ACLP originally sought to register PAVILION for "electronic communication services, namely on-line services for selected markets which include educational institutions and for-profit, non-profit, and affinity groups." In January 1995, ACLP first changed the recitation of services from "electronic communication services, namely on-line services" to "providing . . . access to a national computer information network. . . ." Later in January 1995, ACLP made a second change to the recitation of services to read "providing . . . access to an international digital electronic information and communication network. . . ." Both changes were made at the recommendation of the examiner, because the USPTO was "changing the definitions," and were made "[i]n order to obtain approval of the application." The change in description included a change in the classification of the mark from class 38 to class 42. ACLP's application was published for opposition by the USPTO and no opposition was filed.
Docket no. 82, appendix B, exhibit 1; docket no. 87 at 3; docket no. 1, Complaint, exhibit A.
Docket no. 82, appendix B, exhibit 1.
Docket no. 82, appendix B, exhibit 2.
Docket no. 82, appendix B, exhibit 2; docket no. 1, Complaint ¶ 7; plaintiff's consolidated exhibits, exhibit 9.
Docket no. 1, Complaint; docket no. 114, exhibit 3 (Cahn deposition).
Docket no. 114, exhibit 3 (Cahn deposition).
Docket no. 87, appendix B, exhibit 4.
The United States Patent and Trademark Office ("USPTO") registration certificate indicates that a federal service mark issued to ACLP for PAVILION®, typed in block letters, for International Class 42 (Miscellaneous Services) pursuant to U.S. Trademark Registration No. 1, 974, 286. The mark applies to the services of:
[p]roviding educational institutions and for-profit, non-profit and affinity groups access to an international digital electronic information and communication network for the transfer and dissemination of a wide range of information.
Docket no. 82, appendix B, exhibit 7; docket no. 1, Complaint, ¶ 8 and exhibit A; docket No. 36, Lane Declaration, exhibit D.
Docket no. 82, appendix B, exhibit 7; docket no. 1, Complaint, exhibit A.
In the meantime, HP test-marketed its then-newly developed home computer in a single nationwide retailer, Circuit City, in April 1995. On May 9, 1995 HP received an in-house legal opinion clearing the use of the mark PAVILION as a brand name for its home computer. On June 12, 1995 — approximately ten months after the filing of the ACLP ITU application — HP filed its trademark application for the PAVILION mark for International Class 9 (Goods) alleging a first use in commerce of August 14, 1995. The description of the goods reads:
Each home computer sold in the market test was labeled "HP Multimedia PC." Docket No. 25, defendant's brief at 2. Docket No. 36, McKinney deposition, exhibit 29.
Docket no. 82, appendix B, exhibit 11; docket No. 36, Lemley declaration, exhibit D.
Docket no. 82, appendix B, exhibit 8; docket No. 36, Braun deposition, exhibit 68; docket no. 96, exhibit 1. HP filed a trademark application on June 12, 1995, as amended on May 24, 1996 and July 22, 1996. See also Docket No. 27, Hurst affidavit, exhibit A.
Computers, audio and video broadcast display and transmission apparatus; broadcast television, cable television and telecommunications apparatus; computers and multimedia transmission equipment and systems in the fields of consumer electronics and home entertainment. . . .
Docket no. 82, appendix B, exhibit 8.
In August 1995, HP-PAVILION PCs were launched nationwide through placement in nine nation-wide retail outlets. On May 30, 1996 — or, 16 days after ACLP's service mark issued and approximately eight months after Mr. Lane became aware of the HP-PAVILION — ACLP wrote a letter to HP protesting HP's use of the name PAVILION as a brand name. In October 1996 HP's application was published for opposition. On January 31, 1997 ACLP filed its opposition to the HP trademark application. The opposition proceeding is still pending but has been stayed pending the disposition of this lawsuit.
Docket No. 96, Hurst declaration, exhibit 1; docket no. 90, Frankel declaration, exhibits 20, 28, 29 and 31, ¶ 3; docket no. 36, McKinney deposition, exhibit 29.
In his deposition, Lane testified he may have been aware of HP-PAVILION in August 1995. Docket No. 27, Hurst affidavit at 1.
Docket no. 114, exhibit 3 (Cahn deposition); docket no. 105 at 15 (refers to prel. inj, exhibit 16 (Lane declaration)); docket No. 36, Lane Declaration ¶¶ 19 and 21 and exhibit G; docket No. 36, Mosleh deposition, exhibit 17. HP responded that it considered that there would be little likelihood of confusion between the two uses but offered to negotiate a resolution with ACLP Docket No. 36, Lane declaration, exhibit H.
Docket no. 82, appendix B, exhibit 9; docket No. 36, Lane declaration, exhibit I.
Docket no. 82, appendix B, exhibit 10.
V. SUMMARY JUDGMENT STANDARDSThe standard to be applied in deciding a motion for summary judgment is set forth in Federal Rule of Civil Procedure 56, which provides in pertinent part as follows:
The judgment sought shall be rendered forthwith 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 judgment as a matter of law.
Mere allegations of a factual dispute between the parties will not defeat an otherwise proper motion for summary judgment. Rule 56 requires that there be no genuine issue of material fact. A fact is material if it might affect the outcome of the lawsuit under the governing law. A dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Therefore, summary judgment is proper if, under governing laws, there is only one reasonable conclusion as to the verdict; if reasonable finders of fact could resolve a factual issue in favor of either party, summary judgment should not be granted.
Anderson, 477 U.S. at 249.
The movant on a summary judgment motion bears the initial burden of providing the court with a legal basis for its motion and identifying those portions of the record which it alleges demonstrate the absence of a genuine issue of material fact. The burden then shifts to the party opposing the motion to present affirmative evidence in order to defeat a properly supported motion for summary judgment. All evidence and inferences drawn from that evidence must be viewed in the light favorable to the party resisting the motion for summary judgment. Thus, summary judgment motions permit the Court to resolve lawsuits without the necessity of trials if there is no genuine dispute as to any material facts and the moving party is entitled to judgment as a matter of law.
Celotex, 477 U.S. at 323.
Anderson, 477 U.S. at 257.
Hibernia Nat'l Bank v. Carner, 997 F.2d 94, 97 (5th Cir. 1993).
See Fields v. City of South Houston, Texas, 922 F.2d 1183, 1187 (5th Cir. 1991).
VI. DISCUSSIONA. HP's Counterclaim Seeking Cancellation of ACLP's Service Mark
Approximately four months after the initiation of this lawsuit, HP amended its answer to include a counterclaim seeking cancellation of ACLP's service mark on the ground that "the mark has never been used for the services described in the registration." HP has moved for summary judgment on its counterclaim, arguing, in sum, that the services covered by ACLP's registration for PAVILION® are limited to providing customers with dial-up internet service provider ("ISP") connections and that because ACLP admits that ACLP has never provided internet connectivity, the service mark has not been used in commerce as required by 15 U.S.C. § 1127. ACLP also has moved for summary judgment seeking dismissal of HP's counterclaim arguing, in sum, that HP's counterclaim for cancellation of the mark should be dismissed as a matter of law because the counterclaim is procedurally barred and because ACLP has offered services within the description of services contained in the trademark registration.
Docket no. 55 at 1.
1. Procedural Bar
As a threshold matter, ACLP argues that HP was required to seek cancellation of ACLP's mark in the USPTO Trademark Trial and Appeals Board ("TTAB") opposition proceeding brought by ACLP and HP's failure to assert its compulsory counterclaim in that forum procedurally bars HP from raising its counterclaim in this lawsuit. ACLP also argues that abandonment is an affirmative defense that must be pleaded but HP's amended answer does not use the word "abandonment," cite 15 U.S.C. § 1127, or plead the two elements of abandonment. Thus, ACLP argues that HP has not sufficiently pleaded the affirmative defense. On the other hand, HP argues, in sum, that the compulsory counterclaim rule applicable in TTAB proceedings does not govern federal court infringement lawsuits.
It is undisputed that HP did not challenge the registration of PAVILION® before the TTAB. It is also undisputed that an attack on the validity of a trademark or service mark registration is a compulsory counterclaim in a TTAB proceeding, as provided by TTAB Rule 2.106:
A defense attacking the validity of any one or more of the registrations pleaded in the opposition shall be a compulsory counterclaim if grounds for such counterclaim exist at the time of when the answer is filed.
The official comments to Rule 2.106 clearly state that the Rule "appl[ies] only to proceedings before the [TTAB]; [it] does not and could not affect the powers over registrations conferred upon the Federal Courts by section 37 of the Trademark Act." The instant case is not a review of TTAB registration proceedings; indeed, it is undisputed that the TTAB opposition proceedings regarding the HP mark are still pending. Moreover, as argued by HP, the Fifth Circuit has refused explicitly to accord preclusive effect to TTAB proceedings, a position inconsistent with ACLP's argument that the TTAB's compulsory counterclaim rule, which is premised on the doctrines of collateral estoppel and res judicata, should apply in federal court. ACLP cites no instance of Rule 2.106 being applied in a federal court infringement proceeding. Two of the three cases cited by ACLP deal with federal court review of TTAB registration proceedings pursuant to Section 21 of the Lanham Act and not infringement proceedings filed in federal court. The third case relied upon by ACLP discusses estoppel but does not address TTAB Rule 2.106.
Trademark Opposition and Cancellation Proceedings: Counterclaims, 46 Fed.Reg. 6934, 6937 (1981).
American Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494 F.2d 3, 9 (5th Cir. 1974) ("The effect of the dismissal with prejudice of HLIC's registration action depends upon whether the present suit is based upon the same cause of action. A claim for service mark and trade name infringement and a claim for registration present different questions of law and fact, and the relief sought in one action is fundamentally different from the relief sought in the other. . . . While the same parties are fighting over the same word in the two suits, in substance, the causes of action are not the same. In this circumstance, the dismissal warrants no res judicata treatment. . . . And consequently, it raises no collateral estoppel specter either, because the dismissal without findings does not bind the parties on any issues which have arisen in this different cause of action. . . . Similarly, the prior dismissal has no res judicata or collateral estoppel effect on HLIC's counterclaim for cancellation.") (citations omitted).
Valley Disposal, Inc. v. Central Vermont Solid Waste Management District, 113 F.3d 357 (2d Cir. 1997).
Even if this Court were to conclude that Rule 2.106 does have preclusive effect and a counterclaim not brought in a TTAB proceeding — without a finding by the TTAB that it could not be interposed there — cannot be brought in federal court, Rule 2.106 on its terms does not apply to HP's counterclaim for cancellation based on abandonment. A prima facie case of abandonment exists after three years of non-use. Three years since the issuance of ACLP's registration on May 14, 1996 had not expired on March 21, 1997 when HP filed its answer in the TTAB proceedings. The official comments to Rule 2.106 make it clear that:
Docket no. 96, Hurst decl. ¶ 3 and exhibit 2.
[t]he cause of action must have matured by the date of filing of the answer . . . in order for the counterclaim to be compulsory . . . Thus, if a cause of action, such as abandonment does not exist until after the date of the answer, it is not a compulsory counterclaim.
Trademark Opposition and Cancellation Proceedings: Counterclaims, 46 Fed. Reg. at 6938 (emphasis added).
Analogously, the Fifth Circuit construes the compulsory counterclaim rule applicable to federal court proceedings, Rule 13(b), Fed.R.Civ.P., in a similar fashion, holding that "a counterclaim that has not matured at the time the pleader serves his pleading is not compulsory." The earliest date on which HP could have made a viable abandonment challenge was May 14, 1999 — three years after the issuance of ACLP's registration and one month after the TTAB had suspended its proceedings in favor of this lawsuit. Within three weeks of the passing of the three-year period for a prima facie case of abandonment, HP filed its motion seeking leave to assert its counterclaim in this lawsuit.
Young v. City of New Orleans, 751 F.2d 794, 801 (5th Cir. 1985) ("`A counterclaim acquired by the defendant after he has answered will not be considered compulsory, even if it arises out of the same transaction as does the plaintiff's claim.' 6 C. Wright A. Miller, Federal Practice and Procedure § 1411 at 55 (1971)").
Docket no. 82, Appendix B, exhibit 10.
With respect to ACLP's argument that if HP had intended to plead abandonment it should also have pleaded it as an affirmative defense in its answer, ACLP has cited no case that has held that abandonment of a registration must be pleaded as an affirmative defense. If HP prevails on its counterclaim for cancellation, it has negated a predicate element of count one of the complaint — an existing registration — which would require dismissal of that count.
In sum, ACLP's motion for partial summary judgment on the ground of procedural bar is denied.
2. Abandonment of the Registration
ACLP has moved for summary judgment on HP's counterclaim for cancellation of the PAVILION mark, arguing, in sum, that the certificate of registration is prima facie evidence of validity of the mark and that HP's counterclaim for cancellation is contingent upon limiting the services covered by the mark to dial-up ISP services. HP opposes ACLP's motion to dismiss its counterclaim and has filed a cross-motion for summary judgment arguing, in sum, that ACLP never used the PAVILION mark to signify the source for dial-up internet access; ACLP abandoned the mark; the registration should be canceled; and summary judgment should be granted dismissing the first count of ACLP's complaint. HP further argues that, absent its registration, ACLP cannot show that it used the mark in commerce prior to the date of HP's constructive and actual use of the mark in commerce; thus, ACLP cannot show priority of common law use of the mark and summary judgment should be entered dismissing the remaining counts of ACLP's complaint.
A registered mark is deemed abandoned:
When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for three consecutive years shall be prima facie abandonment.
Once non-use for three consecutive years is established, "the burden to demonstrate that circumstances do not justify the inference of intent to resume use" shifts to the registrant. To meet the burden, the registrant must prove activities sufficient to excuse the non-use. If the registrant does not meet its burden, the federal registration must be canceled. A mark is abandoned even though it is used on goods or services in commerce if the use concerns services that are not within the scope of those described in the registration.
Exxon Corp. v. Humble Exploration Co., 695 F.2d 96, 99 (5th Cir.), rehearing denied 701 F.2d 173 (5th Cir. 1983) (two year time period applicable at time of this case).
Imperial Tobacco Ltd. v. Philip Morris, Inc., 899 F.2d 1575, 1581 (Fed. Cir. 1990) ("As in the Exxon case, we also conclude that an affirmative desire by the registrant not to relinquish a mark is not determinative of the intent element of abandonment under the Lanham Act. Nothing in the statute entitles a registrant who has formerly used a mark to overcome a presumption of abandonment arising from subsequent non-use by simply averring a subjective affirmative "intent not to abandon.").
15 U.S.C. § 1057(b), 1115(a), 1127; Imperial Tobacco Ltd. v. Philip Morris, Inc., 899 F.2d at 1577; Miller Brewing Co. v. G. Heileman Brewing Co., 561 F.2d 75, 79 (7th Cir. 1977) (registration description of "beer with no available carbohydrates" did not cover any beer, even beer with low available carbohydrates).
In order for HP to establish a prima facie case of abandonment, HP must show that ACLP has not used PAVILION® to signify the source of the services described in the registration certificate in the last three years. On summary judgment, HP must establish that there is no genuine issue of material fact that ACLP has not so used the PAVILION mark to signify the source of services described in the registration. In order for ACLP to defeat HP's summary judgment and to establish its own case for summary judgment it must show that there is no genuine issue of material fact that HP's counterclaim "is based on an unsupportably narrow conception of the description of services," that ACLP has used PAVILION® in connection with services described in the registration, and an intent to resume use. Therefore, to resolve HP's motion for summary judgment on its counterclaim or to resolve ACLP's motion for partial summary judgment to dismiss the counterclaim, the Court must address the meaning of the registration. HP argues that the determination of the meaning of a service mark registration "generally is a question of law." Before addressing that issue, the Court resolves challenges to the summary judgment proof.
Docket no. 82 at 4.
Exxon Corp. v. Humble Exploration Co., Inc., 695 F.2d at 102-03.
Docket no. 91 at 14. ACLP appears to agree, as it seeks judgment as a matter of law as to the meaning of its registration. But see docket no. 103 at 7.
a. challenges to evidence
evidence supporting ACLP's motion for partial summary judgment
Docket no. 94.
Docket no. 82, appendix B.
Although ACLP has not tendered exhibit 5 with an authenticating declaration, HP does not contend that exhibit 5 is not an accurate copy of the declaration stating use which was filed with the USPTO. The declaration stating use does list its attachments; the internal exhibits 1-12 match that list of attachments; and all the pages are noted to bear consecutive bates-stamped numbers. HP finds fault with the exhibit 5 because it does not explain what its internal exhibits represent or mean. That is a defect that goes to the weight to be afforded the internal exhibits. Exhibit 7 is a copy of the service mark registration in suit, a copy of which is appended to the complaint. HP admitted in its answer that the copy appended to the complaint was true and correct. HP does not argue that the copy of the registration offered by ACLP on summary judgment is not an accurate copy of what was issued by the USPTO or appended to the complaint.
Docket no. 1, exhibit A.
Docket nos. 4 and 76 at 2.
(2) exhibit 14 — overruled; exhibit 15 — sustained on the ground that it has not been authenticated.
(3) exhibit 13 on the ground it is irrelevant — overruled but HP's objections will be considered in deciding what weight, if any, may be afforded to the exhibit.
(4) exhibits 21-24 on the ground they are irrelevant — overruled but HP's objections will be considered in deciding what weight, if any, may be afforded to the exhibits.
(5) exhibits 28-29 on the ground they are inadmissible under the parole evidence rule — overruled but HP's objections will be considered in deciding what weight, if any, may be afforded to the exhibits.
(6) exhibit 30 on the ground it is inadmissible under the parol evidence rule — overruled, but HP's objections will be considered in deciding what weight, if any, may be given to the exhibit.
Dr. Glazer's declaration
ACLP has moved to strike the declaration of Dr. Glazer. In brief, in his declaration, Dr. Glazer offers testimony on the meaning of the word "access" as it relates to the internet. ACLP has moved to strike the declaration on the ground that HP's previously filed designation summarizing the matters about which Dr. Glazer would provide expert opinions did not include an explication on the meaning of "access" to the internet.
Docket no. 106.
HP's designation of expert witnesses however included the following description of Dr. Glazer's opinions: "consumer and firm behavior in the internet . . ." and "the history of commercial activity and marketing on the internet . . . as it relates to the . . . the proper interpretation of the description of services covered by plaintiff's trademark registration." This summary would include an opinion on the meaning of "providing" "access" to the internet referred to in "the description of services covered by plaintiff's trademark registration. Finally, the designation reserved the right of Dr. Glazer to comment on the expert testimony of ACLP's witnesses, Professor Lemley, Dr. Picken and Mr. Lane. Therefore, ACLP's motion to strike the declaration of Dr. Glazer is denied. ACLP's corollary request that HP's cross-motion for summary judgment be held in abeyance and that a continuance be granted in order that ACLP might depose Dr. Glazer and ask its own expert to review the bases of Dr. Glazer's opinion is denied.
Docket no. 106, exhibit 1 at 2.
Docket no. 106, exhibit 1 at 2. See also docket no. 114 at ¶¶ 11-15.
Docket no. 106.
Docket no. 107.
Professor Lemley's declaration
HP has moved to strike the declarations of Professor Mark Lemley on the following grounds: they contain improper legal conclusions which invade the province of the court; they contain irrelevant opinions on the adequacy of HP's trademark search; opinions on the proximity of goods and expansion are outside of the area of the witness' expertise; opinions on evidence of confusion are not helpful to the fact finder; and opinions on HP's internal guidelines for clearing a mark are irrelevant and assert improper legal conclusions.
Docket no. 111.
After a thorough review of HP's arguments and the declarations, with appended expert witness designation and resume, the Court overrules the objections. Professor Lemley appears qualified to render the opinions he offers in his declarations. His opinion on the adequacy of HP's trademark search is relevant to the likelihood of confusion analysis and ACLP's request for damages. His opinions on the relationship of ACLP's services and HP's goods are relevant to both infringement and dilution. His testimony about the e-mails which, ACLP argues, show confusion, are similarly relevant. None of the opinions appear to invade the province of the jury or the Court and HP's objections in that vein appear to be points to be made on cross-examination regarding the weight to be afforded to the testimony.
compliance with the scheduling order
Finally, in its reply briefs, HP argues that ACLP's failure to comply with the Pretrial Order, which requires a party opposing summary judgment to attach a "short, and concise statement of the material facts that, according to the opposing party, contain the issues to be tried," means that "all material facts set forth in the statement required to be served by the moving party may be deemed admitted." HP particularly cites to note one included in each of ACLP's responses which, in essence, directs the Court to the entire record before the Court.
Docket nos. 109, 112 and 113.
Docket no. 5, ¶ 10.
Docket nos. 103, 104 and 105 at 1 n. 1.
The Court agrees that had ACLP submitted the opposition statement of issues and supporting evidence required by the order, the work of the Court and HP in properly identifying and joining the controverted issues would have been facilitated. As in Perez v. Alcoa Fujikara, Ltd., the Court will make no concessions to plaintiff when it fails to refute factual arguments with appropriately specific citations to the record. But, unlike the non-movant in Oliver v. United States, ACLP has not totally failed to properly challenge all of movant's facts, in argument if not through the filing of an opposition statement.
969 F. Supp. 991, 1001 n. 4 (W.D.Tex. 1997).
44 F. Supp.2d 821, 823 (W.D.Tex. 1999).
In sum, the portions of HP's replies which ask that HP's motions for summary judgment and partial summary judgment be granted on procedural grounds due to ACLP's failure to comply with the Court's Scheduling and Pretrial Order are denied.
Docket nos. 109, 112 and 113.
b. description of services in PAVILION® registration
As noted, with the PAVILION mark, ACLP obtained registration for the service of:
[p]roviding educational institutions and for-profit, non-profit, and affinity groups access to an international digital electronic information and communication network for the transfer and dissemination of a wide range of information.
Docket no. 1, Complaint, ¶ 8, exhibit A.
The Trademark Act, regulations and cases require that the description of services be specific and use common language. HP argues that the common meaning of the description of services in ACLP's registration is providing a dial-up connection to the internet. Specifically, HP argues that "providing" means supplying; "international digital electronic information and communication network" means the internet; and that the "common understanding" of supplying "access" to the internet from mid-1995 to the present is providing a dial-up connection to the internet. HP argues that ACLP has never provided a dial-up connection to the internet and, thus, has abandoned its registration through non-use. HP further argues that when the USPTO directed ACLP to change its description from covering "on-line services" to "providing access," the USPTO was indicating that the PAVILION registration would be limited to "access" but not merely content. Therefore, HP argues that ACLP's attempt to "get content back by arguing that its registration actually covers putting up advertising web pages and links to those web pages" must be rejected.
15 U.S.C. § 1057(b); Trademark Rule 2.32(a)(1)(6), 37 C.F.R. § 2.32(a)(1)(6) (requiring that an application specify "particular" goods or services); Trademark Manual of Examining Procedure §§ 804.01 ("The identification of goods or services should set forth common names, using terminology that is generally understood."), 1301.05 ("The major requirements for an identification of services to be acceptable are: . . . (2) it must use the common name or terminology for the services, so as to be readily understandable. . . .") . .
Docket no. 96, Glazer declaration, ¶ 3.
Docket no. 91 at 14; American Heritage Dictionary at 1102 (3rd ed. 1999).
Docket no. 91 at 14-15; docket no. 96, Hurst declaration, exhibit 9 (Lane deposition at 474:3-12 indicating that Mr. Lane agrees with HP's interpretation of this portion of the registration).
Docket no. 91 at 15; docket no. 96, Glazer declaration, ¶¶ 3-11.
Docket no. 112 at 14. HP does not allege fraud in the application process.
ACLP agrees that providing a dial-up access to the internet is covered by the registration, concedes that it has never provided a dial-up connection to the internet, but denies that, at the time it obtained the PAVILION® mark, "access" meant only providing a dial-up connection to the internet. ACLP argues that its activity of marketing and supplying an internet-based advertising service under the PAVILION mark has provided "access" within the scope of the registration. Specifically, ACLP asserts that its hosting of a web site atwww.pavilion.com, which provides visitors to that site "access" to information available on the internet, and the hypertext links between sites use "the functionality of the World Wide Web to provide multiple users `access to' a computer network `for the transfer and dissemination of a wide range of information.'"
Docket no. 79, Answer to counterclaim, ¶ 10 (ACLP admits "it has not advertised or sold to affinity groups dial-up internet access"); docket no. 96, Hurst declaration, exhibit 9 (Lane deposition at 472:23-473:10; 475:8-14; 477:19-478:6), exhibit 7 (Aroian deposition at 304:-306:22). ACLP once considered acquiring an internet service provider or bundling the software and service of an ISP with ACLP's own services, but those plans have not come to fruition. Docket no. 96, Hurst declaration, exhibit 7 (Aroian deposition at 270:8-274:25 and exhibit 19).
Docket no. 82 at 7-8.
The USPTO's certificate of registration of PAVILION® is prima facie evidence of the validity and registration of that mark and of ACLP's ownership of and exclusive right to use that mark in commerce. Although valid registration of mark does not create significant substantive rights it does provide procedural advantage in that it creates presumption that statutory prerequisites to valid registration have been met. ACLP filed an ITU application to register the PAVILION mark. In an ITU application, registration will not be granted unless and until applicant files a verified statement, together with specimens, that it has used the mark in commerce. ACLP's PAVILION application was examined at least twice to insure that it met the legal criteria for issuing a trademark: at least once before the ITU application was issued for publication and again after the submission of the declaration of use.
15 U.S.C. § 1127 provides, in part: For purposes of this chapter, a mark shall be deemed to be in use in commerce — . . . (2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce. . . .
Docket no. 82, appendix B, exhibits 1, 2, 3. The examiner's amendments were made on two different dates in January 1995 based on two separate telephone conversations with ACLP's representative which suggests two examinations of the application prior to the declaration of use.
Docket no. 82, appendix B, exhibit 6. Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1190 (6th Cir. 1988); Eastman Kodak Co. v. Bell Howell Document Management Products Co., 994 F.2d 1569, 1573 n. 4 (Fed. Cir. 1993) ("Examination of the statement of use follows the same procedural course as the initial examination of the application under Trademark Rule 2.61 et seq., 37 C.F.R. § 2.61 et seq. TEG Section A.9.a.).
HP's assertion that ACLP has never used the PAVILION mark in commerce to offer services within the scope of the registration is a collateral attack on the USPTO's approval of ACLP's application and statement of use. The USPTO "accepted in all respects" the statement of use and issued the registration. Inferentially and necessarily, the USPTO concluded that the services for which the mark was used fell within the scope of the registration. HP counters that the acceptance of the statement of use by the USPTO did not mean that the examiner closely examined and approved the use in commerce, citing to § 901.01 of the Trademark Manual of Examining Procedure which provides, inter alia, that:
Docket no. 82, appendix B, exhibit 6.
Docket no. 82, appendix B, exhibit 6.
The Office will not inquire into the sufficiency of an applicant's or registrant's use in commerce in the examination of applications, amendments to allege use, statements of use, affidavits of use or renewals unless the specimens or other evidence of record clearly raise a question concerning the applicants or registrant's use. The consideration of whether a particular use satisfies the statutory definition is one appropriate to an inter partes proceeding.
McCarthy notes that there are four inter partes proceedings: opposition, cancellation, interference and concurrent use proceedings. HP did not oppose ACLP's mark prior to its issuance. E.g., 4 McCarthy on Trademarks and Unfair Competition, chapter 20 (4th ed. 1999).
Although the USPTO examined the statement of use and found it to be adequate, the Court will further examine the statement of use and the evidence of use in the record to address HP's argument that ACLP's uses do not fall within the scope of the registration.
ACLP's statement of use included a USA Today article which described ACLP's services, used "access" to describe connections to information within web sites, and expressly stated that subscribers to Alumnet "must already have internet access." As depicted in attachments to the statement of use, a "pavilions" button was present on Alumnet web sites. It is not contested that the "pavilions" button provided and provide hypertext links to the PAVILION® advertising site.
As referenced in the Findings of Fact denying issuance of a preliminary injunction and as illustrated in examples of the uses of the mark submitted to the USPTO, ACLP's uses of the mark included such uses as "People's Pavilion" and "Pavilions" as well as "Pavilion." Docket no. 82, appendix B, exhibit 5. These uses of variations of the mark are material to an assessment of likelihood of confusion.
HP has not contested the links, but has contested priority of use.
HP's summary judgment evidence on the meaning of "access" establishes that the USPTO settled on definitions of "access" in this expanding field in its April 1999 amendments to the Trademark Acceptable Identification of Goods and Services Manual, well after the issuance of ACLP's mark. Dr. Glazer's declaration establishes only that the "typical" consumer in 1995-1996 would understand the phrase "providing access" to mean, "first and foremost," providing a dial-up connection to the internet:
I have been asked to render an opinion as to the meaning a typical consumer or business in 1995-1996 would give to the phrase "access to an information network" (such as the internet). It is my opinion that "access" to the internet clearly meant then (and, indeed, in large measure still does today) first and foremost the provision of a "dial-up" connection to the internet in the sense of being an internet service provider (or ISP). . . . the notion of internet "access" has never meant the mere provision of information content (such as a web site).
Docket no. 96, ¶ 3 (underlining in original).
Dr. Glazer's declaration reinforces the conclusion that standardization of terminology is important to this evolving industry and that "there is a material difference (in consumer perceptions regarding internet functions) between" connecting to the web (an ISP) and navigating the web (an OSP or on-line service provider) — a conclusion also of likely importance in assessing likelihood of confusion. But, the terminology used in ACLP's registration, as reflected in the history of HP's own DeepCanyon, are matters established and reviewed by the USPTO and not the "typical consumer," even though common meanings are to be respected. HP's own summary judgment evidence shows that in the period of 1994-1996 either an ISP or an OSP might provide "content" as well as "access." The 95/1 examination notes of the USPTO addressing "link providers versus content providers" merely confirms that classification is difficult, that "provision of computer access and provision of material being accessed are two different and severable services that should not be confused," but does not show that, at the time ACLP's mark issued, that "access" was limited to dial-up connectivity. Specifically, HP's summary judgment evidence does not establish that "access" did not include web site navigation and hyperlinking. Without such evidence, HP is not entitled to summary judgment on the grounds of non-use. On the other hand, although ACLP has presented evidence that "access" has been understood by some to include navigation of the web after a connection has been made, its evidence appears to underline the factual dispute without resolving it.
Docket no. 96, ¶ 11.
Docket no. 96, Para; 3, 11, 12. For example, the March 1997 10-k report of PSI Net, Inc. uses the phrase "access services" to include "access" beyond that of internet connectivity. The April 1996 10-k report of UUNet, Inc. similarly uses "internet access options" to include web services as well as connectivity. Dr. Glazer's declaration does not expressly address "hyperlinking" as an aspect of access.
Docket no. 91 at 17 and docket no. 96, exhibit 5 (Hurst declaration).
Docket no. 82, appendix B, exhibits 5, 17, 18, 19, 20 and 21; Prel. Inj. Ex., Decl. of Lane ¶¶ 12-15. At least one other court has used the term "access" to describe a person's navigation from site to site on the internet using a hyperlinking mechanism. MTA v. CTIA, 929 F. Supp. 473, 477 (D.D.C. 1996) ("subscribers will be able to access WirelessNOW through an internet web site like CTIA's."). Cf. Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1042 (9th Cir. 1999) (Brookfield's federal trademark registration of "MovieBuff" in part designated services of "providing multiple user access to an on-line network database . . . "; there is no indication in the opinion that Brookfield was an ISP or limited its services to dial-up connectivity.).
Docket no. 103 at 7 ("At the very most, there is a fact issue to be resolved at trial, precluding HP's motion for summary judgment on its counterclaim.").
ACLP cites to a number of trademark applications and registrations for web information services under the same or similar definition of services. Indeed, ACLP's summary judgment evidence includes information on approximately 1052 service mark registrations for "access" in connection with computer services. HP argues that such "extrinsic" evidence should not be considered at all under the parole evidence rule.
Docket no. 82, appendix B, exhibit 30. The keywords searched were: "providing," "access," "network," "dissemination" and "information." ACLP's registration was number 1022, that is, only the 30th "access" registration issued.
HP does argue, however, that reference to the file history of the registration is appropriate in interpreting the description of services. Docket no. 112 at 12-13; Miller Brewing Co. v. G. Heileman Brewing Co., 561 F.2d at 78-79. HP also has offered the declaration of Dr. Glazer on the meaning of "access."
To the extent that a common law parole evidence rule applies to the interpretation of a trademark registration, the Court agrees that interpretation of an unambiguous document is a question for the Court which should be assessed, if possible, without resort to extrinsic evidence. But, as HP has previously argued:
AM Inter'l Inc. v. Graphic Mgt. Assocs., Inc., 44 F.3d 572, 576-77 (7th Cir. 1995).
Interpretation of the registration is necessarily central to that issue [of whether ACLP has offered services described in the registration], and extrinsic evidence is admissible on that point. Under federal trademark law, when the description of services for a registration is "somewhat unclear . . . it is improper to simply consider that description in a vacuum." . . . Instead, a court must consider extrinsic evidence showing the specific meaning of the description."
Plaintiff's consolidated exhibit, exhibit 8 (memorandum regarding deposition of Mr. Cahn) at 11, citing In Re Trackmobile, 15 U.S.P.Q.2d 1152 (T.T.A.B. 1990). See also docket no. 91 at 16. HP argues that the resort to extrinsic evidence is a concession that the registration is ambiguous and therefore, the registration should be construed strictly against ACLP. Docket no. 91 at 14-16. HP cites no case that holds that mark registrations are construed strictly against the drafter. And, here, the wording of the services was changed at the initiation of the examiner.
ACLP's evidence of other marks for "providing access" in the context of web information services is provocative but does not show whether the descriptions are identical to those used by ACLP; whether the descriptions are the only descriptions included within the registrations; or whether the registrants do or did provide dial-up connectivity to the internet. HP's trademark applications for MOPY and DeepCanyon do show that as late as April 1999 HP's legal department considered "providing . . . access" to be the appropriate description for a web information service without offering dial-up internet connectivity. Yet, the USPTO rejected the description of "providing access" as applied to web site publishing in connection with the DeepCanyon application but did not suggest similar revision of the MOPY application also covering web site publishing as well.
Docket no. 91 at 21. HP concedes that even if "only a web site has been provided by their owners, (apparently such as WOMEN LEADERS ONLINE), . . . [there is] . . . the possibility that there are some other service mark registrations that may be incorrect. . . ." Id.
Docket no. 82, appendix B, exhibit 27.
Therefore, there is a disputed issue of fact whether ACLP's PAVILION® mark has been used in connection with services which provide "access" to the internet and, consequently, whether ACLP's registration is to be given presumptive effect. More specifically, there is a factually disputed issue whether the following services have provided "access" to the internet: (1) a person's navigation from site to site using hypertext links to "access" information stored in other locations on the internet even though connectivity to the internet has not been established through the same services; and/or (2) the hosting of PAVILION® service sites which provide computer storage and network servers "access" to informational sites. "Unless the parties can present authority to the contrary (and none is provided in the cross-motions for summary judgment), this factually disputed issue" of whether "access" to the internet has been provided under the PAVILION mark shall be resolved by the jury.
Immuno Vital, Inc. v. Golden Sun, Inc., 49 F. Supp.2d 1344, 1356-57 (S.D.Fla. 1997). Because the Court has declined to cancel ACLP's registration for abandonment based on failure to use the mark in connection with registered services, the Court does not further address HP's argument that ACLP is not entitled to the constructive use priority date of July 1994 and cannot establish a priority of common law use against HP's ITU for PAVILION on June 12, 1995 and first use in commerce on August 14, 1995. Docket no. 91 at 22-25.
In sum, the Court denies ACLP's motion for summary judgment to dismiss HP's counterclaim alleging abandonment premised on ACLP's failure to use the mark for services described in the registration and denies HP's cross-motion for summary judgment to cancel ACLP's registration based on the same ground. HP asked, in a footnote, if the Court granted ACLP's motion for summary judgment on the counterclaim, for a continuance to allow HP to depose the examining attorney and ACLP's attorney, Mr. Cahn, about the prosecution history of ACLP's registration. Therefore, the request for a continuance is denied as moot.
Docket no. 91 at 18 n. 15. HP indicated that the parties had agreed to depose both the attorney and the examiner during the same trip. It appears that Mr. Cahn was deposed in late December 1999. Docket no. 114, exhibit 3.
HP has separately moved for partial summary judgment of the issue of tacking. HP argues, in sum, that "only legally prior uses may be asserted against HP as a basis for likelihood of confusion" so that ACLP should not be able to "tack" its subsequent uses of variations of the mark in suit — such as PARTNER PAVILION, PLANNER PAVILION and MY PAVILION — to the earlier date of its registration for PAVILION®, because the variants of the mark are not "in all material respects identical to the use for which it does have priority." ACLP responds, in sum, that tacking is not applicable because ACLP "is not citing other uses of its PAVILION® mark in order to establish seniority over HP's usage." ACLP argues that it is "uncontested" that ACLP both used the mark and filed a trademark application before HP selected PAVILION as the brand name for a line of computers. Importantly, ACLP concedes that its other uses of variations of PAVILION® are not "separate trademarks; rather there is just one service mark — PAVILION® — with some varying but related usages."
Docket no. 87. This motion also requests dismissal of the third count of the complaint alleging dilution, an issue addressed below.
Docket no. 87 at 1, 6.
Docket no. 104 at 3.
Docket no. 104 at 3.
"Tacking" is a constructive use theory typically applied to establish seniority in the use of a mark. Tacking is describes
the ability of a trademark owner to claim priority based on the first use date of a priority in a mark based on the first use date of a similar, but technically distinct mark — but only in the exceptionally narrow instance where "the previously used mark `is the legal equivalent of the mark in question or is distinguishable therefrom' such that consumers `consider both as the same mark.'"
Brookfield Communications, Inc., 174 F.3d at 1047-48 (citations omitted).
The standard for tacking is "exceedingly strict" and is "considerably higher than the standard for `likelihood of confusion.'" To allow tacking, "[t]he marks [at issue] must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be `tacked.'" "A party seeking to `tack' its use of an earlier mark onto its use of a later mark for the same goods or services may do so only if the earlier and later marks are legal equivalents, or are indistinguishable from one another." HP argues that tacking is a question of law or the Court. ACLP argues that tacking is a question of fact in the Fifth Circuit because likelihood of confusion is a question of fact in the Fifth Circuit.
Brookfield Communications, Inc., 174 F.3d at 1048.
Id. See also Lincoln Logs, Ltd v. Lincoln Pre-Cut Log Homes, Inc., 971 F.2d 732, 735 (Fed. Cir. 1992) (citations omitted).
Pro-Cuts v. Schilz-Price Enterprises, Inc., 27 U.S.P.Q.2d (BNA) 1224, 1226-27 (T.T.A.B. 1993).
Docket no. 87 at 8 n. 6.
Docket no. 104 at 5.
HP argues that ACLP began its use of the related terms PARTNER PAVILION, MY PAVILION TOOLS, PLANNER PAVILION, and MY PAVILION only after HP filed its ITU trademark application in August 1995 and began using HP PAVILION to refer to its brand of home computers in the summer of 1995. HP argues that ACLP "has barely used" the PAVILION mark "in any context" and should not be allowed to relate its later use of variants of the mark back to the PAVILION mark for purposes of priority because ACLP cannot establish that PAVILION and its variants are "legal equivalents" that create the same commercial impression.
The summary judgment evidence shows that PARTNER PAVILION was used by Amicus or ANI in September 1998 in connection with a collection of internet links within password-protected restricted access extranet web sites provided to broker-dealer and financial service clients. Docket no. 90, Frankel declaration, exhibit 21 (Passovoy deposition); exhibit 3 (Aroian deposition); exhibit 34 (Aroian declaration); and exhibit 12 (Lane deposition).
The summary judgment evidence shows that MY PAVILION TOOLS has been used by Amicus or ANI in connection with a personal booknote function as apart of PARTNER PAVILION. Docket no. 90, Frankel declaration, exhibit 21 (Passovoy deposition).
The summary judgment evidence shows that PLANNER PAVILION was intended for launch in October 1999 as, in sum, a destination site for financial planners. Docket no. 90, Frankel declaration, exhibit 23 (Passovoy deposition).
The summary judgment evidence shows that MY PAVILION has been intended for launch in the first quarter of 2000 as, in sum, a destination site for general consumers to participate in financial information. Docket no. 90, Frankel declaration, exhibit 23 (Passovoy deposition).
Docket no. 87 at 1.
HP cites to numerous decisions of the courts and TTAB which have found that uses of a mark in conjunction with an additional word or words cannot be tacked onto the mark. For example, AMERICAN MOBILPHONE with a unique stars-and-stripes design could not be tacked to the mark AMERICAN MOBILPHONE PAGING with the same design; HOME PROTECTION HARDWARE could not be tacked to HOME PROTECTION CENTER; CLOTHES THAT WORK FOR YOU" could not be tacked to CLOTHES THAT WORK; FIRST NATIONAL BANK could not be tacked to FIRST BANK; SHAPE could not be tacked to SHAPE UP; and MOVIEBUFF.COM could not be tacked to THE MOVIE BUFF'S MOVIE STORE. HP argues that the variant names are not legally equivalent to PAVILION®: they each contain additional substantive words; the additional words create a different commercial impression; and the terms are used for different services.
American Paging, Inc. v. American Mobilphone, Inc., 13 U.S.P.Q.2d (BNA) 2036 (T.T.A.B. 1989), aff'd, 17 U.S.P.Q.2d (BNA) 1726, 1727 (Fed. Cir. 1990).
Ilco Corp. v. Ideal Security Hardware, 527 F.2d 1221, 1224-25 (C.C.P.A. 1976).
Van Dyne Crotty, Inc. v. Wear-Guard Corp., 926 F.2d 1156, 1159 (Fed. Cir. 1991).
Corporate Fitness Programs, Inc. v. Weider Health Fitness, Inc., 2 U.S.P.Q.2d (BNA) 1682, 1687 (T.T.A.B. 1987).
Brookfield Communications, Inc., 174 F.3d at 1047-50.
As noted in the discussion of the cross motions for summary judgment on abandonment/cancellation, ACLP's registration of PAVILION® on the principal register is prima facie evidence of the validity of the registered mark and of ACLP's exclusive right to use the mark in commerce for services specified in the registration. HP can rebut this presumption by showing that it used the mark in commerce first, since ownership of a mark is governed by priority of use. "The first to use a mark is deemed the `senior' user and has the right to enjoin `junior' users from using confusingly similar marks in the same industry and market or within the senior user's natural zone of expansion."
ACLP is not citing its uses of variants of PAVILION® to establish priority of use of PAVILION®. Nor is a determination of the timing of ACLP's use of variants of PAVILION® important to defeat an argument of abandonment of PAVILION®. Although HP has argued that ACLP's uses of PAVILION® are not for services within the scope of the registration and although HP has argued that ACLP's uses of the PAVILION mark are common law uses, it is undisputed that ACLP registered the domain name www.pavilion.com on November 4, 1994. It is undisputed that it used "Pavilion services" in connection with the Virginia Tech ALUMNET® site, the ALUMNET® center for Education and the Worchester Polytechnic Institute. It is undisputed that Jackson Dawson sponsored a Chevrolet PAVILION® site and the First USA (credit card) PAVILION® service followed and continues to day as a link on the Virginia Tech ALUMNET® and ARMENIANET® sites. HP does not argue on summary judgment that ACLP's use of "PAVILION" or "PAVILIONS" or "www.pavilion.com" are not relevant uses of the mark.
Docket no. 82, exhibit 12; ACLP's consolidated exhibits, exhibit 11. ACLP argues that it demonstrated "PAVILION services" to The University of Texas Ex-Students Association, Texas AM and Electronic Data Services (EDS) in 1994. Docket no. 82, exhibit 5, internal exhibits 1-6. HP disputes that the presentation of "PEOPLE PAVILION" to The University of Texas ex-Students' Association was a demonstration of "PAVILION services." Docket no. 93 at 4. HP also contends that "PAVILION services" were not yet available at the time of the presentations to Texas AM and EDS and that ACLP pitched "ALUMNET service" not "PAVILION service" to Texas AM. Docket no. 93 at 4.
Docket no. 93 at 6; docket no. 82, exhibit 5, internal exhibits 7-11. The Virginia Tech and ARMENIANET® sites continue to have "pavilions" buttons that lead to the PAVILION site where the Virginia Tech Visa Card offer is made available. ACLP's consolidated exhibits, exhibit 11.
Docket no. 93 at 6; docket no. 82, exhibits 16-20; docket no. 93 at 6.
In sum, ACLP does not need to tack the noted variations of PAVILION® in order to obtain priority. The summary judgment record indicates that ACLP first used PAVILION in commerce. This is not to say that ACLP's subsequent use of variants of PAVILION® is not probative of likelihood of confusion. The use of modifying words with PAVILION® and the use of the mark in the plural form, as in the "pavilions" buttons on web sites, likely will be relevant to arguments that the mark is descriptive and weak in connection with an assessment of likelihood of confusion.
The remaining issues implicated by the HP's motion for partial summary judgment on this ground are arguments relating to the an assessment of likelihood of confusion between HP's and ACLP's uses of PAVILION, issues which implicate disputed issues of material fact. Regardless of whether tacking is viewed as a question of law for the court or a question of fact for the finder of fact, there is not an adequately developed, uncontested record to allow for a reliable resolution of this issue. Disputed issues of material fact exist whether PAVILION®, MY PAVILION, MY PAVILION TOOLS, PLANNER PAVILION, PARTNER PAVILION create the same commercial impression, whether the impressions are continuous, and whether the uses are on the same or substantially similar goods. The question of likelihood of confusion is almost always a fact question for the finder of fact. To the extent that HP's motion for summary judgment on tacking may be considered as a motion in limine to exclude evidence regarding ACLP's uses of variants of the mark, the Court would be reluctant to make that determination on the present record, especially since ACLP's use of variants of the mark appear to be relevant to an assessment of the strength of the mark.
Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188, 196 (5th Cir. 1998).
HP has moved for partial summary judgment on count three of ACLP's complaint which seeks injunctive relief based on the claim that HP's use of PAVILION dilutes ACLP's mark in violation of the Texas anti-dilution statute. In sum, HP argues that PAVILION® lacks sufficient distinctiveness for protection against dilution.
Docket no. 87.
The Texas anti-dilution statute protects marks that have a "distinctive quality" from being diluted through others' use of the same or similar marks:
A person may bring an action to enjoin an act likely to injure a business reputation or dilute the distinctive quality of a mark registered under this chapter or Title 15, U.S.C. or a mark or trade name valid at common law, regardless of whether there is competition between the parties or confusion as to the source of goods or services.
Tex. Bus. Com. Code Ann. § 16.29 (emphasis added).
To prove dilution, plaintiff must establish that: (1) its mark is distinctive; and (2) there is a likelihood of dilution. There are two types of dilution: dilution by blurring or by tarnishment. Dilution by blurring, the theory argued by ACLP, occurs when customers or potential customers see the mark on others' goods or services and are not confused as to source yet the unauthorized use "dilutes" the unique significance of the mark to identify one source in the minds of consumers.
Restatement (Third) of Unfair Competition, § 25 (1995). Sun Banks of Florida v. Sun Fed. Sav. Loan, 651 F.2d 311, 313 n. 2 (5th Cir. 1981) ("Dilution is a concept most applicable where a subsequent user uses the trademark of a prior user for a product so dissimilar from the product of the prior user that there is no likelihood of confusion of the products or sources, but where the use of the trademark by the subsequent user will lessen the uniqueness of the prior user's mark with the possible future result that a strong mark may become a weak mark.") (emphasis added).
The Fifth Circuit has noted that cases interpreting parallel anti-dilution statutes that were based on the United States Trademark Associations's model statute, as the Texas law was based, are instructive "in construing the Texas Statute." Therefore, cases construing the parallel anti-dilution statutes of California, Illinois and New York are particularly relevant to the inquiry at hand. These cases also emphasize that distinctiveness is required for protection under anti-dilution laws.
Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1081 (5th Cir. 1997).
Exxon Corp., 109 F.3d at 1081.
E.g., Sears Roebuck Co. v. Allstate Driving School, Inc., 301 F. Supp. 4, 19 (E.D.N.Y. 1969) (ALLSTATE auto insurance not so distinctive to warrant protection).
ACLP bears the burden of establishing distinctiveness for the purposes of Texas' anti-dilution law. On summary judgment, HP bears the burden of establishing that there is no genuine issue of material fact that ACLP's mark is not distinctive for purposes of the anti-dilution law.
ACLP's threshold argument in opposition to summary judgment — that federal registration of PAVILION® on the principal register entitles ACLP to a presumption of distinctiveness — may be disposed of briefly. There is no requirement that only marks with a "distinctive quality" within the scope of the state anti-dilution law may obtain a federal registration. To the extent that federal registration of ACLP's service mark on the principal register entitles ACLP to a presumption of validity which includes a presumption of distinctiveness, that distinctiveness is for the purposes of registration. As discussed further below, to be capable of being diluted, a mark must have a degree of distinctiveness beyond that needed to qualify as a valid mark.
See 15 U.S.C. § 1063.
15 U.S.C. § 1057(b); see Avery Dennison Corp. v. Sumpton, 189 F.3d 868,876 (9th Cir. 1999) (presumption of distinctiveness but distinctiveness necessary to support registration is not the same as the distinctiveness required under the California anti-dilution statute).
4 McCarthy on Trademarks and Unfair Competition § 24:109.
ACLP's argument that the Order denying a preliminary injunction which observed that likelihood of confusion is a key issue for trial, precludes the Court from entering summary judgment on anti-dilution, also may be disposed of without extensive discussion. Courts have repeatedly held that the distinctiveness necessary for protection under state anti-dilution laws is a higher standard than the strength of the mark considered in determining likelihood of confusion. With the completion of discovery and the filing of dispositive motions, it is appropriate for the Court to consider further the merits of HP's motion for partial summary judgment on the ground of dilution. ACLP's related argument that distinctiveness is a fact-intensive question, not suited for summary judgment, does not comport with the many cases in which summary judgment has been granted on anti-dilution claims. Whether or not there is a disputed issue of material fact which precludes summary judgment is a matter which appropriately can be determined in this case.
Lawfinders Assoc. Inc., 65 F. Supp.2d 414; Pebble Beach Co., 942 F. Supp. at 1565. See docket no. 104 at 10-11 ("distinctive quality . . . appears to be somewhat more than the standard for protection of a mark from an infringing use that causes likelihood of confusion.") (citation omitted).
Cf.Exxon Corp., 109 F.3d at 1074, 1080-83 (upholding summary judgment of anti-dilution claim on other grounds). See also Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1132 n. 13 (9th Cir. 1998) (upholding summary judgment on ground that "mark is not so well-recognized that it falls within the ambit of the anti-dilution statute"); Mejia Assocs., Inc. v. IBM Corp., 920 F. Supp. 540, 552 (S.D.N.Y. 1996) (summary judgment appropriate where "plaintiff has not shown that its mark is so strong as to warrant protection under [New York] anti-dilution statute"); Mana Prods., Inc. v. Columbia Cosmetics Mfg., Inc., 858 F. Supp. 361, 369 (S.D.N.Y. 1994), aff'd 65 F.3d 1063 (2d Cir. 1995) (summary judgment on distinctiveness); Wonder Labs, Inc. v. Proctor Gamble Co., 728 F. Supp. 1058, 1067 (S.D.N.Y. 1990) (summary judgment under New York statute where court "cannot conclude that the plaintiff's trademark has acquired that level of distinctiveness that would warrant a finding of dilution"); Tower Publications, Inc. v. Emra Corp., 626 F. Supp. 699, 707 (N.D.Ill. 1985), aff'd 817 F.2d 410 (7th Cir. 1987) (summary judgment under Illinois statute when plaintiff failed to show distinctiveness); M-F-G Corp. v. Emra Corp., 626 F. Supp. 699, 707 (N.D. Ill. 1985), aff'd 817 F.2d 410 (7th Cir. 1987) (same).
ACLP unpersuasively contends that HP is attempting to replace the lesser state standard of "distinctive quality" with the higher federal anti-dilution standard of "distinctive quality" and "fame." Unlike its federal counterpart, the Texas anti-dilution statute does not expressly apply only to "famous" marks." But, the Texas statute does require a mark that "`either is of truly distinctive quality or has acquired secondary meaning.'" Although the Texas statute does not define what is meant by "distinctive quality," it is clear that not all marks have "distinctive quality" within the meaning of the Texas anti-dilution law. Indeed, without a requirement of distinctiveness, "an anti-dilution statute becomes a rogue law that turns every trademark no matter how weak, into an anti-competitive weapon."
Docket no. 104 at 9.
Exxon Corp., 109 F.3d at 1082 n. 14 quoting Deere Co. v. MTD Prods., Inc., 41 F.3d 39, 42 (2d Cir. 1994). See also Mead Data Central v. Toyota Motor Sales U.S.A., 875 F.2d 1026 (2d Cir. 1989) ("it has become talismanic in the New York courts and in this Circuit that a cause of action under [the New York anti-dilution statute] involves . . . 1) an extremely strong mark — either because of the mark's distinctive quality or because it has acquired secondary meaning. . . .) (citations omitted) (J. Sweet, concurring) (emphasis added). "Secondary meaning attaches to a mark when `the consuming public primarily associates the term with a particular source.'" Estee Lauder, Inc. v. The Gap, Inc., 108 F.3d 1503, 1509 (2d Cir. 1997) (citation omitted).
E.g., Pebble Beach Co., 942 F. Supp. at 1557, 1564-65, 1567 (court found distinctiveness for extensively used and advertised mark with "national reputation" but not to trade dress that did not "automatically serve as identifiers of source").
4 McCarthy on Trademarks and Unfair Competition § 24:108 at 24-197. For this reason, the California anti-dilution law, which also protects against "dilution of the distinctive quality of a mark," has been construed to apply only to famous marks. Avery Dennisson Corp., 189 F.3d at 874, 876. It is not necessary for this Court to reach that issue in resolving ACLP's dilution claim.
ACLP's argument in opposition to summary judgment focuses on the "fact intensive" nature of an inquiry into distinctiveness and its evidence centers on the declarations of Professor Lemley who has testified, among other things, that ACLP's services and HP's goods are closely related and there have been several instances of actual confusion which arguably show the relationship. But, even if the instances of confusion are accepted as true, they amount to no more than nine instances in four years of concurrent presence in the marketplace and, though arguably relevant to infringement/confusion, do not establish the distinctiveness and strength of the mark for dilution as a matter of law. ACLP's admission that "[s]econdary meaning is not an issue in this case" may be a concession that ACLP cannot establish a "mental association" between the mark and either party or a recognition that "secondary meaning" in the context of state dilution is not the same as in the infringement analysis. In any event, it does not discharge ACLP's summary judgment burden to show a genuine issue of material fact regarding either the truly distinctive quality of PAVILION® or secondary meaning.
ACLP's consolidated exhibits, exhibit 1 (Lemley declaration) ¶¶ 35, 36 and exhibits E and F and exhibit 13 (Aroian deposition) with internal exhibits 2-6. The summary judgment evidence show that one of the two purchasers of "PAVILION services" was not aware of the mark and the other had little recollection of it. Docket no. 90, Frankel declaration, exhibit 8 (Ellis deposition) at 13:11-15, 22:2-5, 37:11-25; exhibit 14 (Ledwith deposition) at 29:19-31:15, 35:2336:12, 40:18-41.1, 42:3-18; exhibit 27 (Tiller deposition) at 10:841:4, 110:11-111.6. ACLP's reliance on Council of Better Business Bureaus, Inc. v. Better Business Bureau of South Florida, Inc., 200 U.S.P.Q. 282, 297 (S.D.Fla. 1978) (one case of actual confusion shows likelihood of confusion) and Wells Fargo Co. v. Wells Fargo Construction Co., 609 F. Supp. 710, 712 (D. Ariz.) (two misdirected calls proves likelihood of confusion) is unavailing; confusion does not, without additional proof, establish distinctiveness or secondary meaning).
Docket no. 104 at 15.
Mejia and Assocs., Inc. v. International Business Machines, Corp., 920 F. Supp. at 552 ("`secondary meaning' as used in New York's anti-dilution statute is not the same as defined under the federal trademark law and many commentators and courts have required marks to be `extremely strong' to be eligible for protection.") (citations omitted). 4 McCarthy on Trademarks and Unfair Competition § 24:70 ("For dilution to occur, the relevant public must make some connection between the mark and both parties. But that connection is not the kind of mental link between the parties that triggers the classic likelihood of confusion test. . . . even with those who perceive distinct sources and affiliation, the ability of the senior user's mark to serve as a unique identifier . . is weakened because the relevant public now also associates that designation with a new and different source.").
Of particular note is the Second Circuit's decision in Mead Data Central v. Toyota which reversed a preliminary injunction entered against Toyota to prevent the sale of Lexus automobiles finding that Mead Data Central's Lexis mark was not sufficiently distinctive to fall within the scope of the parallel New York anti-dilution statute. The Second Circuit discussed the anti-dilution statute's purpose in "protect[ing] a trademark's `selling power'" as follows:
Exxon Corp., 109 F.3d at 1081 ("As one court has already noted, the Texas statute tracks in particular the language of the New York dilution statute.") (citation omitted).
Although the anti-dilution statute dispenses with the requirements of competition and confusion, it does not follow that every junior use of similar mark will dilute the senior mark in the manner contemplated by the New York legislature.
As already stated, the brief legislative history . . . described the purpose of the statute as preventing the "whittling away of an established trademark's selling power and value through its unauthorized use by others upon dissimilar products." The history disclosed a need for legislation to prevent such "hypothetical anomalies' as "Dupont shoes," . . . and cited cases involving similarly famous marks. . . .
Mead Data Central, 875 F.2d at 1030, 1031 (citations omitted; emphasis added).
Just as the New York anti-dilution statute has been held to protect "only extremely strong marks," the Illinois anti-dilution statute "requires that plaintiff show his mark to be a strong mark which has acquired a widespread reputation through much effort or costly and extensive advertising and which has a distinctiveness or secondary meaning." The undisputed evidence in this case does not show that ACLP's PAVILION® is an "established mark" with "selling power" or a "strong mark" with a "widespread reputation." Distinctiveness within the meaning of the Texas anti-dilution statute has not been established.
Sally Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 625 (2d Cir. 1983).
M-F-G Corp. v. Emra Corp., 626 F. Supp. at 707.
Moreover, "[t]hird-party use of the mark . . . is . . . an important factor in assessing distinctiveness. Concurrent use by other firms makes it unlikely that consumers will form a single mental association with the mark." ACLP has not disputed HP's evidence that a Thomson Thomson search discloses approximately 40 federal registrations of "Pavilion" and phrases including that word. HP's summary judgment proof discloses an additional 59 state registrations and dozens of common law uses. In addition, there are numerous uses of "Pavilion" as a source identifier on internet web sites. ACLP argues that these numerous uses of the mark are not automatically disqualifying because, for example, in Service Merchandise, the court held that 226 registered service marks beginning with the word "Service" did not support defendant's claim that plaintiff's mark was weak and in Amstar Corp., the Fifth Circuit held that DOMINO was distinctive for sugar-related products but 72 third party registrations limited plaintiff's protections to the uses to which it had already put the mark." But, in Service Merchandise, the SERVICE MERCHANDISE mark was proved to have significant commercial strength and in Amstar the DOMINO mark was not protected under the Georgia anti-dilution statute for any uses beyond its then-current uses precisely because third party uses demonstrated it was a weak mark. Admittedly, when "Pavilion" is already used to market perfume, stationary, tents, curtain rods, furniture, games, vegetable oil, clothing, a retail outlet and computer software, plaintiff's task of showing distinctiveness may be more difficult, but ACLP has failed to show that its mark possesses present distinctiveness through past and present selling power. "The possibility that someday [plaintiff's mark] may become a famous mark in the mind of the general public has little relevance in the instant dilution analysis since it is quite apparent that the general public associates nothing with [plaintiff's mark].
Restatement (Third) of Unfair Competition § 25 cmt. e (1995). See also Sun Banks of Florida v. Sun Fed. Sav. Loan, 651 F.2d at 315-16; Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 260 (5th Cir. 1980) (third party registrations persuasive evidence of strength of mark).
Docket no. 90, Frankel declaration, ¶ 4 and exhibits 1 and 2.
Docket no. 90, Frankel declaration, ¶¶ 5-6 and exhibits 1 and 2.
Docket no. 90, Frankel declaration, ¶ 46 and exhibit 42. ACLP has agreed that Pavilion Technologies can use and register the marks PAVILION and PAVILION DIGITAL INTERFACE in connection with computer software. Docket no. 90, Frankel declaration, exhibits 12 and 13.
Docket no. 104 at 13; Service Merchandise v. Service Jewelry Stores, Inc., 737 F. Supp. at 996; Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d at 260. ACLP also relies on Sun Banks of Florida v. Sun Federal Sav. Loan, 651 F.2d at 315-16. In Sun Banks, the Fifth Circuit held that the "Sun Banks" mark was distinctive even though there was evidence of 4,400 other businesses in Florida containing the word "sun." But, Sun Banks was not a dilution case.
Docket no. 90, Frankel declaration, exhibit 11.
Mead Data Central, 875 F.2d at 1031.
Courts applying the Texas anti-dilution law and parallel anti-dilution statutes have looked to the following factors to determine whether or not a mark is sufficiently distinctive to receive protection: (1) whether the mark is arbitrary; (2) the length of time a user has used the mark; (3) the scope of the user's advertising and promotions; (4) the nature and extent of the first user's business; and (5) the scope of the first user's reputation. Each of these factors will be examined briefly.
Pebble Beach Co., 942 F. Supp. at 1564-65; International Jensen, Inc. v. Metrosound U.S.A. Inc., 4 F.3d 819, 826 (9th Cir. 1993);McGraw-Edison Co. v. Walt Disney Prods., 787 F.2d 1163, 1174 (7th Cir. 1986); TV Land, L.P. v. Viacom Int'l, Inc., 908 F. Supp. 543, 553 (N.D. Ill. 1995). Additional factors have been identified in analyzing likelihood of dilution, the second prong of a dilution claim. E.g., Mead Data Central, 875 F.2d at 1035 (J. Sweet, concurring).
First, HP claims that PAVILION is at least suggestive, if not descriptive, relying on testimony from officers and employees of ACLP who have stated, in sum, that PAVILION was meant to describe a meeting place or mall in cyberspace. ACLP responds that its employees' definition of the name pavilion does not mean that consumers will define it similarly. But, ACLP has presented no summary judgment evidence to show that consumers consider the mark to be arbitrary.
Docket no. 87 at 16; docket no. 90, exhibit 3, 4, 10, 13, 16, 25, 41.
Docket no. 104 at 14.
Docket no. 1.
T.V. Land, L.P. v. Viacom Int'l, Inc., 908 F. Supp. at 554 (continuous use for four years did not support distinctiveness).
Third, ACLP has not provided summary judgment evidence to contest HP's showing that ACLP has not, until recently, paid to advertise PAVILION®. ACLP argues that its sales promotion efforts, use on the internet in www.pavilion.com, favorable articles in a few newspapers, and an advertisement by ALUMNET® in a trade publication are sufficient to raise a genuine issue of material fact regarding its promotion of the mark. ACLP's summary judgment evidence provides no information as to the scope of its sales promotion efforts and does not show extensive promotion. Even taking ACLP's evidence of its activities in promoting PAVILION® as true, the undisputed facts establish that the "scope of the user's advertising and promotions" has been targeted and relatively focused on specific audiences.
Docket no. 90, exhibits 3, 20; Aroian, Prel. Inj. Decl. ¶ 5; Lane Prel. Inj. Decl. ¶¶ 14-15, 17; docket no. 114, exhibit 8.
Construing all evidence on this issue in ACLP's favor, the Court has even considered promotions which contain the term PARTNER PAVILION rather than of the PAVILION mark. Aroian Prel. Inj. Decl., exhibits 2 and 3.
Fourth, it is undisputed that ACLP's business related to the PAVILION mark is small, with a narrow market segment. In the five years it has been in business, ACLP's total revenues for services related to the PAVILION mark are under $100,000. The summary judgment evidence reflects that ACLP has made only two sales of "PAVILION® services" through agreements with Jackson-Dawson (for Chevrolet) and Virginia Tech/First USA for advertising targeted to ACLP's ALUMNET subscribers. As of May 1999, ACLP had three employees. ACLP's business has been directed at a small market segment of alumni affinity groups, broker dealers and their independent registered representatives and financial planners. ACLP does not dispute this evidence as a factual matter but contends only that the evidence is irrelevant because it concerns secondary meaning, which is not at issue in this case. The Court does not agree with ACLP's assessment of the legal significance of this undisputed evidence. Although the narrowness of plaintiff's existing market may be less important when defendant uses the mark in the same market as plaintiff, here defendant's uses of the mark are not directed narrowly at the same market segment. Defendant has sold home computers under the brand in suit and plaintiff has sold web services under its mark. ACLP has not shown on summary judgment that these markets are not distinct.
Docket no. 90, exhibit 27.
Docket no. 90, Frankel declaration, exhibit 10 (Lane deposition) at 270:15-18 and exhibit 36 (Lane prel. inj.) at 130:4-9.
Docket no. 90, Frankel declaration, exhibit 36 (Lane prel. inj.) at 137:21-24.
Docket no. 90, Frankel declaration, exhibits 3, 9, 10, 13, 22, 23.
Docket no. 104 at 15.
See docket no. 61 (summary of evidence adduced at the preliminary injunction hearing on similarity of markets). Even though competition between the parties is not a pre-requisite for dilution, in striking the appropriate balance between protecting marks and permitting non-diluting uses, courts have considered and defined the relevant market within which the mark has recognition. Cf. Avery Dennison v. Sumpton, 189 F.3d 868 (9th Cir. 1999) (summary judgment in favor of trademark holder on federal anti-dilution claim reversed, holding that "specialized fame" was sufficient to satisfy the famousness prong `if the diluting uses are directed narrowly at the same market segment"); Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 633 (7th Cir. 1999) (summary judgment in favor of alleged dilutor on federal anti-dilution claim reversed, holding that narrowness of trademark holder's market is less important when defendant uses mark in the same market).
Fifth and finally, with respect to the "scope of [ACLP's] reputation," HP's summary judgment proof establishes that ACLP's own expert testified that at the time HP began using PAVILION, ACLP had no goodwill associated with the mark. Nor is there any evidence of expansive reputation of ACLP in connection with the PAVILION mark since that time. ACLP argues that the relevant inquiry is distinctiveness, not renown but, significantly, has not shown that its mark is strong, that "PAVILION®" and ACLP's business have "become synonymous in the minds of the public" in any market segment, or that PAVILION® "retains its source significance when encountered outside the context of goods or services with which it is used."
Docket no. 90, Frankel declaration, exhibit 6 (Bayley deposition) at 77:21-78:1, 84:1-6.
Restatement (Third) of Unfair Competition § 25 cmt.e (1995).
In sum, viewing all evidence and inferences in ACLP's favor, HP is entitled to partial summary judgment on the third count of dilution. The summary judgment record establishes that there is no genuine issue of material fact that PAVILION® lacks distinctiveness within the meaning of the Texas anti-dilution statute. Because of the different standards of distinctiveness, this ruling is without prejudice to ACLP's infringement claims.
C. Monetary Recovery
HP moves for partial summary judgment on ACLP's claims for money damages; because only equitable claims remain, HP moves that the jury demand be stricken; alternatively, HP moves for partial summary judgment on ACLP's request for attorney's fees; and additionally, HP moves for partial summary judgment on its defense of laches.
A mark holder may recover damages for infringement based on: defendant's profits; plaintiff's damages; and costs of the action. HP argues that ACLP may not recover damages based on an accounting of HP's profits because plaintiff cannot show deliberate infringement or willful intent to deceive purchasers by HP. There are three bases for an award of an accounting of a defendant's profits: compensation for lost or diverted sales between competitors; redress for defendant's unjust enrichment; or as a deterrent to further infringement.
Maltina Corp. v. Cawy Bottling Co., Inc., 613 F.2d 582, 585 (5th Cir. 1980).
With respect to lost sales, HP argues that "the record is clear that the HP PAVILION line of personal computers does not compete with ACLP's PAVILION web site services." On the other hand, ACLP argues that the proximity of the goods and services provided by the parties under the PAVILION mark or brand and the "logical progression" of ACLP's services which "will place the parties in competition in the future" are at the center of the hotly contested factual issues to be tried. Therefore, ACLP argues that the lack of direct, head-to-head competition does not bar an accounting.
Docket no. 85 at 8.
As for current competition, ACLP cites to the one-touch "finance" key of HP PAVILION computers which is used to link to financial sites on the internet. ACLP Consolidated exhibits, exhibit 14.
Docket no. 105 at 3.
ACLP argues that wilfulness or deliberate infringement may be inferred from facts in the record: if HP had conducted a Dialog search of marks, it would have discovered ACLP's application. Even if it is true that HP was not aware of ACLP until it received Mr. Lane's May 1996 letter after HP already had begun marketing HP PAVILION PCS, the jury would not be precluded from inferring wilfulness from conduct showing a deliberate ignorance. Professor Lemley's declarations raise a genuine issue of material fact regarding the adequacy of HP's trademark search and willful infringement.
In sum, disputed issues of fact remain which preclude the Court from addressing on summary judgment plaintiff's request for an accounting.
A claim for damages is based on proof of plaintiff's actual loss. In this case, ACLP seeks a "reasonable royalty" and a corrective advertising award. HP argues that no damages may be recovered because ACLP cannot show that a consumer was actually confused or deceived. ACLP argues, at minimum, that there are disputed factual issues regarding actual confusion and damages suffered in this reverse confusion case.
HP does not cite authority that establishes as a matter of law that a plaintiff in a reverse confusion case cannot receive a reasonable royalty or corrective advertising damages. Therefore, in order to resolve the issues raised by HP in it motion for partial summary judgment, the Court would be required to weigh the evidence, evaluate credibility and resolve factual disputes regarding actual consumer confusion, if any. These are matters for the finder of fact at trial, not the Court on summary judgment.
Both the "reasonable royalty" and "corrective advertising" theories of damages are potentially available to ACLP. Although HP may dispute and will be fully heard on whether ACLP's evidence of what a reasonable royalty is, that dispute is for trial. Until a finding is made on likelihood of confusion, an assessment of thee factual sufficiency of equating the cost of advertising with plaintiff's damages is premature.
Sands, Taylor Wood Co. v. Quaker Oats Co., 978 F.2d 947, 963 (7th Cir. 1992).
Gillette Co. v. Wilkinson Sword, Inc., No. 89CV3586 (KMW), 1992 WL 30938 (S.D.N.Y. Feb. 3, 1992).
A court may award reasonable attorney's fees in "exceptional cases." An exceptional case is one in which the "violative acts can be characterized as `malicious,' `fraudulent,' `deliberate,' or `willful.'" A showing of "a high degree of culpability on the part of the infringer, for example, bad faith or fraud" is required. HP argues that plaintiff has not sustained its burden of proving that this is an exceptional case.
15 U.S.C. § 1117.
Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1390 (5th Cir. 1996).
Texas Pig Stands, Inc. v. Hard Rock Cafe Int'l. Inc., 951 F.2d 684, 696-97 (5th Cir. 1992).
The Court considers it premature to address HP's motion for partial summary judgment on the award of attorney's fees at this time, prior to the development of a full record in this case.
To establish laches as an affirmative defense, a defendant must prove that: (1) plaintiff delayed in asserting a right or claim; (2) plaintiff's delay was inexcusable; and (3) plaintiff's inaction caused defendant undue prejudice. "Because laches is an equitable doctrine, courts typically look at the interval between the time plaintiff obtained actual or constructive knowledge of the asserted invasion of its rights and the time suit was filed in determining whether a plaintiff's delay in bringing suit was unreasonable." The record reflects, without dispute, that ACLP learned of HP's use of PAVILION no later than September 1995. Yet, this lawsuit was not filed until December 1998. ACLP argues that the real period of delay concerns only the eight month period between September 1995 and its May 1996 letter, since the Fifth Circuit has held that the laches period ends on the date of the cease and desist letter. In this case, ACLP's decision on January 31, 1997 to oppose HP's registration of PAVILION for its home computers put HP on notice that ACLP was not going to "sleep on its rights." The Court cannot conclude that it is unreasonable for ACLP to have first attempted to resolve the matter in administrative proceedings before exercising its option to file a civil action for infringement.
Elvis Presley Enterprises, Inc., 141 F.3d at 205.
Exxon Corp., 109 F.3d at 1082 (citation omitted). In Exxon Corp., the Fifth Circuit recognized only two elements of laches under Texas law: "(1) unreasonable delay by one having legal or equitable rights in asserting them; and (2) a good faith change in position by another to his detriment because of his delay." 109 F.3d at 1082 (citations omitted).
Docket no. 90, Frankel declaration, exhibit 13 (Lane deposition).
Elvis Presley Enterprises, 141 F.2d at 205 ("Any acts after receiving a cease and desist letter are at the defendant's own risk because it is on notice of plaintiff's objection to such acts."). See also Conan Properties, Inc. v. Conans Pizza, Inc., 752 F.2d 145, 151 (5th Cir. 1985); Armco, Inc. v. Armco Burlar Alarm Co., Inc., 693 F.2d 1155, 1157-58 (5th Cir. 1982).
Docket no. appendix B, exhibit 9; Finance Co. of America v. Bankamerica Corp., 502 F. Supp. 593, 595 (D.Md. 1980); Alfred Dunhill of London, Inc. v. Kasser Distillers Prods. Corp., 350 F. Supp. 1341 (E.D.Pa. 1972), aff'd without opinion, 480 F.2d 917 (3rd Cir. 1973).
Based on a thorough review of the parties' arguments and evidence, the Court does not believe it would be appropriate to make an equitable judgment that would bar ACLP of the right to seek recovery of any pre-filing damages on its claims.
James Burrough Ltd. v. Sign of the Beefeater, Inc., 572 F.2d 574, 578 (7th Cir. 1978).
V. CONCLUSIONIn sum, ACLP's motion for partial summary judgment to dismiss HP's counterclaim for cancellation of the service mark is denied; HP's motion for summary judgment on its counterclaim is denied; HP's objections to ACLP's evidence in support of its motion for partial summary judgment are sustained in part and overruled in part; ACLP's objections to HP's evidence in support of its motion for summary judgment and motion for a Rule 56(f) continuance are denied; HP's motion for partial summary judgment on the issue of tacking is denied; HP's motion for partial summary judgment on the issue of dilution is granted; HP's combined motions for partial summary judgment on ACLP's claims for money damages, motion to strike the jury demand, motion for partial summary judgment on ACLP's request for attorney's fees and motion for partial summary judgment on its defense of laches are denied.
IT IS SO ORDERED.