Source: http://law.justia.com/cases/federal/appellate-courts/F2/599/341/114201/
Timestamp: 2013-05-18 15:05:52
Document Index: 697483240

Matched Legal Cases: ['§ 731', '§ 11', '§ 721', '§ 731', '§ 24', '§ 23', '§ 731', '§ 731', '§ 1115', '§ 2578', '§ 729']

599 F.2d 341: Amf Incorporated, a Corporation, Plaintiff-appellant, v. Sleekcraft Boats, a Sole Proprietorship, and Bruce E.nescher, an Individual, Defendants-appellees :: US Court of Appeals Cases :: Justia
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599 F.2d 341: Amf Incorporated, a Corporation, Plaintiff-appellant, v. Sleekcraft Boats, a Sole Proprietorship, and Bruce E.nescher, an Individual, Defendants-appellees
United States Court of Appeals, Ninth Circuit. - 599 F.2d 341
In this trademark infringement action,1 the district court, after a brief non-jury trial, found appellant AMF's trademark was valid, but not infringed, and denied AMF's request for injunctive relief.2
AMF and appellee Nescher3 both manufacture recreational boats. AMF uses the mark Slickcraft, and Nescher uses Sleekcraft. The crux of this appeal is whether concurrent use of the two marks is likely to confuse the public. The district judge held that confusion was unlikely. We disagree and remand for entry of a limited injunction.
After several years in the boat-building business, appellee Nescher organized a sole proprietorship, Nescher Boats, in 1962. This venture failed in 1967. In late 1968 Nescher began anew and adopted the name Sleekcraft.4 Since then Sleekcraft has been the Nescher trademark. The name Sleekcraft was selected without knowledge of appellant's use. After AMF notified him of the alleged trademark infringement, Nescher adopted a distinctive logo and added the identifying phrase "Boats by Nescher" on plaques affixed to the boat and in much of its advertising. (See Appendix A). The Sleekcraft mark still appears alone on some of appellee's stationery, signs, trucks, and advertisements.
"Whether likelihood of confusion is more a question of law or one of fact depends on the circumstances of each particular case. To the extent that the conclusion of the trial court is based solely upon disputed findings of fact, the appellate court must follow the conclusion of the trial court unless it finds the underlying facts to be clearly erroneous.6 Thus, this Court has refused on many occasions to decide De novo the facts underlying the trial court's determination of whether likelihood of confusion existed. See Carter-Wallace, Inc. v. Proctor & Gamble Co., 434 F.2d 794, 799 (9th Cir. 1970); Paul Sachs Originals Co. v. Sachs, 325 F.2d 212, 214 (9th Cir. 1963); Plough, Inc. v. Kreis Laboratories, 314 F.2d 635, 641 (9th Cir. 1963). However, if the facts are not in dispute, the appellate court is 'in as good a position as the trial judge to determine the probability of confusion'.7 Fleischmann Distilling Corp. v. Maier Brewing Co., supra, 314 F.2d (149) at 152, quoting Miles Shoes, Inc. v. R. H. Macy & Co., 199 F.2d 602 (2d Cir. 1952)."
Before reviewing the factors relating to likelihood of confusion, we are confronted with one other argument concerning the proper standard of review. AMF argues that we should pay less deference to the district court's findings than we ordinarily do because the court simply endorsed the findings prepared by appellee's counsel. Although the legal proposition pressed by AMF has been recognized by some courts,8 it is inapposite to the procedure followed below. Before the proposed findings prepared by counsel were submitted, the district judge filed a Memorandum Opinion (R. 335) covering virtually all the issues litigated. The proposed findings are taken, often verbatim, from the court's Memorandum Opinion. Thus, there is no reason to doubt that these findings are a product of the district court's own deliberations to which we should defer.
When the goods produced by the alleged infringer compete for sales with those of the trademark owner, infringement usually will be found if the marks are sufficiently similar that confusion can be expected.9 When the goods are related,10 but not competitive, several other factors are added to the calculus. If the goods are totally unrelated, there can be no infringement because confusion is unlikely.
In determining whether confusion between related goods is likely, the following factors are relevant:11
See, e. g., Sleeper Lounge Co. v. Bell Manufacturing Co., 253 F.2d at 722; Restatement of Torts § 731 (1938). We discuss each serially.
A strong mark is inherently distinctive, for example, an arbitrary or fanciful mark; it will be afforded the widest ambit of protection from infringing uses. See, e. g., National Lead Co. v. Wolfe, 223 F.2d 195, 199 (CA 9), Cert. denied, 350 U.S. 883, 76 S.Ct. 135, 100 L.Ed. 778 (1955) (Dutch Boy not used geographically or descriptively, but in a "fictitious, arbitrary and fanciful manner"). A descriptive mark tells something about the product; it will be protected only when secondary meaning is shown.12 See Miss Universe, Inc. v. Patricelli, 408 F.2d 506 (CA 2 1969); Cf. Hesmer Foods, Inc. v. Campbell Soup Co., 346 F.2d 356 (CA 7), Cert. denied, 382 U.S. 839, 86 S.Ct. 89, 15 L.Ed.2d 81 (1965) (barbecue beans used as a description, not a trademark). In between lie suggestive marks which subtly connote something about the products. Although less distinctive than an arbitrary or fanciful mark and therefore a comparatively weak mark, a suggestive mark will be protected without proof of secondary meaning. Watkins Products, Inc. v. Sunway Fruit Products, Inc., 311 F.2d 496 (CA 7 1962).
Although the distinction between descriptive and suggestive marks may be inarticulable, several criteria offer guidance. See generally McCarthy, Supra, at §§ 11:21-11:22. The primary criterion is "the imaginativeness involved in the suggestion," Restatement of Torts § 721, Comment a (1938): that is, how immediate and direct is the thought process from the mark to the particular product. From the word Slickcraft one might readily conjure up the image of appellant's boats, yet a number of other images might also follow. A secondary criterion is whether granting the trademark owner a limited monopoly will in fact inhibit legitimate use of the mark by other sellers. There is no evidence here that others have used or desire to use Slickcraft in describing their goods. Another criterion is whether the mark is actually viewed by the public as an indication of the product's origin or as a self-serving description of it. See Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794 (CA 9 1970). We think buyers probably will understand that Slickcraft is a trademark, particularly since it is generally used in conjunction with the mark AMF. (See Appendix A). Based on the above criteria and our reading of the district court's findings, we hold that Slickcraft is a suggestive mark when applied to boats. But see Norm Thompson Outfitters, Inc. v. General Motors Corp., 448 F.2d 1293, 1295 (CA 9 1971) (applying Oregon law, court upholds finding by district court that slogan "Escape From The Ordinary" descriptive of assortment of unusual items).
For related goods, the danger presented is that the public will mistakenly assume there is an association between the producers of the related goods, though no such association exists. Cf. Stork Restaurant, Inc. v. Sahati, 166 F.2d at 356 (restaurants with same name in different geographical and price markets). The more likely the public is to make such an association, the less similarity in the marks is requisite to a finding of likelihood of confusion. See American Steel Foundries v. Robertson, 269 U.S. 372, 382, 46 S.Ct. 160, 70 L.Ed. 317 (1926); Russell Chemical Co. v. Wyandotte Chemicals Corp., 337 F.2d 660, 52 C.C.P.A. 807 (1964). Thus, less similarity between the marks will suffice when the goods are complementary, Communications Satellite Corp. v. Comcet, Inc., 429 F.2d at 1253 ("Complementary products, or services, are particularly vulnerable to confusion."); American Drill Bushing Co. v. Rockwell Manufacturing Co., 342 F.2d 1019, 1022, 52 C.C.P.A. 1173 (1965) (drill bits and drill bushings), the products are sold to the same class of purchasers, Restatement of Torts § 731, Comment d (1938), or the goods are similar in use and function. See Syntex Laboratories, Inc. v. Norwich Pharmacal Co., 437 F.2d 566, 569 (CA 2 1971).
"Viewing the foundational question as one of 'confusing similarity' is improper because it merges analysis of one of the preliminary inquiries with the conceptually distinct step of applying the statutory standard.7 The marks may be similar in appearance (foundational fact) yet not likely to cause confusion as to their source, particularly when all the factors are considered. Using this approach, similarity of appearance and the remaining factors provide foundational facts and should be assessed on review under the clearly erroneous rule.
" 'Confusing similarity' is another way of stating the 'likelihood of confusion'."J. B. Williams Co., Inc. v. LeConte Cosmetics, Inc., 523 F.2d at 192. Thus, as in J. B. Williams Co., even when the evidence is not in conflict, the district court's findings on similarity of the marks must be upheld unless clearly erroneous.
Nescher also points out that the Slickcraft name is usually accompanied by the additional trademark AMF. As a result of this consistent use, Nescher argues, AMF has become the salient part of the mark indicative of the product's origin. See Rockwood Chocolate Co. v. Hoffman Candy Co., 372 F.2d 552, 555, 54 C.C.P.A. 1061 (1967) (likelihood of confusion found for Cup-o-Gold and Bag-o-Gold, but not for Rockwood Bag-o-Gold); Cf. John Morrell & Co. v. Reliable Packing Co., 295 F.2d 314 (CA 7 1961) (both parties used house name to identify origin of prepared hams).
Sound is also important because reputation is often conveyed word-of-mouth. We recognize that the two sounds can be distinguished, but the difference is only in a small part of one syllable. In G. D. Searle & Co. v. Chas. Pfizer & Co., 265 F.2d 385 (CA 7 1959), Cert. denied, 361 U.S. 819, 80 S.Ct. 64, 4 L.Ed.2d 65 (1959), the court reversed the trial court's finding that Bonamine sounded "unlike" Dramamine, stating that: "Slight differences in the sound of trademarks will not protect the infringer." Id. at 387. The difference here is even slighter. In a case in which the difference in sound corresponds closely with the instant appeal, the Court of Customs and Patent Appeals held that the sounds Pediglo and Pechglo were similar. Vanity Fair Mills, Inc. v. Pedigree Fabrics, Inc., 161 F.2d 226, 228, 34 C.C.P.A. 1043 (1947). In reversing the patent commissioner's decision allowing the Pediglo mark to be registered, the court said that the question was not a "close one." Id.13 See also Celanese Corp. v. DuPont De Nemours & Co., 154 F.2d at 145, 33 C.C.P.A. 857 (Clar-apel and Clarifoil "sound very nearly alike"); David Sherman Corp. v. Heublein, Inc., 340 F.2d 377, 381 (CA 8 1965) (Smirnoff and Sarnoff "strikingly alike when spoken").
Convergent marketing channels increase the likelihood of confusion. McCarthy, Supra, at § 24.6. There is no evidence in the record that both lines were sold under the same roof except at boat shows; the normal marketing channels used by both AMF and Nescher are, however, parallel. Each sells through authorized retail dealers in diverse localities. The same sales methods are employed. The price ranges are almost identical. Each line is advertised extensively though different national magazines are used; the retail dealers also promote the lines, by participating in smaller boat shows and by advertising in local newspapers and classified telephone directories. Although different submarkets are involved, the general class of boat purchasers exposed to the products overlap.
In assessing the likelihood of confusion to the public, the standard used by the courts is the typical buyer exercising ordinary caution. See HMH Publishing Co. v. Lambert, 482 F.2d 595, 599 n. 6 (CA 9 1973). Although the wholly indifferent may be excluded, McCarthy, Supra, at § 23:27, the standard includes the ignorant and the credulous. Stork Restaurant, Inc. v. Sahati, 166 F.2d at 358; See Drexel Enterprises, Inc. v. Hermitage House Furniture, Inc., 309 F.Supp. 1389, 1390 (D.S.C.1970). When the buyer has expertise in the field, a higher standard is proper though it will not preclude a finding that confusion is likely. American Drill Bushing Co. v. Rockwell Manufacturing Co., 342 F.2d at 1022, 52 C.C.P.A. 1173 (expertise in field differentiated from expertise as to trademarks). Similarly, when the goods are expensive, the buyer can be expected to exercise greater care in his purchases; again, though, confusion may still be likely. See Omega Importing Corp. v. Petri-Kine Camera Co., 451 F.2d 1190, 1195 (CA 2 1971) (warns against undue reliance on the "supposed sophistication" and care of consumers when expensive goods are involved).
The district court also found that trademarks are unimportant to the average boat buyer. Common sense and the evidence indicate this is not the type of purchase made only on "general impressions." See Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F.2d at 161. This inattention to trade symbols does reduce the possibilities for confusion. Restatement of Torts § 731(g).
Inasmuch as a trademark owner is afforded greater protection against competing goods, a "strong possibility" that either party may expand his business to compete with the other will weigh in favor of finding that the present use is infringing. Restatement of Torts § 731(b) & Comment c. When goods are closely related, any expansion is likely to result in direct competition. Compare Communications Satellite Corp. v. Comcet, Inc., 429 F.2d at 1253. The evidence shows that both parties are diversifying their model lines. The potential that one or both of the parties will enter the other's submarket with a competing model is strong.
1 The complaint alleged two other theories of recovery, unfair competition and dilution. Under these facts, the unfair competition count adds nothing. Appellant's dilution theory was not proved at trial: the Slickcraft mark was not shown to be strong enough to be diluted, nor did the evidence show that use of appellee's mark on his boats would tarnish the Slickcraft image. Thus, we need not decide whether California recognizes a cause of action for dilution. See generally HMH Publishing Co. v. Lambert, 482 F.2d 595, 599 (CA 9 1973)
2 AMF also sought an accounting. On appeal AMF has effectively abandoned its request for an accounting
3 Sleekcraft Boats, wholly owned by Nescher, is also a party-appellee. We refer to both as Nescher
4 The parties and the district court assumed this gave AMF absolute priority, for appellee never contended he was entitled to protection as a good faith intermediate user one who innocently adopts an infringing mark after the trademark owner begins to use his mark, but before he registers it. This can be a limited geographical defense. Burger King of Florida, Inc. v. Hoots, 403 F.2d 904 (CA 7 1968); 15 U.S.C. § 1115(b); See Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713 (1916). It was appellee's burden to raise and prove this defense, and he has not
5 Our disposition obviates the need to discuss other issues raised by appellant
6 We do not understand this to mean that our hands are tied if the court's conclusion is wholly with its incompatible findings
8 Wright & Miller, Supra note 7, at § 2578
9 The alleged infringer's intent in adopting the mark is weighed, both as probative evidence of the likelihood of confusion and as an equitable consideration
10 Related goods are those "products which would be reasonably thought by the buying public to come from the same source if sold under the same mark." Standard Brands, Inc. v. Smidler, 151 F.2d 34, 37 (CA 2 1945). See Yale Electric Corp. v. Robertson, 26 F.2d 972 (CA 2 1928)
11 The list is not exhaustive. Other variables may come into play depending on the particular facts presented. Triumph Hosiery Mills, Inc. v. Triumph International Corp., 308 F.2d 196, 198 (CA 2 1962); Restatement of Torts § 729, Comment a (1938)
13 We recognize that actions to register a recently-adopted trademark are distinguishable from infringement actions because the applicant for registration has an infinity of other marks to choose from. Consequently, in registration cases any doubts about the likelihood of confusion will be resolved against the party seeking to register a new mark. Esso Standard Oil Co. v. Sun Oil Co., 97 U.S.App.D.C. 154, 159, 229 F.2d 37, 42 (CADC), Cert. denied, 351 U.S. 973, 76 S.Ct. 1027, 100 L.Ed. 1491 (1956)