Opinion ID: 28599
Heading Depth: 2
Heading Rank: 3

Heading: discussion of southwest’s claims

Text: Southwest claims that the district court erred in denying its trademark infringement claim. Specifically, it challenges the district court’s findings that (1) FieldTurf’s inclusion of “AstroTurf” meta tags27 on its website was not likely to cause customer confusion and (2) FieldTurf’s use of the AstroTurf mark on its website constituted fair use of the mark. “The gravamen for any action of trademark infringement . . . is whether the challenged mark 27 Meta tags are essentially programming code instructions given to on-line search engines. “Although normally invisible to the Int ernet user, meta-tags are detected by search engines and increase the likelihood that a user searching for a particular topic will be directed to that Web designer’s page.” Nat’l A-1 Adver., Inc. v. Network Solutions, Inc., 121 F. Supp. 2d 156, 164 (D.N.H. 2000). Hidden in the code of FieldTurf’s webpage were several “AstroTurf” meta tags. As a result, web browsers searching for “AstroTurf” would find links to FieldTurf’s website, sometimes even before they found their way to Southwest’s website. -13- is likely to cause confusion.”28 In this circuit, whether FieldTurf’s use of the “AstroTurf” trademark is “likely to cause confusion” is a question of fact which can only be set aside if clearly erroneous.29 Southwest asserts that the district court misapplied trademark law by ignoring the possibility that FieldTurf’s meta tags created “initial interest confusion” for web browsers searching for “AstroTurf.” Contrary to Southwest’s assertion, the district court acknowledged that a likelihood of confusion can be established through initial interest confusion. The court found, however, that there was no evidence of “even fleeting customer confusion” in this case, rightfully distinguishing it from Elvis Presley Enterprises Inc. v. Capece.30 In Elvis Presley Enterprises, we upheld a finding of trademark infringement based on the “initial interest” confusion experienced by patrons of a bar called “The Velvet Elvis.”31 Several customers testified that they initially entered the bar believing that it was affiliated with rock ’n’ roll legend Elvis Presley, and that even after determining that it was not affiliated with Mr. Presley, some customers continued to patronize the bar.32 Contrary to Elvis Presley Enterprises, there is no evidence in this case that any customers visited FieldTurf’s website intending to purchase AstroTurf. Southwest proffers the testimony of its Internet expert, Eric Peabody, as proof of customer confusion. Mr. Peabody’s testimony was limited, however, to demonstrating that a web browser search for “AstroTurf” would generate hits on FieldTurf’s website; it provided no insight into whether these hits actually or initially confused any customers. 28 Marathon Mfg. Co. v. Enerlite Prods., 767 F.2d 214, 217 (5th Cir. 1985) (citations omitted). 29 Amstar Corp. v. Domino’s Pizza, Inc., 615 F.2d 252, 258 (5th Cir. 1980). 30 141 F.3d 188 (5th Cir. 1998). 31 Id. at 204. 32 Id. -14- Furthermore, Southwest mistakenly argues that meta tagging another company’s trademark necessarily constitutes trademark infringement. The meta tag cases in which our sister circuits have found trademark infringement involve either evidence of customer confusion or evidence that the meta tags were used illegitimately. For instance, in Brookfield Communications, Inc. v. West Coast Entertainment Corp., the Ninth Circuit held that West Coast infringed Brookfield’s trademark term in part by encoding it into the meta tags of its website.33 Brookfield produced computer software packages under t he “MovieBuff” trademark and marketed them through its website, www.moviebuffonline.com. Brookfield’s MovieBuff software offered information useful to professionals in the entertainment industry, including databases and software applications containing movie credits, box office receipts, and listings of actors, directors, and agents. West Coast ran a website named www.moviebuff.com that offered a searchable entertainment database similar to Brookfield’s. The court found that West Coast’s use of the “MovieBuff” trademark both in its domain name and through its imbedded meta tags was likely to cause customer confusion largely because it offered a nearly identical service marketed under Brookfield’s trademark. Because West Coast’s website made no legitimate reference to Brookfield’s product and used the “MovieBuff” trademark exclusively to market its own product, the court held that the use was likely to confuse Internet browsers and exploit Brookfield’s goodwill. The Ninth Circuit recently explained in Playboy Enterprises, Inc. v. Welles, however, that meta tagging another party’s trademark does not necessarily constitute trademark infringement.34 Terri Welles, the 1981 Playboy Playmate of the Year, maintains an independent website showcasing 33 174 F.3d 1036, 1061–65 (9th Cir. 1999). 34 279 F.3d 796, 804 (9th Cir. 2002). -15- erotic images of herself.35 The website advertises Ms. Welles as a former Playboy Playmate and contains the meta tags “Playboy” and “Playmate,” both of which are registered trademarks of Playboy Enterprises, Inc. (“PEI”).36 Although Internet searches of the terms “Playboy” and “Playmate” generated hits to Ms. Welles’s site, the court held that Ms. Welles had not infringed PEI’s trademarks because her use of the marks was nominative.37 Despite Ms. Welles’s competition with PEI in the sale of adult web content, her reference to PEI’s marks was legitimate and practically necessary to adequately describe the actual content of her site.38 FieldTurf had similarly legitimate reasons for meta tagging Southwest’s “AstroTurf” mark.39 As the district court noted, FieldTurf’s website engaged in comparative advertising with AstroTurf, including links to third-party articles on AstroTurf. This circuit has acknowledged that a party engaged in direct advertising may make “nominative use” of a competitor’s trademark as long as the party uses only so much of the mark as is necessary to identify the competing product, and the party does nothing to suggest affiliation, sponsorship, or endorsement by the markholder.40 FieldTurf’s 35 Id. at 799. 36 Id. at 800. 37 Id. at 804. 38 Id. 39 Contrary to Southwest’s assertions, the fact that FieldTurf made some false and misleading statements about “AstroPlay”does not undermine FieldTurf’s claim that it made legitimate references to “AstroTurf” for product comparison purposes. Southwest has already recovered for the false and misleading statements that FieldTurf made about AstroPlay; the present claim concerns the separate question of whether FieldTurf’s use of the AstroTurf trademark created a likelihood of confusion as to the source of the information on FieldTurf’s website. 40 Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526, 546 (5th Cir. 1998). -16- website does not suggest any affiliation or endorsement by Southwest; rather, its site contains several articles highlighting the differences between its product and AstroTurf. Thus, in light of FieldTurf’s legitimate references to AstroTurf and the complete absence of actual or initial customer-confusion evidence, the district court’s refusal to find trademark infringement was not clearly erroneous. Furthermore, because we find that FieldTurf was not liable for trademark infringement, we need not decide whether, as FieldTurf claims, the “AstroTurf” mark has become generic.
Southwest next contends that the district court abused its discretion in denying its post-trial motion for permanent injunctive relief. Southwest proffered thirteen specific statements that FieldTurf should be enjoined from making and eleven statements that FieldTurf must affirmatively post on its website and distribute to customers to correct the false impression created by its false advertising. “An order granting or denying a preliminary injunction will be reversed only upon a showing that the district court abused its discretion.”41 “The district court abuses its discretion if it (1) relies on clearly erroneous factual findings when deciding to grant or deny the permanent injunction, (2) relies on erroneous conclusions of law when deciding to grant or deny the permanent injunction, or (3) misapplies the factual or legal conclusions when fashioning its injunction relief.”42 The district court’s statements imply that a permanent injunction prohibiting FieldTurf employees from making certain statements and requiring them to make other statements would be difficult or impossible to 41 Martin’s Herend Imports, Inc. v. Diamond & Gem Trading United States of Am. Co., 195 F.3d 765, 772 (5th Cir. 1999). 42 Causeway Med. Suite v. Ieyoub, 109 F.3d 1096, 1102 (5th Cir. 1977). -17- enforce. The court also noted that there was no evidence that FieldTurf continued to engage in false advertising after trial. Based on these reasonable conclusions, we cannot say that the district court clearly abused its discretion in denying Southwest’s request for permanent injunctive relief.43 C. Refusal to Award an Accounting of FieldTurf’s Profits Southwest also contends that the district court abused its discretion in denying it recovery of the profits that FieldTurf earned as a result of its false advertising campaign. Section 1117(a) of the Lanham Act entitles a markholder to recover the defendant’s profits, subject to the principles of equity. An award of the defendant’s profits is not automatic, and is committed to the discretion of the district court, whose decision we review for an abuse of discretion. While this court has not required a particular factor to be present, relevant factors to the court’s determination of whether an award of profits is appropriate include, but are not limited to, (1) whether the defendant had the intent to confuse or deceive, (2) whether sales have been diverted, (3) t he adequacy of other remedies, (4) any unreasonable delay by the plaintiff in asserting his rights, (5) the public interest in making the misconduct unprofitable, and (6) whether it is a case of palming off.44 In this case, we cannot say that the district court abused its discretion in denying an accounting of profits. Although there is some evidence that FieldTurf intended to mislead customers and there is certainly an interest in making this conduct unprofitable, the other factors could reasonably be seen to weigh against an accounting of profits. First, the $1.04 million dollars in lost profits that the jury awarded to Southwest could certainly be seen as an adequate remedy in this case. Second, because of the way that Southwest presented its damage evidence in this case, it is impossible to tell which 43 See, e.g., Complete Auto Transit, Inc. v. Reis, 451 U.S. 401, 420 (1981) (acknowledging that courts are reluctant to grant injunctions that would be difficult to enforce); Moto-Sports, Inc. v. Gulf States Toyota, Inc., 324 F. Supp. 653, 656 (S.D. Tex. 1971) (stating that injunctive relief is appropriately denied if it involves the “impossible task of supervising continuous performance”). 44 Pebble Beach, 155 F.3d at 554 (citations omitted). -18- sales were diverted as a result of FieldTurf’s breach of the Kentucky settlement and which sales were diverted as result of FieldTurf’s false or misleading advertising. Finally, there is no evidence that FieldTurf palmed its product off as one of Southwest’s products. D. Denial of Prejudgment Interest Southwest next contends that the district court abused its discretion in denying prejudgment interest on Southwest’s breach of contract claims. With regard to Southwest’s request for prejudgment interest, the district court held that “there is no way in the record of this case the Court can determine applicable dates when damages occurred, therefore, the Court declines to award the same.” This reasoning for denying prejudgment interest was erroneous because prejudgment interest under Texas law begins to accrue on the earlier of 180 days after the date a defendant receives written notice of a claim or the date the suit is filed.45 Notwithstanding this error, the district court did not abuse its discretion in denying Southwest’s request for prejudgment interest.46 As the district court cautioned on several occasions, Southwest’s submission of a general damage question made it impossible for the court to determine which portion of the award was attributable to its breach of contract claims and which portion was attributable to its false advertising claims. Because Southwest is seeking prejudgment interest only on its breach of contract claim, there is no way for the district court to determine which portion of the damage award is chargeable with interest. The denial of 45 Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 530–31 (Tex. 1998). 46 Cf. Coxson v. Commonwealth Mortgage Co. of Amer., 43 F.3d 189, 192–93 (5th Cir. 1995) (holding that the district court did not abuse its discretion in denying prejudgment interest where there was a legitimate reason to do so, notwithstanding that the court failed to justify its decision). -19- prejudgment interest therefore did not constitute an abuse of discretion.47 E. Denial of Attorneys’ Fees Under 15 U.S.C. § 1117(a) Finally, Southwest argues that the district court abused its discretion in declining to award attorneys’ fees under 15 U.S.C. § 1117(a). The Lanham Act provides that a court may award the prevailing party reasonable attorneys’ fees in “exceptional cases.”48 As we explained in Seven-Up Co. v. Coca-Cola Co., the prevailing party bears the heavy burden of establishing that a case is exceptional, and the district court has broad discretion to determine whether a case qualifies as such: The prevailing party has the burden to demonstrate the exceptional nature of a case by clear and co nvincing evidence. The determination as to whether a case is except ional is left to the sound discretion of the trial court. An exceptional case is one where the violative acts can be characterized as “malicious,” “fraudulent,” “deliberate,” or “willful.” We have recognized that the statutory provision has been interpreted by the courts “to require a showing of a high degree of culpability on the part of the infringer, for example, bad faith or fraud,” and a few cases have gone as far as to require “very egregious conduct” to constitute an “exceptional” case.49 We agree with the district court that whether this qualifies as an “exceptional case” under the Lanham Act is a close question. But mindful that “the district court heard the evidence, saw the witnesses, 47 See Daniels v. Pipefit ters’ Ass’n Local Union, 945 F.2d 906, 925 (7th Cir. 1991) (denying prejudgment interest “[b]ecause the jury awarded a general verdict . . . [and] the district judge had no way of reading the minds of the deliberating jurors to determine how they arrived at the final, comprehensive amount”); Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1375 (9th Cir. 1987) (holding that the district court did not err in denying prejudgement interest on a general verdict even though it may have considered some irrelevant factors in its determination); Wojtkowski v. Cade, 725 F.2d 127, 129 (1st Cir. 1983) (holding that the district court did not abuse its discretion in denying prejudgment interest on a general verdict with mixed federal and state claims because the court could not determine to what extent the award was based on state claims); cf. Arleth v. FreeportMcMoran Oil & Gas Co., 2 F.3d 630, 636 (5th Cir. 1993) (recognizing the holding in Wojtkowski, but distinguishing it in the case where the same damages flow from each of the causes of action constituting the general verdict). 48 15 U.S.C. § 1117(a). 49 86 F.3d 1379, 1390 (5th Cir. 1996) (citations omitted). -20- and appraised their motives,”50 we cannot say that the district court abused its discretion in denying the recovery of attorneys’ fees in this case.