Opinion ID: 166617
Heading Depth: 2
Heading Rank: 3

Heading: analysis

Text: 24 Having concluded that the district court selected the appropriate standard, we now turn to its application of that standard. A careful examination of the opinion below indicates that the district erred both factually and legally in its analysis. 25
26 In the proceedings below, the district court held that in order to successfully recover an award of Hyundai's profits, Western must show that Hyundai chose the name THE HYUNDAI ADVANTAGE with the intent to benefit from Western's reputation or goodwill. 27 This statement is wrong for two reasons. First, the district court confuses Hyundai's manufacturing warranty, THE HYUNDAI ADVANTAGE with its extended warranties, ADVANTAGE and ADVANTAGE PLUS. The defendant's selection of HYUNDAI ADVANTAGE was not at issue in this particular summary judgment motion. The claims involving the manufacturer's warranties were already dismissed in the earlier summary judgment motion and were not appealed. 28 Second, to survive summary judgment, Western does not have to show that Hyundai's decision was made with the intent to benefit from Western's reputation or goodwill. It needs only to raise a genuine issue on this material fact. See Fed.R.Civ.P. 56(c). 29 The district court's errors were not without consequence. First, by confusing the manufacturer's and extended warranties, the district court incorrectly cited facts in support of its argument that applied only to the manufacturer's warranty. For instance, as evidence that Hyundai did not intend to benefit from the goodwill of Western's mark, the district court noted (1) that Hyundai spent a substantial sum of money promoting its warranties; and (2) that it conducted a trademark search prior to launching the product. Both of these facts are correct in relation to the manufacturer's warranty, but they do not pertain to Hyundai's extended warranties. Second, by failing to articulate the summary judgment standard, the court did not grant Western the benefit of the evidentiary inferences to which it is entitled at this stage of the proceedings. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ([O]n summary judgment, the inferences to be drawn from the facts. . . must be viewed in the light most favorable to the party opposing the motion.) (internal quotations omitted, alteration in original). 30 Thus, the appropriately articulated standard should have been as follows: In order to survive summary judgment on its claim for Hyundai's profits, Western must raise a genuine factual issue about whether Hyundai chose the names ADVANTAGE and ADVANTAGE PLUS for its extended warranties with the intent to benefit from Western's reputation or goodwill. 31
32 In our trademark cases dealing with the likelihood of confusion, we have held that the deliberate adoption of a similar mark may lead to an inference of an intent to pass off goods as those of another. . . . Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920, 927 (10th Cir.1986); see also Universal Money Ctrs., 22 F.3d at 1532. As the non-moving party, Western is entitled to the benefit of this presumption. Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348. Even though we established this presumption in a likelihood-of-confusion case, we conclude that it is appropriate to apply the presumption here, particularly because our intent inquiry is the same in both situations.
33 An issue critical to our analysis is the question of Hyundai's knowledge. In its opinion below, the district court stated that 34 it is clear that those responsible for choosing the THE HYUNDAI ADVANTAGE name for Hyundai's extended warranties did not know about Western's competing marks. Logically, therefore, those in charge of choosing the name could not have intended to take advantage of Western or its goodwill. . . . Hyundai's knowledge of Western's marks was obtained only after Hyundai had preliminarily decided to use THE HYUNDAI ADVANTAGE. Therefore, the undisputed evidence shows that no one within Hyundai chose THE HYUNDAI ADVANTAGE with the intent to benefit from Western's mark. 35 However, the above-quoted statement once again conflates Hyundai's manufacturer's warranty, THE HYUNDAI ADVANTAGE, and its extended warranties, ADVANTAGE and ADVANTAGE PLUS. The record clearly indicates that Hyundai learned of Western's marks on September 16, 1998, when it received an opinion letter from its outside counsel regarding the requested trademark search on Hyundai's manufacturer's warranty. It was not until October 1998 when executives at Hyundai's assurance products division chose the names ADVANTAGE and ADVANTAGE PLUS for Hyundai's extended warranties. 36 The district court also relies upon the deposition testimony of Denise Lowery, a member of the product assurance department which selected the name for the extended warranty, in which she stated that she had never heard of Western, their products, or their trademarks. But this assertion is potentially contradicted by Lowery's subsequent statements in which she maintained an opinion that the Hyundai warranty could not be matched by any other extended warranty on the market. This statement tends to show that Lowery had knowledge of her competition and, therefore, of Western's products. 37 Thus, while it seems that Hyundai did not know of Western's marks when it initially selected THE HYUNDAI ADVANTAGE as the name for its manufacturer's warranty, there is at least a genuine factual dispute as to whether it knew of the marks at the time it selected its extended warranties. 38 Hyundai argues, however, that it is inequitable to impute knowledge of Western's trademarks from one division of the company (Legal) to another (Assurance). In support of this proposition, Hyundai cites SecuraComm Consulting, Inc. v. Securacom, Inc., a Third Circuit case in which the court refused to impute one former corporate officer's knowledge of a trademark to his successor because such an action was not consistent with the equitable considerations of the case. 166 F.3d 182, 187-88 (3d Cir.1999). 39 We reject this argument. It is well established that a corporation is chargeable with the knowledge of its agents and employees acting within the scope of their authority. U.D. Sawyer v. Mid-Continent Petroleum Corp., 236 F.2d 518, 520 (10th Cir.1956). SecuraComm is distinguishable because it involved the imputation of knowledge gained several years earlier by a former officer. 166 F.3d at 187-88. At the time the officer left the corporation's employ, there was no reason to think that the corporation was infringing the plaintiff's trademark. Id. Here, we have two divisions of the same corporation, Legal and Assurance, working simultaneously on the same product, the Hyundai extended warranty. Notwithstanding the deposition testimony of Hyundai executives that each department operated as its own island, we see no reason in equity or otherwise to exempt Hyundai from the general principle that an employee's knowledge gained in the course and scope of the employment is imputed to the corporation, and, therefore, to all of its departments. 40 As a result, we conclude that there is at least a genuine factual issue as to whether Hyundai knew of Western's trademark when it selected the names ADVANTAGE and ADVANTAGE PLUS for its extended warranties.
41 In determining whether to apply the presumption that deliberate adoption of a similar mark leads to an inference of an intent to pass off goods as those of another, mere knowledge [of a similar mark] should not foreclose further inquiry. GTE Corp. v. Williams, 904 F.2d 536, 541 (10th Cir.1990). Rather, we must look to the larger factual context of the case. Universal Money Ctrs., 22 F.3d at 1532. Having done so, we remain unconvinced that Western has failed to raise a genuine factual issue as to intent. 42 In Universal Money Centers, even though we acknowledged that the defendant's in-house counsel knew of the trademarked term, we did not find a factual dispute over the intent to benefit from the goodwill of another in part because the defendant had spent nearly $60 million in promoting its own product. Id. at 1532. In the instant case, while the record establishes that Hyundai spent nearly $25 million promoting its manufacturer's warranty, there is nothing to indicate that it spent any significant resources in promoting its extended warranty program. 43 We are also persuaded by the Sixth Circuit's reasoning in WSM, Inc. v. Tenn. Sales Co., 709 F.2d 1084 (6th Cir.1983), in which the court stated: 44 [the defendant] was aware of [the plaintiff's] mark, yet with an infinite variety of non-similar designs available, it chose a virtually identical design, knowing that it intended to sell that design on identical goods in the same channels of trade as that in which [the plaintiff's] mark moved. It is reasonable to infer therefrom that [the defendant] intended to deceive the public concerning the origin of the goods. The district court thus properly awarded profits to [the plaintiff.] Id. at 1087. 2 45 Here, the evidence indicates that Hyundai appropriated not one, but two of Western's marks, THE ADVANTAGE and THE ADVANTAGE PLUS. Furthermore, Hyundai's marks were not only similar to Western's, they were identical and referred to substantially similar products aimed at the same group of consumers, i.e. automobile purchasers. 46 Considering the larger factual context of the case in conjunction with the factual dispute over Hyundai's knowledge, we are compelled to presume that Hyundai's deliberate adoption of two similar marks could lead to an inference that it intended to benefit from Western's goodwill. 47 But we do not hold as a matter of law that Hyundai actually possessed such an intent. Like almost every presumption in the law, the one we apply today may be rebutted by competent evidence in front of a jury. Hyundai argues that its initial selection of the Bumper-to-Bumper name for its extended warranty and the prominence of its corporate logo on the warranty brochures shows that it did not have the requisite intent for willful infringement. These arguments are not without merit, and it may well be that they will win the day when considered by the jury. But at this point in the proceedings, all that can be said is that the parties have established a genuine factual dispute over the intent required for willful infringement. Under Fed.R.Civ.P. 56, nothing else need be shown for the plaintiff to avoid summary judgment.