Court Opinion

ID: 2962062
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:52:06.65149+00
Date Added: 2024-06-11T11:42:25.597492
License: Public Domain

USCA1 Opinion

	

          August 10, 1993   UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-2388                               AKTIEBOLAGET ELECTROLUX,                                Plaintiff, Appellant,                                          v.                            ARMATRON INTERNATIONAL, INC.,                                 Defendant, Appellee.                                 ____________________          No. 92-2439                               AKTIEBOLAGET ELECTROLUX,                                 Plaintiff, Appellee,                                          v.                            ARMATRON INTERNATIONAL, INC.,                                Defendant, Appellant.                                 ____________________                                     ERRATA SHEET               The  opinion of  this  Court issued  on  July 15,  1993,  is          amended as follows:               Page  2, line 3 - insert "Aktiebolaget Electrolux" after the          word "Appellant";               Page 2, line 4 - insert "Armatron International, Inc." after          the word "Appellee";               Page  3, footnote 2, line  1 - insert  word "separate" after          words "filed a";               Page  3, footnote  2, line  1 -  insert phrase  "docketed as          No. 92-2439," after word "appeal"; and               Page  3,  footnote  2,  line 2  -  add  additional sentence,          "Consequently  Armatron  will  be  referred  to  throughout  this          opinion as Appellee."                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-2388                               AKTIEBOLAGET ELECTROLUX,                                Plaintiff, Appellant,                                          v.                            ARMATRON INTERNATIONAL, INC.,                                 Defendant, Appellee.                                 ____________________          No. 92-2439                               AKTIEBOLAGET ELECTROLUX,                                 Plaintiff, Appellee,                                          v.                            ARMATRON INTERNATIONAL, INC.,                                Defendant, Appellant.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Douglas P. Woodlock, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                              Torruella, Cyr and Boudin,                                   Circuit Judges.                                   ______________                                _____________________               Paul J. Hayes,  with whom Dean  G. Bostock, and  Weingarten,               _____________             ________________       ___________          Schurgin, Gagnebin & Hayes, were on brief for plaintiff.          __________________________               Arnold E. Cohen,  with whom Englander, Finks,  Ross, Cohen &               _______________             ________________________________          Pike, Inc., was on brief for defendant.          __________                                 ____________________                                    July 15, 1993                                 ____________________                    TORRUELLA,  Circuit   Judge.    This   is  a  trademark                                _______________          infringement and unfair competition  action under the Lanham Act,          15  U.S.C.    1051 et  seq.1   Appellant  Aktiebolaget Electrolux                             _______          holds a trademark for  a line of gardening products  called "Weed          Eater."  Appellee Armatron  International, Inc. subsequently sold          a gardening product variously  called "Leef Eeter," "Leaf Eater,"                                        ____________________          1  The trademark infringement provision is   1114, which provides          in pertinent part:                      any person who shall, without the consent                      of the registrant --                       (a) use  in commerce any .  . . colorable                      imitation   of   a  registered   mark  in                      connection  with  the sale,  offering for                      sale,  distribution,  or advertising   of                      any  goods or  services  . .  . which  is                      likely  to cause  confusion, or  to cause                      mistake, or to deceive; . . .                       shall be liable in  a civil action by the                      registrant   for   the  remedies   herein                      provided.          The unfair  competition provision is    1125(a)(1), titled "False          designations  of origin  and false  descriptions forbidden."   It          provides in relevant part:                      Any person who, on or in connection  with                      any goods  or services, or  any container                      for goods,  uses  in commerce  any  word,                      term,  name,  symbol, or  device,  or any                      combination   thereof,   or   any   false                      designation    of   origin,    false   or                      misleading description of fact,  or false                      or  misleading  representation  of  fact,                      which  --                       (A) is likely  to cause confusion, or  to                      cause mistake, or to deceive . . .                        shall be liable in  a civil action by any                      person who believes that  he or she is or                      is likely to be damaged by such act.                                         -2-          "Flowtron   Leaf  Eater,"   and  "Vornado   Leaf  Eater."     For          convenience, we will refer to appellee's product as a Leaf Eater.          The district  court, after a  bench trial,  issued an  injunction          requiring appellee to use the term Leaf Eater only in conjunction          with  the  Flowtron  or  Vornado  logos,  but declined  to  award          appellant damages.  Finding no error, we affirm.2                    Appellant has used the  Weed Eater trademark since 1972          to  sell weed  trimmers and  blower/vacuums.   Weed  trimmers are          hand-held  machines which  use a  rapidly spinning  nylon string,          driven  by  a  motor,  to  shave  unwanted  growth  from gardens.          Blower/vacuums  work much like  normal household vacuum cleaners;          they  suck loose debris, such  as fallen leaves,  from the garden          through  a  hose and  deposit  them in  a  bag.   The  leaves are          shredded  by a nylon string  mechanism before they  arrive in the          bag.  Blower/vacuums also  may be used to blow  loose debris away          from the garden  or into manageable piles.  The  user walks along          the garden with both machines.                    Appellee has sold Leaf Eaters  since 1987.  The product          consists  of a  free-standing barrel, into  which the  user pours          collected  leaves.  A nylon string mechanism in the barrel shreds          the leaves and  ejects the fragments at the bottom.  The shredded          leaves may be used as mulch.  Alternatively, the entire apparatus          can  be positioned  over  a garbage  can,  allowing the  user  to          dispose  of the shredded leaves easily.  Appellee boasts that the                                        ____________________          2  Armatron filed a separate notice of appeal docketed as No. 92-          2439, but ultimately  did not attack the judgment.   Consequently          Armatron will be referred to throughout this opinion as Appellee.                                         -3-          Leaf Eater will convert eight bags of normal leaves into one  bag          of  shredded leaves.  Leaf Eaters thus perform only one function:          they shred leaves.                    Appellee  contends that its use  of the Leaf Eater name          flows  naturally  from  the  name of  its  previous  product, the          Skeeter  Eeter, which was used to control insects.  Skeeter Eeter          was  never challenged as an  infringing mark.   Prior to adopting          the  Leaf Eater  mark,  however, appellee  conducted a  trademark          search to determine  whether it was available  legally.  Appellee          learned,  in fact, that Leaf  Eater was trademarked  by a company          called  Idea  Bank, but  that  the  trademark had  since  lapsed.          Appellee  also  learned about  the  Weed  Eater trademark,  which          appellant  trademarked  even before  Idea  Bank trademarked  Leaf          Eater.   Appellee concluded  that Leaf  Eater was  an unprotected          mark,  available for  use  in connection  with  a leaf  shredding          machine.                    After  appellant complained that  Leaf Eater unlawfully          infringed  on the  Weed Eater  mark, appellee  attached the  name          brands  Flowtron  or  Vornado  in  front  of  Leaf  Eater.    The          injunction in  this case  essentially  replicates this  practice.          The district court ordered appellee to use Flowtron or Vornado in          the same or  greater size type as  Leaf Eater.  Furthermore,  the          district court  required appellee to inform  all distributors and          retailers   of   the   injunction's   dictates,   so   that   all          advertisements  would comply.   If the advertisements nonetheless          do not comply, then appellee cannot reimburse the distributors or                                         -4-          retailers for the cost of advertising.                    The district court based the  injunction on a series of          eight factual findings which we have deemed relevant in trademark          infringement  suits.    See  Keds Corp.  v.  Renee  International                                  ___  __________      ____________________          Trading Corp.,  888 F.2d  215, 222  (1st Cir.  1989).   The eight          _____________          factors  are  aimed  at  establishing  whether  a  likelihood  of          confusion exists between the brands, which is the central inquiry          in  a  trademark   infringement  suit.    15  U.S.C.      1114(1)          (prohibiting  the  use  of  a  mark  that  is  "likely  to  cause          confusion, or to cause  mistake, or to deceive"); see  also Keds,                                                            _________ ____          888  F.2d at 222;  Volkswagenwerk Aktiengesellschaft  v. Wheeler,                             _________________________________     _______          814 F.2d 812,  817 (1st Cir. 1987).  No  one factor is conclusive          as to  likelihood  of  confusion, and  the  district  court  must          consider  each.  Keds, 888 F.2d at  222.  We will not disturb the                           ____          district court's  findings on the  eight factors unless  they are          clearly erroneous.  Id.                              ___                    The  findings made by  the district court  in this case          are summarized as follows:                    1)   Similarity  of  Marks:   The  Leaf Eater  mark  is                         _____________________          similar to the Weed Eater mark, but the similarity is  diluted by          the frequent use of appellant's logos Vornado and Flowtron.                    2)  Similarity  of Goods:    The  goods themselves  are                        ____________________          similar in only the broadest sense.  The Weed Eater blower/vacuum          primarily  collects  leaves,  while  the Leaf  Eater  provides  a          convenient method of disposal.   They are in the same ball  park,          but  they are not precisely  the same, sharing  only the mulching                                         -5-          function.   Persons wishing to buy  a Weed Eater would  not buy a          Leaf Eater by mistake.                    3, 4, 5)   Channels of Trade, Advertising and  Class of                               ____________________________________________          Prospective Purchasers:3   The products are  sold side-by-side in          ______________________          the same  stores and at  the same  price, advertised in  the same          media, and aimed at similar consumers.                    6)  Evidence of Actual Confusion:   Appellant made only                        ____________________________          a weak showing  of actual confusion through an  equivocal survey,          showing at best name association confusion.  Appellant was unable          to produce any instances of actual consumer confusion after  both          products coexisted on the market for six years.                    7)   Appellee's Intent in Adopting  the Mark:  Appellee                         _______________________________________          did not act in  bad faith in adopting the mark,  but was aware of          appellant's strong trademark and the risk of legal challenge.                    8)  Strength of Mark:  Weed Eater is a strong mark, but                        ________________          not one that occupies the field.                    Appellant   does  not  contest   the  district  court's          findings seriously,  and we do  not find them  clearly erroneous.          In light of  its findings  on these factors,  the district  court          found  that appellee's  use  of the  Leaf  Eater mark  by  itself          infringed on  appellant's Weed Eater  mark, but  use of  Flowtron          Leaf Eater or Vornado Leaf Eater did not.  We review the district                                        ____________________          3    Treating these  factors together  has  become somewhat  of a          pattern  in this circuit.  See Boston Athletic Ass'n v. Sullivan,                                     ___ _____________________    ________          867   F.2d    22,    30   (1st    Cir.   1989);    Volkswagenwerk                                                             ______________          Aktiengesellschaft v. Wheeler, 814 F.2d 812, 818 (1st Cir. 1987);          __________________    _______          Pignons  S.A.  v. Polaroid  Corp., 657  F.2d  482, 488  (1st Cir.          _____________     _______________          1981).                                         -6-          court's injunction  on a  clearly erroneous standard,  because it          reflects the  district court's  factual finding on  likelihood of          confusion.   Keebler Co. v.  Rovira Biscuit Corp.,  624 F.2d 366,                       ___________     ____________________          377 (1st Cir. 1980).  That factual finding, in turn, rests on the          district court's weighing of the eight factors discussed above.                    Of the  eight factors,  the  strongest tending  towards          confusion in this  case were  the ones addressed  together:   the          similar channels  of trade, advertising and  class of prospective          purchasers.  Appellant's strong  mark also weighed in favor  of a          finding of likelihood of confusion.                      On  the  other  hand,   the  weak  evidence  of  actual          confusion weighs quite heavily against a finding of likelihood of          confusion.  While a  showing of actual confusion is  not required          to establish infringement, an absence  of actual confusion, or  a          negligible amount of it, between two products after a long period          of  coexistence on the market is highly probative in showing that          little  likelihood of confusion exists.  Pignons S.A. v. Polaroid                                                   ____________    ________          Corp.,  657 F.2d 482, 490  (1st Cir. 1981)  (coexistence for four          _____          years); Keebler, 624 F.2d  at 377 (coexistence for three  and one                  _______          half  years).   In this case,  Weed Eaters  and Leaf  Eaters have          coexisted  on  the  market  for  six  years  with  little  actual          confusion, twice the amount of time that we previously have found          convincing.  Keebler, 624 F.2d at 377.                       _______                    Furthermore, the district  court found  that the  goods          themselves  are similar  only in  the broadest  sense:   they are          gardening equipment.  The  intended use and the cosmetics  of the                                         -7-          goods,  however,  reveal  significant   differences  in  the  two          products, negating any significant possibility of confusion.                    The remaining two factors present inconclusive evidence          as  to likelihood of confusion.  First, although appellee did not          act  in bad faith by designating its product Leaf Eater, appellee          knew about  the Weed Eater  mark and the  possibility of  a legal          contest.   Second, the district  court found that  the words Leaf          Eater, standing  alone,  could cause  confusion  but the  use  of          Flowtron or Vornado  in conjunction with Leaf  Eater reduced that          likelihood.                    Taken  together, the factors  suggest little likelihood          of confusion.   Only two clearly weigh in favor  of it, but their          importance  in  this  case is  lessened  by  the  lack of  actual          confusion.   Indeed,  it seems  to  us that  the lack  of  actual          confusion  is all  the more  persuasive because the  products are          sold side-by-side, at the same price,  using the same advertising          media, and to the same consumers.                    In  this  circumstance,  we  cannot  conclude that  the          district  court  clearly  erred  in  finding  infringement   when          appellee used the term Leaf Eater alone, but no infringement when          appellee used the term Flowtron Leaf Eater or Vornado Leaf Eater.          To  the  contrary,  the   district  court  properly  crafted  the          injunction to fit the relevant facts.                    The  mandates of  the  injunction are  not  novel.   We          previously  have  found that  "otherwise  similar  marks are  not          likely  to be confused where used in conjunction with the clearly                                         -8-          displayed  name   and/or  logo  of  the   manufacturer."    Astra                                                                      _____          Pharmaceutical Products,  Inc. v. Beckman Instruments,  Inc., 718          ______________________________    __________________________          F.2d 1201, 1205 (1st Cir. 1983) (citing Pignons, 657 F.2d at 487;                                                  _______          Fisher  Stoves, Inc. v. All  Nighter Stove Works,  Inc., 626 F.2d          ____________________    _______________________________          193,  194-95 (1st Cir. 1980)).  Appellant contends that we cannot          rely  on this principle in  the present case  because those cases          involved  such  well-known  names  as  Polaroid.    In  contrast,          appellant  argues,  Flowtron  and   Vornado  are  unknown  marks,          meaningless in the  minds of the  consumers.  They do  not dilute          the infringing aspects of Leaf Eater.                    Nothing in  those  cases, however,  indicates that  the          relative fame of the manufacturer's name only serves  to sanitize          an otherwise infringing  mark.  Indeed, when measuring the marks,          we  look at "the  total effect of the  designation, rather than a          comparison  of the  individual features."   Pignons, 657  F.2d at                                                      _______          487.   The relative fame of the  terms Flowtron or Vornado may be          one ingredient  that is added to  the mixture, but it  is not the          only one that  arises from the use of those  words.  The district          court found that appellant's survey showed at best a kind of name          association  confusion  between the  Weed  Eater  and Leaf  Eater          products.     When  asked   who  manufactured  the   Leaf  Eater,          respondents  answered   with  the  names  of   various  prominent          manufacturers  of  gardening  equipment,  including  Weed  Eater.          Interestingly,  twice  as many  respondents  believed  that Toro,          rather than Weed Eater,  manufactured the Leaf Eater.   We cannot          find any error in the district court's conclusion that the use of                                         -9-          Flowtron or Vornado, as  the manufacturer's trade name, clarifies          this confusion.                    Relying on Volkswagenwerk,  814 F.2d at 819,  appellant                               ______________          argues that  "strong" marks  are entitled to  "broad" protection.          Because  the district  court found  that Weed  Eater is  a strong          mark,  the   injunction  should  have  bestowed   upon  it  broad          protection, such as  forbidding the  use of the  Leaf Eater  mark          absolutely.                    Appellant    mischaracterizes    our   statements    in          Volkswagenwerk.    We  said  there  that  "'[s]trong'  marks  are          ______________          accorded broader protection against infringement than  are 'weak'          marks."  The statement  is framed in  relative terms, as it  must          be.   A victim of infringement is  entitled to as much protection          as is required to stop the infringement.  15 U.S.C.   1116 (court          shall "grant  injunctions, according to the  principles of equity          and upon such terms as the  court may deem reasonable, to prevent          the violation"  of  trademark rights).    Strong marks  are  more          easily infringed  than weak marks, and  require stronger measures          to remedy  infringement.  Whether  a victim  holds a strong  or a          weak  mark, however, he still is entitled only to such protection          as will eliminate the likelihood of confusion.                    We  come now  to the  district court's  conclusion that          appellant  was not entitled  to monetary  damages.   The relevant          statute is 15 U.S.C.   1117.  It provides, in relevant part, that          when a trademark violation occurs, the  victim shall be entitled,          "subject  to the principles of equity, to recover (1) defendant's                                         -10-          profits,  (2) any damages sustained by the plaintiff, and (3) the          costs of the  action."  Appellant essentially  contends that this          section automatically requires damages when a trademark violation          occurs.   Thus, because the district court found that a violation          occurred and issued an injunction  to prevent it from  recurring,          appellant contends that it is entitled also to money.                    We cannot accept this argument.  We have found "a clear          distinction  between the showing required to establish a right to          injunctive  relief and  that  required to  establish  a right  to          damages."   Camel Hair and Cashmere Inst. v. Associated Dry Goods                      _____________________________    ____________________          Corp.,  799  F.2d 6,  12  (1st Cir.  1986).   The  district court          _____          summarized the  additional showing required  for monetary damages          in  four rules.  These are:   1) a plaintiff seeking damages must          prove  actual harm,  such  as  the  diversion  of  sales  to  the          defendant; 2)  a plaintiff  seeking an accounting  of defendant's          profits must show that  the products directly compete,  such that          defendant's  profits would have gone to plaintiff if there was no          violation; 3) the general rule  of direct competition is loosened          if the defendant acted fraudulently or palmed off inferior goods,          such  that actual  harm  is presumed;  and  4) where  defendant's          inequitable conduct  warrants bypassing the usual  rule of actual          harm,  damages  may  be  assessed  on  an  unjust  enrichment  or          deterrence theory.                    We  find the district court's four part formula to be a          concise distillation of our case law on   1117.   Our decision in          Valmor Products Co. v. Standard Products Corp., 464 F.2d 200, 204          ___________________    _______________________                                         -11-          (1st  Cir. 1972),  reflects  the first  three  rules in  a  brief          passage.  We explained that                      [s]ince  [defendant's]  products do  not,                      concededly,  compete with  [plaintiff's],                      [defendant] can hardly be thought, in the                      absence of fraud or  palming off, to be a                      trustee for  profits  which but  for  the                      infringement     would     have      been                      [plaintiff's],   nor,   when  given   the                      opportunity   at   several  points,   was                      [plaintiff's]  president able  to specify                      any   damages   which  his   company  had                      suffered.          Id.   In that case, we  denied a request for  an accounting, even          ___          though  we upheld  an injunction to  stem a  trademark violation,          because  of a  lack of  actual damages,  direct competition,  and          culpable  behavior by  the  plaintiff.   Those  factors are  thus          relevant to an award of damages or an accounting of  profits.  In          Raxton Corp. v. Anania  Associates, Inc., 668 F.2d 622,  625 (1st          ____________    ________________________          Cir. 1982), we did  not authorize an accounting for  profits when          "the two companies do not compete directly for business . . . and          [plaintiff] offered no proof of actual damages."                    The  district court's  fourth rule  essentially derives          from a  footnote in Quabaug  Rubber Co.  v. Fabiano Shoe  Co. 567                              ___________________     _________________          F.2d 154,  161 n.15 (1st Cir. 1977),  in which we recognized that          other  circuits granted  damages  based on  deterrence or  unjust          enrichment theories.  In Baker v. Simmons  Co., 325 F.2d 580, 582                                   _____    ____________          (1st  Cir. 1963), we also granted damages on an unjust enrichment          theory  when  the  products did  not  directly  compete,  but the          defendant was guilty of  fraud and palming-off.  Thus,  under our          case  law damages have never been allowed under the deterrence or                                         -12-          unjust enrichment theories absent some form of fraud.                    In addition to restating  our law on damages correctly,          the district court applied the law to the facts correctly.                    First,  appellant failed  to establish  actual damages.          Appellant  asks  us  to  give  one  sentence uttered  during  one          deposition of  an officer of  appellee conclusive weight  in this          regard.   Appellant's lawyer asked "[s]o the term Leaf Eater has,          as  you said, a monumental and significant effect on your ability          to sell your  product; is that  right?"  The officer,  namely the          Vice-President of Sales and Marketing,  responded simply "[y]es."          The district court  gave little weight to  this statement because          it was in response  to a leading question, and  more importantly,          because it did not show that appellant lost any sales  due to the          infringing  aspects  of  appellee's  own mark.    Appellant  also          presented  a survey  purporting to  show some confusion  over the          name Leaf Eater.  The survey did not show appellant actually lost          sales due to that confusion, however.  We agree with the district          court that appellant's evidence did not present a colorable claim          of actual damages.                    Second,  Weed  Eater and  Leaf  Eater  products do  not          directly compete, which forecloses one avenue in the quest for an          accounting of appellee's profits.  As the district court noted, a          purchaser of one product would not think that he had just  bought          the other  product.  The  products serve different  functions and          are  designed  with  these differences  in  mind.   The  greatest          similarity between  the products  is the nylon  string mechanism;                                         -13-          the  execution  of  that   mechanism,  however,  is  sufficiently          different  to  place  the  products in  different  categories  of          consumer goods.  Thus, when publications such as Consumer Reports                                                           ________________          rate  leaf shredders,  they discuss  the Leaf  Eater  and various          other  machines,  but  do  not  mention  appellant's  Weed  Eater          products.  Given the lack of direct competition, we cannot assume          thatthe saleof LeafEaters hasappropriatedany ofappellant's sales.                    Third,  appellee  did not  act in  bad  faith so  as to          loosen the  direct competition  or actual harm  rule, foreclosing          the  other avenue in the  quest for an  accounting of defendant's          profits.   As the district court found, appellee chose Leaf Eater          as a natural extension  of its previous mark, Skeeter  Eeter, not          to take advantage of Weed Eater's reputation and good will in the          market.    Indeed,  appellee  did  so  only  after  its  attorney          conducted a  search to  determine Leaf Eater's  trademark status,          and concluded that Leaf Eater was available for use.  Thus, while          appellee may have been aware of a challenge, appellee did not act          in bad faith in using a mark that it believed available.                    For  the same  reasons, the  fourth avenue  for relief,          involving considerations of deterrence and unjust enrichment, has          no place in this situation.                    We are sensitive to appellant's claim that it has spent          a  considerable amount  of  money over  the  course of  years  to          promote the Weed  Eater line  of products.   In sum, however,  we          find  no  justification  to  award  damages   under  our     1117          jurisprudence.  Contrary to appellant's assertions, the  equities                                         -14-          in this case simply do not favor an award of money.  Rather, they          are satisfied with the injunction entered by the district court.                    Affirmed.                    ________                                         -15-