CAR-FRESHNER CORPORATION, JULIUS SÄMANN LTD., Plaintiffs - Appellants, v. AMERICAN COVERS, LLC, FKA AMERICAN COVERS, INC, DBA HANDSTANDS, ENERGIZER HOLDINGS, INC., ENERGIZER BRANDS, LLC, Defendants - Appellees.
Docket No. 19-2750
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
Decided: November 19, 2020
August Term 2020. Argued: September 21, 2020.
Appeal from a judgment of the Northern District of New York (Thomas J. McAvoy, District Judge), dismissing, on motion for summary judgment, a complaint filed by Car-Freshner Corporation and Julius Sämann Ltd. alleging trademark infringement, trademark dilution, and unfair competition by American Covers, LLC d/b/a Handstands, Energizer Holdings, Inc., and Energizer Brands,
The marks allegedly infringed and diluted are “Black Ice” and “Bayside Breeze.”
Affirmed in part, reversed in part, and remanded.
Louis Orbach (Liza R. Magley, on the brief), Bond, Schoeneck & King, PLLC, Syracuse, NY, for Plaintiffs-Appellants Car-Freshner Corporation and Julius Sämann Ltd.
William H. Brewster, Kilpatrick Townsend & Stockton LLP, Atlanta, GA, for Defendants-Appellees American Covers, LLC, Energizer Holdings, Inc., and Energizer Brands, LLC.
JON O. NEWMAN, Circuit Judge:
This appeal in a trademark case is somewhat unusual in that, in the context of products that directly compete with each other, one of the allegedly infringing marks uses the same two words of the senior user‘s mark but adds a word in front of, and a word after, that mark. Plaintiffs-Appellants Car-Freshner Corporation and Julius Sämann Ltd. (collectively “CFC“) appeal from the August 8, 2019, judgment of the District Court for the Northern District of New York (Thomas J. McAvoy, District Judge), dismissing, on motion for summary judgment, their complaint against Defendants-Appellees American Covers, LLC d/b/a Handstands
The case concerns automotive air fresheners,1 products that emit a pleasant scent in automobiles. Both CFC and Energizer sell these products. They use their trademarks as the name of the scents.
CFC contends that its trademark, consisting of the words “Black Ice,” is infringed and diluted by Energizer‘s sale of products labeled with the words “Midnight Black Ice Storm” and also contends that its trademark, consisting of the words “Bayside Breeze,” is infringed and diluted by Energizer‘s sale of products labeled with the words “Boardwalk Breeze.” We conclude that the record developed by CFC sufficed to withstand Energizer‘s motion for summary judgment with respect to CFC‘s mark “Black Ice” but not its mark “Bayside Breeze.” We therefore affirm in part, reverse in part, and remand.
Background
The products. Almost all of CFC‘s product lines are marketed under the brand name “Little Trees.” The products with the mark “Black Ice” include: (1) small two-
CFC has sold air fresheners under the brand name “Little Trees” since 1952. CFC began selling air freshener products with a scent called “Black Ice” in 2004. CFC began selling these products with a scent called “Bayside Breeze” in 2013. Between 2013 and 2018, CFC‘s net sales of “Black Ice” products to its retailer and distributor customers in the U.S. totaled tens of millions of dollars annually. CFC‘s net sales of “Bayside Breeze” products to its retailer and distributor customers in the U.S. were less than $50,000 in 2013, increasing to more than $4,000,000 by late 2018.
Energizer has sold a Handstands product with a single scent called “Ice Storm” for several years and continues to sell it under the brand name “Driven.” Shortly after Energizer acquired Handstands in 2016, it began selling two new products with a single scent, one called “Midnight Black” and another called “Boardwalk Breeze,” and, pertinent to the pending case, new products with two scents, one called “Midnight Black” and another called “Ice Storm,” labeled with the words “Midnight Black Ice Storm.” Like CFC, Energizer primarily sells directly to retailers and distributors and not to consumers. In the six months that Energizer‘s allegedly infringing products were on the market, Energizer sold more than $1 million of product domestically.
Energizer‘s products compete directly with CFC‘s products in the U.S. automotive air freshener market and at many of the same retailers. CFC‘s products
The appearance of the products. The packaging or the container of nearly all of CFC‘s products displays, at the top, the brand name “Little Trees” in white letters on a red stripe sloping slightly upwards. Products with the “Black Ice” scent display a small green pine tree and a small chunk of black ice with jagged edges. White letters cover most of the chunk, with the word “Black” on top in a small font and “Ice” below in a much larger font. The word “Black” is rendered in upper case. The word “Ice” is rendered with a dotted “i” in lower case but in a font size just barely smaller than the large upper case “CE” (Figures 1, 2).
Particularly relevant to this case is the display of the words “Midnight Black Ice Storm.” On Energizer‘s dual-scented diffuser product, the words appear in two ways. They appear in sequence along the top curve of what appears to be a car‘s steering wheel; the words “Midnight Black” appear in white against a black background, and the words “Ice Storm” appear in black against a white background.3 In addition, to the left of an automobile and in slightly smaller font, the word “Midnight” appears above the word “Black” in white against a black background, and, just below, the word “Ice” appears above the word “Storm” in black against a white background (Figure 3).
On Energizer‘s dual scent gel can, the words “Midnight Black” appears on one line above the word “Ice Storm,” with all four words in black against a white background (Figures 4, 5).
CFC‘s products with the “Bayside Breeze” scent display those words in white block letters against a background of blue sky and sea with a sailboat (a sloop), the mainsail of which has three broad horizontal stripes; the top stripe is red, the middle stripe is teal, and the bottom stripe is dark blue (Figure 6).
Energizer‘s products with the “Boardwalk Breeze” scent display, in addition to the “Refresh your car!” brand name at the top, the words “Boardwalk Breeze” in white cursive letters against a background of blue sky and sea with a sailboat (a sloop), the mainsail of which has broad horizontal stripes; the top and bottom stripes are dark blue (Figure 7).
Development of Energizer‘s scent names. Before Energizer acquired Handstands in July 2016, a series of emails in April 2016 reflects the strategy of Handstands’ product development team in naming new scents for its “Refresh Your Car!” brand. One employee asked for guidance on whether to use the words “Ice” or “Black” in the name. Handstands’ then-CEO envisioned “a name like ‘Midnight Black‘” and wrote, “If we really wanted to have some fun” they “could also look at a dual [scent] with a Black Ice variant – along the lines of Midnight Black / Ice Storm.” Another employee suggested that they should “get as close to the Black Ice name as we can,
CFC‘s prior infringement claims. This is not the first time CFC has sought to stop Energizer‘s acquired company, Handstands, from trademark infringement. In 2010, CFC requested Handstands to stop using the term “Car-Fresheners” because it was too similar to CFC‘s “Car-Freshner” marks; Handstands stopped. The next year, Handstands promoted a “Geico” air freshener by using a replica of CFC‘s green tree design, CFC sent Handstands a cease-and-desist letter, and Handstands agreed not to use the green tree design in the future in connection with air fresheners. In 2012, Handstands sold paper air fresheners using the slogan “Let It Hang,” which was identical to one of CFC‘s marks. Handstands settled CFC‘s infringement lawsuit complaining of this practice. In 2013, Handstands again used
Pending litigation. CFC filed its Complaint in February 2017, alleging infringement and dilution of CFC‘s “Black Ice” mark. In April 2017, CFC filed its Amended Complaint, alleging infringement and dilution of both CFC‘s “Black Ice” and “Bayside Breeze” marks. After receiving this Amended Complaint, Energizer moved to phase out its dual-scented products with scents named “Midnight Black” and “Ice Storm” and the single-scented products with a scent named “Boardwalk Breeze,” and stopped selling them as of June 30, 2017. Instead, Energizer began selling the same dual-scented product with the name of one of the two scents changed from “Midnight Black” to “Lightning Bolt” and the name of the other scent retained as “Ice Storm.”
In August 2019, the District Court granted Energizer‘s motion for summary judgment. See Car Freshner, 419 F. Supp. 3d at 449. The Court ruled that CFC had not presented sufficient evidence for a reasonable juror to conclude that Energizer‘s marks were similar enough to CFC‘s marks to create a likelihood of confusion as to source or sponsorship of the products. The Court therefore rejected CFC‘s Lanham Act claim. See id. at 444. For similar reasons the Court rejected CFC‘s federal false
Discussion
I. Trademark Infringement
On this appeal, the ultimate issue on CFC‘s trademark infringement claim is whether Energizer was entitled to summary judgment on CFC‘s claim that Energizer‘s use of the marks “Midnight Black Ice Storm” and “Boardwalk Breeze” “is likely to cause confusion,”
We review a district court‘s grant of summary judgment de novo, “resolving all ambiguities and drawing all permissible inferences in favor of the nonmoving party.” Tiffany & Co. v. Costco Wholesale Corp., 971 F.3d 74, 83 (2d Cir. 2020). In a trademark infringement case, we review de novo a ruling on whether the plaintiff
In determining whether the requisite likelihood of confusion has been shown (or, more precisely, on review of the summary judgment ruling, whether a genuine issue exists as to such likelihood), we consider the eight factors identified by Judge Friendly in Polaroid v. Polarad Electronics, 287 F.2d 492, 495 (2d Cir. 1961): (i) the strength of the senior user‘s marks; (ii) the similarity of the parties’ marks; (iii) the market proximity of their products;5 (iv) the likelihood that the senior user will
Although identification of the Polaroid factors was dictum (the plaintiff was not entitled to an injunction because it had waited too long to sue), see id. at 496, these eight factors6 are so ingrained in the trademark jurisprudence of this Court7 and other courts8 that we readily apply them on this appeal. In doing so, however, we note that the identification of the Polaroid factors provides no guidance on how they are to be weighed in the aggregate or whether any one or more of them are entitled to extra weight.9
“Insofar as the determination of whether one of the Polaroid factors favors one party or another involves a legal judgment—which it often does—we must review that determination de novo.” Tiffany, 971 F.3d at 86 (footnote omitted); see id. n. 7 (“For example, there is a considerable component of law in the determination whether a mark has the degree of strength necessary to weigh in favor of the party
With respect to each Polaroid factor, we next set out the District Court‘s rulings, and then our own assessment of the factor, treating CFC‘s marks separately where appropriate.12 We start with the strength of the marks.
The District Court ruled that CFC‘s “Black Ice” mark had “moderate” strength. Car Freshner, 419 F. Supp. 3d at 424.
We begin our assessment by noting that the strength factor is analyzed based on two components: “(1) the degree to which [the mark] is inherently distinctive; and (2) the degree to which it is distinctive in the marketplace.” W.W.W. Pharmaceutical Co. v. Gillette Co., 984 F.2d 567, 572 (2d Cir. 1993).
We consider “Black Ice” inherently distinctive. As applied to automotive air fresheners, inclusion of the word “ice” could be thought to suggest a product that has the ability to provide cooling refreshment, but the total phrase “Black Ice,” as applied to an automotive air freshener, is close to, if not actually, arbitrary.14
With respect to acquired distinctiveness, sales of “Black Ice” products totaled
We consider “Black Ice,” as applied to automotive air fresheners, to be strong, much farther along the continuum of strength than the District Court‘s description as only “moderate.”
As to “Bayside Breeze,” the District Court considered it to be “weaker in terms of its strength than the ‘Black Ice‘” mark. Car Freshner, 419 F. Supp. 3d at 425.
In our view, “Bayside Breeze” is arguably suggestive of the freshening effect
Furthermore, in contrast to “Black Ice,” the record lacks evidence that “Bayside Breeze” has prompted unsolicited news and consumer social media
We agree with the District Court that “Bayside Breeze” lacks the strength of the “Black Ice” mark.
With respect to similarity, the District Court considered both of CFC‘s marks to be dissimilar from both of Energizer‘s marks, and concluded that “[t]he Court could on this basis alone determine that summary judgment on the infringement claim is appropriate for the Defendants.” Id. at 441. Although acknowledging the identity of some of the words in the parties’ marks, the Court concluded that the differences in packaging, especially the prominence of the parties’ brand names, “establish, as a matter of law, that no likelihood of confusion as to the source of the goods exists in this case.” Id. at 440.
Our consideration of similarity begins with the words of the marks. Both words of CFC‘s two-word mark “Black Ice” appear sequentially in the middle of Energizer‘s four-word mark “Midnight Black Ice Storm.” Energizer places the first two words of its mark above the last two on some products, but places them in sequence on one line on others, such as the one shown in figure 3, supra. As noted earlier, the phrase “black ice” is well known as indicating a section of road on which rainwater has frozen, posing an unseen hazard to motorists. See supra n.14. This
It is extremely unusual for the mark of a junior user to include two identical words of a senior user‘s mark in sequence.17 One litigated example is The Sports Authority, Inc. v. Prime Hospitality Corp., 89 F.3d 955 (2d Cir. 1996). The plaintiff‘s mark was “The Sports Authority“; the defendant‘s mark was “Sports Authority Food, Spirits & Sports,” id. at 959, but the evidence revealed that the defendant often used its mark with only the words “Sports Authority,” id. at 962. The parties were not competitors in the same market. The plaintiff was a sporting goods and apparel retailer, see id. at 959; the defendant, an owner and operator of hotels, ran sports-related restaurants, see id. Despite the difference in businesses, we ruled that a reasonable trier of fact could conclude that the defendant‘s use of the words “sports authority” and “the sports authority” was “similar” to the use of the plaintiff‘s mark. Id. at 962. Weighing all the Polaroid factors, we reversed a grant of summary judgment for the defendant on the plaintiff‘s Lanham Act claim. See id. at 965.
As for CFC‘s “Bayside Breeze” mark, only the one word “Breeze” appears in Energizer‘s mark. In contrast to the use of two words from CFC‘s mark in Energizer‘s mark in sequence, as was the case with “Midnight Black Ice Storm,” the use of a single word from a suggestive mark, coupled with differences in the appearance of the packaging, tends to weigh the similarity factor in favor of Energizer with respect to CFC‘s “Bayside Breeze” mark.
In one respect, however, the packaging of the “Boardwalk Breeze” products displays similarities to the packaging of the “Bayside Breeze” products that are of concern. Both show a sailboat, the boats are the same type (sloops), and the mainsails both have a broad dark blue stripe at the bottom. Although Energizer‘s decision to replicate CFC‘s sailboat and some of the mainsail coloring is eyebrow-raising, these images are not uncommon for products with the word “breeze” in their marks. Furthermore, the significant differences in packaging of the “Bayside Breeze” and “Boardwalk Breeze” products, particularly the prominent display of
We weigh this factor moderately in favor of Energizer.
As to proximity, the District Court acknowledged that both sets of products directly compete with each other, see Car Freshner, 419 F. Supp. 3d at 441. Indeed, they are often displayed side-by-side on retailers’ shelves. We agree that this factor favors CFC.
The District Court considered the bridging-the-gap factor irrelevant, see id., which it clearly is, in view of the fact that the parties’ products are already in the same market.
The District Court ruled that there was no triable issue of fact concerning actual confusion as to either mark. See id. at 442. As the Court noted, CFC could find only one customer even arguably confused, as evidenced by an inquiry posted on Amazon.com. See id. CFC produced no survey evidence. We agree with the District Court that the actual confusion factor favors Energizer. We note, however, that, although evidence of actual confusion is very helpful to an infringement claimant, its absence is not fatal. See, e.g., Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 78 (2d Cir. 1988) (drawing no negative inference from absence of actual confusion as to product on market for short time).
As to bad faith, the District Court concluded that this factor “supports” CFC‘s claim because the internal emails written by staff members of Handstands could reasonably be found to show efforts to “use names that at least echoed” those of CFC‘s scents and show that the Defendants acted in bad faith. Car Freshner, 419 F. Supp. 3d at 443.
We hear a good bit more than an echo. The emails from the Handstands employees as they choose names for their new products are highly probative of their intent to mislead consumers—which, in turn, is probative of whether such efforts would succeed. Handstands’ employees, instructed that the new “Refresh” fragrances would include “a Black Ice variant,” decided to “have some fun” and “get as close to the Black Ice name as we can.” Moreover, from such a name, they “want[ed] the customers to immediately make the connection.” Connection to what? A reasonable inference is a connection to the manufacturer of “Black Ice,” a top-selling automotive fragrance. So they decided to precede the words “Black Ice” in CFC‘s mark with the word “Midnight,” an adjective that could readily be understood as intensifying the “Black” that it modified. (These employees spoke of
With respect to selecting the name “Boardwalk Breeze,” a Handstands manager wrote that the “intent has always been to draw close to [CFC‘s] Bayside Breeze in fragrance and concept” while cautioning that “[o]bviously we don‘t want to tell our customers this.” Why not tell the customers? A reasonable inference is that Handstands wanted customers to mistake the “Boardwalk Breeze” mark for the high-performing “Bayside Breeze” mark.
Rarely does an infringement case reveal such explicit evidence of bad faith. In such circumstances, some might expect a court to accord that factor such significance as alone to require an adverse outcome for the alleged infringer. To do that, however, would be to punish the Defendants for bad faith, rather than to consider bad faith in an overall balance of factors. Bad faith and intent to deceive are relevant to the extent that they add to the likelihood that the accused infringer will achieve its objective of consumer confusion, but they do not alone determine likelihood of confusion nor provide an occasion for imposing punishment.
With respect to the quality of the Defendants’ products, the District Court noted that there was not even an allegation that their products were “of a significantly lower quality” than those of CFC. See id. at 444. We agree with the Court‘s conclusion that “the evidence does not support a finding that the relative quality of the products plays a significant role in the existence of a likelihood of confusion.” Id.
As to sophistication of the relevant consumer group, the District Court noted that the products are priced relatively modestly, are not complicated to use, and are sold in general merchandise stores. See id. at 444. The Court concluded that these circumstances made confusion “more likely,” because “consumers are unlikely to spend a great deal of time on their buying decisions.” Id. To whatever slight extent this factor tips the overall balance toward CFC, we agree.
On the ultimate question of whether Energizer was entitled to a grant of summary judgment, the District Court concluded, primarily because of its view that there was no similarity of marks, that “the evidence is insufficient for a reasonable
Examining all of the Polaroid factors for CFC‘s “Black Ice” mark, we disagree. As explained above, our conclusions with respect to each factor were as follows: (1) the “Black Ice” mark has considerable strength, which weighs in favor of CFC; (2) Energizer‘s mark is significantly similar to CFC‘s mark because it uses the same two nondescriptive words, in sequence or on adjacent lines, where the words, by forming a well known phrase, are readily read together, which also weighs in favor of CFC; (3) Energizer‘s products compete directly with CFC‘s products, which weighs in favor of CFC; (4) the competitive nature of the products indicates there is no gap to be bridged, which favors neither party; (5) CFC did not demonstrate consumer confusion, which may favor Energizer; (6) Energizer‘s bad faith, attributed to it from the undisputed evidence of employees of Handstands, the company it acquired, is substantial, which strongly favors CFC; (7) the products are similar in quality, which favors neither party; and (8) the modest sophistication of the relevant consumer group barely favors CFC. The balance of all the Polaroid factors favors CFC at least sufficiently to preclude summary judgment for Energizer
With respect to infringement of CFC‘s “Bayside Breeze” mark, we agree with the District Court‘s determinations concerning strength, proximity, bridging the gap, lack of actual confusion, quality of Energizer‘s products, and consumer sophistication, but we reach different conclusions from those of the District Court as to two of the Polaroid factors. As explained above, we consider the similarity factor to favor Energizer only moderately (rather than decisively), and the bad faith factor to favor CFC heavily (rather than merely to “support[]” CFC‘s claim).
With some factors favoring each side, we encounter a question as to which Polaroid provides no guidance: how are conclusions as to the eight factors to be considered in the aggregate when some favor each party?20 No formula is available. Just as the party with the greater number of factors in its favor does not necessarily
Considering all eight factors, we conclude that the undisputed evidence warrants entry of summary judgment in favor of Energizer with respect to the Lanham Act claim of infringement of CFC‘s “Bayside Breeze” mark.
II. Dilution
Turning to CFC‘s federal trademark dilution claims, the District Court granted summary judgment to Energizer with respect to both the “Black Ice” and “Bayside Breeze” marks. We affirm substantially for the reasons stated by the District Court in its opinion, i.e., that “no evidence supports a finding that either of the marks in question are famous,” as required to claim dilution. Car Freshner, 419 F. Supp. 3d at 448.
Our disposition of CFC‘s state law claims largely tracks our disposition of the federal trademark infringement claims. As the District Court correctly observed, CFC‘s state law unfair competition claim turned on a likelihood of consumer confusion. See Car Freshner, 419 F. Supp. 3d at 449 (citing American Footwear Corp. v. General Footwear Co., 609 F.2d 655, 664 (2d Cir. 1979)); accord Allied Maintenance Corp. v. Allied Mechanical Trades, Inc., 42 N.Y.2d 538, 543 (1977) (“An action for infringement as well as an action for unfair competition both require a showing that the public is likely to confuse the defendant‘s product or service with that of the plaintiff.“). Finding no likelihood of consumer confusion as to either of CFC‘s marks, it granted summary judgment to Energizer on this claim. For the reasons already stated, we agree that CFC failed to defeat Energizer‘s claim that no genuine issue of material fact existed as to the likelihood of consumers confusing “Bayside Breeze” and “Boardwalk Breeze.” And, therefore, we affirm the grant of summary judgment as to the “Bayside Breeze” mark. Nevertheless, because Energizer has failed to establish as a matter of law that there is no likelihood of confusion between the “Black Ice” and “Midnight Black Ice Storm” marks, we reverse the grant of
With respect to CFC‘s state law trademark dilution claims, the District Court correctly stated that “the marks must be ‘very’ or ‘substantially’ similar” to support a finding of trademark dilution under New York law. Car Freshner, 419 F. Supp. 3d at 448-49 (quoting Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1029 (2d Cir. 1989)); accord Playtex Products, Inc., 390 F.3d at 167. Finding that differences in the products’ packaging, along with “the prominent use of house brand names,” established dissimilarity as a matter of law, the District Court granted summary judgment to Energizer on both dilution claims. Car Freshner, 419 F. Supp. 3d at 440, 449. Because we conclude that the “Bayside Breeze” and “Boardwalk Breeze” marks are only moderately similar, we affirm the grant as to the “Bayside Breeze” mark. However, because “Black Ice” and “Midnight Black Ice Storm” possess a high degree of similarity, we reverse the grant of summary judgment as to the state law dilution claim respecting the “Black Ice” mark.
Accordingly, we: (1) REVERSE the grant of summary judgment for Energizer on CFC‘s federal trademark infringement claim with respect to its “Black Ice” mark, (2) AFFIRM the grant of summary judgment for Energizer on CFC‘s federal trademark infringement claim with respect to the “Bayside Breeze” mark, (3) AFFIRM the grant of summary judgment for Energizer on CFC‘s federal trademark dilution claim with respect to both marks, (4) REVERSE the grant of summary judgment for Energizer on CFC‘s state law claims with respect to the “Black Ice” mark, and (5) AFFIRM the grant of summary judgment for Energizer on CFC‘s state law claims with respect to the “Bayside Breeze” mark. We REMAND the case to the District Court for further proceedings consistent with this opinion.
Notes
In Morningside Group Ltd. v. Morningside Capital Group, L.L.C., 182 F.3d 133 (2d Cir. 1999), the plaintiff‘s and the defendant‘s marks shared the words “Morningside” and “Group,” although the words were not adjacent in the defendant‘s mark. Id. at 140. The parties were “in competition,” although they “focused their investment efforts on somewhat different industries.” Id. at 140. We reversed a judgment for the defendant after a bench trial and ruled that the plaintiff was entitled to an injunction on its Lanham Act claim. See id. at 143.
In In re Paper Doll Promotions, Inc., 84 U.S.P.Q.2d 1660 (T.T.A.B. 2007), “Paper Doll Promotions” for costumes was found likely to cause confusion with “Paper Doll” for clothing. See id. at *10. In Motion Picture Association of America, Inc. v. Respect Sportswear, Inc., 83 U.S.P.Q.2d 1555 (T.T.A.B. 2007), “Rated R Sportswear” for clothing was found likely to cause confusion with the famous motion picture rating. See id. at *7.
In In re Merchandising Motivation, Inc., 184 U.S.P.Q. 364 (T.T.A.B. 1974), “Menswear” was found not confusingly similar to “Men‘s Wear” because “Men‘s Wear” was descriptive. See id. at *2.