Case Information
*1 Before ANDERSON, Chief Judge, MARCUS, Circuit Judge, and MILLS [*] , Senior District Judge.
ANDERSON, Chief Judge:
I. INTRODUCTION
This is a servicemark infringement case. Plaintiff Frehling Enterprises, Inc. ("Frehling") claims that its registered "OGGETTI" mark is being infringed upon by Defendant International Select Group, Inc.'s ("ISG") "BELL' OGGETTI" mark. Frehling sells high-end decorative accessories and furniture for the home under its "OGGETTI" mark, and ISG sells ready-to-assemble furniture designed to house electronic equipment in the home under its "BELL' OGGETTI" mark. The district court held a bench trial and ruled in favor of ISG, finding that there was no likelihood of consumer confusion with respect to the two marks. Frehling appeals, and argues that the district court's finding as to the lack of a likelihood of confusion between the two marks was clearly erroneous.
II. STATEMENT OF FACTS
"OGGETTI" means "objects" in Italian. Robert Frehling, president of Frehling Enterprises, began using the mark in connection with his decorative furniture business in 1975. He adopted the name because many of Frehling's products were manufactured in Italy. He filed an application to register the mark with the *2 Patent & Trademark Office in 1985. The application was accepted and the mark was accordingly registered as a service mark, thus receiving federal protection in 1985. Frehling's "OGGETTI" line is sold at department stores, like Macy's and Bloomingdale's, and is sold through various catalogs as well. In addition, Frehling owns showrooms located in New York, Atlanta, and High Point, North Carolina, and leases many more, in Chicago, Los Angeles, and other major cities. The district court described "OGGETTI" furniture as high-end furniture sold in finer stores and noted that it was targeted at affluent consumers.
"BELL' OGGETTI" means "beautiful objects" in Italian. ISG began using this mark in 1989 in connection with its line of audio-visual furniture. In May 1990, ISG filed an application to register its mark with the Patent & Trademark Office, but was denied because of the perceived confusion that might arise in connection with the earlier-registered "OGGETTI" mark. Upon ISG's further application, however, the Office ruled in favor of ISG and permitted registration of the trademark. [1] ISG sells ready-to-assemble equipment-containing furniture like stereo and television cabinets. ISG sells its furniture to mass market retail outlets, such as Circuit City and HiFi Buys, and also sells its products, as does Frehling, through catalogs. *3 In 1994, ISG procured the toll-free telephone number, "1-800-OGGETTI." This number was included on the enclosed instruction sheet accompanying the purchased product and detailing how to assemble to the furniture. "BELL' OGGETTI" and "1-800-OGGETTI" appeared on the instruction sheet.
In 1995, Frehling president Robert Frehling saw an advertisement for BELL' OGGETTI in a House Beautiful magazine. He called ISG complaining of what he felt was service mark infringement. Shortly thereafter, he sent a demand letter asking ISG to cease using the mark and to cancel its registration. ISG refused, but did stop promoting the "1-800-OGGETTI" toll free phone number. It retained the phone number, but only printed and distributed the numeric toll free number. Frehling then filed suit under the Trademark (Lanham) Act, 15 U.S.C. §§ 1114 (infringement) and 1125(a) (dilution), and various state-law claims. [2] After a two day bench trial, the district court ruled in favor of ISG, finding that there was no likelihood of confusion so as to violate the Lanham Act, nor any cognizable claim under state law.
III. DISCUSSION
Under the Lanham Act, 15 U.S.C. § 1114(1), a defendant is liable for infringement, if, without
consent, he uses "in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
mark" which "is likely to cause confusion, or to cause mistake, or to deceive." Thus, to prevail, a plaintiff
must demonstrate (1) that its mark has priority and (2) that the defendant's mark is likely to cause consumer
confusion.
See Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc.,
*4 This Court considers the following seven factors in assessing whether or not a likelihood of consumer confusion exists:
1. Type of mark
2. Similarity of mark
3. Similarity of the products the marks represent
4. Similarity of the parties' retail outlets (trade channels) and customers 5. Similarity of advertising media
6. Defendant's intent
7. Actual confusion
See Lone Star,
Classifying the type of mark Plaintiff has determines whether it is strong or weak.
See John H.
Harland Co. v. Clarke Checks, Inc.,
Also important in gauging the strength of a mark is the degree to which third parties make use of the
mark.
See John H. Harland Co.,
Finally, if a mark is "incontestable," that is, if it has been registered for five years with the Patent
& Trademark Office, its holder has filed the affidavit required by 15 U.S.C. § 1065(3) with the Patent &
Trademark Office, and the Patent & Trademark Office has accordingly declared the mark "incontestable,"
then the mark's incontestability serves to enhance its strength.
See Wilhelm Pudenz, GmbH v. Littlefuse, Inc.,
In the instant case, the district court found that Frehling's "OGGETTI" mark was suggestive. [3] The court found that the mark was adopted to create an Italian connotation (because the products were manufactured in Italy) and that the mark suggests or describes a significant number of products that Frehling produces-that is, fine, decorative "objects d'art." The court held that, as a suggestive mark, Frehling's mark *6 is entitled to protection without any showing of secondary meaning, but failed to quantify the mark as a strong one. We are persuaded that the mark is indeed a strong one, and thus we conclude that the district court clearly erred in not attributing the proper strength to the mark that it was due under the case law.
In particular, the district court did not address the lack of third-party use of Frehling's mark in
gauging the mark's strength. The case law is clear that such lack of third-party use should be considered in
assessing the strength of a mark.
See, e.g., John H. Harland Co.,
Moreover, the district court failed to consider the fact that Frehling's mark is incontestable and
therefore constitutes a "relatively strong mark."
See Wilhelm Pudenz,
Here, the court compares the marks and considers the overall impressions that the marks create,
including the sound, appearance, and manner in which they are used.
See John H. Harland Co.,
We are persuaded, however, that the marks are very similar, and that this factor strongly favors Frehling; the district court clearly erred in concluding otherwise. ISG's "BELL' OGGETTI" mark is extremely similar to Frehling's "OGGETTI" mark in that the dominant focus in both marks is the Italian term "OGGETTI." Both parties stylize their marks in like fashion, using all capital letters. "BELL' OGGETTI" entirely encompasses "OGGETTI" and merely adds a descriptive adjective "BELL' " meaning "beautiful" to the dominant portion of the mark—the noun "OGGETTI," meaning objects. Thus, the overall impression the marks create is one of striking similarity—they are strikingly similar in sight, sound, and meaning. Moreover, the manner in which they are used is similar in that both are used in advertising to denote home furnishings. In sum, then, the instant comparison reveals the sort of high degree of similarity between marks that portends a likelihood of consumer confusion. Given this palpable similarity, we hold that the "similarity of marks" factor strongly favors Frehling.
In finding the marks dissimilar, the district court's considerable reliance on the fact that Frehling's
mark often appeared as "Tavola Collection by OGGETTI" is misplaced. The underlying purpose in
considering the similarity of marks as an indicator of likelihood of confusion is that the closer the marks are,
the more likely reasonable consumers will mistake the source of the product that each mark represents. The
probability of this potential confusion is the touchstone. In the instant case, Frehling's use of the phrase
"Tavola Collection by OGGETTI" clearly attributes the source of the product to "OGGETTI" in that the
words "by OGGETTI" are used in conjunction with the words "Tavola Collection." The words "Tavola
Collection" suggest that they represent but a single product line or signature collection of "OGGETTI." The
use of these words, contrary to the upshot of the district court's holding, does not undermine the attribution
*8
of the source of the products to "OGGETTI"; a mark may be surrounded by additional words of lesser
importance and not have its strength diluted.
See Old Dutch Foods, Inc. v. Dan Dee Pretzel & Potato Chip
Co.,
This factor requires a determination as to whether the products are the kind that the public attributes
to a single source, not whether or not the purchasing public can readily distinguish between the products of
the respective parties.
See E. Remy Martin & Co., S.A. v. Shaw-Ross Int'l Imports, Inc.,
The district court noted that it was unpersuaded by Frehling's evidence which attempted to show that "OGGETTI" offered custom-made armoires to house television sets, thus serving the same function as "BELL' OGGETTI" furniture, housing electronic components, because the "OGGETTI" armoires were made of wood, not black metal, and further were not ready-to-assemble, and were more expensive than their *9 "BELL' OGGETTI" counterparts. The district court thus concluded that the products were different in function, design, style, and price. It accordingly noted that this factor favored the Defendant.
Although we hesitate to attach a clearly erroneous label to the district court's finding that the parties' products were dissimilar, we are persuaded that the district court improperly weighed this evidence in the overall balance of the likelihood of confusion analysis. In other words, we find that the outcome as to this factor is far closer than the district court indicated and thus does not clearly favor ISG.
In
E. Remy Martin,
our Court reversed the lower court's finding that wine and cognac or brandy were
dissimilar "to the drinking world."
Viewing the instant case in this light, a reasonable consumer could possibly attribute the products here to the same source—both products are home furnishings. While the compositional differences matter, they are not dispositive; we focus, rather, on the reasonable belief of the average consumer as to what the likely source of the goods was. In this case, it is not unreasonable to fathom that the goods emanate from the same source. Both products are furniture pieces, designed for the home, and both have the capability to house electronic equipment. In addition, both products are marketed as having an Italian design and thus a consumer could, on this basis alone, given that both marks connote furniture, attribute the products to one source given the shared Italian theme.
Therefore, although the products are somewhat dissimilar in composition, function, and design, they are similar in that they are both home furnishings sold under a very similar Italian label, and hence it seems possible that a consumer could attribute both products to a single source. While this possibility is perhaps not strong enough to suggest a likelihood of consumer confusion, neither is it so remote as to raise the opposite inference—that a reasonable consumer would likely not be confused. Thus, to the extent that the *10 district court found that this factor favored ISG significantly, we find that the attribution of such weight to this factor in ISG's favor was clearly erroneous. Similarity of the Parties' Retail Outlets (Trade Channels) and Customers
"Dissimilarities between the retail outlets for and the predominant customers of plaintiff's and
defendant's goods lessen the possibility of confusion, mistake, or deception."
Amstar Corp. v. Domino's
Pizza, Inc.,
As with the similarity of products factor, we find that the district court's conclusion with respect to the instant factor, while not clearly erroneous, does not militate heavily in favor of ISG, if at all. We are troubled by the district court's methodology of dividing the world up into distinct segments of "affluent" and "less affluent" for the purpose of determining the balance of the instant factor. Common sense suggests such a categorical distinction is tenuous. See 4 McCarthy, supra, § 24:52, at 24-74-75 ("[I]t may be difficult to draw a line between those consumers who shop at 'class' retailers and those who shop at 'mass' retailers because of those consumers who 'cross-shop' and frequent both types of retailers."). In other words, affluent people shop at Sears and less affluent people shop at Macy's. Hence, there would seem to be overlap in customer base even though the retail outlets where the parties' products are sold are not exactly the same. *11 Furthermore, "OGGETTI" presented evidence that it sells to consumers through catalogs, as does BELL' OGGETTI, and that both companies are expanding their operations to the Internet. In addition, both companies sell their wares to and through interior designers. Lastly, the similarity of advertising media, discussed infra, suggests that the parties indeed target the same types of customers, evidenced by their advertisements in similar types of magazines, like Architectural Digest and House Beautiful, for instance. With these facts in hand, we conclude that the district court clearly erred by weighing this factor too heavily in favor of ISG; rather, we see the balance on this factor as much closer than the district court found it to be. Similarity of Advertising Media
This factor looks to each party's method of advertising.
See John H. Harland Co.,
Evidence was presented below demonstrating that in addition to advertising in electronics publications, ISG advertised in home magazines, like Design Times and House Beautiful. Indeed, at oral argument, ISG conceded that for two years, one-quarter of its advertising was in House Beautiful. Frehling adduced evidence that "OGGETTI" advertises in the same genre of home magazines as "BELL' OGGETTI," including Interior Design and Architectural Digest. ISG argued, and the district court accepted, the premise that the parties have never advertised in the same publication and therefore the advertising media used by the parties were not similar.
This argument does not fairly represent the proper legal standard, however. Identity of periodicals
is not required; the standard is whether there is likely to be significant enough overlap in the readership of
the publications in which the parties advertise that a possibility of confusion could result.
See Safeway Stores,
*12
Inc. v. Safeway Discount Drugs, Inc.,
If it can be shown that a defendant adopted a plaintiff's mark with the intention of deriving a benefit
from the plaintiff's business reputation, this fact alone may be enough to justify the inference that there is
confusing similarity.
See John H. Harland Co.,
On appeal, Frehling points out that this intentional blindness was manifested by ISG's failure to conduct a trademark search before attempting to register its "BELL' OGGETTI" mark in 1990. In addition, Frehling notes that after ISG's request to register the "BELL' OGGETTI" mark was refused by the Patent & Trademark Office because of the potential likelihood that it may be confused with Frehling's earlier-registered "OGGETTI" mark, ISG continued to pursue the use of its "BELL' OGGETTI" mark, without making any attempt to contact Frehling or to explore the potential likelihood of confusion between the two marks. In other words, ISG clearly had notice as to the strong similarity of the marks and hence was aware that they may be confused and yet continued to use the "BELL' OGGETTI" mark. Moreover, given this knowledge, Frehling asserts that ISG's later adoption of the 1-800-OGGETTI toll free number is particularly indicative of improper intent. Indeed, the 1-800 number constitutes a direct replication of Frehling's "OGGETTI" mark. Furthermore, ISG continued to use the 1-800 number despite Frehling's repeated objections and contrary to *13 the advice of ISG's own counsel. Given the totality of this evidence, we agree with the district court that ISG's behavior displays an improper intent through intentional blindness and, given the demonstrated prevalence of this improper intent, we accordingly conclude that this factor weighs substantially in Frehling's favor. Actual confusion
It is undisputed that evidence of actual confusion is the best evidence of a likelihood of confusion.
See John H. Harland Co.,
At trial, the Plaintiff did offer some evidence of actual confusion. [4] The principal evidence of actual confusion adduced at trial was Robert Frehling's testimony that a professional "BELL' OGGETTI" buyer, along with his wife, visited an "OGGETTI" showroom in High Point, North Carolina. Apparently, the man mistakenly believed that he was in a "BELL' OGGETTI" store. He could not understand why the showroom sign said only "OGGETTI" and not "BELL' OGGETTI." The district court admitted this testimony, but assigned little weight to it, concluding that it was self-serving and vague, seemingly because the confused buyer's name could not be recalled.
On appeal, Frehling characterizes the evidence as much more probative. In support of its argument
that this incident embodies compelling evidence of actual confusion, Frehling points out that it is not the
number of people actually confused by the marks that is important, but rather the type of person confused.
*14
This notion is supported by the case law.
See Safeway Stores,
In the instant case, the type of person confused was telling: a professional buyer for "BELL' OGGETTI," visiting a company showroom. As noted above, the district court did not mention this point, but instead seemed to discount the entire incident as constituting vague and, hence, unpersuasive evidence. The court, however, did not expressly make a finding that Frehling's testimony was not credible, and the fact that Frehling could not remember the buyer's name does not seem significant enough that it would strip the testimony of all its credibility and relative weight. Thus, in light of the reasoning in Safeway Stores —that the confusion of someone very familiar with the enterprise (like the professional buyer in the instant case) is relevant evidence of actual confusion—we conclude that the above incident was at least sufficient to raise an inference of actual confusion, but we conclude that the outcome as to this factor is not sufficiently dispositive so as to favor either side in an appreciable fashion. [5]
Evaluating the overall balance of the seven above factors, we hold that Frehling demonstrated a likelihood that its senior "OGGETTI" mark would be confused with ISG's junior "BELL' OGGETTI" mark. We hold that the district court's conclusion to the contrary, that there was no likelihood of confusion, was *15 clearly erroneous. In so holding, we conclude that factors one, strength of the mark, two, similarity of the marks, and six, defendant's intent, weigh in Frehling's favor, with particular emphasis on how similar the sight, sound, and usage of the marks were. We conclude that factors three, similarity of goods, and four, similarity of trade channels and customers, did not weigh heavily in favor of ISG; to the extent that the district weighed these factors strongly in ISG's favor so as to preclude a finding of a likelihood of confusion, we hold that the attribution of such significant weight to those factors was clearly erroneous. With respect to factor five, similarity of advertising media, we conclude that the district court applied an improper legal standard, and that, applying the correct legal standard, it is clear, at the very least, this factor does not favor ISG. With respect to factor seven, actual confusion, we find that this factor favored neither side. In sum, we are persuaded that Frehling demonstrated a likelihood that a reasonable consumer would be confused by the two marks and would likely be confused as to the source of the goods that each mark represents, [6] and that the district court's contrary conclusion was clearly erroneous.
IV. CONCLUSION
For the foregoing reasons, we reverse the judgment of the district court and remand the case for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
Notes
[*] Honorable Richard H. Mills, Senior U.S. District Judge for the Central District of Illinois, sitting by designation.
[1] The district court and ISG both note the fact that Frehling's mark is a service mark and ISG's mark is a
trademark. Servicemarks identify services, whereas trademarks identify goods. However, this distinction
has little legal significance in the instant case. The infringement analysis is the same under both standards
and courts thus treat the two terms as interchangeable in adjudicating infringement claims.
See e.g., Boston
Professional Hockey Ass'n, Inc. v. Dallas Cap & Emblem Mfg., Inc.,
[2] These state-law claims were for deceptive and unfair trade practices under Fla. Stat. ch. 501, false advertising under Fla. Stat. § 817.41, unfair competition under Florida common law, dilution under Fla. Stat. § 495.151, and dilution under Florida common law.
[3] Under the "doctrine of foreign equivalents," a word from another language that is commonly used in that language as the generic name of a product cannot be imported into the United States and thereby transformed into a valid trademark. See 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 12:41, at 12-83 (4th ed.1996). Thus, in the strength-of-mark analysis, foreign words are translated into English before being tested for descriptiveness or genericness. See id. As noted above, "OGGETTI" is the Italian word for the English word "objects." At oral argument, ISG's counsel disclaimed any argument that the doctrine of foreign equivalents made Frehling's mark generic, and conceded that the district court did not clearly err in characterizing Frehling's "OGGETTI" mark as suggestive. Consequently, we have no need to address the possible impact of the foreign equivalents doctrine in the instant case.
[4] On appeal, Frehling invites this Court to take judicial notice of two additional incidents that it claims
demonstrate actual confusion. We decline to take judicial notice of these additional incidents for several
reasons.
See Shahar v. Bowers,
[5] The only other evidence of actual confusion was excluded by the district court as double hearsay. It involved an incident in which a telephone operator was confused with respect to the 1-800-OGGETTI number. Frehling challenges the exclusion on appeal, but because we find the evidence would have been entitled to very little relative weight even if admitted, we decline to address whether or not it was properly excluded. See 3 McCarthy, supra, § 23:13, at 23-41 (noting that evidence demonstrating the confusion of telephone operators is often not particularly probative of actual confusion and is often due more to carelessness than to actual confusion). We also note that ISG argued at trial that Frehling had not proffered any survey evidence demonstrating actual confusion and therefore a presumption against such confusion should apply. This Circuit, however, has moved away from relying on survey evidence. See Safeway Stores, 675 F.2d at 1167 n. 10. Thus, the failure to adduce such evidence is not damaging to the Plaintiff's case. The district court correctly held that the lack of survey evidence was not dispositive.
[6] We construe Frehling's briefs on appeal to have abandoned Count VII (state common-law dilution). However, with respect to Frehling's other state-law claims, because the district court erred in finding no likelihood of confusion, and that erroneous ruling likely informed the district court's ruling on the similar state-law claims, the district court should reconsider those state-law claims on remand.
