Serenity Springs v. The LaPorte County Convention and Visitors BureauSerenity Springs v. The LaPorte County Convention and Visitors Bureau
care is provided by a physician who is an independent contractor and not subject to the control and supervision of the hospital.” 714 N.E.2d at 152 (emphasis added). BMH‘s notice that “many” providers are independent contractors does not appear to satisfy that requirement, and the trial court correctly found there was a genuine issue as to the adequacy of notice.
CONCLUSION
As the federal decision is not res judicata as to BMH‘s potential liability as the Doctor and Clinic‘s apparent principal and there is a fact question as to such apparent agency, summary judgment for BMH was error. The trial court correctly found BMH might be vicariously liable for any act of Dr. Rudicel or Nurse Practitioner Steinbarger at BMH. We accordingly affirm in part, reverse in part, and remand.
Affirmed in part, reversed in part, and remanded.
ROBB, C.J., and PYLE, J., concur.
Michael S. Bergerson, Law Offices of Michael S. Bergerson, Michigan City, IN, Attorney for Appellee.
OPINION
FRIEDLANDER, Judge.
Serenity Springs, Inc. and its principal owner, Laura Ostergren, (collectively, Serenity) appeal from the trial court‘s order permanently enjoining Serenity from using the designation “Visit Michigan City LaPorte”1 and ordering Serenity to transfer the domain name registration for visitmichigancitylaporte.com to the LaPorte County Convention and Visitors Bureau (the Bureau). Serenity raises three issues, which we consolidate and restate as follows: Did the trial court err in concluding that Serenity committed trademark infringement and cybersquatting? The Bureau cross-appeals and requests an award of appellate attorney fees. Concluding that the Bureau did not establish that Serenity committed trademark infringement or cybersquatting because it failed to establish that it held a valid and protectable trademark in the designation “Visit Michigan City LaPorte,” we reverse the trial court‘s judgment and remand with instructions to consider the Bureau‘s remaining claims. Additionally, because Serenity has prevailed in this appeal, we deny the Bureau‘s request for appellate attorney fees.
The Bureau is a special-purpose governmental unit governed by
In early 2009, the Bureau contracted with a private marketing firm to conduct a branding study for the purposes of identifying new and better ways to promote tourism in the area. On September 9, 2009, the Bureau held a public meeting at which the results of the branding study were announced, and a representative of Serenity was in attendance. The Bureau‘s representatives announced that the phrase “Visit Michigan City LaPorte” had been identified as the branding identifier for the area.
Immediately after the meeting, an employee of Serenity registered the domain
Thereafter, the Bureau sent a cease-and-desist letter to Serenity claiming that Serenity had infringed its trademark and committed cybersquatting by registering visitmichigancitylaporte.com. Serenity responded that it had been unable to find any federal or state trademark registrations for Visit Michigan City LaPorte and further claimed that (1) Serenity had not committed trademark infringement because it registered and began using the visitmichigancitylaporte.com domain name before the Bureau made any commercial use of the designation Visit Michigan City LaPorte, and (2) that the designation was not protectable as a trademark because it was merely descriptive and had not acquired distinctiveness. Appellee‘s Appendix at 53-54.
On April 29, 2010, the Bureau filed an application with the Secretary of State to register “Visit Michigan City LaPorte and logo” as a trademark under the Indiana Trademark Act. Appellant‘s Appendix at 17. In its application, the Bureau indicated that the mark was first used in commerce on September 9, 2009, and disclaimed any rights to the words “Michigan City” or “LaPorte.” Id. The Bureau received a certificate dated May 13, 2010 indicating that “Visit Michigan City LaPorte” had been registered as a trademark with the Secretary of State. Id. at 16. The certificate also indicated that the mark was first used on September 9, 2009, and the words “Michigan City LaPorte” had been disclaimed. Id.
On May 26, 2011, the Bureau sent another cease-and-desist letter to Serenity, again asserting that Serenity was infringing its rights in the now-registered trademark. The Bureau attached a copy of the certificate of trademark registration to the letter and informed Serenity that the letter would be its final attempt to resolve the matter before taking legal action.
Serenity sent a response letter to the Bureau on June 1, 2010. In the letter, Serenity again asserted that it was the first party to use the mark in commerce, and argued further that the Bureau‘s registration of the mark did not affect Serenity‘s common-law rights to use the mark or confer retroactive trademark rights. Serenity stated that it was willing to assign the domain name to the Bureau if it could provide proof that it first used the mark in commerce on or before September 9, 2009. Serenity argued that if the Bureau had not used the mark in commerce by that date, it had fraudulently misrepresented the date of first use on the application for trademark registration, which would result in cancellation of the registration.
On January 4, 2011, the Bureau filed a complaint against Serenity alleging trademark infringement, cybersquatting, and unfair competition.2 The Bureau also sought and obtained a preliminary injunction prohibiting Serenity from using the domain name. The matter proceeded to a bench trial on March 8, 2012, and the trial court entered judgment in favor of the
1.
Serenity appeals from a judgment entered following a bench trial. In reviewing claims tried by the bench without a jury, our court shall not set aside the judgment “unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.”
We define the clearly erroneous standard based upon whether the party is appealing a negative or an adverse judgment. Garling v. Ind. Dep‘t of Natural Res., 766 N.E.2d 409 (Ind.Ct.App.2002), trans denied. “A negative judgment is one entered against a party who bears the burden of proof, while an adverse judgment is one entered against a party defending on a given question.” Id. at 411. In the instant case, the trial court entered judgment in favor of the Bureau, the party bearing the burden of proof at trial. Accordingly, Serenity is appealing an adverse judgment. Under these circumstances, we hold the trial court‘s findings clearly erroneous if they are not supported by substantial evidence of probative value. Garling v. Ind. Dep‘t of Natural Res., 766 N.E.2d 409. Moreover, “[e]ven if the supporting evidence is substantial, we will reverse the judgment if we are left with a definite and firm conviction a mistake has been made.” Id. at 411.
Serenity argues that the trial court erred in concluding that it had committed trademark infringement and cybersquatting because (1) the Visit Michigan City LaPorte designation is geographically descriptive and not subject to trademark protection, and (2) alternatively, if the designation is protectable, Serenity Springs acquired superior rights to the mark because it was the first to use it in commerce. As an initial matter, we note that the trial court concluded that the law of trademarks did not apply to the Bureau with the same force as a private entity due to the transparency requirements imposed upon governmental units. Specifically, the court concluded
34. That the construction of trademark law suggested by [Serenity] does not take into account demands of transparency placed on governmental entities concerning how they do business, and to construe the law so as to require government to do business just as private concerns do business would violate those laws that demand openness in government.
35. The demand for openness in government required [the Bureau] to reveal matters that in private business would not have been revealed publicly, thereby jeopardizing [the Bureau‘s] ability to protect its mark and its investment in money.
36. The construction of trademark law suggested by [Serenity] would require that [the Bureau] do business in a manner similar to a private entity, without
regard to the requirements placed on governmental units by Indiana law, including the Open Door Law. Conducting business in such a manner makes it impossible for a governmental entity to protect its investment of tax money in projects such as this one.
Appellant‘s Appendix at 11.
Serenity argues that “adopting the trial court‘s reasoning would, in effect, create an exception to a statutory rule of law that would apply in nearly every situation where a public entity and private entity were in competition.” Appellant‘s Brief at 17. We agree. This court has long held that the exclusive right to use a mark is acquired through adoption and use of the mark in commerce. See Johnson v. Glassley, 118 Ind.App. 704, 83 N.E.2d 488 (1949) (“[t]he mere adoption of a particular name as a trade name, without actual use thereof in the market, confers no right thereto, even though such adoption is publicly declared“); Hartzler v. Goshen Churn Ladder Co., 55 Ind.App. 455, 104 N.E. 34 (1914). We are unaware of any authority suggesting that governmental units need not comply with the use requirement in order to acquire exclusive rights to use a particular mark. To the extent the trial court concluded that governmental entities competing with private entities are entitled to extra protection or relieved of the burden of establishing the elements of trademark infringement claims, such conclusion was error.
Before turning to the merits of Serenity‘s argument concerning the validity of the Bureau‘s claimed trademark, a brief review of the law of trademarks is in order. Trademark law is a subspecies of the law of unfair competition. 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 2.7 (“A basic aspect of the United States economy is that of the market place policed by laws that set a minimum level of fair competition. The law of trademarks is but a branch of this broader area called the law of ‘Unfair Competition’ or ‘Unfair Trade Practices.‘” (footnote omitted)); 20 Ind. Law Encyc. Monopolies and Unfair Trade § 8 (noting that “trademark infringement is one type of unfair competition.” (footnote omitted)).
The goal of trademark protection is to allow a firm to affix an identifying mark to its product (or service) offering that will, because it is distinctive and no competitor may use a confusingly similar designation, enable the consumer to discover in the least possible amount of time and with the least possible amount of head-scratching whether a particular brand is that firm‘s brand or a competitor‘s brand.
Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604 (7th Cir.1986); see also Carroll v. Lordy, 431 N.E.2d 118, 123 (Ind.Ct.App.1982) (“[t]he purpose of a trademark is to identify the source of the product, not the product itself“).
Trademark law is rooted in English common law, and was “largely codified” at the federal level in the Trademark Act of 1946, commonly known as the
In 1999, Congress passed the Anti-Cybersquatting Consumer Protection Act (ACPA) as an amendment to the
‘[C]ybersquatting’ occurs when a person other than the trademark holder registers the domain name of a well[-]known trademark and then attempts to profit from this by either ransoming the domain name back to the trademark holder or by using the domain name to divert business from the trademark holder to the domain name holder. A trademark owner asserting a claim under the ACPA must establish the following: (1) it has a valid trademark entitled to protection; (2) its mark is distinctive or famous; (3) the defendant‘s domain name is identical or confusingly similar to, or in the case of famous marks, dilutive of, the owner‘s mark; and (4) the defendant used, registered, or trafficked in the domain name (5) with a bad faith intent to profit.
Id. (citations omitted); see also Felsher v. Univ. of Evansville, 755 N.E.2d 589 (Ind.2001) (discussing
To receive protection under the
The latter three categories of marks—those that are suggestive, arbitrary, or fanciful—are considered inherently distinctive and entitled to trademark protection “because their intrinsic nature serves to identify a particular source of a
Descriptive marks and generic marks, on the other hand, are not inherently distinctive. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 112 S.Ct. 2753. Generic designations refer merely “to the genus of which the particular product is a species,” and are never protectable as trademarks because they do not indicate the particular source of an item. Id. at 768, 112 S.Ct. 2753; see also Sally Beauty Co. v. Beautyco, Inc., 304 F.3d 964, 976 (10th Cir.2002) (identifying the word “cola” as an example of a generic designation). Descriptive marks describe “the ingredients, qualities, or characteristics of an article of trade or a service[.]” Platinum Home Mortg. Corp. v. Platinum Fin. Group, Inc., 149 F.3d 722, 727 (7th Cir. 1998). As a general matter, descriptive marks are not protectable as trademarks, “both because they are poor means of distinguishing one source of services from another and because they are often necessary to the description of all goods or services of a similar nature.” Mil-Mar Shoe Co. v. Shonac Corp., 75 F.3d 1153 (7th Cir.1996) (quoting Liquid Controls Corp. v. Liquid Control Corp., 802 F.2d 934, 936 (7th Cir.1986)). Descriptive marks will become protectable, however, “where the holder can establish that the mark has acquired ‘secondary meaning’ in the collective consciousness of the relevant community.” Id. (quoting Gimix, Inc. v. JS & A Group, Inc., 699 F.2d 901, 907 (7th Cir.1983)). Secondary meaning exists when consumers regard the designation not as a description, but as the name of the product or service itself. Packman v. Chicago Tribune Co., 267 F.3d 628 (7th Cir. 2001). Geographically descriptive designations generally fall within the descriptive category; thus, to be protected, they must have acquired secondary meaning. 2 McCarthy §§ 14:1 (“[i]f a geographic term is used merely to indicate the location or origin of the goods and services, it is purely descriptive’ “). A mark‘s proper placement on the spectrum of distinctiveness is a question of fact. Welding Servs., Inc. v. Forman, 509 F.3d 1351 (11th Cir. 2007).
Under the
The Indiana Trademark Act is similar, and in some respects identical, to the
The Indiana Trademark Act‘s definitions of “trademark” and “service mark” track the
We first note that the designation in question is a geographic composite mark, that is, “one composed of geographic matter coupled with additional matter (e.g. wording and/or a design element).” U.S. Patent and Trademark Office, Trademark Manual of Examining Procedure § 1210.02(c) (hereinafter TMEP), available at http://www.uspto.gov/trademarks/resources/TMEP_archives.jsp. Such marks are classified based on their primary significance. Id.; see also
The Bureau seems to suggest that its registration of the mark with the Secretary of State is sufficient proof of distinctiveness and/or secondary meaning. We cannot agree that registration is a substitute for evidence of the mark‘s validity. The Indiana Trademark Act provides that the Secretary of State shall cancel a
Although the Indiana Trademark Act was intended to provide a system of state trademark protection consistent with the
Having concluded that the mark is geographically descriptive and not entitled to a presumption of validity, we turn our attention to whether the mark was nevertheless protectable, i.e., whether it had acquired secondary meaning. “The existence of secondary meaning is a question of fact, with the burden of proof on the person claiming rights in the name.” Id.; see also 2 McCarthy § 15:29. The rule applied by the majority of courts, and which we adopt here, is that “the senior user must prove the existence of secondary meaning in its mark just prior to the time and place that the junior user first began use of the mark.” 2 McCarthy §§ 15:4, 16:34.
The trial court found that subsequent to the Bureau‘s registration of the mark with the Office of Secretary of State, “the trademark VISITMICHIGANCITYLA- PORTE
In the present case, the Bureau presented no evidence that the mark at issue acquired secondary meaning before Serenity began using it. It is undisputed that Serenity purchased the domain name visitmichigancitylaporte.com on September 9, 2009 and immediately began using it to direct internet traffic to its main website on that date. The Bureau also claimed September 9, 2009 as the date of its first use of the mark in its application for trademark registration, and trial court found that the Bureau first used the mark in commerce on that date. Assuming arguendo that the trial court‘s finding in this regard is supported by the evidence,9 the Bureau‘s and Serenity‘s first uses of the mark were virtually simultaneous. Secondary meaning is acquired through actual use of a mark, and there is simply no evidence in the record supporting a conclusion that the mark became associated with the Bureau in the minds of consumers on September 9, 2009 in the hours prior to Serenity‘s registration of the domain name. Indeed, Jack Arnett, the Bureau‘s executive director, testified that the Bureau intended to begin using the mark following the September 9 announcement, and that securing the domain names would have been the first step in that effort. Because Serenity had already registered and begun using the visitmichigancitylaporte.com domain name by the time the Bureau sought to do the same, it would appear that Serenity began using the mark first, and it would therefore follow that the mark could not possibly have acquired a secondary association with the Bureau prior to Serenity‘s first use.
In arguing that it is nevertheless entitled to trademark protection, the Bureau argues that it made an investment in undertaking the branding study, registering the mark, and attempting to defend the mark by issuing cease-and-desist letters. The Bureau argues that trademark protection exists to protect such investments, and that Serenity made no comparable investment in or attempt to protect the mark, and has even denied ownership thereof.
As an initial matter, we note that Serenity‘s alleged denial of ownership of the mark would be entirely consistent with its argument that the mark is not protectable as a trademark. Additionally, we agree that trademarks exist, at least in part, to protect businesses’ investments in marks as a means to inform consumers about the source of the goods or services they offer. See Kohler Co. v. Moen, Inc., 12 F.3d 632; see also 1 McCarthy, § 2:2. This goal must be balanced, however, against competing concerns about depriving competitors of the ability to effectively market
For all of these reasons, we conclude that the trial court‘s findings that the designation Visit Michigan City LaPorte was distinctive and properly registered as a trademark were clearly erroneous. Because the Bureau failed to establish that the designation was protectable as a trademark against Serenity, its claims of trademark infringement and cybersquatting must necessarily fail.11 Accordingly, we reverse and remand with instructions to the trial court to vacate its judgment and enter judgment in Serenity‘s favor on these claims.
None of this is to say, however, that Serenity‘s actions are necessarily beyond the reach of the law. Although the trial court ruled only on the Bureau‘s trademark infringement and cybersquatting claims, the Bureau asserted additional claims, including a claim of common-law unfair competition, which does not necessarily turn on the existence of a valid and protectable trademark. See also Keaton and Keaton v. Keaton, 842 N.E.2d at 820 (noting that the law of unfair competition is very broad and not limited to passing off one‘s goods and services as those of another); Felsher v. Univ. of Evansville, 755 N.E.2d at 598 (noting that unfair competition does not refer to a tort with a specific number of elements, but “instead describes a general category into which a number of new torts may be placed when recognized by the courts. The category is open-ended, and nameless forms of unfair competition may be recognized at any time for the protection of commercial values” (quoting W. Page Keeton, Prosser and Keeton on the Law of Torts, 105 (5th ed. 1984))). Because these claims were not addressed by the trial court, we do not pass on their merits. Instead, we remand with instructions to the trial court to consider the Bureau‘s remaining claims. Because this matter has already proceeded to a trial on the merits, however, the trial court may not receive new evidence and must limit its consideration to the evidence and claims already presented by the Bureau.
2.
On cross-appeal, the Bureau requests an award of appellate attorney fees. Under
Judgment reversed and remanded with instructions.
NAJAM, J., and BRADFORD, J., concur.
Casey WALKER, Appellant-Defendant, v. STATE of Indiana, Appellee-Plaintiff.
No. 76A04-1204-CR-207
Court of Appeals of Indiana.
April 18, 2013.