MEMORANDUM OPINION AND FINAL JUDGMENT
This is an action for trademark infringement under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1994). Plaintiff The Teaching Company Limited Partnership (“TTC”) filed a three-count Complaint against Defendant Unapix Entertainment, Inc. (“Unapix”), alleging two counts of trademark infringement and one count of unfair competition. The issues presented are: 1) whether TTC has a valid, protecti-ble trademark in the use of “GREAT MINDS of the Western Intellectual Tradition;” and 2) whether Unapix’s use of a colorable imitation of the trademark is likely to cause confusion among consumers. For the reasons which follow, the Court holds that the plaintiff TTC has shown by a preponderance of the evidence that it has acquired a trademark in the term “Great Minds” as it relates to its educational audio/video tape products and the defendant Unapix is liable for infringement upon the plaintiffs mark. Pursuant to Federal Rule of Civil Procedure 52(c), the Court renders the following findings of fact and conclusions of law.
I. Findings of Fact
This Court heard five days of testimony without a jury. Having considered the testimony and demeanor of the witnesses, and weighed all the evidence, the Court renders the following findings of fact.
The Teaching Company Created a Series of Educational Audio/Video Products Entitled “Great Minds of the Western Intellectual Tradition”
Plaintiff TTC is a producer of educational audio and video tapes, which feature the lectures of leading college professors from major universities. TTC is a limited partnership organized under the laws of Delaware having a principal place of business in Springfield, Virginia. Defendant Una-pix produces audiovisual products, including videotapes, audiotapes, and compact discs. Unapix is a Delaware corporation having a principal place of business in New York, New York.
The mark at issue is “Great Minds of the Western Intellectual Tradition” (“GMWIT”), which is the name of a series of audio/video taped lectures by leading college professors discussing renowned philosophers like Aristotle, Plato and other so-called “great thinkers.” The GREAT MINDS series was created in 1992 and included fifty-seven lectures approximately forty-five minutes in length. The series was divided into five parts: 1) Ancient Philosophy and Faith: From Athens to Jerusalem; 2) The Age of Faith to the Age of Reason; 3) The Enlightenment and Its Critics; 4) Philosophy in the Epoch of Ideology; and 5) Modernism and the Age of Analysis. Each subpart includes several audio and video tapes, as well as printed material concerning the lectures and bibliographic information. TTC has never attempted to register the title “Great Minds of the Western Intellectual Tradition.”
In 1996, TTC released a second edition of the GMWIT series. The 1996 edition added updates and modifications to the original lectures. The number of lectures increased to seventy. In addition to the five parts of the series, TTC also released selections of lectures in separate sets. These separate selections were also marked with GREAT MINDS. In June 2000, TTC plans to release a new edition of GMWIT, including a new video edition.
Since TTC produced GMWIT in 1992, TTC has continually marketed and sold the GMWIT series. Print advertisements and direct mail advertising are used to generate interest in the series and to create sales of the product. TTC has advertised in the following print media: the New York Times Sunday Book Review section, The Economist, Science News, Time, New York Review of Books, Nation, New Republic, The Sciences, Archaeology,
TTC has spent nearly $700,000 on newspaper and magazine advertising devoted exclusively to the GMWIT series since 1992. Prior to August 1996, TTC spent $300,000 in print advertising solely dedicated to the GMWIT series. TTC has spent over $11 million on direct mail advertising featuring GMWIT along with other products. Over 20 million catalogs offering the GMWIT series have been distributed. Furthermore, TTC has advertised its products on classical radio stations and National Public Radio.
In addition to TTC’s advertisements, GMWIT has received gratuitous coverage in newspapers. Morton Kondracke, writing in the New Republic, referred to the GMWIT series as “the widely advertised philosophy lecture tapes produced by the Teaching Company.... ” Morton Kon-dracke, Searching, The New Republic, Dec. 21, 1992, at 43. Articles on TTC and the GMWIT series have also appeared in Forbes, the Chicago Tribune, the Princeton Weekly Bulletin, the New York Times, Mirabella, and Success. For example, an article published in Mirabella in February 1993 recounted the author’s experience of watching the GMWIT series in its entirety. The author referred to the GMWIT series as “the big kahuna” of TTC’s offerings. Tom Bachtell, Civilization in 10 Easy Tapes, MiRAbella, Feb. 1993, at 56.
TTC also employs a variety of channels to distribute its audio and video tapes. TTC’s print advertising and catalogs provide 800-numbers for customers to directly order the products. Several bookstore chains, including Barnes & Noble and Crown Books, have sold GMWIT. In addition, TTC has also recently created its own Internet site to promote and increase sales of all of its products, including the GMWIT series.
In terms of profits, the GMWIT series has consistently been one of TTC’s top selling products, generating revenues between $500,000 and $1.2 million per year. The audio versions of the GMWIT series sell for approximately $150 a set. When available, the video versions sold for $550 a set, or $150 per part. The video version was intermittently offered at the sale price of $350' for the set. Thus, the GMWIT series generates significant revenues for TTC.
TTC’s activities and use of the term “Great Minds” must now be contrasted with the activities of the defendant Unapix.
Unapix Produces “Great Minds of ...” Series of Video Tapes and Matching Books
Defendant Unapix is a multimedia company which produces and sells movies, television programs, and home videos. Mr. Timothy Smith helped create Unapix’s “Great Minds of ...” video documentary series. Mr. Smith is currently president of Unapix Docere, a division of Defendant. He created the Unapix series when he worked for a company named IVN Communications, Inc. (“IVN”) from May 1995 to January 1996. Mr. Smith conceived of a video series of interviews and data documentaries focused on innovations in science and IVN released the series entitled “Discovering Great Minds of Science” in November 1995. The IVN Discovering Great Minds was co-produced in conjunction with Disney Magazine Publishing, Inc. d/b/a Discover Magazine (hereinafter “Disney”).
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The concept for “Discovering Great Minds of Science” was developed by Mr. Smith. Mr. Smith intended to develop a series of documentaries on various top
During the planning stage of development, Unapix considered several possible titles for the series, including “Visionaries of ...” and “Master Minds of....” In August 1996, Unapix settled on “Great Minds of....”
In an effort to avoid any potential conflicts with the prior rights holders, Unapix entered into agreements with Disney under which Disney acquired all of.IVN’s intellectual property rights in the “Discovering Great Minds of Science” series. Disney granted Unapix a license to exploit this series in return for financial consideration. The Unapix/Disney agreements expressly acknowledged Unapix’s intention unilaterally to produce other “Great Minds of ...” series independent of “Discovering Great Minds of Science,” without any obligation to Disney. The Disney-IVN agreement was executed on July 22, 1996. The Disney-Unapix agreement was dated September 20, 1996. Disney paid $50,000 to IVN, and Unapix paid $50,000 to Disney.
During the course of development of the series, Mr. Smith made a judgment about what to call the series of educational videotapes. His consideration of a name for the series warrants discussion.
Unapix’s “Discovering Great Minds” Series and Consideration of “Great Minds of ...”
To develop the project series, Mr. Smith sought a partner from a major publication or media outlet interested in a joint venture in the promotion and sale of the videos. Unapix selected WGBH as a co-producer and distributor of the series. WGBH was an ideal joint venturer because it is a nationally recognized public televison station with a large following. The promotional plan for the series would involve airing the initial national telecast of the videos on public television with sale of the video .offered at the end of each telecast and promotion in public television previews.
Mr. Steve Atlas was the WGBH co-producer of the “Discovering Great Minds of Science” project. On August 14, 1996, when Unapix was considering a name for the video series, Mr. Atlas advised Mr. Smith that he had concerns about the viability of the “Discovering Great Minds ...” name as he had seen “a lot of ads for ‘Great Minds of the Western Intellectual Tradition.’ ” Mr. Atlas asked Mr. Smith to consider whether GREAT MINDS was the best choice for the Unapix series. Mr. Atlas forwarded to Mr. Smith a copy of a TTC advertisment of the “Great Minds of the Western Intellectual Tradition” audio/video tape series as it appeared in the New York Times Book Review section.
Mr. Smith received the advertisement and Unapix did not investigate TTC’s prior use of GREAT MINDS. In his initial deposition, Mr. Smith testified that after receiving the fax from Mr. Atlas, “it didn’t bother me much. So I didn’t — I might have discussed it with the Business Affairs Office. But, it wasn’t like a major concern of ours at the time. I frankly didn’t remember it until I was reviewing the records last week.” While Mr. Smith did not investigate TTC’s use, he informed the President of the company, David Fox, as well as Mr. Herbert Pearlman, the Chairman of the Board of Unapix, of TTC’s conflicting use of GREAT MINDS.
On August 17,1996, the day after speaking with Mr. Atlas, Mr. Smith circulated a memo which stated: “Advertising deadlines are rapidly approaching and we will have to make some key decisions quickly if we want to bring GREAT MINDS to market for direct sales for the Christmas season.” Mr. Smith also testified that at the time he learned of TTC’s use of GREAT MINDS, he was already “fairly determined” to use the mark.
On or about August 21, 1996, Unapix received a trademark search report that identified the existence of a trademark application filed by IVN in March 1996.
Unapix modified and marketed the preexisting “Discovering Great Minds of Science” series, renaming it “Great Minds of Science.” In the fall of 1997, Unapix released its first offerings in the GREAT MINDS series, “Great Minds of Medicine” and “Great Minds of Business,” for broadcast on public television stations. In the fall of 1998, Unapix released its “Great Minds of American History” series for cablecast over the History Channel. Una-pix’s collections retail for about $60 in videotape format and $25 in audiotape format, or for about $19.95 and $14.95 for single videotapes or audiotapes, respectively, within each collection. The running times of the individual tapes vary, ranging from 30-60 minutes, with the longest full collection running six hours.
In late 1995 or early 1996, TTC saw an advertisement in Discover Magazine for a set of videos sold under the name “Discovering Great Minds of Science.” TTC ordered a set of the videos. Thomas Rollins, TTC’s President and CEO, examined the product packaging and content description. The videos were produced by Pangea Digital Pictures, a division of IVN Communications, Inc. TTC never saw another advertisement or came across any product from this same company. At that time, TTC did not pursue any action regarding this potentially infringing use of the mark.
In November 1995, TTC had its lawyers conduct a search for users of the mark GREAT MINDS. This search did not uncover any relevant users of the mark. In August 1997, in connection with a search of another mark, TTC discovered that an intent-to-use application had been filed for the mark GREAT MINDS with respect to audio and video cassettes. The intent-to-use application had been assigned to Una-pix. TTC continued to monitor the status of the application. The mark was published in September 1998. Following publication of the mark, TTC’s counsel sent a letter notifying Unapix of its rights in the mark, and demanding that it cease and desist its confusingly similar use. TTC timely filed an opposition to registration of the mark based upon its prior use of the GREAT MINDS mark. The opposition is still pending.
In the fall of 1998, Unapix began significant marketing of the Unapix videos in TTC’s channels of trade. In or around November 1998, an advertisement for videos entitled “Great Minds of American History” appeared in American Heritage magazine. The advertisement identified Unapix as the source of these videos. The overall appearance and layout of this advertisement is strikingly, similar to the overall appearance and layout of TTC’s print advertisements for the GMWIT series. Mr. Smith testified that he participated in the selection. In December 1998, Unapix began advertising its videos using the GREAT MINDS mark in the New York Times Sunday Book Review section. This advertisement also included an 800-number to call to order the videos. As stated, since 1992, the Book Review section of the New York Times is the most frequently used print advertising vehicle of TTC. Furthermore, Unapix has run full-page ads at least twice in each of the nationally-distributed Discover Magazine, Forbes, Health, and American Heritage. The series, or parts of it, has also appeared in the PBS catalog, Amazon.com, and various web sites. Unapix has maintained a web site at http: //www.great-mindsof.com since 1998.
On April 1, 1999, TTC filed the present action against Unapix, alleging federal unfair competition (Count I), common law trademark infringement (Count II), and common law unfair competition (Count
II. Conclusions of Law
In order to prevail under Section 43(a) of the Lanham Act for trademark infringement and unfair competition, a complainant must demonstrate 1) that it has a valid, protectible trademark; and 2) that the defendant’s use of a colorable imitation of the trademark is likely to cause confusion among consumers.
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See Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc.,
As a threshold matter, the parties dispute whether GREAT MINDS or “Great Minds of the Western Intellectual Tradition” as used by TTC functioned as a trademark. Unapix contends that TTC never used a title which functioned as a trademark because Plaintiff never consistently used GREAT MINDS. As argued by Unapix: sometimes GREAT MINDS appeared in small print, Plaintiff always used the complete title “Great Minds of the Western Intellectual Tradition,” and Plaintiff never used GREAT MINDS by itself except in one situation.
The Court finds that substantial evidence in the record establishes TTC used GREAT MINDS as a trademark. GREAT MINDS is the dominant element in the full title, “Great Minds of the Western Intellectual Tradition.” GREAT MINDS constitutes the first words seen by the consuming public in Plaintiffs full page ads.
See Pizzeria Uno Corp. v. Temple,
A. Validity of the Mark
On the question of whether the plaintiff has a valid, protectible mark, the degree of protection is “directly related to the mark’s distinctiveness.”
Sara Lee Corp. v. Kayser-Roth Corp.,
Suggestive marks connote some quality, ingredient, or characteristic of a product.
See Sara Lee,
“Descriptive” marks describe the intended purpose, function, size, desirable characteristic, use, or the nature of the product, or the class of users or end effect upon the user.
See Sara Lee,
TTC argues that GREAT MINDS and GMWIT serve as suggestive marks because without knowing more about the product than its name, the consumer does
On the other hand, Unapix contends that both titles are descriptive. GMWIT, taken in its entirety, simply describes the subject matter of TTC’s course. According to Unapix, someone who purchases TTC’s product is buying the teachings of these “great minds” as related by modern-day scholars; consequently, the mark is indicative of the general nature of the product. The product cannot be considered suggestive because it describes the course in a manner readily understandable to the consumer.
See Washington Speakers Bureau,
Series titles can function as trademarks. For magazine, newspaper, radio, and television series, the title of the series indicates the source of the product. Several courts have treated non-descriptive series titles as suggestive and not requiring proof of secondary meaning.
See Atlantic Monthly Co. v. Frederick Ungar Pub. Co.,
The Court finds that GREAT MINDS and GMWIT are suggestive marks. If the consumer had no knowledge about the product other than the name, he or she would not know more about the product. Consumers are required to use their imagination to discern that GREAT MINDS is a video or audio product which features lecturers discussing profound ideas espoused by intellectual innovators. GREAT MINDS and GMWIT conjure images of the product without actually describing it. “If the mental leap between the word and the product’s attributes is not almost instantaneous, this strongly indicates suggestiveness, not direct descriptiveness.” Id. § 11:67 at 11-111 (footnote omitted). In considering GREAT MINDS alone or in connection with the larger title, the consumer must use his imagination to connect great minds to leading thinkers, connect the thinkers to others discussing them, and to finally connect the words to TTC’s product: audio and visual tapes which feature professors discussing leading thinkers in the particular field. As stated by TTC President, Mr. Rollins, “[i]t is suggestive of grandeur, of genius, of great sweep as well as of the philosophers and scientists and theologians and others covered by the series.”
The fact that GREAT MINDS is subject to several interpretations indicates that consumers are required to use their imagination. GMWIT could contain the actual works of the “great minds,” rather than discussions about them. Or, the product could display the “great minds” themselves rather than presenters discussing their works and thoughts. In fact, even Una-pix’s product is a documentary of the individual. A consumer could also reasonably conclude that the product consisted of biographies of great thinkers. Finally, as one respondent in Robert N. Reitter’s
A title which tells consumers something about the contents of a product is not, for that reason alone, descriptive for trademark purposes. In permitting registration of the title “Code & Symbol” as a trademark for a trade magazine whose contents included articles about product codes and symbols, the Trademark Trial and Appeals Board observed that:
A certain degree of flexibility and an understanding of the commercial realities of both the publishing business and of the business or industry to which a particular publication is directed are very helpful in making the necessarily subjective decision whether a particular title qualifies as a valid trademark. From the publisher’s point of view, it is important to select a title, especially for a trade or technical journal, that conveys some idea of the subject matter of the contents; without at least a suggestive title, it would be hard for the publisher to reach and interest the relatively small (as compared to the general population) number of potential subscribers. From the point of view of competitors of the publisher, it is important not to grant, by way of a trademark registration, rights so broad and encompassing as to render unavailable, at least without the threat or possibility of litigation, the most apt or the only appropriate words to describe a journal’s contents.
In re Distribution Codes, Inc.,
In determining whether a mark is suggestive or descriptive, courts give due respect to the determination of the Patent and Trademark Office (“PTO”), which necessarily decides whether a mark is suggestive or descriptive.
See Lone Star,
In this case, the PTO has reviewed the GREAT MINDS mark three times in connection with the intent-to-use applications presented by Unapix. Each time, the PTO determined that the mark is inherently distinctive. Specifically, the Patent and Trademark Office has determined that use of the phrase “GREAT MINDS” in connection with television programs or audio or video tape presentations “featuring information about famous persons in various fields, professions and disciplines ...” is not descriptive. Def.’s Trial Exs. 281, 282, 288. The fact that Unapix filed these applications is not relevant. Since the GREAT MINDS mark is inherently distinctive, it follows that TTC owned rights to a valid mark beginning in 1992.
Unapix contends that the Court should not be persuaded by the determination of the examining attorney because he only
Even if the Court found the mark to be descriptive, the Court finds that TTC has established ownership of a valid mark because GREAT MINDS has acquired secondary meaning. Secondary meaning is where “in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself.”
Sara Lee,
In determining whether there is secondary meaning, the Court should consider several factors: 1) advertising expenditures; 2) consumer studies linking the mark to a source; 3) sales success; 4) unsolicited media coverage of the product; 5) attempts to plagiarize the mark; and 6) the length and exclusivity of the mark’s use.
See id.; see also Thompson Medical Co., Inc. v. Pfizer, Inc.,
Applying the factors, the Court finds that GREAT MINDS enjoys secondary meaning. First, it is undisputed that TTC has used the GREAT MINDS mark without interruption since 1992. While TTC does not currently offer the video version, it is still actively marketing its audio .tapes and plans to release the video edition in 2000. Second, TTC has spent approximately $700,000 on 169 full-page ads in major publications promoting its GREAT MINDS product.
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Additionally, TTC has spent more than $11 million mailing over 20 million catalogs and other literature to millions of persons across the country. These catalogs prominently feature GMWIT. TTC’s advertisements and mailings make prominent use of the GREAT MINDS mark. Third, TTC has sold significant amounts of the products with the GREAT MINDS mark. Since 1992, over $6 million of video and audio tapes with the GREAT MINDS mark have been sold. Fourth, TTC has received extensive unsolicited media coverage for the GREAT MINDS products. In several instances, the media coverage used the alleged trademark, GREAT MINDS, to reference the product. Such media coverage illustrates the nexus between the mark and the source; as is required for secondary meaning.
See Devan Designs Inc. v. Palliser Furniture Corp.,
B. Likelihood of Confusion
As stated, in order to recover for trademark infringement, the plaintiff must also demonstrate that the defendant’s use of the mark is likely to cause confusion.
See Pizzeria Uno,
The first factor concerns the strength or distinctiveness of the mark. Even if the mark is valid and protectible, it may be so weak that. the public is not likely to be confused by the use of a similar mark on other goods and services.
See Lone Star,
Alternatively, the Court has found that .even if GREAT MINDS was a descriptive mark, TTC has established secondary meaning. Descriptive marks “are usually enforced only against closely similar marks which are used on virtually identical products.” See id. (citation omitted). While Unapix has presented evidence of the phrase GREAT MINDS being used with books, greeting cards, etc., those products are not in the same genre as those at issue. In this case, both parties produce high quality educational audio and video tapes bearing the name GREAT MINDS. Thus, this factor weighs in favor of finding likelihood of confusion.
2. Similarity of the two marks
The parties dispute whether TTC’s and Unapix’s use of GREAT MINDS is similar and likely to cause consumer confusion. TTC focuses on the fact that “GREAT MINDS” is the dominant portion of both • parties’ mark. TTC’s product is generally.sold by reference to “Great Minds of the Western Intellectual Tradition.” However, TTC’s product is referred to by the consumer and in publications as “Great Minds.” Defendant Unapix’s product is generally sold by reference to “Great Minds of....” Thus, TTC submits that Unapix uses the identical GREAT MINDS mark. On the other hand, Unapix argues that similarity of the marks inquiry requires the Court to analyze a mark as a whole as it is actually used in commerce.
See Washington Speakers Bureau,
The issue of confusion requires consideration of the composite-word trademark.
See Pizzeria Uno,
In this case, GREAT MINDS is the dominant portion of TTC’s “GREAT MINDS of the Western Intellectual Tradition” and Unapix’s “GREAT MINDS of Medicine,” “GREAT MINDS of American History,” etc. The dominant portion of each mark is identical. GREAT MINDS is located at the beginning of each mark. Although in their entirety the disputed marks are not identical, TTC’s and Una-pix’s marks sound and appear extremely similar. Thus, this factor weighs in favor
S. Similarity of the products the marks identify
The third factor in the likehhood of confusion analysis is the similarity between the products offered by TTC and Unapix. Both companies produce and market video and audio tapes on educational topics. While the subjects covered by each tape may be different, the goods themselves are the same. The Fourth Circuit focuses on whether the goods serve the same purpose and if the purposes are related.
See, e.g., Pizzeria Uno,
The Court finds that the subtle differences between TTC’s and Unapix’s products are insignificant. While Unapix’s videos are documentaries and TTC’s videos are taped lectures, TTC and Unapix sell video and audio tapes providing non-fiction information regarding influential thinkers and the substance of their views. Both Unapix and TTC prominently feature the mark GREAT MINDS in their advertising. Both companies’ ads prominently promise an intellectually satisfying presentation of important thinkers and their ideas. Thus, the products are highly similar.
See Pizzeria Uno,
A Similarity of the facilities/channels of trade
Factor four requires the Court to consider the similarity between the parties’ facilities and "trade channels. TTC’s GREAT MINDS series and Unapix’s videos use the same trade channels. Both advertise in well-known national circulation magazines. In fact, both parties have published ads in the very same publications, such as the New York Times Book Review section and American Heritage magazine. Additionally, both parties advertise on the Internet. Both products are advertised in catalogs which are mailed directly to potential customers and contain an order form and provide a toll free 800-number to buy the product. Therefore, the similarity of retail and sales channels shows a likelihood of confusion.
5. Similarity of advertising
The fifth factor that the Court must consider is the similarity of advertising. Both TTC and Unapix advertise their respective products to the general public via print media. The products are both advertised in leading publications devoted to intellectual, social, political, and cultural topics. Thus, the number of consumers who could encounter both parties’ advertisements is great. In fact, the products have been advertised within weeks of each other in the same publication,- the New York Times Book Review section. The New York Times Book Review section has remained one of TTC’s most regular advertising outlets since 1992.
See Pizzeria Uno,
6. Defendant’s intent in adopting its same or similar mark
The Court must consider the defendant’s intent in adopting the same or similar mark. Unapix admits that it learned of TTC’s use of GREAT MINDS as of August 1996. On August 14, 1996, Mr. Steve Atlas called Mr. Smith, Unapix’s represen
The law provides that a junior user of a mark has an affirmative duty to select a mark that is not confusing.
See
3 McCaethy § 23-65 at 23-149, 150. When a defendant adopts a mark with full knowledge of the plaintiffs mark, intent is inferred.
See Beer Nuts, Inc. v. Clover Club Foods, Co.,
The ■ Court is unpersuaded - by Unapix’s contention that it relied upon the advice of counsel in using the mark GREAT MINDS and did not act- with knowledge and intent. “[Counsel's opinion is not properly founded and of no professional value” where full and accurate disclosures have not been made.
See Cuisinarts v. Robot-Coupe Int’l Corp.,
7. Evidence of confusion
The law does not require the plaintiff to prove actual confusion.
See Pizzeria Uno,
Unapix presented an expert, Mr. A1 Os-sip, to dispute the results of Dr. Jacoby’s survey. Primarily, Unapix contends that Dr. Jacoby’s survey design was biased in that a key question in the survey is leading. Dr. Jacoby’s question inquired
If you have any thoughts about it, is there, or isn’t there, anything in any of these items that makes you think one or more of the products they advertise comes from the same company that put out the tapes shown in ad _, the ad you looked at earlier?
Study of Dr. Jacob Jacoby, Audio/Video Materials (Main Questionnaire), Question 2a (1999).
The Court finds that this question is not leading, but rather is equally balanced. There are three possible responses: no thoughts on the question (“If you have any thoughts about it”); an affirmative response (“is there”); and a negative response (“or isn’t there”). The question does not intimate that GREAT MINDS provides the basis for the participant’s response. The question is designed to elicit a general response. Furthermore, Unapix fails to identify any aspect of the follow-up, open ended question which suggests association based on name.
Although Defendant presented an expert to challenge Dr. Jacoby’s results, Mr. Ossip acknowledged that the best way to determine whether the alleged design flaws he identified had any effect on the outcome would be to conduct an alternate survey. However, Unapix did not present any alternative survey. When questioned about Unapix’s failure to conduct its own survey, Mr. Ossip suggested that time and financial limitations did not permit it. However, Unapix had ample opportunity to conduct a “proper” survey on likelihood of confusion, since it had completed a survey purportedly addressing secondary meaning by the end of July.
In a further attempt to discredit TTC’s survey, Unapix offered alternative tabulations of Dr. Jacoby’s report by purportedly demonstrating low levels of confusion. Mr. Ossip’s alternative calculations do not persuade the Court that the likelihood of confusion is lower than that found in the Jacoby survey. Mr. Ossip recalculates Dr. Jacoby’s confusion percentages by totaling all of the responses to the survey indicating that respondents believed that the two products in question come from a common source. However, Mr. Ossip’s calculations fail to take into consideration the basis for the participant’s answer. Mr. Ossip’s approach is inconsistent with his earlier criticism that Dr. Jacoby’s survey design allegedly produced trivial and irrelevant responses indicating confusion over a common source or business relationship. If, as Mr. Ossip elsewhere contends, Question 2a encouraged positive responses, it is all the more important to analyze the specific reasons given for such general answers in order to present valid data. Instead, Mr. Ossip’s recalculation gives equal weight to reasons which clearly demonstrate actionable confusion (confusion based on the common name, GREAT MINDS) with responses that have nothing to do with anything (e.g. both parties use a cut-out coupon in the
8. Additional Factor
The Court finds that the quality of the defendant’s product and the sophistication of the buyers are not relevant factors in this case. The quality of the defendant’s goods becomes an issue mainly in situations involving cheap copies of a competitor’s protected goods.
See Sara Lee,
III. Statute of Limitations/Laches Defenses
A. Statute of Limitations
The critical question is when TTC’s cause of action accrued for purposes of the statute of limitations. Unapix contends that TTC failed to file suit for infringement within the two-year statute of limitations and its claims are time barred. Una-pix submits that TTC’s cause of action accrued in late 1995 when it discovered IVN’s usage of the phrase “Great Minds” and believed that the products were confusingly similar. TTC’s counsel did not notify Unapix of TTC’s trademark and of Unapix’s infringement upon TTC’s mark until October 1998. Then, TTC waited an additional five months thereafter to file the present action. In response, TTC concedes that the two-year statute of limitations applies. However, TTC contends that its action did not accrue until the cause of action was complete, which is when the likelihood of confusion is present. TTC submits that it did not learn that Unapix was selling video tapes bearing the GREAT MINDS mark until May 1998, when TTC’s attorney found them for sale on the PBS web site. As it filed this action in April 1999, TTC argues that it is well within the filing period. The Court overrules Unapix’s motion for judgment for the reasons which follow.
The statute of limitations applicable to TTC’s federal and common law claims for trademark infringement and unfair competition is two years.
See Unlimited Screw Prods., Inc. v. Malm,
Under trademark law, a cause of action is complete when, on all the facts and circumstances, a plaintiff concludes or should conclude that a likelihood of confusion is present, not merely when a confusingly similar use is uncovered. “[T]he test
As shown by the discussion, supra, the likelihood of confusion analysis requires consideration of a number of factors. Unapix fails to prove that sufficient facts were known to, or should have been known to, TTC which established a likelihood of confusion prior to April 1, 1997. Prior to this time, TTC only knew that a video series entitled “Discovering Great Minds of Science” existed, and had been the subject of a single magazine ad. Mr. Rollins testified that he thought the mark was confusingly similar. After learning of this ad, the company carefully monitored its channels of trade and saw no further marketplace activity, and so concluded that the product was a “flash in the pan.” Moreover, IVN used the title “Discovering Great Minds of Science,” which is different in meaning and context from GREAT MINDS alone.
All of the critical facts which do in fact establish a likelihood of confusion arose within the statute of limitations period. Unapix first released the initial GREAT MINDS series, “Great Minds of Business” and “Great Minds of Medicine,” for broadcast and sale on video in the fall of 1997, less than two years prior to the filing of the present action. Moreover, TTC did not learn that Unapix was selling video tapes bearing the GREAT MINDS mark until May 1998, when TTC’s attorney found them for sale on the PBS web site. Unapix’s first substantial incursion into TTC’s traditional channels of trade occurred in the fall of 1998 when it advertised in two publications in which TTC had historically advertised its GREAT MINDS series.
Furthermore, even if TTC had a viable cause of action that triggered the statute of limitations with respect to IVN’s marketing effort in 1995, it would not bar claims against subsequent acts of infringement by Unapix. When a defendant commits multiple wrongful acts, a separate statute of limitations attaches to each wrongful act.
See, e.g., Bay Area Laundry and Dry Cleaning Pension Trust Fund v. Ferbar Corp. of California, Inc.,
B. Laches
Unapix also contends that TTC’s claims should be barred by the doctrine of laches because TTC slumbered on its rights and delaying the suit was highly prejudicial to Unapix, who has invested time, effort, and money into developing its product.
The estoppel-by-laches defense arises only where the plaintiff has unreasonably delayed its pursuit of a remedy.
See Sara Lee,
IV. Remedy
In light of Unapix’s infringement of TTC’s GREAT MINDS mark, TTC is entitled to a remedy. TTC seeks both injunc-tive relief and damages.
A. Injunctive Relief
The Lanham Act provides that:
The several courts vested with jurisdiction of civil actions arising under this chapter shall have power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation under section 1125(a) of this title.
15 U.S.C. § 1116(a) (1994).
The equitable remedy of an injunction is not generally granted unless the remedy at law, or monetary damages, is inadequate.
See
5 McCaRthy § 30-1 at 30-6. If a defendant has béen found to be committing acts which constitute unfair competition, there is little doubt that money damages are inadequate to compensate for continuing harm. See
id.
Irreparable injury necessary for injunctive relief regularly follows from trademark infringement.
See Lone Star,
In this case, Unapix and Plaintiff are operating within the same market. Both TTC and Unapix sell their audio and video tapes on a national level and use national publications for the purposes of advertising. Furthermore,, Dr. Jacoby’s study regarding likelihood of confusion created by Unapix’s use of GREAT MINDS indicated that approximately sixteen percent of those surveyed were confused. Thus, TTC is entitled to a permanent injunction to prevent Unapix from using the mark GREAT MINDS or any confusingly similar mark in connection with its video and audio tapes and related products.
The Court recognizes that Defendant has extensively invested in its product. Unapix has produced and released four separate “Great Minds of ...” series, which have been broadcast on numerous cable and public television stations. Una-pix presented evidence that it has entered into cross-marketing arrangements with its business partners and has numerous agreements involving third parties. Furthermore, Unapix has invested great sums in promoting its GREAT MINDS mark. However, the Court finds that Unapix has acted at its own peril by adopting an identical mark without conducting an investigation of the senior use. See 3 McCarthy § 23:66 at 23-150.
In view of the Court’s ruling that Una-pix infringed upon TTC’s rights to the
Unapix must assign to TTC all rights asserted in the pending applications for trademark, which contain the words “Great Minds” or any combination of those words, filed with the United States Patent and Trademark Office.
Defendant must provide new product labels to items held in inventory which bear the mark “Great Minds” and any variation, and to add new labels to them prior to distribution. Defendant is not required to re-film existing inventory to reflect the new product names.
Within thirty (30) days of this order, Defendant is directed to file with the Court and serve on Plaintiffs counsel, a written “Compliance Report,” under oath, setting forth in detail the manner and form in which Defendant has complied with the foregoing injunction.
B. Damages
Section 35(a) of the Lanham Act provides that a prevailing plaintiff is entitled, subject to the principles of equity, to recover “(1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.” See 15 U.S.C. § 1117(a) (1994). TTC asks the Court to use the “defendant’s profits” as the measure for recovery instead of its lost sales or other damages.
Unapix contends that TTC must prove that Unapix acted in bad faith, intending to infringe or willfully calculating to exploit the advantage of an established mark, in order for TTC to be entitled to an award of monetary damages.
See Bandag, Inc. v. Al Bolser’s Tire Stores, Inc.,
A violation of the Lanham Act can be remedied in a variety of ways. A plaintiff who seeks to recover damages must prove a violation, that the violation caused actual confusion among the consumers of the product, and that the plaintiff suffered actual injury.
See Web Printing,
In
Wynn Oil,
the Seventh Circuit found that the district court had abused its discretion by refusing to award the plaintiff a recovery based on the defendants’ profits.
Id.
The defendants relied upon two cases for supporting their proposition that actual confusion must be shown to justify a monetary award.
See Brunswick Corp. v. Spin-it Reel Co.,
As articulated by the Seventh Circuit, The Lanham Act specifically provides for the awarding of profits in the discretion of the judge subject only to principles of equity_“The trial court’s primary function is to make violations of the Lanham Act unprofitable to the infringing party.”
Roulo,
An accounting of the profits of the trademark infringer is proper under a theory of unjust enrichment.
See Babbit Elees., Inc. v. Dynascan Corp.,
Additionally, in determining profits, “the plaintiff shall be required to prove defendant’s sales only....” 15 U.S.C. § 1117(a). The defendant, as an infringer, bears the burden of proving any proper costs or deductions from gross revenues to determine profits. See id.
The burden is the infringer’s to prove that his infringement had no cash value in sales made by him. If he does not do so, the profits made on sales of goods bearing the infringing mark properly belong to the owner of the mark.... There may well be a windfall to the trade-mark [sic] owner where it is impossible to isolate the profits which are attributable to the use of the infringing mark. But to hold otherwise would give the windfall to the wrongdoer.
Mishawaka,
In this case, the Court finds that an award related to Defendant’s gross profits is proper for several reasons. First, Defendant was aware of Plaintiffs GMWIT products as of August 14, 1996— prior to the marketing of Defendant’s program. As stated previously, Mr. Steve Atlas alerted Mr. Smith of Unapix to the existence of Plaintiffs GMWIT and forwarded a copy of Plaintiffs advertisement. Mr. Atlas specifically questioned the propriety of using “Great Minds” for the series title. Mr. Smith failed to take any affirmative steps to ascertain the propriety of using the name.
Second, after hearing of the potential trademark conflict, Unapix made an intentional business decision to proceed to mar
Third, it should have been readily apparent to Mr. Smith from reviewing the New York Times Book Review section advertisement that Plaintiffs product and Una-pix’s proposed product were similar in genre and trade channels. Each product is an educational video/audio tape series which is directed toward readers of the New York Times Book Review section and similar publications. Furthermore, at trial, the evidence revealed that Defendant’s advertising layouts were very similar in appearance to those of TTC. Compare PI. ’s Trial Exs. 71,131, with Def.’s Trial Exs. 5, 6.
Fourth, Plaintiff presented credible consumer survey evidence gathered in a reliable fashion demonstrating a sixteen percent actual consumer confusion rate between the source of Plaintiffs products and Defendant’s products. Actual direct consumer confusion evidence was not presented to the Court, however, the Court is persuaded by the totality of the evidence that actual confusion of the source of origin of these products exists in the marketplace.
Fifth and finally, Mr. Smith and Unapix were well aware that the term “Great Minds” had commercial significance as a trademark. While preparing to take its products to market, Unapix initiated a trademark search in order to make its claim for the mark (not to ascertain the rights of any predecessor use of the mark). On August 21,1996, Mr. Smith and Unapix received a trademark search report which revealed an application for trademark filed by IVN in March 1996. Unapix then entered into contractual arrangements to buy the trademark application. Later, Unapix had its counsel consider sending a cease and desist letter to TTC. Then, Unapix later filed its own trademark applications with the PTO, seeking to acquire rights to the terms for its products. Now, in trial, Unapix takes the remarkable position that the term “Great Minds” is generic and not subject to trademark law protection.
The Court holds that Unapix’s conduct in connection with examination of its rights and liabilities was willful and intentional conduct taken in derogation of Plaintiffs rights.
See Tommy Hilfiger, 80
F.3d at 753. Knowing or willful infringement is more than an accidental encroachment.
See SecuraComm Consulting Inc. v. Secu-racom Inc.,
At trial, Unapix submitted that its costs in producing the “Great Minds of ...” series exceeded its gross revenue, thus, yielding no profits. However, the Court finds that Unapix has failed to sustain its burden of proving the propriety of many of those costs and deductions. Unapix produced Mr. Stewart Ellner, corporate controller, who offered testimony concerning the costs and expenses related to the sale and marketing of the “Great Minds of ... ” series. Unapix presented a series of financial statements which reflect that the series has sustained losses. The Court finds that Mr. Ellner’s testimony and the financial statements submitted contain several flaws which render them unreliable for deduction of costs. Defendant’s exhibits and the other evidence at trial reveal:
(1) prior to this lawsuit, Unapix’s business partners had not been provided with royalty statements, Trial Tr. Vol. 3 at 96, 100;
(2) in most instances, business partners have not been provided with full royalty payments from Unapix in the amounts claimed in Court, see id. at 81-82, 84;
(3) Unapix has stated double charges for international and domestic distribution fees in an amount in excess of $300,000, see id. at 78;
(4) revenue projections and royalty statements do not include a charge off of overhead costs to the business partners; see id. at 80;
(5) amounts charged to the projects include a fixed percentage for legal and accounting expenses without real reference to time spent or salary costs, see id. at 78;
(6) interest costs claimed are not supported by any corroborating verification, see id. at 86;
(7) amounts charged for personnel salaries as a percentage are without verification or a basis to assess the number of hours or salary costs, see id. at 76-77; and
(8) charges listed for advertising by Ein-son Freeman were overstated by $12,-500.00, see id. at 90-91.
Furthermore, the Court finds that Una-pix offered other unreliable financial information. For instance, Unapix allocated excessive overhead expenses to the infringing products. The infringing product constitutes a minute portion of Unapix’s sales, and would not have resulted in an increase in Unapix’s overhead costs. Additionally, Unapix has included excessive costs for “entertainment” expenses for Mr. Smith, and costs for development of other products which were dropped or not yet completed or released. These costs are not properly deductible. Unapix’s improper accounting negates any set-off of expenses. Without critical proof of Defendant’s costs, the Court must consider compensation that, is just according to the circumstances.
Despite Unapix’s discrepancies, the Court finds that Unapix carried its burden of proof of proper costs and deductions in certain areas. Specifically, Unapix’s August 30, 1999 Revenue and Expense Report asserted the marketing, production, shipping, and non-capitalized costs for its series. See Pl.’s Trial Ex. 74. These costs were not sufficiently rebutted by TTC. The Court accepts the following:
Unapix’s “Great Minds of...” Expense Statement
Costs Science Business Medicine History
Marketing $ 61,917.37 $115,455.45 $ 76,242.04 $ 29,000.92
Production $137,166.92 $262,238.44 $235,735.95 $188,419.87
Shipping $ 1,919.19 $ 3,707.82 $ 3,962.97 $ 1,963.55
Non-capitalized $ 19,775.69 $ 11,389.87 $ 13,670.11 $ 26.95
Totals $220,769.17 $392,791.58 $329,611.07 $219,411.29
Considering the amounts in relation to the development of each of its series, Unapix has proven $1,162,583.11 in total costs.
The Court finds that it is appropriate to use the gross revenue figures proven at trial less those accepted deductions for purposes of computing damages.
See Maltina Corp. v. Corny Bottling Co., Inc.,
The purpose of the award of Defendant’s profits here is to compensate Plaintiff for its loss and not to punish Defendant or to provide Plaintiff with a windfall. Rather the award serves to remove the profits from infringement from Defendant.
See Roulo,
The Court is not persuaded that this is a case where enhancement of the award by multiples is appropriate or necessary because the sum awarded is sufficient compensation for the trademark infringement. See 15 U.S.C. § 1117(a). Plaintiffs products sustained some loss as a result of reduced sales from national advertising but not to a degree to exceed the award or warrant increase of the award.
As to attorney’s fees, such an award is reserved for exceptional cases.
See id.
To be entitled to an award of attorney’s fees, TTC must prove that Unapix acted in bad faith in adopting its mark.
See Scotch Whisky Ass’n v. Majestic Distilling Co., Inc.,
The Clerk is directed to forward a copy of this Order to counsel of record.
Notes
. Pangea Digital Pictures is the IVN internal division involved with producing "Discovering Great Minds of Science."
. The test for trademark infringement and unfair competition under the Lanham Act is essentially the same as that for common law unfair competition under Virginia law because both address the likelihood of confusion as to the source of the goods or services involved.
See Lone Star,
. There is no argument that GREAT MINDS or "Great Minds of the Western Intellectual Tradition” are fanciful or arbitrary marks. "Fanciful” marks are made-up words expressly designed to serve as a trademark, such as "Kodak” or "Exxon.”
See Sara Lee,
. The following marks have also been held to be descriptive: CHAP STICK skin preparation in a stick, CONTINUOUS PROGRESS educational materials, FOOD FAIR supermarket, NO SPOT car wash system, OFF THE RACK men's store, POCKET BOOK paperback books, RICH 'N CHIPS chocolate chip cookies, and WORLD BOOK encyclopedia. 2 McCarthy § 11:24 at 11-32, 33, 37, 38, 39, 42.
. The manual states:
To the fullest extent possible, the examining attorney will examine the intent-to-use application for registrability under Trademark Act §§ 1, 2(a), 2(b), 2(c) and 2(e), 15 U.S.C. §§ 1051 and 1052(a), (b), (c) and (e), according to the same procedures and standards which apply to any other application. That is, the examining attorney must make all appropriate refusals with respect to such issues as ownership, deceptiveness, mere descriptiveness and surname significance. The examining attorney should investigate all possible issues regarding registrability under these sections through all available sources.... The examining attorney must raise all possible issues under these sections in the initial examination of the application. As discussed more fully in TMEP § 1105.05(f) et seq., Office policy precludes the issuance of a requirement or refusal during examination of the statement of use if the issue could or should have been treated in the initial examination, unless the failure to do so constitutes a clear error.
TRADEMARK MANUAL OF EXAMINING PROCEDURE, § 1105.01(a)(iv) (emphasis added).
. While Unapix suggests that such levels are not sufficient, courts have found secondary meaning based upon much lower advertising expenditures.
See, e.g., George Basch Co., Inc. v. Blue Coral, Inc.,
. In discussing survey formats for eliciting responses as to confusion, McCarthy cautions that questions regarding source confusion should be followed with the "Why” question. See 5 McCarthy § 32-175 at 32-261. "Often, an examination of the respondents’ verbatim responses to the 'why' question are the most illuminating and probative part of a survey, for they provide a window into consumer thought processes in a way that mere statistical data cannot.” Id.
