Kellogg Co. v. Exxon Corp.

• Decision Date: 14 September 1999
• Docket Number: V,CROSS-APPELLANT,DEFENDANT-APPELLEE,PLAINTIFF-APPELLANT,Nos. 98-6237,CROSS-APPELLE,98-6360,s. 98-6237
• Citation: 209 F.3d 562
• Parties: (6th Cir. 2000) KELLOGG COMPANY,/EXXON CORPORATION,/ Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 562

209 F.3d 562 (6th Cir. 2000)

KELLOGG COMPANY, PLAINTIFF-APPELLANT/CROSS-APPELLEE,

V.

EXXON CORPORATION, DEFENDANT-APPELLEE/CROSS-APPELLANT.

Nos. 98-6237, 98-6360

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: September 14, 1999

Decided and Filed: April 6, 2000

Appeal from the United States District Court for the Western District of Tennessee at Memphis. No. 96-03070--Julia S. Gibbons, Chief District Judge. [Copyrighted Material Omitted] Grady M. Garrison (briefed), Baker, Donelson, Bearman & Caldwell, Memphis, Tennessee, Daniel S. Mason (argued and briefed), San Francisco, California, Christopher T. Micheletti (briefed), Furth, Fahrner & Mason, San Francisco, California, for Plaintiff-Appellant/Cross-Appellee.

Buckner P. Wellford (briefed), John J. Thomason (briefed), Thomason, Hendrix, Harvey, Johnson & Mitchell, Memphis, Louis T. Pirkey (argued and briefed), Stephen P. Meleen (briefed), William G. Barber (briefed), Arnold, White & Durkee, Austin, Texas, Robert D. Rippe, Jr. (briefed), Charles A. Beach (briefed), Exxon Corporation, Irving, Texas, for Defendant-Appellee/Cross-Appellant.

Before: Batchelder and Gilman, Circuit Judges; Hood,^* District Judge.

OPINION

Alice M. Batchelder, Circuit Judge.

Plaintiff-Appellant Kellogg Company appeals the district court's order granting summary judgment to Defendant-Appellee Exxon Corporation on Kellogg's complaint alleging federal and state law claims of trademark infringement, false designation of origin, false representation, dilution, and unfair competition. Because we conclude that the district court erred in (1) holding that Kellogg had acquiesced in Exxon's use of the challenged mark, (2) dismissing Kellogg's dilution claim, and (3) holding that no genuine issues of fact material to Kellogg's claim of abandonment remain for trial, we reverse the judgment of the district court and remand the case for further proceedings.

BACKGROUND

In 1952, Kellogg began using a cartoon tiger in connection with "Kellogg's Frosted Flakes" cereal and registered its "Tony The Tiger" name and illustration in the United States Patent and Trademark Office ("PTO"). Today, Kellogg owns a number of federal trademark registrations for the name and appearance of its "Tony The Tiger" trademark; those trademark registrations cover, among other things, "cereal-derived food product to be used as a breakfast food, snack food or ingredient for making food."

In 1959, Exxon began using a cartoon tiger to promote motor fuel products, and in 1965, Exxon registered federally its "Whimsical Tiger" for use in connection with the sale of petroleum products. Exxon used its cartoon tiger in its "Put A Tiger In Your Tank" advertising campaign, which ran between 1964 and 1968. In 1968, Kellogg acknowledged Exxon's use of its cartoon tiger when it requested Exxon not to oppose Kellogg's application to register its "Tony The Tiger" trademark in Germany. Exxon's "Whimsical Tiger" trademark, obtained with no opposition from Kellogg, became incontestable in 1970.

In 1972, Exxon changed its name from Standard Oil Company to Exxon Corporation and changed its primary trademarks from "Esso," "Enco", and "Humble" to "Exxon." Exxon submitted into evidence numerous newspaper and magazine articles and other promotional materials demonstrating its extensive and costly advertising campaign to promote its new "Exxon" mark using the cartoon tiger and to launch its "Energy For A Strong America" campaign, which ran in the latter half of the 1970s. For example, an article in a 1973 issue of Advertising Age called Exxon's advertising campaign "the classic 'name change' campaign of all time, with approximately $100,000,000 involved in the face lift!" Harry Wayne McMahan, McMahan Picks the 100 Best TV Commercials of the Year, Advertising Age, Feb. 19, 1973.

In the early 1980s, Exxon's advertising agency, McCann-Erickson ("McCann"), suggested that Exxon phase out the use of its cartoon tiger and begin using a live tiger, opining that the cartoon tiger was too whimsical and, hence, inappropriate in light of prevalent oil shortages. In 1981, Exxon began to adopt a new look for its gas stations, implementing a program to modernize the gas pumps and to eliminate its cartoon tiger on the pump panels. At that time, Exxon had between 16,000 and 18,000 gas stations in the United States. Over 11,000 of these gas stations were owned and operated by independent distributors ("distributor stations"), and the rest were owned and operated by Exxon ("company operated retail stores" or "CORS") or owned by Exxon and operated by independent dealers ("dealer stations"). The modernization program to bring about this "new look" entailed removal of the cartoon tiger head design from the lower panels or "pump skirts" on its Exxon "Extra" gasoline dispensers. In a letter dated August 12, 1982, Exxon instructed its regional managers to begin phasing out their use of the cartoon tiger:

The purpose of this memo is to communicate new guidelines pertaining to the application of the Exxon Tiger and the Exxon Emblem in all advertising, point-of-sale material, Company publications, etc.

Exxon Tiger--Effective immediately, the use of the cartoon tiger is to be discontinued.

Exxon explored possible ways to protect its cartoon tiger trademark while shifting toward a live tiger. For example, a 1984 internal office memo suggested:

Since the only way to protect the Trademark is to use it, it might be wise for us to explore ways that the Cartoon Tiger can be used in marketing on a limited basis. This is not a hot item, but one that we can't forget about and be embarrassed later.

A 1985 internal office memo, which listed the subject as "Trademarks," stated:

Advertising discontinued use of the "Cartoon Tiger" in all advertising, point-of-sale material and company publications on August 12, 1982. Regions were advised at that time to do the same (see letter attached). To my knowledge, there has been no use of the "Cartoon Tiger" by advertising or [in] the areas other than the tiger head which appears on the pre-RID Trimline Exxon Extra gasoline pumps/dispensers.

We have asked McCann to explore ways that the "Cartoon Tiger" could be used to protect the mark. In reviewing possible station applications, two general areas seem to afford the most opportunities....

This memo discussed possible strategic placement of cartoon tiger decals around the pump islands and sales rooms/kiosks. Other correspondence between Exxon's attorneys Exxon's marketing department, and McCann reveals Exxon's efforts to reduce its use of the cartoon tiger while ensuring trademark protection. Exxon ultimately decided to use its cartoon tiger as a graphic display on its stations' pump toppers.

Many Exxon stations were slow to remove the cartoon tiger from their pumps. In late 1985 and early 1986, Exxon was using its cartoon tiger on pump toppers at approximately 2,500 gas stations. In 1987, Exxon photographed every distributor station in the United States. Thousands of photographs were taken and stored at Exxon, but most of them were destroyed in a 1994 routine file room clean-up. Based upon those photographs that remain, Exxon estimates that approximately 10% of the 11,000 distributor stations still displayed the cartoon tiger in 1987. In 1993, Exxon contractually obligated its distributors to comply with the modernization program and to convert their stations to the "new look," threatening to remove from the Exxon chain those stations that failed to comply by April 1, 1995.

Exxon submitted evidence in an effort to show that, despite its efforts to convert the look of its gas stations and shift toward the use of a live tiger, its use of the cartoon tiger throughout the 1980s was sufficient to maintain its rights in the mark. In November 1985, Exxon had renewed its federal trademark registration for its cartoon tiger; this renewal would last an additional 20 years. From 1985 to 1990, some Exxon stations used a costumed version of the cartoon tiger for appearances at grand opening events and various promotional activities. In late 1989 and again in 1993, Exxon ran a promotion called "Color to Win," in which over one million contestants submitted entries of a cartoon tiger to hundreds of Exxon stations. In the early 1990s, Exxon used its cartoon tiger to promote the Texas State Fair. Exxon also presented evidence showing that in 1973, an Exxon distributor in Virginia placed a large statue of a cartoon tiger in front of its gas station near the highway, and the statue remains there today.

In the early 1990s, after the Exxon Valdez oil spill, Exxon changed the appearance of its cartoon tiger, making it "more endearing, warm, and friendly." In the words of Exxon's principal artist, "Today's tiger is now cast in a more humanitarian role. He is polite to the elderly, plants trees for ecology and has an overall concern for the environment." Exxon also began to expand the use of its cartoon tiger. Although Exxon had opened its first company-operated convenience store in 1984, it was not until the early 1990s that Exxon began to use its cartoon tiger to promote the sale in those stores of certain foods and beverages, such as Domino's Pizza, Coca Cola, Pepsi Cola, Lays Potato Chips, and Dunkin Donuts. Exxon also began using its cartoon tiger to promote its own private label beverage, "Wild Tiger," and its own private label coffee, "Bengal Traders."

Exxon's use of the cartoon tiger to promote food, beverages, and convenience stores increased dramatically from 1992 to 1996. In October 1992, Exxon had about eight "Tiger Mart" stores; by October 1993, there were about 68 "Tiger Mart" stores; by October 1996, there were over 265 "Tiger Mart" stores.

On November 3, 1992, having learned of Exxon's reintroduction of its cartoon tiger in Canada and Argentina, Kellogg's trademark counsel complained about that use in a telephone conversation with an Exxon attorney and was...