22 F.3d 1527 (10th Cir. 1994), 92-3259, Universal Money Centers, Inc. v. American Tel. & Tel. Co.

Docket Nº:92-3259.
Citation:22 F.3d 1527
Party Name:30 U.S.P.Q.2d 1930 UNIVERSAL MONEY CENTERS, INC., Plaintiff-Appellant, v. AMERICAN TELEPHONE & TELEGRAPH CO., and Universal Bank, Defendants-Appellees.
Case Date:April 29, 1994
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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22 F.3d 1527 (10th Cir. 1994)

30 U.S.P.Q.2d 1930

UNIVERSAL MONEY CENTERS, INC., Plaintiff-Appellant,

v.

AMERICAN TELEPHONE & TELEGRAPH CO., and Universal Bank,

Defendants-Appellees.

No. 92-3259.

United States Court of Appeals, Tenth Circuit

April 29, 1994

Page 1528

Carter H. Kokjer (Joseph B. Bowman, Kokjer, Kircher, Bowman & Johnson, P.C., Kansas City, MO, on the briefs), Kokjer, Kircher, Bowman & Johnson, P.C., Kansas City, MO, for plaintiff-appellant.

Kirk T. May, of Rouse, Hendricks, German, May & Shank, P.C., Kansas City, MO, for defendants-appellees. Noah J. Hanft, of AT & T Universal Card Services Corp., Jacksonville, FL, of counsel.

Before TACHA, BRORBY, and EBEL, Circuit Judges.

TACHA, Circuit Judge.

Plaintiff-appellant Universal Money Centers, Inc. ("UMC") filed an action against defendant-appellee American Telephone and Telegraph Co. ("AT & T") alleging trademark infringement as a result of AT & T's use of the word "Universal" to describe its combination telephone and retail credit card. The district court entered an order granting AT & T's motion for summary judgment. UMC appeals. We exercise jurisdiction under 28 U.S.C. Sec. 1291 and 15 U.S.C. Sec. 1121 and affirm.

I. Background

UMC is a Missouri corporation with its principal offices in Shawnee Mission, Kansas, and is the owner of four registered trademarks incorporating the word "UNIVERSAL": (1) "UNIVERSAL MONEY CARD" (with the words "MONEY CARD" disclaimed); (2) "UNIVERSAL MONEY CENTER" (with the words "MONEY CENTER" disclaimed); (3) "UNIVERSAL MONEY" and design (with the word "MONEY" disclaimed); and (4) "UNIVERSAL MONEY" (with the word "MONEY" disclaimed). Since 1981, UMC has provided electronic banking services and has contracted with various financial institutions to issue to their customers plastic electronic banking cards bearing one of UMC's trademarks. (See Appendix.)

UMC has approximately 160,000 cardholders throughout the United States. UMC cardholders may use their cards to purchase goods and services at selected retail establishments, to access selected insurance products, and to obtain cash from automatic teller machines ("ATMs") operated by UMC or from ATMs owned by organizations such as American Express, Discover, Cirrus and BankMate with whom UMC has an association or affiliation through an electronic funds transfer network. Reciprocally, the cardholders of these affiliated organizations may use their cards in any of the ATMs operated by UMC. UMC customarily places its trademarks on its electronic banking cards, on printed material accompanying the cards when the cards are mailed to customers, on ATM receipts, on signs displayed at banks and business establishments accepting UMC's cards and on the ATMs themselves.

On March 26, 1990, AT & T introduced a new combination telephone and retail credit card--the "AT & T Universal Card." (See Appendix.) As of February 1991, AT & T had spent over $60 million to promote its card by means of direct mail and telemarketing campaigns and by advertising in the media, including national newspapers, magazines and television. AT & T has more than 10,000,000 cardholders. The AT & T Universal Card is affiliated with Visa and MasterCard and may be used to place telephone

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calls, to make purchases at retail stores affiliated with VISA and MasterCard and to obtain cash from ATMs displaying the "Plus" or "VISA" logos. AT & T cardholders cannot use their cards to obtain cash from ATMs operated by UMC because AT & T and UMC are not affiliated.

UMC first became aware of the AT & T Universal Card on March 26, 1990, when some UMC executives and employees saw an AT & T television commercial broadcast during the Academy Awards presentation. Shortly thereafter, UMC filed a motion for a preliminary injunction seeking to enjoin AT & T 1 from using the term "Universal" in connection with the AT & T Universal Card on the basis that AT & T's use of the term constituted trademark infringement under 15 U.S.C. Sec. 1114(1), false designation of origin under 15 U.S.C. Sec. 1125(a), and unfair competition under state common law. On August 30, 1990, the district court issued an order denying UMC's motion for a preliminary injunction. UMC then amended its complaint by adding a request for money damages.

On November 7, 1991, AT & T filed a motion for summary judgment. The court granted AT & T's motion on June 16, 1992, finding as a matter of law that AT & T's use of the word "Universal" is not likely to cause confusion as to the source of the AT & T Universal Card or the source of UMC's products and services, 797 F.Supp. 891. UMC now appeals.

II. Discussion

  1. Standard of Review

    We review the grant of summary judgment de novo, using the same standard applied by the district court. Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "When applying this standard, we examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment." Applied Genetics, 912 F.2d at 1241.

    While the party moving for summary judgment bears the burden of showing the absence of a genuine issue of material fact, the moving party need not negate the nonmovant's claim, but need only point out to the district court "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). If the moving party carries this initial burden, the party opposing the motion for summary judgment "may not rest upon mere allegations or denials of his pleading," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986), but "must set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof." Applied Genetics, 912 F.2d at 1241 (emphasis added); see also Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. An issue of material fact is "genuine" if a "reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient" to defeat a properly supported motion for summary judgment. Id. at 252, 106 S.Ct. at 2512.

  2. Likelihood of Confusion

    The unauthorized use of "any reproduction, counterfeit, copy, or colorable imitation" of a registered trademark in a way that "is likely to cause confusion" in the marketplace concerning the source of the different products constitutes trademark infringement under the Lanham Act. 15 U.S.C. Sec. 1114(1)(a); see Beer Nuts, Inc. v. Clover Club Foods Co. (Beer Nuts II), 805 F.2d 920, 924 (10th Cir.1986); see also Jordache Enters., Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482,

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    1484 (10th Cir.1987) (noting that a similar test is used for false designation of origin claims under 15 U.S.C. Sec. 1125(a)). Notwithstanding the fact that UMC's registered trademarks have become incontestable under 15 U.S.C. Sec. 1065, "[t]he party alleging infringement has the burden of proving likelihood of confusion." Jordache, 828 F.2d at 1484. Thus, to prevail on its claims, UMC must demonstrate that AT & T's use of the term "Universal" is likely to cause consumers to believe either that UMC is the source of the AT & T Universal Card (direct confusion), or alternatively, that AT & T is the source of UMC's products and services (reverse confusion). See Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 958 (7th Cir.1992) (noting that several circuits have found reverse confusion to be a valid basis for a trademark infringement claim under the Lanham Act), cert. denied, --- U.S. ----, 113 S.Ct. 1879, 123 L.Ed.2d 497 (1993); see also Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 561 F.2d 1365, 1371-72 (10th Cir.1977) (establishing the doctrine of "reverse confusion"), cert. dismissed, 434 U.S. 1052, 98 S.Ct. 905, 54 L.Ed.2d 805 (1978).

    The following factors are considered in determining whether there is a likelihood of confusion between two marks:

    (a) the degree of similarity between the designation and the trade-mark or trade name in

    (i) appearance;

    (ii) pronunciation of the words used;

    (iii) verbal translation of the pictures or designs involved;

    (iv) suggestion;

    (b) the intent of the actor in adopting the designation;

    (c) the relation in use and manner of marketing between the goods or services marketed by the actor and those marketed by the other;

    (d) the degree of care likely to be exercised by purchasers.

    Jordache, 828 F.2d at 1484. "This list is not exhaustive. All of the factors are interrelated, and no one factor is dispositive." Id. In this case, for example, evidence of actual confusion and the strength or weakness of UMC's trademarks are two additional relevant factors. See Nikon Inc. v. Ikon Corp., 987 F.2d 91, 94 (2d Cir.1993) (listing evidence of actual confusion and strength or weakness of trademark as relevant factors); DeCosta v. Viacom Int'l, Inc., 981 F.2d 602, 606 (1st Cir.1992) (same), cert. denied, --- U.S. ----, 113 S.Ct. 3039, 125 L.Ed.2d 725 (1993); Americana Trading, Inc. v. Russ Berrie & Co., 966 F.2d 1284, 1287 (9th Cir.1992) (same).

    After examining the above four factors as well as evidence of actual confusion and the strength of UMC's marks, the district court concluded as a matter of law that consumers in the marketplace are not...

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