Entrepreneur Media, Inc. v. Smith

Decision Date11 February 2002
Docket NumberNo. 00-56559.,00-56559.
Citation279 F.3d 1135
PartiesENTREPRENEUR MEDIA, INC., A California Corporation, Plaintiff-Appellee, v. Scott SMITH, an Individual dba Entrepreneurpr, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Jeffrey S. Kravitz, Sacramento, CA, for the defendant-appellant.

Mark A. Finkelstein, Latham & Watkins, Costa Mesa, CA, for the plaintiff-appellee.

Appeal from the United States District Court for the Central District of California Florence-Marie Cooper, District Judge, Presiding. D.C. No. CV-98-03607-FMC.

Before BFLETCHER, T.G. NELSON, and BERZON, Circuit Judges.

BERZON, Circuit Judge.

Entrepreneur Media, Inc. ("EMI"), publisher of Entrepreneur magazine, contends that Scott Smith infringed EMI's federally registered trademark "ENTREPRENEUR" by using the word "entrepreneur" in connection with his public relations company. The district court, Cooper J., granted summary judgment in favor of EMI on its trademark infringement claims, and Smith appeals. We affirm in part, reverse in part, and remand for a trial on the merits.

I. BACKGROUND
A. Entrepreneur Media, Inc.

Since 1978, the appellee EMI has published Entrepreneur magazine, a monthly publication geared towards small businesses and their owners. Entrepreneur has a paid circulation of approximately 540,000 and sells for $3.95 on newsstands. Advertisements in Entrepreneur cost the advertiser from $12,000 to just over $60,000 per issue. EMI also publishes other magazines, books, computer software, and audio and video tapes, and participates in trade shows and seminars, all in connection with the world of small business.

EMI has a Web site with the domain names "entrepreneur.com" and "entrepreneurmag.com." On the Web site, visitors can view on-line versions of Entrepreneur magazine, subscribe to the publication, interact with other visitors, and learn about business opportunities. EMI uses the Web site for marketing and advertising, and also advertises on radio, on television, and in print. Additionally, EMI promotes small business events and sends complimentary copies of its magazine to other members of the media.

In 1987, EMI registered the term "ENTREPRENEUR" as a trademark on the federal Principal Register in International Class 16 for "paper goods and printed matter; namely magazines, books and published reports pertaining to business opportunities" and in International Class 9 for "computer programs and programs/user manuals all sold as a unit." The mark has attained incontestable status for the paper good and computer program categories.1 In 1995, EMI registered the term "ENTREPRENEUR" as a service mark for trade show exhibitions, seminars, and workshops. EMI has also registered various other marks, including: "ENTREPRENEUR EXPO," "ENTREPRENEUR INTERNATIONAL," "ENTREPRENEURIAL WOMAN," and "EntrepreneurMag.com."

B. Scott Smith d/b/a EntrepreneurPR

In 1995, the appellant Smith started a public relations company for small businesses called ICON Publications. ICON produced a publication entitled Yearbook of Small Business Icons, containing copyright-free articles about ICON's clients, and distributed the Yearbook free of charge to various media contacts, with the goal of increasing the clients' media coverage. ICON also operated a Web site, at iconpub.com.

When Smith decided to publish the Yearbook on a quarterly rather than yearly basis he also decided that name changes were in order. Smith hired a name-consultation firm, had a trademark search performed, and, in 1997, settled on "EntrepreneurPR" as the new name for his company, Entrepreneur Illustrated as the new name for the Yearbook, and entrepreneurpr.com as his new Web site address.

EntrepreneurPR's clients pay $10,000 per year for inclusion in Entrepreneur Illustrated, distributed to approximately 3,800 media representatives free of charge. Entrepreneur Illustrated does not otherwise accept paid advertisements.

C. Procedural History

EMI filed this case in 1998, alleging trademark infringement, unfair competition, and counterfeiting under the Lanham Act, 15 U.S.C. § 1125, and unfair competition under the California Business and Professions Code § 17200. Both parties moved for summary judgment. The district court granted EMI's motion on the trademark infringement and unfair competition claims, denied EMI's motion on the counterfeiting claim, and denied Smith's motion in its entirety. EMI thereupon dismissed its claim for counterfeiting. After supplemental briefing, the court, on August 29, 2000, awarded EMI $337,280 in damages and enjoined Smith from using any marks confusingly similar to "Entrepreneur," including the terms "Entrepreneur," "EntrepreneurPR," "Entrepreneur Illustrated," and "Entrepreneur.com" [sic].

Smith filed a timely Notice of Appeal on September 11, 2000. On October 23, 2000, this court denied Smith's emergency motion to stay the judgment pending appeal. We have jurisdiction pursuant to 28 U.S.C. § 1291.

II. ANALYSIS
A. Standard of Review

This court reviews the district court's grant of summary judgment de novo. See Interstellar Starship Servs., Ltd. v. Epix, Inc., 184 F.3d 1107, 1109 (9th Cir.1999). We must determine whether, "viewing the evidence in the light most favorable to the nonmoving party, ... there are any genuine issues of material fact, and whether the district court correctly applied the relevant substantive law." Wendt v. Host International, Inc., 125 F.3d 806, 809-10 (9th Cir.1997). "Because of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena." Interstellar, 184 F.3d at 1109 (citing Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1356 n. 5 (9th Cir.1985)).

B. The Trademark Infringement Claim

"The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers." Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 198, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985). To achieve these goals, the Act allows for civil liability against "[a]ny person who, on or in connection with any goods or services, ... uses in commerce any word, term, name, symbol, or device, or any combination thereof ..., which (A) is likely to cause confusion ... as to the origin, sponsorship, or approval" of the goods or services. 15 U.S.C. § 1125(a)(1) (emphasis added).

The only element of EMI's trademark infringement claim in dispute is whether Smith's use of the terms "EntrepreneurPR," "Entrepreneur Illustrated," and "entrepreneurpr.com" are "likely to cause confusion" as to their "origin, sponsorship, or approval." Id. "The test for likelihood of confusion is whether a `reasonably prudent consumer' in the marketplace is likely to be confused as to the origin of the good or service bearing one of the marks." Dreamwerks Production Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129 (9th Cir.1998).

In AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir.1979), this court developed an eight-factor test "intended to guide the court in assessing the basic question of likelihood of confusion." E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290 (9th Cir.1992). The Sleekcraft factors, as applied to this case, are:

1. The strength of EMI's trademark;

2. The similarity of the marks;

3. The proximity or relatedness of the goods or services;

4. Smith's intent in selecting the marks;

5. Evidence of actual confusion;

6. The marketing channels used;

7. The likelihood of expansion of product lines; and,

8. The degree of care consumers are likely to exercise.

Sleekcraft, 599 F.2d at 348-49. The ultimate question of likelihood of confusion "is predominantly factual in nature," as is each factor within the Sleekcraft likelihood of confusion test. Wendt, 125 F.3d at 812.

Although the Sleekcraft test plays an important role in the analysis of whether a likelihood of confusion exists, "[i]t is the totality of facts in a given case that is dispositive." Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir.1987). After applying the Sleekcraft analysis, we agree with the district court's ultimate finding of likelihood of confusion as a matter of law only as to the use of the mark "Entrepreneur Illustrated" on the cover of EntrepreneurPR's printed publication. We therefore reverse the grant of summary judgment and remand except as to that issue; we affirm the grant of summary judgment on the question whether Smith infringed EMI's trademark by his use of the mark "Entrepreneur Illustrated" on the cover of that publication.

1. Overview of the Sleekcraft Analysis

The Sleekcraft factors are, as E. & J. Gallo says, a "guide" to decision-making, intended to channel the analytical process but not dictate any result. 967 F.2d at 1290. Since each factor represents only a facet of the single dispositive issue of likely confusion, the factors, not surprisingly, tend to overlap and interact, and the resolution of one factor will likely influence the outcome and relative importance of other factors. For instance, as this case demonstrates, if the trademark holder's mark is weak, "only if the marks are quite similar, and the goods closely related, will infringement be found." Sleekcraft, 599 F.2d at 350.

Thus, we do not decide whether confusion is likely by considering mechanically the number of Sleekcraft factors that weigh in favor of either party, or by giving the same weight to a particular factor from case to case. Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1054 (9th Cir.1999). To do so would be entirely misleading, as the determination of one factor is often, in essence, only another way of viewing the same considerations already taken into account in finding the presence or...

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