Caliber Auto. Liquidators Inc v. Chrysler

• Decision Date: 07 May 2010
• Docket Number: No. 08-16179.,08-16179.
• Parties: CALIBER AUTOMOTIVE LIQUIDATORS, INC., a California corporation, Plaintiff-Counter-Defendant-Appellant,v.PREMIER CHRYSLER, JEEP, DODGE, LLC, a Georgia corporation, d.b.a. Premier Automotive Group, Gwinnett, LLC, a Florida corporation, d.b.a. Premier Dodge, d.b.a. Premier Automotive Group, and Sam Kazran, a Florida resident, a.k.a. Sam Khazrwan, Defendants-Counter-Claimants-Appellees,Who's Calling, Inc., Movant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

605 F.3d 931

CALIBER AUTOMOTIVE LIQUIDATORS, INC., a California corporation, Plaintiff-Counter-Defendant-Appellant,v. PREMIER CHRYSLER, JEEP, DODGE, LLC, a Georgia corporation, d.b.a. Premier Automotive Group, Gwinnett, LLC, a Florida corporation, d.b.a. Premier Dodge, d.b.a. Premier Automotive Group, and Sam Kazran, a Florida resident, a.k.a. Sam Khazrwan, Defendants-Counter-Claimants-Appellees,Who's Calling, Inc., Movant-Appellee.

No. 08-16179.

United States Court of Appeals Eleventh Circuit.

May 7, 2010.

Arthur A. Gardner, Joseph W. Staley, Gardner, Groff, Greenwald & Villanueva, P.C., Atlanta, GA, for Appellant.

James M. Green, Robert J. Kiser, Kiser & Green, LLC, Loganville, GA, for Appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before BLACK, MARCUS and HIGGINBOTHAM,^* Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Caliber Automotive Liquidators, Inc. provides advertising promotions to car dealerships and owns service marks on “Slash-It! Sales Event” and “Slasher Sale.” Premier Automotive Group uses its own marketing-an infomercial called the “Slasher Show”-to sell cars. Caliber sued Premier in the Northern District of Georgia under both federal and state law, claiming infringement. The district court granted Premier summary judgment, holding that no reasonable jury could find a likelihood of confusion between Caliber's marks and Premier's advertising. Caliber appealed. Persuaded that the district court erred in its measure of confusion of Caliber's customers by Premier's advertising and in the weight it gave an incontestible mark, we reverse and remand.

I.

Daniel Ryan owns and operates Caliber Automotive Liquidators, Inc., offering its services to car dealerships throughout the country.¹ Caliber's service follows a regimen it developed to reduce quickly a dealer's existing inventory. Starting two weeks before a dealership's sale, Caliber assists in a saturation of the local market with radio, television, and print ads. In the days immediately before the sale, its team arrives on-site to prepare the dealership, putting up marketing paraphernalia and energizing the dealership's sales staff, as Caliber's staff do not act as floor salespersons. Instead, during the sale, the dealer's salespersons-performing for the customers-histrionically slash the car prices and seal the deals. Caliber enjoys a demand for its service, as its methods often help dealerships shrink inventory over three-day “blowouts.”²

Caliber has held a federal registration for “Slash-It! Sales Event” since 1999. The registration³ provides that the service mark⁴ is used for “advertising agency services, namely, promoting the services of automobile dealerships through the distribution of printed and audio promotional materials and by rendering sales promotion advice.” The Slash-It! Sales Event mark, in trademark parlance, is “incontestible,” a status we will come to.⁵ Caliber also owns a federal registration⁶ for the service mark “Slasher Sale,” which the company purchased in 2005.⁷ Daniel Ryan scours the country's automotive advertisements to ensure that no car dealer uses the slasher marks. Ryan has stopped hundreds of would-be infringers, sells a license to use both Slash-It! Sales Event and Slasher Sale, and has favorably settled several nascent legal actions against alleged infringers.

In the summer of 2006, Ryan learned that Premier Automotive Group, owned by Sam Kazran, was running infomercials called Slasher Shows for its dealerships in greater Atlanta, advertising drastically reduced-priced vehicles. The public could not buy cars through the infomercial, but instead had to come to the showroom. In addition to the Slasher title, the infomercial featured a Slasher Countdown, a Slasher Man complete with slasher jewelry, off-camera voices screaming “slash it,” and on camera uses of the term “slash it.” Premier also highlighted the Slasher Show theme on its website.

To Ryan's eyes, the Slasher Show infringed Caliber's marks. More significantly, the infomercial perplexed its customers. Caliber over the years had done business with various Bill Heard Dealerships, each located in Georgia. Mark Henry, general manager of a Heard dealership, saw the Slasher Show and became upset. He was under the impression that Caliber had granted Heard exclusive use of slasher sales in Georgia, that the show for Premier breached that agreement. John Sumner, formerly general manager of a couple of Heard dealerships, was angered by a radio version and a TV episode of the Slasher Show, thinking that Caliber had violated the exclusive license by doing the show for Premier. Responding to the perceived duplicity, Sumner canceled Caliber-run Slash-It! Sales Events at his Union City, Georgia dealership and ordered his workforce not to pay Caliber's invoices.⁸

II.

Ryan called Kazran to work out a licensing agreement. Kazran responded that he commanded an “army of lawyers,” ending the conversation with rude comments. Caliber filed suit in federal court, alleging: (1) infringement under the Lanham Act;⁹ (2) false designation of origin under the Lanham Act;¹⁰ (3) deceptive trade practices under Georgia law; ¹¹ (4) unfair competition under Georgia law;¹² and (5) dilution of trademark under Georgia law.¹³ Premier moved for summary judgment, arguing that no reasonable jury could find infringement, and the district court agreed.

The court started with a correct observation that: “A successful cause of action for trademark infringement requires the evidence to establish that the infringer 1) used the mark in commerce, without consent; and 2) that the use was likely to cause confusion.”¹⁴ Our focus is upon the element of confusion. The district court properly identified the seven-factor weighted balancing test “to be considered as to the likelihood of confusion: (1) type of mark; (2) similarity of mark; (3) similarity of the products the marks represent; (4) similarity of the parties' retail outlets and customers; (5) similarity of advertising media; (6) defendant's intent; and (7) actual confusion. Of these, the type of mark and the evidence of actual confusion are the most important.”¹⁵

The court concluded that: the similarity of the marks and “slight” actual confusion weighed in favor of likelihood of confusion; similarity in advertising did not tip the balance either way; and the strength of mark, similarity of events, similarity of sales method, and defendants' intent all weighed against likelihood of confusion. Tallying the score, the district court found that no reasonable jury could find likelihood of confusion, and granted summary judgment to Premier on the trademark infringement claim under 15 U.S.C. § 1114.

Because the false designation of origin claim under 15 U.S.C. § 1125 and the Georgia-law claims for deceptive trade practices and unfair competition all pivoted upon the same likelihood of confusion test, the district court also granted summary judgment on those claims.¹⁶ Finally, the district court granted Premier summary judgment on Caliber's Georgia-law trademark dilution claim, because Caliber has no registered Slasher mark on file in the state of Georgia-a prerequisite for recovery.¹⁷

Caliber appealed, focusing on two arguments. First, the district court acknowledged evidence of actual confusion of Caliber's customers but devalued it, because the Slasher Show did not confuse Premier's retail customers. Caliber urges that this was error. Second, Caliber asserts that the district court understated the strength of its marks. With these factors weighing in favor of likelihood of confusion, the argument goes, a reasonable jury could find for Caliber-making summary judgment improper.

III.

“We review de novo a district court's grant of summary judgment. Summary judgment is proper only if the record before the district court shows that there is no genuine issue as to any material fact and [Premier] is entitled to judgment as a matter of law. We must view the evidence in the light most favorable to [Caliber], rather than weighing the evidence ourselves or making credibility determinations.”¹⁸

A.

All parties concede that evidence of actual confusion is the most weighty consideration.¹⁹ The district court analyzed the evidence of actual confusion of two audiences: (1) Caliber's car dealership customers and (2) car-buying retail customers. Although the district court found that Caliber's patrons were confused, it offset this evidence with the fact that the car-buying public was not. In the end, the court found an overall “slight” amount of actual confusion.

On appeal, Caliber challenges the district court's focus on the car-buying public, the customers who frequent Premier's showrooms, understandably because the type of confusion was a heavy stone in the balance. We have explained that “[p]erhaps as important as ... the number of instances of confusion are the kinds of persons confused and degree of confusion. Short-lived confusion or confusion of individuals casually acquainted with a business is worthy of little weight while confusion of actual customers of a business is worthy of substantial weight.”²⁰

There is more. We have specified that “[a]ctual consumer confusion is the best evidence of likelihood of confusion.”²¹ This circuit's caselaw makes plain that the consumers of the relevant product or service, especially the mark holder's customers, turn the key.²² All potential consumers of the relevant product or service, including middlemen, can inform the inquiry, and the ultimate consumers deserve special attention.²³

In this case, advertising and promoting represent the services. As car dealerships, not the general public, purchase slasher promotions, it is unremarkable that a retail customer of a dealer would be unfamiliar with Caliber. Confusion of persons casually acquainted with a business carry little weight. At the same time, Caliber has proffered competent summary judgment evidence of actual...