608 F.3d 225 (5th Cir. 2010), 09-20702, Amazing Spaces, Inc. v. Metro Mini Storage

Docket Nº:09-20702.
Citation:608 F.3d 225
Opinion Judge:KING, Circuit Judge:
Party Name:AMAZING SPACES, INC., Plaintiff-Appellant, v. METRO MINI STORAGE; Landmark Interest Corporation, Defendants-Appellees.
Attorney:Gregory Matthew Luck, Duane Morris, L.L.P., Houston, TX, Robert L. Byer (argued), Susan G. Schwochau, Special Counsel, Duane Morris, L.L.P., Pittsburgh, PA, for Amazing Spaces, Inc. James Daniel Petruzzi (argued), Mason & Petruzzi, Houston, TX, for Metro Mini Storage. Thad K. Jenks (argued), Jeff...
Judge Panel:Before KING, WIENER, and DENNIS, Circuit Judges.
Case Date:June 02, 2010
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 225

608 F.3d 225 (5th Cir. 2010)

AMAZING SPACES, INC., Plaintiff-Appellant,

v.

METRO MINI STORAGE; Landmark Interest Corporation, Defendants-Appellees.

No. 09-20702.

United States Court of Appeals, Fifth Circuit.

June 2, 2010

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[Copyrighted Material Omitted]

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Gregory Matthew Luck, Duane Morris, L.L.P., Houston, TX, Robert L. Byer (argued), Susan G. Schwochau, Special Counsel, Duane Morris, L.L.P., Pittsburgh, PA, for Amazing Spaces, Inc.

James Daniel Petruzzi (argued), Mason & Petruzzi, Houston, TX, for Metro Mini Storage.

Thad K. Jenks (argued), Jeff D. Weems, Harrison, Bettis, Staff, McFarland & Weems, L.L.P., Houston, TX, for Landmark Interest Corp.

Appeal from the United States District Court for the Southern District of Texas.

Before KING, WIENER, and DENNIS, Circuit Judges.

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KING, Circuit Judge:

Amazing Spaces, Inc., and Metro Mini Storage are rival self-storage businesses in Houston, Texas. Amazing Spaces brought this action against Metro and Landmark Interest Corporation, a construction company, alleging infringement of a star design that it claims as a service mark. The district court concluded that the design was not a legally protectable mark and dismissed Amazing Spaces's claims on summary judgment. We agree that the design was not legally protectable, and we affirm the judgment dismissing Amazing Spaces's service mark infringement claims. However, we also conclude that the district court erred in dismissing Amazing Spaces's claims relating to infringement of its trade dress, and we reverse and remand for further proceedings.

I. BACKGROUND

Amazing Spaces and Metro compete directly with each other in providing self-storage services in Houston, Texas. Landmark has built facilities for both Amazing Spaces and Metro. Amazing Spaces claims, in connection with providing storage services, exclusive use rights in a design consisting of a raised, five-pointed star set within a circle (the " Star Symbol" ), a copy of which is attached as an appendix to this opinion.1 Metro uses a similar star design on its buildings. In response to this use, Amazing Spaces brought suit against Metro and Landmark in federal district court, alleging federal and state causes of action.2 With respect to the Star Symbol alone, Amazing Spaces brought a federal claim for service mark infringement under the Lanham Act and state law claims for common law infringement and statutory dilution. With respect to its trade dress, of which the Star Symbol comprises one element, Amazing Spaces brought federal claims for trade dress infringement under the Lanham Act and copyright infringement and state law claims for common law unfair competition and statutory dilution.

Amazing Spaces was founded in 1998 by Scott and Kathy Tautenhahn, and it currently operates three storage facilities in the greater Houston area. The facilities opened in 1998, 2001, and 2006, respectively. Landmark was hired to build each of these facilities and, at Amazing Spaces's request, installed the Star Symbol under the peaks of the facilities' gabled roofs. Amazing Spaces has used the Star Symbol in its facilities' architecture and in its advertising, and it claims to have done so since at least April 1998. One trade magazine has recognized Amazing Spaces for its storage services, and the magazine displayed the Star Symbol in connection with the accompanying article. Amazing Spaces has also used the Star Symbol to designate the locations of its facilities on maps, and it claims to have directed customers-through telephone advertisements-to " look for the star."

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The Star Symbol is registered as a service mark with the United States Patent and Trademark Office (PTO). Prior to applying for registration, Amazing Spaces engaged a company to perform a database search to determine whether other storage companies had registered a similar star mark; the search revealed no such registrations. Amazing Spaces's application stated that it believed no other person or business was entitled to use the Star Symbol or a deceptively similar design as a mark for storage services. On July 6, 2004, the PTO issued U.S. Service Mark Registration No. 2,859,845 (the " '845 Registration" ) for the Star Symbol; we have attached the '845 Registration as an appendix to this opinion. Amazing Spaces also holds a registration for another design (the " Peaks and Sky Symbol" ) that features a series of roof peaks, including stars on the gables, placed below a sky expanse, with the words " AMAZING SPACES" underneath.

Landmark has also constructed self-storage facilities for Metro; these facilities feature a similar five-pointed-star-in-a-circle design (but not raised) on their gables. Despite Amazing Spaces's demand that Metro cease its use of a star, Metro continued to use its design and remodeled existing facilities to include the design. According to Amazing Spaces, this has caused confusion among its customers, who mistook Metro's facilities for new Amazing Spaces facilities. According to Kathy Tautenhahn, existing or prospective customers have inquired about whether new Amazing Spaces facilities had opened where Metro facilities were located. The record also includes a declaration from a customer to similar effect.

Prior to this lawsuit, Amazing Spaces had, at one other time, threatened legal action against a rival self-storage business for using a star design on its buildings. However, the matter never culminated in a lawsuit: Community Self Storage removed its star design in response to Amazing Spaces's demands. In the present case, Amazing Spaces has submitted a declaration by its alarm technician that the technician was confused by the appearance of Community's facility and believed it to be an Amazing Spaces facility.

Unlike Community, however, and as mentioned above, Metro refused to cease using its star design, and Amazing Spaces proceeded to file the lawsuit at issue. Metro and Landmark each filed an answer, asserting various affirmative defenses and counterclaims. One of these counterclaims was a request that the trademark be canceled for invalidity. The district court recognized early on that " [t]here does seem to be a question about the trademarkability of the Texas star logo." Accordingly, the court ordered discovery to proceed in stages, with the first stage limited to " the threshold issues raised by the ‘ trademarkability’ of the Texas star and similar issues affecting copyright and trade dress."

Following discovery, Metro3 moved for summary judgment on the ground that the Star Symbol was not a valid service mark. It argued primarily that the Star Symbol was not inherently distinctive and that Amazing Spaces could not establish that it had acquired secondary meaning. It supported this contention by presenting evidence

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that the same or a similar five-pointed star was used in commerce " in at least 63 different industries and businesses on buildings, property, and as part of logos" and on the buildings of " at least 28 other self-storage locations." Amazing Spaces, Inc. v. Metro Mini Storage, 665 F.Supp.2d 727, 738 (S.D.Tex.2009).4 The court concluded that " [t]he ubiquitous nature of the five-pointed star set within a circle precludes a finding that it is inherently distinctive or that it can serve as an indicator of origin for a particular business," id., and that " the record d[id] not raise a fact issue material to determining whether the star mark has acquired distinctiveness through a secondary meaning," id. at 742.

In determining whether the Star Symbol was inherently distinctive, the district court considered two tests. See id. at 735-36. The first is known as the Abercrombie test, after Judge Friendly's opinion in Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir.1976). Under this test, marks are " classified in categories of generally increasing distinctiveness ... [:] (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful." Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (citing Abercrombie, 537 F.2d at 9). The second test was articulated in Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F.2d 1342 (C.C.P.A.1978). Under the Seabrook Foods test, courts look to a set of factors " [i]n determining whether a design is arbitrary or distinctive" :

whether it was a " common" basic shape or design, [2] whether it was unique or unusual in a particular field, [3] whether it was a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods viewed by the public as a dress or ornamentation for the goods, or [4] whether it was capable of creating a commercial impression distinct from the accompanying words.5

Id. at 1344 (footnotes omitted).

After laying out the two tests, the district court proceeded to consider their application to the Star Symbol. It first determined that the Star Symbol was not generic or a common geometric shape. Amazing Spaces, 665 F.Supp.2d at 737. It then determined that the Star Symbol was not descriptive of any " characteristic or quality of self-storage service[s]." Id. For essentially the same reason, and because Amazing Spaces disclaimed any argument to the contrary, the court further concluded that the Star Symbol was not suggestive. Id. Under the Abercrombie rubric, this process of elimination left only two possibilities remaining: the Star Symbol was either arbitrary or fanciful. Both of those " categories of marks, because their intrinsic nature serves to identify a particular source of a product, are deemed inherently distinctive and are entitled to protection."...

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