Floralife, Inc. v. Floraline Intern., Inc.

• Decision Date: 09 October 1985
• Docket Number: No. 85 C 6214.,85 C 6214.
• Parties: FLORALIFE, INC., Plaintiff, v. FLORALINE INTERNATIONAL, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

633 F. Supp. 108

FLORALIFE, INC., Plaintiff, v. FLORALINE INTERNATIONAL, INC., Defendant.

No. 85 C 6214.

United States District Court, N.D. Illinois, E.D.

October 9, 1985.

Charles F. Pigott, Jr., Edward D. Gilhooly, Pigott, Gerstman & Gilhooly, Ltd., Chicago, Ill., for plaintiff.

James Van Santen, Hill, Van Santen, Steadman & Simpson, Chicago, Ill., for defendant.

MEMORANDUM OPINION

WILL, District Judge.

This action, as its title may suggest, involves a trademark dispute between two businesses in the floral products and services industry. The plaintiff alleges that the similarities between its registered trademark FLORALIFE and the defendant's FLORALINE mark have resulted or are likely to result in confusion to the public, damage to the plaintiff's business, and invasion of its state and federal trademark protections. Before us are two fully-briefed motions: the defendant's motion to dismiss for improper venue or, alternatively, to transfer to the Eastern District of Michigan; and the plaintiff's motion for a limited preliminary injunction. For the reasons stated below, the defendant's motion is denied and the plaintiff's motion is granted.

I. Background

For nearly fifty years, the plaintiff Floralife, Inc. ("Floralife") and its predecessor, Amling Company, have been engaged in the business of supplying specialty products for florists under the FLORALIFE trademark. Floralife has advertised its products extensively and its name is widely recognized among florists and consumers of floral supplies. From 1978 to 1983, its sales have been in the range of three to five million dollars annually. Its leading product is a preservative used to prolong the life and beauty of cut flowers.

Floralife is the owner of three registered trademarks employing the FLORALIFE name. U.S. Trademark Registration No. 398,694 was issued to Amling Company in 1942 for the word FLORALIFE rendered in special form as applied to the preservative product. Registration No. 366,178 comprises the mark FLORALIFE & DESIGN and includes the words "Helps Flowers Live Longer." Registration No. 1,181,726 consists of the mark FLORALIFE and is used for a plastic cellular composition base for making and holding cut flower arrangements. Each of these registrations remain in full force and effect.

Prior to 1984, the defendant Floraline International, Inc. ("Floraline") was doing business as a retail florist under the name Paul Kostoff Flowers, Inc. In April, 1981, the defendant filed two applications for federal registration, one on the word mark FLORALINE and the other on the composite mark FLORALINE & DESIGN. Each application claimed first use of March 7, 1981 for "retail flower store services, with the added feature of ordering floral gifts at remote booths." Floralife, Inc. v. Floraline Int'l, Inc., Opposition Nos. 67,107 & 67,108, slip op. at 1-2 (T.T.A.B. Nov. 9, 1984). Floralife instituted opposition proceedings in the United States Patent and Trademark Office ("U.S.P.T.O.") against both applications and the two cases were consolidated for hearing and decision by the Trademark Trial and Appeal Board ("T.T.A.B.").

In an opinion dated November 9, 1984, the T.T.A.B. sustained the oppositions and denied the applications for registration. Floraline filed a request for reconsideration that was denied on January 28, 1985. Floraline then filed an emergency petition before the U.S.P.T.O. to convene a new hearing panel of the T.T.A.B. On May 30, 1985, the Assistant Commissioner for Trademarks of the U.S.P.T.O. denied the petition. Pursuant to 15 U.S.C. § 1071(a), Floraline filed an appeal to the United States Court of Appeals for the Federal Circuit (No. 85-2594) that is still pending as of the date of this Memorandum Opinion.

II. Venue

Floraline urges that we dismiss or transfer this case under 28 U.S.C. § 1406(a) (1982) for lack of venue. The only issue is whether Floraline is "doing business" in this district or Floralife's claim arises here. 28 U.S.C. § 1391(b), (c) (1982). If either of these elements are established, venue in this district is proper.

Floraline is a Michigan corporation with its principal place of business in Dearborn, Michigan. Its business consists of receiving floral gift orders from consumers and forwarding them to retail florists located in the vicinity of the gift recipient. The orders are placed from telephone terminals located in airports, department stores, and hotels or 24 hours a day from any telephone by calling a toll-free 800 number. They are forwarded via American Floral Services, a wire service with offices in Oklahoma City, Oklahoma. Customarily, they are charged to a credit card (Visa or Master Charge) of the person placing the order.

According to the affidavit of Floraline's vice-president, Albert M. Pedrosi, Floraline has no offices, salesmen, representatives, or employees in Illinois. Its only Illinois property consists of four telephone terminals, or at least 4% out of a total of nearly 100 nationwide. All the Illinois terminals are located inside Zayre department stores and contain instructional and promotional materials.¹ From October 24, 1984 (the date the Illinois terminals were installed) through July 31, 1985, Floraline had sales of $444.00 resulting from orders placed at Illinois terminals; this figure represents less than 0.6% of its total sales of $71,732.00 for that period.² The amount of orders placed outside Illinois for delivery by Illinois florists to residents of this district has not been disclosed by Floraline and may well be substantially greater. Nor have they disclosed the volume of orders placed through telephones in Illinois other than the four Zayre store terminals.

Clearly, Floraline is "doing business" in this district and its business contacts are "more than minuscule." Tefal, S.A. v. Products Intern. Co., 529 F.2d 495, 497 (3d Cir.1976); Chicago Reader, Inc. v. Metro College Publishing Co., 495 F.Supp. 441, 443-44 (N.D.Ill.1980); McDonald's Corp. v. Congdon Die Casting Co., 454 F.Supp. 145, 148 (N.D.Ill.1978). While in terms of dollar volume the amount of business may be rather small, Floraline's commercial activities cannot be measured solely in terms of completed sales. Each of its telephone terminals functions as a sort of sales representative, soliciting orders, promoting Floraline's services and familiarizing the public with its name. Moreover, as Floralife points out, Floraline must have contractual arrangements with Zayre department stores as well as with retail florists in this area. See Pl.Ex., Affidavit of William J. Gigler.

For similar reasons, Floraline's order figures may not accurately reflect the scope of infringement occurring in this district. Infringement — the claim which must "arise" here — is a result of likely confusion in the public mind over the source of a product or service. LeBlanc Corp. v. Selmer, Inc., 310 F.2d 449, 457 (7th Cir.1962), cert. denied, 373 U.S. 910, 83 S.Ct. 1299, 10 L.Ed.2d 412 (1963). For each individual who actually uses the defendant's service to make a floral purchase, many others must pass by and perceive the mark. Some may stop to read the promotional materials. And with each passerby, and especially with each "reader," the likelihood of confusion and the substantiality of the plaintiff's claim increases. Thus, the confusion likely to occur here may far exceed actual orders placed from the four phones.

Because the defendant resides in the Eastern District of Michigan, we have discretion to transfer the case there if doing so would serve the convenience of parties and witnesses and the interests of justice. 28 U.S.C. § 1404(a) (1982). Floraline emphasizes that it is a small, relatively new corporation while the plaintiff is an established company with annual sales in the millions. These facts alone do not meet the defendant's "strong burden" of proving that its home district is a more appropriate forum. Technical Publishing Co. v. Mayne, 206 U.S.P.Q. 284, 288 (N.D.Ill. 1979). To transfer this case would merely shift the burden of litigating in an out-of-state forum from the defendant to the plaintiff. Id. In light of the plaintiff's customary right to choose the forum and, as we discuss below, Floraline's knowing assumption of the risks of this litigation, we decline to order a transfer.

III. Preliminary Injunction

The filing of this lawsuit was prompted by an advertisement appearing June 22, 1985 in Flower News/Grower's Digest, a national trade weekly for the floral industry. The advertisement, headlined "Introducing the Industry's First Full Service Credit Card" and "Attention Wholesale and Retail Florists," contains the FLORALINE mark and describes the defendant's services as follows:

During the past year and a half, Floraline has installed nearly 100 remote floral order telemarketing units in airports and other select locations nationwide. Those orders have been relayed to individual florists via national wire service channels. The telemarketing volume now allows Floraline International to introduce one of the most exciting and rewarding programs ever to be offered in the industry. First, Floraline "subscribers" will be the receivers of our telemarketing floral orders. Second, an order transfer system will allow subscribers to exchange "wire orders" using the Floraline Directory. Third and most exciting, each subscriber will be supplied with a credit card which will allow instant transfer of funds between Floraline subscribers. The "Quick-Trans" credit card will also allow subscribers to charge purchases with wholesalers and manufacturers.

Pl.Ex. 7. Eighteen days after this advertisement appeared, Floralife filed its complaint and motion for preliminary relief.³ By its motion, Floralife seeks to preliminarily enjoin Floraline International (1) from installing any new telemarketing units in airports and other locations under the FLORALINE mark; and (2) from soliciting any additional subscribers for floral industry...