Ashland Oil, Inc. v. Olymco, Inc.

• Decision Date: 21 August 1995
• Docket Number: No. 94-5520,94-5520
• Citation: 1995 WL 499466,64 F.3d 662
• Parties: NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. ASHLAND OIL, INC., Plaintiff-Appellant, v. OLYMCO, INC., doing business as Olymco Muffler Center; and James A. Livers, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 662

64 F.3d 662

NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.

ASHLAND OIL, INC., Plaintiff-Appellant, v. OLYMCO, INC., doing business as Olymco Muffler Center; and James A. Livers, Defendants-Appellees.

No. 94-5520.

United States Court of Appeals, Sixth Circuit.

Aug. 21, 1995.

Before: KEITH and BATCHELDER, Circuit Judges, and DUGGAN, District Judge. ^*

BATCHELDER, Circuit Judge.

Ashland Oil, Inc., appeals the district court's judgment ordering cancellation of its trademark and dismissing its claim of trademark infringement against Olymco, Inc. We affirm.

I.

In December 1986, Ashland acquired the mark, "Instant Oil Change," from a Michigan corporation of the same name. At that time, the mark was registered on the "Supplemental," rather than the "Principal," register of the United States Patent and Trademark Office (USPTO) since the mark had been classified as descriptive and had not achieved or established secondary meaning. Ashland obtained transfer of the mark to the principal register of the USPTO in March 1988, under Sec. 2(f) of the Lanham Act, which allows for a presumption of distinctiveness of the mark after substantial exclusive use in commerce for five years. Ashland used the mark to identify the rapid oil change service provided by its subsidiary, Valvoline Instant Oil Change, Inc. Ashland owned fourteen service centers in the Louisville, Kentucky metropolitan area.

Olymco has five service centers in the Louisville area. In February 1990, Olymco began using the phrase "Instant Oil Change" in advertising and on signs for its own rapid oil change facilities to denote a service that was "fast, convenient, without delay." Ashland demanded in August 1990 that Olymco remove a sign bearing the words "Instant Oil Change" from one of Olymco's Louisville shops, asserting that the continued use constituted an infringement upon Ashland's exclusive right to use the mark. Olymco did not discontinue its use of the phrase, and Ashland brought suit, seeking injunctive relief and damages. Olymco counterclaimed for cancellation of the trademark registration.

Following the bench trial, the district court concluded that Ashland had failed to establish that the descriptive term "Instant Oil Change" had gained the requisite secondary meaning prior to Olymco's first use of the mark in February, 1990. Consequently, pursuant to 15 U.S.C. Sec. 1119, the court ordered cancellation of the service mark and its removal from the principal register of the USPTO and dismissed Ashland's claim of trademark infringement. Ashland made a timely appeal to this Court in accordance with 28 U.S.C. Sec. 2107 and Fed.R.App.P. 4(a).

II.

The Lanham Act (the "Act") gives a seller or producer the exclusive right to register a trademark and to prevent competitors from using that trademark. 15 U.S.C.A. Secs. 1052, 1114(1) (West 1995); Qualitex Co. v. Jacobson Products Co., 115 S.Ct. 1300, 1302 (1995). However, the Act prohibits registration on the principal register of marks that are merely descriptive, without evidence that the mark has become distinctive of the applicant's goods in commerce. 15 U.S.C.A. Secs. 1052(e) and (f) (West 1995). A mark is descriptive if "it describes ... a desirable characteristic of the goods" offered. Burke-Parsons-Bowlby Corp. v. Appalachian Log Homes, Inc., 871 F.2d 590, 594 (6th Cir.1989) (hereinafter Burke ). In this case, Ashland concedes that the term "Instant Oil Change" is a descriptive mark, ineligible for registration absent proof of distinctiveness, or "secondary meaning."

"Secondary meaning" is achieved when "in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself." Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 851, n. 11 (1982) (citing Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 118 (1938)). This Court has held that secondary meaning "is proved when by a preponderance of the evidence it can be determined that the attitude of the consuming public toward the mark denotes a 'single thing coming from a single source.' " Burke, 871 F.2d at 596 (quoting Aloe Creme Labs, Inc. v. Milsan, Inc., 423 F.2d 845, 849 (5th Cir.), cert. denied, 398 U.S. 928 (1970)).

The section of the Act under which Ashland's "Instant Oil Change" mark is registered provides that proof of substantially exclusive and continuous use of the mark in commerce for the five years before the date on which the claim of distinctiveness is made constitutes prima facie evidence that the mark has become distinctive. 15 U.S.C.A. Sec. 1052(f) (West 1995). A certificate of registration on the principal register is deemed "prima facie evidence of the validity of the registered mark ... and of the registrant's exclusive right to use the registered mark ... in connection with the goods or services specified...." 15 U.S.C.A. Sec. 1057(b) (West 1995).

However, the protection accorded to a registered descriptive mark depends on the "strength" of the mark. Qualitex, 115 S.Ct. at 1305. " '[S]trong' marks, with greater secondary meaning, receive broader protection than 'weak' marks." Id. The Act gives the court the power to cancel registrations, in whole or in part, see 15 U.S.C.A. Sec. 1119 (West 1995), and a trademark may be challenged within five years of its registration on the principal register, if the challenger can prove "any legal or equitable defense or defect ... which might have been asserted if such mark had not been registered." 15 U.S.C.A. Sec. 1115(a) (West 1995); Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 196 (1985). Section 1115(a) allows the mark to be challenged as "merely descriptive," if it is without secondary meaning. Park 'N Fly, 469 U.S. at 196. However, unless the challenger can introduce evidence to rebut the presumption of validity, this Court has held that it will not disturb the conclusions of the Patent and Trademark Office. Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1190 (6th Cir.1988). Further, we have held that registration under the Lanham Act does not shift the ultimate burden of proof of validity of the mark, which remains with the registrant; rather, registration merely imposes on the challenger "the burden of going forward with evidence to meet or rebut the presumption" that the trademark is valid. Burke, 871 F.2d at 597 (Krupansky, J., concurring, citing cases).

In this case, Olymco challenged the registration of the phrase "Instant Oil Change" within the statutory five-year period. The district court found that Olymco overcame the presumption of validity by producing evidence that the mark was merely descriptive, ¹ and that Ashland had failed to sustain its ultimate burden of proving validity. Ashland argues on appeal that the district court erred in its conclusion.

The owner of a descriptive mark must establish that the mark had secondary meaning prior to its first use by the challenger. Burke, 871 F.2d at 596. Secondary meaning may be established by direct proof; however, since direct proof is difficult to obtain, in its absence, "the Court must draw reasonable inferences from evidence of long-term usage, from considerable effort and expenditure of money toward developing a reputation and good will for the trademark." Id. In this case, Ashland could have satisfied its ultimate burden that its mark had acquired secondary meaning by producing either direct evidence, such as a consumer survey or, in the absence of direct proof, indirect evidence from long-term use, sales and advertising expenditures, or effort and expenditures in developing a reputation and good will for the mark.

The trial court's finding that a mark has not acquired secondary meaning is a factual determination. Burke, 871 F.2d at 597 (Krupansky, J., concurring); accord Volkswagenwerk Aktiengesellschaft v. Rickard, 492 F.2d 474, 477-78 (5th Cir.1974). Pursuant to Fed.R.Civ.P. 52(a), factual questions are reviewed under the "clearly erroneous" standard, even if the findings are based on "physical or documentary evidence or inferences from other facts." Anderson v. City of Bessemer City, 470 U.S. 564, 574 (1985).

With regard to the probative value of consumer surveys, there is no general agreement as to what minimal level of consumer association with a single source is required to establish secondary meaning, although figures of fifty percent or more have been considered sufficient by courts in other circuits. See, e.g., Conopco, Inc. v. May Dep't Stores Co., 784 F.Supp. 648, 677 (E.D.Mo.1992), cert. denied, 115 S.Ct. 1724 (1995); compare Spraying Systems Co. v. Delavan, Inc., 975 F.2d 387, 394 (7th Cir.1992) (finding a recognition figure of thirty-eight percent "marginal" evidence of secondary meaning, even in a "properly designed survey") with Monsieur Henri Wines, Ltd. v. Duran, 204 U.S.P.Q. 601, 605 (TTAB1979) (finding a recognition figure of thirty-seven percent probative of secondary meaning where respondents had been required to identify the beverage brands from pictures of the labels, without information on possible brands).

In this case, both Ashland and Olymco presented consumer surveys as evidence to support their respective claims. Ashland's survey involved interviews with "members of the class comprising licensed drivers over the age of 21, who own and are responsible for maintaining at least one car," which individuals were randomly selected from those entering shopping malls in the Louisville area, where both Ashland and Olymco use the name "Instant Oil Change," and in the Atlanta area where the name is not utilized by anyone. At the time the survey was conducted, in January 1992, forty-two percent of the Louisville respondents surveyed believed that the phrase "Instant Oil Change"...