Sun Banks of Florida, Inc. v. Sun Federal Sav. and Loan Ass'n

• Decision Date: 20 July 1981
• Docket Number: No. 78-3530,78-3530
• Citation: 651 F.2d 311,211 USPQ 844
• Parties: SUN BANKS OF FLORIDA, INC., a Florida Corporation Etc., Plaintiff-Appellee, v. SUN FEDERAL SAVINGS AND LOAN ASSOCIATION, a Federal Savings and Loan Association, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 311

651 F.2d 311

211 U.S.P.Q. 844

SUN BANKS OF FLORIDA, INC., a Florida Corporation Etc., Plaintiff-Appellee, v. SUN FEDERAL SAVINGS AND LOAN ASSOCIATION, a Federal Savings and Loan Association, Defendant-Appellant.

No. 78-3530.

United States Court of Appeals, Fifth Circuit.

July 20, 1981.

James Elliott Messer, Robert L. Hinkle, Tallahassee, Fla., for defendant-appellant.

W. Brown Morton, Jr., King George, Va., J. Thomas Cardwell, Orlando, Fla., J. Robert McClure, Jr., Tallahassee, Fla., Charles E. Harris, Orlando, Fla., for plaintiff-appellee.

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

Before HILL and POLITZ, Circuit Judges, and O'KELLEY ^*, District Judge.

POLITZ, Circuit Judge:

This is an action for service mark infringement alleging violation of the Lanham Trademark Act, 15 U.S.C. §§ 1051-1127, ¹ and the common law tort of unfair competition. ² After a bench trial, the district court found a likelihood of confusion between the service marks of Sun Banks of Florida, Inc. (Sun Banks) and Sun Federal Savings and Loan Association (Sun Federal). The court permanently enjoined Sun Federal "from using the name 'Sun' in conjunction with or without the orange sun logo in the advertising and promotion of banking services." We reverse. ³

I. Facts

Appellee Sun Banks, one of the largest multi-bank holding companies in Florida, began doing business in 1967 under the name First at Orlando Corporation. When several banks outside the Orlando area were acquired, the decision was made to adopt a less geographically-restrictive corporate name. On April 12, 1974, after an extensive marketing campaign, appellee officially changed its name to Sun Banks of Florida, Inc. On June 17, 1977, the United States Patent and Trademark Office issued U. S. Registration No. 1,013,709 to appellee. The service mark includes the words "Sun Banks" together with an orange colored arc. In addition to the federal service mark, Sun Banks has five service marks used in connection with its banking businesses that are registered with the State of Florida: "Sun Bank," "Sun Banks" with orange arc design, "SunBank24" (automated teller machine), "SunBanker24" (plastic banking card), and "Sun Banks Preferred Appellant Sun Federal, a savings and loan association with its principal place of business in Tallahassee, Leon County, Florida, conducted business under the name Leon Federal Savings and Loan Association from 1952 until 1975. In 1975 appellant received Federal Home Loan Bank Board approval to open a branch in Venice, Sarasota County, Florida. In marked similarity to Sun Banks' motivation, this development prompted consideration of a less parochial name, and on November 1, 1975, the association changed its name to Sun Federal Savings and Loan Association. Sun Federal subsequently obtained Florida registration of the service mark "BRIGHT ORANGE SUN AND THE WORDS SUN FEDERAL SAVINGS AND LOAN ASSOCIATION." Sun Federal did not seek federal registration.

Account" with orange arc design. At the time of trial, Sun Banks controlled 36 subsidiary banks with 60 offices throughout 16 counties in Florida. ⁴

At the time of trial, Sun Banks did not own banking facilities in either Tallahassee or Venice. Both parties, however, clearly indicated their intentions to expand throughout Florida and, at the time of this writing, very probably are co-existing within one or more communities. ⁵

II. Likelihood of Confusion

The essential question is the "likelihood of confusion" concerning the identity or association between Sun Banks and Sun Federal due to their common use of the name and mark "SUN." 15 U.S.C. § 1114(1); Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d 496 (5th Cir. 1979), cert. denied, 444 U.S. 932, 1100 S.Ct. 277, 62 L.Ed.2d 190 (1979). In assessing whether there is a likelihood of confusion with respect to service marks, we weigh several objective factors: type of service mark, similarity of design, similarity of service, identity of service facilities and customers, similarity of advertising media used, defendant's intent and actual confusion. Roto-Rooter Corporation v. O'Neal, 513 F.2d 44 (5th Cir. 1975). The district court concluded that there was a likelihood of confusion. The threshold consideration on appeal is the applicable standard of appellate review.

Sun Banks urges the aegis of our repeated statements that the likelihood of confusion is a factual finding reviewable under the clearly erroneous test of Rule 52(a), Fed.R.Civ.P. Exxon Corp. v. Texas Motor Exchange of Houston, 628 F.2d 500 (5th Cir. 1980); Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252 (5th Cir. 1980), cert. denied, --- U.S. ----, 101 S.Ct. 268, 66 L.Ed.2d 129 (1980). Sun Federal seeks a more hospitable landing zone and offers a distinction between "likelihood of confusion" as a question of fact in the appellate review crucible and factors of precedential magnitude which must be considered by a court in determining "whether confusion is likely." We find the offered distinction ingenious but unpersuasive. Our comment in Kentucky Fried Chicken v. Diversified Packaging, 549 F.2d 368, 384 (5th Cir. 1977), that "when a district court labors under a misapprehension concerning the governing legal norms, the 'clearly erroneous' standard no longer cirmcumscribes appellate review," may not be taken as an erosion of the standard of review applicable to a finding of likelihood of confusion.

Sun Federal asserts two errors of law by the trial judge in assessing the burden of proof. Because of our disposition of the case they need not be fully addressed.

We simply note that the presumption of validity that attaches to a service mark, 15 U.S.C. § 1057(b), is not relevant to the issue of infringement and that the burden of proof of infringement must be borne by the party claiming injury. See American Foods, Inc. v. Golden Flake, Inc. 312 F.2d 619 (5th Cir. 1963).

Notwithstanding the nuances that might be suggested, the commanding appellate question is whether the district court's finding of likelihood of confusion is clearly erroneous. We are convinced that it is. See United States v. Gypsum Go., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948) ("A (district court's) finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed."); W. R. B. Corporation v. Geer, 313 F.2d 750, 753 (5th Cir. 1963), cert. denied, 379 U.S. 841, 85 S.Ct. 78, 13 L.Ed.2d 47 (1964) ("the clearly erroneous concept of Fed.R.Civ.P. 52(a) requires findings to be set aside if the Court is left with the impression that the result is not the truth and right of the case"). In arriving at our conclusion, we apply seriatim the factors listed in Roto-Rooter Corporation v. O'Neal, supra.

A. Type of Service Mark

A vital factor in the determination whether there is a likelihood of confusion between the two services marks at bar is the strength or weakness of Sun Banks' mark. ⁶ Service marks fall into four categories. A strong mark is usually fictitious, arbitrary or fanciful and is generally inherently distinctive. ⁷ It is afforded the widest ambit of protection. See Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d at 259, quoting Lunsford, Trademark Basics, 59 Trademark Rep. 873, 878 (1969). A descriptive mark tells something about the product; it is protected only when secondary meaning is shown. See Vision Ctr. v. Opticks, Inc., 596 F.2d 111 (5th Cir. 1979), cert. denied, 444 U.S. 1016, 100 S.Ct. 668, 62 L.Ed.2d 646 (1980); Miss Universe, Inc. v. Patricelli 408 F.2d 506 (2d Cir. 1969). But see Hesmer Foods, Inc. v. Campbell Soup Company, 346 F.2d 356 (7th Cir.), cert. denied, 382 U.S. 839, 86 S.Ct. 89, 15 L.Ed.2d 81 (1965) (barbecue beans used as a description, not as a trademark). In contrast to the above is the suggestive mark, which subtly connotes something about the service or product. Although less distinctive than a fictitious, arbitrary or fanciful mark and therefore a comparatively weak mark, a suggestive mark will be protected without proof of secondary meaning. See Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1184 (5th Cir. 1980) ("If used as a trademark for refrigerators, the term 'Penguin' would be suggestive."). Lastly, there are generic terms, which communicate "information about the nature or class of an article or service," America Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494 F.2d 3, 11 (5th Cir. 1974), and therefore can never become a service or trademark.

We do not necessarily disagree with the trial judge that Sun Banks' mark should be categorized as "arbitrary." This label alone, however, does not precipitate absolute protection. Arbitrariness refers to the quality of a mark, i. e., that it bears no relation to the service provided. The ultimate strength of a mark, the key inquiry before us, is determined by a number of factors which establish its standing in the marketplace. As we observed in Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d at 260:

Thus, "Domino" is not a coined word, is not purely fanciful, and while its application to sugar may be arbitrary, it is still not to be accorded the same degree of In Amstar we reversed a finding of likelihood of confusion, in part because the district court failed properly to weigh the impact of extensive third-party uses of the "Domino" mark. In the case at bar we are confronted with an even more impressive array of third-party single and multi-word uses of the "Sun" mark. The evidence reflects that in 1976 over 4400 businesses registered with the Florida Secretary of State used the word "Sun" in their names. A significant number of these businesses fell within the category designated financial institutions. ⁸ In addition, the evidence included a sampling of other businesses across the country having federally registered trade and service...