Armco, Inc. v. Armco Burglar Alarm Co., Inc.
| Citation | 693 F.2d 1155 |
| Decision Date | 20 December 1982 |
| Docket Number | No. 81-1415,81-1415 |
| Parties | ARMCO, INC., Plaintiff-Appellee, v. ARMCO BURGLAR ALARM CO., INC., Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Michael Lowenberg, Dallas, Tex., for defendant-appellant.
Richards, Harris & Medlock, V. Bryan Medlock, Jr., Dallas, Tex., John D. Hayes, Cincinnati, Ohio, for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before JOHNSON, GARWOOD and HIGGINBOTHAM, Circuit Judges.
That "American Rolling Mill Company" and "Alarmco" both shorten to "Armco" is the source of this trademark infringement case. The district court, after making findings of fact and conclusions of law, entered a judgment enjoining defendant-appellant Armco Burglar Alarm Co. from using the "Armco" name in a burglar and fire alarm business in the Dallas-Fort Worth area. We affirm the trial court in all respects except its finding on the defense of laches as to which we reverse and remand.
Plaintiff-appellee Armco, Inc. ("Armco") is an Ohio corporation that has long been successful. Founded in 1917 as the American Rolling Mill Company, it changed its name to Armco Steel Corp. in 1948 and to Armco, Inc., in 1978, after filing this suit. Armco currently sells steel to industrial and commercial customers and has diversified into other areas with net sales in 1979 of five billion dollars. Its Dallas-based subsidiary, Armco Industrial Credit Corp., for example, supplies industrial credit to steel customers. Other subsidiaries, some under the "Armco" name, are engaged in insurance, coal mining, plastics manufacturing, and oil and gas exploration. Despite its diversification, Armco at the time of trial had no plans to enter the burglar alarm market.
Since 1948, Armco or its predecessor Armco Steel Corp. has owned a number of federal registrations of the Armco trademark. Armco's advertising and publicity frequently bear the triangular "Armco" logo, as follows:
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Armco has advertised extensively in trade publications and business magazines. From approximately 1960 until the time of trial, however, Armco had only one Tarrant County employee, Les Neumann, a salesman. His office phone number was listed in the Fort Worth white pages under Armco Steel Corp. (later Armco, Inc.).
Defendant-appellant Armco Burglar Alarm Co. ("Armco Burglar Alarm") is a Texas corporation founded in the late 1960's by a high school student and his father who began by installing burglar alarms in family-owned department stores. While originally named Alarmco Burglar Alarm Co., it changed its name in 1970 at the request of one of its suppliers who was also using the Alarmco name. 1 In that year the burglar alarm company had fifteen to twenty-five accounts and approximately $15,000 in business. By 1975, when the company incorporated, it had reached 400 to 600 accounts and $200,000 to $300,000 in business. At the time of trial the company had over 1000 accounts and a waiting list of forty to fifty accounts.
Although the volume of Armco Burglar Alarm's business has expanded considerably since its founding, the company remains localized in its operations. Most of its accounts are in Tarrant County, where the company is based. Indeed, at the time of trial Armco Burglar Alarm had no plans to service accounts more than thirty to forty miles from its Fort Worth headquarters.
Armco Burglar Alarm does not manufacture burglar and fire alarm equipment. Rather, it monitors equipment it has installed from a station located in its Fort Worth headquarters. Armco Burglar Alarm also employs patrol guards who perform routine patrols and are dispatched along with the local police in response to alarm signals.
Most of Armco Burglar Alarm's business is referred by its customers, although it has done a limited amount of advertising by mail and in the yellow pages. It has also displayed its logo on its headquarters, its vehicles, and the homes and businesses it services. That "stair-step" red-with-black-lettering design appears as follows:
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Since 1970, Armco Burglar Alarm has been listed in the Fort Worth white and yellow pages and in the Dallas white pages.
Armco admitted that it knew in 1970 that Armco Burglar Alarm was listed in the Fort Worth telephone directory. It denied knowing, however, that appellant was using the name "Armco" for its burglar alarm business, because a commercial tracing service it hired was unable to locate Armco Burglar in 1970. It is nonetheless undisputed that Armco Burglar Alarm was in business at that time at the phone number and address listed in the directory. The record has no explanation as to why the tracing service could not locate Armco Burglar Alarm. 2
In 1976 Mr. Neumann, Armco's lone Tarrant County employee, saw an Armco Burglar Alarm ad in the yellow pages. He clipped it out and sent it to his district manager, from where it was routed to Armco's headquarters. Armco by letter dated February 1976 requested that Armco Burglar Alarm discontinue use of the "Armco" name. When Armco Burglar Alarm did not respond, Armco in April 1976 wrote a second letter. Negotiations followed, unsuccessfully, for almost two years.
On May 12, 1978, Armco filed suit against Armco Burglar Alarm, alleging trademark infringement and unfair competition under the Lanham Act and seeking damages and injunctive relief. 3 In March 1980, after a change of attorneys, Armco Burglar Alarm filed a jury demand, and three months later it filed an amended answer in which it denied that its use of the Armco name had created any likelihood of confusion and asserted the affirmative defense of laches.
On the eve of trial, Armco moved to strike Armco Burglar Alarm's jury demand on the grounds that Armco was no longer seeking legal relief. The trial judge allowed the case to be tried before a jury, with the understanding that he would treat the jury's findings of fact as advisory if he later determined that there was no right to a jury trial.
The jury found that Armco had not proved likelihood of confusion, and that it had in any event delayed an unreasonable length of time in pressing its infringement claim. The trial judge, treating the jury's findings as advisory, entered a judgment granting injunctive relief to Armco after determining (1) that there was a likelihood of confusion and (2) that Armco was not guilty of laches. This appeal followed.
Armco Burglar Alarm claims that it was deprived of its right to trial by jury. We find no merit to this claim. The right to trial by jury is determined by the issues, not by the pleadings. 9 Wright & Miller, Federal Practice and Procedure Sec. 2304 (1971); Hildebrand v. Board of Trustees of Michigan State University, 607 F.2d 705, 709-710 (6th Cir.1979). Although Armco never amended its complaint which sought damages as well as equitable relief, it was within the trial judge's discretion to grant Armco's motion that effectively dismissed the legal claims. This then made it proper for the trial judge to treat the jury verdict as advisory. See F.R.Civ.P. 39(a)(2); Anti-Monopoly, Inc. v. General Mills Fun Group, 611 F.2d 296, 307 (9th Cir.1979). 4
Armco Burglar Alarm contends that the trial court's finding of likelihood of confusion was clearly erroneous, conceding that likelihood of confusion is a question of fact. Sun Banks of Florida v. Sun Federal Savings & Loan, 651 F.2d 311, 315 (5th Cir.1981); Exxon Corp. v. Texas Motor Exchange of Houston, Inc., 628 F.2d 500, 504 (5th Cir.1980); Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 258 (5th Cir.), cert. den., 449 U.S. 899, 101 S.Ct. 268, 66 L.Ed.2d 129 (1980).
This court has enumerated seven factors to be considered in determining likelihood of confusion: (1) type of trademark; (2) similarity of design; (3) similarity of product; (4) identity of retail outlets and purchasers; (5) identity of advertising media utilized; (6) defendant's intent; (7) actual confusion. Roto-Rooter Corp. v. O'Neal, 513 F.2d 44, 45 (5th Cir.1975). See also Sun Banks of Florida v. Sun Federal Savings & Loan, 651 F.2d at 314; Exxon Corp. v. Texas Motor Exchange of Houston, Inc., 628 F.2d at 504; Amstar Corp. v. Domino's Pizza, 615 F.2d at 259. Having reviewed these seven factors and the other evidence in the record, we are not "left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). The trial court's finding of likelihood of confusion was not clearly erroneous.
In affirming this finding by the trial court we are aided by the fact that a finding of likelihood of confusion need not be supported by a majority of the so-called Roto-Rooter factors. Several of them do not support the district court's finding. The trademarks of Armco, Inc., and Armco Burglar Alarm have dissimilar designs. 5 The companies provide different products and services. The companies serve different customers. 6 At the time of trial Armco Burglar Alarm, unlike Armco, did very little advertising, relying mostly on referrals. Finally, but significantly, there was no evidence that Armco Burglar Alarm adopted the "Armco" name in order to trade on Armco's goodwill. 7
Nevertheless, arbitrariness of the mark and an absence of third-party use are enough to make "Armco," in the vernacular of the Fifth Circuit, a "strong" trademark. Sun Banks of Florida v. Sun Federal Savings & Loan, 651 F.2d at 315-317; Exxon Corp. v. Texas Motor Exchange of Houston, 628 F.2d at 504; Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d at 259-260. 8 "Armco," as the trial court found, is an arbitrary or distinctive mark, as opposed to a merely...
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