Walt-West Enterprises, Inc. v. Gannett Co., Inc.

• Decision Date: 21 December 1982
• Docket Number: 81-3005,WALT-WEST,Nos. 81-2939,s. 81-2939
• Citation: 695 F.2d 1050
• Parties: ENTERPRISES, INC., Plaintiff-Appellee, v. GANNETT COMPANY, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1050

695 F.2d 1050

217 U.S.P.Q. 1206

WALT-WEST ENTERPRISES, INC., Plaintiff-Appellee, v. GANNETT COMPANY, INC., Defendant-Appellant.

Nos. 81-2939, 81-3005.

United States Court of Appeals, Seventh Circuit.

Argued March 31, 1982.

Decided Dec. 21, 1982.

Edward M. Prince, Cushman, Darby & Cushman, Washington, D.C., for defendant-appellant.

Floyd A. Mandell, Katten, Muchin, Zavis, Pearl & Galler, Chicago, Ill., for plaintiff-appellee.

Before PELL, ESCHBACH, and KASHIWA, ^* Circuit Judges.

ESCHBACH, Circuit Judge.

This case involves a dispute between neighbors of a sort. Plaintiff and defendant own and operate FM radio stations in the Chicago, Illinois metropolitan area. While the parties' transmitting facilities are located many miles apart, their radio stations are "located" contiguously on the FM dial. Plaintiff is licensed to broadcast at a frequency of 106.7 megahertz; defendant at 107.5 megahertz. Each party, for one reason or another, apparently finds decimal points unappealing. Thus, for the purpose of what will tentatively be called station identification, each party decided to "round" their assigned frequency to a whole number. Naturally, both chose the same number--107--and this litigation ensued. Plaintiff rounded to 107 first and argues that it acquired the exclusive right to its use. The district court agreed and enjoined defendant from using 107 in connection with its radio broadcasts. Defendant appeals. We reverse.

I

Plaintiff-appellee, Walt-West Enterprises, Inc., owns and operates FM radio station WYEN which broadcasts in the Chicago area at a frequency of 106.7 megahertz. Beginning in 1971, when it was first licensed by the Federal Communications Commission (FCC), WYEN used the number 107, in conjunction with the acronym FM and its call letters, in its attempts to promote the station through various media (billboards, flyers, television commercials) and used 107 or FM 107 in its broadcasts. Some individuals in the broadcast profession refer to WYEN as FM 107. WYEN broadcasts primarily music, though its programming also consists of news and sporting events. The genre of music it broadcasts is "soft-rock" or "contemporary top 40."

Defendant-appellant, Gannett Company, Inc., owns and operates FM radio station WGCI which broadcasts in the Chicago area at a frequency of 107.5 megahertz. WGCI was licensed by the FCC several years after WYEN commenced operations. Until 1979, whenever WGCI used a number to identify its station, it used its precise frequency: 107.5 or 107 1/2. In 1979, however, it began using the slogan Studio 107. After WYEN informally objected to WGCI's use of Studio 107, WGCI stopped using it, though the reason it did so is unclear. In the summer of 1981, WGCI commenced the practice of identifying itself in its broadcasts as FM 107 five times per day; it did not, however, use FM 107 in its advertisements in other media. WGCI broadcasts primarily music, though its programming also consists of news and sporting events. The genre of WGCI's music is "black contemporary." Further, WGCI characterizes itself as a "black oriented" station--one of four such stations (AM and FM) in Chicago, it says--and maintains that its news and public affairs programming, in addition to its music, are "geared towards the black community."

In the FM radio broadcasting industry it is customary for stations to round their assigned frequencies ¹ to a whole number in order to alert listeners to their location on the FM dial as a mark, a term we use advisedly, of identification. Saying that they round their assigned frequency to a whole number is not entirely accurate. Stations do not feel bound by mathematics when they round to a whole number. Hence, a station with an assigned frequency might round down or up, not necessarily to the nearest whole number. Some stations prefer to round down, for in that way their whole number and their assigned frequency contain the same whole number. Other, perhaps more arithmetically minded stations, round up if their decimal point is greater than or equal to .5. Others may be attracted to a particular number. Some choices, perhaps, have no real explanation beyond the basic aversion to decimal points which the stations exhibit.

Insofar as stations call prospective listeners' attention to their frequency in advertising in order to tell the listeners where they can be found on the FM dial, it is understandable that the decimal points have been discarded. The decimal point is superfluous in this respect. A miniscule number of listeners have radios with digital receivers; virtually all FM dials merely have some of the whole numbers in the FM band printed on them. Moreover, the whole numbers appearing on the dial vary from radio to radio. Thus, one receiver may have the number 107 printed on it, while another may have 106 and 108, forcing the listener to interpolate to tune-in 107. In addition, the accuracy of the calibration between what the dial reflects and the actual frequency being received varies significantly.

WYEN and WGCI are both commercial radio stations. They derive their income from broadcasting commercial messages. A prospective advertiser's choice of a particular radio station and the amount of money which a prospective advertiser is willing to pay a given radio station to broadcast its commercials depend on a variety of factors. A primary factor, of course, is the size of its listening audience. The demographics of the audience and other factors being constant, a station with a comparatively large audience is able to attract more advertisers and charge more for the service of broadcasting its commercial messages. Because advertising revenue is the lifeblood of a commercial radio station, and because this revenue is dependent in large measure on the size of its audience, an accurate method of determining the size of each station's audience is essential.

The Arbitron Company, not a party to this litigation, is in the business of estimating the size and characteristics of radio audiences. Several times a year, in what are called ratings periods, Arbitron distributes "diaries" to a random sample of individuals in a given market. The diaries are basically time logs. The respondents are asked to carry the diary with them wherever they go and each time they listen to the radio, contemporaneously record the station to which they are listening. Respondents are instructed to use the "call letters" of the station to identify it, but if the call letters are not known, they are instructed to "fill in the name of the program--or the dial setting." Def.Exh. 1.

Arbitron tabulates the results of its survey and publishes a list of the stations in the given market with larger audiences. Not all stations make the list. The list is sold to advertisers and stations in the area and is used by them in various ways.

When a respondent to the survey identifies a radio station by its call letters or precise frequency, Arbitron naturally credits the station which is licensed ² to use those call letters or that frequency. In order to be credited with a response using any other term (e.g., "the name of the program"), the radio station must have done two things in advance of the survey in question. First, it must have used that term at least once every four hours it is on the air, and second, it must have informed Arbitron of this fact. Arbitron permits stations to designate, one might say register, three such additional terms.

Arbitron will not credit a station for terms which it deems "generic," including, for example, music, gospel, easy listening, unless they are used in conjunction with a "personal identifier." Def.Exh. 8, at 1. In addition, numerical entries preceded by the first letter of the station's call letters are "considered generic, not personal identifiers." Id.

Arbitron will, however, register whole numbers used merely in conjunction with FM, e.g., FM 107. If only one station in the area has registered that term, diary entries using that term (or 107 alone it appears) will be credited to that station. In addition, Arbitron will register the same term, including whole numbers, for more than one station. In this regard, Arbitron informs radio stations that it "assumes no responsibility for the protection, possession or continued use of any slogan claimed by any station." Def.Exh. 7.

In 1981, Arbitron listed FM 107 as a slogan for WGCI for the first time, and continued to list FM 107 as a slogan for WYEN. Pursuant to its regular practice in such cases where the same term is used by more than one station, Arbitron attempted to credit the proper station with responses of 107 in two ways. First, it examined the specific diary in which the ambiguous response appeared. If that diary listed one of the stations at some other point by an unambiguous referent, e.g., its call letters, all 107 entries in that diary were credited to that station. In instances where that did not resolve the ambiguity, the respective stations were credited with ambiguous entries in proportion to the size of their respective audiences the previous year on a county-by-county basis. ³ This latter method apparently resulted in WGCI being credited with the lion's share of 107 responses in Cook County, the most populous county in the area.

When Arbitron released the results of its fall 1981 survey, WYEN was distressed to discover that it did not make the list of the top stations in the Chicago area for the first time in nine years. WYEN contacted Arbitron and discovered that WGCI was being credited with some diary responses of 107. WYEN claims that it began to receive telephone calls intended for WGCI at approximately the same time that it learned this fact from Arbitron.

II

On November 4, 1981 plaintiff filed a six-count verified complaint against defendant in the United States District Court for the Northern District of Illinois, alleging claims under the labels of false designation of origin,...