Fuji Photo Film Co., Inc. v. Shinohara Shoji Kabushiki Kaisha

• Decision Date: 07 March 1985
• Docket Number: No. 84-2061,84-2061
• Citation: 225 USPQ 540,754 F.2d 591
• Parties: FUJI PHOTO FILM COMPANY, INC., Plaintiff-Appellant Cross-Appellee, v. SHINOHARA SHOJI KABUSHIKI KAISHA and Graphic Machinery International, Inc., Defendants-Appellees Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 591

754 F.2d 591

225 U.S.P.Q. 540

FUJI PHOTO FILM COMPANY, INC., Plaintiff-Appellant Cross-Appellee, v. SHINOHARA SHOJI KABUSHIKI KAISHA and Graphic Machinery International, Inc., Defendants-Appellees Cross-Appellants.

No. 84-2061.

United States Court of Appeals Fifth Circuit.

March 7, 1985.

Sughrue, Mion, Zinn, MacPeak & Seas, Robert G. McMorrow, Cynthia Clarke Dale, Washington, D.C., Vaden, Eigkenroht, Thompson, Bednar & Jamison, G. Byron Jamison, II, Houston, Tex., for plaintiff-appellant cross-appellee.

Edmund F. Bard, C. Alan McClure, Houston, Tex., for defendants-appellees cross-appellants.

Appeals from the United States District Court for the Southern District of Texas.

Before GEE, WILLIAMS and JOLLY, Circuit Judges.

GEE, Circuit Judge:

This action arises from a dispute between two Japanese corporations, both of which claim the right to use the trademark "FUJI" on graphic arts equipment and supplies in the United States. Plaintiff-appellant Fuji Photo Film Co., Ltd. (Fuji) and defendant-appellee Shinohara Shoji Kabushiki Kaisha (Shinohara) each alleged trademark infringement and unfair competition by the other under federal, state, and common law. Both now appeal the decision of the trial court that Fuji take nothing by its claim against Shinohara, and Shinohara take nothing by its counterclaim against Fuji. Shinohara also appeals the trial court's denial of its request for attorneys' fees. We reverse as to Fuji's claim, and affirm as to Shinohara's counterclaim and request for attorneys' fees.

Facts

Fuji is a Japanese corporation founded circa 1934 which has used "FUJI" as its tradename and as a trademark on its products since its inception. Fuji makes various products related to photography and graphic arts, all of which it sells in the United States through its wholly-owned subsidiary Fuji Photo Film U.S.A., Inc. (Fuji USA), a New York corporation. Fuji obtained its first United States registered trademark, "FUJI", for photographic chemicals, in December 1954. Between 1954 and 1972, Fuji obtained nine United States registered trademarks for "FUJI" or composite words containing "FUJI", these registrations covering a variety of photography-related products, some of which are used in the offset printing process. Fuji products have been sold in the United States under the "FUJI" trademark since 1954; since 1965, those relating to graphic arts (rather than amateur photography) have been sold here by Roberts & Porter (Roberts), an Illinois corporation which buys them from Fuji USA.

All of Fuji's products are of the highest quality and have an international reputation for excellence; Fuji won an academy award in 1982 and its "FUJI" film was the official film of the 1984 Summer Olympics. As these facts indicate, Fuji spends a lot of money on advertising (in the millions of dollars); its annual sales in the United States are in the billions of dollars.

Shinohara is also a Japanese corporation, founded in 1919. It has been making and selling printing presses since 1947. These presses have been trademarked "FUJI" in Japan since 1961. Its first United States sale of a printing press occurred in January 1978. ¹ Shinohara filed five applications in 1980 to register the trademark "FUJI", standing alone or with additional words, in the United States. Fuji has filed oppositions to each of these applications; action on the oppositions has been suspended pending the outcome of this litigation.

Shinohara presses are sold in the United States by three companies, including Sundman International, Inc. (Sundman) and defendant Graphic Machinery International, Inc. (Graphic). Fuji first became aware of Shinohara's use of the "FUJI" mark in the United States in 1978, when both Sundman and Roberts exhibited their principals' products at a California trade fair. At that time, Sundman's corporate name was Fuji Graphics, Inc. Sundman's display of "FUJI" presses and "FUJI" brochures alarmed the Roberts representatives, who thought that Fuji had reneged on its exclusive distribution arrangement with them. Visitors to the show also inquired about the connection between the two "FUJIs". There was thus actual confusion at the trade show.

After the show, reports of Sundman's and Shinohara's use of "FUJI" in the United States sped quickly up the Roberts chain of command and thence up that of Fuji. When the news reached Fuji's supervisor of trademarks, he wrote letters to and met with his opposite number at Shinohara. The substance of these communications is disputed. It is undisputed that Fuji then brought an action in the United States district court for the central district of California against Fuji Graphics, Inc., Sundman's company, alleging trademark infringement and unfair competition. Sundman and his lawyer "promptly traveled to Japan to explain the nature and possible consequences of such litigation, and to persuade the management of Shinohara to assume defense of the case," pursuant to the terms of their contract. ² Shinohara was not persuaded and took no part in the case.

In August 1979, the trial court entered a consent judgment in which, among other things, Fuji's various "FUJI" trademarks were found valid, Fuji was found to be the owner of the "FUJI" trademark as applied to graphic arts equipment and materials, and the defendant admitted that his corporate name and the Shinohara "FUJI" materials infringed Fuji's trademarks. The defendant and "any and all persons in active concert or participation with it" were permanently enjoined from use of the name "FUJI" and from sale, distribution or advertising of graphic arts-related products bearing or including the name "FUJI". In compliance with the terms of the judgment, Sundman changed the name of his company and asked Shinohara to stop sending him products marked "FUJI". Shinohara continued to send them, and Sundman to deal in them. In an order entered in September 1980, the court held Sundman in contempt.

In July 1980, another Roberts representative saw more offset presses marked "FUJI" at another trade show, this time in Texas. The sight engendered the same series of reactions, resulting in this lawsuit.

Likelihood of Confusion

Section 32(1) of the Lanham Act, 15 U.S.C. Sec. 1114(1), governs suit for infringement of a registered trademark.

Prior to 1962, Sec. 1114(1) provided that the use of the mark must be 'likely to cause confusion, or to cause mistake, or to deceive purchasers as to the source or origin of such goods or services.' (emphasis added). In 1962, it was amended to delete the underlined portion. Although this amendment 'clearly broadened the protection afforded by the statute,' it is equally clear that this amendment did not delete the confusion requirement entirely, and that a claimant must still prove a likelihood of confusion, mistake or deceit of 'typical' purchasers, or potential purchasers, as to the connection of the trademark owner with the infringing product.

Supreme Assembly, Order of Rainbow for Girls v. J.H. Ray Jewelry Co., 676 F.2d 1079, 1082 n. 3 (5th Cir.1982) (citations omitted). "Likelihood of confusion" is thus the central issue in any suit for trademark infringement, as it is in suits for unfair competition. ³ Fuji contends that the trial court used the wrong legal standard to determine likelihood of confusion. We are convinced by our review of the record that this point is well taken. ⁴

The trial court correctly identified the factors to be considered in determining likelihood of confusion:

(a) type of trademark, that is, the strength of the prior owner's mark;

(b) degree of similarity between the two marks;

(c) similarity between the two products;

(d) identity of retail outlets and purchasers;

(e) identity of advertising media utilized;

(f) defendant's intent;

(g) actual confusion.

Armco, Inc. v. Armco Burglar Alarm, Inc., 693 F.2d 1155, 1159 (5th Cir.1982). The court then, however, apparently cast aside these factors, holding for defendants because "there is no likelihood of confusion between the Plaintiff's products and Shinohara's printing presses." It is obviously true that no one is likely to confuse a printing press with the equipment used in its operation. It is also irrelevant except as bearing on the third factor to be considered, similarity of products. The "most decisive factor" to the trial court was one that did not appear on the list, the sophistication of the buyers of Shinohara's presses, and the high cost of these presses. Even assuming purchaser sophistication and product cost to be proper subjects of inquiry, it is clearly necessary to consider each with respect to each party's products. Here, the trial court erred by stopping at Shinohara's presses, and by equating the admitted technical sophistication of press purchasers with trademark sophistication. It is well settled that expertise in the field of trademarks cannot be inferred from expertise in another area. See, e.g., AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 353 (9th Cir.1979); Omega Importing Corp. v. Petri-Kine Camera Co., 451 F.2d 1190, 1195 (2d Cir.1971); Communications Satellite Corp. v. Comcet, Inc., 429 F.2d 1245, 1252-53 (4th Cir.), cert. denied, 400 U.S. 942, 91 S.Ct. 240, 27 L.Ed.2d 245 (1970) (collecting cases and authorities); American Drill Bushing Co. v. Rockwell Manufacturing Co., 342 F.2d 1019, 1022, CCPA 1173 (1965); Koppers Company, Inc. v. Krupp-Koppers GmbH, 517 F.Supp. 836, 845 (W.D.Pa.1981). (collecting cases).

We may assume the purchasers of presses to be sophisticated about printing; we may also assume that presses, which cost tens of thousands of dollars, are not bought on impulse, but rather with a great deal of care. We may not assume that these facts are determinative. As stated by the Court of Custom and Patent Appeals, in a case dealing with expensive, complex, and complementary electrical products,

[We] are of the opinion that the goods are so closely related that purchasers of the respective...