Rodeo Collection, Ltd. v. West Seventh

• Decision Date: 17 March 1987
• Docket Number: No. 86-5960,86-5960
• Citation: 812 F.2d 1215
• Parties: RODEO COLLECTION, LTD., a California limited partnership, Plaintiff-Appellant, v. WEST SEVENTH, a California limited partnership; Statler and Waldorf, a California corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1215

812 F.2d 1215

2 U.S.P.Q.2d 1204

RODEO COLLECTION, LTD., a California limited partnership, Plaintiff-Appellant, v. WEST SEVENTH, a California limited partnership; Statler and Waldorf, a California corporation, Defendants-Appellees.

No. 86-5960.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 4, 1987.

Decided March 17, 1987.

Ann Kough, Esq., Beverly Hills, Cal., and Stephen M. Lowry, Los Angeles, Cal., for plaintiff-appellant.

James D. Holden, and Susan G. O'Neill, San Francisco, Cal., and Stephen A. Kroft, and Frederic E. Schreyer, Los Angeles, Cal., for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before SNEED, FARRIS and NOONAN, Circuit Judges.

FARRIS, Circuit Judge:

Rodeo Collection, Ltd. owns and operates the Rodeo Collection, an exclusive shopping center located on Rodeo Drive in Beverly Hills. Rodeo holds several registered service marks for the mark "Rodeo Collection" as used in connection with shopping center services. In 1985, West Seventh and Statler and Waldorf announced plans to open a new shopping center in downtown Los Angeles under the name "The Collection." Rodeo asked West Seventh to give the new shopping center a different name. West Seventh refused.

On February 5, 1986, Rodeo filed suit in district court alleging federal service mark infringement, federal unfair competition, and several related state claims. At the same time, Rodeo moved for a preliminary injunction to enjoin West Seventh from using any colorable imitation of Rodeo's registered service mark to identify the new shopping center. The district court denied the motion. Rodeo timely appealed. We affirm.

DISCUSSION

1. Jurisdiction

Appellate jurisdiction is based on 15 U.S.C. Sec. 1121. The district court's order is a reviewable interlocutory order. See Miss Universe, Inc. v. Flesher, 605 F.2d 1130, 1131 n. 1 (9th Cir.1979).

2. Standard of Review

We will set aside the district court's order denying Rodeo's request for a preliminary injunction only if we conclude that the order was an abuse of discretion, was based on an erroneous legal standard, or was based on clearly erroneous findings of fact. See Bank of America National Trust and Savings Association v. Summerland County Water District, 767 F.2d 544, 547-48 (9th Cir.1985); Apple Computer, Inc. v. Formula International Inc., 725 F.2d 521, 523 (9th Cir.1984).

3. Standard Governing the Issuance of a Preliminary Injunction

To qualify for a preliminary injunction, the moving party must show either (1) a combination of probable success on the merits and the possibility of irreparable harm, or (2) that serious questions are raised and the balance of hardships tips sharply in the moving party's favor. Sardi's Restaurant Corp. v. Sardie, 755 F.2d 719, 723 (9th Cir.1985); Apple Computer, 725 F.2d at 523. These are not two distinct tests, but rather the opposite ends of a single "continuum in which the required showing of harm varies inversely with the required showing of meritoriousness." San Diego Committee Against Registration And The Draft v. Governing Board of Grossmont Union High School Dist., 790 F.2d 1471, 1473 n. 3 (9th Cir.1986).

4. Probability of Success on the Merits

Rodeo alleges that West Seventh has infringed, and continues to infringe, the registered service mark "Rodeo Collection" by calling the new shopping center "The Collection." Under 15 U.S.C. Sec. 1114(1), any person who uses in commerce a colorable imitation of a registered service mark, without the registrant's consent and in a way that is likely to cause confusion, is liable for service mark infringement. The parties agree that "Rodeo Collection" is a registered service mark, that Rodeo is using it in commerce, and that West Seventh has adopted the mark "The Collection" for its new shopping center without Rodeo's consent. Whether West Seventh's mark is a colorable imitation of Rodeo's mark is a pivotal factor in assessing the likelihood of confusion. Likelihood of confusion is thus the crucial issue. See Lindy Pen Co. v. Bic Pen Corp., 725 F.2d 1240, 1243 (9th Cir.1984). Rodeo's federal unfair competition claim and its related state claims also turn on the likelihood of confusion. See Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1362 (9th Cir.1985) (en banc); Sardi's Restaurant, 755 F.2d at 723.

A likelihood of confusion exists not only when a consumer viewing a service mark is likely to purchase the identified services under the mistaken belief that they are the services of another service-provider, but also when the consumer would be likely to assume that the identified services are in some way associated with another service-provider. See Alpha Industries, Inc. v. Alpha Steel Tube & Shapes, Inc., 616 F.2d 440, 443 (9th Cir.1980).

We have developed a five-factor test for determining whether a likelihood of confusion exists:

a) The strength of the registered service mark.

b) The relationship between the services identified by the competing service marks.

c) The similarity of the competing service marks.

d) The evidence of actual confusion.

e) The junior user's intent in adopting its service mark.

See Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 782 F.2d 1508, 1509 (9th Cir.1986); Golden Door, Inc. v. Odisho, 646 F.2d 347, 349-50 (9th Cir.1980); Alpha Industries, 616 F.2d at 444.

Likelihood of confusion requires that confusion be probable, not simply a possibility. HMH Publishing Co. v. Brincat, 504 F.2d 713, 717 (9th Cir.1974); Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 804 (9th Cir.1970). It is the totality of facts in a given case that is dispositive. See J.B. Williams Co. v. Le Conte Cosmetics, Inc., 523 F.2d 187, 190 (9th Cir.1975), cert. denied, 424 U.S. 913, 96 S.Ct. 1110, 47 L.Ed.2d 317 (1976); Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 160 (9th Cir.), cert. denied, 374 U.S. 830, 83 S.Ct. 1870, 10 L.Ed.2d 1053 (1963).

a. Strength of Rodeo's Service Mark

A mark's strength can be measured in terms of its location along a continuum stretching from arbitrary, inherently strong marks, to suggestive marks, to descriptive marks, to generic, inherently weak marks. See Surgicenters of America, Inc. v. Medical Dental Surgeries, Co., 601 F.2d 1011, 1014-15 (9th Cir.1979).

A strong mark has secondary meaning. See Bada Company v. Montgomery Ward & Co., 426 F.2d 8, 11 (9th Cir.), cert. denied, 400 U.S. 916, 91 S.Ct. 174, 27 L.Ed.2d 155 (1970). A secondary meaning arises if one of the connotations that a mark evokes is the particular good or service that it identifies. See 1 J.T. McCarthy, Trademarks and Unfair Competition, Sec. 15:2 at 661 (2d ed. 1984). When first coined, descriptive marks have no secondary meaning, but over time, as customers begin associating them with particular goods or services, they may acquire secondary meaning. See Carter-Wallace, 434 F.2d at 800.

Whether a mark is weak and descriptive or strong and distinctive can be determined only by reference to the goods or services that it identifies. Thus, "the mark BRILLIANT may be 'descriptive' on diamonds, 'suggestive' on furniture polish, and 'arbitrary' on canned applesauce." 1 J.T. McCarthy, Trademarks and Unfair Competition, Sec. 11:20 at 489 (2d ed. 1984).

Composite marks should be examined in their entirety, not piece by piece. See California Cooler, Inc. v. Loretto Winery, Ltd., 774 F.2d 1451, 1455 (9th Cir.1985) (the validity of a composite mark is not to be judged by an examination of its parts); Franklin Mint Corp. v. Master Mfg. Co., 667 F.2d 1005, 1007 (CCPA 1981) (a mark should not be dissected and considered piecemeal).

We therefore analyze Rodeo's mark in its entirety and in the context of shopping center services, not piecemeal and in the abstract. West Seventh's argument that Rodeo's mark is weak is based on a mistaken approach. West Seventh focuses on part of Rodeo's mark, "collection," and then argues that the overall mark is weak because the Los Angeles phone book reveals eleven other business uses of the term "collection." Frequency of use, however, is not the proper standard. Instead, we must consider the specific associations that the composite mark triggers in the minds of consumers when it is used to identify shopping center services.

Two tests are commonly used to measure the strength of a mark, the "imagination test" and the "need test." The "imagination test" focuses on the amount of imagination required in order for a consumer to associate a given mark with the goods or services it identifies. If a consumer must use more than a small amount of imagination to make the association, the mark is suggestive and not descriptive. See Golden Door, 646 F.2d at 350; AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir.1979). The "need test" focuses on the extent to which a mark is actually needed by competitors to identify their goods or services:

[If] the suggestion made by the mark [is] so remote and subtle that it is really not likely to be needed by competitive sellers to describe their goods [or services].... this tends to indicate that the mark is merely suggestive, not descriptive. If, however, the message conveyed by the mark about the goods or services is so direct and clear that competing sellers would be likely to [need to] use the term in describing or advertising their goods [or services], then this indicates that the mark is descriptive.

1 J.T. McCarthy, Trademarks and Unfair Competition, Sec. 11:21 at 493 (2d ed. 1984). The two tests are related, because "[t]he more imagination that is required to associate a mark with a product [or service,] the less likely the words used will be needed by competitors to describe their products [or services]." Union Carbide Corp. v. Ever-Ready Inc., 531 F.2d 366, 379 (7th Cir.), cert. denied, 429 U.S. 830, 97 S.Ct. 91, 50 L.Ed.2d 94 (1976).

Both tests indicate that "Rodeo Collection" and the...