Mobil Oil Corp. v. Pegasus Petroleum Corp.

• Decision Date: 04 May 1987
• Docket Number: D,No. 582,582
• Citation: 2 USPQ2d 1677,818 F.2d 254
• Parties: MOBIL OIL CORPORATION, Plaintiff-Appellee, v. PEGASUS PETROLEUM CORPORATION, Defendant-Appellant. ocket 86-7590.
• Court: U.S. Court of Appeals — Second Circuit

Page 254

818 F.2d 254

2 U.S.P.Q.2d 1677

MOBIL OIL CORPORATION, Plaintiff-Appellee, v. PEGASUS PETROLEUM CORPORATION, Defendant-Appellant.

No. 582, Docket 86-7590.

United States Court of Appeals, Second Circuit.

Argued Feb. 11, 1987.

Decided May 4, 1987.

Douglas W. Wyatt, New York City (Wyatt, Gerber, Shoup, Scobey & Badie, New York City, Thomas A. O'Rourke, William E. Marames, Mobil Oil Corp., Fairfax, Va., Edward H. Valance, Lawrence O. Miller, of counsel), for plaintiff-appellee.

Robert B.G. Horowitz, New York City (Eslinger & Pelton, P.C., New York City, Lewis H. Eslinger, Abigail F. Cousins, of counsel), for defendant-appellant.

Before FEINBERG, Chief Judge, LUMBARD, and MINER, Circuit Judges.

LUMBARD, Circuit Judge:

Mobil Oil Corporation brought this action in the Southern District charging Pegasus Petroleum Corporation with trademark infringement and unfair competition, 15 U.S.C. Sec. 1114(1); false designation of origin, 15 U.S.C. Sec. 1125(a); and trademark dilution, N.Y.Gen.Bus.Law Sec. 368-d. On July 8, 1986, after a three-day bench trial, Judge MacMahon entered judgment for Mobil on each of its claims, dismissed Pegasus Petroleum's counterclaims seeking to cancel Mobil's trademark registration, and enjoined Pegasus Petroleum from using the mark "Pegasus" in connection with the petroleum industry or related businesses. We affirm.

Mobil, one of the world's largest corporations, manufactures and sells a vast array of petroleum products to industrial consumers and to the general public. Since 1931, Mobil has made extensive use of its well known "flying horse" symbol--representing Pegasus, the winged horse of Greek mythology--in connection with its petroleum business. Mobil displays this registered trademark, usually in red, but occasionally in blue, black, white, or outline form, at virtually all its gasoline service stations (usually on an illuminated disk four feet in diameter); in connection with all petroleum products sold at its service stations; in connection with the sale of a variety of its other petroleum products; on its oil tankers, barges, and other vehicles; and on its letterhead. As the district court explained, it is "undisputed that Mobil's extensive use of the flying horse symbol for such a long period of time in connection with all of Mobil's commercial activity has rendered it a very strong mark. Indeed, counsel for [Pegasus Petroleum] could think of few trademarks, if any, that were stronger trademarks in American commerce today."

As part of its petroleum business, Mobil buys and sells crude and refined petroleum products in bulk, an activity known as oil trading, to insure a continuous flow of oil to its refineries, and ultimately to its customers. The oil trading market is tight-knit and sophisticated: It encompasses a select group of professional buyers and brokers, representing approximately 200 oil companies, wholesalers, and oil traders; deals are in the hundreds of thousands, or millions of dollars, and in tens of tons; and, oil traders do not consummate deals with strangers except after a thorough credit check. Mobil does not use its flying horse symbol in connection with its oil trading business.

Pegasus Petroleum, incorporated in 1981, confines its activities to oil trading, and does not sell directly to the general public. Its founder, Gregory Callimanopulos, testified that he selected the name "Pegasus Petroleum" because he wanted a name with both mythical connotations and alliterative qualities. Callimanopulos admitted that he knew of Mobil's flying horse symbol when he picked the name, but claimed that he did not know that the symbol represented Pegasus or that Mobil used the word "Pegasus" in connection with its petroleum business. Shortly after the genesis of Pegasus Petroleum, Ben Pollner, then president of the company, sent a letter to 400-500 people in the oil trading business informing them about Pegasus Petroleum's formation. The letter stated that Pegasus Petroleum was part of the "Callimanopulos group of companies," and used an interlocking double P as a letterhead. Pegasus Petroleum has never used a flying horse symbol and sells no products with the name "Pegasus" on them.

In 1982, Mobil approached Pegasus Petroleum after learning of its use of the mark "Pegasus." When attempts to reach an agreement failed, Mobil filed the instant suit. The case proceeded to trial before Judge MacMahon, without a jury. After examining the criteria set forth in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961), Judge MacMahon concluded that "there is a sufficient likelihood of confusion between [Mobil's flying horse symbol] and [Pegasus Petroleum's use of the 'Pegasus' mark] to grant [Mobil] relief under the Lanham Act." Judge MacMahon also held for Mobil on its unfair competition, false designation, and antidilution claims; and enjoined Pegasus Petroleum's further use of the mark "Pegasus" in connection with the oil industry. With Mobil's consent, the injunction has been stayed, pending resolution of this appeal.

The Lanham Act prohibits the use of "any reproduction, counterfeit, copy, or colorable imitation of a registered mark" where "such use is likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. Sec. 1114(1)(a). To state a claim under this section, a plaintiff must show a "likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question." Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978) (per curiam) (citing cases), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979). A nonexclusive list of eight factors, articulated by Judge Friendly in Polaroid, supra, 287 F.2d at 495, helps guide this inquiry: (1) the strength of the plaintiff's mark: (2) the degree of similarity between the two marks; (3) the competitive proximity of the products or services; (4) the existence of actual confusion; (5) the likelihood that the plaintiff will "bridge the gap" between the two markets; (6) the defendant's good faith in adopting its mark; (7) the quality of the defendant's product; and (8) the sophistication of the purchasers. We agree with both the district court's determination of each of the Polaroid factors and its balancing of those factors to arrive at its conclusion that Pegasus Petroleum infringed upon Mobil's senior mark--the flying horse. ¹

Pegasus Petroleum does not dispute the district court's conclusion that the strength of Mobil's flying horse mark is "without question, and perhaps without equal." As an arbitrary mark--there is nothing suggestive of the petroleum business in the flying horse symbol--Mobil's symbol deserves "the most protection the Lanham Act can provide." Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 871 (2d Cir.1986). On the other hand, Pegasus Petroleum vigorously attacks the district court's finding of similarity between the two marks, arguing that the district court erred by blindly equating the word "Pegasus" with its pictorial representation--Mobil's flying horse. While we agree that words and their pictorial representations should not be equated as a matter of law, a district court may make such a determination as a factual matter. See, e.g., Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326, 329 (6th Cir.) ("It is well settled that words and their pictorial representation are treated the same in determining the likelihood of confusion between two marks."), cert. denied, 414 U.S. 858, 94 S.Ct. 66, 38 L.Ed.2d 108 (1973); Izod, Ltd. v. Zip Hosiery Co., 405 F.2d 575, 577 (C.C.P.A.1969) ("Members of the purchasing public viewing appellant's pictorial representation of a feline animal as applied to men's and women's outer shirts and appellee's literal designation TIGER HEAD for men's work socks might well and reasonably conclude that the respective goods of the parties emanated from the same source."): Instrumentalist Co. v. Marine Corps League, 509 F.Supp. 323, 328 (N.D.Ill.1981) ("the fact that defendants' certificate most prominently displays a picture of Sousa (rather than a literal transcription of his name) does not preclude a finding of infringement"). See generally 2 J. McCarthy, Trademarks and Unfair Competition, Sec. 23:8 at 68 & n. 10 (2d ed. 1984) (citing cases). Judge MacMahon made such a determination here:

we find that the similarity of the mark exists in the strong probability that prospective purchasers of defendant's product will equate or translate Mobil's symbol for "Pegasus" and vice versa.

We find that the word "Pegasus" evokes the symbol of the flying red horse and that the flying horse is associated in the mind with Mobil. In other words, the symbol of the flying horse and its name "Pegasus" are synonymous.

That conclusion finds support in common sense as well as the record. ²

The third Polaroid factor addresses the competitive proximity between the two marks. Pegasus Petroleum points out that while Judge MacMahon correctly found that Mobil and Pegasus Petroleum both compete in the oil trading business, Mobil does not use its flying horse trademark in that field. However, "direct competition between the products is not a prerequisite to relief.... Confusion, or the likelihood of confusion, not competition, is the real test of trademark infringement." Continental Motors Corp. v. Continental Aviation Corp., 375 F.2d 857, 861 (5th Cir.1967) (citations omitted). Both Mobil and Pegasus Petroleum use their marks in the petroleum industry. See, e.g., AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 350 (9th Cir.1979) (competitive proximity may be found where goods are similar in use and function); Syntex Laboratories, Inc. v. Norwich Pharmacal Co., 437 F.2d 566 (2d Cir.1971) (same).

Moreover, competitive proximity must be measured with reference to the first two...