Mutual of Omaha Ins. Co. v. Novak

• Decision Date: 17 February 1988
• Docket Number: 87-1043,Nos. 87-1042,s. 87-1042
• Parties: , 56 USLW 2408, 5 U.S.P.Q.2d 1314 MUTUAL OF OMAHA INSURANCE COMPANY, A Nebraska Corporation, Appellee, v. Franklyn NOVAK, an Individual, Appellant. MUTUAL OF OMAHA INSURANCE COMPANY, a Nebraska Corporation, Appellant, v. Franklyn NOVAK, an Individual, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 397

836 F.2d 397

98 A.L.R.Fed. 1, 56 USLW 2408, 5

U.S.P.Q.2d 1314

MUTUAL OF OMAHA INSURANCE COMPANY, A Nebraska Corporation, Appellee, v. Franklyn NOVAK, an Individual, Appellant.

MUTUAL OF OMAHA INSURANCE COMPANY, a Nebraska Corporation, Appellant, v. Franklyn NOVAK, an Individual, Appellee.

Nos. 87-1042, 87-1043.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 4, 1987.

Decided Dec. 30, 1987.

Rehearing and Rehearing En Banc Denied Feb. 17, 1988.

Warren C. Schrempp, Omaha, Neb., for appellant.

Dennis L. Thomte, Omaha, Neb., for appellee.

Before HEANEY, Circuit Judge, ROSS, Senior Circuit Judge, and BOWMAN, Circuit Judge.

BOWMAN, Circuit Judge.

Mutual of Omaha Insurance Company (Mutual) brought suit against Franklyn Novak (Novak) alleging trademark infringement and trademark disparagement. The District Court found for Mutual on the infringement issue ¹ and granted a permanent injunction, but rejected the disparagement claim. Novak appeals the decision concerning infringement and Mutual appeals the disparagement decision. We affirm the District Court's infringement decision and do not reach the disparagement issue. ²

Beginning in 1952, Mutual acquired trademark registrations for marks used in connection with its insurance services and a television program it sponsors. These marks include the familiar "Indian head" logo and the designations "Mutual of Omaha" and "Mutual of Omaha's Wild Kingdom."

In 1983 Novak produced a design reminiscent of the Mutual marks. It uses the words "Mutant of Omaha" and depicts a side view of a feather-bonneted, emaciated human head. Novak initially put the design on T-shirts along with the words "Nuclear Holocaust Insurance." Novak marketed approximately 4000 of these shirts before Mutual obtained a preliminary injunction. He also had the design placed on sweatshirts, caps, buttons, and coffee mugs, which he has offered for sale at retail shops, exhibitions, and fairs. Novak also has advertised such merchandise on television and in newspapers and magazines.

After a trial on the merits of Mutual's claims, the District Court ruled that Novak had infringed Mutual's trademarks. The District Court found that Novak's use of the design created a likelihood of confusion as to Mutual's sponsorship of or affiliation with Novak's merchandise, and therefore held such use to be in violation of both federal and state law. Accordingly, the District Court permanently enjoined Novak from advertising or marketing T-shirts, coffee mugs, and other products featuring the designations "Mutant of Omaha," "Mutant Kingdom," and "Mutant of Omaha's Mutant Kingdom," or confusingly similar designations, and also permanently enjoined Novak from using as a logo a design confusingly similar to Mutual's "Indian head" logo.

Like most trademark cases, this case revolves around the "likelihood of confusion" issue. See, e.g., WSM, Inc. v. Hilton, 724 F.2d 1320 (8th Cir.1984); Vitek Sys., Inc. v. Abbott Laboratories, 675 F.2d 190 (8th Cir.1982); SquirtCo v. Seven-Up Co., 628 F.2d 1086 (8th Cir.1980). Specifically, the ultimate issue here is whether Novak's design so resembles Mutual's marks that it is likely to cause confusion among consumers as to whether Mutual has sponsored, endorsed, or is otherwise affiliated with the design. See Jordache Enters. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1484 (10th Cir.1987); Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 388 (5th Cir.1977). Likelihood of confusion is a question of fact. WSM, Inc., 724 F.2d at 1329; Vitek Sys., 675 F.2d at 192; SquirtCo, 628 F.2d at 1091; Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d 496, 501 (5th Cir.), cert. denied, 444 U.S. 932, 100 S.Ct. 277, 62 L.Ed.2d 190 (1979). Thus, we can set aside the District Court's finding of a likelihood of confusion only if it is clearly erroneous. Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985); Rogers v. Masem, 788 F.2d 1288, 1292 (8th Cir.1985); WSM, Inc., 724 F.2d at 1329; Vitek Sys., 675 F.2d at 192; SquirtCo, 628 F.2d at 1091; Fed.R.Civ.P. 52(a). It is possible that we would reach a conclusion different from that of the District Court if the likelihood of confusion issue were before us de novo. But our role here is limited to determining whether there is sufficient support in the record for the District Court's finding. We believe there is such support and therefore do not view the finding of a likelihood of confusion as clearly erroneous.

In resolving the likelihood of confusion issue, the District Court considered the factors that this Court enumerated in SquirtCo, 628 F.2d at 1091: 1) the strength of the trademark; 2) the similarity between the trademark and the defendant's mark; 3) the competitive proximity of the products on which the respective marks are placed; 4) the intent of the alleged infringer to pass off his goods as those of the trademark holder; 5) the incidents of actual confusion; and 6) the degree of care likely to be exercised by potential customers of the trademark holder. ³ We have continued to give weight to the SquirtCo factors in subsequent cases. See, e.g., WSM, Inc., 724 F.2d at 1329; Vitek Sys., 675 F.2d at 192-93.

The first factor is undisputed. The parties agree that Mutual's trademarks are strong.

With respect to the second factor, the District Court concluded that Novak's design is "very similar" to Mutual's marks. Mutual of Omaha Ins. Co. v. Novak, 648 F.Supp. 905, 909 (D.Neb.1986). We do not disagree. The letters and styles of the phrases are virtually identical. Novak's "Indian head" logo depicts a side view of a feather-bonneted head similar to Mutual's "Indian head" logo. And use of the word "Mutant" in place of "Mutual" is, in the context of Novak's design, suggestive of Mutual. ⁴

Regarding competitive proximity, Novak puts his design on T-shirts and coffee mugs, the same types of items on which Mutual puts its marks. Mutual sells such items to agents and company representatives, who in turn use them as gifts or incentives. While the District Court determined that there was little or no direct competition in these items between the parties, it noted that infringement still could be found. Mutual of Omaha Ins. Co., 648 F.Supp. at 910. This is undoubtedly so, for confusion, not competition, is the touchstone of trademark infringement. See SquirtCo, 628 F.2d at 1091; Hanson v. Triangle Publications, Inc., 163 F.2d 74, 78 (8th Cir.1947), cert. denied, 332 U.S. 855, 68 S.Ct. 387, 92 L.Ed. 424 (1948). It is error to assume that trademark law protects against use of a mark only on directly competitive products. See Kentucky Fried Chicken, 549 F.2d at 388 (Fifth Circuit has "repeatedly rejected" the argument that "infringement occurs only when the alleged infringer

uses the mark on the same category of product with respect to which the trademark owner obtained the mark"). "The law of trademarks ... is not so ossified, nor its protective scope so niggardly." PGA v. Bankers Life & Casualty Co., 514 F.2d 665, 669 (5th Cir.1975). Moreover, by putting his design on items similar to those on which Mutual puts its marks, Novak increased the likelihood of confusion.

With regard to the fourth factor, there is no finding by the District Court that Novak intended to pass off his goods as Mutual's, and it seems clear that he did not. This cuts in Novak's favor, but it is not dispositive, for intent to pass off one's goods as another's is not essential to an infringement claim; rather, its presence or absence is only one factor to be considered along with the other factors that bear on the issue of likelihood of confusion. SquirtCo, 628 F.2d at 1091.

As to incidents of actual confusion, Mutual produced evidence of actual confusion in the form of a survey conducted by Sorenson Marketing and Management Corporation of New York. We consider this appropriate, for surveys are often used to demonstrate actual consumer confusion. PPX Enters. v. Audiofidelity Enters., 818 F.2d 266, 271 (2d Cir.1987). Sorenson interviewed at random four hundred people over the age of twenty-one in New York, Denver, Chicago, and San Francisco. While viewing Novak's design on a T-shirt, approximately forty-two percent of those surveyed said that Mutual of Omaha came to mind. Plaintiff's Exhibit No. 49, pp. 15, 33. Of that group, twenty-five percent said that they believe Mutual "goes along" with the T-shirts "in order to help make people aware of the nuclear war problem." See id. at 16. Thus, approximately ten percent of all the persons surveyed thought that Mutual "goes along" with Novak's product. Id. at 16, 33. Because manifestations of actual confusion serve as strong evidence of a likelihood of confusion, SquirtCo, 628 F.2d at 1091; World Carpets, Inc. v. Dick Littrell's New World Carpets, 438 F.2d 482, 489 (5th Cir.1971), and may, in fact, be the best such evidence, Jordache Enters., 828 F.2d at 1487, this survey should be given substantial weight unless seriously flawed. See McDonald's Corp. v. McBagel's, Inc., 649 F.Supp. 1268, 1277-78 (S.D.N.Y.1986).

The District Court acknowledged that there may be some ambiguity in the "goes along" question used in the survey, but found the survey as a whole "credible evidence of a likelihood of confusion as to source or sponsorship." Mutual of Omaha Ins. Co., 648 F.Supp. at 911. Novak presents no persuasive reason for overriding the District Court's evaluation of the reliability of the survey. ⁵ Hence, we cannot say that the District Court erred in giving the survey significant weight. Courts frequently give substantial weight to properly conducted surveys. See Anheuser-Busch Inc. v. Stroh Brewery Co., 750 F.2d 631, 639 (8th Cir.1984); also SquirtCo, 628 F.2d at 1091; Union Carbide Corp. v. Ever-Ready Inc., 531 F.2d 366, 380-81, 385-87 (7th Cir.), cert. denied, 429 U.S. 830, 97 S.Ct. 91, 50 L.Ed.2d 94 (1976); Humble Oil & Ref. Co. v. American Oil Co., 405...