Echo Travel, Inc. v. Travel Associates, Inc.
| Citation | 870 F.2d 1264 |
| Decision Date | 20 March 1989 |
| Docket Number | No. 87-2864,87-2864 |
| Parties | ECHO TRAVEL, INC., Plaintiff-Appellant, v. TRAVEL ASSOCIATES, INC., Defendant-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Thomas M. O'Malley, Willian Brinks Olds Hofer Gilson & Lione, Ltd., Chicago, Ill., for plaintiff-appellant.
Nancy J. Sennett, Foley & Lardner, Milwaukee, Wis., for defendant-appellee.
Before COFFEY, FLAUM and MANION, Circuit Judges.
This is a diversity case that involves the Wisconsin common law of unfair competition. Plaintiff-Appellant Echo Travel, Inc. ("Echo") filed suit against Defendant-Appellee Travel Associates, Inc. ("Associates"), alleging that Associates had attempted to pass off 1 its vacation tour services as those of Echo, by distributing and using a promotional poster which was substantially identical to a poster used by Echo. Echo also filed a motion for a temporary restraining order (TRO) to restrain Associates from using the poster. After an evidentiary hearing, the district court denied the motion for a TRO. Associates then moved for summary judgment, which was granted. Echo appeals from the order of the district court granting summary judgment in favor of Associates. 674 F.Supp. 656. The sole issue on appeal is whether Echo raised a genuine issue of material fact as to whether its poster had acquired secondary meaning. We find that there exists no genuine issue of material fact, and we therefore affirm.
Both Echo and Associates are travel agencies and tour operators that engage in the marketing, selling, and arranging of spring break tours for college students to, among other places, Daytona Beach, Florida. At the time of the TRO hearing held in January 1987, both parties had been in the Daytona Beach market for approximately eight to nine years. 2 Both companies use primarily two methods of advertising to promote their spring break trips: (1) print advertisements in student newspapers; and (2) the distribution and posting of flyers, brochures, and posters. At each campus, the companies work with the student activities office, school clubs, fraternities, and individual student representatives (collectively, "tour marketers") who are responsible for placing the newspaper ads, distributing the literature, posting the posters, and signing up students for the trips. The advertising campaign begins in the summer or fall preceding the spring in which the trips are actually conducted, so that each campaign roughly corresponds to an academic year.
For at least four years prior to the 1985-86 campaign, Echo had used a photograph of a catamaran for its promotional poster. In the summer or early fall of 1985, Echo decided to select a new photograph. Echo's president, David Vander Veen, contacted an advertising agency named Jiloty, Shipley & Associates ("Jiloty"), that was responsible for developing an annual (calendar year) promotional poster for the Daytona Beach Resort Area/Chamber of Commerce ("Daytona Area"). Each year, Jiloty prints "thousands" 3 of Daytona Area posters, which it freely distributes and makes available upon request to hotels and motels, tour brokers, travel agencies, television and radio stations, college newspapers, and magazines. Vander Veen asked Jiloty if Echo could use some of the "outtakes" 4 from the 1985 Daytona Area poster. In response, Jiloty sent to Echo one of the outtakes from the 1985 photography. The outtake photograph showed a beach scene in which a muscular male model is perched atop a lifeguard stand; a female model is standing on the sand, smiling and leaning her back against the lifeguard stand; and a second male model is facing the female, leaning one hand on the stand, and appears to be talking to her. All three models are college-age and clad in bathing suits (the "1985 beach scene"). Echo used this photograph for its 1985-86 poster and used it again for its 1986-87 poster.
In the fall of 1986, Associates, dissatisfied with its previous years' posters, contacted Jiloty to see if it could be of assistance in designing a poster for use in Associates' 1986-87 advertising campaign. Michael Jiloty informed Associates that the transparencies for the 1987 Daytona Area poster would not be ready for approximately four to six weeks, and that he was unable to supply an outtake transparency from the 1986 Daytona Area poster because of technical limitations. (The 1986 Daytona Area poster was a composite of several previous years' posters and included the 1985 beach scene). Jiloty offered to, and did, send to Associates an outtake transparency from the 1985 beach scene. Thereafter, Associates used the outtake to develop its 1986-87 poster. Uncontradicted testimony at the TRO hearing established that Associates was unaware of Echo's use of the 1985 beach scene when Associates developed its poster using a substantially similar outtake of the same scene.
In January 1987, Echo filed an action for unfair competition against Associates. In granting Associates' motion for summary judgment, the district court ruled that: (1) the 1985 beach scene is not inherently distinctive; (2) Echo had no exclusive ownership rights in the photograph; and (3) Echo could not establish that the photograph had acquired secondary meaning. Echo challenges only the third ruling, arguing, in part, that the district court erred by relying on the fact that Echo had no exclusive ownership rights in the photograph to determine that the photograph had not acquired secondary meaning.
The law of unfair competition includes common law trademark infringement. To establish a case of unfair competition based on trademark infringement, a plaintiff must prove two elements: (1) validity of the mark in question; and (2) infringement. See 1 McCarthy, Trademarks and Unfair Competition Sec. 15:1 at 657 (2d ed. 1984) [hereinafter "McCarthy"]. Validity of the mark goes to whether the plaintiff's symbol is protectible as a trademark--i.e., whether it is recognized by the public as identifying and distinguishing plaintiff's goods or services. Infringement goes to whether the defendant's actions have caused a likelihood of confusion among consumers as to the source of the goods or services. Id. The issue on appeal concerns only the first element--the validity of the 1985 beach scene as Echo's alleged picture-mark. 5
As explained by Professor McCarthy, validity of a mark can be shown "in either of two ways: (a) that plaintiff's symbol was inherently distinctive; or (b) that even if not inherently distinctive, the symbol has become distinctive through the acquisition of 'secondary meaning.' " McCarthy Sec. 15:1, at 657. Here, Echo does not claim that the beach scene is inherently distinctive; 6 thus, Echo must show that its picture-mark has acquired secondary meaning-- i.e., that there is "a mental association in buyers' minds between the alleged mark and a single source of the product." McCarthy Sec. 15:2, at 659 (emphasis omitted). The public need not be aware of the name of the source; the plaintiff can establish secondary meaning by showing that "the public is aware that the product comes from a single, though anonymous source." Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 380 (7th Cir.1976).
In determining whether a mark has acquired secondary meaning, the courts consider several factors:
Direct Evidence
(a) direct consumer testimony
(b) consumer surveys
Circumstantial Evidence
(c) exclusivity, length, and manner of use
(d) amount and manner of advertising
(e) amount of sales and number of customers
(f) established place in the market
(g) proof of intentional copying.
See Vaughan Manufacturing Co. v. Brikam International, Inc., 814 F.2d 346, 349 (7th Cir.1987); Gimix, Inc. v. JS & A Group, Inc., 699 F.2d 901, 907 (7th Cir.1983); Union Carbide Corp. v. Ever-Ready Inc., 531 F.2d 366, 380 (7th Cir.1976); American Scientific Chemical, Inc. v. American Hospital Supply Corp., 690 F.2d 791, 793 (9th Cir.1982); see also McCarthy Secs. 15:9-15:20. Echo asserts that it submitted sufficient evidence on five of these seven factors; no consumer surveys were offered, and no evidence of intentional copying was offered. We will consider the remaining five factors.
Echo submitted, as direct consumer testimony, five form affidavits executed by tour marketers. The five affidavits were set up as follows:
1. That I am [name of affiant] at the [name of school] with the [fraternity or student activities office].
2. That my duties as such are to operate and market tours on the [name of school] campus, and included in that would be coordinating student Winter and Spring break trips.
3. That I performed these duties during the school year 1985-1986.
4. That I am familiar with the ECHO TRAVEL posters used for the Spring break Florida trip during Spring 1986 and Spring 1987.
5. That I directly associate the picture on that poster, that is, the scene, color, etc. with the ECHO TRAVEL tour to Daytona Beach and no other tour.
Of the five first paragraphs, two affiants stated that they were with a fraternity, and three stated that they were with a student activities office.
The district court struck the affidavits on the ground that the affiants were not members of the relevant consumer class, and their testimony was, therefore, irrelevant. The district court defined the relevant consumer class as college students. Echo claims that the district court erred in striking the affidavits because (1) the consumer class should not have been limited to college students, (2) two of the affiants were college students, who had taken Echo trips to Daytona, and (3) the three non-student affiants were university officials who had also taken Echo trips.
In support of its argument that the district court defined the consumer class too narrowly, Echo merely points to the fact that its complaint stated that it arranged tours "for college...
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