Americana Trading Inc. v. Russ Berrie & Co.

• Decision Date: 02 June 1992
• Docket Number: No. 88-15334,88-15334
• Citation: 966 F.2d 1284,23 U.S.P.Q.2d 1031
• Parties: AMERICANA TRADING INC., doing business as AMTRA, a Connecticut corporation, Plaintiff-Appellant, v. RUSS BERRIE & CO., a New Jersey corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1284

966 F.2d 1284

23 U.S.P.Q.2d 1031

AMERICANA TRADING INC., doing business as AMTRA, a Connecticut corporation, Plaintiff-Appellant, v. RUSS BERRIE & CO., a New Jersey corporation, Defendant-Appellee.

No. 88-15334.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 11, 1992.

Decided June 2, 1992.

John P. Sutton and Maria S. Cefalu, Limbach, Limbach & Sutton, San Francisco, Cal., for plaintiff-appellant.

Dirks B. Foster, John A. Hughes, Townsend and Townsend, San Francisco, Cal., for defendant-appellee.

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

Before: HALL and WIGGINS, Circuit Judges, and BURNS, District Judge. ^*

CYNTHIA HOLCOMB HALL, Circuit Judge:

Americana Trading ("Amtra") appeals the district court's grant of summary judgment to Russ Berrie & Co. ("Russ") in Amtra's trademark infringement suit against Russ. We reverse and remand for trial.

I

In June 1984, Amtra began selling pairs of stuffed bears under the trademark "Wedding Bears." (Figure 1). Each pair consisted of a teddy bear dressed as a bridegroom and another dressed as a bride. As sold to consumers, the bears were connected by strips of velcro on the bears' hands. The product experienced substantial success, and by 1986 Amtra was selling an entire line of "Wedding Bears" products, including the bride and groom pair in various sizes as well as an entire bridal party of stuffed bears sold separately from the bride and groom set. Amtra's products received coverage on national television and newspapers, and Amtra claims it made "significant" advertising expenditures to promote the bears.

Amtra received a federal registration for its "Wedding Bears" trademark on June 25, 1985. Amtra subsequently licensed use of its "Wedding Bears" mark to Commonwealth Toys & Novelty ("Commonwealth"), which undertook a million-dollar advertising campaign. Commonwealth procured coverage in the New York Post and on television news, and once succeeded in having the bears given away as a prize on the "Newlyweds" television program.

In October 1985, Russ decided to market teddy bears dressed as brides and grooms. (Figure 2). A variety of names were considered for these products: "Wedding Bear," "Bearly-in-love," and "Forever Bride and Forever Groom." Russ chose to name the two products "Bride Bear" and "Groom Bear." A tag sewn into the bottom (or rump) of Russ's bears, however, bore the notation "Wedding Bear" in large letters. (Figure 3). This tag, known as a "content tag" because it identifies the materials used to manufacture the bear, was made of fabric and designed to remain permanently on the bears. The back of the content tag bore Russ's housemark and "RUSS BERRIE & CO., INC." Russ's bears also had two tags displayed prominently on the front of the bears, designed to be snipped off after purchase, which bore Russ's housemark and its "Caress" trademark in large letters. The term "Wedding Bear" was not used on promotional or sales materials.

Russ's product planner stated in her deposition that she chose the term "Wedding Bear" for the content tag because "I thought it was a descriptive name for bears dressed in wedding attire." Internal Russ memoranda, marked "confidential," indicate that Russ was aware of Amtra's Wedding Bears line as early as January 30, 1985. For example, a memorandum dated September 18, 1985, appears to be a report on sales volume of Amtra's Wedding Bears at a particular retail outlets: "[At] Paper Tiger, Paramus Park[.] Sold 9 of 12 pair in approximately two weeks. Has reordered 24 pieces. While in Boston Valerie and I found these selling in Noah's. Seven of 12 pair sold in less than two weeks."

In November 1985, about the time that Russ was planning its Bride and Groom Bears, Amtra's attorney wrote to Russ to complain that Russ's "The Newlyweds" Bears infringed Amtra's "Wedding Bears" mark. Russ denied that "The Newlyweds" was an infringement. "The Newlyweds" were a line of Russ goods, different from "Bride and Groom Bears," that Russ had sold since 1984. "The Newlyweds" were listed on Russ order forms under the category "Wedding."

Russ's Bride and Groom Bears were first sold in January or February 1986. In August 1987, Amtra filed suit in district court for trademark infringement and related state law claims. On October 2, 1987, the district court entered a preliminary injunction enjoining Russ from using the "Wedding Bear" mark. Russ complied and has not used the mark since.

In response to Russ's motion for summary judgment, Amtra offered evidence that consumers and retailers were confused by Russ's use of the "Wedding Bear" mark on its Bride and Groom Bears. Vernon Goldsmith, a principal of Amtra, visited several retail stores and asked each if it carried "Wedding Bears" brand stuffed animals. In several instances, the clerks led him to Russ's "Wedding Bear" products. Goldsmith's solicitations of orders were rebuffed by potential customers because the retailers were already carrying Russ's bears. According to Goldsmith, Amtra lost accounts it had already procured because Russ offered its Bride and Groom Bears at a lower price. Also according to Goldsmith, Russ's sales steadily increased at the expense of Amtra's sales. Finally, a letter mailed to Amtra expressed enthusiasm for Amtra's products but enclosed a picture of Russ's bears.

The district court granted Russ's motion for summary judgment, and Amtra now appeals.

II

This court reviews a grant of summary judgment de novo to determine whether, viewing the evidence in the light most favorable to the nonmoving party, there are any genuine issues of material fact and whether the district court applied the correct substantive law. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-41 (9th Cir.1989).

Russ does not attempt to challenge the validity of Amtra's federally registered mark. Russ argues only that its use of "Wedding Bear" did not result in a likelihood of confusion between Russ's and Amtra's goods and, therefore, that Russ did not infringe Amtra's trademark. See Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 845 (9th Cir.1987) (likelihood of confusion is test for trademark infringement). Amtra had the burden of proof to show that consumers were likely to believe that Russ's bears were manufactured by Amtra. See id. Alternatively, Amtra could prove "reverse confusion," namely that purchasers would believe that Russ manufactured Amtra's bears. See id.; see also Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 871 (2d Cir.1986) (likelihood of any confusion as to the relationship between trademark owner and alleged infringer may constitute infringement); Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 561 F.2d 1365, 1371-72 (10th Cir.1977) (origin of modern reverse confusion doctrine), cert. dismissed, 434 U.S. 1052, 98 S.Ct. 905, 54 L.Ed.2d 805 (1978).

We will apply the six-factor test used by the district court to determine likelihood of confusion: (1) Strength or weakness of the marks; (2) similarity in appearance, sound, and meaning; (3) class of goods in question; (4) marketing channels used; (5) evidence of actual confusion; and (6) intent of the defendant. See J.B. Williams Co. v. Le Conte Cosmetics, Inc., 523 F.2d 187, 191 (9th Cir.1975), cert. denied, 424 U.S. 913, 96 S.Ct. 1110, 47 L.Ed.2d 317 (1976); see also Academy of Motion Picture Arts & Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1454 n. 3 (9th Cir.1991) (no single test mandated by this circuit). We consider each factor in turn.

A

The district court first held that there was insufficient evidence as a matter of law that "Wedding Bears" had come to be associated with Amtra, and that Amtra's mark was therefore "weak." Both parties agree that "Wedding Bears" is a descriptive mark. Descriptive marks are generally regarded as weak and entitled to less protection than fanciful or arbitrary marks. See AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir.1979). We believe, however, that the district court gave insufficient weight to the presumptive effect of Amtra's federal registration. As applied to a descriptive mark such as Amtra's, the registration carries a presumption of secondary meaning. Lois Sportswear, 799 F.2d at 871 ("[R]egistered trademarks are presumed to be distinctive and should be afforded the utmost protection."); 1 J. Thomas McCarthy, Trademarks and Unfair Competition § 15:11, at 687 (2d ed. 1984). Russ therefore had the burden to prove that secondary meaning had not attached if it wished to argue that Amtra's mark was weak. To the extent that secondary meaning had attached to a descriptive mark, the mark was rendered stronger and more worthy of protection.

B

The district court ruled that the marks were not similar in sound, appearance and meaning because Russ only displayed "Wedding Bear" on the content tag sewn on the rear of the bears. The district court correctly noted that similarity "must be considered in light of the way the marks are encountered in the marketplace and the circumstances surrounding the purchase of the [products]." Lindy Pen Co. v. Bic Pen Corp., 725 F.2d 1240, 1245 (9th Cir.1984), cert. denied, 469 U.S. 1188, 105 S.Ct. 955, 83 L.Ed.2d 962 (1985). According to the district court, Russ's use of "Wedding Bear" was not similar to Amtra's because Russ "did not use that phrase on its hang tags, displays, advertising, or any other material which is apparent to the purchasers in the retail store." Russ argues that the content tag "did not, in essence, actually appear in the marketplace at all."

We do not believe the district court was equipped at summary judgment to conclude whether the "Wedding Bear" mark was apparent to consumers or not. The district court and Russ both relied upon Lindy Pen, but neglected to notice that Lindy Pen reviewed a finding by a district court based upon "[o]verwhelming evidence at trial." Id. The...