994 F.2d 1364 (9th Cir. 1993), 91-55866, Pacific Telesis Group v. International Telesis Communications

Docket Nº:91-55866.
Citation:994 F.2d 1364
Party Name:26 U.S.P.Q.2d 1786 PACIFIC TELESIS GROUP, a Nevada corporation, Plaintiff-Appellee, v. INTERNATIONAL TELESIS COMMUNICATIONS, a California corporation, Defendant-Appellant.
Case Date:May 18, 1993
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1364

994 F.2d 1364 (9th Cir. 1993)

26 U.S.P.Q.2d 1786

PACIFIC TELESIS GROUP, a Nevada corporation, Plaintiff-Appellee,

v.

INTERNATIONAL TELESIS COMMUNICATIONS, a California

corporation, Defendant-Appellant.

No. 91-55866.

United States Court of Appeals, Ninth Circuit

May 18, 1993

Argued and Submitted April 5, 1993.

Page 1365

William J. Robinson, Graham & James, Los Angeles, CA, for defendant-appellant International Telesis Communications.

Andrew J. Belansky and David A. Dillard, Christie, Parker & Hale, Pasadena, CA, for plaintiff-appellee Pacific Telesis Group.

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

Before: NOONAN and LEAVY, Circuit Judges, and TANNER, [*] District Judge.

NOONAN, Circuit Judge:

In 1988, Pacific Telesis Group (PTG) brought an action against International Telesis Communications (ITC) for infringement of its service mark in violation of the Lanham Act, 15 U.S.C. § 1114 and Cal.Bus. and Prof.Code § 14400; for false designation of origin contrary to the Lanham Act, 15 U.S.C. § 1125(a); and for unfair competition contrary to Cal.Bus. and Prof.Code § 17200. The district court found these violations to have occurred, 795 F.Supp. 979. We affirm.

FACTS

PTG was formed in 1983 in anticipation of the court-mandated break-up of American Telephone and Telegraph Company. It was to take over the businesses of AT & T's regional subsidiary, Pacific Telephone and Telegraph Company, and Pacific Telephone's subsidiary, Bell Telephone Company of Nevada. It was incorporated on October 26, 1983 and became the holding company for the operating companies in California and Nevada. Its subsidiaries were Pacific Bell, Nevada Bell, Pac Tel Publishing, Pac Tel Communications Services and Pac Tel Mobile Access.

Prior to the incorporation of PTG, the executives of Pacific Telephone had selected Pacific Telesis Group as the name for the new holding company. On August 5, 1983, Pacific Telephone distributed to customers in California, and Nevada Bell distributed to customers in Nevada, an advertisement for "Telesis" telephone services such as call-forwarding, call-waiting, and 3-way calling. On August 8, 1983 Pacific Telephone filed an application for federal registration of TELESIS as a service mark, and on September 11, 1983, the United States Patent and Trademark Office issued the registration for communications services, "namely telephone services." In the fall of 1983 the mark was similarly registered as a California service mark. At the beginning of 1984 these marks were assigned by Pacific Telephone with its business to PTG.

Simultaneous press conferences in San Francisco and Reno on August 8, 1983 announced the selection of "Pacific Telesis Group" as the name of the new holding company. An advertisement in the San Francisco Chronicle on August 7, 1983 announced:

Pacific Telephone gives birth to a new family of companies: Introducing Pacific Telesis Group

PTG was then described and the full name repeated six times. The dictionary definition of "telesis" was given: "progress intelligently planned and directed."

Thereafter, from September 1983 through January 1984, advertisements were run in the Wall Street Journal, Barrons, Business Week, Forbes, Fortune, Newsweek and Time, using the full name of PTG and describing its goals. The ads typically put "Pacific Telesis" in larger type than "Group." "Pacific" and "Telesis" were equally emphasized. The advertising was addressed both to potential investors and potential customers. Its cost was approximately $2.5 million.

Advertising of PTG's full name continued in the same national publications into 1986 with the aim of increasing recognition of the name. Through 1984 and 1985 PTG also sponsored the "Nightly Business Report" on 260 Public Broadcasting Stations. The program was regularly seen by approximately two million people. The full name of the sponsor was given. From September 1985 into 1989, PTG ran a series of commercials on television in the major metropolitan centers

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of California. The combined print and television advertising of PTG's name from 1984 through 1989 cost close to $50 million. In the same period the subsidiaries of PTG spent about $290 million. In this advertising in print, on the radio, and on television, each subsidiary was identified by its own name and as "A Pacific Telesis Company."

The break-up of AT & T and the development of telecommunications technology in the 1980s led to the development of the business of consulting on telecommunications, a business conducted by PTG subsidiaries and by consultants independent of the telephone companies. Pacific Bell presents its account teams as advisors, problem solvers, and strategic planners. They will design voice and data networks. Pac Tel Connection, a division of Pac Tel Communications...

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