Oriental Financial Group, Inc. v. Cooperativa De Ahorro Y Credito Oriental, 080316 FED1, 15-1009

Docket Nº:15-1009
Opinion Judge:LIPEZ, Circuit Judge.
Party Name:ORIENTAL FINANCIAL GROUP, INC., ORIENTAL FINANCIAL SERVICES CORP., ORIENTAL BANK AND TRUST, Plaintiffs, Appellants, v. COOPERATIVA DE AHORRO Y CREDITO ORIENTAL, Defendant, Appellee.
Attorney:Roberto C. Quiñones-Rivera, with whom Leslie Yvette Flores and McConnell Valdés LLC were on brief, for appellants. Carla Ferrari-Lugo, with whom Veronica Ferraiuoli-Hornedo was on brief, for appellee.
Judge Panel:Before Barron, Hawkins, and Lipez, Circuit Judges.
Case Date:August 03, 2016
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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ORIENTAL FINANCIAL GROUP, INC., ORIENTAL FINANCIAL SERVICES CORP., ORIENTAL BANK AND TRUST, Plaintiffs, Appellants,

v.

COOPERATIVA DE AHORRO Y CREDITO ORIENTAL, Defendant, Appellee.

No. 15-1009

United States Court of Appeals, First Circuit

August 3, 2016

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. José Antonio Fusté, U.S. District Judge]

Roberto C. Quiñones-Rivera, with whom Leslie Yvette Flores and McConnell Valdés LLC were on brief, for appellants.

Carla Ferrari-Lugo, with whom Veronica Ferraiuoli-Hornedo was on brief, for appellee.

Before Barron, Hawkins, [*] and Lipez, Circuit Judges.

LIPEZ, Circuit Judge.

Four years ago, we affirmed a judgment that a Puerto Rico credit union (in Spanish, a "cooperativa") infringed on the trademark rights of a competing bank by adopting a confusingly similar logo and trade dress. Oriental Fin. Grp., Inc. v. Cooperativa de Ahorro y Crédito Oriental, 698 F.3d 9 (1st Cir. 2012) ("Oriental I"). In this subsequent appeal, we consider whether the credit union also infringed the bank's word mark and trade name ORIENTAL with its competing marks COOP ORIENTAL, COOPERATIVA ORIENTAL, ORIENTAL POP, and CLUB DE ORIENTALITO. Notwithstanding the similarity between them, the district court found that the latter marks did not infringe upon the former, and refused to enjoin their use.

With regard to COOP ORIENTAL, COOPERATIVA ORIENTAL, and ORIENTAL POP, the district court's determination of non-infringement was clearly erroneous. We reverse that portion of the judgment and remand for reconsideration of whether the injunction should be expanded to remedy the infringing use of those marks. We conclude, however, that the district court's determination is supportable as to CLUB DE ORIENTALITO, and affirm that portion of the judgment.

I. A. Competing financial institutions

Plaintiffs-appellants Oriental Financial Group, Inc., 1Oriental Bank and Trust, and Oriental Financial Services Corp. (collectively, "Oriental Group") originated in eastern Puerto Rico and expanded to offices and retail locations throughout the island. It has used the word mark ORIENTAL to market its financial services since 1964.2 The mark means "eastern" in both Spanish and English. Although it originally signaled Oriental Group's geographic origins, it is now used as an arbitrary mark3 to distinguish its financial services from others in the marketplace. Oriental Group also uses a logo consisting of the word ORIENTAL in orange letters and distinctive orange trade dress. Oriental I, 698 F.3d at 14. Defendant-appellee Cooperativa de Ahorro y Crédito Oriental ("Cooperativa") has used ORIENTAL in its full name since 1966, and began using a shortened version, COOP ORIENTAL, in 1995. For many years its advertising was "de minimis, " id. at 23, and it maintained only a few branches in the eastern part of the island. However, starting in 2008, Cooperativa substantially expanded its geographic reach, changed its branding, and began an advertising campaign at roughly the same time. Between 2008 and 2010, Cooperativa added branches in San Juan and other regions of Puerto Rico, becoming a competitor to Oriental Group in such financial services as checking and savings accounts, certificates of deposit, IRAs, and credit cards. See id. at 13-14; Oriental Fin. Grp. Inc. v. Cooperativa de Ahorro y Crédito Oriental, 750 F.Supp.2d 396, 400-01 (D.P.R. 2010) ("2010 Injunction Order"). In 2009, it rebranded itself and adopted new trade dress, similar to Oriental's in tone and its use of the color orange. Oriental I, 698 F.3d at 13-14; 2010 Injunction Order, 750 F.Supp.2d at 401. As part of the rebranding, it also adopted a black, brown and orange logo featuring the COOP ORIENTAL word mark, with the word ORIENTAL in larger type than COOP. 2010 Injunction Order, 750 F.Supp.2d at 401. At the same time, it initiated "an expansive advertising campaign in newspapers[, ] television . . . [and] billboards." Oriental I, 698 F.3d at 14. Soon thereafter, several incidents of consumer confusion occurred in which consumers wrongly believed that Oriental Group and Cooperativa were affiliated. Id. at 19. Oriental Group then brought this action on May 21, 2010.

B. The district court proceedings

Oriental Group sued Cooperativa for, inter alia, service mark4 infringement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).5 Oriental Group alleged that Cooperativa's COOP ORIENTAL word mark, and its logo and trade dress, were confusingly similar to its ORIENTAL mark. Oriental I, 698 F.3d at 14. It asked for injunctive relief against Cooperativa to prevent the use of, inter alia, "any composite trademark that includes the term ORIENTAL." Id. (emphasis added). This claim did not include Cooperativa's full name, which Oriental concedes is non-infringing. Id. at 20.

After a preliminary injunction hearing in 2010, which the parties subsequently agreed to treat as a bench trial on the issue of a permanent injunction, the district court made findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). 2010 Injunction Order, 750 F.Supp.2d at 400. The court found that Oriental Group's "mark is strong in Puerto Rico, " that it and Cooperativa "offer many of the same services to some of the same geographical regions in Puerto Rico, " and "advertise in the same newspapers, " and that incidents involving actual consumer confusion took place beginning in 2010. Id. at 403-04. Building on those findings, the district court concluded that Cooperativa's "new logo -- in particular, the prominent placement of the word 'Oriental' -- and its new color scheme, " in "combination, " "infringe[] [Oriental Group's] service mark under both federal and Puerto Rico law." Id. at 406.

In determining whether an injunctive remedy was appropriate, the court considered the factors outlined in eBay Inc.

v. MercExchange, L.L.C., 547 U.S. 388 (2006). See eBay, 547 U.S. at 391 (listing equitable considerations that must be considered before a permanent injunction may be issued); Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 34 (1st Cir. 2011) (applying the eBay factors in the trademark context). After determining that Oriental Group suffered ongoing and irreparable harm from the infringement, that the balance of hardships favored Oriental Group, and that the public interest would be served by an injunction, see eBay, 547 U.S. at 391, the court enjoined Cooperativa from using its infringing orange trade dress and logo, 2010 Injunction Order, 750 F.Supp.2d at 405.

Though it was not clear on this point, the district court apparently believed that Oriental Group was challenging only Cooperativa's logo and trade dress, and had not challenged its use of the word mark COOP ORIENTAL. Oriental I, 698 F.3d at 16 (citing 2010 Injunction Order, 750 F.Supp.2d at 404, 406). Consistent with that view of the case, the district court never analyzed the likelihood of confusion based on the word mark alone, and allowed Cooperativa to "revert to the mark and dress it used prior to 2009, " which incorporates COOP ORIENTAL. 2010 Injunction Order, 750 F.Supp.2d at 406. Its order also left Cooperativa free to use the word mark in print and radio advertising. Cooperativa subsequently registered COOP ORIENTAL and COOPERATIVA ORIENTAL with the United States Patent and Trademark Office (PTO).

C. The first appeal

Unsatisfied, Oriental Group moved to amend or alter the injunction to proscribe all use of COOP ORIENTAL and COOPERATIVA ORIENTAL, even when not embedded in the infringing logo or accompanied by the infringing trade dress. Oriental I, 698 F.3d at 15. It noted that consumers might encounter the word marks abstracted from logos or trade dress in radio advertisements and news media. The district court denied the motion on the ground that Oriental Group had not shown a likelihood of confusion based on the word marks alone. The court reasoned that Oriental Group's evidence of consumer confusion was limited to the time following the 2009 introduction of Cooperativa's new logo, whereas Cooperativa's use of its shortened names, COOP ORIENTAL and COOPERATIVA ORIENTAL, had begun in 1995. Id. The district court entered final judgment, and Oriental Group timely appealed.6

In the first appeal, as here, the only issue was the likelihood of confusion. We affirmed the judgment in part and vacated in part. We held that "to the extent that the district court concluded that Oriental did not challenge the COOP ORIENTAL mark divorced from the 2009 orange trade dress, it was incorrect." Id. at 16. To the contrary, "[t]he record is clear that Oriental challenged not only Cooperativa's use of the 2009 logo and trade dress, but also Cooperativa's use of the COOP ORIENTAL mark and similar...

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