Aero-Motive Co. v. US Aeromotive, Inc.

• Decision Date: 22 March 1996
• Docket Number: No. 4:94-CV-175.,4:94-CV-175.
• Citation: 922 F. Supp. 29
• Parties: AERO-MOTIVE COMPANY, Plaintiff, v. U.S. AEROMOTIVE, INC., Defendant.
• Court: U.S. District Court — Western District of Michigan

922 F. Supp. 29

AERO-MOTIVE COMPANY, Plaintiff, v. U.S. AEROMOTIVE, INC., Defendant.

No. 4:94-CV-175.

United States District Court, W.D. Michigan, Southern Division.

March 22, 1996.

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David G. Boutell, Flynn, Thiel, Boutell & Tanis, Kalamazoo, MI, James J. Hill, Emrich & Dithmar, Chicago, IL, for plaintiff.

Randall G. Litton, Price, Heneveld, Cooper, Dewitt, et al., Grand Rapids, MI, for defendant.

OPINION

QUIST, District Judge.

This is an action by Aero-Motive Company against U.S. Aeromotive, Inc. for false designation of origin, trade name, and service mark infringement and dilution of trade name under the Trademark (Lanham) Act of 1946, as amended, 15 U.S.C. §§ 1051, et seq., and for unfair competition under the common law of Michigan. Count IV of the complaint seeks injunctive relief for dilution of plaintiff's trade name under Michigan common law. The plaintiff does not pursue an award of monetary damages in this action.

Facts

Plaintiff Aero-Motive Company is a Michigan corporation with its principal manufacturing facilities in Kalamazoo, Michigan. Aero-Motive employs approximately 200 people in the manufacture and sale of its products. Aero-Motive distributes its products throughout the United States through a network of manufacturers, representatives, and dealers. Plaintiff also has direct sales representatives for larger customers. Plaintiff's sales range in the tens of millions of dollars annually. (E.g., Exhibit 62.) Plaintiff also allocates a substantial amount of money on an annual basis for advertising its products. (See Exhibit AE.)

Plaintiff began its business in 1939 and has continuously used "Aero-Motive" as a part of its corporate name. Plaintiff first registered the trademark "Aero-Motive" in 1947. Plaintiff began as a contract manufacturer, or "job shop." In or around 1957, plaintiff ceased to be a job shop, preferring to manufacture products of its own design.

Plaintiff updated its original registered mark when it obtained a federal registration number 838,729 in 1967 for the following products: cord reel, cable reels, hose reels, balance reels, spring motors, and self-propelled carriers for applying tension to elongated flexible elements, such as cable hoses, and power transmission lines. Plaintiff registered a second trademark, number 1,500,216, in 1988 for the mark "Aero-Motive" as applied to industrial mechanical manipulators and articulating balance arms. Both registered trademarks are incontestable.

Defendant, U.S. Aeromotive, Inc., is an Ohio corporation having its principal place of business in Dayton, Ohio. Defendant is engaged in the contract manufacturing business. It machines and assembles components utilized in the manufacture of automobiles and aircraft to customers' designs and specifications. Defendant has no significant product line of its own. Defendant also produces minority-owned business Department of Defense ground support equipment.

Defendant began its business in 1976 under the corporate name "Tape Tech, Inc." In 1985, Suhas Kakde, the current president of U.S. Aeromotive, joined the company as part owner. In 1991, defendant changed its name, following an employee contest, to its present name in order to acquire a name which more accurately described its actual business. The name, "U.S. Aeromotive, Inc.," was submitted for a clearance search to the Dayton, Ohio, intellectual property firm of Killworth, Gottman, Hagan and Schaeff, which rendered an opinion clearing the name for use by defendant in a letter dated July 10, 1991. Defendant's sales have totaled more than $5 million annually for the past decade. (Exhibit 8.)

On August 23, 1991, defendant, through the Killworth law firm, filed an intent to use trademark registration application in the U.S. Patent and Trademark Office, attempting to register the mark "U.S. Aeromotive." Plaintiff first became aware of defendant's application when it was published for opposition in the Official Gazette of the U.S. Patent and Trademark Office on March 22, 1994. Immediately upon learning of defendant's application, plaintiff filed an opposition in the Patent and Trademark Office. The opposition has been suspended because of the instant case.

Discussion

I. Plaintiff's Standing

Where the public is confused about the origin of goods or services due to the use of another's trademark, the holder of the mark is injured because its reputation has been placed beyond its control. International Kennel Club, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1091 (7th Cir.1988). Under federal law, proof of likelihood of confusion is all that is required to subject a trademark or trade name infringer to civil liability. See 15 U.S.C. §§ 1114(1)(a) and 1125(a)(1).

Defendant argues that plaintiff lacks standing under Article III of the United States Constitution because plaintiff has failed to establish that it has suffered an actual, as opposed to an abstract, injury. Defendant argues that there has been no confusion between the litigants' products to date and that plaintiffs have only voiced a concern that there could be a confusion between the litigants' products at some point in the future as the two companies evolve.

Plaintiff, however, alleged in its Complaint that at present the public is likely to be confused as to the origin of services and products offered by the litigants due to defendant's use of plaintiff's trademark. (Complaint at ¶ 20.) Furthermore, while plaintiff has admitted that there is no evidence of actual confusion to date, plaintiff maintains that the strength of its mark and its similarity to defendant's mark is enough to create a present likelihood of confusion between the companies. (Plaintiff's Post-Trial Brief at 2.) Thus, plaintiff has adequately and consistently alleged an actual injury. Whitmore v. Arkansas, 495 U.S. 149, 155, 110 S.Ct. 1717, 1723, 109 L.Ed.2d 135 (1990). As a result, plaintiff has standing under Article III to maintain its lawsuit.

II. Likelihood of Confusion

Count I of the Complaint is based upon 15 U.S.C. § 1114(1)(a). Count II of the Complaint is based upon 15 U.S.C. § 1125(a). "The test for unfair competition under § 1125(a) is identical to that for trademark infringement under 15 U.S.C. § 1114, whether there is a likelihood of confusion." Chrysler Corp. v. Newfield Publications, Inc., 880 F.Supp. 504, 509 (E.D.Mich.1995). Under the "likelihood of confusion test," the same factors are considered under both statutes. Wynn Oil Co. v. American Way Serv. Corp. (Wynn Oil II), 943 F.2d 595, 604 (6th Cir. 1991). Count III of the Complaint is based upon the Michigan common law regarding trademark and trade name infringement. Furthermore, the likelihood of confusion standard applicable under 15 U.S.C. § 1125(a) is also the standard for infringement under the Michigan common law.¹ Carson v. Here's Johnny Portable Toilets, Inc., 698 F.2d 831, 833 (6th Cir.1983).

In the Sixth Circuit, eight factors must be considered when determining if there is a likelihood of confusion between trademarks: (1) the strength of plaintiff's mark; (2) the relatedness of the products or services; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the marketing channels used; (6) the likely degree of purchaser care and sophistication; (7) the intent of the defendant in selecting its mark; and (8) the likelihood of expansion of the product lines using the mark. Homeowners Group, Inc. v. Home Marketing Specialists, Inc., 931 F.2d 1100, 1106 (6th Cir.1991); Countrywide Funding Corp. v. Countrywide Fin. Corp., 879 F.Supp. 771, 773 (W.D.Mich. 1994). While the determination of whether there is a likelihood of confusion is a mixed question of fact and law, the "determination of whether a given set of foundational facts establishes a likelihood of confusion is a legal conclusion." Homeowners, 931 F.2d at 1107.

There is no mathematical formula for weighing the evidence. A plaintiff need not prove all, or even most, of the above factors to recover for trademark infringement. Wynn Oil Co. v. Thomas (Wynn Oil I), 839 F.2d 1183, 1186 (6th Cir.1988). The analysis is intended to yield an answer to the ultimate question of "whether relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way." Homeowners Group, 931 F.2d at 1107.

A. The Strength of Plaintiff's Mark

The Sixth Circuit has held that a mark is considered strong "if it is highly distinctive, i.e., if the public readily accepts it as the hallmark of a particular source; it can become so because it is unique, because it has been the subject of wide and intensive advertisement, or because of a combination of both." Homeowners, 931 F.2d at 1107 (quoting Frisch's Restaurant, Inc. v. Shoney's Inc., 759 F.2d 1261, 1264 (6th Cir. 1985)). In short, the Sixth Circuit uses two factors when determining a mark's distinctiveness within the public marketplace, i.e., the strength of the mark: (1) the mark's inherent distinctiveness and (2) the mark's "acquired distinctiveness" (through advertising, reputation, and the like). See Homeowners, 931 F.2d at 1107; cf. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769, 112 S.Ct. 2753, 2757-58, 120 L.Ed.2d 615 (1992) (calling a mark's acquired distinctiveness its "secondary meaning").

A mark's inherent distinctiveness is usually classified according to one of five categories, in order of increasing protection accorded: (1) generic; (2) descriptive; (3) suggestive; (4) fanciful; and (5) arbitrary. Two Pesos, 505 U.S. at 768, 112 S.Ct. at 2757. The Second Circuit has defined these terms as follows:

A generic mark is generally a common description of goods and is ineligible for trademark protection. A descriptive mark describes a product's features, qualities or ingredients in ordinary language, and may be protected only if secondary meaning

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