Am. Nat'l Ins. Co. v. Am. Nat'l Inv. Advisors, LLC

• Decision Date: 21 November 2014
• Docket Number: Case No. 11-cv-4016
• Parties: American National Insurance Company, a Texas Insurance Company, Plaintiff, v. American National Investment Advisors, LLC, an Illinois Limited Liability Company, Defendant.
• Court: U.S. District Court — Northern District of Illinois

American National Insurance Company,a Texas Insurance Company, Plaintiff, v. American National Investment Advisors, LLC,an Illinois Limited Liability Company, Defendant.

Case No. 11-cv-4016

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

November 21, 2014

Judge John Z. Lee

MEMORANDUM OPINION AND ORDER

In October 2009, Defendant American National Investment Advisors, LLC ("ANIA") began offering investment advisory and financial planning services to clients in the Chicago area under the name "American National." By that time, however, Plaintiff American National Insurance Company ("ANICO"), an insurance company based in Texas, had already registered the trademark "American National," and related permutations of "American National," for use in connection with the various insurance and financial services it offered. ANICO requested that ANIA cease from using "American National" in connection with its business. When ANIA refused, ANICO commenced this lawsuit, asserting claims for trademark infringement and false designation of origin pursuant to the Lanham Act, 15 U.S.C. §§ 1114, 1125(a); trademark infringement and unfair competition under Illinois common law; violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/1; and violations of the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/1.

Having considered the evidence presented during the three-day bench trial as well as the numerous post-trial submissions, the Court finds that Defendant ANIA's use of "AmericanNational" infringes upon Plaintiff ANICO's "American National" mark as set forth in Registration No. 1,837,021. As discussed below, the Court finds no sufficiently compelling evidence to invalidate this registration. Furthermore, the similarity of ANIA's mark to ANICO's '021 mark, coupled with the similarity of goods and services sold under the parties' respective marks, creates a likelihood of consumer confusion sufficient to support findings of infringement and false designation of origin under the Lanham Act. Having satisfied the Lanham Act test, ANICO also succeeds on its Illinois statutory and common law claims for trademark infringement, unfair competition, and deceptive trade practices. Accordingly, the Court enters judgment in favor of ANICO and against ANIA as to Counts I through V of the Complaint with respect to the mark "American National" as set forth in Registration No. 1,837,021. As for ANICO's other federally registered trademarks, the Court finds that ANICO has failed to prove by a preponderance of the evidence that a likelihood of confusion exists with respect to these marks and enters judgment in favor of ANIA in this regard.

I. Procedural History

On June 13, 2011, ANICO filed a complaint against ANIA, which asserted five causes of action:

I. Federal trademark infringement in violation of Section 32 of the Lanham Act, 15 U.S.C. § 1114, for using a counterfeit or colorable imitation of ANICO's federally registered "American National" marks;

II. Federal unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), for creating a false designation of origin or misleading representations by using the mark "American National";

III. State common law trademark infringement, for using ANICO's existing "American National" marks in a way likely to cause confusion, mistake or deception to the public;IV. State statutory and common law unfair competition claims pursuant to the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 505/1-12 and 815 Ill. Comp. Stat. 510/1-7 respectively, and Illinois common law, for creating a likelihood of confusion, mistake, or deception with the public as the origin of ANIA's goods and services; and

V. State statutory trademark dilution in violation of the Illinois Anti-Dilution Act, 765 Ill. Comp. Stat. 1035/15, for diluting the distinctiveness and identifiability of ANICO's "American National" marks.

Dkt. 1 (Compl.) at 4-7. The complaint sought recovery of lost profits, treble damages, attorney's fees, and an injunction regarding ANIA's alleged unauthorized use of the name "American National." Id. at 8-9.

On July 12, 2011, ANIA filed its answer to the complaint and raised five affirmative defenses, asserting that: (1) the mark "American National" was merely descriptive, mis-descriptive, geographically descriptive, or otherwise lacking in distinctiveness; (2) the complaint failed to state a claim upon which relief could be granted; (3) the claims were barred by the doctrines of laches and estoppel; (4) ANICO abandoned its '021 mark; and (5) ANICO perpetrated a fraud on the USPTO when registering the '021 mark. Dkt. 10 (Ans.) at 9-13.

On July 5, 2012, ANIA asked the Court to stay these proceedings pending the outcome of the USPTO's cancellation proceeding for one of the registered marks at issue.¹ Dkt. 43. In that proceeding, ANIA had petitioned the USPTO's Trademark Trial and Appeal Board ("TTAB") to cancel the mark. Id. at 4. This motion was denied.² Dkt. 46.

ANICO subsequently moved for summary judgment on ANIA's first, third, fourth, and fifth affirmative defenses. Dkt. 72. The Court granted summary judgment in favor of ANICO asto the first affirmative defense, holding that ANICO's '021 mark is incontestable. ANIA's third affirmative defense was withdrawn, and the remainder of the motion was denied. Dkt. 97.

The Court then conducted a three-day bench trial on ANICO's claims and ANIA's remaining affirmative defenses. In its post-trial brief, ANICO withdrew the claim of state trademark dilution asserted in Count V of its complaint, which was based upon an Illinois statute that had been repealed in 1998. Dkt. 103 (Pl.'s Post-Trial Br.) at 2.

II. Standard of Decision

Where an action is "tried on the facts without a jury," Fed. R. Civ. P. 52 requires the district court to "find the facts specially and state its conclusions of law separately." Fed. R. Civ. P. 52(a); see Khan v. Fatima, 680 F.3d 781, 785 (7th Cir. 2012). "The district court must 'explain the grounds' of its decision and otherwise demonstrate a 'reasoned, articulate adjudication.'" Susan Patterson Interiors, Inc., v. Tobias, No. 11-C-221, 2012 WL 4578694, at *3 (N.D. Ill. Oct. 1, 2012) (quoting Aprin v. U.S., 521 F.3d 769, 776 (7th Cir. 2008)).

In rendering its decision in this case, the Court has considered the admissible testimony and documentary evidence offered at trial. In so doing, the Court has considered the weight to be given to the evidence and has assessed the credibility of the witnesses in light of their demeanor, their ability to see, hear, and know the matters about which they testified, and any potential for bias. Furthermore, the Court has considered the memoranda submitted by the parties after the trial and the legal and factual arguments set forth therein.

III. The Trial

During the trial, ANICO presented evidence of the validity of its trademarks and the likelihood of confusion caused by ANIA's use of the name "American National." ANIAdisputed the validity of ANICO's '021 registration on the grounds of abandonment and fraud, and further argued against a likelihood of confusion caused by ANIA's use of its mark.

A. Fact Witnesses

ANICO called Deborah Janson, Dwain Akins, and Max Davenport as fact witnesses. Ms. Janson is vice president of corporate planning at ANICO and provided testimony regarding ANICO's financial products, entity structure and operations, and market strength. Mr. Akins is a senior vice president of corporate relations and chief compliance officer at ANICO. He attested to ANICO's financial products, entity structure, and operations. Mr. Davenport, a multiple line general agent at ANICO, testified regarding ANICO's financial products and the activities of ANICO's agents.

For its part, ANIA presented Peter C. Claeys. Mr. Claeys is the founder and president of ANIA, and testified regarding ANIA's financial services and operations.

B. Expert Witnesses

ANICO presented Timothy C. Pfeifer as an expert witness. Mr. Pfeifer is an actuarial consultant in the area of insurance and investment products. He opined as to the likelihood of consumer confusion caused by use of the "American National" mark.

ANIA called Thomas J. Maronick as an expert witness. Dr. Maronick is a professor of marketing at Towson University and a former director of impact evaluation in the Bureau of Consumer Protection at the Federal Trade Commission. He testified regarding the results of a consumer survey that he performed to evaluate the likelihood of consumer confusion caused by ANIA's use of the name "American National."

On rebuttal, ANICO tendered Gabriel M. Gelb, a professional market researcher, as an expert witness. Mr. Gelb testified regarding survey research generally and Dr. Maronick's survey in particular.

Based upon the evidence admitted at trial and the post-trial submissions of the parties, the Court enters the following findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52(a).³

IV. Factual Background

A. ANICO

ANICO is an insurance company founded in 1905 and headquartered in Galveston, Texas. Dkt. 92 (Stipulations) at 12. It creates insurance and financial products and provides other financial services tied to its core insurance business. Id. Over the years, ANICO has expanded its offerings to include a wider array of other financial and investment-related products, including variable annuities and other variable products, in-house funds bundled into its products, retail mutual funds, securities brokerage, and investment and financial consulting services. Id. at 12-13.

ANICO has offered these products through a somewhat complicated network of subsidiaries, licensees, and agents. According to Mr. Akins of ANICO, the United States Securities and Exchange Commission ("SEC") and applicable state regulations generally...