American Diabetes Ass'n v. National Diabetes Ass'n

• Decision Date: 02 July 1981
• Docket Number: Civ. A. No. 81-0114.
• Citation: 533 F. Supp. 16
• Parties: AMERICAN DIABETES ASSOCIATION, INC. and American Diabetes Association Greater Philadelphia Affiliate, Inc. v. NATIONAL DIABETES ASSOCIATION, Dennis J. Connor and Suzanne F. Mottola.
• Court: U.S. District Court — Eastern District of Pennsylvania

533 F. Supp. 16

AMERICAN DIABETES ASSOCIATION, INC. and American Diabetes Association Greater Philadelphia Affiliate, Inc. v. NATIONAL DIABETES ASSOCIATION, Dennis J. Connor and Suzanne F. Mottola.

Civ. A. No. 81-0114.

United States District Court, E. D. Pennsylvania.

July 2, 1981.

COPYRIGHT MATERIAL OMITTED

Manny D. Pokotilow, Philadelphia, Pa., for plaintiffs.

Malcolm H. Waldron, Jr., Philadelphia, Pa., for defendants.

FINDINGS

McGLYNN, District Judge.

This action for trademark infringement and unfair competition, arising under common law and section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), respectively, is presently before the Court on plaintiffs' motion for preliminary injunction. The basic question presented is whether defendants' use of the name National Diabetes Association in solicitations for contributions to its charitable organization violates the Lanham Act and infringes upon a trademark of plaintiffs,¹ American Diabetes Association, Inc. and American Diabetes Association Greater Philadelphia Affiliate, Inc. (collectively the American Diabetes Association). For the reasons discussed below, plaintiffs' motion for preliminary injunction is granted.

Plaintiffs, as the leading charitable organizations in the diabetes field, have been engaged in raising money to fund research, render services, and inform the public for forty years under the name American Diabetes Association. Defendant Dennis J. Connor is part owner of a weight reduction organization known as Weight Masters, located in Philadelphia, Pennsylvania. In the fall of 1979 Connor requested from John Graham, the Executive Director of the American Diabetes Association Greater Philadelphia Affiliate, Inc., an endorsement of the Weight Masters' program by the American Diabetes Association. In return, Weight Masters would pay to the American Diabetes Association twenty dollars for each Weight Masters program that was sold as a result of using the American Diabetes Association endorsement. Through Graham, the American Diabetes Association informed Connor that, because Weight Masters was a commercial enterprise, the American Diabetes Association would not endorse it.

In the summer of 1980, Connor and his daughter, defendant Suzanne F. Mottola, formed the defendant National Diabetes Association. In September of 1980, defendants applied for registration of the National Diabetes Association as a charitable organization under the regulations of the Commonwealth of Pennsylvania. Pending the outcome of the application for registration, defendants began to solicit funds by telephone under the designation National Diabetes Association. To date, defendants have only solicited funds and have not provided any services with those funds.

Beginning in October of 1980, plaintiff began to receive daily complaints from people who had confused solicitations by the National Diabetes Association with those by the American Diabetes Association. Plaintiffs then instituted the present action seeking a permanent injunction enjoining defendants from using the designation National Diabetes Association in connection with the solicitation of funds and treble damages for harm sustained as a result of loss of goodwill and other consequences of defendants' acts.

At a hearing on plaintiffs' motion for preliminary injunction held on March 13, 1981, defendants agreed to cease all solicitations pending a ruling on defendants' application for registration as a charitable organization in the Commonwealth of Pennsylvania. The National Diabetes Association was so registered in May of 1981, and the hearing was reconvened on June 4, 1981.

A plaintiff seeking a preliminary injunction must show that: 1) irreparable harm will result if the relief requested is not granted to maintain the status quo until final adjudication and 2) there exists a reasonable probability of success on the merits. Continental Group, Inc. v. Amoco Chemical Group, 614 F.2d 351 (3d Cir. 1980). In addition, the Court must weigh the possibility of harm to the opposing party, and when relevant, the harm to the public. Id.

LIKELIHOOD OF SUCCESS

As a preliminary determination, the Court must decide whether the designation American Diabetes Association is entitled to trademark protection. Under common law and the Lanham Act, a term for which trademark protection is claimed will fit within the following classifications: 1) generic or common descriptive, 2) merely descriptive, 3) suggestive, and 4) arbitrary or fanciful. See Miller Brewing Co. v. G. Heilemen Brewing Co., 541 F.2d 75 (7th Cir. 1977), cert. denied, 434 U.S. 1025, 98 S.Ct. 751, 54 L.Ed.2d 772 (1978); Walker-Davis Publications, Inc. v. Penton/IPC, Inc., 509 F.Supp. 430 (E.D.Pa.1981).

A generic or commonly descriptive term is one which is commonly used to describe the goods or services. These cannot become trademarks under any circumstances because appropriation of such generally descriptive terms would grant the owner of the mark a monopoly and prevent a competitor from adequately describing his goods or services. A merely descriptive term specifically describes a characteristic of the service. It can, by acquiring customer recognition and secondary meaning, achieve protectible status as a valid trademark. Suggestive and fanciful terms are those which are inherently distinctive because they are so far removed from mere descriptions of the goods or services. Both can be protected without proof of a secondary meaning.

The designation American Diabetes Association is not a formally registered mark, nor is it inherently distinctive. Therefore, plaintiffs are required to prove that the mark can be protected and that it has achieved a secondary meaning. The term American is geographically descriptive of the market within which the American Diabetes Association functions. Although no one is entitled to claim an exclusive right to a geographical term in common use, one who has created a secondary meaning for a geographical word may challenge the trademark use thereof by others.

Secondary meaning is buyer association. John Wright, Inc. v. Casper Corp., 419 F.Supp. 292, 318 (E.D.Pa.1976), rev'd in part on other grounds sub nom. Donsco, Inc. v. Casper Corp., 587 F.2d 602 (3d Cir. 1978). The question is whether the relevant class of contributors associates the American Diabetes Association with the charitable services it performs. In determining whether the designation has achieved a secondary meaning, courts have considered: 1) the length and manner of its use, 2) the nature and extent of advertising and promotion, and 3) other efforts at creating a conscious connection in the public's mind between the designation and the service. Id.

The plaintiffs have been using the American Diabetes Association designation for forty years. At the hearing they showed a long history of advertising in magazines and on television as well as extensive promotional efforts aimed at creating a nexus in the public's mind between the American Diabetes Association and the services they provide. These factors indicate that there is a reasonable likelihood that plaintiffs will be able to show that their designation has achieved secondary meaning and is therefore legally protectible.

For an injunction to issue in an action for trademark infringement and unfair competition, the plaintiff, after establishing that its name is entitled to trademark protection, must show that a likelihood of confusion will exist as to the source of the goods or services if the defendant continues to use defendant's designation. American Express Co. v. Pan American Express, 509 F.Supp. 348 (E.D.Pa.1981). A showing of actual confusion, although probative, is not necessary.

Likelihood of confusion exists whenever buyers who encounter the mark are likely to assume that the product or service is associated with the source of a different product or service. Scott Paper Co. v. Scotts Liquid Gold, Inc., 589 F.2d 1225 (3d Cir. 1978). The factors courts consider in determining the likelihood of confusion are:

(1) the degree of resemblance between the trademark and the other's designation in: 1) appearance, 2) pronunciation, 3) translation of the words involved, and 4) suggestiveness, connotation or meaning;

(2) intent of the actor in adopting and using the designation;

(3) the similarity of the circumstances and conditions surrounding the purchase of the goods and services;

(4) the degree of care likely to be exercised by purchasers.

American Express Co. v. Pan American Express, 509 F.Supp. 348 (E.D.Pa.1981); ...