Attrezzi, LLC v. Maytag Corp.

• Decision Date: 27 January 2006
• Docket Number: No. 05-2098.,No. 05-2181.,05-2098.,05-2181.
• Citation: 436 F.3d 32
• Parties: ATTREZZI, LLC, Plaintiff, Appellee/Cross-Appellant, v. MAYTAG CORPORATION, Defendant, Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — First Circuit

436 F.3d 32

ATTREZZI, LLC, Plaintiff, Appellee/Cross-Appellant, v. MAYTAG CORPORATION, Defendant, Appellant/Cross-Appellee.

No. 05-2098.

No. 05-2181.

United States Court of Appeals, First Circuit.

Heard November 10, 2005.

Decided January 27, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Edward A. Haffer with whom Sheehan Phinney Bass & Green, P.A. was on brief for plaintiff.

James G. Goggin with whom Peter S. Black and Verrill Dana, LLP were on brief for defendant.

Before BOUDIN, Chief Judge, SELYA, Circuit Judge, and STAHL, Senior Circuit Judge.

BOUDIN, Chief Judge.

Attrezzi, LLC ("Attrezzi, LLC") a New Hampshire limited liability company, operates a single retail store of the same name in Portsmouth, New Hampshire, specializing in fine kitchen products and services. The proprietor, Jennifer Slade, opened her shop's doors in June 2002, and at the same time launched a website (www.attrezzinh.com) to support an anticipated mailorder business. Slade obtained a New Hampshire trademark registration for "Attrezzi" in November 2003.

Maytag, a well-known appliance maker, selected the same word, "Attrezzi," in the spring of 2003 as the name for a new line of small electric kitchen appliances that Maytag was preparing to launch. Attrezzi LLC's line of products includes such appliances although it does not carry Maytag's products. Before launching its line, Maytag learned through the customary trademark investigation that Attrezzi LLC was using the term for its business, and Maytag's in-house trademark counsel warned that this created "a problem."

After higher management asked its in-house counsel to "take another look," counsel reversed his position, and in March 2003 Maytag filed an "intent-to-use" application with the Patent and Trademark Office ("PTO") to register Attrezzi as its trademark for small electric appliances. The next month Maytag began to promote the name as a sub-brand of "Jenn-Air," its "high-end house mark"; it announced that its "Jenn-Air Attrezzi" line would include small electric kitchen appliances and might extend to "our own coffee, [b]ar ware, cups, glasses, [and] cutlery."

The PTO eventually approved Maytag's application (subject to opposition) and gave public notice of this action. Attrezzi LLC wrote to Maytag complaining of Maytag's use of the term Attrezzi and filed a "use" service mark application of its own, with the PTO, to register the term for retail store and online use for the sale of kitchen and dining goods. Maytag responded to Attrezzi LLC that there was no likelihood of customers confusing the source of Jenn-Air Attrezzi branded products with the Attrezzi store.

In turn, Attrezzi LLC filed suit, in October 2003, in federal district court in New Hampshire, charging Maytag with violating the unfair competition provision of the Lanham Act, 15 U.S.C. § 1125(a) (2000),¹ and New Hampshire's trademark infringement, unfair competition, and trademark dilution statutes, N.H.Rev.Stat. Ann. §§ 350-A:11-14, 358-A:2, 350-A:12 (1995 & Supp.2005). Attrezzi LLC requested a jury trial and sought declaratory relief, a permanent injunction against the use of the term Attrezzi, and enhanced damages, attorneys' fees and costs.

Prior to trial, the district court denied Attrezzi LLC's motion for a preliminary injunction and Maytag's motion for summary judgment. It also denied Maytag's motion to strike Attrezzi LLC's jury demand, reserving the question until "after the case has been completed," at which point, "[i]f [the court] determine[s] that plaintiff does not have a right to a jury trial, [it] w[ould] treat the jury's verdict as advisory pursuant to Fed.R.Civ.P. 39(c)." In the meantime, in September 2004, Attrezzi LLC filed an opposition before the PTO to Maytag's application to register Attrezzi.

After a five-day trial in February 2005, the jury found Maytag to have willfully infringed Attrezzi LLC's trademark and to have caused damages of $5,400 (the cost of Attrezzi LLC's opposition to Maytag's application before the PTO). After post-trial proceedings, the district court granted a permanent injunction against Maytag's use of the mark Attrezzi (but allowed it a 12-month period to sell off stock so marked) and awarded double damages ($10,800) and attorneys' fees.

Maytag now appeals from the judgment against it. Attrezzi LLC cross-appeals, opposing the 12-month sell-off period and the denial of certain litigation expenses. This court granted unopposed motions for a stay of the injunction pending appeal and for expedited consideration of the appeals. We begin with Maytag's claims of error—that there was no right to a jury trial; that even if there were, the evidence did not permit findings necessary to liability; and that the provision of the New Hampshire statute providing for the award of attorneys' fees and enhanced damages is preempted by the Lanham Act.

The jury trial issue deserves attention first because, in its post-trial proceedings, the district judge said that in a bench trial, he would have decided the case in Maytag's favor. His reason was that, if he were the trier of fact, he would have found the evidence insufficient in the present circumstances to establish a likelihood of customer confusion as between Attrezzi and Jenn-Air Attrezzi. Had the jury trial been disallowed, we would be reviewing the evidence from the opposite perspective.

Maytag made a timely objection to a jury trial, which it renewed in its motions for judgment as a matter of law. Its main argument was that the injunctive action was equitable and that no evidence supported a claim for damages. An infringement claim for damages is a common-law rather than an equitable claim and such a claim would be triable to a jury even if joined, as here, with a request for equitable relief. Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 508-11, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959).

Here, Maytag's attack is solely on the sufficiency of the evidence presented at trial to show monetary damages. We are thus spared any consideration of how matters stood at the pleading and summary judgment stages. Compare Laskaris v. Thornburgh, 733 F.2d 260, 264 (3d Cir.), cert. denied, 469 U.S. 886, 105 S.Ct. 260, 83 L.Ed.2d 196 (1984), with Hildebrand v. Bd. of Trs. of Mich. State Univ., 607 F.2d 705, 709-10 (6th Cir.1979).

Since the jury in this case found damages, Maytag's attack must fail unless "reasonable persons could not have reached the conclusion that the jury embraced." Sanchez v. P.R. Oil Co., 37 F.3d 712, 716 (1st Cir.1994). As we have said elsewhere, the test "is a stringent one":

"[W]e must examine the evidence in the light most favorable to the plaintiff and determine whether there are facts and inferences reasonably drawn from those facts which lead to but one conclusion—that there is a total failure of evidence to prove plaintiff's case." Mayo v. Schooner Capital Corp., 825 F.2d 566, 568 (1st Cir.1987) (quotation and citation omitted). In reviewing the record, we will evaluate neither the credibility of the witnesses nor the weight of the evidence. Santiago-Negron v. Castro-Davila, 865 F.2d 431, 445 (1st Cir.1989).

Vázquez-Valentín v. Santiago-Díaz, 385 F.3d 23, 29 (1st Cir.2004), petition for cert. filed, 73 U.S.L.W. 3604 (U.S. Feb. 11, 2005) (No. 04-1322).

In this instance, Maytag argues that there was never any basis for Attrezzi LLC's claim of monetary damages because Attrezzi LLC introduced no evidence of lost profits or damage to its goodwill. And, although Attrezzi LLC did claim and obtained damages reflecting the expense of opposing Maytag's PTO application, Maytag says that this expense was unrecoverable because full relief including an injunction could have been granted by the district court, making it unnecessary for Attrezzi LLC to oppose Maytag's PTO application.²

It is true as a general matter that a patently unnecessary expense would be avoidable damage and so not collectible. See Restatement (Second) of Torts § 918 (1979). Maytag argues that the opposition was unnecessary because the district court could have granted injunctive relief. However, fearing the repercussions of a PTO grant for the infringement claim in district court, a competent lawyer could sensibly oppose Maytag's PTO application. It is a matter of reasonable judgment whether the precaution was legitimate; nothing indicates that Attrezzi LLC's choice was unreasonable.

This brings us to the central issue on the appeal, namely, Maytag's claim that at trial there was insufficient evidence of a protectable mark and of likely customer confusion to permit a verdict for Attrezzi LLC. Although our review of the district court's rejection of the Rule 50(b) motions is de novo, the question is whether any rational jury could have found for Attrezzi LLC on the evidence presented. Sanchez, 37 F.3d at 716.

Under governing case law, a trade name is safeguarded by the Lanham Act only if the mark is "distinctive," a term of art meaning that the mark must be arbitrary or "suggestive" or, if merely "descriptive," must have acquired "secondary meaning."³ An arbitrary or suggestive term, being "inherently distinctive," can be appropriated by a first user, while a descriptive term is subject to such appropriation "only if it has acquired `secondary meaning' by which consumers associate it with a particular producer or source." Boston Beer Co. Ltd. P'ship v. Slesar Bros. Brewing Co., 9 F.3d 175, 180 (1st Cir.1993).

The jury found specially that Attrezzi LLC's use of the name Attrezzi for its goods was a suggestive, rather than a descriptive use, and that in any event the name had acquired secondary meaning. Both findings are treated as determinations of fact, Boston Beer, 9 F.3d at 180, and it is enough to qualify the name for protection if either one is established. Here, a rational jury could find the Attrezzi mark, as used to identify a service selling kitchen appliances, utensils, and dinnerware, to be suggestive.

Under the ...