Beacon Mut. Ins. Co. v. Onebeacon Ins. Group
| Decision Date | 14 November 2003 |
| Docket Number | C.A. No. 01-354S. |
| Citation | 290 F.Supp.2d 241 |
| Parties | The BEACON MUTUAL INSURANCE COMPANY, Plaintiff, v. ONEBEACON INSURANCE GROUP, Defendant. |
| Court | Rhode Island Supreme Court |
Steven E. Snow, Michael A. Gamboli, Partridge, Snow & Hahn LLP, Providence, RI, for Plaintiff.
William M. Dolan, III, Brown Rudnick Berlack Israels LLP, Providence, RI, Martha J. Collins, Steven A. Kaufman, Ropes & Gray, Boston, MA, for Defendant.
DECISION AND ORDER
In this trademark infringement action, the Court considers whether the use of the name "OneBeacon" and a lighthouse logo violates the Lanham Act and Rhode Island's common and statutory trademark and service mark laws. Defendant One-Beacon Insurance Group moves for summary judgment on all claims brought by the Plaintiff The Beacon Mutual Insurance Company. For the following reasons, the motion is granted.
The Beacon Mutual Insurance Company ("Plaintiff" or "Beacon") is the largest writer of workers' compensation insurance in the state of Rhode Island, and has used the name "The Beacon Mutual Insurance Company" and a lighthouse logo ("Plaintiff's Marks") since 1992. All employers with at least one employee in Rhode Island must purchase workers' compensation insurance. See R.I. Gen. Laws § 28-29-6. Since its inception as the Workers' Compensation Insurance Fund in 1990, a state-chartered provider of workers' compensation insurance, see n. 9 infra, Plaintiff has increased its promotional spending to retain and attract customers: from $5,000 in 1992 to well over $1,000,000 in 2000 and 2001. Notwithstanding these efforts, however, Plaintiff's share of the workers' compensation market in Rhode Island has fluctuated over the past decade: in 1994, Plaintiff had almost 85% of the market, but by 2001, Plaintiff's market share had fallen to 66%.1
Defendant OneBeacon Insurance Group ("Defendant" or "OneBeacon"), formerly known as CGU Insurance, changed its name in June of 2001, and began using a lighthouse logo as well. Plaintiff alleges that Defendant's use of the name "OneBeacon" and a lighthouse logo similar to its own has damaged it, and violates the Lanham Act (15 U.S.C. § 1125(a)) (Count I); Rhode Island's unfair competition law (Count II); Rhode Island's service mark infringement common law (Count III); and Rhode Island's anti-dilution of common law trademark statute (Count IV).
OneBeacon moves for summary judgment on three principal grounds: (1) that Plaintiff's Marks are not legally protected because Plaintiff has not shown that they are sufficiently "distinctive"; (2) that there is no likelihood of confusion between the parties' marks (this contention comprises the majority of the motion, and relates to Counts I, II, and III); and (3) that Plaintiff's Marks have not been diluted (this argument relates to Count IV alone).
Federal Rule of Civil Procedure 56(c) states that a party shall be entitled to summary judgment
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). When ruling on a motion for summary judgment, this Court must review the evidence in the light most favorable to the nonmoving party and must draw all reasonable inferences in the nonmoving party's favor. Rochester Ford Sales, Inc. v. Ford Motor Co., 287 F.3d 32, 38 (1st Cir.2002); Mesnick v. General Electric Co., 950 F.2d 816, 820 (1st Cir. 1991); Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990).
To oppose the motion successfully, the nonmoving party "may not rest upon mere allegation or denials of his pleading." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Moreover, the evidence presented by the nonmoving party "`cannot be conjectural or problematic; it must have substance in the sense that it limns differing versions of the truth which a factfinder must resolve at an ensuing trial.'" Mesnick, 950 F.2d at 822 (citing Mack v. Great Atl. & Pac. Tea Co., 871 F.2d 179, 181 (1st Cir.1989)). In the context of a trademark infringement case,
Rule 56 places a special gloss upon the usual analytic approach. On summary judgment the reviewing court must decide whether the evidence as a whole, taken most hospitably to the markholder, generates a triable issue as to likelihood of confusion.
Int'l Assoc. of Machinists and Aerospace Workers, AFL-CIO v. Winship Green Nursing Center, 103 F.3d 196, 201 (1st Cir.1996).
The Lanham Act was intended to make "actionable the deceptive and misleading use of marks" and "to protect persons engaged in ... commerce against unfair competition." 15 U.S.C. § 1127.
It is undisputed that Plaintiff's Marks are not registered trademarks,2 trade names, or service marks. The Lanham Act, however, also protects unregistered trademarks, as it prohibits any person from using
in connection with any goods or services ... any word, term, name, symbol, or device, or any combination thereof ... which ... is likely to cause confusion, or to cause mistake, or to deceive ... as to the origin, sponsorship, or approval of his or her goods ... by another person[.]
15 U.S.C. § 1125(a)(1)(A).
Thus, in order to make out a claim under § 1125(a), a plaintiff must establish that its mark is (1) either inherently distinctive or has acquired secondary meaning; (2) not merely functional;3 and (3) likely to be confused with defendant's mark. Three Blind Mice Designs Co., Inc. v. Cyrk, Inc., 892 F.Supp. 303, 310 (D.Mass.1995).
The First Circuit has instructed that "[a] court's inquiry into whether a term merits trademark protection starts with the classification of that term along the spectrum of `distinctiveness.'" Boston Beer Co. L.P. v. Slesar Bros. Brewing Co., 9 F.3d 175, 180 (1st Cir.1993); see also The Yankee Candle Co., Inc. v. Bridgewater Candle Co., LLC, 259 F.3d 25, 38 (1st Cir.2001) () (citations omitted). "Whether a term is generic, descriptive, or inherently distinctive is a question of fact." Boston Beer, 9 F.3d at 180.
Defendant contends that Plaintiff has not met its burden to demonstrate a genuine issue of material fact as to whether Plaintiff's Marks are distinctive under either the "inherently distinctive" or the "secondary meaning" rubrics. This argument depends a priori on the exclusion of Plaintiff's expert testimony and evidence— the consumer survey and accompanying report of Dr. Jacob Jacoby. Because this Court has ruled that the factfinder may consider this evidence, see Beacon Mut. Ins. Co. v. Onebeacon Ins. Group, 253 F.Supp.2d 221 (D.R.I.2003), the basis for Defendant's argument on this point collapses. Consequently, there exists a genuine issue of material fact as to distinctiveness.
With functionality conceded by the Defendant for purposes of this motion, and distinctiveness in issue, Defendant's argument comes down to its assertion that Plaintiff has failed to demonstrate "likelihood of confusion." In this Circuit, the factors to be assessed in determining whether a likelihood of confusion exists between the plaintiff's and defendant's marks are: (1) the similarity of the marks; (2) the similarity of the goods or services; (3) the relationship between the parties' channels of trade; (4) the relationship between the parties' advertising; (5) the classes of prospective purchasers; (6) evidence of actual confusion; (7) the defendant's intent in adopting the mark; and (8) the strength of the plaintiff's mark. Astra Pharmaceutical Prods., Inc. v. Beckman Instruments, Inc., 718 F.2d 1201, 1205 (1st Cir.1983). While no one factor is necessarily determinative, each must be considered. Id.
In order to assess these eight factors in a meaningful way, it is necessary first to determine the relevant market in which they apply. OneBeacon markets its products exclusively through a group of selected insurance agents. It contends that the relevant market is limited to those agents who sell OneBeacon products. OneBeacon argues that because it does not sell a workers' compensation product in Rhode Island, any confusion among business owners or others charged with purchasing workers' compensation insurance for their companies is not relevant; if it exists at all, it will always be corrected by the agents when any such confused purchaser attempts to purchase workers' compensation insurance from a OneBeacon agent. Defendant supports this position with an expert who, not surprisingly, reports that none of the OneBeacon agents in Rhode Island are confused. See pp. 247-248 infra.
Plaintiff argues that Defendant's definition of the relevant market is far too narrow. Plaintiff points to considerable authority (some of it from courts in this Circuit) indicating that persons who may influence future purchases, users of the goods and services, lenders or investors, suppliers, vendors, retailers and others in the distribution chain, as well as constituents or supporters of noncommercial organizations all make up the relevant market for its product. Pl. Mem. at 5-7. Michael Lynch, Plaintiff's Vice President of Legal Services, testified extensively by affidavit regarding the evidence of actual confusion within the workers' compensation system about whether Plaintiff and Defendant are the same or affiliated companies. This confusion has allegedly affected Plaintiff's clients'...
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