Beer Nuts, Inc. v. Clover Club Foods Co.
| Decision Date | 12 March 1985 |
| Docket Number | No. NC 79-82J.,NC 79-82J. |
| Citation | 605 F. Supp. 855 |
| Parties | BEER NUTS, INC., Plaintiff, v. CLOVER CLUB FOODS COMPANY, Defendant. |
| Court | U.S. District Court — District of Utah |
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Robert Mallinckrodt, Salt Lake City, Utah, Robert M. Newbury, Chicago, Ill., for plaintiff.
R. William Johnston, Pasadena, Cal., for defendant.
This is an action for trademark infringement under the Lanham Act, 15 U.S.C. § 1114 (1976). Beer Nuts, Inc., asserts that the defendant Clover Club Food Company's use of the term BREW NUTS and a drawing of an overflowing stein on a package of sweetened and salted peanuts infringes the plaintiff's registered trademark BEER NUTS ®. After a trial on the merits, this court ruled that because there was no likelihood of confusion concerning the origin of the competing products, Clover Club had not infringed Beer Nuts' trademark. Beer Nuts, Inc. v. Clover Club Foods Co., 520 F.Supp. 395 (D. Utah 1981). The United States Court of Appeals for the Tenth Circuit, after concluding that this court based its decision "solely on a side-by-side comparison of the Beer Nuts and Brew Nuts packages," reversed and remanded. Beer Nuts, Inc., v. Clover Club Foods Co., 711 F.2d 934, 941 (10th Cir. 1983).
On January 13, 1984, the court heard oral arguments on remand. Robert Mallinckrodt and Robert M. Newbury appeared for the plaintiff Beer Nuts. R. William Johnston appeared for the defendant, Clover Club. At that time, the court took the matter under advisement. After due consideration of the oral arguments, the memoranda filed by the parties, and the transcript of the trial, the court now enters this memorandum opinion in accordance with the instructions of the Court of Appeals.
Each of the parties markets sweetened and salted peanuts. Beer Nuts asserts that Clover Club's BREW NUTS package infringes Beer Nuts' trademark in violation of section 32(1) of the Lanham Act. That section provides in pertinent part as follows:
15 U.S.C. § 1114(1).
It is undisputed that Beer Nuts, Inc., has registered the trademark BEER NUTS®.1 It is also undisputed that Clover Club has used in commerce the words "Brew Nuts" in connection with the sale of its salted, sweetened peanuts.2 Beer Nuts does not contend that the BREW NUTS package is a copy or a counterfeit of the BEER NUTS® trademark. Thus, the sole issue on remand is whether Clover Club's use of the words "Brew Nuts" in conjunction with a picture of an overflowing stein "is likely to cause confusion in the marketplace concerning the source of the different products." Beer Nuts, 711 F.2d at 940.3
The courts have recognized two separate categories of confusion concerning the source of products. One is that the defendant's mark will confuse the public about the source of the defendant's product—that it will mislead the public into believing that the defendant's product is produced by or is related to the plaintiff. The second category, known as reverse confusion, is that the defendant's mark will confuse the public about the source of the plaintiff's product —that it will mislead the public into believing that the plaintiff's product is produced by or is related to the defendant. Big O Tire Dealers v. Goodyear Tire & Rubber Co., 561 F.2d 1365 (10th Cir.1977). Beer Nuts does not claim that Clover Club has caused reverse confusion. Therefore, squarely presented, the only issue before this court on remand is whether Clover Club's packaging is likely to create confusion in the marketplace concerning the source of Clover Club's product, BREW NUTS.
In resolving this issue,4 the court has examined numerous factors, including those listed in Restatement of Torts § 729 (1938):
See Beer Nuts, 711 F.2d at 940. The court has considered these factors both individually and as a whole; "no one factor is determinative." Id.
The first factor the court has considered is "the degree of similarity between the designation and the trademark ... in (i) appearance; (ii) pronunciation of the words used; (iii) verbal translation of the pictures ... involved; and (iv) suggestion." Restatement § 729. The court has considered the similarity of the marks "in light of what occurs in the marketplace, not in the courtroom." James Burrough Ltd. v. Sign of Beefeater, Inc., 540 F.2d, 266, 275 (7th Cir.1976).
BREW NUTS is sold in drug stores, convenience stores, supermarkets, gas stations, vending machines, taverns, and liquor stores. The package is presented to consumers on racks, on shelves, or in bins. In any case, the package is visible to the public so that a potential buyer can examine the information given on at least the front of the package and decide whether to purchase the product without first touching the package.
Occasionally, both BREW NUTS and BEER NUTS® are marketed side-by-side.5 However, because that is not always the case, the court must determine whether the Brew Nuts package creates a probability that a potential purchaser will be confused concerning the source of BREW NUTS "when singly presented." Beer Nuts, 711 F.2d at 941.
The court has examined the probability of confusion with regard to four groups of potential purchasers: those who have not heard of either BEER NUTS® or BREW NUTS, those who are aware of both BEER NUTS® and BREW NUTS, those who have heard of BREW NUTS but not BEER NUTS®, and those who have heard of BEER NUTS® but not BREW NUTS. The only group of potential customers that face the potential of confusion over the source of BREW NUTS is the group that has heard of BEER NUTS® but not BREW NUTS. Those who know nothing about BEER NUTS cannot be confused into believing that BREW NUTS comes from Beer Nuts, Inc. In addition, those who are familiar with both will not be confused because they would recognize that the two products come from different sources.
In order to make a finding regarding "the degree of similarity between the designation and the trademark ... in appearance," the court must make a comparison. Conceptually, it is impossible to make a comparison in a vacuum; the court must compare the BREW NUTS package with something. Comparing the BREW NUTS package with the BEER NUTS® package is the most obvious comparison, but the Tenth Circuit has now ruled that such a comparison, if that is all that is done, is inappropriate.
The Court of Appeals seems to have directed this court to compare the BREW NUTS package with a hypothetical customer's mental picture of BEER NUTS®.6 First, the court must determine what a hypothetical prospective purchaser's mental picture of BEER NUTS® would be. Second, the court must compare that picture with the BREW NUTS package to determine whether that same hypothetical prospective purchaser would be confused about the source of Clover Club's BREW NUTS.
a. A hypothetical prospective purchaser's mental picture of BEER NUTS®. In making a finding about what a hypothetical prospective purchaser may remember about BEER NUTS®, the court must make some assumptions about that prospective purchaser. It is clear that not every prospective purchaser of BEER NUTS® will have the same mental picture of BEER NUTS®. Some will have perfect recall of the entire package. Others will recall only that the BEER NUTS® package is printed in red ink with block letters that spell "BEER NUTS." Still others may remember nothing more than the name "Beer Nuts."
The group of prospective purchasers most likely to be confused about the origin of BREW NUTS is the group with the least amount of recall about BEER NUTS®. The court must be concerned with the possibility of confusion if an "appreciable number of purchasers are likely to be misled." Restatement § 728, comment a (emphasis added). It follows that in deciding which mental picture to compare with the BREW NUTS package, the court should select the mental picture of the group of purchasers having the least amount of recall so long as that group contains an appreciable number of purchasers.
In this case, the court assumes, without deciding, that an appreciable number of people would recall only the name "Beer Nuts." Therefore, for the purpose of determining whether the BREW NUTS package creates a probability that a hypothetical prospective customer will be confused about the origin of BREW NUTS, the court assumes, as the Court of Appeals did,7 that the prospective purchaser has heard of BEER NUTS® and knows the name but either has never seen the BEER NUTS® package or cannot recall what it looks like.
b. Comparing the hypothetical prospective purchaser's mental picture of BEER NUTS® with the BREW NUTS package. The court must next compare the words "Beer Nuts" with the BREW NUTS package. Initially, the court notes that the words "Beer Nuts" are not created, original, and arbitrary words such as the word "Kodak." The words were taken from the common pool of language and used as a mark. As a mark, they have acquired a secondary meaning relating to the origin of the product, honey sweetened, salted...
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Beer Nuts, Inc. v. Clover Club Foods Co.
...of confusion with the BEER NUTS trademark and thus Clover Club has not infringed the BEER NUTS trademark. Beer Nuts, Inc. v. Clover Club Foods Co., 605 F.Supp. 855 (D.Utah 1985). We reverse the decision of the district court and remand for determination of the relief to be granted in accord......