Binder v. Disability Group Inc.

• Decision Date: 25 January 2011
• Docket Number: Case No. CV 07–2760–GHK (Ssx).
• Citation: 97 U.S.P.Q.2d 1629,772 F.Supp.2d 1172
• Court: U.S. District Court — Central District of California
• Parties: Harry J. BINDER, et al., Plaintiffs,v.DISABILITY GROUP, INC., et al., Defendants.

772 F.Supp.2d 1172

97 U.S.P.Q.2d 1629

Harry J. BINDER, et al., Plaintiffs,

v.DISABILITY GROUP, INC., et al., Defendants.

Case No. CV 07–2760–GHK (Ssx).

United States District Court, C.D. California.

Jan. 25, 2011.

Jessica G. Bower, Thomas M. Galgano, Galgano & Associates, PLLC, Long Beach, NY, Kenneth G. Parker, Haynes and Boone LLP, Robert G. Loewy, Irvine, CA, for Plaintiffs.Matt Kohn, Matt Kohn Law Offices, Santa Monica, CA, Ronald D. Miller, Ronald D. Miller Law Offices, Greg David Derin, Greg D. Derin Law Offices, Los Angeles, CA, for Defendants.

MEMORANDUM OF FINDINGS OF FACT AND CONCLUSIONS OF LAW

GEORGE H. KING, District Judge.I. Background

We held a court trial on the above-captioned matter from October 5, 2010 through October 7, 2010. We received evidence, heard testimony, observed the manner and demeanor of the witnesses, and considered the declarations and deposition testimony of various persons. On November 18, 2010, we heard closing arguments from the Parties. Having considered all of the foregoing as well as arguments from counsel, we make the following findings of fact and conclusions of law in this Memorandum under Federal Rule of Civil Procedure 52(a)(1).

At trial, Plaintiffs Harry J. Binder; Charles E. Binder; Binder & Binder—The National Social Security Disability Advocates LLC; Binder and Binder—The National Social Security Disability Advocates (N.Y.), LLC; Binder & Binder—The National Social Security Disability Advocates (NJ), LLC; Binder & Binder—The National Social Security Disability Advocates (PA), LLC; Binder & Binder—The National Social Security Disability Advocates (NC), LLC; Binder & Binder—The National Social Security Disability Advocates (FL), LLC; Binder & Binder—The National Social Security Disability Advocates (TX), LLC; Binder & Binder—The National Social Security Disability Advocates (IL), LLC; and Law Offices—Harry J. Binder and Charles E. Binder P.C. (collectively, “Plaintiffs”) pursued three claims against Defendants Disability Group, Inc. and Ronald Miller (“Miller” and, collectively, “Defendants”). Plaintiffs' three claims are: (1) trademark infringement under the Lanham Act, 15 U.S.C. § 1114(1); (2) false representation under the Lanham Act, 15 U.S.C. § 1125(a); and (3) unfair competition under California common law.

Both Parties agree that from March 26, 2006 to November 6, 2006 Defendants used Plaintiffs' trademark in an advertising campaign through Google AdWords. Google AdWords allows advertisers to pay to place targeted “Sponsored Links” on the results page of a Google search. In order to have their ads appear on the search results page, Google advertisers select and bid on AdWords (purchased keywords) so that their ad might be displayed on the search results. Defendants used “Binder and Binder” as AdWords linked to their websites. Defendants raise a number of defenses to Plaintiffs' claims. We discuss each of these claims and defenses in turn below.

II. Plaintiffs' Claims

A. Claim for Infringement of Registered Trademark

Plaintiffs' first claim is that Defendants' use of the “Binder and Binder” mark constituted trademark infringement. To prevail on a trademark infringement claim, a plaintiff must prove by a preponderance of the evidence that it is a holder of a registered trademark, and a defendant used: (1) any reproduction, counterfeit, copy or colorable imitation of a mark; (2) without the registrant's consent; (3) in commerce; (4) in connection with the sale, offering for sale, distribution or advertising of any services; (5) where such use is likely to cause confusion, or to cause a mistake or to deceive. 15 U.S.C. § 1114(1)(a); Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1178 (9th Cir.1988).

Here, there is no dispute that Plaintiffs did not give consent. The use of the AdWords through Google constituted use in commerce in connection with the sale or advertising of Defendants' services. Playboy Enter., Inc. v. Netscape Commc'n Corp., 354 F.3d 1020, 1024 (9th Cir.2004). The Defendants do not dispute that they used Plaintiffs' mark in their Google AdWord campaign. Moreover, we find as a matter of fact that Defendants used the “Binder and Binder” mark in a Google AdWord campaign. We find that Defendants bid successfully on the name with the result that Defendants' website appeared as a sponsored link on Google when potential customers searched for Plaintiffs' trademarked name. Thus, the only two elements in dispute are Plaintiffs' ownership of the marks and the likelihood of confusion.

1. Ownership of the Marks

Plaintiffs claim trademarks for: “Binder & Binder,” Trademark Reg. No. 2,161,478; “Binder and Binder,” Trademark Reg. No. 2, 161, 479; and Binder & Binder, in a stacked design, Trademark Reg. No. 2,109,191. (Exh. Nos. 330, 331, and 332). These three trademarks were initially registered in 1997 and 1998 to “Binder and Binder (Partnership).” ( Id.) However, in 2004, the Partnership was registered as an LLP under New York law. In 2006, the trademarks were assigned by the LLP to “Binder & Binder.” (Exh. No. 149). In 2009, a correction was filed which stated that the trademarks were intended to be assigned to “Binder and Binder.” In 2010, the trademarks were assigned to SSDI Holdings, (Exh. No. 338), and subsequently assigned to “Binder & Binder—The National Social Security Disability Advocates LLC.” (Exh. No. 339).

Defendants bring two challenges to Plaintiffs' ownership of these marks. First, Defendants claim there is a defect in the chain of title. Specifically, they argue that in 2006 the assignor did not own the marks it sought to assign to Binder & Binder. The premise of this argument is that Binder and Binder Partnership, the owner of the registered marks, is a separate legal entity from Binder and Binder LLP, which acted as the assignor in 2006. This presents a question of law inasmuch as the Parties do not dispute the underlying facts. We reject Defendants' premise that Binder and Binder Partnership became a separate legal entity when it was registered as a LLP under New York law in 2004.¹ Under New York Partnership Law § 121–1500(d), an LLP is “for all purposes the same entity that existed before the registration and continues to be a partnership without limited partners under the laws of this state.” As one court explained: “The statute clearly enunciates that a general partnership that is registered as a RLLP is for all purposes the same entity that existed before registration and continues to be a general partnership under the laws of New York.” Mudge Rose Guthrie Alexander & Ferdon v. Pickett, 11 F.Supp.2d 449, 452 n. 12 (S.D.N.Y.1998). Thus, we conclude there was no defect in the chain of title to the marks.

Defendants' next argument is that the 2006 assignment to “Binder & Binder” rather than “Binder and Binder” rendered the assignment ineffective. Again, this is a question of law as both Parties agree that the assignment was made to “Binder & Binder” while the name of the partnership at the time was written as “Binder and Binder.” The question is whether this error has any effect on the ownership of the trademarks. We disagree with Defendants that this recordation has any impact on the claims at issue in this case. See TMEP § 503.06(a)(i), U.S. Patent and Trademark Office (6th ed., Rev. 1 Oct. 2009) (“If the original cover sheet contains a typographical error that does not affect title to the application or registration against which the original assignment or name change is recorded, the Assignment Services Branch will correct the Assignment Database and permit the recording party to keep the original date of recordation.”). The initial error is not a material defect that impacts title. Defendants still had notice upon viewing the trademark that it was a properly recorded trademark. Although more precision may be desirable when the question is what is the trademark itself, we do not confront that question here. The use of the ampersand rather than the word “and” relates only to describing the entity that owns the trademarks not the precise nature of the trademarks themselves. Thus, we reject both of Defendants' challenges to Plaintiffs' ownership of the marks and conclude that Plaintiffs had valid ownership of the trademarks.

2. Likelihood of Confusion

In evaluating the likelihood of confusion, we consider eight non-exhaustive factors (the “ Sleekcraft factors”) whose relative importance varies from case to case: (1) the similarity of the marks; (2) the strength of the plaintiff's mark; (3) the proximity or relatedness of the goods or services; (4) the defendant's intent in selecting the mark; (5) evidence of actual confusion; (6) the marketing channels used; (7) the likelihood of expansion into other markets; ² and (8) the degree of care likely to be exercised by purchasers of the defendant's product.³ AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir.1979). Moreover, “[i]n the context of the Web in particular, the three most important Sleekcraft factors [the ‘Internet trilogy’] are (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the simultaneous use of the Web as a marketing channel.” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir.2000).

Here, we find there was a strong likelihood of confusion. Plaintiffs' mark ⁴ and that used by Defendants are identical—both are Plaintiffs' registered trademark of “Binder and Binder.” We find that Plaintiffs' marks are strong based on testimony that Plaintiffs extensively marketed and advertised their services and worked to build their reputation based around their name. (Dick Summer Trial Testimony, Day 1 court trial, 150). The services provided are identical—both Plaintiffs and Defendants are competing for clients for social security disability cases. Defendants intentionally chose Plaintiffs' mark based on its strength and appeal in the market. Additionally, both Plaintiffs and Defendants market their ...