Cohn v. Petsmart, Inc.

Decision Date12 February 2002
Docket NumberNo. 00-35328.,00-35328.
Citation281 F.3d 837
PartiesMike COHN, D.V.M., Plaintiff-Appellant, v. PETSMART, INC., a Delaware corporation, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Ken J. Pedersen, Pedersen & Company, PLLC, Boise, ID, for appellant.

John W. Crittenden, Kathryn M. Wheble, Nate A. Garhart, Cooley Godward LLP, San Francisco, CA, for the appellee.

Appeal from the United States District Court for the District of Idaho; B. Lynn Winmill, District Judge, Presiding.

Before: BROWNING, WALLACE, and T.G. NELSON, Circuit Judges.

OPINION

PER CURIAM.

Dr. Mike Cohn appeals the district court's grant of summary judgment on his claim that Petsmart infringes his trademark "Where Pets are Family." He presents two issues: 1) whether the amount in controversy required for diversity jurisdiction was satisfied, and 2) whether there is a likelihood of confusion in Petsmart's use of Cohn's mark. We hold the amount in controversy requirement was met and that there is no likelihood of confusion between the two marks as a matter of law. Therefore, we affirm.

I.

In 1993, Cohn opened his Boise veterinary clinic, the Critter Clinic, and began advertising it as a place "Where Pets are Family." In 1994, Petsmart began using the same slogan to promote its national chain of pet supplies stores, including its Boise store. Petsmart received a federal trademark registration for the phrase in 1996; Cohn received a state trademark registration for the same phrase in 1997.

Petsmart does not provide veterinary services. However, beginning in 1992, Dr. Deborah Barton provided pet vaccinations at the Boise Petsmart store on weekends, and since 1994, leased space within the Boise store for a full-service veterinary clinic. Petsmart has advertised that veterinary services are available at "our pet hospital."

Cohn sued Petsmart in Idaho state court for infringement of his Idaho trademark rights. His complaint did not claim a specific amount of damages, but asked for treble compensatory damages, treble the profits derived by Petsmart from the alleged infringement, attorney's fees, and an injunction. Petsmart removed the action to federal court based on diversity of citizenship and an amount in controversy over $75,000. The district court denied Cohn's motion to remand and granted Petsmart's motion for summary judgment, holding that there was no likelihood of confusion. Cohn appeals.

II.

To support removal based on diversity jurisdiction, Petsmart has the burden of proving, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. See Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996); 28 U.S.C. § 1332. Petsmart relies on a single piece of evidence: a letter from Cohn to Petsmart offering to settle the dispute.1 In the letter, he asserted that "the mark is worth more than $100,000 to him" and demanded that amount in compensation.2

A settlement letter is relevant evidence of the amount in controversy if it appears to reflect a reasonable estimate of the plaintiff's claim.3 See Chase v. Shop `N Save Warehouse Foods, Inc., 110 F.3d 424, 428-30 (7th Cir.1997) (plaintiff's settlement offer is properly consulted in determining "plaintiff's assessment of the value of her case"); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1097 (11th Cir.1994) (while a "settlement offer, by itself, may not be determinative, it counts for something"); Wilson v. Belin, 20 F.3d 644, 651 n. 8 (5th Cir.1994) ("Because the record contains a letter, which plaintiff's counsel sent to defendants stating that the amount in controversy exceeded $50,000, it is `apparent' that removal was proper."). Cohn could have argued that the demand was inflated and not an honest assessment of damages, but he made no attempt to disavow his letter or offer contrary evidence. Rather, he consistently maintained that his mark is worth more than $100,000.

This evidence is sufficient to establish the amount in controversy. The heart of Cohn's suit is his request for injunctive and other equitable relief. "In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation." Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). The undisputed evidence shows that Cohn values his trademark rights — the object of the litigation — as worth more than $100,000. As the amount in controversy exceeded $75,000, the case was properly removed to federal court.

III.

The district court did not err in granting summary judgment on Cohn's claim for trademark infringement.4 To prove infringement under Idaho Code § 48-512, Cohn must prove that Petsmart's use of "Where Pets are Family" creates a likelihood of confusion with his trademark. We look to federal trademark law for guidance in interpreting the Idaho statute. See Idaho Code § 48-518 (stating that federal trademark law is "persuasive authority for interpreting and construing this act").

Cohn asserts that Petsmart has used his mark so extensively that consumers are likely to mistake Cohn's clinic as being associated with Petsmart. This alleges a claim for reverse confusion. In such a case, the smaller senior user, such as Cohn, seeks to protect its business identity from being overwhelmed by a larger junior user who has saturated the market with publicity. See Dreamwerks Production Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129 (9th Cir.1998).

We examine the eight Sleekcraft factors to determine the likelihood of confusion.5 These factors are flexible, merely guiding the analysis of the overall likelihood of confusion: whether consumers will mistakenly believe that Cohn's clinic is somehow affiliated with or sponsored by Petsmart. See Dreamwerks, 142 F.3d at 1129. The parties do not seriously dispute the material facts. Cohn argues, however, that the district court erred in the conclusions it drew from the record and in its ultimate holding that there was no likelihood of confusion as a matter of law. Although we recognized the validity of Cohn's theory in Dreamwerks, we agree with the district court that Cohn has failed to offer sufficient evidence to support it. Therefore, we affirm.

A.

Two of the Sleekcraft factors support Cohn's claim. First, the parties indisputably sell related goods and services: Cohn provides veterinary services and makes ancillary sales of pet supplies, while Petsmart sells pet supplies and offers ancillary veterinary services through Dr. Barton. See Dreamwerks, 142 F.3d at 1130.

Second, Petsmart's extensive advertising gives it the ability to overwhelm any public recognition and goodwill that Cohn has developed in the mark. See Walter v. Mattel, Inc., 210 F.3d 1108, 1111 n. 2 (9th Cir.2000) ("In a reverse confusion case ... the inquiry focuses on the strength of the junior mark because the issue is whether the junior mark is so strong as to overtake the senior mark.") (emphasis added); see also A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 231 (3d Cir.2000) ("in a reverse confusion claim, a plaintiff with a commercially weak mark is more likely to prevail than a plaintiff with a stronger mark, and this is particularly true when the plaintiff's weaker mark is pitted against a defendant with a far stronger mark").

Although the mark "Where Pets Are Family" is a laudatory slogan that is not itself particularly distinctive, Petsmart has spent many millions of dollars to promote it through newspaper advertisements, television commercials, and its web site. In contrast, Cohn promoted the mark only through local yellow page listings, handbills, occasional advertisements in the local newspaper, and an advertisement in a high school volleyball calendar.6 Petsmart's ability to saturate the marketplace creates a potential that consumers will assume that Cohn's mark refers to Petsmart, and thus perceive that the businesses are somehow associated.

B.

Although these two factors raise the potential for confusion, Cohn's evidence fails to create a genuine issue that confusion is "probable, not simply a possibility." Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217(9th Cir.1987). Several other considerations, taken together, undercut Cohn's claim.

First, although the parties superficially use the identical slogan as a trademark, consumers will actually encounter the trademarks differently in the marketplace. A critical factor here is that both parties use the trademark merely as a tagline to their distinctive business names: as "Critter Clinic — Where Pets Are Family," and "Petsmart — Where Pets Are Family." The emphasis on these housemarks "has the potential to reduce or eliminate likelihood of confusion." 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 23:47 (4th ed.1997). See Norm Thompson Outfitters, Inc. v. General Motors Corp., 448 F.2d 1293, 1298 (9th Cir.1971) (likelihood of confusion mitigated where "the name of the company invariably accompanied the [trademarked] slogan"). The names "Petsmart" and "Critter Clinic" present the dominant commercial identity.

Similarly, although the parties share some overlapping marketing channels, their marketing efforts are concentrated in different media: Cohn obtains most of his customers through yellow pages listings, while Petsmart promotes itself through television advertising, newspaper inserts, and a Web site. More significantly, the advertisements themselves dispel confusion by emphasizing the names "Petsmart" and "Critter Clinic" in the largest, most prominent typefaces, while relegating the taglines to subordinate locations and sizes. See Walter, 210 F.3d at 1111(noting that different appearances of marks, when combined with housemark, "negates any similarity").

Third, Cohn presented no evidence of actual confusion.7 Because evidence of actual...

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