Custom Vehicles, Inc. v. Forest River, Inc.

• Decision Date: 07 February 2007
• Docket Number: No. 06-2009.,06-2009.
• Citation: 476 F.3d 481
• Parties: CUSTOM VEHICLES, INC., Plaintiff-Appellant, v. FOREST RIVER, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

476 F.3d 481

CUSTOM VEHICLES, INC., Plaintiff-Appellant, v. FOREST RIVER, INC., Defendant-Appellee.

No. 06-2009.

United States Court of Appeals, Seventh Circuit.

Argued December 8, 2006.

Decided February 7, 2007.

Patrick F. O'Leary (argued), Goshen, IN, for Plaintiff-Appellee.

Ryan M. Fountain (argued), Mishawaka, IN, for Defendant-Appellee.

Before EASTERBROOK, Chief Judge, and POSNER and RIPPLE, Circuit Judges.

POSNER, Circuit Judge.

Custom Vehicles sued Forest River for trademark infringement, lost on summary judgment, and appeals. In 1999 Custom (actually a predecessor, but we can ignore that detail) had created a product that it called "Work-N-Play." It was a van the interior of which could be converted by the owner in about an hour from a mobile office to a camper, or vice versa, so that he could, in Custom Vehicles' words, "work out of it through the week" and "play out of it on the weekends." Hence the name, which Custom Vehicles first registered with the Patent and Trademark Office in 2000 as an "intent to use" trademark— meaning that it would be used in commerce, in a sense we explain later in this opinion, within six months. 15 U.S.C. §§ 1051(b), (d); WarnerVision Entertainment Inc. v. Empire of Carolina, Inc., 101 F.3d 259, 260 (2d Cir.1996).

Custom Vehicles sold its first van— though not under the "Work-N-Play" name—that year. The following year Forest River, a much larger company, decided to build a towed van with a ramp door at the back and space inside for a repair shop so that the van's owner could both transport his motorcycle or snowmobile and repair it without taking it to a repair shop. Vans of this sort are called "toy trailers," because motorcycles, snowmobiles, and the like are referred to by aficionados as "adult toys." Forest River called its new product "Work and Play," a name as apt to its dual use as to Custom Vehicles'.

Forest River began selling the vans in 2002, and by 2004 their annual sales exceeded $10 million. Meanwhile, Custom Vehicles sold only one other "Work-N-Play" van—its demo model, which it sold to a family member of Custom Vehicles' owner for $1,000—until 2004, when it sold six more vans. Those were its first bona fide sales of vans under the "Work-N-Play" mark, since its first sale had not been under that name and the second sale, to a relative for roughly 2.5 percent of the van's normal sales price, was not a commercially meaningful sale.

Both Custom Vehicles and Forest River promoted their respective products at recreational-vehicle trade shows. We may assume without having to decide that the products are sufficiently alike that if "Work-N-Play" is a valid trademark, Forest River's use of "Work and Play" as the name of its van is potentially infringing, though even if the trademark is valid, Custom Vehicles, to prevail in an infringement suit, would have to prove that Forest River's use of it would be likely to deceive or confuse. 15 U.S.C. § 1114(1)(a); Sullivan v. CBS Corp., 385 F.3d 772, 775-77 (7th Cir.2004); 4 Thomas J. McCarthy, McCarthy on Trademarks and Unfair Competition § 23:1 (4th ed.1996).

"Work-N-Play" is what in trademark law is called a "descriptive" mark. That is, it does more than merely name a brand; it describes the product category to which the brand belongs (so Maxwell House is a brand, coffee the product), in this case vans usable both for work and for play. "Holiday Inn," "All Bran," and "American Girl" are familiar examples of descriptive marks. A descriptive mark is not a complete description, obviously, but it picks out a product characteristic that figures prominently in the consumer's decision whether to buy the product or service in question.

A seller must not be permitted to appropriate as the name of its brand a term by which the public knows the product category to which the brand belongs, for that would make it difficult for other sellers of the same product to describe their brands, and this would impair competition. Hence a descriptive mark cannot be registered, 15 U.S.C. 1052(e); Park `N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 193-94, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985); Mil-Mar Shoe Co. v. Shonac Corp., 75 F.3d 1153, 1157 (7th Cir.1996)— with an important exception. In time, a term that originally was descriptive may come to signify to consumers a single brand. A new product may require a descriptive name to introduce consumers to it, but if the product catches on, the name may come to be uniquely associated with the original seller, and another term may come into use to describe the product. For example, "All Bran" came to mean not any all-bran cereal but a particular brand of all-bran cereal. Once this happens, the term can be appropriated as a trademark because it has come to denote a single brand, not the entire product, so that its use by other sellers of the product would confuse consumers about the source of what they were buying. In trademark parlance the descriptive mark will have acquired "secondary meaning" and now can be enforced against sellers that use the term or a confusingly similar variant. Park `N Fly, Inc. v. Dollar Park & Fly, Inc., supra, 469 U.S. at 194, 105 S.Ct. 658; Peaceable Planet, Inc. v. Ty, Inc., 362 F.3d 986, 988 (7th Cir.2004); Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 609 (7th Cir.1986); Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-10 (2d Cir.1976); see 15 U.S.C. § 1052(f).

So unless and until "Work-N-Play" achieved secondary meaning as the name of Custom Vehicles' product, it could not be a legally protected trademark. And even if it could be, its use by another firm would not infringe because, unless Custom Vehicles' descriptive mark had achieved secondary meaning, a consumer would not associate the name with Custom Vehicles and so could not be confused if someone else used the name. 2 McCarthy on Trademarks and Unfair Competition, supra, § 15:11. "[I]f there is no secondary meaning, there is no mark to protect and confusion is not possible." Id.

Forest River could in that event, by dint of heavy advertising and a large sales volume, acquire secondary meaning for its use of the name first chosen by Custom Vehicles. This is the case of "reverse passing off," where, as we explained in Peaceable Planet, Inc. v. Ty, Inc., supra, 362 F.3d at 987, "the plaintiff complains that the defendant is trying to pass off the plaintiff's product as the defendant's," perhaps in order "to obliterate the plaintiff's corporate identity and prevent him from entering new markets, where the defendant, having appropriated the plaintiff's trademark, would claim that the plaintiff was the infringer." Another name for this phenomenon is "reverse confusion," which "exists when a junior user uses its size and market penetration to overwhelm the senior, but smaller, user. The `senior user' [that would be Custom Vehicles in this case] is the first to adopt and use a mark anywhere in the country. The `junior user' [Forest River in this case] is the second user, regardless of whether it adopts and uses a mark in a geographically remote location. Reverse confusion doctrine protects the senior user's control of its mark and the goodwill created by the mark from a junior user's employment of the mark, and protects the public from being deceived into believing that the senior user's product emanates from, is connected to, or is sponsored by the junior user." Lucent Information Management, Inc. v. Lucent Technologies, Inc., 186 F.3d 311, 316 (3d Cir.1999). That may have happened in the present case— prospective buyers who approached Custom Vehicles at recreational-vehicle trade shows thought when they saw the "Work-N-Play" brand name that Custom Vehicles was affiliated with Forest River.

But Forest River's swamping of Custom Vehicles' marketing efforts infringes only if "Work-N-Play" is a legally protected trademark; and it is difficult, maybe impossible, for a small seller of an unpopular brand—a seller who has negligible sales—to acquire secondary meaning for its brand name. Such a seller is better off adopting a fanciful or arbitrary mark, which is enforceable without proof of secondary meaning. When Forest River launched its "Work and Play" van in 2002, Custom Vehicles' predecessor had made only one commercial sale, and that sale wasn't even made under the name "Work-N-Play." Few consumers could have thought that "Work and Play" designated Custom Vehicles' brand rather than an indefinitely larger set of products usable for both work and recreation.

We acknowledge that the difficulty of obtaining secondary meaning in a mark equally descriptive of a range of products made by established firms may create a dilemma for the producer of a genuinely novel product. As we noted earlier, a descriptive mark will facilitate introducing a new product to the public,...