Dieter v. B & H Industries of Southwest Florida, Inc., 88-3363

• Decision Date: 10 August 1989
• Docket Number: No. 88-3363,88-3363
• Parties: Richard A. DIETER, d/b/a Shutterworld, and Richard A. Dieter General Contractor, Inc., Plaintiff-Appellant, Cross-Appellee, v. B & H INDUSTRIES OF SOUTHWEST FLORIDA, INC., Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 322

880 F.2d 322

11 U.S.P.Q.2d 1721

Richard A. DIETER, d/b/a Shutterworld, and Richard A. Dieter General Contractor, Inc., Plaintiff-Appellant Cross-Appellee, v. B & H INDUSTRIES OF SOUTHWEST FLORIDA, INC. Defendant-Appellee, Cross-Appellant.

No. 88-3363.

United States Court of Appeals Eleventh Circuit.

Aug. 10, 1989.

David W. Pettis, Jr., Tampa, Fla., for plaintiff-appellant, cross-appellee.

Merrill N. Johnson, Naples, Fla., for defendant-appellee, cross-appellant.

Appeals from the United States District Court for the Middle District of Florida.

Before RONEY, Chief Judge, HILL, Circuit Judge and HOWARD ^*, Chief District Judge.

Howard, Chief District Judge:

I. BACKGROUND. ¹

This is a trademark infringement action arising out of two southwest Florida shutter vendors' use of the same name and trademark. Appellant Dieter is the president and sole shareholder of appellant Richard A. Dieter General Contractor, Inc., a Florida corporation (collectively referred to as "Dieter"), headquartered in the Tampa Bay area. Dieter sells several types of shutters, some of which it manufactures. Its products include pre-hung wooden shutter assemblies, which are mostly decorative items intended for indoor use. The wooden shutters which Dieter manufactures are labelled with its registered trademark, which is burned into the wood. Those shutters sold but not manufactured by Dieter are labelled with small silver stickers marked with the name "Shutter-World" in plain block letters, hyphenated.

In 1976, Dieter applied for federal trademark registration of a trademark incorporating the name "Shutterworld." The mark consists of the name in script form, superimposed on a large letter "O." The registration states that Dieter first used the mark in 1970, and that it first used the mark in commerce in 1974. In 1983 Dieter supplemented its federal registration with a "combined sections 8 & 15 declaration," filed on Dieter's behalf by Janet E. Hudson as secretary-treasurer. The declaration stated that "Shutterworld, Inc., a Florida corporation" was owner of federal registration number 1,062,778. It stated that the registered mark had been in continuous use in interstate commerce since April 5, 1977 for "pre-hung wooden shutter assemblies," and that the mark was still so used. Dieter has made extensive use of its mark in forms other than the registered design. Dieter has not obtained Florida registration of its mark.

Appellee B & H Industries of Southwest Florida, Inc., ("B & H") is headquartered in Fort Meyers, Florida, approximately 120 miles south of Tampa and Largo. B & H sells exterior "insulated roll-down security shutters," which are designed for exterior use as protection against weather and intruders. B & H obtained Florida registration of a mark consisting of the name "Shutterworld" in "neon sign" typeface, with an oversized letter "O," and with the letters "SW" in three line script on a dark background. B & H was refused federal registration of a mark which used the word "Shutterworld" with a large "O" with the letters "SW" inside the "O," on the grounds that such a mark was likely to be confused with Dieter's registered mark. B & H amended its application with affidavit and pictorial evidence intended to show that there was a lack of confusion between its mark and Dieter's. The mark was then deemed "entitled to registration," and was published pursuant to statute. Dieter filed an opposition to registration of that mark.

Dieter filed suit against B & H in the Middle District of Florida, alleging trademark infringement. Its complaint included causes of action under the Lanham Act, 15 U.S.C. Secs. 1114, 1125(a); under the Florida common law of unfair competition; and under FLA.STAT.ANN. Sec. 495.151 for damage to business reputation. Dieter sought a permanent injunction against B & H's use of the word "Shutterworld," as well as an accounting for profits, treble damages, and attorney's fees. The case was tried to the district court without a jury. At the close of the trial, the court found that Dieter's mark was valid and enforceable, but that there had been no trademark infringement, because the district court concluded that there was no likelihood of confusion. We disagree and reverse.

II. LIKELIHOOD OF CONFUSION.

Count One of Dieter's complaint alleged that B & H's mark was a "colorable imitation" of its mark, and that B & H's use of the mark was likely to cause confusion, to cause mistake, or to deceive. In this appeal, Dieter challenges the trial court's finding of no likelihood of confusion. Applying the clearly erroneous standard, ² a trial court's decision may be reversed when the reviewing court is left with the "definite and firm conviction that a mistake has been committed." Armstrong Cork, 597 F.2d at 501 (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)). Review of the transcript, the exhibits introduced at the trial of the case, the trial court's opinion, and the arguments by counsel on appeal leaves this Court with the definite conviction that the trial court committed a mistake by finding no likelihood of confusion.

In a trademark infringement action, the plaintiff must show, first, that its mark is valid and, second, that the defendant's use of the contested mark is likely to cause confusion. 15 U.S.C. Sec. 1114(1)(a); Burger King Corp. v. Mason, 710 F.2d 1480, 1491 (11th Cir.1983), cert. denied, 465 U.S. 1102, 104 S.Ct. 1599, 80 L.Ed.2d 130 (1984). Because Dieter's mark is "incontestable" its validity is conclusively presumed, see infra, Part III, and accordingly the only factual issue for the trial court's determination was whether B & H's use of the "Shutterworld" mark was likely to cause confusion. Determination of likelihood of confusion requires analysis of the following seven factors: (1) type of mark, (2) similarity of mark, (3) similarity of the products the marks represent, (4) similarity of the parties' retail outlets and customers, (5) similarity of advertising media used, (6) defendant's intent and (7) actual confusion. ³ Freedom Sav. and Loan Ass'n v. Way, 757 F.2d 1176, 1182 (11th Cir.1985), cert. denied, 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985); University of Georgia Athletic Ass'n v. Laite, 756 F.2d 1535 (11th Cir.1985); Wesco Mfg. v. Tropical Attractions of Palm Beach, 833 F.2d 1484, 1488 (11th Cir.1984); Sun Banks of Fla. v. Sun Fed. Sav. & Loan, 651 F.2d 311 (5th Cir.1981) ⁴. Of these factors, the type of mark and the evidence of actual confusion are the most important in this circuit. Freedom Sav., 757 F.2d at 1186. The trial court used this seven factor analysis and concluded that B & H's use of the mark was not likely to cause confusion. ⁵ Dieter challenges four specific points in the trial court's opinion: (1) its finding that Dieter's mark had not acquired secondary meaning, (2) its finding that the retail strategies of Dieter and B & H were not similar, (3) its finding that the businesses of Dieter and B & H were geographically separate, and (4) its finding that B & H's continued use of the "Shutterworld" mark was in good faith.

The trial court's finding that Dieter's mark lacked secondary meaning relates to factor one, the type of mark. Evaluating Dieter's mark, the trial court found the mark to be merely descriptive, and found that Dieter had not established that its mark had acquired secondary meaning. Review of the transcript and the exhibits shows that although there was some evidence that certain homeowners equated the "Shutterworld" mark with Dieter's products, such evidence was second-hand, and came from a witness whom the trial court found to lack credibility. Accordingly, the trial court did not err in finding that Dieter had not established secondary meaning for the "Shutterworld" mark. However, our holding in Part III of this opinion renders the trial court's findings on the existence or non-existence of secondary meaning moot.

Dieter also challenges the trial court's analysis under factor four, the similarity of the parties' retail outlets and customers. Although the trial court found that the parties' customers were similar, it found that their retail strategies were dissimilar and concluded that this difference militated against confusion. This finding was premised on the evidence at trial, which tended to show that while Dieter made most of its sales from retail outlets and through dealers, B & H made its sales at customers' houses. This Court agrees with the trial court's determination of the facts, but disagrees as to the effect of those facts on this part of the analysis. These shutter purchasers are homeowners in a relatively small geographic area, and this Court is not convinced that the difference between the retail strategies of Dieter and B & H is so great as to preclude confusion. Customers and potential customers might well think that Dieter and B & H are one and the same entity, named "Shutterworld," which sold its shutters, both exterior and interior, through several media. The Court finds that the similarity of the parties' customers and retail outlets is so strong as to be likely to cause confusion, and accordingly, the district court's finding on factor four is clearly erroneous.

In its analysis of factor five, the similarity of advertising media used by the parties, the trial court found that the businesses of Dieter and B & H were geographically separate and that there was no medium in which the plaintiff and the defendant had advertised simultaneously. Consideration of these two facts led the district court to conclude that the geographic separation between the two parties decreased the likelihood of confusion between Dieter and B & H. We disagree with that conclusion. Dieter and B & H are both located in the southwest quadrant of the state of Florida, and it is likely that Dieter's customers would be exposed to B & H's advertising, given the relatively...