Enterprises Rent-a-Car v. Advantage Rent-a-Car

• Decision Date: 30 May 2003
• Docket Number: No. 02-1444.,02-1444.
• Citation: 330 F.3d 1333
• Parties: ENTERPRISE RENT-A-CAR COMPANY, Appellant, v. ADVANTAGE RENT-A-CAR, INC., Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

330 F.3d 1333

ENTERPRISE RENT-A-CAR COMPANY, Appellant, v. ADVANTAGE RENT-A-CAR, INC., Appellee.

No. 02-1444.

United States Court of Appeals, Federal Circuit.

Decided: May 30, 2003.

Rehearing En Banc Denied: July 9, 2003.

Rudolph A. Telscher, Jr., Harness, Dickey & Pierce, P.L.C., of St. Louis, Missouri, argued for appellant.

William D. Raman, Thompson & Knight LLP, of Austin, Texas, argued for appellee.

Before BRYSON, GAJARSA, and DYK, Circuit Judges.

DYK, Circuit Judge.

Under the Trademark Amendments Act of 1999 § 2(b), 15 U.S.C. § 1063(a), and the Federal Trademark Dilution Act of 1995 § 3, 15 U.S.C. § 1125(c), the owner of a famous mark can oppose the registration of a diluting mark without establishing likelihood of confusion. This case presents the question whether such an opposition can be maintained when the applicant's mark was used in a limited geographic area before the opposer's mark became famous. This case also requires us to decide whether an opposition under 15 U.S.C. § 1063(a) can be based on claims of trademark dilution under state dilution statutes. We conclude that the owner of a famous mark cannot oppose registration based on dilution where its mark did not achieve fame prior to the applicant's prior use in a limited geographic area, and that a trademark holder cannot oppose registration based on claims of dilution under state law. We therefore affirm the decision of the United States Patent and Trademark Office, Trademark Trial and Appeal Board ("the Board") dismissing the opposition with prejudice.

BACKGROUND

This case requires us to construe for the first time the Federal Trademark Dilution Act of 1995, 15 U.S.C. §§ 1125(c), 1127 (2000) ("FTDA"), which creates a federal cause of action for trademark dilution, and a related provision, the Trademark Amendments Act of 1999, Pub.L. No. 106-43, 113 Stat. 218 (codified in scattered sections of 15 U.S.C.), which, inter alia, requires the Board to consider dilution under the FTDA as a ground for opposition to trademark registration.

The FTDA provides a federal cause of action for owners of "famous" trademarks, allowing them to enjoin diluting uses, and in some cases, to recover monetary damages. The Act provides:

[t]he owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided in this subsection.

15 U.S.C. § 1125(c)(1) (2000) (emphasis added).¹ Thus, in order to secure relief, the owner of a famous mark must establish that the allegedly diluting use began "after the mark ha[d] become famous." The Act provides a list of non-exclusive factors that a court is to consider in determining whether a mark is "famous" and, therefore, qualifies for protection under the statute:

In determining whether a mark is distinctive and famous, a court may consider factors such as, but not limited to —

(A) the degree of inherent or acquired distinctiveness of the mark;

(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;

(C) the duration and extent of advertising and publicity of the mark;

(D) the geographical extent of the trading area in which the mark is used;

(E) the channels of trade for the goods or services with which the mark is used;

(F) the degree of recognition of the mark in the trading areas and channels of trade used by the mark's owner and the person against whom the injunction is sought;

(G) the nature and extent of use of the same or similar marks by third parties; and

(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.

Id. § 1125(c)(1).

In 1999, Congress amended the Lanham Act to add dilution under section 1125(c) as a ground for opposition to federal trademark registration. See Trademark Amendments Act of 1999, § 2(b), 113 Stat. 217, 218. The opposition statute now provides, in pertinent part, "[a]ny person who believes that he would be damaged by the registration of a mark upon the principal register, including as a result of dilution under section 1125(c) of this title, may ... file an opposition in the Patent and Trademark Office." 15 U.S.C. § 1063(a) (2000) (emphasis added).

The allegedly diluting use in this case began in 1990, when the appellee (the applicant for registration), Advantage Rent-A-Car, Inc. ("Advantage"), produced a television commercial for its car-rental service that used the phrase "We'll Even Pick You Up." The commercial was broadcast in the San Antonio, Texas, area approximately 100 times between 1992 and 1995. From August 1997, to April 1998, the commercial was broadcast an additional 289 times in Arkansas, Louisiana, New Mexico, and Texas.

The appellant (the party opposing registration), Enterprise Rent-A-Car Co. ("Enterprise"), did not begin using the phrases "Pick the Company that Picks You Up" and "Pick Enterprise, We'll Pick You Up" in national advertising until 1994, after Advantage's prior use in San Antonio, Texas. On January 16, 1996, Enterprise obtained federal registration for the mark "PICK ENTERPRISE, WE'LL PICK YOU UP," U.S. Trademark Reg. No. 1,948,828; on January 30, 1996, for the mark "PICK THE COMPANY THAT PICKS YOU UP," U.S. Trademark Reg. No. 1,953,083; and on August 5, 1997, for the mark "WE'LL PICK YOU UP," U.S. Trademark Reg. No. 2,085,472, as service marks in connection with the rental and leasing of vehicles.

On June 16, 1998, Advantage filed suit against Enterprise in the United States District Court for the Western District of Texas alleging unfair competition in violation of 15 U.S.C. § 1125(a) and under the common law of Texas and seeking cancellation of Enterprise's mark under 15 U.S.C. § 1119. Enterprise, inter alia, counterclaimed for unfair competition under state and federal law and for trademark dilution under federal and state law.

While the case was pending in the district court, on May 4, 1999, Advantage filed for federal registration of its mark, "We'll Even Pick You Up," as a service mark in connection with the rental and leasing of vehicles. U.S. Trademark Application Ser. No. 75-697875. On August 21, 2000, Enterprise filed an opposition to Advantage's application, alleging that it would be damaged by the registration of Advantage's mark, because Advantage's mark caused dilution of Enterprise's mark under the FTDA. The Board suspended the opposition proceedings on September 25, 2000, pending resolution of the civil action before the district court.

On May 24, 1999, the parties agreed to the entry of a partial consent judgment in the district court civil action. The parties agreed to the entry of findings of fact and conclusions of law to the effect that the use by Advantage of WE'LL EVEN PICK YOU UP in connection with its car-rental business was not likely to cause consumer confusion with Enterprise. Advantage Rent-A-Car, Inc. v. Enterprise Rent-A-Car Co., No. A 98CA 372, slip op. at 1-2 (W.D.Tex. May 24, 1999) (Partial Consent Judgment). The consent judgment disposed of all claims asserted by Advantage and of all counterclaims asserted by Enterprise, except its claims for trademark dilution. Id. at 1. The consent judgment also made clear, however, that Enterprise's dilution claims were unaffected. Id. at 3.

On October 25, 1999, after a bench trial, the district court entered judgment against Enterprise on the dilution claims. The court held that Enterprise was not entitled to relief, "because the slogan at issue is not sufficiently famous or distinctive to receive protection under the [FTDA]." Advantage Rent-A-Car, Inc. v. Enterprise Rent-A-Car Co., No A 98CA 372, slip op. at 1 (W.D.Tex. Oct. 25, 1999). The district court concluded that fame was an element of Enterprise's claims under the state dilution statutes on which Enterprise relied as well. Id. at 10. Therefore, the district court held, Enterprise could not recover for dilution under federal or state law.

On appeal, the Fifth Circuit upheld the district court's determination that Enterprise's marks were insufficiently famous to win relief under the FTDA or under the Arkansas and New Mexico anti-dilution statutes. Advantage Rent-A-Car, Inc. v. Enterprise Rent-A-Car Co., 238 F.3d 378, 381, 57 USPQ2d 1561, 1564 (5th Cir.2001). However, the Fifth Circuit held that the district court erred in its conclusion that lack of fame barred recovery under the Louisiana and Texas anti-dilution statutes, because both those statutes "require[ ] only distinctiveness, not fame." Id. The court, therefore, affirmed the judgment for Advantage on Enterprise's claim under the FTDA and the anti-dilution statutes of Arkansas and New Mexico, but remanded for a determination of whether the mark was sufficiently "distinctive" to state a claim under the Texas or Louisiana dilution statutes. Id.

Following the Fifth Circuit litigation, the Board dismissed Enterprise's opposition. Enterprise Rent-A-Car Co. v. Advantage Rent-A-Car, Inc., 62 USPQ2d 1857, 1858, 2002 WL 1290196 (TTAB 2002). The Board held that Enterprise's claim of dilution under the FTDA was barred by res judicata, because the district court and the Fifth Circuit had already decided that Enterprise's mark was not famous. While Enterprise argued that its mark had achieved fame in the period after the admission of evidence on fame in the district court in 1999, the Board held that "a party seeking to invoke dilution as a ground for cancellation must establish that its mark became famous prior to applicant's first use of the mark." Id. at 1861 (citation omitted). "Unless [Enterprise] can establish that its mark was famous prior to [Advantage's] use — anywhere in the country — it cannot prevail." Id....