Everest Capital Ltd. v. Everest Funds Management

• Decision Date: 04 January 2005
• Docket Number: No. 04-1282.,04-1282.
• Citation: Everest Capital Ltd. v. Everest Funds Management, 393 F.3d 755 (8th Cir. 2005)
• Parties: EVEREST CAPITAL LIMITED, Plaintiff — Appellant, v. EVEREST FUNDS MANAGEMENT, L.L.C.; Everest Funds; Vinod Gupta; Everest Investment Management, L.L.C., Defendants — Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

393 F.3d 755

EVEREST CAPITAL LIMITED, Plaintiff — Appellant, v.EVEREST FUNDS MANAGEMENT, L.L.C.; Everest Funds; Vinod Gupta; Everest Investment Management, L.L.C., Defendants — Appellees.

No. 04-1282.

United States Court of Appeals, Eighth Circuit.

Submitted: August 26, 2004.

Filed: January 4, 2005.

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Mark J. Hyland, argued, New York, NY (Jeffrey M. Dine, New York, NY, and John Passarelli, Omaha, NE, on the brief), for appellant.

Mark C. Laughlin, argued, Omaha, NE (Russell A. Westerhold, Omaha, NE, on the brief), for appellee.

Before LOKEN, Chief Judge, WOLLMAN and BEAM, Circuit Judges.

LOKEN, Chief Judge.

Everest Capital Limited is a Bermuda-based investment advisor that began managing off-shore "hedge funds" in 1990, using the trademark "Everest Capital" in the names of its funds, in letters to investors, and in marketing materials.Some years later, entrepreneur Vinod Gupta formed Everest Investment Management to manage his personal wealth through a collection of limited partnerships in which his family, close friends, and senior employees of his company have participated.Gupta later formed Everest Funds Management, an Omaha-based investment advisor that manages Everest Funds, an entity consisting of two small mutual funds.

In this action, Everest Capital sued Everest Investment Management, Everest Funds Management, Everest Funds, and Gupta (collectively, the "Everest Defendants") asserting federal Lanham Act claims for trademark infringement, trademark dilution, and commercial misrepresentation.15 U.S.C. §§ 1125(a)(1)(A), (a)(1)(B), and (c).Everest Capital also asserted state-law claims under the Nebraska Consumer Protection Act, Neb. Rev. Stat. § 59-1601 et seq.; the Nebraska Uniform Deceptive Trade Practices Act, Neb. Rev. Stat. § 87-301 et seq.; and Nebraska common law.After a jury returned a verdict against Everest Capital on all claims, the district court¹ denied a post-verdict motion for judgment as a matter of law.Everest Capital appeals, arguing insufficient evidence to support the jury's verdict and instructional and evidentiary errors by the court.We affirm.

I.Background.

Everest Capital is an investment advisor whose hedge funds pursue sophisticated strategies that frequently involve emerging foreign markets and distressed and high-yield foreign securities.Since its formation in 1990, Everest Capital has used a mark consisting of the underlined words "Everest Capital," with the underlining forming a stylized mountain peak between the two words.As an unregulated off-shore entity, Everest Capital is prohibited from advertising or marketing its funds or services in the United States.It attracts new United States customers through word of mouth.

At the time of trial, Everest Capital managed three quarters of a billion dollars in assets on behalf of some two hundred wealthy individuals, universities, and foundations.Everest Capital investors must have a net worth of at least one million dollars and usually invest at least a million dollars in an Everest Capital fund.For example, Everest Capital's founder testified that financier George Soros invested half a billion dollars in Everest Capital funds.Everest Capital's promotional materials warn that its investments are intended for "experienced and sophisticated persons" who are able to bear the risk of impairment or loss of their investments.Its brief on appeal admits that "the potential market [for Everest Capital funds] consists of a small proportion of the investment community, namely sophisticated and accredited investors such as universities and foundations."

The Everest Defendants.Everest Investment Management, like Everest Capital, manages private investment partnerships that may invest in a variety of financial instruments.However, except for a brief, unsuccessful marketing campaign aimed at institutional investors, to date Everest Investment Management's partnerships have served almost exclusively as investment vehicles for Mr. Gupta, his family, and close friends and associates.The partnerships have invested in domestic Internet companies, not in risky foreign assets of the type favored by Everest Capital.

Everest Funds Management manages the "Everest Cubed" fund, an index fund that attempts to duplicate the performance of the American securities markets, and the Everest America fund, a conservatively-managed mutual fund that invests primarily in "blue chip" American companies.Both funds are open to investors regardless of net worth and require an initial investment of only $2,000.At the time of trial, each fund managed just three million dollars in assets.Gupta's family owned 98 percent of those assets, and each fund had less than ten investors outside of his family.

The Everest Defendants consistently use the words "Everest Investment Management,""Everest Funds Management," and "Everest Funds" printed in capital letters in a font distinct from Everest Capital's font, and accompanied by a rather fuzzy drawing of Mount Everest in a square border, either above or to the side of the corporate names.

II.Trademark Infringement.

Neither Everest Capital nor any Everest Defendant has been granted federal registration of its mark.See15 U.S.C. §§ 1051,1057,1115.However, section 43 of the Lanham Act grants to qualifying unregistered marks comparable protection from infringement and unfair competition.SeeTwo Pesos, Inc. v. Taco Cabana, Inc.,505 U.S. 763, 767-68, 112 S.Ct. 2753, 120 L.Ed.2d 615(1992).To prevail on its claim of trademark infringement, Everest Capital must prove that the Everest Defendants' use of their marks was "likely to cause confusion" as to the origin of their products and services, or whether they are affiliated with Everest Capital.15 U.S.C. § 1125(a)(1)(A)."The ultimate inquiry always is whether, considering all the circumstances, a likelihood exists that consumers will be confused about the source of the allegedly infringing product."Hubbard Feeds, Inc. v. Animal Feed Supp., Inc.,182 F.3d 598, 602(8th Cir.1999).

Most trademark infringement cases come to this court for review of a summary judgment or for review of the grant or denial of injunctive relief.When the likelihood-of-confusion issue is decided by a court, the inquiry is framed by six non-exclusive factors — "(1) the strength of the owner's mark; (2) the similarity of the owner's mark and the alleged infringer's mark; (3) the degree of competition between the products; (4) the alleged infringer's intent to `pass off' its goods as the trademark owner's; (5) incidents of actual confusion; and, (6) the type of product, its cost, and conditions of purchase."Luigino's, Inc. v. Stouffer Corp.,170 F.3d 827, 830(8th Cir.1999);seeSquirtCo v. Seven-Up Co.,628 F.2d 1086, 1091(8th Cir.1980).²

In this case, Everest Capital requested a jury trial, and the district court submitted the trademark infringement claims to the jury, without objection.InstructionNo. 17 told the jury that, in deciding the likelihood of confusion issue, it "should consider" the above six factors.The district court further instructed, consistent with our prior decisions, that "[t]he presence or absence of any particular factor should not necessarily resolve whether there was a likelihood of confusion, because you must consider all relevant evidence in determining this."SeeGeneral Mills, Inc. v. Kellogg Co.,824 F.2d 622, 626(8th Cir.1987).The verdict form simply asked whether any Everest Defendant"infringed Everest Capital's trademark rights, pursuant to Jury InstructionNo. 17."The jury answered, "No."

A.Sufficiency of the Evidence.Everest Capital is entitled to judgment as a matter of law only if "there is no legally sufficient evidentiary basis for a reasonable jury to find" the Everest Defendants not liable for trademark infringement.Fed. R. Civ. P. 50(a)(1).In reviewing a post-verdict motion for judgment as a matter of law, the district court"should review the record as a whole [but] disregard all evidence favorable to the moving party that the jury is not required to believe."Reeves v. Sanderson Plumbing Prods., Inc.,530 U.S. 133, 151, 120 S.Ct. 2097, 147 L.Ed.2d 105(2000).We review the district court's denial of a motion for judgment as a matter of law de novo, giving equal deference to the jury's verdict.SeeR.M. Taylor, Inc. v. Gen. Motors Corp.,187 F.3d 809, 812(8th Cir.1999), cert. denied,528 U.S. 1159, 120 S.Ct. 1169, 145 L.Ed.2d 1079(2000);Anheuser-Busch, Inc. v. John Labatt Ltd.,89 F.3d 1339, 1344(8th Cir.1996)(a trademark case).

On appeal, Everest Capital reviews the evidence it submitted regarding each of the six SquirtCo factors and argues that these factors "weigh overwhelmingly in its favor."Perhaps this argument would be sound in the Second Circuit, where likelihood of confusion is an issue of law reviewed de novo by the appellate court.SeePlus Prods. v. Plus Discount Foods, Inc.722 F.2d 999, 1004-05(2d Cir.1983).But in this circuit, "[l]ikelihood of confusion is a finding of fact."SquirtCo,628 F.2d at 1091.And properly so, in our view.Though the question is not free from doubt, we agree with the Fourth Circuit that "[t]his pivotal trademark issue is particularly amenable to resolution by a jury.... which represents a cross-section of consumers [and] is well-suited to evaluating whether an `ordinary consumer' would likely be confused."Anheuser-Busch, Inc. v. L & L Wings, Inc.,962 F.2d 316, 318(4th Cir.1992).Therefore, because the jury returned what amounts to a general verdict of no trademark infringement, the only issue on appeal is whether the record as a whole, viewed in the light most favorable to the jury's verdict, contains sufficient evidence supporting that verdict.Detailed analysis of each SquirtCo factor is unnecessary.

Viewing the trial record in this light, it is clear that the district court properly denied Everest...