Frehling Enterprises v. Int'l Group Select

• Decision Date: 18 October 1999
• Docket Number: No. 98-4153,98-4153
• Parties: (11th Cir. 1999) FREHLING ENTERPRISES, INC., d.b.a. Oggetti, Plaintiff-Appellant, Counter-defendant, v. INTERNATIONAL SELECT GROUP, INC., d.b.a. Bell' Oggetti International Ltd., Defendant-Appellee, Counter-claimant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1330

192 F.3d 1330 (11th Cir. 1999)

FREHLING ENTERPRISES, INC., d.b.a. Oggetti, Plaintiff-Appellant, Counter-defendant, v. INTERNATIONAL SELECT GROUP, INC., d.b.a. Bell' Oggetti International Ltd., Defendant-Appellee, Counter-claimant.

No. 98-4153.

United States Court of Appeals,

Eleventh Circuit.

Oct. 18, 1999.

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeal from the United States District Court for the Southern District of Florida. (No. 96-1486-CIV-GRAHAM), Donald L. Graham, Judge.

Before ANDERSON, Chief Judge, MARCUS, Circuit Judge, and MILLS^*, Senior District Judge.

ANDERSON, Chief Judge:

I. INTRODUCTION

This is a servicemark infringement case. Plaintiff Frehling Enterprises, Inc. ("Frehling") claims that its registered "OGGETTI" mark is being infringed upon by Defendant International Select Group, Inc.'s ("ISG") "BELL' OGGETTI" mark. Frehling sells high-end decorative accessories and furniture for the home under its "OGGETTI" mark, and ISG sells ready-to-assemble furniture designed to house electronic equipment in the home under its "BELL' OGGETTI" mark. The district court held a bench trial and ruled in favor of ISG, finding that there was no likelihood of consumer confusion with respect to the two marks. Frehling appeals, and argues that the district court's finding as to the lack of a likelihood of confusion between the two marks was clearly erroneous.

II. STATEMENT OF FACTS

"OGGETTI" means "objects" in Italian. Robert Frehling, president of Frehling Enterprises, began using the mark in connection with his decorative furniture business in 1975. He adopted the name because many of Frehling's products were manufactured in Italy. He filed an application to register the mark with the Patent & Trademark Office in 1985. The application was accepted and the mark was accordingly registered as a service mark, thus receiving federal protection in 1985. Frehling's "OGGETTI" line is sold at department stores, like Macy's and Bloomingdale's, and is sold through various catalogs as well. In addition, Frehling owns showrooms located in New York, Atlanta, and High Point, North Carolina, and leases many more, in Chicago, Los Angeles, and other major cities. The district court described "OGGETTI" furniture as high-end furniture sold in finer stores and noted that it was targeted at affluent consumers.

"BELL' OGGETTI" means "beautiful objects" in Italian. ISG began using this mark in 1989 in connection with its line of audio-visual furniture. In May 1990, ISG filed an application to register its mark with the Patent & Trademark Office, but was denied because of the perceived confusion that might arise in connection with the earlier-registered "OGGETTI" mark. Upon ISG's further application, however, the Office ruled in favor of ISG and permitted registration of the trademark.¹ ISG sells ready-to-assemble equipment-containing furniture like stereo and television cabinets. ISG sells its furniture to mass market retail outlets, such as Circuit City and HiFi Buys, and also sells its products, as does Frehling, through catalogs.

In 1994, ISG procured the toll-free telephone number, "1-800-OGGETTI." This number was included on the enclosed instruction sheet accompanying the purchased product and detailing how to assemble to the furniture. "BELL' OGGETTI" and "1-800- OGGETTI" appeared on the instruction sheet.

In 1995, Frehling president Robert Frehling saw an advertisement for BELL' OGGETTI in a House Beautiful magazine. He called ISG complaining of what he felt was service mark infringement. Shortly thereafter, he sent a demand letter asking ISG to cease using the mark and to cancel its registration. ISG refused, but did stop promoting the "1-800-OGGETTI" toll free phone number. It retained the phone number, but only printed and distributed the numeric toll free number. Frehling then filed suit under the Trademark (Lanham) Act, 15 U.S.C. 1114 (infringement) and 1125(a) (dilution), and various state-law claims.² After a two day bench trial, the district court ruled in favor of ISG, finding that there was no likelihood of confusion so as to violate the Lanham Act, nor any cognizable claim under state law.

III. DISCUSSION

Under the Lanham Act, 15 U.S.C. 1114(1), a defendant is liable for infringement, if, without consent, he uses "in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark" which "is likely to cause confusion, or to cause mistake, or to deceive." Thus, to prevail, a plaintiff must demonstrate (1) that its mark has priority and (2) that the defendant's mark is likely to cause consumer confusion. See Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 122 F.3d 1379, 1382 (11th Cir.1997); Dieter v. B & H Indus. of S.W. Fla., Inc., 880 F.2d 322, 326 (11th Cir.1989), cert. denied, 498 U.S. 950, 111 S.Ct. 369, 112 L.Ed.2d 332 (1990). The priority of Frehling's mark is not in dispute, and thus the issue for this Court is whether the district court clearly erred in finding that there was no likelihood that consumers would confuse the two marks.

This Court considers the following seven factors in assessing whether or not a likelihood of consumer confusion exists:

1. Type of mark

2. Similarity of mark

3. Similarity of the products the marks represent

4. Similarity of the parties' retail outlets (trade channels) and customers

5. Similarity of advertising media

6. Defendant's intent

7. Actual confusion

See Lone Star, 122 F.3d at 1382. Of these, the type of mark and the evidence of actual confusion are the most important. See Dieter, 880 F.2d at 326. The findings as to each factor, and as to the ultimate conclusion regarding whether or not a likelihood of confusion existed, are subject to the clearly erroneous standard of review. See id. at 325.

1.Type of Mark

Classifying the type of mark Plaintiff has determines whether it is strong or weak. See John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 973 (11th Cir.1983). The stronger the mark, the greater the scope of protection accorded it, the weaker the mark, the less trademark protection it receives. See id. at 973. There are four categories of marks: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary. See Freedom Sav. & Loan Ass'n v. Way, 757 F.2d 1176, 1182 (11th Cir.), cert. denied, 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985). The categories are based on the relationship between the name and the service or good it describes. See John H. Harland Co., 711 F.2d at 974. Generic marks are the weakest and not entitled to protection-they refer to a class of which an individual service is a member (e.g., "liquor store" used in connection with the sale of liquor). See Freedom Savings, 757 F.2d at 1182-83 n. 5. Descriptive marks describe a characteristic or quality of an article or service (e.g., "vision center" denoting a place where glasses are sold). See id. "Suggestive terms suggest characteristics of the goods and services and require an effort of the imagination by the consumer in order to be understood as descriptive." Dieter, 880 F.2d at 327 (internal quotation marks omitted). For instance, "penguin" would be suggestive of refrigerators. See Freedom Savings, 757 F.2d at 1182-83 n. 5. An arbitrary mark is a word or phrase that bears no relationship to the product (e.g., "Sun Bank" is arbitrary when applied to banking services). See id. Arbitrary marks are the strongest of the four categories. See id.

Also important in gauging the strength of a mark is the degree to which third parties make use of the mark. See John H. Harland Co., 711 F.2d at 974-75; Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Ass'n, 651 F.2d 311, 316 (5th Cir. July 20, 1981). The less that third parties use the mark, the stronger it is, and the more protection it deserves. See John H. Harland Co., 711 F.2d at 975.

Finally, if a mark is "incontestable," that is, if it has been registered for five years with the Patent & Trademark Office, its holder has filed the affidavit required by 15 U.S.C. 1065(3) with the Patent & Trademark Office, and the Patent & Trademark Office has accordingly declared the mark "incontestable," then the mark's incontestability serves to enhance its strength. See Wilhelm Pudenz, GmbH v. Littlefuse, Inc., 177 F.3d 1204, 1208 (11th Cir.1999); Dieter, 880 F.2d at 328- 29.

In the instant case, the district court found that Frehling's "OGGETTI" mark was suggestive.³ The court found that the mark was adopted to create an Italian connotation (because the products were manufactured in Italy) and that the mark suggests or describes a significant number of products that Frehling produces-that is, fine, decorative "objects d'art." The court held that, as a suggestive mark, Frehling's mark is entitled to protection without any showing of secondary meaning, but failed to quantify the mark as a strong one. We are persuaded that the mark is indeed a strong one, and thus we conclude that the district court clearly erred in not attributing the proper strength to the mark that it was due under the case law.

In particular, the district court did not address the lack of third-party use of Frehling's mark in gauging the mark's strength. The case law is clear that such lack of third-party use should be considered in assessing the strength of a mark. See, e.g., John H. Harland Co., 711 F.2d at 973-75 (collecting cases standing for the proposition that extent of third-party use is an important factor in determining the distinctiveness and thus the strength of the mark); Sun Banks, 651 F.2d at 313 (same); 2 McCarthy, supra, 11.88 (same). Where there is a lack of third-party use, the mark's strength is enhanced, as it is more distinctive, and therefore more easily recognized by consumers. See Sun Banks, 651 F.2d at 313. The record indicates that the "OGGETTI" mark was not used by third parties, thereby contributing to its distinctiveness and enhancing its strength. Thus, by...