Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Club Ltd. Partnership.

• Decision Date: 12 August 1994
• Docket Number: No. 94-2578,94-2578
• Citation: 31 U.S.P.Q.2d 1811,34 F.3d 410
• Parties: , 31 U.S.P.Q.2d 1811 INDIANAPOLIS COLTS, INC., National Football League Properties, Inc., and National Football League, Plaintiffs-Appellees, v. METROPOLITAN BALTIMORE FOOTBALL CLUB LIMITED PARTNERSHIP, James L. Speros, and Canadian Football League, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 410

34 F.3d 410

63 USLW 2126, 31 U.S.P.Q.2d 1811

INDIANAPOLIS COLTS, INC., National Football League Properties, Inc., and National Football League Plaintiffs-Appellees, v. METROPOLITAN BALTIMORE FOOTBALL CLUB LIMITED PARTNERSHIP James L. Speros, and Canadian Football League Defendants-Appellants.

No. 94-2578.

United States Court of Appeals Seventh Circuit.

Argued Aug. 3, 1994.

Decided Aug. 12, 1994. ^*

Daniel C. Emerson, Bose, McKinney & Evans, Indianapolis, IN, Nadine P. Flynn, John P. Reiner, Robert L. Raskopf, Townley & Updike, New York City, for Indianapolis

Colts, Inc., National Football League Properties, Inc., National Football League.

Stanley C. Fickle, Robert P. Johnstone, Michael Rosiello, Barnes & Thornburg, Indianapolis, IN, George F. Pappas, David J. Heubeck, Mitchell Y. Mirviss, Vicki Margolis, Kenneth C. Bass, III, Venable, Baetjer & Howard, Baltimore, MD, for Metro. Baltimore Football Club Ltd. Partnership, James L. Speros, Canadian Football League.

Before POSNER, Chief Judge, and BAUER and KANNE, Circuit Judges.

POSNER, Chief Judge.

The Indianapolis Colts and the National Football League, to which the Colts belong, brought suit for trademark infringement (15 U.S.C. Secs. 1051 et seq.) against the Canadian Football League's new team in Baltimore, which wants to call itself the "Baltimore CFL Colts." (Four of the Canadian Football League's teams are American.) The plaintiffs obtained a preliminary injunction against the new team's using the name "Colts," or "Baltimore Colts," or "Baltimore CFL Colts," in connection with the playing of professional football, the broadcast of football games, or the sale of merchandise to football fans and other buyers. The ground for the injunction was that consumers of "Baltimore CFL Colts" merchandise are likely to think, mistakenly, that the new Baltimore team is an NFL team related in some fashion to the Indianapolis Colts, formerly the Baltimore Colts. From the order granting the injunction the new team and its owners appeal to us under 28 U.S.C. Sec. 1292(a)(1). Since the injunction was granted, the new team has played its first two games--without a name.

A bit of history is necessary to frame the dispute. In 1952, the National Football League permitted one of its teams, the Dallas Texans, which was bankrupt, to move to Baltimore, where it was renamed the "Baltimore Colts." Under that name it became one of the most illustrious teams in the history of professional football. In 1984, the team's owner, with the permission of the NFL, moved the team to Indianapolis, and it was renamed the "Indianapolis Colts." The move, sudden and secretive, outraged the citizens of Baltimore. The city instituted litigation in a futile effort to get the team back--even tried, unsuccessfully, to get the team back by condemnation under the city's power of eminent domain--and the Colts brought a countersuit that also failed. Indianapolis Colts v. Mayor & City Council of Baltimore, 733 F.2d 484, 741 F.2d 954 (1984), 775 F.2d 177 (7th Cir.1985).

Nine years later, the Canadian Football League granted a franchise for a Baltimore team. Baltimoreans clamored for naming the new team the "Baltimore Colts." And so it was named--until the NFL got wind of the name and threatened legal action. The name was then changed to "Baltimore CFL Colts" and publicity launched, merchandise licensed, and other steps taken in preparation for the commencement of play this summer.

The defendants do not argue that the balance of irreparable harm is so one-sided against them that the preliminary injunction should not have been issued even if the plaintiffs have the stronger legal position. Curtis 1000, Inc. v. Suess, 24 F.3d 941, 945 (7th Cir.1994). They stand foursquare on the contention that the district judge committed serious legal errors. The first they say was in holding that the Baltimore team is within the reach of Indiana's long-arm statute which is applicable to this suit by virtue of Fed.R.Civ.P. 4(k)(1)(A). The only activity of the team undertaken or planned so far in Indiana is the broadcast of its games nationwide on cable television. Since the Indiana statute reaches as far as the U.S. Constitution permits, Ind.R.Trial Pro. 4.4, we need decide only whether the due process clause of the Fourteenth Amendment forbids the degree of extraterritoriality entailed by this lawsuit. We think not, and are not even certain that the broadcasts in Indiana are critical. The Indianapolis Colts use the trademarks they seek to defend in this suit mainly in Indiana. If the trademarks are impaired, as the suit alleges, the injury will be felt mainly in Indiana. By choosing a name that might be found to be confusingly similar to that of the Indianapolis Colts, the defendants assumed the risk of injuring valuable property located in Indiana. Since there can be no tort without an injury, Midwest Commerce Banking Co. v. Elkhart City Centre, 4 F.3d 521, 524 (7th Cir.1993), the state in which the injury occurs is the state in which the tort occurs, and someone who commits a tort in Indiana should, one might suppose, be amenable to suit there. This conclusion is supported by the Supreme Court's decision in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), holding that the state in which the victim of the defendant's defamation lived had jurisdiction over the victim's defamation suit.

We need not rest on so austere a conception of the basis of personal jurisdiction. In Calder as in all the other cases that have come to our attention in which jurisdiction over a suit involving intellectual property (when broadly defined to include reputation, so that it includes Calder itself) was upheld, the defendant had done more than brought about an injury to an interest located in a particular state. The defendant had also "entered" the state in some fashion, as by the sale (in Calder ) of the magazine containing the defamatory material. Well, we have that here too, because of the broadcasts, so we needn't decide whether the addition is indispensable. The bulk of the Indianapolis Colts' most loyal fans are, no doubt, Hoosiers, so that the largest concentration of consumers likely to be confused by broadcasts implying some affiliation between the Indianapolis Colts and the Baltimore team is in Indiana. It is true that the defendants have not yet licensed the sale of merchandise with the name "Baltimore CFL Colts" on it in Indiana, but citizens of Indiana buy merchandise in other states as well. And it is only a matter of time before the Baltimore team will be selling its merchandise nationwide; the plaintiffs are entitled to seek injunctive relief before that happens. Certainly the Baltimore Colts had a national following, and we do not doubt that the resonance of the name, and not merely the clamor of the Baltimoreans, motivated the Baltimore team's choice of "Colts," out of all the appealing animals in the ark.

It is as clear or clearer that venue is proper in Indiana. See 28 U.S.C. Sec. 1391(b)(2); 3 J. Thomas McCarthy, McCarthy on Trademarks and Intellectual Property Sec. 32.22(3)(b)(iii) (3d ed. 1994), so we can turn to the merits of the trademark dispute, cautioning the reader that the expression of views that follows is tentative, as we do not wish to prejudice the outcome of the trial on the merits.

The Baltimore team wanted to call itself the "Baltimore Colts." To improve its litigating posture (we assume), it has consented to insert "CFL" between "Baltimore" and "Colts." A glance at the merchandise in the record explains why this concession to an outraged NFL has been made so readily. On several of the items "CFL" appears in small or blurred letters. And since the Canadian Football League is not well known in the United States--and "CFL" has none of the instant recognition value of "NFL"--the inclusion of the acronym in the team's name might have little impact on potential buyers even if prominently displayed. Those who know football well know that the new "Baltimore Colts" are a new CFL team wholly unrelated to the old Baltimore Colts; know also that the rules of Canadian football are different from those of American football and that teams don't move from the NFL to the CFL as they might from one conference within the NFL to the other. But those who do not know these things--and we shall come shortly to the question whether there are many of these football illiterates--will not be warned off by the letters "CFL." The acronym is a red herring, and the real issue is whether the new Baltimore team can appropriate the name "Baltimore Colts." The entire thrust of the defendants' argument is that it can.

They make a tremendous to-do over the fact that the district judge found that the Indianapolis Colts abandoned the trademark "Baltimore Colts" when they moved to Indianapolis. Well, of course; they were no longer playing football under the name "Baltimore Colts," so could not have used the name as the team's trademark; they could have used it on merchandise but chose not to, until 1991 (another story--and not one we need tell). When a mark is abandoned, it returns to the public domain, and is appropriable anew--in principle. In practice, because "subsequent use of [an] abandoned mark may well evoke a continuing association with the prior use, those who make subsequent use may be required to take reasonable precautions to prevent confusion." 2 McCarthy, supra, Sec. 17.01, at p. 17-3. This precept is especially important where, as in this case, the former owner of the abandoned mark continues to market the same product or service under a similar name, though we cannot find any previous cases of this kind. No one questions the validity of "Indianapolis Colts" as the trademark of the NFL team that plays out of Indianapolis and was formerly known as the Baltimore Colts. If "Baltimore CFL Colts" is confusingly similar to "Indianapolis Colts" by virtue of the history of the...