International Stamp Art v. U.S. Postal Service

• Decision Date: 18 July 2006
• Docket Number: No. 05-13492.,05-13492.
• Citation: 456 F.3d 1270
• Parties: INTERNATIONAL STAMP ART, INC., Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

456 F.3d 1270

INTERNATIONAL STAMP ART, INC., Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee.

No. 05-13492.

United States Court of Appeals, Eleventh Circuit.

July 18, 2006.

James Jay Wolfson, Matthew James Pulliam, Greenberg Traurig, LLP, Atlanta, GA, V. Stephen Cohen, William J. Schifino, Jr., Williams, Schifino, Mangione & Steady, P.A., Tampa, FL, for Plaintiff-appellant.

Aileen Bell Hughes, Atlanta, GA, Scott D. Bolden and John Fargo, U.S. Dept. of Justice, Commercial Lit., Washington, DC, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before BIRCH and CARNES, Circuit Judges, and TRAGER^*, District Judge.

PER CURIAM:

Plaintiff-appellant, International Stamp Art, Incorporated ("ISA") appeals a grant of summary judgment in favor of defendant-appellee, the United States Postal Service ("Postal Service") with respect to the Postal Service's assertion of fair use in response to ISA's allegations of trademark infringement. The appeal requires us to determine the appropriate legal standard for good faith with respect to a fair-use defense in this context, an issue of first impression for us. Because we join four other circuits in holding that the legal standard is the same as for any other trademark infringement inquiry into good faith — whether the alleged infringer intended to benefit from the good will associated with the holder of the mark — and because there is no evidence in the record indicating that the Postal Service so intended, we AFFIRM.

I. BACKGROUND

ISA, a for-profit corporation engaged in the production of note cards, greetings cards, posters, and prints, was founded in 1985. For most of these products, ISA has used a perforated border design that evokes the functional flat-edged perforation of an older postage stamp. See R3-56, Exhs. Q, S. In October 1994, ISA filed an application with the United States Patent and Trademark office seeking to register the perforated border design as a trademark and, in 1996, was granted U.S. Registration No. 1,985,086 for that mark for use on printed note cards and greeting cards. For the purposes of the summary judgment motion from which the order now before us arises, the parties have stipulated that the mark is incontestable.¹

Almost from its inception, ISA was a non-exclusive licensee of the Postal Service. Between 1985 and 1997 there were a series of license agreements between the parties. In each case, the Postal Service licensed use of its "stamp designs" which were further specified to include "[a]ll United States postage stamps to which the U.S. Postal Service owns the copyright." See R1-19, Exh. 1 at 1-2, 19; id., Exh. 2 at 1-2, 19. Stamp images were transmitted to licensees in the form of transparencies, each marked as copyright protected and depicting the entire stamp including any perforated edges. See, e.g., R3-49 at A204 (licensing transparency of Girl Scouts Stamp); see also R3-56, Exh. C at 72. The Postal Service retained right of approval over all licensed products. R1-19, Exh. 1 at 6-8; id., Exh. 2 at 6-8.

As a licensee, ISA also sought to sell its products at Postal Service locations nationwide, and to that end made several presentations to the Postal Service and, later, to its license management firm, Hamilton Projects. In the late 1980s and early 1990s, a few Postal Service stores did carry ISA products. In the mid 1990s, the parties discussed the possibility of expanding such sales to Postal Service stores nationwide. Nothing further came of it, however, and the Postal Service did not respond to any of ISA's subsequent proposals to handle its distribution and management of stationary and greeting cards.

In the late 1990s, the Postal Service Retail Division began offering its own line of stamp art cards. Most of these cards included the perforated border of the original stamp as part of the stamp's image. See, e.g., R1-1, Exhs. 3 (Sylvester and Tweety), 5 (Love), & 6 (Snoopy). The Postal Service has also occasionally licensed or produced cards incorporating the art depicted in its stamps without any perforated border. R3-56, Exh. R (Elvis, Holly, Pansy, two versions of Midnight Angel). Most cards have included the stamp value designation and the "USA" as they appeared on the stamp, but some of the cards that incorporate only the art and not the entire stamp image have not included those elements. Id. (Pansy, two versions of Midnight Angel). The Postal Service's choice about whether to depict stamp images or some other form of the underlying stamp art has often reflected the extent of its ownership interest in the stamp image. See id., Exh. C at 38-39; id., Exh. D at 28-30. In the case of jointly-owned stamp designs, in which the copyright interest in the underlying artwork is held by another, the Postal Service has often been limited to reproducing the entire stamp image with all its constituent elements — the "USA," the price, and any perforations — because it is not licensed to reproduce the underlying art alone. Id., Exh. C at 38-39; id., Exh. D at 27-30.

Since the Postal Service adopted self-adhesive for its stamps, Postal Service cards incorporating the images of stamps have depicted the stamps with their new serpentine die-cut "perforated" borders. R1-1, Exhs. 5-6; R3-56, Exh. P (Love, Snoopy, Puppy, Kwanzaa, Hanukkah). Postal Service cards include an easily visible imprint of its familiar Eagle trademark on the back, generally accompanied by information about the history of the stamp or stamp art depicted on the card and another smaller image of the entire stamp.² R3-56, Exhs. P, R. There is no record evidence that the Postal Service has created any card that adds a perforated border to the image of one of the few stamps it has produced without any perforations.

In September 2002, ISA sued the Postal Service alleging unlawful infringement of its perforated border mark with respect to those Postal Service cards depicting the entire image of a stamp. The Postal Service moved for summary judgment, asserting that (1) it did not use the mark; (2) its use of the perforated border in depicting images of its stamps fell within the fair-use exception provided by law; (3) ISA had abandoned the mark; and (4) damages were precluded based on actual notice. The district court found that the Postal Service had used the disputed border, but that it had used it "other than as a mark, in a descriptive manner, and in good faith," and granted summary judgment in favor of the Postal Service on the basis of fair use.³ R4-77 at 13. On appeal, ISA disputes the grant of summary judgment arguing only that the district court erred in finding no genuine issue of material fact as to the Postal Service's good faith in using the border.

II. DISCUSSION

"We review a district court's grant of summary judgment de novo." Siemens Power Transmission & Distribution, Inc. v. Norfolk S. Ry., 420 F.3d 1243, 1248 (11th Cir.2005). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to "come forward with specific facts showing that there is a genuine issue for trial." See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (quotations and emphasis omitted). If the movant bears the burden of proof on an issue, because, as a defendant, it is asserting an affirmative defense, it must establish that there is no genuine issue of material fact as to any element of that defense. See Martin v. Alamo Community College Dist., 353 F.3d 409, 412 (5th Cir.2003).

A trademark is "any word, name, symbol, or device, or any combination thereof [used] to identify and distinguish [one's] goods ... from those manufactured or sold by others and to indicate the source of the goods." Gift of Learning Foundation, Inc. v. TGC, Inc., 329 F.3d 792, 797 (11th Cir.2003) (per curiam) (quoting 15 U.S.C. § 1127). "A plaintiff seeking to prevail on a trademark infringement claim must show 1) that he had a valid trademark and 2) that the defendant had adopted an identical or similar mark such that consumers were likely to confuse the two." Id.

As for the first element, the parties have stipulated that ISA's mark is incontestable. As to the second, the district court found that the Postal Service stamp art products did incorporate a perforated border similar to ISA's mark. Accordingly, the question became whether or not the Postal Service's use of the border could be defended as a "fair use" of the mark. Because the Postal Service moved for summary judgment on the ground that it could be so defended, it had the burden to establish that there was no genuine issue of material fact as to any element of the fair-use defense. See Martin, 353 F.3d at 413.

A fair-use defense is established if a defendant proves that its use is "(1) other than as a mark, (2) in a descriptive sense, and (3) in good faith." EMI Catalogue P'ship v. Hill, Holliday, Connors, & Cosmopulos, Inc., 228 F.3d 56, 64 (2d Cir. 2000) (citing 15 U.S.C § 1115(b)(4)); see also Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir.1980). "The `fair-use' defense, in essence, forbids a trademark registrant to appropriate a descriptive term for [its] exclusive use and so prevent others from accurately describing a characteristic of their goods." Soweco, 617 F.2d at 1185. In this case, the district court found no genuine issue of material fact as to whether the Postal Service had (1) used the border other than as a mark, (2) used the border descriptively, and (3) done so in good faith. On appeal, ISA challenges only the...