Kelley Blue Book v. Car-Smarts, Inc.

• Citation: 802 F. Supp. 278
• Decision Date: 27 August 1992
• Docket Number: No. SA CV 90-712-LTL (RWRx).,SA CV 90-712-LTL (RWRx).
• Court: U.S. District Court — Central District of California
• Parties: KELLEY BLUE BOOK, Plaintiff, v. CAR-SMARTS, INC., Daniel T. Cwieka, and Jay Barchenger, Defendants.

802 F. Supp. 278

KELLEY BLUE BOOK, Plaintiff, v. CAR-SMARTS, INC., Daniel T. Cwieka, and Jay Barchenger, Defendants.

No. SA CV 90-712-LTL (RWRx).

United States District Court, C.D. California.

August 27, 1992.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Edouard V. Rosa, Law Offices of Huebner & Rosa, Los Angeles, Cal., for plaintiff.

William E. Levin, Hawes & Fischer, Newport Beach, Cal., for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

LYDICK, District Judge.

This action came on regularly for trial before the Court sitting without a jury on August 3, 1992. Having heard the testimony of the witnesses called, reviewed and examined the other evidence presented by the parties and heard the arguments of counsel, the Court now makes its findings of fact and conclusions of law:

FINDINGS OF FACT

I

This action brought by plaintiff Kelley Blue Book ("plaintiff") against defendants Car-Smarts, Inc., Daniel T. Cwieka, and Jay Barchenger (collectively "defendants") arises under the Lanham Trade-Mark Act, 15 U.S.C. § 1051 et seq. (plaintiff's federal trademark infringement and false designation of origin causes of action); the California Business and Professions Code § 17200 et seq. (plaintiff's unfair trade practices cause of action); the California Business and Professions Code § 14330 (plaintiff's dilution cause of action); and the common law (plaintiff's common law unfair competition and common law trademark infringement causes of action).

II

Plaintiff is a general partnership organized under the laws of California with its principal place of business in Irvine, California. Defendant Car-Smarts, Inc. ("Car-Smarts") is a California corporation with its principal place of business in Laguna Niguel, California. Defendant Daniel T. Cwieka ("Cwieka") is the president and co-owner of Car-Smarts. Defendant Jay Barchenger ("Barchenger") is a former officer and co-owner of Car-Smarts.

III

Plaintiff is a publisher of publications for the automobile industry which list values for new and used vehicles covering new cars, R.V.'s, motorcycles, and manufactured housing. The publications are sold under the "KELLEY BLUE BOOK & DESIGN" trademark. Plaintiff also offers to its customers computerized electronic versions of its publications which can be obtained through a computer networking service or in the form of floppy disks. These products are also provided under the "KELLEY BLUE BOOK & DESIGN" trademark. In addition, plaintiff provides administrative services to automobile dealers who sell contracts to their customers, and plaintiff sells this service also under the "KELLEY BLUE BOOK & DESIGN" service mark.

IV

Defendants operate an automobile pricing information service under the "1-900-BLU-BOOK" and "1-800-BLUE-BOOK" service mark and telephone designation. Defendants first began offering this service under the "1-900-BLU-BOOK" and "1-800-BLUE-BOOK" designations in 1990 and 1992 respectively.

V

Both defendants Cwieka and Barchenger, as agents of defendant Car-Smarts, authorized or participated in the use of the "1-900-BLU-BOOK" and "1-800-BLUE-BOOK" designations.

VI

Plaintiff is the owner of United States Trademark Registration No. 1,142,514 for the mark "Kelley Blue Book and Design" for booklets in the nature of price lists for used cars, new cars, mobile homes and motorcycles. The trademark registration of this trademark indicates that to acquire the registration plaintiff disclaimed a right to the exclusive use of the words "Blue Book" apart from the mark as shown on the trademark registration.

VII

Plaintiff has continuously sold its automotive publications to auto dealers, lending institutions and other interested members of the automotive industry under the name "Kelley Blue Book" since 1926 and has marketed its automobile service contracts, on-line computerized pricing information services and computer diskettes under the name "Kelley Blue Book" since 1976, 1982 and 1986 respectively.

VIII

Within the last ten years plaintiff has spent more than $2.5 million to market its products and services and has widely advertised and promoted the sales of its automotive publications and related services under the name "Kelley Blue Book" throughout the United States and particularly in California. During the same ten years, plaintiff has sold over $70 million worth of automotive publications and services under the name "Kelley Blue Book." Due to its longstanding and extensive advertising and sales of its automotive publications and related services under the Kelley Blue Book name, plaintiff has acquired an established and reliable reputation in at least the five western states of California, Nevada, Arizona, Oregon and Hawaii for these publications and services.

IX

The evidence introduced by plaintiff of its use of the phrase "blue book" standing alone does not support a finding that plaintiff has acquired a common law trademark in that phrase standing alone. However, plaintiff's sole and longstanding use of the mark "Kelley Blue Book" supports a finding that plaintiff has acquired a common law trademark in that phrase.

X

The phrase "blue book," standing alone, refers to any number of items, including blank booklets used in taking examinations, directories of socially prominent persons, official British publications, a telephone directory and price guides for a wide variety of products. The evidence presented here does not indicate that the public interprets the phrase "blue book" to refer principally to any vehicle valuation guide or to valuation guides in general. Therefore, the Court finds that the phrase "blue book" is not a generic term for vehicle or other valuation guides.

XI

As to the strength of plaintiff's trademark, the "Kelley Blue Book" trademark is a strong mark in the automotive field because it is distinctive as a whole and the descriptive portion of it has acquired a secondary meaning. In at least the five western states of California, Nevada, Arizona, Oregon and Hawaii the term "blue book," when referring to automotive pricing guides and automotive pricing information services, primarily denotes plaintiff as the source of origin.

XII

As to the proximity of the goods, both parties offer pricing information for new and used automobiles.

XIII

As to the similarity of plaintiff's and defendants' marks, plaintiff's "Kelley Blue Book" trademark and defendants' "1-900-BLU-BOOK" and "1-800-BLUE-BOOK" designations are substantially similar in sight, sound and appearance. Defendants' attempts to distinguish their marks from plaintiff by using their own business name along with their telephone designations have been inadequate. Considering plaintiff's and defendants' marks in their entirety and as they appear in the marketplace, the marks are confusingly similar.

XIV

As to evidence of actual confusion, evidence was introduced indicating that on several occasions the parties received telephone inquiries from persons who believed that plaintiff was responsible for the telephone numbers maintained by defendants.

XV

As to the marketing channels used, plaintiff sells its goods and services primarily to automotive dealers. Defendants sell their services primarily to non-auto dealer consumers. However, through banks, libraries and automobile dealers themselves, these latter consumers have access to and rely on the information conveyed in plaintiff's goods and services and defendants do not limit their sales to any particular class of consumers.

XVI

As to the types of goods in question and the degree of care likely to be exercised by the purchaser, the reasonably prudent purchaser of plaintiff's automotive valuation goods and services is likely to believe that defendants' telephone numbers are actually being offered by plaintiff, absent a clear indication by defendants that it is defendants' company that is utilizing the "1-900-BLU-BOOK" and "1-800-BLUE-BOOK" telephone numbers.

XVII

As to defendants' intent in selecting the mark, the Court finds that defendants used the phrase "blue book" in its telephone numbers with the intention of capitalizing on plaintiff's reputation as an authoritative source in the vehicle valuation field.

XVIII

As to likelihood of expansion, the evidence indicates that plaintiff has considered and is considering plans to expand sales of its goods and services to consumers other than automotive dealers.

XIX

In light of the factors discussed in Findings of Fact XI through XVIII above, there exists a likelihood of confusion in the vehicle valuation field in at least the states of California, Nevada, Arizona, Oregon and Hawaii between plaintiff's "Kelley Blue Book" trademark and defendants' "1-900-BLU-BOOK" and "1-800-BLUE-BOOK" designations.

XX

Plaintiff has not introduced evidence of monetary damages resulting from defendants' actions. However, in light of the likelihood of confusion between plaintiff's and defendants' marks, defendants' use of the "1-900-BLU-BOOK" and "1-800-BLUE-BOOK" designations is likely to harm plaintiff by diffusing plaintiff's "Kelley Blue Book" trademark. In addition, evidence that defendants have available to them scant financial resources supports a finding that defendants' use of their telephone designations may injure plaintiff's reputation.

XXI

Defendant has not proved by a preponderance of evidence that plaintiff has engaged in any misconduct which would render the issuance of an injunction inequitable.

XXII

Plaintiff has not proved by clear and convincing evidence that defendants are guilty of oppression, fraud or malice in their actions giving rise to this lawsuit.

XXIII

Any finding of fact herein which is deemed to be a conclusion of law is hereby incorporated in the following conclusions of law.

CONCLUSIONS OF LAW

I

Any conclusion of law herein which is deemed to be a finding of fact is hereby incorporated in the above findings of fact.

II

This Court has jurisdiction over plaintiff's federal trademark...