Lindy Pen Co., Inc. v. Bic Pen Corp.

• Decision Date: 16 February 1984
• Docket Number: No. 82-6053,82-6053
• Citation: 725 F.2d 1240,226 USPQ 17
• Parties: LINDY PEN COMPANY, INC., and Blackfeet Plastics, Inc., Plaintiffs-Appellants, v. BIC PEN CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1240

725 F.2d 1240

226 U.S.P.Q. 17

LINDY PEN COMPANY, INC., and Blackfeet Plastics, Inc., Plaintiffs-Appellants, v. BIC PEN CORPORATION, Defendant-Appellee.

No. 82-6053.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Nov. 7, 1983.

Decided Feb. 16, 1984.

Stephen R. Smith, Morgan, Finnegan, Pine, Foley & Lee, New York City, Thomas A. Turner, Jr., Seymour A. Scholnick, Beverly Hills, Cal., for plaintiffs-appellants.

Thomas F. Reddy, Jr., Pennie & Edmonds, New York City, for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before HUG and FLETCHER, Circuit Judges, and INGRAM, ^* District Judge.

FLETCHER, Circuit Judge:

Lindy Pen Company, owner of a trademark registration for the word "Auditor's" in connection with ballpoint pens, sued Bic Pen Corporation for trademark infringement, unfair competition, breach of contract and trademark dilution. After a bench trial limited to the issues of liability, the district court entered judgment for Bic on all claims. Lindy Pen Co. v. Bic Pen Corp., 550 F.Supp. 1056. Lindy appeals.

BACKGROUND

Both Lindy and Bic manufacture a variety of ballpoint pens. In 1955, Lindy began to use the word "Auditor's" in connection with the sale of its 460-F model fine point, non-refillable, stick pen. In 1966, Lindy obtained federal trademark registration for the use of "Auditor's" in connection with the sale of ballpoint pens. Lindy imprints the mark on the barrel of its model 460-F fine point pens and uses it on the packaging and advertisements for 460-F pens. Lindy sells most of its 460-F pens to the retail trade. The record appears to indicate that Lindy has also sold 460-F pens to at least one distributor in the commercial trade. ¹

Bic manufactures a fine point pen, model PF, imprinted with the phrase "Auditor's fine point." It adopted the designation in 1979 in order to distinguish its PF pen from its retail fine point and accountant fine point pens. The Bic PF is functionally identical to these retail fine point pens, but has a differently colored hexagonal barrel and contrasting cap and button. Bic sells its PF pens to the commercial office supply trade and sells its fine point and accountant fine point pens to the retail trade. Because the pricing structure of the retail market differs from that of the commercial market, Bic decided to sell a distinct product line exclusively to commercial accounts to avoid the possibility of price erosion between markets. The trial court found, however, that a small number of Bic's PF pens reached retail outlets.

Lindy filed suit in 1980. While the lawsuit was pending, Lindy sold its assets to Blackfeet Plastics, Inc. Blackfeet Plastics was joined as a plaintiff before trial. Lindy and Blackfeet Plastics appeal the district court's judgment for Bic on Lindy's trademark infringement and breach of contract claims.

I. Trademark Infringement.

The essential question in a trademark infringement case is whether the alleged infringement creates a likelihood of confusion. Shakey's, Inc. v. Covalt, 704 F.2d 426, 431 (9th Cir.1983); Jockey Club, Inc. v. Jockey Club of Las Vegas, Inc., 595 F.2d 1167 (9th Cir.1979). Unless there is a likelihood of confusion, there is, under the Lanham Trademark Act, no liability for trademark infringement. 15 U.S.C. Sec. 1114 (1976). See Carson Manufacturing Co. v. Carsonite International Corporation, 686 F.2d 665, 670 (9th Cir.1981), cert. denied, --- U.S. ----, 103 S.Ct. 1499, 75 L.Ed.2d 930 (1983). In an infringement suit, the plaintiff bears the burden of proving likelihood of confusion, see Golden Door, Inc. v. Odisho, 646 F.2d 347, 349 (9th Cir.1980), which "exists when consumers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service identified by a similar mark." Alpha Industries v. Alpha Steel Tube & Shapes, 616 F.2d 440, 443 (9th Cir.1980) (quoting Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1229 (3d Cir.1978)).

We treat a determination of the likelihood of confusion as a conclusion of law premised on an analysis of a number of subsidiary factors, including the strength of plaintiff's mark, the similarity of the marks, the similarity of plaintiff's and defendant's goods and the proximity of their marketing channels, evidence of actual confusion, defendant's intent in selecting the mark, the type of goods and the degree of care exercised by purchasers. See Carson Manufacturing Co. v. Carsonite International Corporation, 686 F.2d at 670-71. We consider these factors to be "foundational facts" and review them under the clearly erroneous standard. Alpha Industries v. Alpha Steel Tube & Shapes, 616 F.2d at

443-44; see Golden Door, Inc. v. Odisho, 646 F.2d at 349.

A. Foundational Facts.

The district court found that "Auditor's" was a weak mark, that there was no evidence of actual confusion, that Bic adopted the designation "Auditor's fine point" without intent to capitalize on Lindy's mark and that, although the pens were inexpensive, Lindy had made no showing that purchasers failed to exercise ordinary caution. None of these findings is clearly erroneous. The record indicates that a number of competing pen manufacturers had used or were using "Auditor's" to designate fine point pens at the time Lindy adopted the word as a trademark. Prior to selecting "Auditor's" to designate its PF pen, Bic determined that several brands of pens advertised "auditor's point" or "auditor's extra fine point" pens. Bic elicited testimony from Lindy's witnesses that "Auditor's" indicated a pen with an extra fine point. Lindy introduced no evidence of actual confusion ² and no testimony indicating purchaser carelessness.

The district court also found that Bic and Lindy sold the PF and 460-F pens in different markets, and through different marketing channels. Finally, the district court concluded that Lindy's "Auditor's" mark and Bic's "Auditor's fine point" mark were not confusingly similar because they appeared in conjunction with "BIC" and "LINDY" on pens, packaging and promotional material that were dissimilar in appearance. Lindy challenges both of these findings as clearly erroneous. We reverse the district court's finding that Lindy and Bic sell the pens in different marketing channels, and reverse in part the finding that the marks are not confusingly similar.

1. Marketing Channels.

Much of the testimony given at trial focused upon the marketing channels in which the 460-F and PF pens are sold. The district court determined that Bic sold its PF pens to mail order and telephone solicitation markets for resale to commercial users, but that some Bic PF pens reached the retail market. It found that Lindy sold 460-F pens to wholesalers for resale to retail customers. Despite the parties' stipulation that Lindy sold some 460-F pens in the commercial market and testimony indicating that Lindy had sold 460-F pens to at least one commercial distributor, the district court made no express finding as to Lindy's past or current presence in the commercial market. ³ We hold that the determination that the two companies are not in the same channel of trade is clearly erroneous. In Alpha Industries v. Alpha Steel Tube & Shapes, 616 F.2d at 445, we concluded that some overlap in channels of trade was, on balance, not significant enough to put the companies in the same channel of trade where the goods sold were related but not identical, the purchasers were two distinct groups, the buyers were knowledgeable and the items were expensive. Here, in contrast, the ballpoint pens are essentially interchangeable, the purchasers overlap and are regularly exposed to pens sold in both commercial and retail markets, and the pens are inexpensive, disposable items. In view of the court's finding that some percentage of Bic's PF pens are sold in the retail market and the evidence

                in the record indicating that some Lindy 460-F pens have been sold in the commercial market, we conclude that the parties sell pens in convergent marketing channels.   See AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 353 (9th Cir.1979).  Convergent marketing channels increase the likelihood of confusion.  Id
                

2. Similarity of The Marks.

Overwhelming evidence at trial established that the Lindy and Bic pens and all packaging, display and promotional materials were dissimilar in appearance and readily distinguishable. The trial court further found that the trademarks "BIC" and "LINDY" were prominently and repeatedly displayed on the pens and all packaging and promotional materials. The trial court therefore concluded that the two marks, Lindy's "Auditor's" and Bic's "Auditor's fine point," considered in the context in which they appeared in the marketplace, were not confusingly similar.

Lindy argues that the district court erred in determining whether the marks were confusingly similar without first finding as a threshold matter that the two marks were almost identical. Lindy insists that the court, thus, collapsed the inquiry as to similarity of the marks into the ultimate legal conclusion whether defendant's mark creates a likelihood of confusion. See AMF, Inc. v. Sleekcraft Boats, 599 F.2d at 350. Although Lindy is correct that it is improper to equate the two inquiries, see id., we read the district court's opinion to reflect the appropriate examination of the marks' similarity. The two marks viewed in isolation are indeed identical, but their similarity must be considered in light of the way the marks are encountered in the marketplace and the circumstances surrounding the purchase of the pens. Alpha Industries v. Alpha Steel Tube & Shapes, 616 F.2d at 444; AMF, Inc. v. Sleekcraft Boats, 599 F.2d at 351; Walt Disney Productions v. Air Pirates, 581 F.2d 751, 759 (9th Cir.1978), cert. denied sub nom. O'Neill v. Walt Disney Productions, 439 U.S. 1132, 99 S.Ct. 1054, 59 L.Ed.2d 94 (1...