Linn Camera Shop Inc. v. Meijer, Inc.

• Citation: 559 F. Supp. 175
• Decision Date: 28 December 1982
• Docket Number: No. G82-716 CA5.,G82-716 CA5.
• Parties: LINN CAMERA SHOP INC., a Michigan corporation, Plaintiff and Counter-Defendant, v. MEIJER, INC., a Michigan corporation, Defendant and Counter-Plaintiff.
• Court: U.S. District Court — Western District of Michigan

559 F. Supp. 175

LINN CAMERA SHOP INC., a Michigan corporation, Plaintiff and Counter-Defendant, v. MEIJER, INC., a Michigan corporation, Defendant and Counter-Plaintiff.

No. G82-716 CA5.

United States District Court, W.D. Michigan, S.D.

December 28, 1982.

COPYRIGHT MATERIAL OMITTED

McKinnon & McKinnon by Malcolm R. McKinnon and Malcolm L. McKinnon, Lansing, Mich., for plaintiff and counter-defendant.

Price, Heneveld, Huizenga & Cooper by William W. DeWitt and Donald S. Gardner, Grand Rapids, Mich., for defendant and counter-plaintiff.

OPINION RE: MOTION FOR PRELIMINARY INJUNCTION

HILLMAN, District Judge.

This is a civil action brought by plaintiff Linn Camera Shop in which plaintiff seeks a Declaratory Judgment pursuant to 28 U.S.C. §§ 2201, 2202. Specifically, plaintiff seeks a declaration from this court that plaintiff's past and continued use of the phrase, "NEXT DAY OR FREE," in connection with its film processing business does not amount to service mark infringement or unfair competition under the trademark laws of the United States or the laws of the State of Michigan. Jurisdiction over the instant action is predicated upon the Trademark Act of 1946, as amended, 60 Stat. 427, 15 U.S.C. §§ 1121, 1125(a) as well as 28 U.S.C. § 1338.

Currently before the court is defendant Meijer, Inc.'s motion for a preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure. Defendant Meijer seeks preliminary injunction enjoining plaintiff Linn Camera from offering photographic services in connection with the phrase, "NEXT DAY OR FREE." This motion is based upon defendant Meijer's counterclaims filed in response to Linn Camera's complaint for a declaratory judgment. For the reasons that follow, defendant's motion for a preliminary injunction is denied.

STATEMENT OF THE CASE

Plaintiff, Linn Camera Shop, Inc., is a corporation organized and existing under the laws of the State of Michigan having its principal place of business in Lansing, Michigan. Plaintiff is engaged in the business of film developing, processing, printing, and photo finishing. Linn Camera advertises its services on radio and television commercials, in newspapers, and on billboards located adjacent to interstate highways.

In advertising its services, plaintiff uses the service mark, "LINPRINTS," in conjunction with the phrase "NEXT DAY OR FREE." Plaintiff has used this phrase to promote its rapid film processing business in which plaintiff promises its customers that Linn Camera Shop will complete its film processing service within 24 hours or the prints are provided to the customer at no cost.

Defendant Meijer, Inc., is a corporation organized and existing under the laws of Michigan. Since 1934, Meijer, Inc., has been engaged in the distribution and sale of a wide variety of goods ranging from groceries to building materials. In conjunction with its operation, Meijer offers a variety of services ranging from beauty salons to automobile service stations.

Since 1970, Meijer has offered retail film processing services through outlets in its various stores in the State of Michigan. In more recent years, Meijer has offered film processing services in the States of Ohio and Kentucky.

The actual film processing and development has been done for Meijer by various service companies including Guardian Photo Division, Guardian Industries Corporation of Northville, Michigan, and Fox Photo, Inc. of San Antonio, Texas. These companies provide film processing services for Meijer in different geographical areas.

In 1980, Meijer and Guardian Photo Division of Guardian Industries jointly engaged in a rapid film development program for Meijer customers. The program was designed to ensure Meijer customers that Meijer would provide customers with developed film within a predetermined period of time or the customer would be provided with prints at no cost. Meijer has extensively advertised and promoted its rapid film development service using the phrase, "NEXT DAY OR FREE."

In its printed advertising, Meijer uses the phrase, "NEXT DAY OR FREE," in association with a rainbow design. Meijer's name or its logo, a stylized "M," is placed in close proximity to the phrase, "NEXT DAY OR FREE."

Guardian Photo uses "NEXT DAY OR FREE" concurrently with Meijer in states other than Michigan, Ohio and Kentucky. Guardian has attempted to register the phrase, "NEXT DAY OR FREE," as a service mark with the Patent and Trademark Office of the United States Department of Commerce. Such registration has been refused by the Patent and Trademark Office on the grounds that the phrase, when applied to film processing, is merely descriptive and, therefore, not entitled to trademark protection. This refusal is currently being appealed.

In June of 1982, Meijer filed an application with the Michigan Department of State to register the phrase, "NEXT DAY OR FREE," as a service mark of Meijer, Inc. In August of 1982, the Secretary of State for the State of Michigan certified that Meijer had registered the Service Mark, "NEXT DAY OR FREE" with the Michigan Department of State. By September 1, 1982, Meijer had also registered the phrase, "NEXT DAY OR FREE," in the States of Ohio and Kentucky.

In June of 1982, Meijer, Inc., wrote Linn Camera Shop advising Linn that Linn's use of "NEXT DAY OR FREE" constituted trademark infringement and unfair competition. As alleged by plaintiff, Meijer threatened to take legal action against Linn Camera if Linn Camera did not cease using "NEXT DAY OR FREE."

On September 16, 1982, Linn Camera filed the instant action for a Declaratory Judgment that Linn Camera has not infringed upon any rights of Meijer in using the phrase, "NEXT DAY OR FREE." Linn Camera's complaint also sought a decree from this court declaring any registration of the phrase to be invalid.

On October 7, 1982, defendant Meijer filed its answer and counterclaims to plaintiff's complaint. Defendant's counterclaims are four-fold. First, that Linn Camera's use of "NEXT DAY OR FREE" in connection with film developing services constitutes false designation of origin in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Second, that plaintiff's conduct constitutes an infringement of Meijer's Michigan Service Mark in violation of the Michigan Trademark Act, M.C.L.A. § 429.31, et seq. Third, that Linn Camera's conduct constitutes the common law tort of unfair competition. Fourth, that Linn Camera's actions constitute a deceptive commercial practice in violation of section 3 of the Michigan Consumer Protection Act. M.C.L.A. § 445.901, et seq.

On December 8, 1982, defendant Meijer moved, on the basis of its counterclaims, for a preliminary injunction against plaintiff Linn Camera. Defendant Meijer's motion seeks an order from the court restraining Linn Camera from using the purported service mark, "NEXT DAY OR FREE," in connection with any of plaintiff's photo processing services. Furthermore, defendant requested the court to expedite and decide defendant's motion before January 1, 1983, in light of the fact that the pending holiday season is one of the busiest seasons in the film processing business.

On December 20, 1982, a hearing, at which all parties were represented, was held before the court. At the hearing, defendant Meijer stressed that the primary issue before the court is whether Linn Camera's use of the phrase, "NEXT DAY OR FREE," constituted a false designation of origin in violation of 15 U.S.C. § 1125. Meijer contended that since the general public associates the phrase, "NEXT DAY OR FREE," with Meijer's services, plaintiff's use of the phrase creates a likelihood of confusion as to the origin of the film development services and, therefore, constitutes unfair competition.

In support of its contention, Meijer has submitted a number of affidavits of Meijer employees. These affidavits generally state that a number of Meijer customers have told Meijer employees that they associate "NEXT DAY OR FREE" with Meijer. Furthermore, these affidavits state that a number of customers have specifically asked Meijer employees whether or not Meijer offers "Linprints," plaintiff's service mark, at Meijer stores. Additionally, the affidavits state that on a number of occasions, Meijer customers have requested that their developed prints be delivered to them in clear plastic boxes rather than in paper envelopes. This service, defendant alleges, is associated with Linn Camera Shop and is promoted by plaintiff in its advertisements using "NEXT DAY OR FREE."

Defendant contends that the affidavits along with the registration in three states, of the phrase and defendant's extensive advertising establish the strength of defendant's purported service mark and show that the public will likely be confused by Linn's continued use of "NEXT DAY OR FREE."

In opposing defendant's contentions, plaintiff Linn Camera submitted numerous advertisements from various businesses engaged in rapid film processing. These advertisements all promote film services using phrases such as "24 hours or FREE," "ONE DAY OR NO PAY," "Back Next DAY or FREE." Furthermore, plaintiff has submitted advertisements used by an Ohio film development company which has used the phrase, "NEXT DAY OR FREE," since 1980. Additionally, plaintiff has supplied the court with advertisements used by a nationally recognized chain store which has used the phrase, "NEXT DAY OR FREE," in the Michigan area.

Plaintiff has contended that the proliferation of rapid film development businesses and their use of slogans similar to the phrase used by the parties in the instant case show that there is little likelihood of confusing the general public as to the origin of "NEXT DAY OR FREE" services. Linn contends that since so many businesses use similar slogans, the public simply views these slogans as describing film services. Plaintiff also contends that the wide use of slogans promoting rapid film development also shows...