Marketing Displays, Inc. v. Traffix Devices, Inc.

• Decision Date: 21 September 1999
• Docket Number: Nos. 97-1148,97-2097,97-2096,s. 97-1148
• Citation: Marketing Displays, Inc. v. Traffix Devices, Inc., 200 F.3d 929 (6th Cir. 1999)
• Parties: (6th Cir. 1999) Marketing Displays, Incorporated, Plaintiff-Appellee/Cross-Appellant (97-2097), v. Traffix Devices, Incorporated, Defendant-Appellant(97-1148/2096)/ Cross-Appellee. Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 929

200 F.3d 929 (6th Cir. 1999)

Marketing Displays, Incorporated, Plaintiff-Appellee/Cross-Appellant (97-2097), v.Traffix Devices, Incorporated, Defendant-Appellant(97-1148/2096)/ Cross-Appellee.

Nos. 97-1148, 97-2096, 97-2097

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: September 21, 1999

Decided and Filed: December 29, 1999

[Copyrighted Material Omitted]

Richard W. Hoffman(briefed), Jeanne-Marie Marshall, REISING, ETHINGTON, BARNES, KISSELLE, LEARMAN & McCULLOCK, Troy, Michigan, Irwin Alterman, KEMP, KLEIN, UMPHREY & ENDELMAN, Troy, Michigan, Irwin Alterman(argued & briefed), Kemp, Klein, Umphrey & Endelman, Troy, MI, for Defendant-Appellant/Cross-Appellee.

Frank A Angileri, Brooks & Kushman, Southfield, MI, John A. Artz, LYON & ARTZ, Southfield, Michigan, for Appellee.ON BRIEF: Jeanne-Marie Marshall, Richard W. Hoffmann, REISING, ETHINGTON, BARNES, KISSELLE, LEARMAN & McCULLOCK, Troy, Michigan, Irwin Alterman, KEMP, KLEIN, UMPHREY & ENDELMAN, Troy, Michigan, for Appellant.

Appeal from the United States District Courtfor the Eastern District of Michigan at Flint.No. 95-40230--Paul V. Gadola, District Judge.

Before: BOGGS and DAUGHTREY, Circuit Judges; and MCKINLEY,^*District Judge.

OPINION

BOGGS, Circuit Judge.

This consolidated appeal concerns three related but distinct disputes between the parties.Marketing Devices, Inc.(owner of the WindMaster trademark) claims that TrafFix Displays, Inc.(owner of the WindBuster trademark) has infringed its trademark, infringed its trade dress, and violated federal unfair competition laws in the process.TrafFix denies these charges, and counterclaims that MDI, by aggressively pursuing sham litigation to extend its patent, has violated § 2 of the Sherman Antitrust Act, which prohibits attempts to monopolize.MDI's unfair competition claim turns on the same evidence as its trademark and trade dress claims, so the three real disputes raised for consideration are 1) infringement of the WindMaster trademark, 2) infringement of the WindMaster trade dress, and, should those claims prove sufficiently unfounded, 3) MDI's alleged attempt to monopolize through sham litigation.TrafFix appeals the district court's order granting summary judgment against TrafFix and enjoining use of its infringing trademark, as well as the dismissal of its antitrust counterclaim.MDI cross-appeals the district court's grant of summary judgment to TrafFix on MDI's trade dress and federal unfair competition claims.

We find no reason to disturb the district court's order permanently enjoining use of the WindBuster trademark.However, because we believe that MDI established genuine issues of material fact on its trade dress and unfair competition claims, we reverse the district court's summary judgment on those issues.In light of these holdings, we affirm summary judgment for MDI on the antitrust counterclaim brought by TrafFix.

I

MDI manufactures a number of different products for sale to the highway construction industry.In particular, it markets a popular, wind-resistant, mobile, traffic-sign stand under the brand name WindMaster, which was trademarked July 5, 1977.The WindMaster sign's design depends in part on patents for a dual-spring base that helps the sign resist windy conditions.MDI's president Robert Sarkisian developed the patented sign stand in the mid-1960s, and the last relevant patent expired on May 16, 1989, seventeen years after its issuance.TrafFix also sells traffic safety products to the highway construction industry.Knowing that the technology protected by a patent becomes available to the public after the patent expires, TrafFix owner and president Jack Kulp sent an MDI sign to Korea to be reverse engineered into a product he could sell in competition with MDI.Before founding TrafFix, Kulp had distributed WindMaster signs as an employee at another company.TrafFix brought its sign to market in the fall of 1994, but did not begin using the brand name WindBuster until mid-1995.Kulp says he chose the name WindBuster, suggested by a business associate, because it connoted wind resistance, he liked it, and it sounded "like breaking and busting a bronco . . . ."

Before using the name, Kulp directed a patent attorney to conduct a trademark search to determine the availability of WindBuster as a trademark for traffic signs.Attorney Donald Stout concluded in a January 11, 1994 opinion letter that TrafFix had a "reasonably good chance" of registering WindBuster despite the prior marks of WindMaster and WindFlex for traffic-sign stands.He believed that there was not any confusing similarity between WindBuster and the other marks, especially given the "specialized field" and "discriminating" consumer base.TrafFix then filed an application to register WindBuster as a trademark with the United States Patent and Trademark Office on February 10, 1994.The examining attorney found no similar registered mark that would bar registration.The PTO published the proposed new trademark in its Official Gazette on March 14, 1995, to provide an opportunity for anyone to object to the mark's use.No one objected within the post-publication period prescribed by law.Thus, the PTO allowed the WindBuster trademark on June 21, 1995.The trademark registration for WindBuster issued on January 9, 1996.

In the meantime, MDI quickly became aware of the new trademark and filed its initial complaint in this case on July 11, 1995.In an order dated January 13, 1997, the district court granted summary judgment to MDI on its trademark infringement claim, permanently enjoined TrafFix's use of the infringing mark, and dismissed TrafFix's antitrust counterclaim.Then, on June 12, 1997, the district court granted summary judgment to TrafFix, dismissing MDI's trade dress and unfair competition claims.The parties filed timely notices of appeal on the issues adverse to them, and the district court certified all liability issues as final for appeal on September 11, 1997.

II

This court reviews de novo the district court's grant of summary judgment as to trademark infringement and its issuance of a permanent injunction.SeeDaddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275, 280(6th Cir.1997).Because the district court granted summary judgment rather than conducting a trial on this issue, a de novo standard of review applies to the entire appeal of the trademark and trade dress claims.Seeid. at 279-80.Summary judgment on the antitrust counterclaim is likewise reviewed de novo, but this court reviews for abuse of discretion the district court's decision not to allow discovery on the antitrust counterclaim.SeeGlen Eden Hosp., Inc. v. Blue Cross and Blue Shield of Mich., Inc., 740 F.2d 423, 428(6th Cir.1984).

III

As noted by the district court, to prevail on a motion for summary judgment in its Lanham Act trademark infringement claim, MDI must prove that the purportedly infringing mark is "likely to cause confusion" in prospective purchasers' minds.15 U.S.C. § 1114;SeeWynn Oil Co. v. Thomas, 839 F.2d 1183, 1186(6th Cir.1988);See alsoHomeowners Group, Inc. v. Home Mktg. Specialists Inc., 931 F.2d 1100, 1107(6th Cir.1991)(identifying the ultimate question as "whether relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way");Daddy's Junky Music, 109 F.3d at 280(calling the key question "whether the defendant's use of the disputed mark is likely to cause confusion among consumers regarding the origin of the goods offered by the parties").Likelihood of trademark confusion can be a question of law appropriate for determination on a motion for summary judgment.SeeWSM, Inc. v. Tennessee Sales Co., 709 F.2d 1084, 1086(6th Cir.1983).

The Sixth Circuit has identified eight factors as informing the likelihood of confusion inquiry:

1. strength of the plaintiff's mark;

2. relatedness of the goods;

3. similarity of the marks;

4. evidence of actual confusion;

5. marketing channels used;

6. likely degree of purchaser care;

7. defendant's intent in selecting the mark; [and]

8. likelihood of expansion of the product lines.

Frisch's Restaurants, Inc. v. Elby's Big Boy, 670 F.2d 642, 648(6th Cir.1982), quotingAMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348(9th Cir.1979).None of these factors is a sine qua non for the plaintiff's case, so the defendant does not necessarily establish a genuine issue of material fact merely by disproving the existence of any one--or even a majority of--the factors.SeeWynn Oil, 839 F.2d at 1186.Rather, summary judgment for the plaintiff is appropriate if, upon consideration of all factors, the district court determines that no reasonable jury could fail to find that confusion of the marks would be likely.

TrafFix argues that summary judgment is not appropriate whenever "there is a dispute regarding the underlying factors."That argument misconstrues the holding in Homeowners, where this court stated:

To resist summary judgment in a case where the likelihood of confusion is the dispositive issue, a nonmoving party must establish, through pleadings, depositions, answers to interrogatories, admissions and affidavits in the record, that there are genuine factual disputes concerning those of the Frisch's factors which may be material in the context of the specific case.

Homeowners, 931 F.2d at 1107.This language does not indicate that any disputed factor is enough, because any one factor standing alone may not be material.Indeed, the district court is apt to find, as it did here, that at least one factor favors the nonmoving party.Since that does not prevent an overall finding of likelihood of confusion in the movant's favor, it would be illogical for a merely disputed factor to preclude summary judgment.Homeowners must be understood to mean that the nonmoving party's burden is to identify a disputed factor or set of...