Metro Pub., Ltd. v. San Jose Mercury News

• Decision Date: 08 March 1993
• Docket Number: No. 91-16537,91-16537
• Citation: 987 F.2d 637
• Parties: , 21 Media L. Rep. 1150 METRO PUBLISHING, LTD., a California partnership, Plaintiff-Appellant, v. SAN JOSE MERCURY NEWS, a California corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 637

987 F.2d 637

25 U.S.P.Q.2d 2049, 21 Media L. Rep. 1150

METRO PUBLISHING, LTD., a California partnership, Plaintiff-Appellant, v. SAN JOSE MERCURY NEWS, a California corporation, Defendant-Appellee.

No. 91-16537.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 5, 1993.

Decided March 8, 1993.

John I. Alioto, Alioto & Alioto, San Francisco, CA, for plaintiff-appellant.

Kevin M. Fong, Pillsbury, Madison & Sutro, San Francisco, CA, for defendant-appellee.

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

Before: FLETCHER, REINHARDT and NOONAN, Circuit Judges.

FLETCHER, Circuit Judge:

In this trademark infringement action Metro Publishing ("Metro"), the publisher of the weekly tabloid Metro, a regular feature of which is a column called "Public Eye," appeals the district court's denial of its motion for a preliminary injunction to stop San Jose Mercury News ("Mercury News") from publishing a competing weekly tabloid called "eye." We reverse and remand.

FACTS AND PROCEDURAL HISTORY

Appellant has published the weekly tabloid Metro, billed as "Santa Clara Valley's Weekly Newspaper," since 1984. The paper is distributed free to the public every Thursday in the San Jose metropolitan area, mainly via newspaper racks found in restaurants, night clubs, stores, theaters, and on the street. According to appellant, although Metro carries news and feature stories, "the paper's focus is entertainment and arts, including restaurant reviews, a dining guide and a detailed list of what's happening in metropolitan San Jose in areas of film, music, theater, nightlife and special events." (Appellant's Opening Br. at 5.)

In 1985, Metro began carrying a column called "Public Eye," devoted primarily to local political gossip and intrigue. The format of "Public Eye" has varied somewhat over the years. Although since its introduction "Public Eye" has been a consistent feature, until recently it has only occasionally been mentioned on the cover of the paper. The column is sometimes personified as "Eye" in the pages of Metro, as, for example, "Eye has it on good authority that...." and "Eye's call set the wheels of bureaucracy spinning." (E. Davis Decl. of 9/12/91 Ex. C at 4, Ex. D at 3.) "Public Eye" has not been registered as a trademark by appellant.

Appellee points out, with support in the record, that after appellant learned in the spring of 1991 that Mercury News planned to introduce its publication eye, a reference to the "Public Eye" column began featuring prominently on every Metro cover. In addition, in May 1991, Metro changed the word "eye" in the "Public Eye" logo to a different typeface and to lower case, and began using it at times without "public," so that it closely resembled the "eye" logo adopted by the Mercury News.

The San Jose Mercury News is a daily newspaper serving the San Jose metropolitan area. According to the complaint, it has an 85% share of the Santa Clara County daily newspaper market. Until June 1991, a "Weekend" section, printed in standard newspaper format, was included in each Friday edition of the News. The "Weekend" section included listings of movies and events, film and restaurant reviews, and "other items on entertainment options." (Br. for Appellee at 5.)

In June 1991, Mercury News discontinued its "Weekend" section and replaced it with the weekly tabloid eye which carries the same items as "Weekend" did, "plus additional entertainment information sought by many existing Mercury News Readers." (Id.) Although appellee notes that eye does not report on political matters, the entertainment-oriented content of eye overlaps substantially with that of Metro and there is a notable similarity in the two tabloids' five-column formats.

In addition to being included as a Friday insert in the News, eye is distributed free to the public from newspaper racks bearing the "eye" logo. The racks are of the same type and located in the same sorts of establishments as Metro's racks.

After notifying Mercury News in May 1991 that it considered the use of the name "eye" for the forthcoming publication an infringement of its "Public Eye" mark, appellant filed suit in district court. The complaint alleges federal trademark and antitrust violations as well as state law claims of unfair competition, trademark dilution, and predatory pricing, and seeks damages and injunctive relief. The district court denied appellant's application for a temporary restraining order and set a preliminary injunction hearing for September 19, 1991. ¹

In support of its motion for a preliminary injunction on its Lanham Act claims, appellant submitted a number of declarations in which regular readers of Metro recounted experiences wherein they picked up a tabloid thinking it to be Metro, only to discover that it was in fact Mercury News' eye. Some stated, for example, that when they first saw eye as a weekly insert in the News they assumed it was Metro: "I saw an arts and entertainment insert in the paper and thought it was Metro. It looked just like Metro. I wondered what Metro was doing in the Mercury News." (C.R. 27 (H. Teifeld Decl.) p 2, at 2.) An advertiser recalled becoming "very upset" when he mistakenly thumbed through a copy of eye trying to locate the ad he had placed in Metro. (C.R. 24 (Gaetano Decl.) p 2, at 2.)

Other declarants noted their familiarity with Metro's "Public Eye" feature. A political consultant in San Jose who reads the column "religiously" and noted that she and her friends refer to it as the "Eye," observed, "It used to be that reference to the 'Eye article' meant the one that appeared in Metro. Now it can also mean an article in the Mercury News." (C.R. 30 (Kouzes Decl.) p 2, at 2.) One of Metro's founders submitted a declaration in which he recalled being telephoned by an advertising representative who "congratulated [him] on the Eye publication which she believed was Metro's." (C.R. 28 (Pulcrano Decl.) p 3, at 2.) Finally, several of the declarants noticed that eye was being distributed out of Metro newsracks at different locations.

The district court denied appellant's motion for a preliminary injunction except insofar as it sought to prohibit Mercury News from placing its tabloid in Metro newsracks which appellee, maintaining that any such placement was accidental, did not oppose. Reasoning that "the name of a column within a paper does not appear to rise to the level of a trademark," the court found that appellant had not shown a likelihood of success on the merits of its trademark infringement claim. (E.R. 1 at 5.) ² The court continued, "There is evidence that consumers are confused. However, this evidence of confusion is relevant only if it is clear that there is a trademark to be protected. Since there does not appear to be any trademark, the Metro's use of the term 'eye' does not appear to merit protection." (Id.)

Appellant has timely appealed the district court's order.

JURISDICTION

The district court had jurisdiction of the federal trademark claims under 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331, 1337, and 1338. This court has jurisdiction to review the court's denial of a preliminary injunctive relief under 28 U.S.C. § 1292(a)(1).

DISCUSSION

To obtain a preliminary injunction, a party must demonstrate either 1) a combination of probable success on the merits and the possibility of irreparable injury, or 2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in its favor. First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1381 (9th Cir.1987). The denial of a preliminary injunction is subject to only a limited review. Religious Technology Ctr., Church of Scientology Int'l, Inc. v. Scott, 869 F.2d 1306, 1309 (9th Cir.1989). We can reverse the denial only if we find that the district court abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact. Id. Issues of law underlying the district court's decision on the preliminary injunction we review de novo. Senate of Cal. v. Mosbacher, 968 F.2d 974, 976 (9th Cir.1992).

A plaintiff will succeed on the merits of its trademark infringement claim under the Lanham Act if it establishes that the defendant's use of its mark gives rise to a "likelihood of confusion" in the consuming public. E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290 (9th Cir.1992). A likelihood of confusion exists when consumers " 'are likely to assume that a product or service is associated with a source other than its actual source because of similarities between the two sources' marks or marketing techniques.' " Nutri/System, Inc. v. Con-Stan Indus., Inc., 809 F.2d 601, 604 (9th Cir.1987) (quoting Shakey's Inc. v. Covalt, 704 F.2d 426, 431 (9th Cir.1983)). The Ninth Circuit has developed an eight-factor test to assess likelihood of confusion: 1) strength of the allegedly infringed mark; 2) proximity or relatedness of the goods; 3) similarity of the sight, sound, and meaning of the marks; 4) evidence of actual confusion; 5) degree to which the marketing channels converge; 6) type of goods and degree of care consumers are likely to exercise in purchasing them; 7) intent of the defendant in selecting the allegedly infringing mark; and 8) likelihood that the parties will expand their product lines. Gallo, 967 F.2d at 1290. Because each factor is not necessarily relevant to every case, this list functions as a guide and is "neither exhaustive nor exclusive." Id. Once the plaintiff has demonstrated a likelihood of confusion, it is ordinarily presumed that the plaintiff will suffer irreparable harm if injunctive relief is not granted. Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 612 n. 3 (9th Cir.1989). It is not necessary that a trademark be registered in order for it to qualify for protection under the Lanham Act. New West Corp. v. NYM Co., Inc., 595 F.2d 1194, 1198 (9th Cir.197...