Murphy v. Provident Mut. Life Ins. Co. of Philadelphia

• Decision Date: 22 January 1991
• Docket Number: D,No. 169,169
• Citation: 923 F.2d 923
• Parties: , 17 U.S.P.Q.2d 1299 Thomas M. MURPHY d/b/a Thomas M. Murphy & Associates, Plaintiff-Appellant, v. PROVIDENT MUTUAL LIFE INSURANCE COMPANY OF PHILADELPHIA, and AIMS, Inc., Defendants-Appellees, and Harleysville Insurance Companies, Intervening-Appellees. ocket 90-7335.
• Court: U.S. Court of Appeals — Second Circuit

Page 923

923 F.2d 923

59 USLW 2464, 17 U.S.P.Q.2d 1299

Thomas M. MURPHY d/b/a Thomas M. Murphy & Associates Plaintiff-Appellant, v. PROVIDENT MUTUAL LIFE INSURANCE COMPANY OF PHILADELPHIA, and AIMS, Inc., Defendants-Appellees and Harleysville Insurance Companies, Intervening-Appellees.

No. 169, Docket 90-7335.

United States Court of Appeals Second Circuit.

Argued Oct. 1, 1990.

Decided Dec. 21, 1990.

As Amended Jan. 22, 1991.

Stephen M. Trattner, Washington, D.C. (Lewis & Trattner, Washington, D.C., Michael P. Foley, Jr., Blazzard, Grodd & Hasenauer, Westport, Conn., of counsel), for plaintiff-appellant.

Barry Kramer, Southport, Conn. (Gerald E. Linden, Kramer, Brufsky & Cifelli, Southport, Conn., of counsel), for defendant-appellee Provident Mut. Life Ins. Co. of Philadelphia.

Barry L. Kelmachter, New Haven, Conn. (Bachman & LaPointe, New Haven, Conn., of counsel), for intervening-appellees.

Before FEINBERG, VAN GRAAFEILAND, and KEARSE, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

Thomas M. Murphy appeals from a summary judgment of the United States District Court for the District of Connecticut (Eginton, J.) dismissing Murphy's servicemark infringement and unfair competition claims. We affirm.

In recent years, insurance brokers and third party administrators (TPAs) have strongly favored the use of the word "hot" in their advertisements. The following scattered examples are typical:

What's RED HOT about cafeteria plans; WE MATCH HOT IDEAS WITH HOT PRODUCTS; A HOT NEW TEAM IN TOWN; NOW! The 'Hot' Products in Small Group; 3 Hot UL's; Newest, Hottest Plan in the Market; Color this plan RED HOT; HOT NEW YEAR SPECIAL; Hot New Annuity Product; A new HOT term product; It's Hot; Hot Stuff; WHY IT'S SO HOT; The Hottest Sale in Life Insurance; Your hot line; THE HOTTEST SPWL AROUND; The Hottest Income Generators.

Not surprisingly, many of the advertisements in which these words were used contained symbols that expressed the concept of heat, such as flames, burning matches, torches, and fire spouting dragons.

Murphy, a TPA who marketed and administered small group insurance plans to brokers and agents, went along with the crowd. In January 1986 Murphy began to administer a stand-alone dental health insurance plan that he created, called "Employers Dental Trust". During 1986, Murphy's advertisement described Employers Dental Trust as "the hottest dental plan in the insurance industry." While other advertisements used burning matches, torches, etc. to carry out the concept of hot sales, Murphy's used a steaming coffee cup. In late 1986 Murphy changed his advertisement by describing his plan as "the hottest dental plan under the sun" and substituting a bursting thermometer for the coffee cup. This advertisement appeared in the January and February 1987 issues of Life Association News, an insurance industry trade publication. Murphy maintains that he continued to use the thermometer graphic in direct mailings and personal presentations to brokers and agents until June 1987. Murphy did not register the thermometer symbol as a trademark or servicemark, and his advertisement did not contain a copyright, trademark, or servicemark notice. Indeed, the bursting thermometer idea was not unique with Murphy. Other advertisements, in and out of the insurance industry, used it when the concept of hot sales was being pushed. For example, a June 30, 1987 advertisement of Insurance Times, an insurance industry weekly newspaper, contained a bursting thermometer and the words "the hotter it gets, the better we like it."

AIMS, Inc., also a TPA, began in early 1987 to administer a stand-alone medical health plan called "Plan USA" that was underwritten by Provident Mutual Life Insurance Company of Philadelphia. AIMS created an advertisement for Plan USA that included the words "Brand New and Red Hot" and contained a bursting thermometer identical to the one in Murphy's advertisement. AIMS's advertisement for Plan USA appeared in the June and July 1987 issues of Broker World, another insurance industry trade publication. AIMS did not publish it thereafter. Murphy returned briefly to his thermometer advertisement with insertions in two July 1987 trade publications and the August 1987 issue of Financial Times. Beginning in September 1987, Murphy changed the theme of his advertising from hot sales to boosted sales and replaced the thermometer with a man on a rocket. In May 1988 he changed again, this time to the theme of rising sales, with a man in a balloon replacing the man on a rocket.

Murphy brought this action in April 1988, claiming servicemark infringement under section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a), and unfair competition under Connecticut law. Defendants-appellees moved for summary judgment, and the district court referred the case to Magistrate Thomas P. Smith. In a well-reasoned opinion, Smith held that Murphy had no right of recovery under either federal or state law. Following de novo review, the district court adopted and affirmed the magistrate's opinion.

After the magistrate filed his opinion, chapter 7 bankruptcy proceedings were commenced against AIMS, and the bankruptcy court stayed further proceedings in this action against AIMS. As a result of AIMS's bankruptcy, Harleysville Insurance Companies, which were obligated under insurance policies held by AIMS to pay the cost of its defense, intervened in this action in order to protect their interest in securing reimbursement of attorneys' fees and costs expended in providing AIMS with a defense.

Murphy's claim is based primarily on the similarity between the use of the words "hot" and "hottest" and the identity in appearance of the thermometers. However, similarity, even identity, is not enough if Murphy had no interest in the words and the graphic that entitled him to restrict their use. Centaur Communications, Ltd. v. A/S/M Communications, Inc., 830 F.2d 1217, 1221 (2d Cir.1987); American Television & Communications Corp. v. American Communications & Television, Inc., 810 F.2d 1546, 1548 (11th Cir.1987). In Murphy's complaint, he alleged the existence of such proprietary interest by asserting that he owned a protectable servicemark in his "hot campaign and his thermometer." The court below correctly held that he had neither.

In brief, a servicemark is a word, name, or symbol used to identify and distinguish the services of one person from the services of others. See West & Co. v. Arica Institute, Inc., 557 F.2d 338, 340 n. 1 (2d Cir.1977); 15 U.S.C. Sec. 1127. Our first task, therefore, is to identify the "services" whose source Murphy is seeking to identify. Since the Lanham Act does not define the term, we may look to prior judicial decisions for help. Clearly, the term does not apply to goods or products. Application of Radio Corp. of America, 40 C.C.P.A 1025, 205 F.2d 180, 182 (1953). Moreover, it does not apply to services that are solely for the benefit of the performer; the services must be rendered to others. In re Dr Pepper Co., 836 F.2d 508, 509 (Fed.Cir.1987); In re Advertising & Marketing Development, Inc., 821 F.2d 614, 619 (Fed.Cir.1987). Assuming that Murphy's sale of his insurance expertise to others may be treated as a service under the Act, the advertising of this service, as distinguished from its performance, may not. See In re Dr Pepper, supra, 836 F.2d at 509-12; Application of Orion Research, Inc., 523 F.2d 1398, 1399-1400 (C.C.P.A.1975); see also Haagen-Dazs, Inc. v. Frusen Gladje, Ltd., 493 F.Supp. 73, 75 (S.D.N.Y.1980). In short, the theme of Murphy's advertising campaign is not a service for which a servicemark could be claimed. It follows that, if Murphy was selling insurance, a product, rather than his expertise in the field, he performed no services that a servicemark might be said to identify.

Murphy contends, of course, that he was selling services rather than a product. Defendants contend, on the other hand, that he was selling a product, an insurance plan or program. They point to statements in Murphy's complaint and depositions, and in the advertisement itself, that so state. The magistrate observed that, although Murphy's complaint described his claimed mark as a servicemark, Murphy used the terms servicemark and trademark interchangeably in his legal memoranda. It is not surprising, therefore, that the magistrate couched much of his discussion in trademark terms. Indeed, under the facts of this case, it makes little difference whether Murphy is claiming a trademark or a servicemark. A servicemark differs from a trademark only in that a servicemark identifies services rather than goods. West & Co., supra, 557 F.2d at 340 n. 1; Evans, A Primer on Trademarks and Service Marks, 18 St. Mary's L.J. 137, 139 (1986). Whether a mark is one or the other, the standards for determining infringement are essentially the same. Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 203 n. 3 (2d Cir.1979); West & Co., supra, 557 F.2d at 340 n. 1.

As pointed out above, during the time at issue herein the insurance brokerage industry was committed to the "hot" theme in its advertising. Both the words and the graphics in the advertisements were intended to convey the idea of "hot" sales in a new and specialized area of business. The thermometer in Murphy's advertisement was no exception; it was intended to exemplify this quality or characteristic of his insurance plan or program. The magistrate correctly concluded, therefore, that, if the thermometer graphic in Murphy's advertisement was a mark at all, it was a descriptive mark. Marks that are laudatory and that describe the alleged qualities or characteristics of a product or service are descriptive marks. See Centaur Communications, supra, 830 F.2d at 1220; 20th Century Wear, Inc. v. Sanmark-Stardust, Inc., 747 F.2d 81, 87-88 (2d Cir.1984), cert. denied, 470 U.S. 1052, 105 S.Ct. 1755, 84 L.Ed.2d 818 (1985). Indeed, the notion of a "hot"...