National Automobile Club v. National Auto Club, Inc.

• Decision Date: 30 October 1973
• Docket Number: No. 70 Civ. 1741.,70 Civ. 1741.
• Citation: 365 F. Supp. 879,180 USPQ 777
• Parties: NATIONAL AUTOMOBILE CLUB, a corporation, Plaintiff, v. NATIONAL AUTO CLUB, INC., a corporation, Defendant.
• Court: U.S. District Court — Southern District of New York

365 F. Supp. 879

180 USPQ 777

NATIONAL AUTOMOBILE CLUB, a corporation, Plaintiff, v. NATIONAL AUTO CLUB, INC., a corporation, Defendant.

No. 70 Civ. 1741.

United States District Court, S. D. New York.

October 30, 1973.

Blum, Moscovitz, Friedman & Kaplan, New York City, for plaintiff; Alex Friedman, New York City and William B. Mackay, San Francisco, Cal., of counsel.

Frank Weg, and Robert M. Brandes, New York City, for defendant.

ROBERT L. CARTER, District Judge.

OPINION

Plaintiff, a California corporation, brings this action against defendant, a New York corporation, for service mark infringement and unfair competition.¹ The court has jurisdiction pursuant to 15 U.S.C. § 1121 and 28 U. S.C. § 1338(a) and (b).

Basic Factual Considerations:

Plaintiff's action is concerned with the infringing use of its service mark consisting of its name, National Automobile Club, in association with an eagle and shield design. Plaintiff has been in business since 1924, its service mark was registered in the United States Patent Office on May 24, 1955, the date of first usage of said mark was March 31, 1924. Plaintiff's members are almost exclusively California residents and motor vehicle owners and the few out-of-state members it does have are persons who first became members as California residents, but who may have subsequently moved out of the State. Apparently, such persons are maintained on the membership rolls until the expiration date of their current memberships. If they remain out of the state after their membership has expired, it is not renewed. In essence, all of plaintiff's active members are California residents.

Plaintiff obtains its members through insurance brokers. For an annual membership fee of twenty-two ($22.00) dollars, plaintiff disseminates among its members travel information, hotel and motel ratings, recovers stolen automobiles, provides legal services, pays traffic violations, and obtains motor vehicle license plates and title certificates. Some of the services it provides its members, such as, emergency road services, handling or assisting in travel arrangements or accommodations, and traffic citations, are available on a national scale. In addition, plaintiff arranges with various touring services throughout the country to provide help and assistance to its members when they visit the city or town in which the touring service is located. Plaintiff has 253,000 members, a gross annual income of $7,000,000 and during the period 1962-1972 plaintiff spent in excess of three million ($3,000,000) dollars in publicizing and advertising its name, including the publication of a magazine called "The National Motorist" and placing advertisements in publications with nationwide circulation, such as Forbes, Barrons and The Wall Street Journal.

Defendant, on the other hand, is a recent entrant into the motor club field. Defendant's President and one hundred percent stockholder is himself an insurance broker and sells memberships in his organization to his clients. There are about 2,000 members and defendant has been in operation since November 19, 1968, when it was incorporated under the laws of New York. Its first use of the alleged infringing mark, National Auto Club in association with an eagle and shield design, occurred at that time, and in November, 1968 defendant heard of plaintiff's organization for the first time. Defendant's members are New York residents.

Application of Governing Legal Principles:

Section 1114 of Title 15 of the United States Code provides the basic statutory remedy for trademark infringement and for unfair competition in the use of any registered mark. Its relevant language imposes civil liability upon

"(1) Any person who shall, without the consent of the registrant

(a) use in commerce any reproduction . . . or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; . . . shall be liable in a civil action by the registrant for the remedies hereinafter provided."

The essence of liability for trademark infringement is a similarity likely to cause confusion or deception of the consuming public. (Safeway Stores, Inc. v. Safeway Properties, Inc., 307 F. 2d 495, 497 (2d Cir. 1962); Maternally Yours v. Your Maternity Shop, 234 F.2d 538, 542 (2d Cir. 1956)). The interests of the prior mark owner which are threatened by confusion of the public and deserving of protection are threefold: (1) protection against diversion of patronage, (2) protection of goodwill and customer favor, and (3) protection of legitimate potential to expand to other markets. Federal Telephone & Radio Corp. v. Federal Television Corp., 180 F.2d 250, 251 (2d Cir. 1950); S. C. Johnson & Son, Inc. v. Johnson, 116 F. 2d 427, 429 and 175 F.2d 176, 180 (2d Cir. 1940, 1949).

While registration of a mark creates a presumption of its validity and is evidence of the exclusive right to its use, 15 U.S.C. § 1115(a), (b), Flexitized, Inc. v. National Flexitized Corp., 335 F. 2d 774, 779 (2d Cir. 1964), it does not assure its protection in an infringement action.

". . . a finding on infringement is by necessity a subjective determination by the trial judge based on his visceral reactions as to the likelihood of confusion the allegedly infringing mark will create in the minds of the public." Societe Anonyme v. Julius Wile Sons & Co., 161 F.Supp. 545, 547 (S.D.N.Y.1958).

The Second Circuit, as well as other courts, has recognized in numerous decisions that a second comer has a duty to so name and package his product or service as to avoid all likelihood of consumers confusing it with the product or service of the first comer. Harold F. Ritchie, Inc. v. Chesebrough-Pond's Inc., 281 F.2d 755, 758 (2d Cir. 1960). But these holdings are only helpful insofar as they show a general pattern, since ultimately each case must be judged on its own facts. Id., at 757; see also, La Touraine Coffee Co., Inc., v. Lorraine Coffee Co., Inc., 157 F.2d 115, 117 (2d Cir.), cert. denied, 329 U.S. 771, 67 S. Ct. 189, 91 L.Ed. 663 (1946).

A set of criteria, useful in determining whether consumer confusion is probable, has evolved from the case law in this field. Among those factors which are considered significant are: the strength of the mark, the degree of similarity between the marks in appearance and suggestion, the proximity of the products and services, the area and manner of concurrent use, actual confusion, the degree of care likely to be exercised by purchasers, and the defendant's intent and good faith in adopting its own mark. See, Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961); Maternally Yours, Inc. v. Your Maternity Shop, Inc., 234 F.2d 538, 543 (2d Cir. 1956); Sears, Roebuck & Co. v. Allstate Driving School, Inc., 301 F.Supp. 4 (E.D.N.Y.1969); Societe Anonyme v. Julius Wile Sons & Co., 161 F.Supp. 545 (S.D.N.Y.1958). It should be kept in mind that:

". . . no single factor may be taken as determinative and that all the pertinent factors must be considered." Triumph Hosiery Mills, Inc. v. Triumph International Corp., 308 F.2d 196, 200 (2d Cir. 1962).

In the immediate case, the plaintiff and defendant are engaged in basically similar businesses and in assessing the similarity of the marks themselves, a judge must put himself in the approximate position of an ordinary purchaser. See, Vitarroz Corp. v. River Brand Rice Mills, Inc., 266 F.Supp. 981, 983-984 (S.D.N.Y.1967). The mark must be considered as an entire unit.

"The ordinary buyer does not stop to dissect the marks and analyze their component parts; if he is deceived it is attributable to the mark as a totality and not normally to any particular part of it." Societe Anonyme, supra, at 547 of 161 F.Supp.

Simulation of a mark need not be identical in order to confuse. Points of general similarity rather than less important points of particular differences should be controlling because: "Confusion on the part of the careless or inattentive purchaser may not be disregarded." Harold F. Ritchie, Inc. v. Chesebrough-Pond's Inc., 281 F.2d 755, 761 (2d Cir. 1960).

Bearing this in mind, it would be difficult not to conclude that the two marks are confusingly similar. There are some differences in detail in that the defendant's mark uses the word "auto", rather than "automobile", adds the words "service and protection", and has some additions and deletions in the pictorial part containing an eagle with spread wings. Yet, considering the mark as a totality, there is a strong probability that the average consumer would identify it with the mark of the plaintiff.

While the services and marks of the two parties are nearly identical, these are not the crucial factors in determining whether infringement has occurred. Despite the similarity of services and service marks, there are strong counter-vailing factors which would tend to mitigate the likelihood of consumer confusion and its resulting negative effect on the business interests of the plaintiff.

The mark of the plaintiff is an exceedingly weak one. See Matsushita Electric Industrial Co. v. National Steel Construction, 442 F.2d 1383 (CCPA 1971); The National Drying Machinery Co. v. Ackoff, 129 F.Supp. 389 (E.D.Pa. 1955), aff'd, 228 F.2d 349 (3rd Cir. 1955). The word "national" has been used many times to describe many types of products and services. "National" is a geographic term descriptive in nature since it pertains to a feature of the service, such as its purpose or function, and is not likely to be considered by the public a word of identification. See Safeway Stores, Inc. v. Safeway Properties, Inc., 307 F.2d 495, 498 (2d Cir. 1962). It is a word of our general vocabulary which all can use to describe products or services and should not be unduly limited. Id.

"It is axiomatic that a word or phrase

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