Platinum Home Mortg. Corp. v. Platinum Financial Group, Inc.

• Decision Date: 18 August 1998
• Docket Number: No. 97-3336,97-3336
• Citation: 149 F.3d 722
• Parties: PLATINUM HOME MORTGAGE CORPORATION, Plaintiff-Appellant, v. PLATINUM FINANCIAL GROUP, INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 722

149 F.3d 722

47 U.S.P.Q.2d 1587

PLATINUM HOME MORTGAGE CORPORATION, Plaintiff-Appellant, v. PLATINUM FINANCIAL GROUP, INCORPORATED, Defendant-Appellee.

No. 97-3336.

United States Court of Appeals, Seventh Circuit.

Argued April 13, 1998.

Decided July 24, 1998.

Rehearing Denied Aug. 18, 1998.

Richard M. LaBarge (argued), Madeline Henricks Devereux, Marshall, O'Toole, Gerstein, Murray & Borun, Chicago, IL, for Plaintiff-Appellant.

James E. Mahoney, Ronald A. Rascia (argued), Griffith & Jacobson, Chicago, IL, for Defendant-Appellee.

Before BAUER, FLAUM, and DIANE P. WOOD, Circuit Judges.

BAUER, Circuit Judge.

Platinum Home Mortgage Corporation ("Platinum Mortgage") filed suit against Platinum Financial Group, Incorporated ("Platinum Financial") for unfair competition under Section 43 of the Lanham Act, 15 U.S.C. §§ 1125(a)(1)(A) and (B), for common law trademark infringement, and for deceptive trade practices under the Uniform Deceptive Trade Practices Act, 815 ILCS 510/1-7 (1996). Platinum Mortgage filed a motion for preliminary injunctive relief, requesting the district court to enjoin Platinum Financial from using the term "platinum" in its name. The district court denied the motion, and Platinum Mortgage now appeals. For the reason set forth below, we affirm.

BACKGROUND

In January of 1994, Platinum Mortgage began to offer home mortgage services, including certain government-sponsored mortgage loans, and it currently maintains offices throughout Illinois in Aurora, Chicago, Libertyville, River Grove, Rolling Meadows, and also in the State of Colorado. In January of 1997, Platinum Financial began to offer various financial services, including limited mortgage services for the purpose of developing long-term strategies in financial planning, and currently its office is located in Lake Forest, Illinois. Platinum Financial does not provide, nor does it intend to provide the government-sponsored loans offered by Platinum Mortgage. Both firms have submitted that they have incurred various advertising costs and promotional expenses to publicize their businesses; of course, these advertisements and promotions use the word "platinum" to identify each company's services.

William Giambrone, the Chief Financial Officer for Platinum Mortgage, first became aware of Platinum Financial when he noticed an advertisement for its mortgage services in the Chicago Tribune. Giambrone objected to Platinum Financial's use of "platinum" and was concerned that consumers interested in obtaining a mortgage would be confused by the similarity of their names. Platinum Mortgage filed this suit against Platinum Financial on July 15, 1997 for unfair competition, common law trademark infringement, and deceptive trade practices, objecting to Platinum Financial's use of "platinum" in its name. Then, on August 1, 1997, Platinum Mortgage filed a motion for preliminary injunctive relief.

In a memorandum opinion and order issued on September 4, 1997, the district court refused to grant the preliminary injunction, finding that Platinum Mortgage does not have more than a negligible chance of success on the merits of its trademark infringement claim. First, the court determined that its trade name is merely descriptive, and second that it is quite unlikely Platinum Mortgage could show its name has acquired secondary meaning. Accordingly, the district court concluded that Platinum Mortgage would not be entitled to trademark protection for its trade name under the Lanham Act and, therefore, denied its motion for preliminary injunctive relief.

Platinum Mortgage filed a timely notice of appeal and now argues that the district court erroneously found that "platinum," as a trademark, is only descriptive when used in connection with its mortgage services. Again, Platinum Mortgage contends that its mark is suggestive and entitled to protection

without evidence of secondary meaning. Alternatively, Platinum Mortgage argues that even if evidence of secondary meaning is required, it nonetheless submitted substantial evidence of actual confusion that demonstrates "platinum" has acquired secondary meaning. With these facts as background, we now turn to the issues presented for review. ¹

ANALYSIS

In reviewing the grant or denial of a preliminary injunction, we review a district court's findings of fact for clear error, its balancing of the factors of a preliminary injunction for an abuse of discretion, and its legal conclusions de novo. Meridian Mut. Ins. Co. v. Meridian Ins. Group, Inc., 128 F.3d 1111, 1114 (7th Cir.1997). The purpose of preliminary injunctive relief is "to minimize the hardship to the parties pending the ultimate resolution of the lawsuit." Faheem-El v. Klincar, 841 F.2d 712, 717 (7th Cir.1988). When evaluating the merits of a motion for preliminary injunctive relief, a district court must determine whether the party seeking the preliminary injunction has demonstrated that: (1) it has a reasonable likelihood of success on the merits of its claim; (2) no adequate remedy at law exists; (3) it will suffer irreparable harm if preliminary injunctive relief is denied; (4) the irreparable harm it will suffer without preliminary injunctive relief outweighs the irreparable harm the nonmoving party will suffer if the preliminary injunction is granted; and (5) the preliminary injunction will not harm the public interest. Rust Environment & Infrastructure, Inc. v. Teunissen, 131 F.3d 1210, 1213 (7th Cir.1997). The threshold consideration in a motion for a preliminary injunction is the moving party's likelihood of success on the merits of the underlying claim. Id.

"Trademark law aims to aid consumers in identifying the source of goods by allowing producers the exclusive right to particular identifying words or symbols which they may attach to their products as a designator of source." Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 657 (7th Cir.1995). Accordingly, the protection afforded to a trademark attempts to prevent consumer deception and confusion. However, that trademark protection should not interfere with the traditional policies of a competitive market, and courts have generally recognized that the public substantially benefits from competition. August Storck K.G. v. Nabisco, Inc., 59 F.3d 616, 619 (7th Cir.1995). In the context of a motion for a preliminary injunction in a trademark infringement claim, a likelihood of success exists if the party seeking the preliminary injunctive relief demonstrates that it has a "better than negligible" chance of succeeding on the merits of the underlying infringement claim. Curtis v. Thompson, 840 F.2d 1291, 1296 (7th Cir.1988).

In a trademark infringement claim, the plaintiff must demonstrate: (1) the validity of its trademark; and (2) the infringement of that mark. Echo Travel, Inc. v. Travel Associates, Inc., 870 F.2d 1264, 1266 (7th Cir.1989). The validity of a mark pertains to whether a "word, term, name, symbol or device," 15 U.S.C. § 1125(a)(1), is entitled to protection under trademark law by focusing on whether that mark specifically identifies and distinguishes one company's goods or services from those of its competitors. The infringement of a mark concerns whether the actions of a subsequent user of a substantially similar or identical mark causes a likelihood of confusion among consumers as to the source of those specific goods or services.

                Echo Travel, Inc., 870 F.2d at 1266.   When the identifying "word, term, name, symbol or device" claimed as a trade name or mark is not registered with the United States Patent and Trademark Office, the burden is on the claimant, Platinum Mortgage in the instant case, to establish that it is entitled to protection under § 43(a) of the Lanham Act.  Mil-Mar Shoe Co., Inc. v. Shonac Corp., 75 F.3d 1153, 1156 (7th Cir.1996)
                

We initially recognize that there are various categories of terms and words that are entitled to trademark protection when consumers rely on those marks to identify and distinguish one company's goods or services from those of its competitors. Marks are classified into five categories of increasing distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 767-68, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). In general, the level of trademark protection available corresponds to the distinctiveness of the mark. Id. A generic term is one that is commonly used and does not identify any particular source and, therefore, is not entitled to any trademark protection. Liquid Controls Corp. v. Liquid Control Corp., 802 F.2d 934, 936 (7th Cir.1986). A descriptive mark is one that "describes the ingredients, qualities, or characteristics of an article of trade or a service" and, generally, it is not protected as a trademark because a merely descriptive mark is a " 'poor means of distinguishing one source of services from another.' " Id. (quoting M.B.H. Enters. v. WOKY, Inc., 633 F.2d 50, 54 (7th Cir.1980)). However, a descriptive mark may receive trademark protection if it acquires secondary meaning "in the collective consciousness of the relevant community." Mil-Mar Shoe, 75 F.3d at 1157 (citing Gimix, Inc. v. JS & A Group, Inc., 699 F.2d 901, 907 (7th Cir.1983)). Finally, terms that are either suggestive, arbitrary, or fanciful are automatically entitled to trademark protection because they are inherently distinctive. Two Pesos, 505 U.S. at 767-68, 112 S.Ct. 2753.

Platinum Mortgage first asserts that the district court clearly erred in finding that "platinum" is only descriptive of its services, arguing instead that the mark is suggestive and therefore entitled to full trademark protection. A district court's determination that a trademark is either descriptive or suggestive is a finding of fact that is reviewed for clear error. Meridian Mut. Ins. Co., 128 F.3d at 1114. A finding of fact is clearly erroneous only if, based on the entire...