Progressive Distribution Servs., Inc. v. United Parcel Serv., Inc.

• Decision Date: 16 May 2016
• Docket Number: Case No. 1:14-CV-430
• Citation: Progressive Distribution Servs., Inc. v. United Parcel Serv., Inc., 186 F.Supp.3d 741 (W.D. Mich. 2016)
• Parties: Progressive Distribution Services, Inc., Plaintiff, v. United Parcel Service, Inc., a Delaware corporation, United Parcel Service, Inc., an Ohio corporation, United Parcel Service of America, Inc., a Delaware corporation, and United Parcel Service Market Driver, a Georgia corporation, Defendants.
• Court: U.S. District Court — Western District of Michigan

186 F.Supp.3d 741

Progressive Distribution Services, Inc., Plaintiff,

v.United Parcel Service, Inc., a Delaware corporation, United Parcel Service, Inc., an Ohio corporation, United Parcel Service of America, Inc., a Delaware corporation, and United Parcel Service Market Driver, a Georgia corporation, Defendants.

Case No. 1:14-CV-430

United States District Court, W.D. Michigan, Southern Division.

Signed May 16, 2016

Michael Owen Fawaz, Michael F. Wais, Jeffrey A. Sadowski, Howard & Howard Attorneys PLLC, Royal Oak, MI, for Plaintiff.

Laura Craver Miller, Kilpatrick Townsend & Stockton LLP, Winston-Salem, NC, Megan P. McKnight, Plunkett Cooney, Bloomfield Hills, MI, Nichole Davis Chollet, Samantha Hayes Barber, Tywanda Harris Lord, Kilpatrick Townsend & Stockton LLP, Atlanta, GA, Richard J. Gianino, Plunkett Cooney, Detroit, MI, for Defendants.

OPINION

GORDON J. QUIST, UNITED STATES DISTRICT JUDGE

Plaintiff, Progressive Distribution Services, Inc.(Progressive), has sued several Defendants in the United Parcel Services family of companies (collectively referred to herein as UPS) alleging that UPS is liable for trademark infringement and unfair competition under the Lanham Act,15 U.S.C. § 1051, et seq. , and the common law.Progressive also alleges that UPS violated the Michigan Consumer Protection Act (MCPA), M.C.L.A. § 445.901 et seq. .

All of Progressive's claims arise out of UPS's use of Progressive's federally-registered trademark ORDERLINK as part of the name UPS OrderLink.

UPS has moved for summary judgment, arguing that Progressive's trademark and unfair competition claims fail because, as a matter of law, Progressive cannot establish a likelihood of confusion.Alternatively, UPS argues that it is entitled to summary judgment on Progressive's damage claim for corrective advertising and other elements, as well as Progressive's claim for a reasonable royalty.Finally, UPS argues that Progressive's MCPA claim fails because UPS's shipping application was not offered for personal, family, or household purposes.

As explained more fully below, the Court concludes that UPS is entitled to summary judgment on the trademark and unfair competition claims because application of the pertinent factors in Frisch's Restaurant, Inc. v. Elby's Big Boy, Inc. , 670 F.2d 642(6th Cir.1982), in light of the record evidence, shows that there is no likelihood of confusion as a matter of law.Accordingly, the Court need not reach UPS's damages arguments relating to those claims.Finally, the Court concludes that Progressive fails to establish a claim under the MCPA.

I.BACKGROUND

Progressive is engaged in the business of providing, among other things, outsourced, fully-integrated order fulfillment infrastructure and services under various trademarks, including ORDERLINK.(ECF No. 118 at PageID.3208.)Progressive describes OrderLink as an "innovative e-commerce service that allows an organization to quickly participate in the many benefits of direct channel web commerce without the expense, risk, or delay of in-house development."(ECFNo. 97-3 at PageID.1799.)Order fulfillment begins upon placement of an order, and includes payment processing, inventory availability and coordination, assistance with alternative products, packaging, labeling, and shipping.(ECF No. 118 at PageID.3209-10.)OrderLink platform features include web commerce features, such as customer product reviews, promotion services, media buy administration, marketing support, affiliate site interfacing, site management tools, supply integration, and payment processing.(ECFNo. 97-12.)The OrderLink service typically requires a four-to-six week set up period, and customers must commit to a two-year contract with a set-up fee ranging from a few thousand dollars to $25,000.(ECFNo. 99-3 at PageID.50;ECFNo. 99-5;ECFNo. 99-6.)

John McGovern, Progressive's founder and president, adopted the ORDERLINK mark in approximately 1996 because it reflected Progressive's business of "process [ing] of orders and movement of orders to the final fulfillment."(ECF No. 118 at PageID.3212.)The ORDERLINK mark was registered on the Principal Register of the United States Patent and Trademark Office(PTO) on September 21, 2004.(ECFNo. 33-2.)

UPS is the world's largest package shipping company and its trademarks, with their well-known brown and gold color scheme, make UPS one of the world's most famous brands.(ECFNo. 97-43.)UPS's customers include, in addition to large volume shippers, small volume shippers who operate businesses on Amazon and eBay marketplaces.(ECFNo. 97-23 at PageID.1901.)In 2012, UPS's Customer Technology Marketing (CTM) team proposed an initiative directed to such customers.The project included creation of an internet-based application to enable online marketplace sellers to manage orders and process shipments by linking their orders to UPS's shipping application.(ECF No. 119 at PageID.3226.)UPS intended this service to compete with similar services offered by competitors FedEx and the U.S. Post Office.(ECFNo. 97-23 at PageID.1938.)

UPS's CTM team and Christine Allen, UPS's Brand Manager, developed a list of potential names, including OrderLink, for the new service that were descriptive and easy for its customers to understand.(ECFNo. 97-16 at PageID.1858, 1860.)Allen searched the proposed names on the internet and at the PTO to determine whether other parties were using them.Allen initially determined that OrderLink was not available because it was registered to Progressive for order fulfillment services.She also found shopping cart software called "Order-Link" by Ashop Software.(ECFNo. 97-26 at PageID.1988.)Further investigation revealed at least two additional uses of the words "order" and "link" together: OrderWebLink for computer programs for automating cataloging, sales quotes, and sales ordering by Lantek, Inc., and "Conestoga OrderLink" for software allowing for customized quotes and order management for Conestoga customers (a cabinet manufacturer).(ECFNo. 97-25 at PageID.1976.)Ultimately, the CTM team settled on the name UPS OrderLink because the UPS house mark leveraged the UPS brand and OrderLink described the application's function.(ECFNo. 97-21 at PageID.1886;ECFNo. 97-25 at PageID.1981.)UPS submitted an application to the PTO to register "UPS OrderLink" as a mark.However, on November 25, 2013, the PTO rejected the application based on a likelihood of confusion with Progressive's mark.(ECF No. 136-1 at PageID.3377.)

UPS launched the UPS OrderLink shipping application on December 28, 2013, as a free "secured web-based shipping solution at ups.com that enables eBay and Amazon sellers to import their orders from these marketplaces to the shipping solution and process for shipping."(ECFNo. 97-29 at PageID.2003.)UPS promoted UPS OrderLink on its website at www.ups.com, through its online version of UPS's Compass magazine on a UPS microsite, and to existing UPS customers through direct sales calls.(ECFNo. 97-30;ECFNo. 97-56 at PageID.2241–42.)In addition, links to UPS Orderlink were placed on Amazon and eBay pages devoted to shipping solutions.(ECFNo. 97-30 at PageID.2036.)

On February 17, 2014, Progressive's counsel sent UPS a cease and desist letter demanding that UPS immediately cease using the UPS OrderLink name.In response, UPS approached Progressive about entering into a coexistence agreement.(ECFNo. 97-18 at PageID.1869–70.)While waiting to hear back from Progressive, UPS began to explore replacing UPS OrderLink with "Ship Marketplace Orders."After Progressive filed its complaint in the instant case on April 17, 2014, UPS continued with its name-change plan and adopted the name "UPS Marketplace Shipping."(ECFNo. 97-16 at PageID.1862.)The transition from UPS OrderLink to UPS Marketplace Shipping was substantially completed by August 15, 2014.

II.SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.Fed. R. Civ. P. 56.Material facts are facts which are defined by substantive law and are necessary to apply the law.Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202(1986).A dispute is genuine if a reasonable jury could return judgment for the non-moving party.Id.

The court must draw all inferences in a light most favorable to the non-moving party, but may grant summary judgment when "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party."Agristor Fin. Corp. v. Van Sickle , 967 F.2d 233, 236(6th Cir.1992)(quotingMatsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538(1986) ).

III.DISCUSSION

A.Trademark Infringement and Unfair Competition Claims

The key inquiry in resolving claims under the Lanham Act for both trademark infringement and unfair competition is whether there is a likelihood of confusion.Georgia–Pacific Consumer Prods. LP v. Four–U–Packaging, Inc. , 701 F.3d 1093, 1100(6th Cir.2012)."The touchstone of liability under § 1114 is 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."Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr. , 109 F.3d 275, 280(6th Cir.1997).In this case, Progressive alleges infringement under a theory of reverse confusion of sponsorship.As the Sixth Circuit has explained, such theory posits that rather than seeking to capitalize on the senior user's goodwill in the trademark:

the junior user saturates the market with a similar trademark and overwhelms the senior user.The public comes to assume the senior user's products are really the junior user's or that the former has become somehow connected to the latter.The result is that the senior user loses the value of the trademark—its

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