Reddy Communications v. Environmental Action
| Decision Date | 17 July 1979 |
| Docket Number | Civ. A. No. 77-1105. |
| Citation | 477 F. Supp. 936 |
| Parties | REDDY COMMUNICATIONS, INC., Plaintiff, v. ENVIRONMENTAL ACTION FOUNDATION, Defendant. |
| Court | U.S. District Court — District of Columbia |
COPYRIGHT MATERIAL OMITTED
John T. Roberts, Irons & Sears, Washington, D.C., for plaintiff.
Hadrian R. Katz, Barry S. Sandals, Arnold & Porter, Washington, D.C., for defendant.
In this action, the plaintiff Reddy Communications, Inc. (RCI), seeks to enjoin the defendant Environmental Action Foundation (EAF), from using RCI's service mark Reddy Kilowatt (Reddy) in EAF publications.
Plaintiff alleges service mark infringement, false designation of origin and unfair competition under common law and the Federal Trademark Act of 1946 (the Lanham Act), 15 U.S.C. § 1051 et seq.
EAF admits its use of Reddy, but contends that such use is legally proper.
By Memorandum and Order of November 11, 1977 the Court denied preliminary injunctive relief.
The case was tried to the Court, on the merits, on May 9, 10, 11, 14 and 15, 1979.
The Court concludes that RCI has failed to satisfy its burden of proving that EAF is infringing the plaintiff's service mark, and accordingly denies injunctive relief.
Pursuant to Fed.R.Civ.P. 52(a), the Court sets out below the findings of fact and conclusions of law relevant to its conclusion.*
1. The plaintiff Reddy Communications, Inc. (RCI) is a Delaware corporation with its principal place of business in Connecticut. RCI provides advertising, public relations and communications services to investor-owned public utilities (investor utilities). It derives substantial income from the services provided.
2. RCI uses a stick figure, commonly called "Reddy Kilowatt' (Reddy), in conjunction with the corporate business.
3. Reddy was created by Ashton B. Collins (Collins) in 1926. It is best described as a humanized cartoon or stick figure composed of a body and limbs of jagged lines simulating lightning, a rounded head with a light bulb for a nose and electric outlets for ears, see Appendix A. Reddy is frequently pictured wearing rubber gloves and shoes, as worn by electric utility linemen for safety purposes.
4. Collins founded the company identified as Reddy Kilowatt Services (RKS) for the promotion of Reddy and related advertising services. RCI is the business successor to RKS. RKS and RCI have used Reddy continuously from 1926 to date.
5. RCI has registered Reddy as a service mark with the United States Patent Office (Patent Office) on four occasions pursuant to the provisions of the Federal Trademark Act of 1946 (the Lanham Act), 15 U.S.C. § 1051, et seq. The last registration was on September 2, 1969. As a consequence, RCI is the owner of all right, title and interest in and to service mark registration nos. 752,650; 769,300; 848,347; and 876,224.
6. The service mark registration of Reddy, number 752,650, bears the following description of Reddy's intended use: "Design and Formulation of Advertising and Public Relations Material to be used by Investor-Owned Public Utilities in promoting the sale of their services, in Class 101." Each succeeding registration has included a similar description.
7. RCI designs advertising material to be used by investor utilities which RCI selects as its clients. RCI also offers (1) publications and public relations material of its own creation and (2) articles and stories for use by its clients in their magazines and publications.
8. When used by RCI in sales to its client companies, Reddy stands for RCI's service of providing advertising materials, public relations services, consulting services and the like to its client companies.
9. In 1934 RKS began to license the use of its service mark Reddy to investor utilities of its own choosing. RCI continues the practice to date.
10. RCI currently has some 140 licensees, which are located in each of the fifty states except Nebraska. There is no licensee in Washington, D.C 11. The contractual relationship between RCI and an individual licensee is governed by a licensing agreement (the license) entered into by the parties. RCI has used different licenses over the years. The current license was adopted in 1976. Prior versions were adopted in 1971, 1968, 1963, 1953, 1941 and 1934. See plaintiff's Exhibit 4.
12. The license describes the services RCI supplies the licensee. It also provides that the investor utility may use Reddy, but that such use must:
13. RCI's licensees use Reddy in all three phases of investor utility advertising viz. (1) promotional, (2) institutional, and (3) informational advertising. However, RCI's licensees are not in the business of selling advertising. Rather the investor utilities utilize advertising to promote the sale of their product, electric power, and in some instances gas and telephone services. RCI tells its licensees they may use Reddy to identify their electric services in their advertising directed to the buying public. See Reddy Design Guide, plaintiff's Exhibit 4(b), sheet 16 and Reddy Kilowatt Handbook of Trademark Usage, plaintiff's Exhibit 4(a), sheet 15.
14. The licensees use Reddy to identify themselves, as for example in a company signature, or in the body of an advertisement, or in a booklet. Reddy is also displayed at civic functions, in public displays at licensees' offices, at appliance shows and at state fairs.
15. Generally, the smaller RCI clients simply add their company names to material sent out by RCI, and then distribute that material through employee publications, newspaper advertising and other media. The larger licensees, guided and advised by RCI, usually design their own advertising materials utilizing Reddy therein.
16. One aid RCI provides to licensees in formulating advertising material is the Reddy Kilowatt Art Service Reproduction Proofs Catalogue. See defendant's Exhibit 321. The catalogue contains proofs of hundreds of poses of Reddy which RCI makes available to its licensees for reproduction in their advertising. These recommended poses of Reddy relate to such issues as burdensome utility taxes (sheet 1086), the need for rate increases (sheets 1128, 1132, 1158), promotion of all-electric homes (sheet 1140), promotion of electric water heating (sheet 1184), the need to increase the supply of electricity (sheet 1195), promotion of electric heat pump heating/air conditioning (sheet 1238), and encouraging support for fuel adjustment clauses (sheet 1240). The Art Service book also includes numerous uses of Reddy Kilowatt to stand for electricity running along transmission wires (sheet 1092), sitting in a shopping cart wearing a sign that says "bargain" (sheet 1142), being generated from coal (sheet 1272), the sun (sheet 1245), and atoms (sheet 1245), and emerging from electric outlets (sheet 1284). (All sheet references are to defendant's Exhibit No. 327).
17. In its current brochure issued to its licensees, "Reddy Communications, Inc. Counsel and Services," RCI indicates that Reddy may be used by the licensees in their advertising regarding the "six major issues facing the energy industry," viz. money, nuclear energy, energy supply and demand, environment, government power, and operations and public service. See plaintiff's Exhibit 3(d), sheet 6.
(1) RCI Publications
18. RCI sells five books and a quarterly pamphlet "Energy Dialog" directly to the public. The "Energy Dialog" identifies Reddy as a trademark, while the books do not.
19. RCI also publishes comic books and produces motion pictures. These items are sold to RCI's licensees which, in turn, distribute the comic books and show the motion pictures to schools, civic clubs and the like.
20. RCI makes use of Reddy in its own publications, as for example: (1) in RCI's comic book "Color it Conserved" Reddy is identified as the investor utilities' symbol for their product electricity, see plaintiff's Exhibit 3(a)(1); (2) in RCI's comic book "The Mighty Atom" Reddy is identified as a trademark and is characterized as portraying the power of electricity, see plaintiff's Exhibit 3(a)(2); and (3) in the "Wizard of Light" Reddy is identified as a trademark, see defendant's Exhibit 120.
21. The motion picture "The Mighty Atom" was shown at trial and its content is similar to that of the comic book by the same name. See plaintiff's Exhibit 3(a)(2) and defendant's Exhibit 324.
22. Defendant, Environmental Action Foundation (EAF) is a non-profit corporation incorporated in the District of Columbia in 1971. It has a Coordinator and a Board of Directors which supervises the EAF staff.
23. EAF characterizes its function as researching and educating the public about environmental issues. To that end, it is organized into several projects, one of which is the Utility Project coordinated by Richard E. Morgan. The conduct of Utility Project is the basis for this lawsuit.
(1) EAF Publications
24. The Utility Project publishes and sells to the public, books and magazines wherein caricatures of Reddy appear. The Project identifies each of the publications as authored by EAF, see plaintiff's Exhibit 10. The publications consist of commentary on political, economic, social and environmental issues, upon which readers often rely for factual information. The publications do not resemble the advertising produced by investor utilities or the public relations...
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