Reed-Union Corp. v. Turtle Wax, Inc.

• Decision Date: 13 December 1994
• Docket Number: No. 91 C 5625.,91 C 5625.
• Citation: 869 F. Supp. 1304
• Parties: REED-UNION CORPORATION, Plaintiff, v. TURTLE WAX, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

869 F. Supp. 1304

REED-UNION CORPORATION, Plaintiff, v. TURTLE WAX, INC., Defendant.

No. 91 C 5625.

United States District Court, N.D. Illinois, Eastern Division.

November 15, 1994.

Opinion Supplementing Decision December 13, 1994.

COPYRIGHT MATERIAL OMITTED

John J. Arado, Craig S. Fochler, John Sheldon Letchinger, Wildman, Harrold, Allen & Dixon, John Bostjancich, Pattishall, McAuliffe, Newbury, Hillard & Geraldson, Patricia Susan Smart, Chicago, IL, for plaintiff.

J. Patrick Herald, Kevin C. Parks, Philip J. Zadeik, David Jonathan Davis, Baker & McKenzie, Chicago, IL, for defendant.

MEMORANDUM OPINION AND ORDER

PLUNKETT, District Judge.

For nearly twenty years, Reed Union has owned and marketed a polish for automobiles styled "NU FINISH." NU FINISH received trademark protection in the mid-1970s. NU FINISH has always been marketed in an orange plastic bottle with black lettering including the name NU FINISH on the upper half of the bottle, and a series of claims about the product on the bottom half (the trade dress). For most of its life, NU FINISH was a minor player in the car wax market. Although Reed Union had always advertised the product on television extensively (one to one and one-half million dollars per year), its sales during the first ten or eleven years remained stagnant. All of that changed in the late 1980s when Reed Union, for the first time, was successful in placing NU FINISH in national mass marketing retail stores such as K-Mart. Thereafter, NU FINISH sales mushroomed until, in 1991, they reached some sixteen million dollars.

Enter Turtle Wax. Throughout the 1970s and 1980s, Turtle Wax had been perhaps the undisputed leader in the car wax market. It had retained that position in part by keeping track of its competitors and developing new products to compete with any interlopers (more about this later). Turtle Wax had largely ignored Reed Union and its NU FINISH because of its low volume of sales. By 1989, it could afford to do so no longer. After its effort to market a new and improved Turtle Wax hard-shell finish in 1989 failed to affect NU FINISH's growing market share, Turtle Wax created a new brand of car wax. It is uncontested that this new product was designed in large part to compete directly against NU FINISH. Turtle Wax's new product was named "FINISH 2001," and Turtle Wax quickly obtained a trademark on that name. The trade dress for FINISH 2001 was created by Turtle Wax's art department (Mr. Campagnolo) with help from its marketing department (Mr. Cusack). FINISH 2001 is in a fluorescent green bottle (somewhat larger than NU FINISH's orange one). The green bottle also has a somewhat different shape. Turtle Wax selected a fluorescent orange-red label (called scarlet by Mr. Campagnolo) and black lettering. FINISH 2001 was successful. Its sales grew steadily if not remarkably in 1990 through 1993. In that same period, NU FINISH sales declined.¹

The battleground was set. NU FINISH sued Turtle Wax on several different theories, all of which essentially claim that the name and trade dress of FINISH 2001 caused confusion among consumers and pirated NU FINISH sales. Although this Court's decision on Turtle Wax's motion for summary judgment disposed of some counts, the case proceeded to trial before this Court without a jury on Count I, captioned unfair competition and trademark infringement. This count is a potpourri of claims including a violation of section 1125(a) of the Lanham Act, 15 U.S.C. § 1125(a) trademark infringement in violation of 15 U.S.C. §§ 1051-1127 and claims of unfair competition and deceptive trade practices under various state laws. All of these claims have a single theme — the name, trade dress, and promotion of Turtle Wax's FINISH 2001 is confusingly similar to that of NU FINISH, a confusion that has cost Reed Union millions of dollars in sales.

The Likelihood of Confusion Between NU FINISH's Mark and Trade Dress with that of FINISH 2001

The touchstone of trademark infringement analysis is "likelihood of confusion," a deceptively simple test. The Seventh Circuit has developed seven factors to evaluate this likelihood of confusion. They are:

1. the similarity between the marks in appearance;

2. similarity of the products;

3. area and manner of concurrent use;

4. degree of care likely to be exercised by consumer;

5. strength of complainant's mark;

6. actual confusion;

7. intent of defendant to palm off his product as that of another.

Smith Fiberglass Prod., Inc. v. Ameron, Inc., 7 F.3d 1327 (7th Cir.1993), quoting AHP Subsidiary Holding Corp. v. Stuart Hale Co., 1 F.3d 611, 616 (7th Cir.1993). None of these seven factors alone are dispositive, and the weight accorded to each factor will vary from case to case. Schwinn Bicycle Co. v. Ross Bicycle, Inc., 870 F.2d 1176, 1187 (7th Cir.1989). With this in mind, we consider the critical factors (although somewhat out of order).

I. Similarity of Products and Area and Manner of Concurrent Use

FINISH 2001 and NU FINISH are both car polishes. Each is priced in the five to six dollar range and competes with the other. Each makes similar claims — for example, a once-a-year car polish that has a high shine and excellent protective qualities. When the marks and trade dress in question are used on directly competitive products sold through the same channels of trade, less similarity is required between the marks to establish confusion. Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 377 (7th Cir.), cert. denied, 429 U.S. 830, 97 S.Ct. 91, 50 L.Ed.2d 94 (1976). These two factors clearly favor NU FINISH. The remaining factors must be evaluated in light of this highly competitive position.

II. The Strength of the NU FINISH Trademark and Trade Dress

We next consider the strength of the NU FINISH trademark and trade dress.² The term "strength" of a trademark refers to the distinctiveness of the mark or more precisely, its tendency to identify the goods sold as coming from a particular source. McGregor-Doniger, Inc. v. Drizzle, Inc., 599 F.2d 1126, 1131 (2d Cir.1979). Strength of the mark is a crucial factor in the likelihood of confusion analysis because the stronger the mark, the broader protection to which it is entitled. Similarly, the converse is true.

In evaluating the strength of the mark, we must consider the mark's conceptual and commercial strength on a spectrum ranging from generic to descriptive to suggestive to fanciful or arbitrary. Kozak Auto Drywash, Inc. v. Enviro-Tech Int'l, 823 F.Supp. 120, 123 (W.D.N.Y.1993). A generic term cannot achieve trademark status despite whatever promotion effect may have been expended to exploit it. Miller Brewing Co. v. G. Heileman Brewing Co., 561 F.2d 75 (7th Cir.1977), cert. denied, 434 U.S. 1025, 98 S.Ct. 751, 54 L.Ed.2d 772 (1978).

Turtle Wax argues that the mark "NU FINISH" is generic. It points out that the term "NU" or correctly spelled "NEW" is so commonly used that it is incapable of distinguishing the source of products. R.J. Reynolds Tobacco Co. v. Brown & Williamson Tobacco Corp., 226 U.S.P.Q. 169, 176 (TTAB 1985). Similarly, the word "FINISH" is generic in the sense that it is synonymous with car wax or polish. Thus, the name NU FINISH and its claims of "The Once A Year Car Polish," and "no rubbing, no buffing" simply denominate a type or category of goods. In this sense, the argument goes, NU FINISH is like the name "Wash Wax," which is generic and not registerable. Turtle Wax, Inc. v. Blue Coral, Inc., 2 U.S.P.Q.2d 1534 (TTAB 1987). We are only partially convinced by this argument. We agree that the claims "Once a Year Car Polish" and "no rubbing or buffing" is not entitled to protection. Those phrases simply define a central characteristic of car waxes in general, and as such are merely generic. See Union Carbide Corp. v. W.R. Grace & Co., 213 U.S.P.Q. 400, 411 (TTAB 1982). To hold otherwise would deprive all car polish manufacturers of claims of a long lasting product or easy applications. This would impoverish the language and cannot be sanctioned. Loctite Corp. v. National Starch & Chem. Corp., 516 F.Supp. 190, 201 (S.D.N.Y.1981). However, the name NU FINISH is different. As used to describe a car polish or wax, it does not convey the same concept as if it were used to describe a furniture finishing product. While there maybe other car polishes that use the name "FINISH," few have any measurable market share. Referring to a car wax or polish as a new finish is, we conclude, not simply generic the way new wax or new polish would be.

Having said this, however, we also conclude that the mark "NU FINISH" is not fanciful or even suggestive. Rather, on the continuum of protectability, it is a descriptive mark, i.e., it makes a car's finish appear new. Although the distinction between suggestive and descriptive is somewhat blurred, the Seventh Circuit has distinguished the two concepts as follows:

If the mark imparts information directly it is descriptive. It stands for an idea which requires some operation of the imagination to connect it with the goods, it is suggestive. If the notion is that the more imagination that is required to associate a mark with a product the less likely the words used will be needed by competitors to describe their products.

Union Carbide v. Ever-Ready, Inc., 531 F.2d at 377.

Thus, we conclude NU FINISH is a descriptive mark. It imparts information or a claim of an extraordinary nature. This product will create a new finish for your car. The mark is weak but protectable.

The trade dress of NU FINISH is a more interesting question. Reed Union must prove that its packaging and its commercial are inherently distinctive or have acquired a secondary meaning. Two Pesos, Inc. v. Taco Cabana, Inc., ___ U.S. ___, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). In examining the trade dress, we must consider whether it is a common or basic shape or design, whether it is unique or unusual in part or whether it is a mere refinement of...