Renaissance Greeting Cards v. Dollar Tree Stores

• Decision Date: 19 December 2005
• Docket Number: No. 1:05cv341.,1:05cv341.
• Citation: 405 F.Supp.2d 680
• Parties: RENAISSANCE GREETING CARDS, INC. Plaintiff, v. DOLLAR TREE STORES, INC. Defendant.
• Court: U.S. District Court — Eastern District of Virginia

405 F.Supp.2d 680

RENAISSANCE GREETING CARDS, INC. Plaintiff, v. DOLLAR TREE STORES, INC. Defendant.

No. 1:05cv341.

United States District Court, E.D. Virginia, Alexandria Division.

December 19, 2005.

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Michael Steven Culver, Millen White Zelano & Branigan PC, Arlington, VA, for Plaintiff.

Beth Hirsch Berman, Williams Mullen Hofheimer Nusbaum, Norfolk, VA, for Defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

In this suit, an owner of three registered trademarks sues a large discount retailer for trademark infringement and unfair competition under both the Federal Trademark Act of July 5, 1946, 15 U.S.C. § 1051, et seq., as amended, and Virginia common law. More particularly, plaintiff Renaissance Greeting Cards, Inc. ("RGC"), a marketer of greeting cards and the owner of three registered trademarks employing the words RENAISSANCE and RENAISSANCE GREETING CARDS for its line of greeting cards, brings this federal trademark infringement and state unfair competition action against the defendant, Dollar Tree Stores, Inc. ("Dollar Tree"), for using the word RENAISSANCE in marketing its own line of gift bags, and to a lesser degree for use in the marketing of gift wraps, bows, boxes, tissue paper and ribbon. At issue is whether RGC's RENAISSANCE trademark is so well-recognized by consumers of greeting cards (that is, strong) that Dollar Tree's use for noncompetitive products is likely to cause confusion among consumers.

I.¹

Plaintiff RGC is a Maine Corporation engaged in the business of creating and marketing specialty greeting cards. RGC is a wholly owned subsidiary of Florists' Transworld Delivery, Inc. ("FTD"). In August 1992, RGC registered with the Patent and Trademark Office ("PTO") a trademark employing the word RENAISSANCE in stylized form,² and a trademark using the phrase RENAISSANCE GREETING CARDS in a similarly stylized form.³ In 1996, RGC restyled the lettering of the 1992 trademarks slightly and continues using this restyled lettering today.⁴ In October 2003, RGC registered a third trademark for the word RENAISSANCE in typed form.⁵ RGC and its predecessors have used these marks for greeting cards continuously since 1977. The parties agree that RGC's RENAISSANCE mark is incontestable as applied to greeting cards pursuant to 15 U.S.C. §§ 1065 and 1115(b).⁶

The word RENAISSANCE is a very Commonly-used mark for a wide variety of goods and services, both within industries arguably related to greeting cards and in the economy in general. For example, RGC's marks are registered in PTO International Class 16, which covers paper and printed goods.⁷ In this class, there are currently, apart from RGC's marks, 20 active registrations or applications for marks using the word RENAISSANCE. These registrations are for a variety of paper products including: labels, wedding albums, periodicals and various paper goods. Among all classes of products, there are presently 465 active federal and 203 state trademark registrations or pending applications for marks containing the word RENAISSANCE. These hundreds of marks represent a diverse array of industries, including: the hotel industry, the information technology industry, executive education services, and costume jewelry. Indeed, it appears that included among these many marks is a mark used in connection with greeting cards. A registered trademark of CLASSIC GREETINGS.COM: HOME PORT OF THE WWW RENAISSANCE,⁸ is registered for "entertainment services, namely, providing information on art, music, and poetry in the field of classical art and literature via the global computer network," but visitors to the website www.classicgreetings.com are also offered "free classic greetings and poetry cards."⁹ In addition, there are 245 identifiable "common law trademarks" using the word RENAISSANCE and at least 2,925 businesses using the word RENAISSANCE in their business names. Thus, the word RENAISSANCE is widely used by companies selling a variety of products, some related to, and many distinct from, greeting cards.

In an effort to protect its trademark, RGC has initiated one cancellation proceeding and three opposition proceedings at the PTO against parties who had registered or were seeking to register marks containing the word RENAISSANCE. In August 2004, RGC formally opposed registration of the mark RENAISSANCE LABEL by Renaissance Mark, Inc. for its line of Printed labels. The parties reached a settlement restricting the types of labels Renaissance Mark, Inc. may offer under the RENAISSANCE mark. In October 2001, RGC opposed registration of the mark RENAISSANCE by Album X Corporation for its line of wedding and photo albums. This dispute was settled by an agreement that Album X Corporation would not market its albums in department stores, while allowing Album X to continue to market its albums elsewhere under the RENAISSANCE mark. In September 1992, RGC opposed Renaissance of Thought, Inc.'s registration of the mark RENAISSANCE OF THOUGHT, INC. The merits of the opposition were not adjudicated, as the other party voluntarily abandoned the application. Finally, in April 1993; RGC petitioned for the cancellation of the registered mark of RENAISSANCE held by Argo Wiggins S.A. RGC withdrew its petition in 1994 and the registration was cancelled shortly thereafter under Section 8 of the Lanham Act, which requires the PTO to cancel a registration after six years if the mark is no longer in use. 15 U.S.C. § 1058(a). In addition, counsel for RGC corresponded with three other parties using or intending to use the RENAISSANCE mark in a conflicting manner, which resulted in the cessation of the conflicting use.

RGC's sales constitute a very small portion of the overall domestic greeting cards market. Over the past five years RGC has had average annual sales of $12 million. By comparison, the retail greeting cards market is valued at roughly $7 billion annually. In the three year period prior to 1993, RGC's sales averaged just $7.7 million annually. The vast majority of RGC's sales are made not directly to consumers, but through its sales representatives and sales force to various retailers and to florists affiliated with FTD. The distribution among these outlets, based on the percentages of RGC's sales, is as follows: 18% for pharmacies; 16% for florists; 15% for grocery stores; 13% for card and gift shops; 12% for hospital gift shops; and 26% for other retail outlets including bookstores, convenience stores, department stores, hardware stores, hotel lobby stores, mail box stores, newsstands, party goods stores, office supply stores and the like.

With the exception of local advertising in support of its retail outlet store in Maine, RGC does not advertise its products directly to retail consumers, but instead advertises exclusively in trade publications and at trade shows. Most of RGC's advertising efforts, therefore, are directed at its wholesale customers. Over the past five years, RGC has expended an average of $358,000 annually on advertising. In the three years prior to 1993, RGC expended an average of approximately $230,000 annually on advertising. RGC has not provided any survey evidence on the brand recognition of its RENAISSANCE trademark.

Greeting cards are sometimes marketed under the same trademark as gift bags or gift wrap, or both. Several of RGC's competitors have marketed these items under the same trademark including: Paramount Cards, Marian Heath, Marcel Schurman, Recycled Paper Greetings, Hallmark and the Carlton division of American Greetings. Indeed, RGC marketed its own line of gift bags, gift wrap, bows and ribbon under the "Renaissance" trademark during the 1980s, but it ceased doing so in 1990 and has not done so since.

Defendant Dollar Tree is a large national retailer operating approximately 2,845 stores in all 48 contiguous states of the continental United States. For the year that ended January 29, 2005, Dollar Tree's net sales totaled $3.126 billion. Its net income for the same period was $180.250 million.¹⁰ Dollar Tree has used the RENAISSANCE mark on its line of gift bags since 1993, and on its line of gift wrap, boxes, bows, ribbon and tissue since 2002. Examples of Dollar Tree's use of the mark RENAISSANCE on its products are attached hereto as Exhibit A. Dollar Tree developed its marks without knowledge of RGC's marks. Dollar Tree chose the RENAISSANCE mark for its line of gift bags because it "symbolize[d] high quality and fanciness to enhance the perceived value of the gift." Edney Declaration ¶ 5. Dollar Tree has provided different estimates as to how many gift bags it has sold. These estimates range from approximately 250 million to approximately 500 million units of gift bags, gift wrap, bows, etc., on which the RENAISSANCE mark has appeared since 1995. In addition to selling gift bags, Dollar Tree markets greeting cards under the TENDER THOUGHTS trademark of its supplier, American Greetings Corporation.

Dollar Tree did not conduct a trademark search or obtain opinion of counsel prior to its initial use of the RENAISSANCE mark in 1993, nor did it do so before using the mark on its gift wrap products in 2002. During the latter half of 2003, Dollar Tree performed searches on various marks that it used, and discovered that the mark RENAISSANCE was used by many different companies. In light of this discovery, it considered abandoning use of the RENAISSANCE mark, and ultimately did so in May 2004 when it began marketing its line of gift bags, gift wrap, etc. under the mark VOILA. Despite this abandonment, some gift bags bearing Dollar Tree's RENAISSANCE mark made prior to May 2004 remained in stock and available for purchase as late as July 2005.

Despite the very large volume of bags bearing the RENAISSANCE mark sold by Dollar Tree beginning in the early 1990s, RGC did not discover Dollar Tree's use of the mark on its line of gift bags until 2003. As a result of this discovery,...