Sally Beauty Co., Inc. v. Beautyco, Inc., 01-6049.
| Decision Date | 03 September 2002 |
| Docket Number | No. 01-6075.,No. 01-6049.,01-6049.,01-6075. |
| Citation | 304 F.3d 964 |
| Parties | SALLY BEAUTY COMPANY, INC., a Delaware corporation; Marianna Imports, Inc., a Nebraska corporation, Plaintiffs-Appellants/ Cross-Appellees, v. BEAUTYCO, INC., a Delaware corporation, Defendant-Appellee/Cross-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Craig S. Fochler, Wildman, Harrold, Allen & Dixon, Chicago, Illinois (Charles R. Mandly, Jr. and Nathan E. Ferguson, Wildman, Harrold, Allen & Dixon, Chicago, IL; and Jill Robb Ackerman and Michael Sullivan, Baird, Holm, McEachen, Pedersen, Hamann & Strasheim, Omaha, NE, with him on the briefs), for Plaintiffs-Appellants/Cross-Appellees.
Joseph P. Titterington (G. Neal Rogers with him on the briefs), Dunlap, Codding & Rogers, P.C., Oklahoma City, OK, for Defendant-Appellee/Cross-Appellant.
Before LUCERO, McKAY, and MURPHY, Circuit Judges.
Sally Beauty Co., Inc. ("Sally Beauty") and Marianna Imports, Inc. ("Marianna"), collectively "Plaintiffs," sued Beautyco, Inc. ("Beautyco") for trademark infringement, trade dress infringement, and false advertising. Beautyco markets a line of hair care products under the trade name GENERIX, which the Plaintiffs claim infringes the trademark and trade dress of their competing line of hair care products called Generic Value Products. The district court granted summary judgment to Beautyco on the Plaintiffs' claims. The court also granted summary judgment to the Plaintiffs on Beautyco's counterclaims for violations of Oklahoma antitrust and unfair competition laws. Exercising jurisdiction under 28 U.S.C. § 1291, this court affirms in part, reverses in part, and remands.
Plaintiff Sally Beauty owns and operates stores under the name Sally Beauty Supply and sells hair care, skin care, and nail care products. Plaintiff Marianna is a "filler" or contract manufacturer and packager of beauty supply products. Defendant Beautyco operates a chain of beauty supply stores that competes with Sally Beauty Supply and sells beauty supplies to the general public and the salon trade.
Sometime in 1989 or 1990, Sally Beauty began selling a line of hair care products called Generic Value Products, which Sally Beauty conceived as a lower-priced alternative to brand name salon products. Generic Value Products contain ingredients, colors, and fragrances similar to their salon counterparts. Marianna helped design the packaging for Generic Value Products and manufactures the line for Sally Beauty. The parties do not dispute that the trade dress at issue includes Sally Beauty's white bullet-shaped bottle with a flat, black cap. In addition, the Generic Value Products mark appears in white lettering against a black rectangular field near the top of the bottle. In the middle of the bottle, the product compares itself to a brand name salon product. On the back, there is a side-by-side listing of the ingredients in the Generic Value Products item and the name brand salon product.
The Plaintiffs agreed with each other that Sally Beauty would own the trade dress for the Generic Value Products line and Marianna would own the trademark. Marianna applied for and received federal trademark protection for the Generic Value Products mark in 1998. Sally Beauty holds an exclusive license from Marianna to use the trademark.
The mark consists of the words "Generic Value Products" when associated with hair care products. Marianna's mark is typed in capital letters in the principal trademark register, which means that the registration covers all design features and is not limited to any special form or lettering. See J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:58 (4th ed. & June 2002 database update) [hereinafter McCarthy on Trademarks] . The registration explicitly disavows the right to use the words "generic" and "products" separate from the mark. Since its introduction, Sally Beauty has sold millions of dollars of the Generic Value Products line.
Beautyco was a customer of Marianna for many years. Around 1994, Marianna had discussions with Larry Rhodes, the former owner of Beautyco, to create a lower-priced alternative hair care line for Beautyco. Rhodes proposed a product line called GENERIX to be packaged in a bullet-shaped bottle with a black cap and a black-and-white design. Because Marianna believed that the packaging and name for the proposed GENERIX line too closely resembled Sally Beauty's Generic Value Products, Marianna asked Beautyco to change the proposed packaging. Beautyco refused. Marianna did not produce the line and Beautyco proceeded with production of the GENERIX line with another filler.
Beautyco launched the GENERIX line in 1995 or 1996. The GENERIX shampoo product contains elements similar to the Generic Value Products line. Like the Sally Beauty trade dress, GENERIX uses packaging consisting of a white bullet-shaped bottle with black lettering and a flat, black top. As in the Generic Value Products line, the GENERIX trade dress also compares itself to a name brand salon product on the front of the bottle and contains an ingredient comparison chart on the back of the bottle.
In 1996, Beautyco applied for federal trademark registration of its GENERIX mark. Marianna opposed the application. After settlement negotiations between the parties failed, the Plaintiffs filed suit, alleging federal and state law claims that Beautyco's GENERIX products infringed on Marianna's Generic Value Products trademark, infringed on Sally Beauty's trade dress, and contained false advertising on their labels. Beautyco filed a counterclaim, alleging, inter alia, that the Plaintiffs' lawsuit violated Oklahoma antitrust and unfair competition laws. Beautyco moved for summary judgment on the Plaintiffs' claims and the Plaintiffs moved for summary judgment on Beautyco's counterclaims. The district court granted Beautyco's motion for summary judgment on the Plaintiffs' claims and Plaintiffs' motion for summary judgment on Beautyco's state antitrust and unfair competition counterclaims. The parties cross-appealed from the district court's orders.
This court reviews the grant of summary judgment de novo, employing the same standard applied by the district court. King of the Mountain Sports, Inc. v. Chrysler Corp., 185 F.3d 1084, 1089 (10th Cir.1999). Summary judgment is appropriate if the pleadings, depositions, other discovery materials, and affidavits demonstrate the absence of a genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The party seeking summary judgment bears the initial burden of demonstrating an absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party does not bear the burden of proof at trial on a dispositive issue, that party may make such a showing simply by indicating to the court a lack of evidence for the nonmovant on an essential element of the nonmovant's claim. Id. at 325, 106 S.Ct. 2548. Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to go beyond the pleadings and set forth specific facts showing that there is a genuine issue for trial. Universal Money Ctrs., Inc. v. Am. Tel. & Tel. Co., 22 F.3d 1527, 1529 (10th Cir. 1994). An issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We construe the evidence and the reasonable inferences drawn therefrom in the light most favorable to the nonmovant. King of the Mountain Sports, 185 F.3d at 1089.
Congress has defined a trademark as "any word, name, symbol, or device, or any combination thereof ... to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown." 15 U.S.C. § 1127. Marianna brought a federal trademark infringement claim under 15 U.S.C. § 1114, which prohibits the unauthorized use of a counterfeit or imitation of the registered mark likely to cause confusion in the marketplace concerning the source of the different products. See 15 U.S.C. § 1114(1)(a); First Sav. Bank, F.S.B. v. First Bank Sys., Inc., 101 F.3d 645, 651 (10th Cir.1996). In determining whether a likelihood of confusion exists between two marks, this court considers the following nonexhaustive factors: (1) the degree of similarity between the marks; (2) the intent of the alleged infringer in adopting its mark; (3) evidence of actual confusion; (4) similarity of products and manner of marketing; (5) the degree of care likely to be exercised by purchasers; and (6) the strength or weakness of the marks. See King of the Mountain Sports, 185 F.3d at 1089-90. These factors are interrelated and no one factor is dispositive. Id. at 1090. In this circuit, likelihood of confusion is a question of fact but one amenable to summary judgment in appropriate cases. See id. at 1089 . If the nonmovant demonstrates a genuine issue of material fact regarding the likelihood of confusion, however, summary judgment is not...
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