Star Markets, Ltd. v. Texaco, Inc.

Decision Date08 November 1996
Docket NumberCivil No. 95-01018 BMK.
Citation950 F.Supp. 1030
PartiesSTAR MARKETS, LTD., a Hawaii corporation, Plaintiff, v. TEXACO, INC., a Delaware corporation, and Texaco Refining and Marketing, Inc., a Delaware corporation, Defendants.
CourtHawaii Supreme Court

Susan Oki Mollway, Milton M. Yasunaga, Martin E. Hsia, Cades Schutte Fleming & Wright, Honolulu, HI, for plaintiff.

Paul Maki, Elise Owens Thorn, Maki & Thorn, Honolulu, HI and Mark D. Litvack, Texaco Inc. Legal Department, Universal City, CA, and William G. Pecau, Pennie & Edmonds, New York City, for defendants.

ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO DILUTION CLAIM AND GRANTING DEFENDANTS' CROSS MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO PLAINTIFF'S DILUTION CLAIM

KURREN, United States Magistrate Judge.

This case is a trademark infringement action brought by Star Markets, Ltd. against Texaco, Inc. and Texaco Refining and Marketing, Inc. Plaintiff has operated a supermarket business in Hawaii under the name "Star Markets" since 1946. Plaintiffs business now includes eight grocery stores on Oahu, Maui and Kauai. Defendants operate gasoline stations throughout the United States. They began operating gasoline stations in Hawaii in 1959. Defendants also operate convenience stores in connection with some gasoline stations on the mainland and, since the 1980s, in Hawaii. These stores had been named "Food Mart," but Defendants have converted the name of some stores to "Star Mart" on the mainland. In December of 1995, Defendants began to use the name "Star Mart" preceded by the Texaco "Star-T" logo for its 17 convenience stores in Hawaii. Plaintiff challenges, in part, Defendants' use of "Star Mart" claiming that it causes dilution of Plaintiffs "Star Market" mark.

On August 16, 1996, Plaintiff filed a Motion for Partial Summary Judgment as to Dilution Claim. Plaintiff seeks a ruling granting summary judgment in its favor or, in the alternative, a ruling that Defendants will be deemed as a matter of law to be diluting Plaintiff's mark if Defendants' mark is found to cause confusion relating in any way to Plaintiff. Defendants filed a Cross Motion for Partial Summary Judgment as to Plaintiff's Dilution Claim on October 3, 1996. The motions came on for hearing before this court on October 21, 1996. After careful consideration of the pleadings and arguments of counsel, the court DENIES Plaintiff's Motion and GRANTS Defendants' Cross Motion for Partial Summary Judgment as to Plaintiff's Dilution Claim.

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party has the initial burden of "identifying for the court those portions of the materials on file in the case that it believes demonstrate the absence of any genuine issue of material fact." T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986)). In a motion for summary judgment, the court must view the facts in the light most favorable to the nonmoving party. State Farm Fire & Casualty Co. v. Martin, 872 F.2d 319, 320 (9th Cir.1989).

Once the moving party has met its burden of demonstrating the absence of any genuine issue of material fact, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. T.W. Elec., 809 F.2d at 630; Fed.R.Civ.P. 56(e). The opposing party may not defeat a motion for summary judgment in the absence of any significant probative evidence tending to support its legal theory. Intel Corp. v. Hartford Accident & Indemnity Co., 952 F.2d 1551, 1558 (9th Cir.1991). If the nonmoving party fails to assert specific facts, beyond the mere allegations or denials in its response, summary judgment, if appropriate, shall be entered. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 884, 110 S.Ct. 3177, 3186-87, 111 L.Ed.2d 695 (1990); T.W. Elec., 809 F.2d at 630; Fed.R.Civ.P. 56(e). There is no genuine issue of fact if the opposing party fails to offer evidence sufficient to establish the existence of an element essential to that party's case. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552; Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir.1994); Blue Ocean Preservation Soc. v. Watkins, 754 F.Supp. 1450, 1455 (D.Haw.1991).

DISCUSSION

In Count Two of Plaintiff's Second Amended Complaint, Plaintiff asserts a claim of dilution in violation of 15 U.S.C. § 1125(c). Pl.'s Second Am. Compl. ¶¶ 43-50. The federal Trademark Dilution Act of 1995 ("Act") entitles the holder of a famous trademark to relief1 when that mark is diluted by another's use of a similar mark, whether or not there is any likelihood of confusion between the marks. The Act provides, in part:

(1) The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark.

15 U.S.C.A. § 1125(c)(1) (Supp.1996). To obtain protection from this statute, Plaintiff must demonstrate that: (1) its mark is famous, (2) Defendants' use of their allegedly diluting mark began after Plaintiff's mark achieved such fame, and (3) Defendants' use of their mark causes dilution of the distinctive quality of Plaintiff's mark.

The Act further provides:

In determining whether a mark is distinctive and famous, a court may consider factors such as, but not limited to —

(A) the degree of inherent or acquired distinctiveness of the mark;

(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;

(C) the duration and extent of advertising and publicity of the mark;

(D) the geographical extent of the trading area in which the mark is used;

(E) the channels of trade for the goods or services with which the mark is used;

(F) the degree of recognition of the mark in the trading areas and channels of trade used by the mark's owner and the person against whom the injunction is sought;

(G) the nature and extent of use of the same or similar marks by third parties;

(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.

15 U.S.C.A. § 1125(c)(1). In short, the Act protects truly famous marks, which are presumed distinctive,2 but not distinctive marks if they are not also sufficiently famous. See generally, JEROME GILSON, TRADEMARK DILUTION NOW A FEDERAL WRONG 11 (1996).

Furthermore, for purposes of satisfying the third element, the statute defines dilution as "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of — (1) competition between the owner of the famous mark and the other parties, or (2) likelihood of confusion." 15 U.S.C.A. § 1127 (Supp.1996). Dilution may be established by showing tarnishment or blurring. To determine whether dilution by blurring is established, the following factors are balanced: a) similarity of the marks, b) similarity of the products covered by the marks, c) sophistication of consumers, d) predatory intent, e) renown of the senior mark, and f) renown of the junior mark.3

I. Plaintiff's "Star Markets" mark is not sufficiently famous to merit protection from dilution pursuant to the Act.

A mark must be especially famous and distinctive to merit protection under the Act because a violation of the Act triggers extensive relief — preventing all others from using the mark, regardless of whether the marks are in related fields or are those of competitors. The Act identifies eight non-exclusive factors for the court to balance in determining whether a mark is famous. The court's analysis of each factor is discussed below.

A. Degree of distinctiveness of Plaintiff's mark

John Bunge, one of Plaintiff's experts, conducted a secondary meaning survey for Plaintiff which measured the association between the word "Star" and Plaintiff's grocery stores. Just over seventy-five percent of the respondents associated "Star" with Plaintiff. Accordingly, Mr. Bunge concluded that "Star" was sufficiently associated with Plaintiff to establish secondary meaning. Both parties agree that Mr. Bunge's secondary meaning survey established that Plaintiff's mark has acquired distinctiveness. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769, 112 S.Ct. 2753, 2757-58, 120 L.Ed.2d 615 (1992) (determining that secondary meaning is the same as acquired distinctiveness).

The parties dispute the significance of this distinctiveness. Plaintiff, relying on Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. B.E. Windows Corp., contends that marks possessing acquired distinctiveness are entitled to protection under the Act. See Ringling Bros., 937 F.Supp. 204, 211 (S.D.N.Y.1996) (finding that a slogan comprised of common words is capable of being protected under the Act if secondary meaning is established).

Plaintiff's reliance is misplaced, however. The court in Ringling Bros. merely stated that a slogan comprising common words could not be deemed distinctive unless it had secondary meaning, and only then could it be capable of protection. Being capable of protection, however, is not the same as meriting protection. The degree of that distinctiveness must still be weighed.4

Acquired distinctiveness is merely a minimum threshold for establishing protectibility of a trademark that is not suggestive, arbitrary or fanciful. Once established, the Act compels the court to consider the degree of that distinctiveness as one of many factors for determining whether the mark is famous.

Plaintiff then contends...

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