Therma-Scan, Inc. v. Thermoscan, Inc.

• Decision Date: 10 July 2002
• Docket Number: No. 00-2408.,00-2408.
• Citation: 295 F.3d 623
• Parties: THERMA-SCAN, INC., Plaintiff-Appellant, v. THERMOSCAN, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 623

295 F.3d 623

THERMA-SCAN, INC., Plaintiff-Appellant, v. THERMOSCAN, INC., Defendant-Appellee.

No. 00-2408.

United States Court of Appeals, Sixth Circuit.

Argued March 22, 2002.

Decided and Filed July 10, 2002.

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Mark A. Cantor (argued and briefed), Brooks & Kushman, Southfield, MI, for Plaintiff-Appellant.

Dennis M. Barnes, Barris, Sott, Denn & Driker, Detroit, MI, Marie V. Driscoll (argued and briefed), Fross, Zelnick, Lehrman & Zissu, New York, NY, for Defendant-Appellee.

Before: NORRIS, SILER, and GILMAN, Circuit Judges.

OPINION

GILMAN, Circuit Judge.

Therma-Scan, Inc. (TSI), a Michigan corporation, brought this lawsuit for trademark infringement and unfair competition against Thermoscan, Inc., a Georgia corporation. TSI sought monetary damages and injunctive relief, as well as cancellation of Thermoscan's allegedly infringing trademark. The district court granted Thermoscan's motion to enforce a purported settlement that the parties reached during oral argument on Thermoscan's motion for summary judgment. We reversed the district court's order in a prior appeal because a material dispute existed as to whether a meeting of the minds had actually occurred regarding the purported settlement. The case was then remanded "for a ruling on Thermoscan's motion for summary judgment and, if necessary, for a trial on the merits." Therma-Scan, Inc. v. Thermoscan, Inc., 217 F.3d 414, 415 (6th Cir.2000). After allowing the parties to file supplemental briefs, the district court granted summary judgment in favor of Thermoscan. For the reasons set forth below, we AFFIRM the judgment of the district court.

I. BACKGROUND

A. Factual background

TSI performs infrared thermal-imaging examinations of the human body. After analyzing the resulting images, TSI prepares diagnostic reports that are provided to its clients or their physicians.

Most of TSI's clients are residents of the greater Detroit, Michigan area. TSI performs approximately 28 examinations each week at its facility in Huntington Woods, Michigan. Although a few clients learn about TSI's services on their own, the large majority are referred by their physicians.

On November 1, 1988, TSI received the formal registration of its "THERMA-SCAN" trademark from the United States Patent and Trademark Office. TSI's trademark appears on its office door, stationery, literature, reports to physicians and patients, and informational and advertising materials.

Although TSI has sold various medical devices in the past, it no longer markets any products. TSI promotes its services primarily through maintaining and developing contacts with physicians. In addition, it seeks to cultivate relationships with individuals who conduct radio news programs on which TSI's services might be mentioned. TSI does not, however, advertise in any magazines, professional journals, or other publications.

Thermoscan, a Georgia corporation that began its operations in March of 1989, manufactures hand-held electronic ear thermometers. Sales of these devices increased from $3 million in 1991 to over $147 million in 1996. During the same period, Thermoscan's advertising and promotional expenses increased from $1.2 million to over $20 million.

On November 16, 1989, Thermoscan filed an application to register "THERMOSCAN" as a trademark for use on its thermometers. It began using the "THERMOSCAN" trademark on its thermometers in 1990, prior to the completion of the trademark registration process. The United States Patent and Trademark Office accepted Thermoscan's application and published it for opposition on January 15, 1991. A registration for THERMOSCAN was issued on September 24, 1991.

In October of 1992, TSI's attorney informed Philip Hoekstra, the president of TSI, that Thermoscan was using the THERMOSCAN trademark on its thermometers. The attorney recommended that TSI take action against Thermoscan for infringement of the THERMA-SCAN trademark. Hoekstra decided against pursuing any action at that time because he believed that the thermometers would not interfere with TSI's business.

Over a year later, in December of 1993, Hoekstra sent TSI's attorney a facsimile with a subject line reading "Ref: Infringement on trademark." That communication included a catalog advertisement for Thermoscan's thermometer. Hoekstra became concerned with Thermoscan's use of the THERMOSCAN trademark, and the possibility that it might create confusion with TSI's services, when he saw the thermometer being sold in drugstores and being advertised in magazines and on television.

In 1995, The Gillette Company acquired Thermoscan. Braun, Inc., a subsidiary of Gillette, began marketing Thermoscan's thermometers in April of 1996. The trademark "BRAUN" now appears on all Thermoscan packaging and on the thermometers themselves.

Despite its awareness of Thermoscan's products and the THERMOSCAN trademark, TSI did not take any action against Thermoscan until August of 1996, when TSI's attorney sent Thermoscan a protest letter. On September 10, 1996, TSI commenced a proceeding in the United States Patent and Trademark Office to cancel Thermoscan's registration. TSI's cancellation proceeding was suspended to await the disposition of the present lawsuit.

B. Procedural background

This lawsuit was filed in the United States District Court for the Western District of Michigan on January 26, 1998. TSI's complaint alleges trademark infringement and unfair competition, in violation of 15 U.S.C. §§ 1114 and 1125(a), respectively. In addition, TSI requested that the district court, pursuant to its authority under 15 U.S.C. § 1119, issue an order directing the Commissioner of Patents and Trademarks to cancel Thermoscan's trademark registration.

Thermoscan filed a motion for summary judgment in October of 1998. The district court conducted a hearing on the motion several months later. During oral argument, the parties reached a purported settlement. The district court then summarized for the record the understanding between the parties with respect to the settlement. Despite this development, the parties were unable to agree on the specific terms of their purported agreement in subsequent discussions. Thermoscan eventually filed a motion to enforce the settlement or, in the alternative, for a ruling on its motion for summary judgment. The district court granted the motion to enforce the settlement agreement as drafted by Thermoscan and dismissed the lawsuit with prejudice on April 20, 1999.

TSI appealed the district court's order. We reversed and remanded the case, concluding that "it was an abuse of discretion for the court to impose Thermoscan's version of the settlement upon TSI." Therma-Scan, Inc. v. Thermoscan, Inc., 217 F.3d 414, 420 (6th Cir.2000).

The district court allowed the parties to file supplemental briefs on the motion for summary judgment after the remand. On October 25, 2000, the court granted Thermoscan's motion for summary judgment and entered judgment against TSI. This appeal followed.

II. ANALYSIS

A. Standard of review

A district court's grant of summary judgment is reviewed de novo. Holloway v. Brush, 220 F.3d 767, 772 (6th Cir.2000). Summary judgment is proper where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering such a motion, the court must view the evidence and draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The central issue is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

B. Whether a likelihood of confusion exists — the eight-factor test

In order to prevail on its trademark infringement and unfair competition claims, TSI must establish that Thermoscan's trademark creates a likelihood of confusion regarding the origin of the goods or services offered by TSI and Thermoscan. Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275, 280 (6th Cir.1997) ("The touchstone of liability under § 1114 is whether the defendant's use of the disputed mark is likely to cause confusion among consumers regarding the origin of the goods offered by the parties."); Holiday Inns, Inc. v. 800 Reservation, Inc., 86 F.3d 619, 622-23 (6th Cir.1996) (explaining that a party seeking to avoid summary judgment in a case alleging trademark infringement and unfair competition, in violation of 15 U.S.C. §§ 1114 and 1125(a), "must establish that genuine factual disputes exist concerning those factors that are material to whether confusion is likely in the marketplace as a result of the alleged infringement").

This court has identified eight factors that are relevant in determining whether a likelihood of confusion exists: (1) the strength of the plaintiff's mark, (2) the relatedness of the goods or services offered by the plaintiff and the defendant, (3) the similarity of the marks, (4) any evidence of actual confusion, (5) the marketing channels used by the parties, (6) the probable degree of purchaser care and sophistication, (7) the defendant's intent in selecting its mark, and (8) the likelihood of either party expanding its product line using the marks. Daddy's Junky Music Stores, 109 F.3d at 280 (citing Frisch's Restaurants, Inc. v. Elby's Big Boy, Inc., 670 F.2d 642, 648 (6th Cir.1982)). Not all of these factors will be relevant in every case, and in the course of applying them, "[t]he ultimate question remains whether relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way." Homeowners Group, Inc. v. Home Mktg....