Detroit Coffee Company, LLC v. Soup For You, LLC et al
Filing
75
ORDER Granting Defendants' Motion for Summary Judgment and Denying Plaintiff's Motion for Summary Judgment. Signed by District Judge Victoria A. Roberts. (LVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Detroit Coffee Company, LLC,
Plaintiff,
v.
Case No. 18-10688
Honorable Victoria A. Roberts
Soup For You, LLC, d/b/a Detroit
Bold Coffee Co. and Allen James
O’Neil,
Defendants.
________________________________/
ORDER GRANTING DEFENDANTS’ MOTION
FOR SUMMARY JUDGMENT AND
DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
I. Background
Plaintiff Detroit Coffee Company brings suit against Defendants for
federal and New York state law violations arising from an alleged
trademark infringement.
This dispute is over Defendants’ use of its “Detroit Bold,” “Detroit Bold
Coffee Co.,” and “Detroit Bold Coffee Company DB” marks in connection
with their coffee products and related merchandise. Plaintiff argues the use
of those marks infringes on its senior “Detroit Coffee” and “Detroit Coffee
Company” marks, also used in connection with coffee and merchandise.
1
Plaintiff is a New York based company. It began doing business as
Detroit Coffee Company in 2003. It registered a trademark for “Detroit
Coffee” for coffee and clothing merchandise in 2013 with the principal
register of the United States Patent and Trademark Office (“USPTO”).
Initially, Plaintiff was active with its coffee sales and promotion,
amassing $22,339 in nationwide marketing expenses and roughly $26,000
in sales with its marks. However, Plaintiff engaged in no active marketing in
the past three years; instead relying on promotion via its website,
www.detroitcoffee.com, and “word-of-mouth.”
Plaintiff’s only business in Michigan consists of selling coffee to a
Detroit café that closed in 2005, an undisclosed number of online sales in
Michigan, and donating coffee to Michigan events sometime before or
during 2011. Overall, Plaintiff’s sales nationwide consist of approximately
$900 in each of the past four years.
Defendants began using the mark Detroit Bold to sell coffee in 2009,
and registered “Detroit Bold,” “Detroit Bold Coffee Co.,” and “Detroit Bold
Coffee Company DB” between 2014 and 2016 in the USPTO supplemental
register. They sell coffee and other merchandise using the Detroit Bold
mark via Amazon, the website www.detroitboldcoffee.com, and several
retail stores like Meijer and Plum Market. Defendants market Detroit Bold
2
via their website, a third-party marketing agency called Karma Jack, social
media, the Detroit Eastern Market, advertisements in local Detroit papers,
and events in the Detroit area.
In 2016, Plaintiff filed proceedings against Defendants with the
USPTO. Defendants say this was the first time they learned of Plaintiff’s
marks. Later that same year, Plaintiffs filed suit in the Southern District of
New York for several trademark related claims. These were transferred to
the Eastern District of Michigan. The claims before the Court are:
I. Federal trademark infringement in Violation of 15 U.S.C. § 1114;
II. Unfair competition in violation of 15 U.S.C. § 1125;
III. Trademark dilution in violation of 15 U.S.C. § 1125;
IV. Cybersquatting under federal law 15 U.S.C. § 1125(d);
V. State law trademark infringement under N.Y. GEN. BUS. Law §
360;
VI. Unfair business practices under state law N.Y. GEN. BUS. Law §
349;
VII. Injury to business practices and unfair competition under N.Y.
GEN. BUS. Law § 360-L;
VIII. Common Law trademark infringement and unfair competition.
3
Defendants and Plaintiff filed motions for summary judgment on all of
Plaintiff’s claims. Defendants’ motion for summary judgment is granted;
Plaintiff’s is denied.
Defendants also filed counter claims for:
I. Cancellation of Plaintiff’s trademark due to abandonment;
II. Cancellation of Plaintiff’s trademark for being merely descriptive;
III. Cancellation of Plaintiff’s trademark for being misdescriptive;
IV. Cancellation of Plaintiff’s trademark due to fraud;
V. Violations of Michigan’s Consumer Protection Act, M.C.L. 445.903;
VI. Common law trademark infringement; and
VII. Declaratory judgment of noninfringement.
These claims are not raised in these motions and will proceed.
II. Standard of Review
A motion for summary judgment can be granted under Fed. R. Civ. P.
56 when the pleadings, depositions, answers to interrogatories, and
admissions on file show there is no genuine issue of material fact such that
the moving party is entitled to judgment as a matter of law. Gen. Motors
Corp. v. Lanard Toys, Inc., 468 F.3d 405, 412 (6th Cir. 2006). There must
be no evidence that would allow a reasonable jury to find for the non4
moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242-43
(1986). Generally, the burden is on the moving party to demonstrate no
material fact exists, but that burden may be discharged provided there is an
absence of evidence supporting the nonmoving party’s case. Bennett v.
City of Eastpointe, 410 F.3d 810, 817 (6th Cir. 2005). When reviewing a
motion for summary judgment, evidence is viewed in a light most favorable
to the non-moving party. Id.
III. Analysis
Both parties agree that the analysis of Count I, trademark
infringement in violation of 15 U.S.C. § 1125, is dispositive for almost all of
Plaintiff’s claims, including Counts I, II, VII. As later discussed, it is also
dispositive of Counts V, VI, and VIII.
Claims under 15 U.S.C. § 1125 are analyzed in a two-step process.
Innovation Ventures, LLC v. N.V.E., Inc., 694 F.3d 723, 728 (6th Cir. 2012).
First, the Court determines whether the mark is protectable under the
statute. Id. Second, the Court decides if the allegedly infringing mark is
likely to cause confusion among relevant consumers. Id.
Plaintiff says it has a valid and protectable mark, which Defendants
dispute in one of their counter claims but do not directly address in their
5
motion for summary judgment. The parties hotly contest whether
Defendants’ mark is likely to cause confusion.
A. Protectable Nature of “Detroit Coffee”
Plaintiff asserts that the “Detroit Coffee” mark is protectable
because it was registered with the USPTO’s principal register. Defendants
argue in Count II of their counter claims and in some portions of their
motion for summary judgment that the mark is merely geographically
descriptive and thus not distinctive or protectable.
A mark is only protected if it is “distinctive” as a matter of law.
Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., 502 F.3d 504, 513 (6th
Cir. 2007). There are three levels of distinctiveness used to classify marks.
Id. The first and least distinctive is the generic mark, which is merely the
commonly used name of the goods and is never afforded protection. Id.
The second, called descriptive marks, are marks that directly impart
information such as the goods’ geographic origin, function or use, intended
class of users, desirable characteristics, or effects on the end user. BurkeParsons-Bowlby Corp. v. Appalachian Log Homes, Inc., 871 F.2d 590, 594
(6th Cir. 1989). Descriptive marks may sometimes be protected. Id. The
third, called inherently distinctive marks, are marks that are “arbitrary,”
6
“fanciful,” or “suggestive” and are always protected. Leelanau, 502 F.3d at
513.
Descriptive marks - between generic and inherently distinctive - are only
afforded protection if they have developed a secondary meaning among
consumers; for example, when the public associates the goods as
originating from the mark holder, rather than being merely described as
originating from a place. Id.
A mark that contains a geographical term can be either merely
descriptive or inherently distinctive, depending on whether the geographic
term is “minor, obscure, remote or unconnected with the goods.” See
Burke, 871 F.2d at 594. Terms that bear no relationship to the goods or are
otherwise not manufactured in the geographic area identified in the mark
are inherently distinctive, rather than merely descriptive. Id.
Detroit Coffee is inherently distinctive. Detroit is a metropolitan city
and not a producer of coffee. Therefore, the geographic term “Detroit” is
unconnected to the term “Coffee,” resulting in an inherently distinctive mark
that is protectable.
Even if the mark is merely descriptive, its registration with the
USPTO’s primary register creates a rebuttable presumption that the mark
has developed a secondary meaning. Leelanau, 502 F.3d at 511.
7
Defendants do not attempt to rebut that presumption, so the mark is
protectable either way.
Plaintiff’s mark is protectable under 15 U.S.C. § 1125.
B. Likelihood of Confusion
The parties dispute whether any of the “Detroit Bold” and “Detroit
Coffee” marks are confusing to consumers.
The second inquiry is whether a defendant’s use of its mark is likely
to cause confusion among consumers over which party the goods originate
from. Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr.,
109 F.3d 275, 280 (6th Cir. 1997). Confusion is the touchstone of liability
for violations of 15 U.S.C. § 1125, and is determined by eight factors:
1. Strength of the senior mark;
2. Relatedness of the goods or services;
3. Similarity of the marks;
4. Evidence of actual confusion;
5. Marketing channels used;
6. Likely degree of purchaser care;
7. The intent of defendant in selecting the mark; and
8. Likelihood of expansion of the product lines.
8
Id. There is no mathematical precision when weighing these factors,
and the fact-specific nature of trademark disputes often means not all of the
eight factors will be relevant in every case. Homeowners Grp., Inc. v. Home
Mktg. Specialists, Inc., 931 F.2d 1100, 1107 (6th Cir. 1991).
The parties contest every factor of confusion; claiming each one
either weighs in their favor or is neutral.
1. Strength of the Senior Mark
The parties disagree over the strength of Detroit Coffee. Plaintiff says
the mark is strong because it is registered. Defendants say the mark is
weak because it has low consumer recognition as seen by Plaintiff’s low
sales and lack of marketing.
The stronger a mark, the more likely confusion will result from its
infringement. Daddy’s, 109 F.3d at 280. As a result, stronger senior marks
are afforded greater protection. Id. The strength of a mark is determined by
both its (1) conceptual strength and (2) commercial strength. Progressive
Distribution Servs., Inc. v. United Parcel Serv., Inc., 856 F.3d 416, 428 (6th
Cir. 2017). Conceptual strength is measured by the mark’s distinctiveness:
whether it is generic, descriptive, or inherently distinctive as already
discussed. Id.
9
Commercial strength depends on the mark’s recognition in the
marketplace: the extent people associate the mark with the product. Id. A
mark may be conceptually strong but weak overall due to lack of
commercial strength. Kibler v. Hall, 843 F.3d 1068, 1074 (6th Cir. 2016).
Ultimately, the Court must weigh the mark’s conceptual and commercial
strength to deduce its overall strength. Progressive, 856 F.3d at 430.
A mark can be too commercially weak to outweigh its conceptual
strength when it lacks marketing and sales. Kibler, 843 F.3d at 1075. For
instance, in Kibler, the plaintiff advertised his senior, conceptually strong
mark via social media, limited appearances in magazines, newspapers,
and television shows. It sold roughly 300 albums over the previous three
years and 60,000 albums in the past sixteen years. Id. at 1074-75. Plaintiff
did not produce evidence of how successful his online marketing was. Nor
could he explain how widely circulated his appearances in news articles or
television shows were. Id. Thus, while it was possible to produce evidence
of commercial strength despite low sales by providing evidence that the
mark was widely marketed, plaintiff failed to do so. Id. at 1075-76. The
mark was found to be weak overall despite its conceptual strength. Kibler,
843 F.3d at 1075-76; see also Rohn v. Viacom Int'l Inc., 706 F. App'x 319,
10
320 (6th Cir. 2017) (finding mark with uncontested conceptual strength was
still weak overall because of its commercial weakness).
The parties here contest different portions of this factor. The Plaintiff
relies on the mark’s registration with the USPTO, which it says makes the
mark conceptually strong. Defendants do not contest the conceptual
strength of Plaintiff’s mark. Instead they argue it is commercially weak due
to low sales and marketing. Defendants prevail on this point.
For starters, Plaintiff’s argument is not correct. While registration with
the USPTO’s primary register grants a presumption of a valid and
protectable mark under 15 U.S.C. § 1125, it does not create a presumption
of a relatively strong conceptual mark. Leelanau, 502 F.3d at 516 (finding
mark with presumption of validity was not conceptually strong because it
was merely descriptive with a presumed secondary meaning and not
incontestable). However, since the Court already determined that “Detroit
Coffee” is inherently distinctive, the mark is conceptually strong regardless
of what presumption of validity or incontestable status it has.
As in Kibler and Rohn, Plaintiff’s mark is conceptually strong but that
strength does not outweigh its commercial weakness. Plaintiff’s marketing
consists of an appearance in “Business Week” in 2005, non-specific and
11
sporadic event sponsorships in a few states, world-of-mouth advertising,
and the existence of its website.
Plaintiff’s word-of mouth advertising and website have an unknown
reach. Plaintiff does not divulge how much traffic its site gets, nor does
Plaintiff provide evidence of how many people are talking about the mark.
Additionally, one can hardly call “word-of-mouth” a form of marketing, which
was Plaintiff’s sole form of advertisement the past three years.
Lack of marketing, coupled with Plaintiff’s small sales numbers
totaling 900 dollars or less in the past four years, indicate the mark is too
commercially weak for a reasonable jury to find the mark’s commercial
weakness is outweighed by its conceptual strength, like in Kibler.
This factor weighs in favor of Defendants.
II. Relatedness of Goods
The parties dispute the relatedness of the marks. Plaintiffs say the
marks are highly related because they are both for coffee products sold
over the internet. Defendants refute this, arguing that the parties sell in
different markets, which makes the goods unrelated because they merely
exist in the same broad coffee industry.
The relatedness of goods is determined by organizing the goods into
one of three categories. AutoZone, Inc. v. Tandy Corp., 373 F.3d 786, 798
12
(6th Cir. 2004). In the first category, “direct competition,” confusion is likely
if the marks are sufficiently similar, which is the third factor the court must
consider. Id. Even if the goods are in direct competition, this factor weighs
against the likelihood of confusion if the marks are not similar. Leelanau,
502 F.3d at 516.
In the second category, the goods are “somewhat related but not
competitive,” and the likelihood of confusion will depend on other factors.
Kellogg Co. v. Toucan Golf, Inc., 337 F.3d 616, 624 (6th Cir. 2003).
In the third category, the products are “unrelated” and thus confusion
is highly unlikely. Id.
Goods are not necessarily related because they exist in the same
broad industry. Homeowners, 932 F.2d at 1109. Instead, relatedness
focuses on whether “goods or services with comparable marks that are
similarly marketed and appeal to common customers are likely to lead
customers to believe they come from the same source. . . .” Therma-Scan,
Inc. v. Thermoscan, Inc., 295 F.3d 623, 633 (6th Cir. 2002). Thus, if the
goods or services are marketed to different segments of the population,
they do not directly compete. Id. If the goods or services are the same and
are sold in the same region then they directly compete, even if they are
distributed by different means. Leelanau, 502 F.3d at 516.
13
There is no question that the goods are at least somewhat related;
both marks are for coffee. The question is whether the goods are in direct
competition.
Defendants argue there is no direct competition because Plaintiff only
sells products online and, to a limited extent, in person, but Defendants sell
online, to physical retailers, and in person. Defendants say this places the
parties on different levels of the broad coffee business. In contrast, Plaintiff
argues that because both parties sell online there is an overlap in
customers such that the goods are in direct competition.
Defendants’ argument is misplaced. Their argument is that there is
no overlap in how the parties distribute their goods, which is considered
later in the fifth factor and does not affect the relatedness of the marks as
seen in Leelanau. Both marks are for coffee sold online with a national
reach and marketed to everyone. This places the parties in direct
competition.
However, because the Court later concludes the marks are not
similar, this factor weighs in favor of Defendants.
III. Similarity
The parties contest how similar their marks are. Plaintiff states the
marks are similar because they share similar wording and emphasis on the
14
word “Detroit.” Defendants argue the marks are dissimilar because they
differ in appearance when viewed in market conditions.
The similarity of the marks is given considerable weight. Daddy’s, 109
F.3d at 283. To determine similarity, courts must analyze the
“pronunciation, appearance, and verbal translation of conflicting marks.” Id.
Marks should not be compared side-by-side as they might be shown in the
courtroom. Homeowners, 932 F.2d at 1106. Instead, courts determine
whether the marks would confuse the public when viewed alone, as some
sufficiently similar marks may confuse consumers that do not have both
marks before them when in market conditions. Daddy’s, 109 F.3d at 283.
Additionally, courts are not permitted to dissect the marks, since they must
be considered in their entirety with the focus on their overall impressions,
rather than their individual features. AutoZone, 373 F.3d at 795. Where the
differences between the marks are significant and outnumber the
similarities between them, the likelihood of confusion is small. Leelanau,
502 F.3d at 517.
Plaintiff argues that the word “Detroit,” in the “Detroit Bold” and
“Detroit Coffee” marks makes them sufficiently similar because it is the first
word in the mark and highly emphasized. Defendants contend that the
15
marks are dissimilar because they have unique stylistic appearances when
presented at market.
When viewed in market conditions, the marks are not similar. Merely
taking the term “Detroit” in isolation as Plaintiff encourages would be
dissecting the marks for similarities, which is not permitted. Instead,
viewing the marks on the whole as they appear in the marketplace, the
dissimilarities between the marks are significant and far outnumber the
similarities. The marks have dissimilar fonts, colors, and overall stylistic
impressions originating from their shape, lettering, and capitalization.
Additionally, in “Detroit Bold” the emphasis is placed on “Bold,” as it
appears with significantly more prominence on the mark than “Detroit,”
which is the opposite of the relationship between “Detroit” and “Coffee” in
the plaintiff’s mark.
Effectively, the only similarity between the marks is the use of the
word “Detroit.” When viewed in light of the numerous dissimilarities, this is
not significant enough to allow a reasonable jury to find the marks are
similar even when viewed independently in a market setting.
Defendants’ “Detroit Bold Coffee Co.” and “Detroit Bold Coffee
Company DB” marks, are also not significantly similar to plaintiff’s marks.
While these marks contain the additional terms “Coffee” and “Company”
16
that appear in Plaintiff’s marks, they retain all the mentioned dissimilar
characteristics.
When viewed as a whole in market context, all of the marks are
dissimilar. This factor weighs in favor of Defendants.
IV. Evidence of Actual Confusion
Plaintiff offers evidence of actual confusion between the marks and
says this weights this factor weigh in its favor. It points to four potential
instances of actual confusion. The examples of confusion include (1) a pair
of voicemails sent by a customer asserting that he ordered Plaintiff’s coffee
from Amazon for shipment to his Michigan home and it did not arrive when
expected, (2) an email sent to Plaintiff inquiring if he had reached the email
address of “A.J.,” (3) an email sent to Plaintiff asking if it has a store, and
complimenting the coffee bought at Eastern Market, and (4) an email
stating the customer bought coffee at Eastern Market.
Defendants say these examples are not probative of actual
confusion; they claim this was merely evidence of isolated instances of
confusion made by customers unfamiliar with the parties’ products, which
should make this factor neutral.
While the likelihood of confusion is most strongly shown by examples
of actual confusion, Daddy’s, 109 F.3d at 284, evidence of actual confusion
17
is not required to demonstrate a likelihood of confusion, and a lack of actual
confusion is rarely significant. Progressive, 856 F.3d at 433. Isolated
instances of actual confusion are not weighty enough to support a finding
that confusion is likely. Id. Furthermore, confusion that is brief and occurs
among individuals that are unfamiliar with the products is entitled to
considerably less weight than chronic mistakes. Therma-Scan 294 F.3d at
634.
In Therma-Scan, there were 18 instances of consumers contacting
the wrong company, but only 6 of them were relevant to confusion. Id. The
six relevant emails were those that showed confusion about the companies’
products by attributing the incorrect product to the plaintiff. Id. While even a
single instance of confusion could at least support the likelihood of
confusion, the weight of that support was so diminished it was legally
insignificant. Id.
Three factors helped make that decision: (1) the size of defendant’s
operation was large with several million units sold, (2) the email format of
the inquiries meant the confusion could have originated from mere
carelessness among consumers, and (3) the emails were sent over a
limited time-frame of two years despite both products co-existing for longer.
Id.
18
The support that the six emails provided for the likelihood of
confusion was legally insignificant. Therma-Scan 294 F.3d at 634-35; see
also Progressive, 856 F.3d at 434 (noting that courts generally decline to
give probative weight to isolated instances of actual confusion).
Plaintiffs have not produced legally significant evidence of actual
confusion. Like in Therma-Scan, the two emails and the voicemail that
mention coffee are relevant to confusion because they demonstrate
customers attributing the incorrect product to Plaintiff. The email about
“A.J.” has nothing to do with coffee. Also like in Therma-Scan – these three
incidents of confusion are likely the result of careless consumers, rather
than chronic confusion among purchasers.
While Defendants are not selling millions of coffee bags comparable
to Therma-Scan, they are engaged in a significant amount of business
such that three instances of confusion are unlikely to be significant in light
of their operations. It is unclear what time period this confusion spans, but it
began in 2012 at the earliest and the marks have co-existed since 2009.
While these three instances of confusion do support the likelihood of
confusion, that support is legally insignificant. This factor is neutral.
V. Marketing Channels Used
19
The parties disagree on whether the marketing channels used for
their marks are the same. Plaintiff argues that both parties sell over the
internet, which generates a significant overlap in the marketing channels
and makes this factor weigh in its favor. Defendants refute this. They say
there is no overlap because of the Plaintiff’s low sales and the differences
in amount and type of the marketing conducted by the parties.
When considering marketing channels used by the parties, courts
examine “how and to whom the respective goods or services of the parties
are sold.” Leelanau, 502 F.3d at 519. When goods are sold via different
avenues, there is less likelihood of confusion. Id. The same result occurs if
the parties have different customers and market their goods or services in
different ways. Therma-Scan 294 F.3d at 636. This factor significantly
illuminates what happens in the marketplace, and is thus most helpful when
other factors are not. Id.
Just because two parties market their goods on the internet does not
mean they use common marketing channels. Progressive, 856 F.3d at 435.
Instead, where overlap on the internet is in question, the court examines (1)
whether the parties use the internet as a substantial marketing channel, (2)
whether the product is web-based, and (3) whether the parties’ marketing
channels overlap in other ways. Kibler, 843 F.3d at 1079. Additionally,
20
sophisticated advertising programs are “quite different” from less
sophisticated ones. Little Caesar Enterprises, Inc. v. Pizza Caesar, Inc.,
834 F.2d 568, 572 (6th Cir. 1987). And, inevitable overlap in local and
national advertisements does not significantly increase the likelihood of
confusion. Daddy’s, 109 F.3d at 286.
There is no significant overlap in marketing channels between the
parties. While both parties sell coffee over the internet, this does not
generate a significant overlap.
First, the goods are sold via different avenues. Plaintiff sells almost
exclusively via its website; Defendants sell their goods via Amazon, retail
chains, Eastern Market, and their website. Second, the marketing used by
the parties differs in sophistication and methodology. Defendants market
their goods via a marketing agency, social media, events in the Detroit
area, and Detroit based newspapers. Plaintiff relies almost entirely on
“word-of-mouth” marketing, which is less sophisticated. Third, the parties
sell to different customers. While both parties sell coffee, Plaintiff has a
limited online customer base. Thus, it is unlikely a customer would ever
encounter both products.
Finally, the marketing done on the internet does not generate
significant overlap because (1) the Defendants market their products by
21
other means, (2) the products are not internet-based, and (3) there is little
marketing overlap via other means.
The Court finds that the parties sell goods to different people in
different ways. This factor weighs in favor of Defendants.
VI. Likely Degree of Purchaser Care
The likely degree of purchaser care is contested by both parties.
Plaintiff says that the likely degree of care is low because coffee is bought
on impulse with a casual attitude and little care. Defendants disagree; they
say the likely degree of purchaser care is too variable to be useful.
The general prediction of whether confusion is likely is based on the
standard of an ordinary buyer exercising ordinary caution. Progressive, 856
F.3d at 435. If customers are likely to exhibit a higher degree of care, then
the likelihood of confusion is diminished. Id. This generally occurs when the
goods in question are expensive or have a particular expertise associated
with them. Homeowners, 932 F.2d at 1111. If the goods are cheap to the
point where a purchaser exhibits a casual degree of care that could result
in “impulse buying,” then the likelihood of confusion is greater. Frisch's
Restaurants, Inc. v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642, 648
(6th Cir. 1982) (finding fast-food items were subject to impulse buying).
22
Where the range of consumer care varies, the likely degree of
purchaser care does not greatly affect the likelihood of confusion. Kibler,
843 F.3d at 1081 (finding that purchasing music on iTunes would be done
by consumers with a varying degree of care and thus the likely degree of
purchaser care is not helpful); see also Wynn Oil Co. v. Thomas, 839 F.2d
1183, 1188-89 (6th Cir. 1988) (upholding that likely degree of purchaser
care was unhelpful in the context of a 15 dollar car care product).
Plaintiff argues that coffee is akin to a cheap, impulse buy item like
fast food and thus consumers are unlikely to exhibit care when purchasing
it. Defendants contend that the factor is unhelpful and thus neutral.
The likely degree of purchaser care is not helpful in this case. Unlike
in Frisch, the coffee sold is not as cheap as fast food or subject to a
universally casual consumer attitude. Its price ranges between the fifteen
and forty dollar mark per bag. Additionally, while some coffee consumers
adopt a casual attitude in deciding what coffee to drink, others care deeply.
This spectrum of price and consumer attitude makes it difficult to ascertain
the level of likely consumer care, and the Court finds this factor is
unhelpful.
This factor is neutral.
VII. Defendants’ Intent in Selecting the Mark
23
Plaintiff claims that the Defendants intentionally copied their mark.
Plaintiff says that Defendants adopted their mark after Plaintiff, which would
put Defendants on constructive notice of Plaintiff’s mark. Plaintiff contends
this means Defendants knew of Plaintiffs mark and thus had an intent to
copy. Defendant simply says it did not know of Plaintiff’s mark and thus
could not have intentionally copied it.
Intent in a trademark action is relevant because purposefully copying
the plaintiff’s mark demonstrates a belief that the mark will divert business
from the senior user. Daddy’s, 109 F.3d at 286. Evidence of intent must be
either direct or circumstantial that the defendant initially selected the mark
to attract plaintiff’s customers. Id.
Evidence that the contested mark was used with knowledge of the
protected mark can support an inference of intentional copying. Id. An
extensively advertised and long-used mark can create a presumption that
the alleged infringing party knew of the mark. Id. But the mere prior
existence of a registered mark does not demonstrate intentional copying.
Id. at 286-87.
Plaintiff provides no support for the notion that registration with the
USPTO provides constructive notice, or that constructive notice is sufficient
to establish Defendants knew of the senior mark prior to using the
24
contested mark. That notion contradicts the Sixth Circuit’s position that the
mere prior existence of the registered mark does not demonstrate
intentional copying. Further, Defendants began using the mark in 2009,
several years prior to the registration of Plaintiff’s mark in 2013 when the
supposed constructive notice would have been given.
There is also insufficient evidence to establish that Plaintiff’s mark
was long-used and extensively advertised in 2009, and there is not a
substantial similarity between the marks that creates an inference of
intentional copying. Plaintiff’s argument is untenable.
There is no direct or indirect evidence to show that Defendants knew
of Plaintiff’s mark at the time they began using it, making this factor neutral.
VIII. Likelihood of Expansion
Defendants argue that neither party shows a strong possibility of
expansion. Plaintiff argues this factor weighs in favor of confusion because
the parties already compete.
A strong possibility that either party will expand its business to
compete with the other or be marketed to the same customers weighs in
favor of finding that the present use will likely cause confusion. Daddy’s,
109 F.3d at 287. The expansion can be either geographic or related to the
products or services offered. Id.
25
Neither party argues that there is a strong possibility of either form of
expansion.
This factor is neutral.
IX. Balance of Factors
All eight factors are either neutral or weigh in favor of finding that
there is no likelihood of confusion. This leads to the conclusion that
confusion is unlikely. However, Plaintiff argues that the court should not
weigh factors that consider the size of its sales or marketing budget against
it. It contends this approach dooms small businesses and renders their
marks unenforceable against larger entities.
Current law demands that sales, marketing budgets, and other
indicators of a business’s size be accounted for in certain factors because
they affect the likelihood of confusion.
As such, the Court finds that no reasonable jury could conclude that
confusion between the marks is likely.
C. Effect on Plaintiff’s Claims
That confusion is unlikely directly affects most of Plaintiff’s claims. A
likelihood of confusion is required to sustain a claim of federal trademark
infringement under 15 U.S.C. § 1114, a claim of unfair competition in
violation of 15 U.S.C. § 1125, and a common law trademark infringement
26
claim. See Progressive, 856 F.3d at 422. The finding of no likelihood of
confusion resolves Counts I, II, and VIII in favor of Defendants.
There are several related New York state law claims before the court.
The test for confusion is the same under New York state law as it is for
federal law; confusion is required to sustain a claim for trademark
infringement under N.Y. GEN. BUS. Law § 360. Biosafe-One, Inc. v.
Hawks, 639 F. Supp. 2d 358, 367 (S.D.N.Y. 2009). The same is true for
unfair competition under N.Y. GEN. BUS. Law § 360. Codename
Enterprises, Inc. v. Fremantlemedia N. Am., Inc., No. 16CIV1267ATSN,
2018 WL 3407709, at *13 (S.D.N.Y. Jan. 12, 2018). Confusion is also
required to sustain a claim of injury to business reputation under N.Y. GEN.
BUS. Law § 360-L. This resolves Counts V and VII in favor of Defendants.
Count VI, unfair business practices under N.Y. GEN. BUS. Law § 349
requires a showing that Defendants (1) conducted a consumer-oriented
act, (2) the act was misleading in a material way, and (3) plaintiff was
injured by the act. Stutman v. Chem. Bank, 95 N.Y.2d 24, 29 (2000). The
act must be “likely to mislead a reasonable consumer acting reasonably
under the circumstances.” Id. In asserting that the act was misleading,
Plaintiff relies solely on the argument that confusion is likely. Since
27
confusion is unlikely, a reasonable consumer would not be misled. The
court decides this Count VI in favor of Defendants as well.
D. Plaintiff’s Dilution Claim
Defendants argue that Plaintiff’s dilution claim should be dismissed
because it has not shown the Detroit Coffee marks are famous.
Count III, trademark dilution in violation of 15 U.S.C. § 1125(d)
requires that the senior mark be (1) famous and (2) distinctive, while the
junior mark must be (3) used in commerce (4) subsequent to the senior
mark becoming famous, and (5) cause dilution of the distinctive quality of
the senior mark. AutoZone, 373 F.3d at 802.
A mark is famous when it is widely recognized by the general public
of the United States as a source of the mark owner’s goods. Kibler, 843
F.3d at 1083. To decide if the mark is widely recognized enough to be
famous, the court must analyze (1) the duration, extent, and reach of
advertising and publicity around the mark; (2) the amount, volume, and
extent of sales; and (3) actual recognition of the mark. Id. The Court should
find the mark is a “household name,” and it is easier to demonstrate a mark
is commercially strong than it is to establish it is famous. See id. (finding it
is more difficult for a mark to be famous than to achieve public recognition
required to establish strength in a likelihood of confusion test).
28
As previously discussed, Plaintiff fails to establish that its mark is
even commercially strong. The Court’s earlier discussion encompassed the
sale, marketing, and actual recognition of the mark in making that decision.
The mark does not rise to the level of public awareness required to be
famous.
Summary judgment is awarded to Defendants on Count III.
E. Plaintiff’s Cybersquatting Claim
Defendants claim that Plaintiff cannot sustain its claim of
cybersquatting because it fails to show its mark is distinctive or famous and
that Defendants acted with a bad faith intent to profit from Plaintiff’s marks.
Plaintiff says its claim should proceed because Defendant had a bad faith
intent to profit from its marks and the domains used by the parties are
similar.
Plaintiff’s Count IV is for cybersquatting in violation of 15 U.S.C. §
1125(d). A successful claim for cybersquatting requires that the trademark
owner asserting the claim show (1) he has a valid trademark entitled to
protection, (2) the mark is distinctive or famous, (3) the defendant’s domain
name is identical or confusingly similar to the mark or, in cases of famous
marks, dilutive of the mark, and (4) the defendant used, registered or
29
trafficked in the domain name, with (5) a bad faith intent to profit.
DaimlerChrysler v. The Net Inc., 388 F.3d 201, 204 (6th Cir. 2004).
For the third factor, domain names that incorporate an entire mark
are normally confusing; consumers might think the domain name is used,
approved, or permitted by the mark holder. Id. at 206. Additionally, slight
changes to a domain name, such as generic or minor words, are irrelevant.
Id.
For the fifth factor, courts consider nine factors as outlined in 15
U.S.C. § 1125(d)(1)(B)(i) when determining a bad faith intent to profit. Id.
They include:
1. Defendant’s trademark or other rights to the domain name;
2. Whether the domain name consists of someone’s legal name;
3. Defendant’s prior use, if any, of the domain name to offer bona fide
goods or services;
4. Defendant’s bona fide noncommercial or fair use of the mark;
5. Defendant’s intent to divert customers from the mark owner’s site
either for commercial gain or in an attempt to tarnish or disparage the mark;
6. Defendant’s offer to transfer, sell, or otherwise assign the domain
to the mark owner or third party for financial gain without having used the
domain for bona fide goods or services;
30
7. Defendant’s use of material or misleading false contact information
when applying to register the domain name, intentional failure to maintain
accurate contact information, or prior conduct indicating a pattern of such
behavior;
8. Defendant’s registration or acquisition of multiple domain names
that are confusingly similar to the mark;
9. How distinctive or famous the Plaintiff’s mark is.
Id. at 206-07. These factors should be considered in their entirety. Id.
at 207.
Defendants do not contest that their domain
www.detroitboldcoffee.com is confusingly similar to Plaintiff’s
www.detroitcoffee.com. Instead, they argue that the “Detroit Coffee” mark
is neither distinctive nor famous and that there was no bad faith intent to
profit from the similar domains.
As already discussed, the “Detroit Coffee” mark is inherently
distinctive. However, the nine factors of bad faith do not indicate that there
was a bad faith intent to profit from the similar domain names. Defendants
began using the mark “Detroit Bold” prior to learning of Plaintiff’s mark,
which indicates they did not intend to divert customers from Plaintiff’s
website. Defendants (1) used their domain to sell bona fide goods, (2) did
31
not offer to transfer or sell the domain to Plaintiff or a third party, (3) did not
hide their involvement in registering the domain, or (4) register multiple,
similar domains. Plaintiff’s mark, while distinctive, is not widely recognized
or famous.
While the Defendants did not use the domain in connection with a
legal name, and did not register their marks until several months after their
domain, those two factors alone do not indicate a bad faith intent. In all,
there is insufficient evidence for a reasonable jury to find Defendants’ acted
with a bad faith intent to profit from the similarity between the domain
names.
Summary judgment is awarded to Defendants on Count VI.
III. Conclusion
Defendants’ motion for summary judgment in their favor is GRANTED
in its entirety. Plaintiff’s motion for summary judgment is DENIED.
This case will proceed on Defendants’ counter claims only.
IT IS ORDERED.
S/ Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: 08/21/2019
32
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?