Lodestar Anstalt v. Route 66 Junkyard Brewery
Filing
88
MEMORANDUM OPINION AND ORDER by District Judge Judith C. Herrera denying 47 Plaintiff Lodestar Anstalt's Motion for Partial Summary Judgment and a Permanent Injunction and 56 Defendants Route 66 Junkyard Brewery LLC's and Henry Lackey's Motion for Summary Judgment on Non-Infringement. (baw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
LODESTAR ANSTALT,
a Liechtenstein Corporation,
Plaintiff,
v.
No. 1:17-cv-00062-JCH-JHR
ROUTE 66 JUNKYARD BREWERY LLC,
a New Mexico Limited Liability Company,
and HENRY LACKEY, an individual,
Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff owns trademarks of the phrase Route 66 and the iconic highway shield design to
make and sell beer. Defendants Route 66 Junkyard Brewery LLC (“the Brewery”) and its owner
Henry Lackey also use the phrase Route 66 and a design logo to produce beer at a microbrewery
in Grants, New Mexico. After unsuccessful cease-and-desist efforts, Plaintiff brought an action
under the Lanham (Trademark) Act, 15 U.S.C. § 1114 against Defendants for infringement of their
federally registered trademarks and against the Brewery for unfair competition under 15 U.S.C. §
1125. See Am. Compl., ECF No. 17. The parties cross-moved for summary judgment, arguing that
they are entitled to judgment as a matter of law on whether Defendants willfully infringed on
Plaintiff’s Route 66 trademarked beer. Plaintiff additionally sought summary judgment on
Defendants’ affirmative defenses and an injunction to permanently enjoin Defendants from using
the phrase Route 66 in connection with beer. After carefully considering the motions, briefs,
evidence, and relevant law, the Court concludes that the parties’ motions should be denied.
I.
BACKGROUND
In presenting the facts taken from the parties’ cross-motions for summary judgment, the
Court will set forth the respective parties’ version of events as supported in the record. The Court
will construe the facts in the light most favorable to the non-moving party in the analysis of each
party’s respective motion for summary judgment.
A.
Plaintiff’s Trademarks and Product Advertising
Plaintiff owns United States Trademark Registration No. 4,254,249 for the word mark
ROUTE 66, a standard character mark without any particular font, style, size, or color, and No.
4,442,767 for the following design mark:
See Plaintiff’s Motion for Partial Summary Judgment and Permanent Injunction, ECF No. 47
(“Pl.’s MSJ”), Undisputed Fact (“UF”), ¶ 1; Pl.’s Ex. 2, ECF No. 49-1. Both marks are for use
with beer and had respective registration dates of 2012 and 2013. UF ¶ 1. Under these marks,
Plaintiff manufactures and distributes an India pale ale/lager blend brewed to Plaintiff’s
specifications by Minhas Craft Brewery located in Wisconsin. Id. ¶ 3. Plaintiff’s beers are offered
as draft beer at bars in the United States and sold alongside local specialty beers. Id. ¶¶ 5-6. Where
its Route 66 beer sold on draft , Plaintiff provides bars with Route 66-branded tap handles. Id. ¶ 5.
Plaintiff shipped and sold its beer using its Route 66 marks in New Mexico, Kansas, Arkansas,
and Missouri. Id. ¶ 8. Plaintiff currently uses a distributor, Admiral Beverage Company
(“Admiral”) to sell its beer in New Mexico. Id. ¶ 9.
Since 2012, Plaintiff has used its marks to advertise beer online throughout the United
States, including New Mexico, by way of its website, YouTube channel which has garnered over
2
82,000 views, and Facebook account. See Declaration of André Levy, ¶¶ 6-7; 9, ECF No. 49,
(“Levy Decl.”). Since 2016, Plaintiff has also advertised images of its Route 66 beer and marks on
its Instagram account where it has over 31,000 Instagram “followers.” Id. ¶ 8. Plaintiff has also
used these marks to advertise beer on billboards, radio advertisements, t-shirts, placards, in-store
displays, and sponsorships. Id. ¶ 11. However, in 2014 and 2015 Plaintiff’s advertising of its Route
66 beer in the United States “tailed off” because of low product sales and by 2016 and 2017
Plaintiff spent no money advertising “above the line” of its beer in in the United States. See
Deposition of André Levy, 57:21-25 – 58:1-7; 59:8-25 – 60:1-23, ECF No. 52-1 (“Levy Dep.”).
According to Defendants, “above the line” advertising refers to product advertising conducted by
radio, television and magazine, whereas “below line” advertising refers to advertising conducted
on the internet. See Defs.’ Resp. Br., ¶ 2, ECF No. 52.
B.
Mr. Lackey Establishes the Brewery
Mr. Lackey opened the Brewery in July 2016 and brewed and sold draft beer there. See UF
¶¶ 17; 12. The Brewery used the words Route 66 in connection with selling beverages. See Pl.’s
Req. for Admis., Ex. 2, ECF No. 48-1. Mr. Lackey is the Brewery’s president and sole owner and
he decided to use the name Route 66 in connection with the Brewery. See UF ¶¶ 10-11. Mr. Lackey
was unaware of Plaintiff and its Route 66 beer at the time he established the Brewery. See Affidavit
of Henry Lackey, ¶ 5, ECF No. 52-1 (“Lackey Aff.”). Before opening the Brewery, Mr. Lackey
did an internet search of the terms “Route 66 brewery,” but not of the terms “Route 66 beer.”
Deposition of Henry Lackey, 55:7-12, ECF No. 48-1 (“Lackey Dep.”). Nor did Mr. Lackey consult
with a trademark attorney before opening his business. See UF ¶ 15. Mr. Lackey believed that
Route 66 belonged in the public domain and stated that “I think that if you want to use something
that’s already been made popular by somebody else, then that’s the risk you run that other people
3
are going to use it,” and that he chose to use the words Route 66 with the understanding that
“someone else is going to sell Route 66 beer.” Lackey Dep. 91:5-8; 92:1-8. An internet search of
the term “Route 66 beer” would have returned Plaintiff’s website as the first result. See UF ¶ 14.
After the Brewery opened, one of its best-selling beers was a pale ale that Defendants
referred to as “Route 66 Junkyard Brewery Metro” on a menu. Id. ¶ 23. Defendants also referred
to the pale ale as a “Route 66 Junkyard Metro” on a dry erase board. Id. Defendants used the
following logo to promote their beer:
Pl.’s Ex. 8, ECF No. 48-1. This logo was used on the Brewery’s Facebook page, food and drink
flyers, menus, and on various signs located on the Brewery’s interior walls, the bar where drinks
were served, and on a sign next to the Brewery’s exterior doorway. See id.; Pl.’s Exs. 22 – 26,
ECF No. 48-1. Defendants’ logo differed from Plaintiff’s Route 66 shield mark in five ways:
Defendants’ logo has a spigot on the side; is yellow; has bubbles within the yellow coloring;
contains the word “Junkyard;” and has a different font. See Defs.’ Motion for Summary Judgment
on Non-Infringement, ECF No. 56 (“Defs.’ MSJ”); Defs.’ Resp. Br. ¶ 3(a)-(e); Pl.’s Reply Br. 1,
ECF No. 54.
In requests for admission, Defendants admitted that they used the words Route 66 to
identify the Brewery and not to identify the Brewery’s address as being on Route 66. See UF ¶ 28.
The Brewery’s physical address is 1634 B Highway 66. Id. ¶ 29. In an affidavit, though, Mr.
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Lackey stated that he did use the name Route 66 to describe where the Brewery was located. See
Lackey Aff. ¶ 4.
C.
Plaintiff’s Cease-and-Desist Efforts
On September 21, 2016, about two months after Mr. Lackey established the Brewery,
Plaintiff sent Mr. Lackey a cease-and-desist letter notifying him of Plaintiff’s trademark
registrations and requesting that he stop using Route 66 in connection with selling and brewing
beer. See UF ¶ 24. Mr. Lackey did not respond, so on November 4, 2016 Plaintiff sent a followup letter. Id. Mr. Lackey replied in late November saying “Route 66 Junkyard Brewery is the name
of the location and not the name of a beer that we sell. We currently have on beer that we brew
and it is called Metro, … We will never sell a beer called route 66!” Pl.’s Ex. 1 (cited by Plaintiff
as Ex. 28), ECF No. 48-1. Plaintiff responded to Mr. Lackey in December and reiterated its
infringement claim. See UF ¶ 26.
After receiving Plaintiff’s cease-and-desist letter, Mr. Lackey researched Route 66 beer to
determine whether he should comply with the letter. See Lackey Aff. ¶ 13. Mr. Lackey learned
that Sierra Blanca Brewing Company in Moriarty, New Mexico sold a Route 66-branded beer. Id.
¶ 24; Lackey Dep. 24:19-25 – 25:1-20. In fact, Mr. Lackey sold Sierra Blanca’s Route 66 beer at
the Brewery, and he knew that Plaintiff also targeted Sierra Blanca with cease-and-desist letters.
See Lackey Dep. 22:21-24. Despite Plaintiff’s cease-and-desist letter to Defendants in 2016,
Defendants sold Sierra Blanca’s lager and referred to it verbally and on a dry erase board as a
Route 66 beer. See UF ¶ 27.
Another brewery, Blue Grasshopper Brewing in New Mexico, also sold Sierra Blanca’s
Route 66 branded beer, with Admiral acting as the distributor for several years. See Affidavit of
Greg Nielsen, 1, ¶ 1, ECF No. 52-1 (“Nielsen Aff.”). Plaintiff sent Blue Grasshopper’s owner, Mr.
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Nielsen, a cease-and-desist letter in mid-2017, asking him to stop selling Sierra Blanca’s Route 66
beer. Id. ¶ 2. Mr. Nielsen still sells Sierra Blanca’s beer, but the beer goes by a new name. Id. ¶ 3
E.
Plaintiff’s Beer Sales in the United States and Admiral’s Distribution of
Plaintiff’s Beer
Mr. Levy, Plaintiff’s Trademark Advisor, testified that Plaintiff sold no Route 66 beer in
New Mexico until 2016, although Plaintiff did continually advertise its beer and marks in New
Mexico by means of online advertisements. See Levy Dep. 67:3-17. Plaintiff had on its website a
list of locations in the United States where its Route 66 beer was sold retail in stores or bars so that
customer could find where to buy its beers. Id. 82:22-25 – 83:1-2. No more locations were added
to this database after May 2014, although the database was incomplete. Id. 84:8-12. Mr. Levy
testified that Plaintiff’s beer sales in the United States temporarily ceased while Plaintiff “reviewed
the situation” because of poor product sales. Id. 84:16-25.
How long that temporary cessation lasted is disputed by the parties.1 One of Plaintiff’s
business records titled “Route 66 sales 2016 to 2017” shows that Plaintiff’s beer sales were in
Europe and the Middle East. At the time Mr. Levy was deposed in July 2017, however, Plaintiff
had renewed beer sales within the United States, including New Mexico.
Kevin Lente, Admiral’s Craft Brand Manager, purchases and distributes beer to retailers
in the Albuquerque area. See Affidavit of Kevin Lente, ECF No. 61-1 (“Lente Aff.”). Mr. Lente
1
Relying on Mr. Levy’s deposition, Defendants assert that Plaintiff’s beer was such a weak
product that Plaintiff did not sell its beer in the United States between 2014 and 2017. See Defs.’
Resp. Br. at 9 (citing Levy Dep. 83:1-24 – 84:1-24). Defendants also assert, without any citation
to the record, that Plaintiff only sold its beer in Europe and therefore customer confusion
between Defendants’ logo with Plaintiff’s marks is “impossible.” See Defs’ Reply Br., ECF No.
61 at 3. However, nowhere did Mr. Levy testify that Plaintiff’s beer sales in the United States
stopped between 2014 and 2017, so the Court does not draw that inference in Defendants’ favor.
Nor does the Court credit as true Defendants’ claim that Plaintiff exclusively sold its beer in
Europe because Defendants failed to cite the evidentiary record in support of this assertion.
6
stated in an affidavit that Admiral sold Plaintiff’s Route 66 beer in July 2017 and that Plaintiff’s
beer was sold retail through Jubilation Wine & Spirits in Albuquerque, New Mexico. Id. ¶¶ 2, 4.
Because Plaintiff’s beer sales underperformed, Mr. Lente informed Plaintiff in an October 6, 2017
e-mail that Admiral did not plan to purchase more of Plaintiff’s beer. Id. ¶¶ 5-6. Until Plaintiff
approached Mr. Lente in 2017 to sell its beer, Mr. Lente never heard of Plaintiff or its Route 66
beer. Id. ¶ 7.
Plaintiff submitted a rebuttal affidavit from Greg Brown, Mr. Lente’s superior at Admiral.
In his affidavit, Mr. Brown stated that “Mr. Lente did not have authority to make the statements
contained in his … affidavit … and Mr. Lente was not making statements in that affidavit on behalf
of Admiral.” Affidavit of Greg Brown, ¶ 3, ECF No. 65-1 (“Brown Aff.”). Mr. Brown stated that
“Admiral is currently the distributor of Lodestar’s Route 66 beer in New Mexico and will distribute
additional Lodestar branded beer in New Mexico.” Id. ¶ 4.
In a supplemental affidavit, Mr. Levy, stated that Admiral “is currently and has
continuously been the distributor for Lodestar’s Route 66 beer in New Mexico and will distribute
additional Lodestar Route 66 branded beer in New Mexico;” that Admiral “has distributed
Lodestar’s Route 66 beer to at least three locations in Albuquerque, all of which currently offer
the product for sale;” and that it is also for retail sale outside of New Mexico. See Supplemental
Affidavit of André Levy, ¶¶ 2-4, ECF No. 65-2 (“Suppl. Levy Aff.”). Mr. Levy also stated that in
October 2017 Plaintiff marketed and promoted its Route 66 beer at the National Beer Wholesalers
Association in Las Vegas, Nevada and that it is establishing regional and national distribution
agreements to sell its beer nationwide. Id. ¶¶ 5-6.
II.
PROCEDURAL HISTORY
7
Plaintiff brought a two-count amended complaint on March 17, 2017 against Defendants,
claiming that Defendants’ alleged use of its federally registered Route 66 marks in connection with
the sale of beer constitutes infringement (Count I) and unfair competition (Count II), both of which
are violations of the Lanham Act. In its Prayer for Relief, Plaintiff seeks to permanently enjoin
Defendants from the continued use of the word Route 66; a monetary award for corrective
advertising to rectify alleged customer confusion caused by Defendants’ alleged infringing use;
disgorgement of profits; damages and treble damages under the Lanham Act; and attorneys’ fees.
See Am. Compl. ¶¶ 1-7 at 7.
Mr. Lackey answered pro se on behalf of the Brewery. See ECF No. 13. The Court struck
that pleading as violating D.N.M.LR-Civ. 83.7, which requires a business entity to appear in
federal court through legal counsel. See ECF No. 14. Defendants complied with the Court’s Order
and Defendants’ subsequent filings have been through counsel. In their Answer, Defendants
pleaded seven affirmative defenses: fair use, unclean hands, trademark abandonment, failure to
mitigate damages, failure to state a claim upon which relief can be granted, equitable estoppel, and
lack of standing.2 See Defs.’ Answer, ECF No. 29, 4-6. On October 16, 2017 discovery closed and
the deadline to submit dispositive motions and fully briefed Daubert motions was October 30,
2017. Both parties timely moved for summary judgment on the issue of infringement, arguing that
they were entitled to judgment as a matter of law on whether Defendants infringed on Plaintiff’s
marks.
On December 20, 2017, after the dispositive motion deadline passed, Defendants moved
to reopen discovery to formally depose Messrs. Lente and Brown from Admiral, and to re-depose
2
The Answer only purports to plead on behalf of Mr. Lackey. However, the parties’ summary
judgment arguments assume that the Answer applies to both Defendants, so the Court will
interpret the Answer as pleading on behalf of Mr. Lackey and the Brewery.
8
Mr. Levy. See ECF No. 67. Defendants contended that Mr. Levy made contradictory statements
concerning whether Plaintiff’s beer was only sold internationally, and that reopening discovery
would resolve material fact issues concerning whether Plaintiff’s marks are commercially strong
and whether consumers are likely to encounter Plaintiff’s mark and Defendants’ logo. The
Honorable Jerry H. Ritter, United States Magistrate Judge, denied Defendants’ motion to reopen
discovery to depose the witnesses. Judge Ritter found that Defendants had three months of
discovery to follow-up with Mr. Levy, but never did so, and that the need to depose the Admiral
witnesses was foreseeable, yet Defendants never bothered to depose either witness. See Mem. Op.
and Order, ECF No. 73.
III.
PLAINTIFF’S EVIDENTIARY OBJECTIONS
Before turning to the merits of the case, the Court must address Plaintiff’s numerous
evidentiary objections to statements in the affidavits of Messrs. Lente, Lackey, and Greg Nielsen.
All three men appear as trial witnesses. See Pretrial Order, ECF No. 72. Rather than setting forth
its legal analysis in a motion to strike, which is the more common practice for mounting a challenge
of this kind, Plaintiff instead objected to the witnesses’ affidavits in its summary judgment briefs.
For their part, Defendants unhelpfully failed to respond with facts and legal arguments to
Plaintiff’s challenges, even though as the proponent of the evidence, it is their burden to show that
the witnesses’ statements are admissible or that Defendants can “put the … substance or content
of the evidence [] into an admissible form” for trial. Brown v. Perez, 835 F.3d 1223, 1232 (10th
Cir. 2016).
A.
Affidavit of Kevin Lente
Mr. Lente is an employee at Admiral. Admiral is purportedly both Plaintiff’s and Sierra
Blanca’s beer distributor. Plaintiff challenges Mr. Lente’s affidavit statements that Plaintiff’s beer
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did not perform well in sales, that Admiral did not order more of Plaintiff’s beer, and that it had
no plans to purchase more of Plaintiff’s beer. Plaintiff also challenges Mr. Lente’s statement that
he was unaware of Plaintiff or its beer until 2017 and that New Mexico law prohibits
microbreweries from selling beer not produced in New Mexico such that Plaintiff’s beer cannot
be sold in a microbrewery in New Mexico. See Lente Aff., ¶¶ 5-7; 9-10; Pl.’s Evidentiary
Objections to Lente Aff., ECF No. 62. Plaintiff objects that Mr. Lente lacks personal knowledge
to make these statements, that his statements exceed the bounds of lay testimony, are hearsay,
irrelevant, and that Mr. Lente was not disclosed as a potential witness before discovery ended in
violation of Fed. R. Civ. P. 26.3
Plaintiff is incorrect that Mr. Lente lacks personal knowledge that Plaintiff’s beer sales
underperformed, that Admiral ordered no more of Plaintiff’s beer and had no plans to do so, and
that Mr. Lente was unaware of Plaintiff or its beer until 2017. It is hard to see how Mr. Lente lacks
personal knowledge on these matters given that he oversees buying and selling beer to retailers.
Plaintiff’s rebuttal affidavit from Greg Brown that Mr. Lente’s statements were not made on
Admiral’s behalf, that Mr. Lente “did not have authority” to make his statements, and that
“Admiral is currently the distributor of Lodestar’s Route 66 beer in New Mexico and will distribute
additional Lodestar [beer] in New Mexico,” does not decide the matter. Rather, these are issues
over which there is a genuine dispute of material fact for the trier of fact to resolve.
3
Plaintiff had adequate notice that Mr. Lente would be a witness: Defendants identified an
Admiral corporate representative in their initial disclosures (although they did not identify Mr.
Lente specifically), Plaintiff litigated its objections to Mr. Lente’s statements in a sur-reply, and
Mr. Lente was disclosed as a trial witness in the Pretrial Order entered on February 28, 2018. See
ECF Nos. 68-2; 72.
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Plaintiff also says that Mr. Lente’s statements about whether Plaintiff’s beer is sold in New
Mexico are irrelevant to the likelihood of confusion analysis.4 Citing the Tenth Circuit’s statement
that “federally registered marks receive nationwide protection regardless of the area in which the
registrant actually used the mark,” First Sav. Bank, F.S.B. v. First Bank Sys., Inc., 101 F.3d 645,
651 (10th Cir. 1996), Plaintiff argues that its 2012 and 2013 federal registration of its marks put
Defendants on nationwide notice that they could not use a confusingly similar mark, regardless of
whether Plaintiff sold beer in New Mexico. However, Plaintiff’s registration of its trademarks does
not answer the question of whether, in fact, Plaintiff’s marks and Defendants’ logo are confusingly
similar. Mr. Lente’s statements concerning the scale of Plaintiff’s business presence in New
Mexico are relevant evidence of whether consumers are likely to affiliate the parties’ goods and
whether the parties compete in overlapping channels. The Court will consider as part of the
summary judgment record Mr. Lente’s affidavit statements in paragraphs five through seven.
However, the Court will not consider as part of the summary judgment record Mr. Lente’s
affidavit statements in paragraphs nine and ten in which Mr. Lente stated that “New Mexico law
prohibits New Mexico Microbreweries from selling out of state beer” and therefore “Lodestar’s
Route 66 beer cannot be sold at any New Mexico Microbrewery.” Defendants have not shown that
Mr. Lente is competent to provide opinion testimony about the rules governing microbreweries.
Paragraphs nine through ten of Mr. Lente’s affidavit will not be considered in the Court’s
evaluation of the summary judgment evidence.
B.
Affidavit of Henry Lackey
4
“Likelihood of customer confusion” is the legal test for trademark infringement. See infra, p.
17.
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In his affidavit Mr. Lackey described the differences between craft versus commercial beer,
stating that the craft and commercial beer markets are distinct so that beer drinks are unlikely to
confuse the parties’ products. He stated that Plaintiff’s beer is a commercial beer like Budweiser,
Coors, and Michelob; that he felt Plaintiff’s beer was a poor product after researching it; and that
Plaintiff’s beer and Defendants’ beer are not sold in the same markets and thus the parties are not
market competitors. See Lackey Aff. ¶¶ 12, 14, 16, 17. Mr. Lackey also described the
characteristics of craft beer consumers, saying that his typical clients are “sophisticated beer
enthusiast[s]” who are tired of commercial beer and who seek out craft beer. See id. ¶¶ 18-19. Craft
beer enthusiasts would not confuse craft with commercial beer, Mr. Lackey said, and he regularly
asked his customers if they were familiar with Plaintiff’s beer and they answered no. See id. ¶¶ 20,
22.
Plaintiff objected that Mr. Lackey lacks personal knowledge to make these statements, that
his statements exceed the bounds of lay testimony, are hearsay, and are irrelevant.
Concerning Mr. Lackey’s alleged lack of personal knowledge of the statements in his
affidavit, Plaintiff is incorrect that Mr. Lackey lacks personal knowledge about the difference
between craft and commercial beer, his feeling that Plaintiff’s beer was a poor product based on
his research, and that Plaintiff’s and Defendants’ beers are not sold in the same market and that
the parties’ products do not directly compete. Mr. Lackey’s personal knowledge is properly based
on his experience as a microbrewery owner and master brewer. The Court therefore considers as
part of the summary judgment record the statements in Lackey Aff. ¶¶ 12, 16, 17, and that portion
of paragraph 14 in which Mr. Lackey stated that he felt Plaintiff’s beer was a poor product. Mr.
Lackey also personally knows about craft beer consumer preferences and characteristics. While it
would have been preferable to include an affidavit from such a consumer, courts in trademark
12
disputes have considered affidavits from company owners describing the characteristics of their
customers. See Xtreme Lashes, LLC v. Xtended Beauty, Inc., 576 F.3d 221, 231 (5th Cir. 2009)
(considering store owner’s affidavit describing characteristics of eyelash kit purchasers.). The
Court will therefore consider as part of the summary judgment record Lackey Aff. ¶¶ 6 – 8.
Plaintiff also objects that to be admissible, Mr. Lackey’s statements concerning craft beer
and craft beer consumers’ preferences require expert testimony and that testimony must be
subjected to Fed. R. Evid. 702 analysis set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc.,
509 U.S. 579 (1993). As a general matter, courts permit expert testimony on things like consumer
purchasing decisions. See e.g. Conopco, Inc. v. May Dep’t Stores Co., 46 F.3d 1556, 1573 (Fed.
Cir. 1994) (consumer psychology expert opined on consumer characteristics and motivations when
purchasing inexpensive products.). Here, neither party disclosed an intention to call expert
witnesses, although they said they “reserve[d] their right to rely on expert testimony” at trial. See
Joint Status Report, ECF No. 18, 6. At this stage, no party has shown that craft beer and the
characteristics of craft beer drinkers are matters on which the trier of fact requires an expert’s
specialized knowledge. The Court will consider as part of the summary judgment record Mr.
Lackey’s opinion testimony on craft beer and craft beer consumers.
But the Court will not consider as part of the summary judgment record Mr. Lackey’s
affidavit statements in paragraphs 15, 23, and 24, and embedded portions of paragraphs 14 and 22.
Mr. Lackey stated that he “checked with [an] Admiral distributor and found that [Plaintiff’s beer]
had not been sold in New Mexico;” that he asked Jubilation Wine & Spirits’ beer manager about
sales of Plaintiff’s beer and that the manger told him that sales underperformed; and that Admiral
distributed Sierra Blanca’s “Route 66 Lager” in New Mexico for five years. See Lackey Aff. ¶¶
15, 23-24. Mr. Lackey also stated that according to a website Plaintiff’s beer had a low rating, and
13
that “not ... a single customer” of his was familiar with Plaintiff’s beer. See id. ¶¶ 14, 22. The
forgoing statements are hearsay excluded under Fed. R. Evid. 802. Because no exclusion or
exception to the hearsay rule allow Defendants to offer Mr. Lackey’s out-of-court statements
described herein, the Court does not consider those statements as part of the summary judgment
record.
Nor will the Court consider Mr. Lackey’s statement that Plaintiff’s beer “is a weak product
that will not survive in the New Mexico marketplace and will never be sold in New Mexico
Microbreweries and therefore my [Brewery] will never compete and has never competed with
Lodestar’s Route 66 beer.” See id. ¶ 25. Mr. Lackey lacks personal knowledge about Plaintiff’s
future commercial viability. And his statement that Plaintiff’s beer will never be sold in
microbreweries in New Mexico and that the parties’ products will never compete relies on rules
governing microbreweries that Defendants have not shown Mr. Lackey is competent to provide
opinion testimony on.
C.
Affidavit of Greg Nielsen
Mr. Nielsen, owner of Blue Grasshopper Brewing, stated that Plaintiff’s beer is not craft
beer, and that Plaintiff cannot sell its beer in a microbrewery in New Mexico because it is brewed
out of state. See Nielsen Aff. ¶¶ 5-6, 8. Mr. Nielsen stated that craft beer drinkers tend to be
discerning customers who are tired of commercial beer, that such consumers are unlikely to
confuse Plaintiff’s with Defendants’ beer because they are not likely to drink commercial beer,
nor search for Plaintiff’s beer at a microbrewery. Mr. Nielsen additionally stated that Plaintiff’s
marks and Defendants’ logo are different and “craft beer drinkers know exactly what they are
looking for and are not likely to be confused.” See id. ¶¶ 9-11.
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The Court will consider as part of the summary judgment record Mr. Nielsen’s statements
that Plaintiff’s beer is not craft beer and that craft beer drinkers are beer enthusiasts who seek out
craft as opposed to commercial beer. See id. ¶¶ 5, 9. Like Mr. Lackey, Mr. Nielsen has personal
knowledge of these facts and nothing indicates that expert opinion is necessarily required on these
topics.
The Court will also consider as part of the summary judgment record Mr. Nielsen’s
statements that Plaintiff’s beer “cannot be sold in any microbrewery in the state of New Mexico
because it is not brewed” and Defendants therefore cannot sell Plaintiff’s beer. See id. ¶¶ 6, 8.
Unlike Messrs. Lente and Lackey, Mr. Nielsen stated that “going through the process of filling out
the application for the federal and state licenses for microbreweries I am familiar with the laws
surrounding Microbreweries.” Id. at 1. This opinion is properly based on Mr. Nielsen’s experience
as a business owner in the craft beer industry and his personal knowledge about the scope of a craft
beer license. Even if Mr. Nielsen’s statements touch on specialized matters, “[w]hen a lay witness
has particularized knowledge by virtue of her experience, she may testify – even if the subject
matter is specialized or technical – because the testimony is based upon the layperson’s personal
knowledge rather than on specialized knowledge within the scope of Rule 702.” Donlin v. Philips
Lighting N. Am. Corp., 581 F.3d 73, 81 (3d Cir. 2009); United States v. DeMuro, 677 F.3d 550,
561-562 (3d Cir. 2012) (tax agent’s opinion not necessarily based on specialized knowledge of the
tax code where agent had personal knowledge and specialized expertise.).
However, the Court will not consider as part of the summary judgment record Mr.
Nielsen’s conclusions that craft beer drinkers would not confuse Plaintiff’s and Defendants’
products, and that consumers will not confuse Plaintiff’s marks and Defendants’ logo. See Nielsen
Aff. ¶¶ 10-11. Likelihood of confusion between Plaintiff’s mark and Defendants’ logo is the
15
ultimate factual issue for the trier of fact to resolve, and therefore Mr. Nielsen’s cursory conclusion
on this issue will not be considered. See Int’l Mkt. Brands v. Martin Int’l Corp., 882 F. Supp. 2d
809, 814 (W.D. Pa. 2012) (prohibiting expert opinion on whether confusion was likely because it
intruded into the factfinder’s role.).
IV.
STANDARD OF REVIEW
Summary judgment is warranted “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–50 (1986). A fact is considered
material if it “might affect the outcome of the suit under the governing law.” Anderson, 477 U.S.
at 248–50. An issue is “genuine” if the evidence is such that it might lead a reasonable jury to
return a verdict for the nonmoving party. See Tabor v. Hilti, Inc., 703 F.3d 1206, 1215 (10th Cir.
2013). “The nonmoving party is entitled to all reasonable inferences from the record; but if the
nonmovant bears the burden of persuasion on a claim at trial, summary judgment may be warranted
if the movant points out a lack of evidence to support an essential element of that claim and the
nonmovant cannot identify specific facts that would create a genuine issue.” Water Pik, Inc. v.
Med-Systems, Inc., 726 F.3d 1136, 1143-44 (10th Cir. 2013). In analyzing cross-motions for
summary judgment, a court “must view each motion separately, in the light most favorable to the
non-moving party, and draw all reasonable inferences in that party’s favor.” United States v.
Supreme Court of New Mexico, 839 F.3d 888, 906–07 (10th Cir. 2016). “Cross motions for
summary judgment are to be treated separately; the denial of one does not require the grant of
another.” Christian Heritage Acad. v. Okla. Secondary Sch. Activities Ass’n, 483 F.3d 1025, 1030
(10th Cir. 2007).
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If the moving party bears the burden of proof on its claims at trial, it must first affirmatively
show that, on all the essential elements of his claims, no reasonable jury could find for the
nonmovant. See Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986) (Brennan, J. dissenting).
“Summary judgment in favor of the party with the burden of persuasion ... is inappropriate when
the evidence is susceptible of different interpretations or inferences by the trier of fact.” Leone v.
Owsley, 810 F.3d 1149, 1153 (10th Cir. 2015) (quoting Hunt v. Cromartie, 526 U.S. 541, 553
(1999)). “In other words, the evidence in the movant’s favor must be so powerful that no
reasonable jury would be free to disbelieve it. Anything less should result in denial of summary
judgment.” Leone, 810 F.3d at 1153 (citation and quotations omitted).
V.
ANALYSIS
A.
Cross-Motions for Summary Judgment on Trademark Infringement
“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.’” Sally Beauty Co. v. Beautyco, Inc., 304 F.3d 964, 972 (10th Cir. 2002) (citing
15 U.S.C. § 1127). The Lanham Act allows the owner of a registered mark to bring an infringement
action against any person who
use[s] in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark in connection with the sale, offering for sale, distribution or
advertising of any goods or services on or in connection with which such use is
likely to cause confusion, or to cause mistake, or to deceive ….
15 U.S.C. § 1114(1)(a).
“The key inquiry in a trademark infringement case is the likelihood of confusion between
two similar marks.” Team Tires Plus, Ltd. v. Tires Plus, Inc., 394 F.3d 831, 832–33 (10th Cir.
2005). “Confusion occurs when consumers make an incorrect mental association between the
17
involved commercial products or their producers.” John Allan Co. v. Craig Allen Co. L.L.C., 540
F.3d 1133, 1138 (10th Cir. 2008). “Likelihood of confusion is a question of fact, but the court may
grant summary judgment in appropriate circumstances.” Water Pik, Inc., 726 F.3d at 1143. To
show a likelihood of confusion, the trademark infringement plaintiff must show that confusion is
probable, not merely possible. See id. at 1150-51. Six factors serve as a guide for evaluating the
likelihood of confusion:
(1) the degree of similarity between the competing marks; (2) the intent of the
alleged infringer in adopting the contested mark; (3) evidence of actual confusion;
(4) the similarity of the parties’ products and the manner in which the parties
market them; (5) the degree of care that consumers are likely to exercise in
purchasing the parties’ products; and (6) the strength of the contesting mark.
Hornady Mfg. Co. v. Doubletap, Inc., 746 F.3d 995, 1001 (10th Cir. 2014). “These [six] factors
are interrelated and no one factor is dispositive.” Water Pik, Inc., 726 F.3d at 1143. “At all times
… the key inquiry is whether the consumer is likely to be deceived or confused by the similarity
of the marks.” Id. “[A] genuine dispute of material fact will not exist if all relevant factors, properly
analyzed and considered together, ... indicate consumers are not likely to be confused.” Hornady
Mfg. Co. Inc., 746 F.3d at 1001 (quoting Heartsprings, Inc. v. Heartspring, Inc., 143 F.3d 550,
558 (10th Cir.1998)). “The factors are interrelated, and the importance of any particular factor in
a specific case can depend on a variety of circumstances, including the force of another factor.”
Hornady Mfg. Co. Inc., 746 F.3d at 1001. The party alleging infringement bears the burden of
proving likelihood of confusion at trial. See Water Pik, Inc., 726 F.3d at 1144.
1. Similarity of the Marks
“The similarity of the marks is the first and most important factor.” Id. “In evaluating the
degree of similarity between marks, [the court] consider[s] the marks as they are encountered by
the consumer in the marketplace and examine[s] them on three levels: sight, sound, and meaning.”
18
Heartsprings, Inc., 143 F.3d at 554. A court “must determine whether the allegedly infringing
mark will confuse the public when singly presented, rather than when presented side by side with
the protected trademark.” Sally Beauty Co., 304 F.3d at 972; Beer Nuts, Inc. v. Clover Club Foods
Co., 711 F.2d 934, 941 (10th Cir. 1983) (“[i]t is axiomatic in trademark law that” a court should
not engage in a “‘side-by-side’ comparison” of the marks at issue) (“Beer Nuts I”). In making this
evaluation, “similarities are weighed more heavily than differences, particularly when the
competing marks are used in virtually identical products packaged in a similar manner.” Sally
Beauty Co., 304 F.3d at 972. “[T]he test is not whether the public would confuse the marks, but
whether the viewer of an accused mark would be likely to associate the product or service with
which it is connected with the source of products or services with which an earlier mark is
connected.” AutoZone, Inc. v. Strick, 543 F.3d 923, 930 (7th Cir. 2008) (citations and quotations
omitted) (emphasis in original).
a. Sight
Here, Plaintiff claims that the sight and sound of Plaintiff’s marks and Defendants’ logo
are “identical,” because both feature the word “Route 66,” and that a reasonable jury viewing
Plaintiff’s mark and Defendants’ logo would find that overall the visual impact between the two
are not so dramatically different since both prominently feature the words “Route 66” and the
shield mark design. However, “the court is not free to give dispositive weight to any one
component of the marks,” such as focusing entirely on the words Route 66. See Hornady Mfg. Co.,
Inc., 746 F.3d at 1002. Courts may not “focus solely on name similarity,” but must consider “the
effect of marketplace presentation, including lettering styles, logos and coloring schemes.” Id.
(holding that the fact that the marks TAP and DoubleTap both contained the syllable “tap” did not
control the similarity inquiry and rejecting plaintiff’s contention that the district court erred “by
19
not elevating the .. word ‘tap’…above all differences.”); Water Pik, Inc., 726 F.3d at 1156
(comparing the full words “SinuCleanse” and “SinuSense,” and not just the components “Cleanse”
and “Sense” and finding that the marks were dissimilar.).
Comparing Defendants’ logo and Plaintiff’s marks, both share the phrase Route 66 and
both are set in a highway shield sign. Defendants’ logo differs from Plaintiff’s steely grey design
mark in that it has a spigot on the side; is yellow; has bubbles within the yellow coloring; contains
the word “Junkyard.” Plaintiff describes these modifications as nothing more than taking
Plaintiff’s marks and adding beer coloring, bubbles, and a beer tap. These modifications – because
they are so slight and because they relate to beer – are bound to make confusion even more likely,
Plaintiff says.
However, differences in the overall marketplace impression between Plaintiff’s mark and
Defendants’ logo show that a reasonable jury could conclude that there are enough differences
between the two to diminish likelihood of confusion. Both parties utilize the word Route 66 to sell
beer. But Plaintiff retails its beer in bottles and packaging with the Route 66 shield design and a
“®” symbol next to it or sells its beer on draft using Route 66 tap handles. In contrast, Defendants
did not uniformly advertise their beer in the same visual manner. In one instance Defendants
advertised on a menu the words “Route 66 Junkyard Brewery Metro,” in all capital letters and with
the word “metro” prominently standing out in a large, bold, retro script. However, on a dry erase
board, Defendants deemphasized the word “metro” and in handwritten script simply wrote, “Route
66 Junkyard Metro” beer, omitting the word “Brewery” altogether. While the shared phrase Route
66 overlaps between Plaintiff’s mark and Defendants’ logo, the inclusion of the word “Junkyard”
after Route 66 in Defendants’ logo highlights the visual differences. See King of the Mountain
Sports, Inc. v. Chrysler Corp., 185 F.3d 1084, 1090–91 (10th Cir. 1999) (no similarity despite
20
shared phrase “king of the mountain” because of different coloring, font, and background images
between marks.).
Plaintiff argues that when it comes to inexpensive product like beer, “similarities are to be
weighed more heavily than differences, especially when the trademarks are used on virtually
identical products packaged in the same manner.” Pl.’s MSJ at 8 (citing Beer Nuts, Inc. v. Clover
Club Foods Co., 805 F.2d 920, 925 (10th Cir. 1986) (“Beer Nuts II”) (holding that the marks
BREW NUTS and BEER NUTS were confusingly similar since the products were inexpensive
snack-food easily purchased on impulse, were marketed and packaged in the same manner, and
reached consumers in the same retail outlets)). And in the case of alcoholic beverages specifically,
Plaintiff asserts that “the degree of similarity need not be as high as usual since the likelihood of
confusion is greater because drinks are frequently purchased at bars and clubs without the
pruchaser [sic] seeing any bottles or labels.” Pl.’s MSJ at 8-9 (quoting A. Smith Bowman Distillery,
Inc. v. Schenley Distillers, Inc., 198 F. Supp. 822, 827–28 (D. Del. 1961)). In A. Smith Bowman
Distillery, Inc., the court held that the parties’ marks for bourbon – “Indiana Gentleman” and
“Virginia Gentleman” – were confusingly similar because bars sell bourbon by verbal request and
therefore a customer may only remember the word “gentlemen” when ordering, and will not be
aided by bottles or packaging to help him distinguish the products.
However, these cases demonstrate that confusion necessarily depends on the context where
consumers will encounter the marks in question. The Brewery’s consumer appeal is that it does
not sell commercial beer, thereby diminishing the likelihood that a confused customer will order
Defendants’ beer thinking it is Plaintiff’s beer. A customer at Mr. Lackey’s Brewery will not see
Plaintiff’s tap handles or any bottled or packaged beer because Defendants only sell draft beer. A
customer sitting in Mr. Lackey’s brewery will certainly see Defendants’ Route 66 logo displayed
21
about, but a reasonable jury could conclude that a consumer is unlikely to associate the parties’
products given that craft beer customers purposefully seek out craft beer. These facts demonstrate
that there is a triable issue of fact whether the overall visual marketplace impression between
Plaintiff’s mark and Defendants’ logo is likely to lead to confusion.
b. Sound
As for the sound factor, in examining the differences between Plaintiff’s marks and
Defendants’ logo, the trier of fact could find that that there are aural differences between them.
Plaintiff argues that “[w]hen ‘Route 66’ is spoken … the sound of the marks is identical – ‘Route
66,’” and that the phonetic similarity is particularly important since a customer may only verbally
request a “Route 66” when ordering. Pl.’s MSJ at 9. But the Court cannot shorten Defendants’
commercial name in this manner. See Sally Beauty, 304 F.3d at 973 (district court erroneously
shortened “Generic Value Products” to “Generic” when comparing it by sound with
“GENERIX.”). Accordingly, Defendants’ full spoken name is “Route 66 Junkyard Brewery,” and
the Court may not place dispositive weight on the shared phrase Route 66. See Water Pik, Inc.,
726 F.3d at 1156 (holding that “SinuSense” and SinuCleanse” are aurally dissimilar despite shared
component “Sinu.”).
Plaintiff also argues that Mr. Lackey admitted that he “identified Route 66 beer by orally
referring to it as ‘Route 66’ beer” and thus “customers would not even hear the phrase ‘Junkyard
Brewery’ when offered the ‘Route 66’ beer products.” Pl.’s MSJ at 9; Pl.’s Resp. Br., ECF No. 58,
14. However, the record only shows that Mr. Lackey referred to Sierra Blanca’s beer as a “Route
66 beer.” There is no evidence that Defendants verbally referred to their beer as “Route 66” beer.
c. Meaning
22
As to the meaning factor, the trier of fact could reasonably conclude that Plaintiff’s marks
and Defendants’ logo are similar. Both relate to the sale of beer, and both draw on the phrase Route
66 and shield mark to convey that message. See Standard Oil Co. v. Standard Oil Co., 252 F.2d
65, 74 (10th Cir.1958) (meaning is proved when the two marks convey the same idea or stimulate
the same mental reaction).
In weighing these three elements, the meaning factor favors Plaintiff. However, enough
differences in sight and sound between Plaintiff’s mark and Defendants’ logo makes necessary
resolution by the trier of fact of whether the two are confusingly similar.
2.
Defendants’ Intent
“Evidence that the alleged infringer chose a mark with the intent to copy, rather than
randomly or by accident, typically supports an inference of likelihood of confusion.” Hornady
Mfg. Co. Inc., 746 F.3d at 1003. “Intent on the part of the alleged infringer to pass off its goods as
the product of another raises an inference of likelihood of confusion.” Beer Nuts, Inc., 711 F.2d at
941. “[P]roof that a defendant chose a mark with the intent of copying plaintiff’s mark, standing
alone, may justify an inference of confusing similarity.” Id. “The proper focus [is] whether
defendant had the intent to derive benefit from the reputation or goodwill of plaintiff.” Universal
Money Centers, Inc. v. Am. Tel. & Tel. Co., 22 F.3d 1527, 1532 (10th Cir. 1994). “Conversely, if
the evidence indicates a defendant did not intend to derive benefit from a plaintiff’s existing mark,
this factor weights against the likelihood of confusion.” Heartsprings, Inc., 143 F.3d at 556.
Plaintiff makes three arguments concerning the intent factor. First, it says that Defendants’
intent to copy can be inferred from the fact that that after it sent Defendants a cease-and-desist
letter, Defendants continued to sell Sierra Blanca’s Route 66 beer, and therefore Defendants
conduct was not innocent. But in Hornady Mfg. Co. Inc., the court rejected a similar argument,
23
noting that “[u]nder the intent factor, the alleged infringer’s intent is measured at the time it chose
or adopted its mark.” 746 F.3d at 1004 (internal quotations omitted). Thus, events postdating
Defendants’ adoption of their logo, such as Plaintiff’s cease-and-desist letters, are irrelevant to the
intent analysis. Second, Plaintiff renews its constructive notice argument. It says that federal
registration of its marks gave Defendants constructive notice at the time Defendants adopted their
logo. But “[t]he existence of notice is not evidence that a later user necessarily intended to
confuse.” A & H Sportswear Co. v. Victoria's Secret Stores, Inc., 57 F. Supp. 2d 155, 174 (E.D.
Pa. 1999), aff’d in part, vacated in part sub nom. A & H Sportswear, Inc. v. Victoria’s Secret
Stores, Inc., 237 F.3d 198 (3d Cir. 2000), and thus this evidence also does not control the analysis.
Finally, Plaintiff asserts that Defendants intended to confuse customers by pointing to the
fact that Mr. Lackey did not perform a trademark clearance, and his deposition statements that “if
you want to use something that’s already been made popular by somebody else, then that’s the risk
you run that other people are going to use it. And when I chose my name, Route 66, I chose it with
the understanding that, hey, someone else is going to sell Route 66 beer. And that’s life.” Lackey
Dep. 91:5-8; 92:1-8. Plaintiff says this is proof that Defendants intended to “capitalize on the
popularity of others using the mark before them for the same goods.” Pl.’s MSJ at 16. Defendants
submitted Mr. Lackey’s rebuttal affidavit that at the time he established the Brewery he was
unaware of Plaintiff’s existence and beer, that he did not try to copy Plaintiff’s beer, and that he
used the name Route 66 to describe the Brewery’s location and the fact that it was housed within
a junkyard.
Thus, both parties have submitted summary judgment evidence that presents a genuine
issue of material fact concerning whether Defendants intended to “pass-off” their beer as Plaintiff’s
product, thereby requiring resolution by a factfinder.
24
3.
Evidence of Actual Confusion
“[A]ctual confusion in the marketplace is often considered the best evidence of likelihood
of confusion.” Water Pik, Inc., 726 F.3d at 1144. However, evidence of actual confusion is not
necessary to prevail on a trademark infringement claim since it is very difficult to prove, and the
legal standard is likelihood, not actual, confusion. See Sally Beauty Co., 304 F.3d at 974. “Such
evidence may be introduced through surveys, although their evidentiary value depends on the
methodology and questions asked.” Id. “Evidence of actual confusion does not create a genuine
issue of fact regarding likelihood of confusion if it is de minimis.” Id. Plaintiff introduced no
surveys. Instead, Plaintiff points out that Mr. Lackey confused Plaintiff with Sierra Blanca after
he received Plaintiff’s cease-and-desist letter, mistakenly believing that Sierra Blanca sent the
letter and was going to sue him. Plaintiff argues that this shows Mr. Lackey was confused as to the
source of Plaintiff’s beer, and that Mr. Lackey’s confusion is highly relevant because as a brewery
owner he is more sophisticated than the point-of-sale customer. Defendants argue that only direct
consumer confusion is relevant evidence of actual confusion.
Of course, the “confusion” referred to is confusion caused by Plaintiff’s mark and
Defendants’ logo – not Mr. Lackey’s confusion of Sierra Blanca’s and Plaintiff’s products, as
Plaintiff argues. Even assuming, arguendo, that this is evidence of actual confusion, it is de
minimis. See Hornady Mfg. Co., 746 F.3d at 1005 (three instances of confusion over a ten-year
period, including several phone calls indicating customer confusion of products, considered de
minimis); Water Pik, Inc., 726 F.3d at 1151. However, the Court must treat as neutral the absence
of actual evidence of confusion. See Beer Nuts II, 805 F.2d at 928. Thus, this factor weighs neither
for nor against either party.
4.
Similarity of Products and Manner of Marketing
25
“The greater the similarity between the products ..., the greater the likelihood of
confusion.” Sally Beauty Co., 304 F.3d 964. The court analyzes this factor “by separately
considering (1) the similarity of products and (2) the similarity in the manner of marketing the
products.” Id. As to the first prong, Defendants conceded in their motion for summary judgment
that the parties’ products are similar.
As to the second prong, similarity in marketing channels, the court considers “whether the
parties were competitors in consumer markets.” Sally Beauty Co., 304 F.3d at 974. The Tenth
Circuit analyzed this factor in Sally Beauty Co., holding that the district court wrongly concluded
that there was little risk of confusion because the products did not compete in the same retail
outlets. 304 F.3d at 975. The district court should have analyzed the similarity in marketing
channels by “consider[ing] whether the parties were competitors in consumer markets,” rather than
require that the “infringing product be available on the same shelves.” Thus, if products are
marketed to consumers “in competing retail outlets,” then likelihood of confusion increases. But a
plaintiff need not show that the products are sold side-by-side at the same outlet. Id. at 975. In
Sally Beauty, the products did compete in retail outlets, specifically in beauty supply stores. Thus,
the marketing channels were similar because “[a] consumer who bought either party’s products,
which are similar in nature and packaging, … did so in competing retail outlets.” Id.
Defendants do not sell their beer in retail outlets stores, but they do sell their beer from the
Brewery. Plaintiff sells its beer in retail outlets and in bars. Thus, to a degree the parties compete
in overlapping trade channels—bars—and target the beer consuming public. However, in
analyzing this factor, the Court may consider whether consumers of the parties’ products are
distinct. See Heartsprings, Inc., 143 F.3d at 556-57 (affirming district court’s finding that the
parties “[did] not provide products for the same group of consumers.”). The record shows enough
26
contrasts in the craft versus commercial beer markets for a reasonable jury to conclude that
confusion is unlikely. As noted earlier, the Brewery’s consumer appeal is that craft beer is not
commercial beer and that craft beer consumers are aware of the distinction. A customer at the
Brewery will not encounter Plaintiff’s marks, bottles, packages, tap handles, or beer. Similarly, a
customer seeking Defendants’ beer in a retail store will always come up empty handed. Plaintiff
sold no beer in New Mexico until either 2016 or 2017. Plaintiff provided evidence that Admiral
distributes Plaintiff’s beer in New Mexico and will distribute additional beer, and that Plaintiff is
establishing regional and national distribution agreements to sell its beer. However, Defendants’
evidence shows that Plaintiff’s market foothold in New Mexico is tenuous and that Plaintiff’s beer
sales in the United States temporarily ceased altogether. The Brewery is in Grants, New Mexico –
a town off the former U.S. Route 66 – and there is conflicting record evidence concerning whether
Defendants used the words Route 66 to identify the Brewery’s location or its products. These facts
amply demonstrate that there is a genuine dispute of material fact over whether the parties can
fairly be regarded as competitors in trade channels.
Plaintiff believes that the parties’ overlapping social media advertising strategies present a
genuine issue of material fact. Concerning advertising similarities in particular, the parties’
marketing practices “are particularly relevant[,] … because these practices directly impact the way
in which consumers experience the parties’ respective marks.” Heartsprings, Inc., 143 F.3d at 556.
Plaintiff provides evidence that both parties use Facebook in their marketing efforts and therefore
contends that the parties compete in overlapping social media marketing channels. Defendants
failed to counter Plaintiff’s social media argument.5 So the Court draws the inference in Plaintiff’s
5
Defendants did submit record evidence that Mr. Levy could not remember how much money
Plaintiff spent on social media advertising, suggesting that Plaintiff failed to generate overall
consumer recognition for its beer. However, no reasonable jury could conclude that a witness’s
27
favor and holds that a reasonable jury could conclude that Plaintiff’s marks and Defendants’ logo
could have reached consumer in similar online marketing channels that could likely confuse
customers.
Thus, although Defendants have put forward evidence showing that a reasonable jury could
conclude that the parties are not competitors in the market, Plaintiff provided evidence that the
advertising and marketing techniques are the same for both products, creating a triable issue on
this element of likelihood of confusion.
5.
Degree of Consumer Care
“The court must examine the degree of care with which the public will choose the products
in the marketplace.” Beer Nuts I, 711 F.2d at 941. “The general impression of the ordinary
purchaser, buying under the normally prevalent conditions of the market and giving the attention
such purchasers usually give in buying that class of goods, is the touchstone.” Id. (citations and
quotations omitted) “Buyers typically exercise little care in the selection of inexpensive items that
may be purchased on impulse. Despite a lower degree of similarity, these items are more likely to
be confused than expensive items which are chosen carefully.” Id. This factor is based upon a
notion that unsophisticated buyers increase the likelihood of confusion, whereas sophisticated
buyers selecting a product with a high degree of care reduces the likelihood of confusion. See Sally
Beauty Co., 304 F.3d at 975. The focus of the inquiry is on “the consumer’s degree of care
exercised at the time of purchase and whether the item is one commonly purchased on impulse.”
Hornady Mfg. Co., Inc., 746 F.3d at 1006 (citations and quotations omitted).
lack of memory is particularly probative of anything in this context, and thus the Court does not
draw that inference in Defendants’ favor.
28
Plaintiff argues that this factor weighs in its favor because beer is a “textbook” cheap good
that consumers purchase impulsively under the “chaotic conditions” of a bar where they cannot
see packages or labels. Pl.’s MSJ at 13-14 (citing Guiness United Distillers & Vintners B.V. v.
Anheuser-Bush, Inc., No. 02 CIV. 0861 (LMM), 2002 WL 1543817, at *6 (S.D.N.Y. July 12,
2002)). However, Plaintiff presented no evidence that beer consumers carelessly purchase craft
beer. See Hornady Mfg. Co., Inc., 746 F.3d at 1006 (no genuine dispute of material fact where
trademark infringement plaintiff failed to present evidence that consumers of firearm ammunition
purchased ammunition impulsively and carelessly.). In contrast, Defendants provided Messrs.
Lackey’s and Nielsen’s affidavits that craft beer drinkers are beer “sophisticated enthusiasts” who
“seek a fresh beer that is locally brewed and has a craft taste and history.” Because Defendants
have provided concrete evidence concerning this factor and Plaintiff has not, the Court draws
draws the inference in Defendants’ favor and finds that a reasonable jury could conclude that craft
beer consumers exercise careful purchasing decisions when buying craft beer.
6.
Strength of Plaintiff’s Mark
“Likelihood of confusion depends partly on the senior mark’s strength—that is, its capacity
to indicate the source of the goods or services with which it is used.” Water Pik Inc., 726 F.3d at
1151 (citations and quotations omitted). “Strength has two aspects: conceptual strength, or the
mark’s place on the spectrum of distinctiveness, and commercial strength, or its level of
recognition in the marketplace.” Id.
a. Conceptual Strength
“Conceptual strength is measured on a spectrum of distinctiveness ranging along the
following five categories (from least to most distinctive): (1) generic, (2) descriptive, (3)
29
suggestive, (4) arbitrary, and (5) fanciful.” Hornady Mfg. Co., 746 F.3d at 1007. “Only suggestive,
arbitrary, and fanciful marks are considered strong in and of themselves.” Id.
Defendants fail to identify which of the five categories of conceptual strength Plaintiff’s
mark falls within. But they call Plaintiff’s mark “weak” because third-parties apply for trademark
registrations in which the phrase Route 66 appears, including for use with alcoholic beverages. For
instance, in 2009 third-party Aneks Group Ltd. applied for a trademark for future use of ROUTE
66 CLASSIC VODKA, but by 2014 the U.S. Patent and Trademark Office deemed Aneks’
application “abandoned” because Aneks never followed up with proper paperwork. See Defs.’
Resp. Br., Ex. 2, ECF No. 52-1. Plaintiff argues that Aneks’ abandoned trademark application is
minimally probative evidence, but in Water Pik, Inc., 726 F.3dd at 1152, the Tenth Circuit held
that similar evidence of third-party trademark applications and registrations in which the word
“sinu” or “sinus” appeared, including on sinus-irrigation products, shed light on the conceptual
strength of the plaintiff’s “SinuCleanse” trademark.
For its part, Plaintiff argues that its marks are arbitrary, making them conceptually strong.
An arbitrary mark “is a word or symbol already in common use that does not have any apparent
relation to the product,” as in “Apple computers” (i.e. just as “Apple” and “computers” have no
apparent relation, nor does “Route 66” and “beer.”). See Water Pik., Inc., 726 F.3d at 1152.
However, Plaintiff’s own evidence shows that its marks are not particularly strong. Plaintiff’s
search of the federal registry reveals that the term Route 66 and the highway shield design are used
widely by third-parties. See Pl.’s Resp. Br. at 9 (“The USPTO regularly grants trademark
registrations to applicants, including … for marks including ROUTE 66.”). Plaintiff points to six
businesses using the term Route 66 or the highway sign for goods and services ranging from
computers software programs, safety equipment, vehicles, furniture and furnishings. See Pl.’s Exs.
30
1-6, ECF No. 59-1. Thus, Plaintiff’s own evidence shows that its marks are conceptually weak.
See First Sav. Bank, 101 F.3d at 653 (“[t]he greater the number of identical or more or less similar
marks already in use on different kinds of goods, the less is the likelihood of confusion between
any two specific uses of the weak mark.”). Plaintiff argues that there is no evidence of third-party
use of Route 66 with beer specifically. However, this argument misses the point that “if a mark is
weak, use of a similar mark even on similar goods is unlikely to cause confusion if minor
differences distinguish one party’s mark from another.” Water Pik, Inc., 726 F.3d at 1151;
Universal Money Centers, Inc., 22 F.3d at 1533-34 (plaintiff’s trademarks with word
UNIVERSAL in connection with electronic banking services weak because over 200 business,
including six financial institutions, used the term.). Thus, there is no genuine dispute of material
fact that Plaintiff’s marks are conceptually weak.
b. Commercial Strength
“Commercial strength is the marketplace recognition value of the mark.” King of the
Mountain, 185 F.3d at 1093. “It is analogous to secondary meaning.” Hornady Mfg. Co., 746 F.3d
at 1008. “Secondary meaning refers to the level of distinctiveness that a descriptive mark must
attain in the minds of consumers before it is eligible for trademark protection.” Water Pik, Inc.,
726 F.3d at 1154. “To acquire secondary meaning, a descriptive mark must have been used so long
and so exclusively by one producer with reference to his goods or articles that, in the trade and to
that branch of the purchasing public, the mark has come to mean that the article is his product.”
Id. The court evaluates secondary meaning by examining “direct evidence of recognition by
consumers and circumstantial evidence regarding: (1) the length and manner of the mark’s use, (2)
the nature and extent of advertising and promotion of the mark, and (3) the efforts made to promote
a conscious connection, in the public’s mind, between the mark and a particular product.” Hornady
31
Mfg. Co., 746 F.3d at 1008. “The stronger the evidence of secondary meaning, the stronger the
mark, and the more likely is confusion.” Vail Assocs., Inc., 516 F.3d at 866.
i.
Length and Manner of Plaintiff’s Marks’ Use
Defendants did not challenge the length of Plaintiff’s use of its marks, so the Court
therefore draws the inference in Plaintiff’s favor that the length of the marks’ use since 2012 and
2013 lends them commercial strength. Defendants did, however, challenge the manner of the
marks’ use. They point to Mr. Levy’s statement that in 2014 Plaintiff “started to wind down …
activity because the sales were not what had been anticipated.” Levy Dep. 84:16-19. Plaintiff
counters that it has shipped and sold its beer using its Route 66 mark in New Mexico, Kansas,
Arkansas, and Missouri, but admitted that it sold no beer in New Mexico until 2016 and that its
beer sold poorly. The trier of fact should evaluate this evidence in determining whether the manner
of Plaintiff’s marks made them commercially strong.
ii.
Nature and Extent of Advertising and Promotion of
Plaintiff’s Marks
Since 2012 Plaintiff used its marks to advertise beer online throughout the United States,
including New Mexico, by way of its website, YouTube channel and Facebook account and since
2016 it has advertised its marks on its Instagram account. In 2012 and 2013 Plaintiff had a budget
of between $150,000 - $200,000 to advertise its marks. Plaintiff used its marks to advertise beer
on billboards, radio advertisements, t-shirts, placards, in-store displays, and sponsorships. In
Hornady Mfg. Co., 746 F.3d at 1008, the Tenth Circuit found a company’s mark commercially
strong where it “spent hundreds of thousands of dollars” advertising its product in numerous
channels over 17-years and thus a reasonable jury could find that this subfactor weighs in
Plaintiff’s favor even though by 2014 and 2015 Plaintiff tailed-off advertising of its beer in the
United States.
32
iii.
Efforts to Promote a Conscious Connection between
Plaintiff’s Marks and its Beer in the Public Mind
Plaintiff argues that its above and below the line advertising alone created a conscious
connection, in the public’s mind, between its marks and beer. However, “evidence of a mark’s
promotion … standing alone without a context ... may not be sufficient to prove that a mark is very
strong.” Water Pik, Inc., 726 F.3d at 1155. Thus, in Water Pik, Inc., the Tenth Circuit held that the
defendant’s SinuCleanse mark for its sinus irrigation product was not commercially strong even
though it used the mark since 1997, had millions of consumers, sold its product through wellknown retailers, committed 30% of its product sales to advertising, and had its product featured
on the Oprah Winfrey Show. See id. The court held that these facts failed to show whether the
product sales were “stimulated by the [SinuCleanse] mark” or if the public connected the
defendant’s mark to its product. Here, beside pointing to the bare fact that it advertises its marks,
Plaintiff presented no evidence whatsoever that its beer and marks have consumer recognition.
Therefore, a reasonable jury could not conclude that this subfactor weighs firmly in Plaintiff’s
favor.
7.
Weighing of Factors
The record reveals numerous factual disputes concerning the issue of infringement that
preclude the entry of summary judgment in favor of either party. None of the six primary
infringement factors weigh firmly in Plaintiff’s favor, yet it was Plaintiff’s summary judgment
burden to show that its favorable evidence was “so powerful” to make it insusceptible to “different
interpretations or inferences by the trier of fact.” Leone, 810 F.3d at 1153. Meanwhile, Defendants
have shown that only one factor, degree of consumer care, weighs in their favor. The lack of
evidence of actual confusion is neutral. As for the other factors – similarity of Plaintiff’s marks
and Defendants’ logo, Defendants’ intent, similarity of products and marketing channels, and the
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strength of Plaintiff’s marks – both parties have raised genuine disputes of material fact,
necessitating the denial of the parties’ cross-motions for summary judgment.
B.
Affirmative Defenses
1.
Trademark Abandonment
Plaintiff sought summary judgment on Defendants’ affirmative defense of trademark
abandonment. “A mark shall be deemed to be ‘abandoned’ … [w]hen any course of conduct of the
owner, including acts of omission as well as commission, causes the mark to become the generic
name for the goods or services on or in connection with which it is used or otherwise to lose its
significance as a mark.” 15 U.S.C.A. § 1127. “A defendant asserting abandonment must strictly
prove abandonment by clear and convincing evidence.” Navajo Nation v. Urban Outfitters, Inc.,
212 F. Supp. 3d 1098, 1104 (D.N.M. 2016). Defendants argue that Plaintiff abandoned its marks
because at some point Plaintiff knew that Admiral distributed Sierra Blanca’s beer under a Route
66 logo, and therefore a jury should determine whether Plaintiff’s knowledge constituted
abandonment.6 Defs.’ Resp. Br. at 11.
Defendants fail to strictly prove by clear and convincing evidence that Plaintiff abandoned
its marks. Since 2012, Plaintiff has continually advertised its marks throughout the United States
using either above or below the line advertising. Moreover, although “a trademark holder is not
required to sue every possible infringer immediately upon hearing of a possible infringement,”
Navajo Nation, 212 F. Supp. 3d at 1104 (citing Sara Lee Corp. v. Kayser–Roth, 81 F.3d 455, 462
(4th Cir.1996)), Plaintiff provided evidence of numerous cease-and-desist letter it sent to alleged
6
Defendants also argue that Sierra Blanca’s make of a Route 66-branded beer for five years
constituted a period nonuse and abandonment of Plaintiff’s marks. However, Defendants support
these arguments by relying on Mr. Lackey’s hearsay statements that Admiral distributed Sierra
Blanca’s beer for five years. The Court does not consider Mr. Lackey’s statements for the
reasons described earlier. See supra, pp. 13-14.
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infringers throughout the country from 2012 to 2017. Finally, although Plaintiff’s sales were
lackluster, that fact does not result in abandonment. See Bishop v. Equinox Int'l Corp., No. 975161, 1998 WL 650080, at *2 (10th Cir. Sept. 4, 1998) (trademark owner’s sales of 98 bottles per
year over five-years does not constitute abandonment) (unpublished decision). Plaintiff’s evidence
amply rebuts a claim of abonnement. The Court grants Plaintiff summary judgment on that
affirmative defense.
2.
Remaining Affirmative Defenses
Plaintiff additionally moved for summary judgment on Defendants’ affirmative defenses
of fair use, unclean hands, equitable estoppel, and lack of standing. Defendants completely failed
to respond with facts, arguments, and law to protect and prove these remaining defenses even
though it was their burden to do so. The Court therefore grants Plaintiff summary judgment on
these affirmative defenses to the extent that doing so is not inconsistent with the previous sections
of this Memorandum Opinion and Order.
IT IS THEREFORE ORDERED that Plaintiff Lodestar Anstalt’s Motion for Partial
Summary Judgment and a Permanent Injunction [ECF No. 47] and Defendants Route 66 Junkyard
Brewery LLC’s and Henry Lackey’s Motion for Summary Judgment on Non-Infringement [ECF
No. 56] are DENIED.
IT IS SO ORDERED.
________________________________
UNITED STATES DISTRICT JUDGE
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