Opinion
No. IP99-1195-C-H/G
August 3, 2000.
ENTRY ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
Plaintiff Simon Property Group (SPG) has sued defendant mySimon, Inc., alleging federal trademark infringement, federal trademark dilution, fraud, and other related claims. MySimon has moved for summary judgment on SPG's claims of common law fraud, federal trademark dilution, fraud in filing a federal trademark application, federal "cybersquatting," and conversion. SPG has since dropped its cybersquatting and conversion claims, as well as eight of its eleven claims for trademark dilution under different states' laws.
SPG's claims for common law fraud, federal trademark dilution, and fraud in filing a federal trademark application remain before the court on mySimon's motion. For the reasons discussed below, mySimon's motion is granted on SPG's claims of common law fraud and federal trademark dilution, but denied on the claim for fraud in filing a federal trademark application.
Summary Judgment Standard
The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Under Rule 56(c) of the Federal Rules of Civil Procedure, the court should grant summary judgment if and only if the record shows there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Pafford v. Herman, 148 F.3d 658, 665 (7th Cir. 1998).
On a motion for summary judgment, the moving party must first come forward and identify those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, which the party believes demonstrate the absence of a genuine issue of material fact. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party has met the threshold burden of supporting the motion, the opposing party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e).
In determining whether a genuine issue of material fact exists, courts must construe all facts in the light most favorable to and draw all reasonable inferences in favor of the non-moving party, in this case, plaintiff SPG. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Haefling v. United States Parcel Serv., 169 F.3d 494, 497 (7th Cir. 1999). However, the existence of "some alleged factual dispute between the parties," or "some metaphysical doubt" does not create a genuine issue of fact. Piscione v. Ernst Young, L.L.P., 171 F.3d 527, 532 (7th Cir. 1999). The proper inquiry is whether a trier of fact could reasonably find for the party opposing the motion with respect to the particular issue. See, e.g., Vitug v. Multistate Tax Comm'n, 88 F.3d 506, 512 (7th Cir. 1996).
Discussion
I. Common Law Fraud
To establish a claim of fraud under Indiana law, SPG must show that mySimon (1) made at least one representation of past or existing fact, (2) that was false, (3) that mySimon knew was false or made with reckless disregard for the statement's truth or falsity, and (4) upon which SPG reasonably relied to its detriment. E.g., Bowman v. City of Indianapolis, 133 F.3d 513, 518-19 (7th Cir. 1998); Adoptive Parents of M.L.V. and A.L.V. v. Wilkens, 598 N.E.2d 1054, 1058 (Ind. 1992), citing Edwards v. Hudson, 14 N.E.2d 705, 706 (Ind. 1938). MySimon argues it is entitled to summary judgment on this claim for two independent reasons: first, that there is no evidence of a false statement of past or existing fact (as distinct from an allegedly false promise), and second, that there is no evidence that SPG relied to its detriment on any alleged false statement. MySimon is entitled to summary judgment on both grounds.
A. Past or Existing Fact
SPG bases its fraud claim on evidence that one of mySimon's founders, Michael Yang, told SPG that the mySimon name was only a "temporary" one. In an e-mail message sent on April 8, 1998, to Melanie Alshab at SPG, Yang wrote in part: "I believe that there is a lot of synergy between MySimon (temporary name for our company) and Simon DeBartolo Group." Pl. Ex. 15. SPG argues that this message misstated an existing fact because at the time Yang sent it, he actually intended to use mySimon as the permanent name for his company. For purposes of summary judgment, of course, the court assumes that Yang in fact meant to use mySimon as the permanent name for the company when he described it as the temporary name.
Under Indiana law, "actionable fraud cannot be predicated upon a promise to do a thing in the future, although there may be no intention of fulfilling the promise." Sachs v. Blewett, 185 N.E. 856, 858 (Ind. 1933). Although SPG criticizes mySimon's citation to Sachs as an "old case," Pl. Surreply Br. at 2, Sachs is often cited by the Seventh Circuit and other courts as the touchstone for this familiar and basic principle of Indiana's common law of fraud. See, e.g., Wright-Moore Corp. v. Ricoh Corp., 908 F.2d 128, 141 (7th Cir. 1990) (citing Sachs and holding that statement that agreement would be renewed absent poor performance not actionable as fraud); Vaughn v. General Foods Corp., 797 F.2d 1403, 1412 (7th Cir. 1986) ("It has long been the law in Indiana that an action for fraud cannot based `upon promises to be performed in the future,'" and noting that this "principle has been applied uniformly by this court in fraud cases arising under Indiana law."), quoting Smith v. Parker, 45 N.E. 770, 771 (Ind. 1897); Canada Dry Corp. v. Nehi Beverage Co., 723 F.2d 512, 525 n. 10 (7th Cir. 1983); Grande v. General Motors Corp., 444 F.2d 1022, 1025 (7th Cir. 1971).
SPG argues that Yang's use of the term "temporary" was not a promise to do something in the future but was a statement of a present fact. Even viewed in the light reasonably most favorable to SPG, however, Yang's use of the term "temporary" can be understood only as a promise that he would rename the company sometime soon. That is not a statement of present fact. It is at best a false promise to take future action-to rename the company. The allegedly false statement therefore falls squarely within the principle of Sachs v. Blewett.
In response to mySimon's argument on this issue, SPG points to Whiteco Properties, Inc. v. Thielbar, 467 N.E.2d 433 (Ind.App. 1984), in which the plaintiffs purchased condominiums from defendants after defendants told plaintiffs that they would have views of a nearby lake from their condominiums. Plaintiffs paid a premium for the lake views. After the purchases were final, defendants erected a building that obstructed plaintiffs' views of the lake. Evidence showed that defendants planned to build the building at the time they told plaintiffs they would have lake views. Plaintiffs prevailed at trial on a claim of common law fraud. On appeal, defendants argued they did not make any misrepresentations of an existing fact. The Indiana Court of Appeals cited Sachs for the general principle of fraud law but found that defendants' statements were not promises to do something in the future. Instead, they were false statements of existing fact because defendants already had plans in existence to erect the building at the time defendants made the statements to plaintiffs. Therefore, the court found that the statements were in fact false at the time they were made. 467 N.E.2d at 435-36.
SPG also relies upon R.R.S. II Enterprises v. Regency Associates, 646 N.E.2d 56 (Ind.App. 1995), in which plaintiff opened a store in defendants' new shopping center. Plaintiff later sued for fraud, claiming that defendant had told it during negotiations that the planned shopping center would have four lanes of access from a nearby expressway, instead of the two lanes actually built. The trial court dismissed the claim but the Court of Appeals reversed. The plaintiff claimed that when defendant told it the shopping center would have four lanes of access, defendant knew it could not provide that access because the relevant government agencies had already adopted plans that called for only two lanes of access. The Court of Appeals held that, because defendant knew it had approval for only two lanes, defendant misrepresented a present fact each time it reported to plaintiff that the shopping center would have four lanes of access. Id. at 58-59. See also Scott v. Bodor, Inc., 571 N.E.2d 313, 320-21 (Ind.App. 1991) (false representation that plaintiff would have ability to retrieve funds once insurance plan was implemented amounted to representation of present fact).
It is not easy to reconcile the Court of Appeals decisions in Whiteco Properties, R.R.S., and Scott with the Supreme Court of Indiana decision in Sachs v. Blewett and the long line of cases that have followed it, including those in the Seventh Circuit. It is clear, however, that in those three Court of Appeals decisions, the plaintiffs went beyond showing a simple promise or statement of intended future action and produced (or alleged they could produce) contemporaneous, objective evidence that the promise could not be fulfilled. In Whiteco Properties, the plan to build the obstructing building was in existence at the time of the false representations. In R.R.S., government agencies had already made decisions that made it impossible for the defendant to provide the promised four lanes of access. In Scott, the focus was on the plaintiff's legal ability (under foreign law) to retrieve funds, which was knowable at the time the representation was made.
This court's task on this issue of state law is to predict how the Supreme Court of Indiana would decide the issue. Sachs v. Blewett remains good law, as the Seventh Circuit has repeatedly acknowledged. Although some intermediate appellate decisions have eroded the edges of the Sachs rule, they do not provide a sufficient basis for this court to depart from controlling precedent. The intermediate appellate decisions did not draw clear distinctions to explain why the Sachs rule did not apply. Perhaps they might be distinguished by the fact that there was at least some contemporaneous evidence beyond the promisor's state of mind showing that the promise could not be fulfilled when it was made, though that is not a compelling distinction. In any event, this court could not extend those cases to this one without effectively disregarding the Sachs rule. The Supreme Court of Indiana has not even hinted that it questions Sachs. Cf. Bowman v. City of Indianapolis, 133 F.3d at 518 (even after Supreme Court of Indiana had criticized distinction in fraud law between representations of fact and those of law, Seventh Circuit deferred to state court to adopt major changes in fraud doctrine). Viewed in the light reasonably most favorable to SPG, Yang's statement was merely a promise-to change the company's name in the future-that he did not intend to fulfill when he made it. That situation lies at the heart of the Sachs rule, which requires summary judgment in favor of mySimon on the claim of common law fraud.
B. Reliance
Even if Yang's statement were deemed a false statement of a present fact, SPG's claim of common law fraud still fails because SPG has not presented any evidence showing that it relied upon this alleged misrepresentation to its detriment. MySimon's motion squarely raised this issue. In its response, SPG did not put forward any evidence on this issue. Instead, its brief simply stated: "Simon relied, to its detriment, on Yang's misrepresentation. Simon believed Yang when he said that the name was temporary and, since Simon believed Yang would not use mySimon as the permanent name for an ongoing Internet shopping business, it took no immediate affirmative action against him." Pl. Br. at 12. This mere assertion in a brief is not sufficient to create a question of fact to survive summary judgment.
MySimon came forward with evidence showing that SPG did not rely to its detriment on mySimon's alleged misrepresentation of April 8, 1998. The same day Alshab received that message, she forwarded it to Andy Halliday at SPG. On April 13, 1998, Halliday then sent an e-mail regarding mySimon to SPG's in-house counsel, as well as to Simon Brand Venture's CFO, in-house counsel, and outside counsel. Halliday's e-mail stated: "I spoke with Michael Yang, who is chief of a start up company in Silicon Valley which will do a comparison shopping engine with integrated transaction closing capability called mySimon. We should vigorously defend against the use of Simon for any on-line shopping service. We should mark, register, or whatever is necessary to preserve the name Simon for all electronic shopping uses." Def. Ex. 2004 (emphasis added).
SPG asserts that Halliday told Yang not to use the name mySimon in a telephone conversation on April 13, 1998, after the April 8th e-mail referring to the name as "temporary." The court assumes that is true. Halliday and SPG do not claim, however, that Yang ever told Halliday that mySimon would drop the name mySimon.
After mySimon's reply brief pointed out SPG's failure to come forward with any evidence of reliance, as distinct from argument, SPG submitted with its surreply brief an affidavit from Halliday. In this affidavit, Halliday testified:
Michael Yang's use of the word `temporary' to describe the name of his company, in conjunction with (1) the company's early state of development, (2) my indication to him not to use the name Simon or mySimon, and (3) a lack of further communication from Michael Yang or his company, caused me to believe that mySimon was not the permanent name for Michael Yang's business and to decide that no other action needed to be taken apart from registering the SIMON mark, which I believed would also protect against third party use of mySimon.
This latest piece of evidence comes too late. MySimon raised the issue of reliance squarely in its opening brief, and SPG was obliged to respond with evidence of reliance with its responsive brief. It did not do so.
Moreover, the Halliday affidavit still does not create a genuine issue of fact as to reliance. Yang's e-mail led SPG to register the Simon mark, which Halliday believed also protected SPG against use of the mySimon mark. Yet even the Halliday affidavit does not identify any action he or SPG would have taken if he had not believed mySimon's use of the name would be only temporary. SPG has not come forward with any evidence showing what it would have done differently if Yang's e-mail had not contained the reference to mySimon being the "temporary" name of his company. Thus, there is no evidence in the record upon which a reasonable jury could conclude that SPG relied to its detriment on Yang's allegedly false representation, even if it were deemed a misrepresentation of a present fact. MySimon's motion for summary judgment on SPG's fraud claim is granted.
In addition, if the issue was as important to SPG as it now claims, it is difficult to understand how SPG officials like Halliday could reasonably have relied on the bland assurance of a complete stranger (Yang) in the e-mail of April 8, 1998, that he intended to change the company's name, but who gave Halliday no further assurance that he would do so in response to Halliday's protest in the telephone call of April 13, 1998.
II. Federal Trademark Dilution Claim
MySimon has also moved for summary judgment on SPG's federal trademark dilution claim. SPG seeks relief under the Federal Trademark Dilution Act of 1995 (FTDA), which added § 43(c) to the Lanham Act, 15 U.S.C. § 1125(c). Section 43(c)(1) provides:
The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided in this subsection.
Dilution is defined as "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of-(1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception." 15 U.S.C. § 1127.
To establish a dilution claim against mySimon, SPG must prove: (1) the Simon mark is famous; (2) mySimon adopted its mark after the Simon mark became famous; (3) mySimon's use of its mark has diluted the Simon mark; and (4) mySimon's use of its mark is commercial and in commerce. See 15 U.S.C. § 1125(c)(1); Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 633, 639 (7th Cir. 1999). In its motion for summary judgment, mySimon argues that SPG cannot show that its Simon mark is "famous" within the meaning of the statute, and that even if the Simon mark is famous, mySimon adopted its mark before the Simon mark became famous.
The fame requirement is the critical limitation on the FTDA. It is critical to keep the FTDA from swallowing infringement law and from extending unwarranted protection even to quite prominent marks. The Ninth Circuit recently recognized the dangers of unduly extending the FTDA and wrote: "We view the famousness prong of both dilution analyses as reinstating the balance-by carefully limiting the class of trademarks eligible for dilution protection, Congress and state legislatures granted the most potent form of trademark protection in a manner designed to minimize undue impact on other uses." Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 875 (9th Cir. 1999); see also I.P. Lund Trading v. Kohler Co., 163 F.3d 27, 46 (1st Cir. 1998) ("Both the text and legislative history of the original bill in 1988 and the FTDA itself indicate a congressional intent that courts should be discriminating and selective in categorizing a mark as famous."); Times Mirror Magazine, Inc. v. Las Vegas Sporting News, L.L.C., 212 F.3d 157 170-73 (3d Cir. 2000) (Barry J., dissenting) (thoroughly addressing need for rigorous application of fame requirement under FTDA).
The arguments and evidence in this case address two different types of fame for these purposes-fame among consumers in general and fame among retail merchants.
A. Fame Among Consumers
By its terms, section 43(c)(1) of the Lanham Act applies only to commercial use of a famous mark "if such use begins after the mark has become famous." As a result, evidence of arguable fame for SPG's Simon mark after October 1998 when mySimon began using its name and its Simon cartoon character is irrelevant for these purposes. See The Network Network v. CBS, Inc., 54 U.S.P.Q.2d 1150, 1153 (C.D.Cal. 2000). The question is whether SPG has come forward with evidence that would allow a reasonable trier of fact to find that SPG's Simon mark was famous among consumers before October 1998.
Section 43(c)(1) provides a non-exclusive list of eight factors relevant to whether a mark is distinctive and famous:
(A) the degree of inherent or acquired distinctiveness of the mark;
(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(C) the duration and extent of advertising and publicity of the mark;
(D) the geographical extent of the trading area in which the mark is used;
(E) the channels of trade for the goods or services with which the mark is used;
(F) the degree of recognition of the mark in the trading areas and channels of trade used by the mark's owner and the person against whom the injunction is sought;
(G) the nature and extent of use of the same or similar marks by third parties; and
(H) whether the mark was registered.
On the first of these criteria, the Simon mark has little distinctiveness. Simon is not a fanciful name that was created solely for the purpose of naming plaintiff's company. For purposes of trademark law, the "most distinctive are marks that are entirely the product of the imagination. . . . The strongest protection of the trademark laws is reserved for these most highly distinctive marks." Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 216 (2d Cir. 1999). Simon, however, is a common surname and first name, and it has little if any inherent distinctiveness. See 2 McCarthy on Trademarks § 13:2 at 13-3 (4th ed. 1997); see also Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1231 (3d Cir. 1978); S.C. Johnson Son, Inc. v. Johnson, 116 F.2d 427, 430 (2d Cir. 1940). This factor ties in with the seventh factor, the extent of the use of similar marks by third parties. Because it is a common name, Simon or some similar variation of the Simon mark is used by a large number of third parties in a wide range of markets.
Next, it is important to consider the duration and extent of the Simon mark's use and the amount of advertising the mark has received among consumers during this period. SPG asserts that it began using the Simon mark in 1960 and began using it on the Internet in 1997. (SPG also points to its "branding" campaign of the Simon mark as evidence of publicity for its mark. SPG's branding campaign was launched on March 1, 1999, so it is not relevant to a dilution claim based on use beginning in 1998.)
SPG also relies on a November 1997 survey as evidence that its mark was famous among consumers. The survey is entitled "Simon DeBartolo Group Brand Tracking." Pl. Ex. 10. In a test for unaided awareness of mall management companies, respondents were asked: "When thinking of companies that manage shopping malls or shopping centers, which one comes to mind first? What others?" Pl. Ex. 10 at 23. This question was presented to 685 respondents, 498 of who stated that they shopped at Simon DeBartolo Group malls most often while 187 shopped most often at other malls.
SPG boldly asserts that "Simon was recognized by 15% of the respondents as the mall management company." Pl. Br. at 22-23. That is not an accurate representation of the survey results. The survey results state that 15 percent of respondents named either DeBartolo, Simon DeBartolo, or Simon. Pl. Ex. 10 at 23. DeBartolo, Simon DeBartolo, and Simon are different marks. Evidence of consumer awareness of the DeBartolo name or the Simon DeBartolo name is not evidence of consumer recognition of the Simon mark.
In fact, SPG's survey shows that only a meager 3 percent of respondents, or approximately 21 people out of 685 polled, named Simon as a shopping mall management company without prompting from the interviewer. The survey categorized this as a "baseline level of awareness." Pl. Ex. 10 at 23 (also noting "it was originally expected that unaided awareness would be almost non-existent"). This is compared to the approximately 569 respondents who could not name any mall management company at all. Pl. Ex. 10 at 45. While this survey shows that a small percentage of consumers are familiar with the Simon mark, it is not evidence from which a reasonable trier of fact could conclude that the Simon mark was famous among consumers prior to October 1998. It is powerful evidence to the contrary, even giving SPG the benefit of the doubt on its assertions that it has used its Simon marks for many years all over the United States. Also, these survey results came after several years of the Mallperks and gift certificate program, showing that SPG's investments in those promotions fell far short of establishing anything recognizable as "fame" for purposes of the Anti-Dilution Act. SPG's own survey shows as a matter of law that all these efforts have not generated fame sufficient to warrant protection under the FTDA.
SPG also points out that 77 percent of those polled were aware of the gift certificate program and 60 percent were aware of the Mallperks program in 1997. Pl. Ex. 10 at 42. However, these results came from "aided" questions in which the interviewer asked whether the respondent was aware of a specified promotional program. The survey also shows nothing about actual awareness of the Simon mark, and it certainly fails to raise a genuine issue of fact as to "fame."
A reasonable trier of fact could not conclude on this record that SPG's Simon mark had achieved fame among consumers prior to October 1998.
B. Fame Among Retail Merchants and Mall Developers
SPG also contends that its Simon mark is a famous mark in "the trade," including retail merchants and mall developers. Although courts are divided on the issue, in the Seventh Circuit, a plaintiff can establish a dilution claim in a so-called "niche market" even if that same mark has not achieved fame on a broad scale like the Kodak and Coca-Cola marks. In Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 633 (7th Cir. 1999), the Seventh Circuit held that a plaintiff could establish a federal dilution claim in a niche market if plaintiff's mark had achieved fame in that niche market and defendant used its similar mark in the same niche market. Id. at 640-41 (also collecting cases). See also Times Mirror Magazine, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157, 164 (3d Cir. 2000) ("a mark not famous to the general public is nevertheless entitled to protection from dilution where both the plaintiff and defendant are operating in the same or related markets, so long as the plaintiff's mark possesses a high degree of fame in its niche market").
The language of the FTDA does not explicitly recognize that a plaintiff can establish a federal dilution claim by showing fame only in a "niche market." The niche market theory has met with some compelling criticism. See Times Mirror Magazine, 212 F.3d at 174 (Barry, J., dissenting) ("If marks can be `famous' within some market, depending on how narrowly that market is defined, then the FTDA will surely devour infringement law."). In essence, if the dilution claim arises in the context of direct or close competitors, one might think that an old-fashioned claim of trademark infringement would be available and sufficient to the task, without watering down the fame requirement of the FTDA. See Washington Speakers Bureau, Inc. v. Leading Authorities, Inc., 33 F. Supp.2d 488, 504 (E.D.Pa. 1999) ("it seems an odd act of statutory interpretation that permits the owner of a famous mark to prevent dilution only by competitors in the owner's niche market, particularly since in such an instance, relief would likely already be available to the mark's owner under a § 43(a) infringement theory").
SPG asserts its Simon mark is famous in the niche of its "trade," which it says "includes retail merchants, banks, financial institutions, advertising firms, real estate investment trusts, etc." Pl. Br. at 17. To support this claim, SPG cites an investment banker for whom SPG is an important client. He testified that SPG is "recognized as the premier shopping center owner in the industry, both in size, capital. And going back to the predecessor company, [it] is one of the original pioneers in the field of shopping center development dating back to the late 50s, early 60s." Pl. Ex. 35 at 7. A lender who specializes in real estate and who has often loaned money to SPG testified that the Simon name is "well-known" in real estate because of the company's size. Pl. Ex. 36 at 7-8. A securities analyst described Simon as "well known in their industry and owning so many malls." Pl. Ex. 37 at 28. To support its claim to "fame" among "the trade," SPG also relies on evidence of secondary meaning among retail merchants from the TRO hearing. Pl. Br. at 17-18.
Viewing the cited evidence in the light reasonably most favorable to SPG, a trier of fact could not find that, among those involved in development of shopping malls and among retailers who locate their stores in malls, SPG's Simon mark is "famous" for purposes of the FTDA. Evidence of secondary meaning sufficient to support a claim of trademark infringement falls short of evidence of fame under the FTDA.
Avery Dennison Corp., 189 F.3d at 877 (as a matter of law, mark not famous under FTDA despite distinctiveness and secondary meaning); I.P. Lund Trading, 163 F.3d at 47 (vacating preliminary injunction under FTDA where district court had relied on evidence of secondary meaning to show fame in niche market in the trade).
SPG's proposed "niche" here is defined only vaguely. Nevertheless, for purposes of mySimon's summary judgment motion, the court assumes that SPG could show that mySimon competes in a sufficiently close "space" in the online shopping market so that an FTDA claim based on fame in a niche market is at least theoretically viable under the Seventh Circuit's decision in Syndicate Sales. However, applying "the more rigorous definition of fame under the FTDA," see I.P. Lund Trading, 167 F.3d at 47, and keeping in mind that SPG's Simon mark is a common surname and first name in wide use in retailing, SPG has failed to raise a genuine issue of material fact on the fame element even in its proposed niche market. See Avery Dennison Corp., 189 F.3d at 878 (widespread use of names Avery and Dennison by third parties undermined claim of fame that would support injunction against non-competing uses of the names; reversing summary judgment for plaintiff and directing entry of summary judgment for defendant); Hasbro, Inc. v. Clue Computing, Inc., 66 F. Supp.2d 117, 132 (D.Mass. 1999) (plaintiff's use of word "clue" in game title was not "famous;" courts should be "discriminating and selective in categorizing a mark as famous," and mark was common word used by numerous third parties).
On the FTDA claim, finally, SPG asserts that retail merchants and consumers should not be treated as mutually exclusive groups because "[m]any retail merchants are also consumers." Pl. Br. at 22 n. 9. While this statement may be accurate, it is irrelevant for dilution purposes. On this theory, since almost every resident of the United States old enough to understand what is said in a television commercial can be considered a consumer, fame in any niche market would be sufficient to establish fame among consumers. MySimon is entitled to summary judgment on SPG's claim of federal trademark dilution.
III. Fraud in Filing a Federal Trademark Application Claim
Finally, mySimon has moved for summary judgment on SPG's claim that mySimon engaged in fraud in filing its federal trademark application for the mySimon mark. The Lanham Act requires a trademark applicant requires an applicant to verify that:
to the best of the verifier's knowledge and belief, no other person has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods of such other person, to cause confusion, or to cause mistake, or to deceive, [with exceptions for claims of concurrent use].15 U.S.C. § 1051(a)(3)(D). In turn, 15 U.S.C. § 1120 creates a cause of action for procuring a trademark registration "by a false or fraudulent declaration or representation, oral or in writing, or by any false means." A plaintiff asserting such a claim must establish by "clear and convincing evidence" a "deliberate attempt" to mislead the Patent and Trademark Office. Money Store v. Harriscorp Finance, Inc., 689 F.2d 666, 670 (7th Cir. 1982).
The mySimon mark is similar to SPG's Simon mark, and mySimon was aware of the existence of SPG's Simon mark when it applied for a federal trademark for the mySimon mark. The first issue then becomes whether the parties' services are similar enough as to be likely to cause confusion when people see these two marks in commerce. If so, the second issue is whether mySimon was aware when it filed the application that the similarity between the parties' marks and services was likely to cause confusion. See Donald F. Duncan, Inc. v. Royal Tops Mfg. Co., 381 F.2d 879, 883-84 (7th Cir. 1967) (even if statements in application were wrong, district court did not clearly err in finding applicant did not know they were wrong); King-Size, Inc. v. Frank's King Size Clothes, Inc., 547 F. Supp. 1138, 1166 (S.D.Tex. 1982) ("it is not sufficient to prove that plaintiffs failed to disclose that others were using the mark if plaintiffs did not believe that such third-parties had that right"); Wrist-Rocket Mfg. Co. v. Saunders, 379 F. Supp. 902, 921 (D.Neb. 1974) (finding applicant did not commit fraud because he did not believe other user had senior right to use mark), aff'd in relevant part and rev'd in part on other grounds, 516 F.2d 846, 852 (8th Cir. 1975).
On the first issue, mySimon argues that SPG cannot establish that mySimon falsely declared no other user had senior rights in the mark or a confusingly similar mark because, at the time of its application, "SPG and mySimon were providing very different services in different markets." Def. Reply Br. at 19. That will be one of the principal factual issues contested at trial on SPG's claim of trademark infringement. The court does not believe that issue can be resolved as a matter of law on the present record.
As for the second issue, proving by clear and convincing evidence that mySimon knew that SPG had superior rights that would be infringed by mySimon, SPG has a steeper hill to climb. See, e.g., Money Store, 689 F.2d at 673 (reversing as clearly erroneous the district court's finding of fraud in trademark application). However, if SPG can establish at trial a very strong case of actual infringement, that proof plus evidence that mySimon's Yang knew of SPG's mark and of SPG's objections to its use of a similar mark might allow a reasonable jury to make the final, more difficult inference that SPG's rights were so clear that Yang actually knew SPG's rights were superior when he applied to register mySimon's marks.
MySimon's motion for summary judgment on the claim for fraud in filing a trademark application is denied.
Conclusion
For the foregoing reasons, mySimon's motion for summary judgment is granted with respect to SPG's common law fraud claim and federal trademark dilution claim. MySimon's motion is denied on SPG's claim that mySimon committed fraud in filing its federal trademark application. Trial remains scheduled for August 21, 2000.