Opinion
Civil Action No. 01-CV-5614.
April 5, 2002.
MEMORANDUM
This action arises out of the introduction by defendant the Goodyear Tire Rubber Company ("Goodyear") of a new line of automotive tire under the trademark "Fortera." Plaintiffs the Pep Boys Manny Moe Jack of California and the Pep Boys — Manny, Moe Jack (collectively, "Pep Boys") allege that this mark infringes upon their registered trademark "Futura" under which brand they sell private label tires. Plaintiffs have brought suit against defendant pursuant to the Trademark Act of 1946, as amended, 15 U.S.C. § 1051 et seq. (the "Lanham Act"), and Pennsylvania statutory and common law. Pep Boys seek a preliminary injunction pursuant to Federal Rule of Civil Procedure 65 enjoining defendant from using the trademark "Fortera." For the reasons set forth below, the motion for preliminary injunction will be denied.
Background
The following facts are not in dispute or are stipulated by the parties.
Pep Boys own and operate a chain of retail automotive aftermarket stores throughout the country; the stores provide vehicle repair and maintenance services as well as vehicle "replacement" tires, parts and accessories for retail sale. In 1964, Pep Boys began selling private label tires under the registered trademark "Cornell Futura." In 1990, Pep Boys registered the trademark Futura as one of its private label brand tires; plaintiffs also sell a separate brand of tires under the Cornell mark. Pep Boys do not manufacture the tires themselves, but contracts out the manufacturing on a periodic basis. Today there are sixteen lines of tires, covering over eighty sizes, within the Futura brand. Although four of the Futura lines of tires may be used in sport utility vehicles ("SUVs") and light trucks, only three are intended for daily highway use: the Dakota, the Scrambler, and the Adventurer.
Goodyear is one of the world's leading manufacturer of tires and rubber products. Defendant manufactures, sells, markets and distributes consumer, commercial, farm and other tires for replacement and original equipment use under the "Goodyear" brand, as well as replacement tires under the "Dunlop" and "Kelly" brands. In 1999, Goodyear began planning the development and marketing of a new line of high-end SUV and crossover vehicle tire under its Goodyear brand; in October 2001, Goodyear introduced this new line under the name "Fortera." The instant action ensued.
Plaintiffs allege the following violations by Goodyear: (i) trademark infringement under 15 U.S.C. § 1114 (1) and common law; (ii) false representation and designation of origin, unfair methods of competition and unfair or deceptive trade practices under 15 U.S.C. § 1125(a), 73 P.S. § 201-3 and common law; and (iii) dilution of plaintiff's mark and injury to plaintiffs' business and/or reputation under 15 U.S.C. § 1125(c)(1) and 54 Pa. C.S.A. § 1124 and common law. Jurisdiction in this Court is proper pursuant to 28 U.S.C. § 1331, 1338, and 1367. In anticipation of a jury trial, plaintiffs seek a preliminary injunction enjoining defendant from using any colorable imitation of the Futura mark, including but not limited to Fortera. A preliminary injunction hearing was held on February 21, 22 and March 20, 2002.
Standard for Preliminary Injunction
The following four considerations must be taken into account in assessing whether a preliminary injunction should be granted:
(1) whether the movant has shown a reasonable probability of success on the merits; (2) whether the movant will be irreparably harmed by denial of the relief; (3) whether granting preliminary relief will result in even greater harm to the nonmoving party; and (4) whether granting the preliminary relief will be in the public interest.
ACLU v. Reno, 217 F.3d 162, 172 (3d Cir. 2000) (quoting Allegheny Energy, Inc. v. DQE, Inc., 171 F.3d 153, 158 (3d Cir. 1999)). Issuing a preliminary injunction is an "`extraordinary remedy' and should be restricted to `limited circumstances.'" Moscony v. Quaker Farms, LP, No. Civ. A. 00-2285, 2000 WL 1801853, at *1 (E.D.Pa. Dec. 8, 2000) (quoting Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 800 (3d Cir. 1989)). A district court should endeavor to balance these four factors to determine whether an injunction should issue. See BP Chemical Ltd. v. Formosa Chemical Fibre Corp., 229 F.3d 254, 263 (3d Cir. 2000). All four factors must weigh in favor of granting the preliminary injunction. See Pappan Enter., Inc. v. Hardee's Food Sys., Inc., 143 F.3d 800, 803 (3d Cir. 1998). The moving party clearly bears the burden in proving that all elements required for a preliminary injunction are met. See Adams v. Freedom Forge Corp., 204 F.3d 475, 486 (3d Cir. 2000).
Trademark Infringement and Unfair Competition
Federal trademark infringement, 15 U.S.C. § 1114, and federal unfair competition, 15 U.S.C. § 1125(a)(1)(A), are measured by identical standards. See AH Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000). To prove either form of the Lanham Act violation, a plaintiff must demonstrate that (1) it has a valid and legally protectable mark; (2) it owns the mark; and (3) the defendant's use of the mark to identify goods or services causes a likelihood of confusion. See id.
Section 1114 states, in relevant part:
(1) Any person who shall, without the consent of the registrant — (a) use 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; or (b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action by the registrant for the remedies here inafter provided.15 U.S.C. § 1114.
Section 1125(a) provides, in relevant part:
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which — (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.15 U.S.C. § 1125(a).
Ownership of a valid and legally protectable mark is proven where the mark is federally registered and has become "incontestible" under the Lanham Act. See Fisons Horticulture, Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 472 (3d Cir. 1994); 15 U.S.C. § 1058 and 1065. A trademark is incontestible after the owner declares in an affidavit to the Commissioner of Patents that the mark has been registered, has been in continuous use for five consecutive years and that there has been no adverse decision concerning the registrant's ownership or right to registration. Fisons, 30 F.3d at 472 n. 7; 15 U.S.C. § 1065(3). There is no dispute over whether Pep Boys owns Futura and or whether Futura is a valid and legally protectable mark. The issue therefore is whether a likelihood of confusion will result from Goodyear's use of its Fortera mark.
"To prove likelihood of confusion, plaintiffs must show that `consumers viewing the mark would probably assume the product or service it represents is associated with the source of a different product or service identified by a similar mark.'" Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 269 F.3d 270, 280 (3d Cir. 2001) (quoting Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1229 (3d Cir. 1978)). In Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 462 (3d Cir. 1983), the Third Circuit Court of Appeals devised a non-exhaustive list of ten factors, commonly known as the "Lapp" factors, to consider in determining whether there is a likelihood of confusion between marks. These factors are used to test for likelihood of confusion for goods that directly compete with each other, as well as for non-competing goods. AH, 237 F.3d at 215. The Lapp test is a qualitative inquiry; the factors are not to be mechanically tallied, but are to be applied and accorded different weights according to the particular circumstances. Id. at 215-16.
The Lapp factors are as follows: (1) the degree of similarity between the owner's mark and the alleged infringing mark; (2) the strength of the owner's mark; (3) the price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase; (4) the length of time the defendant has used the mark without evidence of actual confusion arising; (5) the intent of the defendant in adopting the mark; (6) the evidence of actual confusion; (7) whether the goods, competing or not competing, are marketed through the same channels of trade and advertised through the same media; (8) the extent to which the targets of the parties' sales efforts are the same; (9) the relationship of the goods in the minds of consumers, whether because of the near-identity of the products, the similarity of function, or other factors; and (10) other facts suggesting that the consuming public might expect the prior owner to manufacture both products, or expect the prior owner to manufacture a product in the defendant's market, or expect that the prior owner is likely to expand into the defendant's market. Id. at 215.
A plaintiff may bring claims for direct confusion, wherein a "junior user of a mark is said to free-ride on the `reputation and good will of the senior user by adopting a similar or identical mark," and reverse confusion, wherein a "junior user saturates the market with a similar trademark and overwhelms the senior user." AH, 237 F.3d at 227-28 (citing Fisons, 30 F.3d at 475). Reverse confusion claims protect smaller companies from losing their trademarks to competitors with established trade names and generous advertising budgets; it protects the value of the senior user's trademark — "its product identity, corporate identity, control over its goodwill and reputation, and ability to move into new markets." Id. (quoting Ameritech, Inc. v. American Info. Techs. Corp., 811 F.2d 960, 964 (6th Cir. 1987)). Although the Lapp test may be used for both direct and reverse confusion claims, the factors might be applied differently depending on the circumstances. Id. at 229. Based upon the evidentiary record presently before me, the following narrative constitutes my findings of fact pursuant to Federal Rule of Civil Procedure 52(a).
1. Similarity of the Marks
The "degree of similarity of the marks may be the most important of the ten factors" in the Lapp test. Fisons, 30 F.3d at 476. The test for similarity is "whether the labels create the `same overall impression' when viewed separately." Id. at 477 (quoting Banff, Ltd. v. Federated Dep't Stores, Inc., 841 F.2d 486, 492 (2d Cir. 1988)). "Side-by-side comparison of the two marks is not the proper method for analysis when the products are not usually sold in such a fashion. Instead, an effort must be made to move into the mind of the roving consumer." AH, 237 F.3d at 216 (citing 3 J. MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION § 23:59, at 23-162 (4th ed. 2000) ("The law does not require that the reasonably prudent purchaser keep a handy file of photographs and labels which he or she must pull out to compare with the label of every product purchased.")). Nevertheless, the general rule to look at the overall impression "does not undermine the common-sense precept that the more forceful and distinctive aspects of a mark should be given more weight, and the other aspects less weight." Id.
Courts must "compare the appearance, sound and meaning of the marks. " Checkpoint, 269 F.3d at 281. Generally, comparison of sound entails looking at the phonetic effect of the trademarked word or words. See, e.g., AH, 237 F.3d at 217 (approving district court comparison of number and similarity of syllables and number of words in mark). Comparing the Futura and Fortera marks, both have three syllables; the first syllable begins with the letter "f," the second begins with "t," and the third syllable is "ra." I find there is some similarity between the sound of the marks.
Comparison of sight assesses the visual impact in the presentation of the marks. See id. (approving district court comparison of use of capital or lower case letters and observation of accompanying slogan and disclaimer); see also Kraft Gen. Foods v. BC-USA, 840 F. Supp. 344, 350 (E.D.Pa. 1993) (assessing color scheme and design of trademarked cream cheese packaging); Int'l Data Group, Inc. v. Ziff Davis Media, Inc., 145 F. Supp.2d 422, 435 (D.Del. 2001) (comparing accompanying graphics, logo, font, style, colors, size, and method of presentation). Comparing the sight of the two marks here, I find that both marks are presented in block capital letters in white outline on the sidewall area of the tires themselves, although the fonts or style of the lettering used on each tire is different from each other. (DX 14 and 78.) In addition, the Futura mark on the tire is always accompanied by the name of the line of the tire (e.g., Adventurer), while the Fortera tire always presents the distinctive stylistic Goodyear name and Mercury flying foot logo in radial fashion on the sidewall opposite the Fortera name. (Joint Exh. 1 at 6 8.) Within the print advertisements of the products, ads for the Futura tire generally include both the name of the specific line of tire within the Futura brand and the Pep Boys name or three man icon. (Joint Exh. 1 at 66 10, 15.) The few print advertisements for the Fortera tire issued to date not only prominently feature the distinctive stylistic Goodyear name and Mercury flying foot logo, but in fact are designed so that the size of the lettering of the word Fortera is much smaller and somewhat more difficult to read than the word Goodyear. (DX 16 and 18.)
Thus, while there is some similarity, viewing the products overall, the visual presentations of the words Futura and Fortera are generally distinct for the reasons noted above.
Comparison of meaning inquires into the impression given by the definition of the marks. See AH, 237 F.3d at 217 (approving district court conclusion that "The Miracle Bra" shifted focus to brasserie portion of bathing suit compared to "Miraclesuit"); BC-USA, 840 F. Supp. at 350 ("Philadelphia" and "Pennsylvania" both geographic names, and Philadelphia is city within Pennsylvania); Int'l Data, 145 F. Supp.2d at 435 ("Insider" and "Insight" similar as both convey impression of containing important information). Comparing the meaning of the marks, I find that the name Fortera conjures an image of strength (a fort) but is otherwise an arbitrary name with no particular meaning. In contrast, Futura connotes the idea of a tire that, while manifest in the present, invokes a tire for the future. I take judicial notice, for the limited purpose of assessing the impression of the presentation of the marks, that the advertisers and the public believe that the designers and manufacturers of products dubbed "futuristic" are smart and forward-thinking and that the products are somehow better than average. I therefore find that the marks do not convey similar images or meanings.
I ultimately find that the marks, while similar in some respects, do not create the "same overall impression" when viewed separately in their respective contexts. In particular, the distinctive stylistic Goodyear name and Mercury flying foot logo featured prominently on both the tire and in the print ads are the "more forceful and distinctive aspects" in the presentation of the Fortera mark. Accordingly, I find that the marks are distinct; thus, the marks are not confusingly similar.
2. Strength of Mark
The strength of the mark is measured by (a) the distinctiveness on the scale of trademarks, and (b) the commercial strength or marketplace recognition. See Fisons, 30 F.3d at 479.
(a) Distinctiveness
The trademark scale consists of the following four classifications:
(1) generic (such as "DIET CHOCOLATE FUDGE SODA"); (2) descriptive (such as "SECURITY CENTER"); (3) suggestive (such as "COPPERTONE"); and (4) arbitrary or fanciful (such as "KODAK").
AH, 237 F.3d at 221. The distinctiveness, or conceptual strength, of the mark depends on the category into which the mark falls.
Arbitrary marks are those words, symbols, pictures, etc., which are in common linguistic use but which, when used with the goods or services in issue, neither suggest nor describe any ingredient, quality or characteristic of those goods or services. . . . Suggestive marks are virtually indistinguishable from arbitrary marks, but have been defined as marks which suggest a quality or ingredient of goods. . . . A mark is considered descriptive if it describes the intended purpose, function, or use of the goods; of the size of the goods, of the class of users of the goods, or of the end effect upon the user.
Checkpoint, 269 F.3d at 282 (quoting Ford Motor Co. v. Summit Motor Prods., 930 F.2d 277, 292 (3d Cir. 1991)). Arbitrary and suggestive marks, as well as descriptive marks that have a demonstrated secondary meaning, are considered distinct and entitled to trademark protection; marks that are generic or descriptive without a secondary meaning are not. Id. at 282-83. The Futura mark, as above noted, suggests a futuristic quality of the tire. As stated above, marks that suggest a quality or ingredient of goods are suggestive marks. As such, the Futura mark falls within the suggestive category in the trademark scale of distinctiveness. Thus, I find that Futura is a distinctive, or conceptually strong, mark.
(b) Commercial Strength
Indications of commercial strength include the level of public recognition of the mark and the amount of money spent on advertisement and promotion. See AH, 237 F.3d at 224. The measure of commercial strength may also take into account the limitations of the mark's recognizability to a specific industry or product market. Checkpoint, 269 F.3d at 284 (approving district court's distinction between physical article security field in which mark had high recognition, from network access security market where mark was weak). Plaintiffs have set forth little evidence on the level of public recognition of Futura, nor on the size of the broader tire market nor their position therein. Moreover, the fact that Pep Boys do not manufacture their tires nor sell tires exclusively, blunts their argument of commercial strength. Upon the current record, I find that it does not appear as though an image of Futura is conjured when contemplating the tire industry. Nevertheless, Pep Boys advertise the Futura mark in all of the forms of advertisements that Pep Boys utilize. (Joint Exh. 1 at 615; PX 7 (internet); PX 11 (video tape of television ads); PX 12 (newspaper ads); PX 13 (catalogs); PX 14 (direct print pieces); and PX 15 (color newspaper inserts)). Approximately 80% of plaintiffs' advertisement in fiscal years 1999 through 2001, roughly $40 million of their advertisement budget, features or mentions, albeit sometimes only briefly, the Futura mark along with a broad line of automotive aftermarket products. (Feb. 21, 2002 Hearing Tr. at 128-130:10-132:2 (Meiers)). During the past five years, Pep Boys have sold more than 24 million Futura tires for $1.1 billion. (Id. at 111:5 — 113:23; PX 18.) The Court infers from the level of sales that there is presumptively a certain level of public recognition of the Futura brand tire. Accordingly, I find that the Futura mark has sufficient commercial strength and distinction to warrant trademark protection.
Nevertheless, the application of the "commercial strength" sub-factor of the "strength of the mark" Lapp factor is shifted when analyzing a reverse confusion claim. See AH, 237 F.3d at 230-31. In a reverse confusion claim, a plaintiff with a commercially weak mark is more likely to prevail than a plaintiff with a stronger mark, and this is particularly true when the plaintiff's weaker mark is pitted against a defendant with a far stronger mark. Id. Thus, in a reverse confusion claim, the commercial strength factor is measured by "(1) the commercial strength of the junior user as compared to the senior user; and (2) any advertising or marketing campaign by the junior user that has resulted in a saturation in the public awareness of the junior user's mark." Id. It has been stipulated that Goodyear is a world leader in tire manufacturing. (Joint Exh. 1 at 6 25.) For the fiscal year ending December 31, 2000, the North American tire division alone of Goodyear sold nearly 116 million tires and accounted for sales revenues of $7.1 billion. I find that Goodyear as a manufacturer and tire vendor is commercially stronger than Pep
Boys as a vendor of private label tires. With regard to the advertisement consideration, the parties have submitted evidence on Goodyear's plans to promote the Fortera tire, including print ads to be run in a dozen national magazines, television ads, point-of-sale/in-store materials, a Fortera section in the Goodyear web site; direct mailings and radio ads. (Joint Exh. 1 at 66 74 — 80.) Nevertheless, there has been no showing that this marketing plan has or will result in a "saturation in the public awareness" of the Fortera mark. Thus, I conclude that this factor does not weigh heavily in plaintiffs' favor for their reverse confusion claim.
3. Care and Sophistication of the Consumers
Courts have generally found that there is less likelihood of confusion when consumers of the relevant products exercise "heightened care in evaluating" the items prior to their purchase. Checkpoint, 269 F.3d at 284. When the purchaser is a professional or commercial buyer, courts will presume that the consumer is exercising a higher standard of care. Id. at 284-85. Approximately 90% of Pep Boys' tires are sold through its retail stores, while 10% are sold to commercial accounts through plaintiffs' auto parts delivery service or to commercial vehicle fleets. (Joint Exh. 1 at 6 4.) Goodyear sells replacement tires to retailers and vehicle owners, but also sells tires for original equipment use to passenger motor vehicle manufacturers ("OEMs") like General Motors. (Id. at 6 28; Feb. 22, 2002 Hearing Tr. at 63 (Steele)). Although the Court considers clients with commercial accounts or OEMs to be professional or commercial buyers, it appears as though the majority of consumers for the parties' tires are from the ordinary consuming public. Nevertheless, Frederick Stampone, the senior vice president and chief administrative officer of Pep Boys testified at the preliminary injunction hearing that tire consumers tend to research products before purchasing, and tend to receive assistance from sales people and point-of purchase material. (Feb. 21, 2002 Hearing Tr. at 57:18 — 59:5 (Stampone)).
Thus, I find that the parties' commercial customers and even ordinary consumers of their tires exercise special care in their purchases.
In addition, when the products at issue are expensive, courts will presume that the consumer is exercising a higher standard of care. Checkpoint, 269 F.3d at 284-85. The current price for a Futura Adventurer is 4 for $279 or about $70 per tire, while the retail price of a Goodyear Fortera tire in the same size is about $125-$135 per tire. (Feb. 22, 2002 Hearing Tr. at 11:14-20; 16:4-8 (Myers)). I find that the prices of the tires are sufficiently expensive to cause special care on the part of the consuming public in their purchase. I further find, in light of the price and the tendency for tire consumers to research prior to purchase, that the consumers of the parties' products exercise a relatively high standard of care in choosing tires.
4. Length of Time of Use of Defendant's Mark Without Evidence of Actual Confusion Arising
Evidence of a lack of actual confusion when the defendant's product has been sold for an "appreciable period of time" allows for the inference that future confusion is unlikely. Checkpoint, 269 F.3d at 291. The Fortera tire has been on the market for less than four months. Goodyear is still in the process of preparing advertisement for the Fortera tire, and the advertisement for it so far has been minimal. It has been too short a period for the lack of actual confusion to be probative of likelihood of confusion. Accordingly, this factor will not be given any consideration.
5. Intent of Defendant
Intent of the defendant in adopting the mark is "relevant to the extent that it bears on the likelihood of confusion." AH, 237 F.3d at 225. It is neither a prerequisite nor, by itself without more, sufficient to prove a Lanham Act violation. See id.; Checkpoint, 269 F.3d at 286.
The defendant's intent thus is only relevant for the Lapp test if it can be shown by a "purposeful manipulation of the junior mark to resemble the senior's." AH, 237 F.3d at 226.
There is considerable evidence showing that there were members of the Goodyear management who were aware of the Futura mark. Goodyear had submitted a bid in 2000 to manufacture Pep Boys' Futura tires, and Todd Hershberger, a Goodyear official, had regular business contact with Pep Boys. (Joint Exh. 1 at 6 30-31.) Moreover, Steven Hale, the Goodyear executive in charge of the Fortera naming project, had heard of the Futura mark in 1993 when he visited a Pep Boys store in Texas. (Id. at 6 53.) Nevertheless, Hale hadn't visited a Pep Boys store or learned any more about their products since that visit. (Id.) In addition, Goodyear undertook a considerably long and expensive process to determine the Fortera name: they devoted six months to a naming project with the Interbrand Group, a branding consulting company, for an approximate cost of $70,000.00; requested a pre-screen analysis from the Daar Fisher law firm for initial clearance; requested a "knock-out" and full availability trademark search from Thomson Thomson; and conducted several focus groups around the country. (Id. at 66 42-43, 47, 51-52, 56-60.) I do not find from the evidence that Goodyear went to such lengths to pick a name that was intended to be confusingly similar to a competitor's. Interbrand had been hired to help Goodyear develop a "distinctive and memorable" brand name that was "unique and [stood] out within the cluttered market place." (Id. at ¶ 43.) I note that it is possible that defendant picked a name through the naming project and proceeded to adopt it regardless of whether the mark infringed or not; that Goodyear's counsel, Williams, did not wait until after the end of the USPTO examination phase before approving the new design molds for the Fortera tire may be evidence of this disregard. (Id. at ¶¶ 62, 67-68.) Yet, carelessness is not probative for purposes of the Lapp factors test of whether defendant intended to rely upon plaintiff's goodwill by copying its mark. See AH, 237 F.3d at 232-33. I conclude that plaintiff has failed to show by the preponderance of the evidence that Goodyear misused its knowledge of the Futura mark.
Pep Boys has argued that the focus group results indicate that Goodyear should have been aware that the Fortera mark was confusingly similar to the Futura mark. Only one respondent in the focus group specifically wrote "Futura" in response to the query, "Does this name remind you of any existing brand names?" (PX 27). Another member answered "Ford Fortura," while a third answered "Frontera." (Id.) In response to the question of what "imagery and personality [Fortera] evokes," the following we re provided by one respon dent each: "60's car," "Ford car," "base name — Ford," "Ford related," and "flows well in the Ford family." (Id.) At least two others responded that it reminded them of "future" and "fortune." (Id.) Finally, when asked to give their preferred name and the relevant reasons, one member stated Fortera was the "tire of the future/modern,"and a seco nd stated that Fortera "sounded futuristic." (Id.) The summary report by Interbrand did not mention Futura, and although the response data sheets were eventually sent to Goodyear, there is no evidence that anyone from Goodyear reviewed them. (Feb. 21, 2002 Hearing Tr. at 173:4-13.) I do not find the focus group results to be probative of Goodyear's intent.
Consequently, I find that defendant did not intend to confuse consumers when it adopted the Fortera mark.
6. Evidence of Actual Confusion
Evidence of actual confusion may be highly probative of the likelihood of confusion, but is not required to prove a Lanham Act violation. Checkpoint, 269 F.3d at 291. Nevertheless, evidence of "isolated" or "idiosyncratic" incidents of actual confusion need not be given much weight; "[o]wnership of a trademark does not guarantee total absence of confusion in the marketplace." AH, 237 F.3d at 227 (quoting Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1231 (3d Cir. 1978)). As noted before, the Fortera tire has been available for too short a period for any lack of evidence of actual confusion to be probative on the issue of likelihood of confusion. To support their argument of likelihood of confusion, however, plaintiffs have proffered expert testimony and a survey report from a qualified market research expert as evidence of actual confusion between the marks by consumers. Although survey evidence is not direct evidence of actual confusion, it has been accepted to provide circumstantial evidence from which the court may extrapolate conclusions on the likelihood of confusion. See 5 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION ("McCarthy") § 32:183.
The Pep Boys survey was undertaken by survey expert Donald Pace. (PX 45.) Dr. Pace conducted a "mall intercept" survey to test the extent, if any, of consumer confusion attributable to the similarity of the Futura and Fortera marks as used for replacement tires. The survey consisted of 409 interviews in 12 shopping malls in cities across the country: Boston, Massachusetts; East Meadow, New York; Trumbull, Connecticut; Chicago, Illinois; Duluth, Minnesota; Springfield, Missouri; Atlanta, Georgia; Dallas, Texas; Melbourne, Florida; Los Angeles, California; Phoenix, Arizona; and Seattle, Washington. To qualify for the interview, the respondents needed to be consumers aged 18 and over, who own an SUV or light truck, are involved in decisions on what tires to purchase for it, and had either purchased a tire in the past 12 months or plan to purchase one in the next 12 months.
The respondents were then divided into a "control" group and a "test" group. Half of the 409 respondents, the "test" group, were first provided with a stack of three different print ads and told to look at them as long as necessary. Of the three print ads, one was a printout from the Goodyear website for the Fortera tire, the second a magazine ad for an SUV, and the third a magazine ad for an "automotive additive." After a period of time, the respondents were then shown a second set of three different prints ads: one for an automotive additive made by the same company as previously shown, one for an SUV made by a different company as previously shown, and the last a printout from the Pep Boys website for the Futura tire. The respondents were asked for each item as it was presented:
"Please tell me whether or not the (PRODUCT TYPE) in this ad is the same brand as, or is made by the same company as the (PRODUCT TYPE) in the ad you saw at the first part of the interview."
If the respondent answered "no" or "don't know/not sure," the interviewer then asked:
"Please tell me whether or not the company that makes the (PRODUCT TYPE) in this ad is in some way affiliated with or connected with the company that makes the (PRODUCT TYPE) in the ad you saw in the first part of the interview."
The "control" group was subjected to an almost identical process, except that they were provided with a modified ad for the Goodyear tire such that the name "Portera" was substituted for Fortera. The survey revealed that 48% of those interviewed in the "test" group responded that they thought that the Futura tire was the same brand or had been made by the same company, or that it was made by a company that was affiliated or connected with, the company that made the Fortera tire shown in the first phase. By contrast, 32% of the consumers in the "control" group responded that they thought the Futura tire was the same brand, made by the same company, or affiliated or connected with the company that made the Portera tire shown in the first phase. The Pace report thus concluded that there was a 16% "net level of confusion" attributable to the Fortera mark.
The results and methodology of this survey were challenged by defendant's likewise qualified expert, Dr. Robert Sorensen, as having critical infirmities in its survey technique, validation, and methodology. I credit the testimony of Dr. Sorensen in this regard. A primary infirmity identified by Dr. Sorensen was Pace's failure to ask respondents why they answered as they did. Dr. Sorensen affirmed that this omission was an egregious error as: (a) the instructions required the interviewer to obtain one answer to a question and no more; (b) respondents were informed only once that it would be all right to say they didn't know an answer to the question; and (c) elements other than the alleged confusing similarity of the two tire names may have been the reason why some respondents answered "yes" to the questions regarding business connection or affiliation between the products. (DX 51 at 636.) As an example of other sources of confusion, Dr. Sorensen pointed to Dr. Pace's use as stimuli in the survey of particular screen shots from the Pep Boys website and the Goodyear website which were similar in format to each other. Dr. Sorensen maintains that in his experience, many survey respondents perceive companies as connected with another because the respondents believed the advertising was similar. The print ads for the other products (the SUVs and automotive additives) used in the survey were in the style of magazine ads, a style very different from the web site print-outs used as the tire ads. Dr. Sorensen argues that this could have contributed to the perception of similarity or affiliation of the tire products. (Id. at 6 24.) I find that because the respondents were not asked the reason for their answers, there is no indication how much influence was exercised by the choice of stimuli over the respondents' perception and thus the survey data are infirmed.
While the survey provide some guidance on the likeliness of confusion, I am ultimately not swayed by the reported results. "The probative value of a consumer survey is a highly fact-specific determination and a court may place such weight on survey evidence as it deems appropriate." Johnson Johnson-Merck Consumer Pharm. Co. v. Rhone-Poulenc Rorer Pharm., 19 F.3d 125, 134 (3d Cir. 1994). Although plaintiffs may have made a good-faith effort to simulate actual market conditions, Pep Boys have not pointed to any evidence on the record to show that web sites are a common forum by which consumers purchase tires. It is true that courts have accepted survey findings of similar levels of confusion. See, e.g., Copy Cop v. Task Printing, 908 F. Supp. 37, 38 (D.Mass. 1995) (16.5 percent is sufficient along with evidence as to other confusion factors to support a finding of likelihood of confusion); see also James Burrough, Ltd. v. Sign of the Beefeater, 540 F.2d 266, 279 (7th Cir. 1976) ("we cannot agree that 15% is `small'"). Nevertheless, because of the infirmities in the survey findings, I reject the purported survey confusion level measured at 16% as showing there is any likelihood of confusion between the two marks.
7. Channels of Trade and Media of Advertisement
These factors relate to how likely the buyers and users of each party's products are to encounter the goods of the other. To the extent parties overlap in their promotional means, the greater the likelihood of confusion may be. See Checkpoint, 269 F.3d at 288-89.
Pep Boys advertises its stores and products, including the Futura tire, through local and national television, radio, web site, print (catalogues, newspaper inserts and direct mail) and point-of-purchase/in-store advertisements. (Joint Exh. 1 at 6 15; PX 7 (internet); PX 11 (video tape of television ads); PX 12 (newspaper ads); PX 13 (catalogs); PX 14 (direct print pieces); and PX 15 (color newspaper inserts)). Goodyear has promoted the Fortera tire to dealers through a promotional conference for its independent dealers as well as advertisements on XPLOR, its intranet site for dealers. (Joint Exh. 1 at 6 73.) Goodyear has promoted the Fortera tire to ordinary consumers through a full page print ad to be run in a dozen national magazines, including Time, Newsweek, Sports Illustrated and People, television advertisements, point-of-sale/in-store material, a Fortera section in the Goodyear web site; Goodyear may also issue direct mailings to consumers during the second quarter of 2002 and has created scripts for radio commercials for the Fortera tire. (Id. at 66 74-80.) The marketing channels for the parties therefore overlap.
Nevertheless, there is much less overlap in the channels of sale and actual purchase by the consumers. Goodyear sells and distributes replacement tires through multiple channels of distribution, including independent and company-owned wholesale distributors, company-owned retail outlets, independent dealers and franchise tire centers, mass merchandisers, and national tire chains. (Id. at 6 28.) Goodyear began shipping Fortera tires to dealers around the end of October, 2001 and began to take orders for Fortera tires from Goodyear-owned retail stores in January, 2002. (Id. at 6 68.) Goodyear has also marketed the Fortera tire as an original equipment tires to several OEMs for use in their SUVs. (Id. at 6 82.) In contrast, Pep Boys sells the Futura tire primarily through its retail stores, although 10% of Pep Boys' tire sales are to its commercial accounts such as its auto parts delivery service or to commercial vehicle fleets. (Joint Exh. 1 at 6 5.) Although some of Pep Boys' commercial accounts are Goodyear tire stores, there have been less than 5,200 sales of Futura tires through Goodyear dealers over the past three years. (Feb. 21, 2002 Hearing Tr. at 75 (Stampone)). Pep Boys does not provide tires to original equipment manufacturers. (Joint Exh. 1 at 6 6.) Pep Boys stores do not keep Goodyear tires in stock, although they may purchase tires directly from a wholesale tire distributor if specifically requested by a customer. (Feb. 21, 2002 Hearing Tr. at 28 (Stampone)). In fact, although he noted that it was possible that a Goodyear dealer might purchase a Futura tire, Mr. Stampone of
Pep Boys testified that he was not aware of any circumstances in which a customer would find both Goodyear Fortera as well as Futura tires offered for sale, side-by-side. (Id. at 76.) Thus, while there is overlap in the media of advertisement, there is far less overlap in the arenas of sale and actual purchase. Accordingly, I conclude that this factor does not weigh heavily in either party's favor.
8. Target Audience
To the extent the parties target their sales efforts to the same consumers, there is a stronger likelihood of confusion. See Checkpoint, 269 F.3d at 289. Goodyear conceives of and promotes Fortera tires as a "premium" or "luxury" brand. (Joint Exh. 1 at 6 39.) When conducting focus groups in choosing the Fortera name, Goodyear set the following demographic profile as similar to the "target" customer for the Fortera tire: age 25-55; college educated; with an annual income of $40,000 or more; and who owns or wants to own an SUV. (Id. at 6 52.) In contrast, Pep Boys' primary target for television and radio advertisement purposes is males 25 to 54, a much larger sub-set of the consuming public; further, Pep Boys' customers are not confined to any particular sex, age, income level, or any other demographic category. (Feb. 21, 2002 Hearing Tr. at 23 (Stampone)). Pep Boys promote the value and low cost of Futura tires in their advertisements. (Feb. 21, 2002 Hearing Tr. at 98 (Stampone)). As Goodyear has pointed out, the Fortera tires range in retail price from $166.20 to $230.50 per tire, as printed in Goodyear's Auto and Light Truck Base Price List for January 2002, while prices for the Futura tires intended for SUV highway use range from $50 and upwards. (DX 55; PX 7.) I find that Goodyear is targeting a higher-end niche market of luxury SUV owners and that Pep Boys Futura tires are sold not only to consumers of all income levels, but also to owners of many different motor vehicles other than SUVs. Thus, I find that the "target" audience of the Goodyear Fortera mark is much more narrowly defined than Pep Boys', but the Goodyear target audience is subsumed within the larger mass audience to which Pep Boys advertises. Moreover, the Court observes that while Goodyear may "target" for marketing purposes the more affluent portion of the purchasing public, this does not mean that the reach of the advertising is limited to that target. I conclude then that the pool of potential purchasers thus are the same for both parties' products.
9. Product Similarity
When the relevant goods are similar, the greater the likelihood that consumers will assume an affiliation or common source between the products. See Checkpoint, 269 F.3d at 287.
Nevertheless, when two products serve different functions and are part of distinct sectors or niche markets within a broader product category, they might be sufficiently unrelated to each other that consumer confusion is less likely. Id. at 287-88. Currently, there are sixteen lines or sub-brands sold by Pep Boys under the Futura private label, covering over eighty tire sizes; the lines are designed for many different consumer uses and requirements in a variety of cars, sport utility vehicles ("SUV") and light trucks. (Joint Exh. 1 at 6 7.) Three lines of Futura brand tires are intended for regular highway use, and are expected to compete with Goodyear's Fortera tire: the Futura Adventurer, the Futura Dakota, and the Futura Scrambler. (Feb. 21, 2002 Hearing Tr. at 105 (Stampone)). The Fortera tire is an SUV and crossover vehicle tire intended primarily for highway driving. (Joint Exh. 1 at 6 37.) There are sixteen sizes of Fortera tires (Id. at 6 85.) As with the target audiences, Goodyear has a specific narrowly tailored tire product that is subsumed within the greater offering of tires of Pep Boys. Thus, I find that although Goodyear has tailored its product to a niche market, there is overlap in the range of the products.
Weighing the Lapp Factors
To summarize, the following findings favor plaintiffs: (1) the Futura mark is strong enough to merit trademark protection, (2) there is overlap in the parties' target audience, and (3) the products are similar. Nevertheless, although the parties' channels of marketing overlap, there is almost no overlap in the channels at the point of sale. Moreover, plaintiffs have not persuaded the Court with their survey results that there is a likelihood of confusion, and have not set forth enough evidence to show any intent by defendant to manipulate its mark to resemble the Futura mark. Finally, the Court finds that the marks are distinct and that the tire consumers generally exercise care in purchasing the goods at issue. I conclude that plaintiffs have failed to meet their burden of proving likelihood of confusion, either direct or reverse, between the parties' marks.
Plaintiffs also sought relief pursuant to section 201-3 of Title 73 of the Pennsylvania statutes. The law against unfair competition and trade practices is enforced by the Attorney General under Section 201-4. Under Section 201-9.2, a private cause of action under the statute is available only to consumers who have purchased or leased goods or services for personal, family, or household purposes. See Weinberg v. Sun Co., 565 Pa. 612, 616-18 (Pa. 200 1). The statute does not provide a private cause of action for the alleged violation of the unfair competition portion of the statute. See Granite State Ins. Co. v. Aamco Transmissions, Inc., 57 F.3d 316, 32 0 n. 3 (3d Cir. 1995). Because Pep Boys brings a claim as a competitor rather than a consumer, and fails to allege that it purchased or leased defendant's tire as a result of the allegedly unfair trade practice, it has no standing to bring an action for unfair competition pursuant to Section 201-3, and it has no likelihood of success on the merits of this claim.
Accordingly, I conclude that plaintiffs have not met their burden of proving likelihood of success on the merits for their federal trademark infringement and federal unfair competition claims.
Standard for Dilution Claim
The Federal Trademark Dilution Act of 1995 ("FTDA"), 15 U.S.C. § 1125 (c), "grants extra protection to strong, well-recognized marks even in the absence of a likelihood of consumer confusion — the classical test for trademark infringement — if the defendant's use diminishes or dilutes the strong identification value associated with the plaintiff's famous mark." Times Mirror Magazines Inc. v. Las Vegas Sports News, 212 F.3d 157, 162-63 (3d Cir. 2000), cert. denied 531 U.S. 1071, 148 L.Ed.2d 662, 121 S.Ct. 760 (2001) (citing 4 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 24:70 (4th ed. 1997)). Thus, the FTDA recognizes a property interest in the value of a famous trademark, and allows a senior user of a famous mark, such as Buick, Dupont or Kodak, to prevent a junior user from diluting the distinctive quality of that mark.
Section 1125(c) provides, in relevant part:
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.15 U.S.C. § 1125(c). The wording for the anti-dilution provisions of the Pennsylvania statutes, 54 Pa. C. S. § 1124, is taken almost verbatim from the anti-dilution provision in the United States Code. Accordingly, there is no appreciable difference in the applicable standard. See Strick Corp. v. Strickland, 162 F. Supp.2d 372, 378 n. 10 (E.D.Pa. 2001).
Plaintiffs must show that they likely will succeed in proving the following elements to establish a dilution claim: (1) plaintiff is the owner of a mark that qualifies as "famous" in light of the eight factors listed in Section 1125(c); (2) defendant's mark is being used in commercial use in interstate commerce; (3) defendant's use began after plaintiff's mark became famous; and (4) defendant's use causes dilution of plaintiff's mark by lessening its capacity to identify and distinguish goods or services. Id.
The following are the eight non-exclusive factors that the Court may use to determine the fame of the mark: (1) the degree of inherent or acquired distinctiveness of the mark; (2) the duration and extent of use of the mark in connection with the goods or services with which the mark is used; (3) the duration and extent of advertising and publicity of the mark; (4) the geographical extent of the trading area in which the mark is used; (5) the channels of trade for the goods or services with which the mark is used; (6) 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; (7) the nature and extent of use of the same or similar marks by third parties; and (8) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register. 15 U.S.C. § 1125(c)(1). A mark may be entitled to anti-dilution protection, even if it is not famous to the general public, if it possesses a "high degree of fame in its niche market." Times Mirror, 212 F.3d at 164.
Dilution may occur by "blurring" or "tarnishing" the mark. Dilution by blurring occurs when the use of the defendant's mark results in the loss of the ability for plaintiff's mark to serve as a unique identifier of the plaintiff's product, causing the public to no longer associate the plaintiff's famous mark with its goods or services. Times Mirror, 212 F.3d at 168. The Court should consider the following factors to determine whether a mark has been blurred: (1) actual confusion and likelihood of confusion; (2) shared customers and geographic isolation; (3) the adjectival quality of the junior use; (4) the interrelated factors of duration of the junior use; (5) harm to the junior user; and (6) delay by the senior user in bringing the action. Id. (citing Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 228 (2d Cir. 1999)). For the reasons stated above, the Court concludes that plaintiffs have not shown actual or a likelihood of confusion of the marks. Accordingly, I conclude that the Futura mark has not been blurred.
A mark is tarnished when it is improperly associated with an inferior or offensive product or service as a result of the junior user's mark, "presenting a danger that consumers will form unfavorable associations with the mark." Strick Corp. v. Strickland, 162 F. Supp.2d 372, 378 n. 10 (E.D.Pa. 2001) (quoting Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 881 (9th Cir. 1999)). In addition to plaintiffs' failure to show a likelihood of confusion between the marks, plaintiffs have not attempted to show that the Fortera tire is an inferior product. Indeed, plaintiffs concede that Goodyear is perceived as one of the producers of the best quality tires in the industry. (Joint Exh. 1 at 6 20.) Mr. Stampone testified that the Futura brand was subject to dilution because Pep Boys feared Goodyear might suffer a fall from grace in a manner similar to the recent Firestone-Bridgestone tire recall. Nevertheless, plaintiffs have set forth no objective evidence to support the wholly subjective likelihood of such an event. (Feb. 21, 2002 Hearing at 63 (Stampone)). Mr. Stampone's fears have no probative value to the Court. I therefore conclude that plaintiffs have not shown tarnishing of the Futura mark.
In light of the reasons set forth above, I find that plaintiffs have failed to show that defendant's use of the Fortera mark would lessen the capacity of plaintiffs' mark to identify and distinguish the Futura tires. Thus, I conclude that plaintiffs have not met their burden of proving likelihood of success on their dilution claim.
Conclusion
For the foregoing reasons, I conclude that plaintiffs have not met their burden of proof on the issue of the likelihood of success on the merits. Accordingly, the motion for preliminary injunction will be denied.
An appropriate Order follows.
ORDER
AND NOW, this 5th day of April, 2002, upon consideration of the motions of plaintiffs for a preliminary injunction (Doc. No. 2), the response of defendant thereto (Doc. Nos. 14, 15), as well as the affidavits, declarations, and exhibits submitted by both parties, including the actual tires at issue, (DX 14; DX 78), having held a hearing on February 21, 22 and March 20, 2002, and for the reasons set forth in the foregoing memorandum, IT IS HEREBY ORDERED that the motion of plaintiffs is DENIED.