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Dranoff-Perlstein Associates v. Sklar

argued: January 28, 1992.

DRANOFF-PERLSTEIN ASSOCIATES, APPELLANT
v.
HARRIS J. SKLAR



On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. Civil Action No. 90-05003)

Before: Stapleton, Scirica and Alito, Circuit Judges

Author: Scirica

Opinion OF THE COURT

SCIRICA, Circuit Judge.

In this trademark infringement action, plaintiff Dranoff-Perlstein Associates appeals the district court's order granting summary judgment for defendant Harris J. Sklar. We agree with the district court that a portion of plaintiff's mark is generic and unprotectible. However, because we are unable to determine on the present record whether there is a likelihood of confusion between the parties' marks as a whole, we will reverse and remand for further proceedings.

I.

Dranoff-Perlstein Associates and Harris J. Sklar both practice personal injury law in the Delaware Valley. In 1984, Dranoff-Perlstein began using "INJURY-1" as its telephone number, and embarked on an advertising campaign designed to capitalize on that mnemonic.*fn1 The campaign included, among other things, sixty-second advertisements on several popular local radio stations;*fn2 advertisements in the "yellow pages" of the telephone book;*fn3 and postage meter tapes with a telephone and the number "I-N-J-U-R-Y-1" prominently featured.

In 1990, Sklar obtained the telephone number "INJURY-9," and began an advertising campaign designed to capitalize on his mnemonic. Sklar's campaign included radio spots,*fn4 advertisements in the yellow pages, newsletters, and handbills, all of which prominently featured the INJURY-9 mnemonic.

On May 4, 1990, Sklar applied for registration of "INJURY-9" as a service mark on the principal register at the United States Patent and Trademark Office. On May 29, 1990, Dranoff-Perlstein applied for registration of "INJURY-1" as a service mark.

On July 31, 1990, Dranoff-Perlstein filed this action in the United States District Court for the Eastern District of Pennsylvania. In its Amended Complaint, Dranoff-Perlstein alleged that Sklar's use of "INJURY-9" constituted unfair competition and trademark infringement under the common law and § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988), which governs unregistered trademarks. The Amended Complaint also included a pendent state law claim for trademark dilution under 54 Pa. Cons. Stat. Ann. § 1124.

On November 21, 1990, Dranoff-Perlstein asked the Patent and Trademark Office to suspend prosecution of Sklar's application for registration during the pendency of this case. That request was granted on November 28, 1990.

On cross-motions for summary judgment, the district court granted Sklar's motion, and dismissed the case with prejudice. The court held, in the alternative: (1) that the marks in question were "functional and generic," and thus not entitled to trademark protection; or (2) if the marks were descriptive, that no showing of "secondary meaning" had been or could be made that would justify trademark protection.

II.

A.

The district court had original jurisdiction under 28 U.S.C. § 1338. We have appellate jurisdiction under 28 U.S.C. § 1291.

In our plenary review of the district court's grant of summary judgment, we apply "'the same test the district court should have utilized initially.'" Erie Telecommunications, Inc. v. City of Erie, 853 F.2d 1084, 1093 (3d Cir. 1988) (quoting Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977)). Therefore, we must determine whether the evidence, taken in the light most favorable to Sklar, demonstrates that there are no genuine issues of material fact and that Dranoff-Perlstein is entitled to judgment as a matter of law. Id.

B.

Section 43(a) of the Lanham Act "extends protection to unregistered trademarks on the principle that unlicensed use of a designation serving the function of a registered mark constitutes a false designation of origin and a false description or representation." A.J. Canfield Co. v. Honickman, 808 F.2d 291, 296 (3d Cir. 1986). However, a designation is only protectible "if the public recognizes it as identifying the claimant's 'goods or services and distinguishing them from those of others.'" Id. (quoting 1 J. Thomas McCarthy, Trademarks and Unfair Competition § 15:1, at 657 (2d ed. 1984)).

Under the Lanham Act, service marks, which are used to identify the source of services, are entitled to the same legal protection as trademarks, which are used to identify the source of goods. 1 Jerome Gilson, Trademark Protection and Practice § 1.02[1][b], at 1-11 (1991). Although technically distinct, the terms are often used interchangeably, with no significant legal consequences. Id.

Trademark law recognizes four separate categories of marks, based on their levels of inherent distinctiveness. From most distinctive to least distinctive, these categories are: (1) arbitrary terms; (2) suggestive terms; (3) descriptive terms; and (4) generic terms. Although these categories are often separated by only the finest of lines,*fn5 the "distinctions are crucial," for:

If we hold a term arbitrary or suggestive, we treat it as distinctive, and it automatically qualifies for trademark protection at least in those geographic and product areas in which the senior user applies it to its goods. If we hold a mark descriptive, a claimant can still establish trademark fights, but only if it proves that consumers identify the term with the claimant, for that identification proves secondary meaning. . . . Finally, if we hold a designation generic, it is never protectable because even complete "success . . . in securing public identification . . . cannot deprive competing manufacturers of the product of the right to call an article by its name."

Honickman, 808 F.2d at 297 (quoting Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976)) (other citations omitted).

One question presented by this case is whether a service mark that corresponds to the markholder's telephone number may acquire trademark protection. The mere fact that the parties marks correspond to their telephone numbers does not substantially alter our analysis.*fn6 Most courts to consider the question have held that marks which correspond to telephone numbers may be protectible. See, e.g., Dial-A-Mattress Franchise Corp. v. Page, 880 F.2d 675 (2d Cir. 1989); Murrin v. Midco Communications, Inc., 726 F. Supp. 1195 (D. Minn. 1989); American Airlines, Inc. v. A 1-800-A-M-E-R-I-C-A-N Corp., 622 F. Supp. 673 (N.D. Ill. 1985); Chicago World's Fair - 1992 Corp. v. 1992 Chicago Worlds' Fair Comm'n, No. 83-C-3424, slip op. (N.D. Ill. Aug. 16, 1983). See also 3 Rudolf Callman, The Law of Unfair Competition, Trademarks and Monopolies § 18.23, at 209 (Supp. Nov. 1991) ("Telephone numbers may be protected as trademarks."). But see Cytanovich Reading Ctr. v. Reading Game, 162 Cal. App. 3d 107, 208 Cal. Rptr. 412, 225 U.S.P.Q. (BNA) 588 (1984).

"To function as a trademark, a term must be . . . an indicator of source, sponsorship, approval or affiliation." Honickman, 808 F.2d at 305 (quoting S. Rep. No. 627, 98th Cong., 2d Sess. 2, reprinted in 1984 U.S.C.C.A.N. 5719). To the extent a mark that corresponds to a telephone number performs these functions, it may, if the other requirements of trademark law are met, be entitled to trademark protection. Dial-A-Mattress, 880 F.2d 675. As the United States Court of Appeals for the Second Circuit has noted, "Companies doing significant business through telephone orders frequently promote their telephone numbers as a key identification of the source of their products." Dial-A-Mattress, 880 F.2d at 678. Although law firms and other providers of services do not solicit "telephone orders," some firms do generate ...


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