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ANALYTIC RECRUITING v. ANALYTIC RESOURCES

July 23, 2001

ANALYTIC RECRUITING, INC., PLAINTIFF,
V.
ANALYTIC RESOURCES, LLC, DEFENDANT.



The opinion of the court was delivered by: Anita B. Brody, District Judge.

  MEMORANDUM AND ORDER

Before me is plaintiff Analytic Recruiting, Inc.'s ("Analytic Recruiting") request for injunctive relief on its claims of trade name infringement under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), and unfair competition under the common law. On May 9, 2001 through May 11, 2001, I held an evidentiary hearing on plaintiff's motion for a preliminary injunction. At the close of the hearing, the parties agreed that the record was complete for purposes of determining what if any permanent relief is appropriate. I will now grant a permanent injunction.

I. Findings of Fact

Having considered all of the testimony and exhibits offered at trial, I make the following findings of fact:

A. The Parties

1. Plaintiff Analytic Recruiting is a nationwide recruiting firm that operates from its offices in New York City, New York. Analytic Recruiting has continuously operated under that name since it was formed in 1980. It is co-owned by Rita Raz ("Raz") and her husband, Dan Raz. Raz is the President of Analytic Recruiting and is also one of its twelve (12) recruiters.
2. Analytic Recruiting specializes in placing individuals with sophisticated backgrounds and strong quantitative and analytical skills in permanent employment positions across a number of industry sectors in quantitative business positions. The individuals recruited for the positions are referred to as "candidates." The companies seeking individuals to fill its employment positions are referred to as "clients."
3. Positions for which Analytic Recruiting recruits include direct marketing analysis, credit-risk analysis, market research and sales forecasting, investment banking, and systems development.*fn1
4. Over the past ten years, Analytic Recruiting has filled between two hundred and fifty (250) and three hundred (300) such positions per year with resulting billings of between five (5) and eight (8) million dollars annually.
5. Analytic Recruiting's corporate client base includes predominantly Fortune-One Thousand companies, as well as some mid-size and some smaller companies, in the United States.
6. In 1980 Rita and Dan Raz conceived of their new business because they thought that jobs requiring quantitative skills and the "slicing and dicing" of data would need to be created and filled to take advantage of the computational powers of computers. They chose the name "Analytic Recruiting" for their business because they thought that the word "analytic" suggested the type of "braininess" or intelligence that was called for by such positions.
7. The majority of Analytic Recruiting's communications with candidates and corporate clients are oral, either by telephone or by email. In such communications, the firm's name is likely to be referred to in an abbreviated form as "Analytic."
8. In its twenty-one (21) year history, Analytic Recruiting has continually advertised in print, and more recently, electronic media. Since 1992, it has spent approximately $957,000 in such advertising, placing ads, both directly and through an advertising agency, in print media such as newspapers (principally the New York Times), and in trade periodicals such as Orms Today, Credit Card Management and Amstat News. Advertising through electronic media now takes place through the company's own web site and through other electronic media such as Dice. com, Headhunter.net, and Bloomberg. Relatively higher expenditures in advertising were made before 1992 when electronic media advertising over the internet was not available.
9. In all such ads, except in the New York Times where the space is especially expensive, prominence is given to the word "Analytic" within the company's name. The word "Analytic" is frequently portrayed independently of the full name of the firm and in much larger, bolder and more stylized type face. The company's web site gives similar prominence and separateness to the word "Analytic" on each screen within the site.
10. The word "Analytic" is the only word on the door of the company's offices. The word "Analytic" is displayed separately and prominently from the company's name as a whole on its letterhead, on its envelopes, and on its memo pads. The word "Analytic" is superimposed on any resume which the company receives from a candidate and then forwards to a corporate client for consideration. The word "Analytic" is given prominence on Analytic Recruiting's written fee agreements with those clients. The word "Analytic," and only that word, is on the company's holiday greeting cards and on notes the company writes to send holiday gifts to its clients.
11. Analytic Recruiting over the years has promoted itself with merchandise bearing the name "Analytic", e.g., tee shirts, pocket calenders, mouse pads and baseball caps all of which have been distributed by the hundreds to clients or candidates.
12. To the extent that either the local yellow pages or the National Directory for Executive Recruiters contains any classification of types of recruiting firms, the classification is of recruiting firms as either permanent or temporary ("contract"). There is no classification or type of recruiting firm known as an "analytic" recruiting firm.
13. In the ordinary course of business, Analytic Recruiting receives job descriptions from corporate clients for positions they wish to fill and advertises those descriptions in print and electronic media. To the extent that the descriptions contain the word "analyst" or some derivation of the word analysis, the word is invariably used in a context which provides some further description of the nature of the analytical position involved, e.g.: Business/Sales Analyst; Manager Risk Analysis; AVP Segmentation Analysis; Quantitative Business Analyst; Database Marketing Analyst.
14. Other than Analytic Resources, Analytic Recruiting has been the only recruiting firm using the word "analytic" or any derivation of the word "analysis" in its company name since its inception. David Carpenter ("Carpenter"), defendant's principal, conducted a web search for companies using the name "analytic" and found a number of other companies doing something other than recruiting, i.e. companies involved in graphic design, advertising, legal consulting, and market research, using "analytic" as the dominant term in its company name, including two other companies with the name "Analytic Resources."
15. Defendant Analytic Resources, LLC ("Analytic Resources") is a limited liability company located in Ardmore, Pennsylvania. Carpenter is the defendant's President and Director of Executive Recruiting. Analytic Resources began its operations in early February 2000.
16. Analytic Resources is a nationwide recruiting firm that specializes in placing individuals with strong statistical, quantitative, and analytical backgrounds in contract positions in quantitative marketing, telecommunications, pharmaceutical and financial services (i.e. consumer credit, banks, retail credit) industries.
17. Analytic Resources seeks to place candidates with corporate clients having sales in excess of one billion dollars ($1,000,000,000).
18. Since it began operation, Analytic Resources has grossed more than two and a half million dollars ($2.5 million) in revenue.
19. Carpenter conceived of the idea for Analytic Resources in February, 1999 while he was employed at Smith Hanley Consulting, a division of Smith Hanley and a competitor of Analytic Recruiting. As of 1999, Carpenter had been employed by Smith Hanley for six (6) years. Up until sometime in 1995, Carpenter placed candidates for permanent positions in the pharmaceutical industry involving clinical drug trials. Subsequently, Carpenter set up a contract staffing division to place candidates in contract positions in the same field.
20. Carpenter's intent at the time he conceived Analytic Resources was to create a contract staffing firm for the pharmaceutical and marketing science or quantitative marketing industries.
21. Carpenter developed the name "Analytic Resources" sometime around July 14, 1999. Beginning in late September or early October 1999, Carpenter made repeated requests of his attorney to complete the filing of the Certificate of Organization for Analytic Resources. The Certificate of Organization was filed on December 13, 1999.
22. Carpenter testified that he chose the name "Analytic Resources" because he wanted a name that would mean something to the candidates and clients across the distinct industries that the company would be providing services to as a contract staffing company, namely, the pharmaceutical and financial services industries.
23. Wherever the name Analytic Resources appears, the name is followed by a further "signature" phrase such that the name and signature phrase together always read: "Analytic Resources — A Staffing Solutions Company." Mr. Carpenter added the signature phrase "A Staffing Solutions Company" because he wanted to fully identify the business in one burst and make sure that the public knew what Analytic Resources does.
24. Carpenter developed the Analytic Resources logo with the assistance of a graphic designer. The logo prominently focuses on the word "Analytic" and presents that word on a separate line in a distinct and different colored typeface from the word "Resources," which appears in much smaller print underneath the word "Analytic". The logo is used on virtually all of defendant's communications, electronic and print.
25. Carpenter testified that he selected the logo because it is very bold, has a "can't miss it" feel, and is a play on the mathematical symbol of a square root. Carpenter stated that he had experienced great success with a logo which had utilized mathematical symbols at Smith Hanley, and that he hoped to take advantage of a visual association between Analytic Resources and the people with quantitative backgrounds that it was servicing. When he selected the logo, Carpenter intended the dominant portion of the logo to be the character "A."
27. Analytic Resources does not advertise in print media. Carpenter anticipated that the company would advertise in trade journals when he first conceived of the new business. However, Carpenter testified that he has found print media to be unsuccessful and too passive. He also testified that it would be too costly for a start-up company.
28. Defendant advertises primarily through electronic media and by attending trade shows. The company has spent approximately $30,000 in advertising subscriptions to internet bulletin boards such as Monster.com, Headhunter.net and Dice.com. Since February, 2000, defendant has attended three trade shows sponsored by the National Conference for Database Marketing ("NCDM"), and is scheduled to attend one in the Summer 2001 and another one later in December 2001. Jim Sunderhauf ("Sunderhauf"), Defendant's Director of Business Services, is advertised as a featured speaker from Analytic Resources at the upcoming NCDM conference and is a regular speaker at these conferences.
29. Analytic Resources has utilized direct mailing/marketing on two occasions. In each instance, a direct mail card was sent to between 1,500-1,800 candidates. The mailings contained the defendant's name and logo and also identified defendant by the full company name, phone number, title and email address.

B. Permanent vs. Contract Recruiting

30. Contract recruiting involves the temporary placement of a candidate who is an employee of the recruiting firm and is then contracted to the corporate client for a temporary assignment. The recruiting firm employs the candidate for the life of the contract and is responsible for paying and administering the candidate's salary and any employment benefits.
31. Permanent recruiting involves the placement of a candidate at a corporate client by which that candidate immediately becomes an employee of the client, and the recruiting firm has no further relationship with or responsibility for the candidate.
32. The permanent recruiting firm is compensated with one up front lump sum payment by the corporate client of a contingent fee which is generally a percentage of the candidate's first year salary in his permanent position. The contract recruiting firm is paid periodically by the corporate client for the services of the contract employee and makes a profit from the difference between the amount charged to the corporate client and the relatively lower amount paid by the recruiting firm to the employee for wages and benefits.
33. The skills involved and required of someone working to place a candidate in a permanent position are entirely different from those used to fill a contract position. In the former situation the recruiter must be more relationship oriented with potential candidates since the candidate is actually being recruited to make a career change. A contract recruiter on the other hand is quickly trying to fill a temporary need for a ...

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