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American Infrastructure v. Zachry Construction Corp.

December 28, 2010

AMERICAN INFRASTRUCTURE, PLAINTIFF,
v.
ZACHRY CONSTRUCTION CORP., ET. AL., DEFENDANTS.



The opinion of the court was delivered by: Goldberg, J.

MEMORANDUM OPINION

In this trademark infringement case, Plaintiff, American Infrastructure, Inc. (AI), seeks to enjoin Defendants, Zachry Construction Corp. (ZCC) and Zachry American Infrastructure (ZAI), from using the "Zachry American Infrastructure" mark and logo.*fn1 Plaintiff's complaintalleges trademark infringement in violation of the Lanham Act, 15 U.S.C. § 1125, et seq.,*fn2 and unfair competition under Pennsylvania common law. Before the Court are Plaintiff's and Defendants' cross motions for summary judgment. For the reasons set forth below, Plaintiff's motion will be denied and Defendants' motion will be granted.

I. BACKGROUND

Unless specified, the following facts are undisputed.

A. American Infrastructure

Plaintiff, American Infrastructure, Inc., is a Delaware corporation with its principal place of business in Worcester, Pennsylvania. Plaintiff began operating in Pennsylvania in 1939 under the name "Allan A. Myers & Son." In 1998, Plaintiff changed its trade name to "American Infrastructure," but in Pennsylvania and Delaware, Plaintiff continues to operate under the name "Allan A. Myers, a company of American Infrastructure." (Defs.' St. of Facts ¶¶ 1, 6, 7, 13.)*fn3

In 1998, Plaintiff acquired the Maryland construction business "T.C. Simons." In 2000, Plaintiff acquired a Virginia business "R.G. Griffith." In 2003, Plaintiff renamed its Maryland business "American Infrastructure - Maryland" and in 2007 renamed its Virginia business "American Infrastructure - Virginia." (Defs.' St. of Facts ¶¶ 7, 9-11.)

Today, after the above acquisitions and name changes, Plaintiff is made up of four business units: Allan A. Myers; American Infrastructure - Maryland; American Infrastructure - Virginia; and Independence Construction Materials,*fn4 all of which conduct business in the Mid-Atlantic region, which includes Pennsylvania, New Jersey, Delaware, Maryland, and Virginia. (Pl.'s Br. Summ. J. 2; Defs.' St. of Facts ¶ 15.)

According to Plaintiff, since 1998 it has used "American Infrastructure"as its service mark and trade name to identify a wide variety of construction services including, construction management, construction planning, and construction of water, wastewater plants, pipelines, roads, highways and bridges. (Pl.'s Br. Summ. J. 2.) Plaintiff claims that it began using the "American Infrastructure"mark in three stylized formats in 2000: (1) "American Infrastructure" plus its icon; (2) "Allan A. Myers, a company of American Infrastructure" and the icon; and (3) "R.G. Griffith, a Company of American Infrastructure" and the icon. (Pl.'s Br. Summ. J. 3.)

Defendant takes issue with Plaintiff's claim that it uses "American Infrastructure" to identify its services, and asserts that Plaintiff uses a variety of names and marks, which are independent, subject to separate trademark applications and differ in appearance. Defendants also argue that Plaintiff is involved in infrastructure construction but has not presented evidence to support its claim that it engages in construction management or planning. (Defs.' Resp. to Pl.'s St. of Facts ¶¶ 1, 10.)

According to Plaintiffs, between 1998 (when the mark was adopted), and 2008, its annual revenues grew from $142 million to almost $485 million, with contracts ranging in value from $250,000 to $170 million. Plaintiff claims to have 1,500 full-time employees and "hundreds of satisfied customers,"40% to 60% of which are government entities. Plaintiff is approximately the 25th largest heavy civil contractor in the country and the 11th largest contractor in the Mid-Atlantic. (Pl.'s Br. Summ. J. 2-3.)

Defendants note that Plaintiff's revenue growth was due, in part, to the acquisition of other companies. Additionally, Defendant alleges that Plaintiff's customer claims are misleading in that its customer list includes vendors, engineers, suppliers and other contacts including law firms, and there is no evidence that the customers were "satisfied." (Defs.' Resp. to Pl.'s St. of Facts ¶ 2.)

B. Zachry American Infrastructure and Zachry Construction Company The Zachry business began in Texas 80 years ago and presently includes over 30 companies that provide a range of goods and services. According to Defendants, ZCC and ZAI are maintained as distinct entities. Both companies are incorporated in Delaware, with their principal places of business in San Antonio, Texas. ZCC is principally engaged in construction services including industrial construction, heavy civil construction and commercial construction, with annual revenues of approximately $400 million. In its marketing activities, ZCC does not use the ZAI mark. (Defs.' Br. Summ. J. 6-7.)

According to Defendants, ZAI was established and began using the "Zachry American Infrastructure" mark in 2005. Defendants assert that ZAI has no construction operations, is not a construction company, and that ZAI was not created to provide revenue streams to ZCC, but rather, to enter a new market involving finance. Defendants state, "ZAI is involved in the financial side of large, privately owned infrastructure projects" in which "ZAI assists with project financing via public-private partnerships (PPP) for road, rail, and utilities, and roadway electronic toll collection services." As of its summary judgment submission, ZIA had only been awarded one contract and had retained ZCC to provide the construction services for that project. (Defs.' Br. Summ. J. 8.)

Defendants further allege that they have not had any development projects in states where Plaintiff operates, and urge that there is no evidence that Plaintiff has lost any business opportunities to, or been in competition with, ZAI. (Defs.' Br. Summ. J. 8.)

Plaintiff counters that contrary to Defendants' assertion that ZAI is involved only in the financial side of infrastructure projects, ZAI's offerings include development, design, construction, ownership, operation and maintenance. (Pl.'s Resp. to Defs.' St. of Facts ¶ 24.) Therefore, according to Plaintiff, "[a]lthough Zachry American Infrastructure's precise business model differs somewhat from that of Plaintiff, some of the services offered to the ultimate customer are identical. To wit, both Plaintiff and Defendants are engaged in the construction of road, highway, bridge and water projects for public entities." (Pl.'s Br. Summ. J. 6-7) (citing to the ZAI brochure: "ZAI was formed to pursue concession type infrastructure projects" . . . "We provide a full-service package that encompasses the finance, delivery and operation of transportation infrastructure projects.")

Plaintiff also points out that Defendants' outside counsel was aware of Plaintiff and its mark prior to the decision to proceed with forming ZAI and beginning to trade under the name "Zachry American Infrastructure." (Pl.'s Br. Summ. J. 6.)

Lastly, while Plaintiff agrees that the mark was established in 2005, it argues that Defendants did not begin to use the "Zachry American Infrastructure" service mark and trade name until a later date.(Pl.'s Resp. to Defs.' St. of Facts ¶ 30; Pl.'s Br. Summ. J. 5.)

II. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 56(c), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to summary judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In order to defeat a motion for summary judgment, disputes must be both (1) material, meaning concerning facts that will affect the outcome of the issue under substantive law, and (2) genuine, meaning the evidence must be such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

A party moving for summary judgment has the initial burden of supporting its motion with evidence that would be admissible in a trial. Id. If this requirement is satisfied, the burden shifts to the non-moving party to "set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e)(2). The non-moving party may meet this burden either by submitting evidence that negates an essential element of the moving party's claims, or by demonstrating that the movant's factual evidence is insufficient to establish an essential element of its claims. Celotex, 477 U.S. at 331.

The non-moving party cannot avert summary judgment with speculation or conclusory allegations such as those found in the pleadings, but rather, must present evidence from which a jury could reasonably find in its favor. Ridgewood Bd. of Edu. v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir. 1999). In reviewing a motion for summary judgment, the court "does not make credibility determinations and must view facts and inferences in the light most favorable to the party opposing the motion." Siegel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1127 (3d Cir. 1995).

Where cross motions for summary judgment have been filed, as is the case here, the following standards apply:

In cases where the parties filed cross-motions for summary judgment, each side essentially contends that no issue of material fact exists from its perspective. We must, therefore, consider each motion for summary judgment separately. The standards under which we grant or deny summary judgment do no change because cross motions are filed. Each party still bears the initial burden of establishing a lack of genuine issues of material fact. Such contradictory claims do not necessarily guarantee that if one party's motion is rejected, the other party's motion must be granted.

Williams v. Philadelphia Housing Authority, 834 F.Supp. 794, 797 (E.D.Pa. 1993) aff'd 27 F.2d 560 (3d Cir. 1994) (citations omitted).

III. APPLICABLE PRECEDENT - TRADEMARK INFRINGEMENT

To prevail on its claim of trademark infringement and unfair competition under the Lanham Act, Plaintiff must establish that (1) its mark is valid and protectable; (2) it owns the mark;*fn5 and (3) defendant's use of the mark to identify goods or services is likely to cause confusion. Checkpoint Systems, Inc. v. Check Point Software Technologies, Inc., 269 F.3d 270, 279 (3d Cir. 2001).*fn6

Where a mark is federally registered and has become incontestable, validity, protectability and ownership are proven. Ford Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277, 291 (3d Cir. 1991) (citing Opticians Ass'n. of America v. Independent Opticians of America, 920 F.2d 187, 192 (3d Cir. 1990)). Here, Plaintiff's mark is not federally registered, therefore the primary issue before the Court is whetherPlaintiff has established that "American Infrastructure"is a valid, legally protectable trademark.

In order to determine validityand protectablility, a court must examine and then place the mark into one of the following four categories:arbitrary or fanciful, suggestive, descriptive, or generic. E.T. Browne Drug Co. v. Cococare Products, Inc., 538 F.3d 185, 191 (3d. Cir. 2008).

"Arbitrary or fanciful marks use terms that neither describe nor suggest anything about the product, they bear no logical or suggestive relation to the actual characteristics of the goods." A&H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 221 (3d Cir. 2000) (citing A.J. Canfield Co., 808 F.2d 291, 296 (3d Cir. 1986)). Examples of arbitrary marks include "Camel" cigarettes, "Rainbow" bread and "Apple" computers. Examples of fanciful marks include "Google" search engine and "Xerox" photocopy equipment. 2 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition §§ 11:8, 11:13 (4th ed. vol. 2, 2010) (hereinafter McCarthy).

Suggestive marks "require consumer 'imagination, thought or perception' to determine what the product is." A&H Sportswear, 237 F.3d at 221 (citing A.J. Canfield, 808 F.2d at 297). Examples of suggestive marks include "Sheer Elegance" pantyhose, "Bear" parkas, ...


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