Filed April 28, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 99-1299
TIMES MIRROR MAGAZINES, INC.
v.
LAS VEGAS SPORTS NEWS, L.L.C.,
d/b/a LAS VEGAS SPORTING NEWS,
Appellant.
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 98-cv-05768)
District Judge: Honorable Bruce W. Kauffman
Argued: January 13, 2000
Before: Alito, Barry and Aldisert, Circuit Judges.
(Filed: April 28, 2000)
Malcolm J. Gross (Argued)
Gross, McGinley, LaBarre & Eaton
Allentown, PA
Attorney for Appellee
Diane S. Danoff (Argued)
Dechert, Price & Rhoads
Philadelphia, PA
Attorney for Appellant
OPINION OF THE COURT
ALDISERT, Circuit Judge.
The issue on appeal is whether the district court erred by
preliminarily enjoining Las Vegas Sports News, L.L.C.,
d/b/a Las Vegas Sporting News ("LVSN"), from using the
phrase "Sporting News" in connection with its weekly
sports-betting publication under the Federal Trademark
Dilution Act of 1995, 15 U.S.C. S 1125(c) ("FTDA" or "Act").
The district court concluded that Times Mirror Magazines
Inc., owner of the federally registered mark "The Sporting
News," was likely to succeed on the merits of its dilution
claim against LVSN, because the mark was "famous" in its
niche market and LVSN's use of the title Las Vegas Sporting
News on its publication diluted the Times Mirror's mark by
blurring its distinctiveness.
The district court had jurisdiction over the dilution
claims pursuant to 15 U.S.C. S 1121(a) and 28 U.S.C.
S 1338. We have jurisdiction pursuant to 28 U.S.C.
S 1292(a)(1). This appeal by LVSN was timelyfiled under
Rule 4, Federal Rules of Appellate Procedure.
LVSN contends that the district court erred by granting
Times Mirror preliminary injunctive relief because Times
Mirror failed to establish a likelihood of success on the
merits of its dilution claim or immediate irreparable harm.
We must decide whether the district court erred by holding
that (a) the mark "The Sporting News" was famous in the
sports periodicals market; (b) LVSN's use diluted the
strength of Times Mirror's mark by blurring its
distinctiveness and (c) Times Mirror's 15-month delay in
bringing suit did not preclude a finding that LVSN's use
would immediately cause irreparable harm to Times Mirror.
In reviewing the grant or denial of a preliminary
injunction, we consider the following:
1. The law has entrusted the power to grant or
dissolve an injunction to the discretion of the trial
court in the first instance, and not to the appellate
court.
2
2. Unless the trial court abuses that discretion,
commits an obvious error in applying the law or
makes a serious mistake in considering proof, the
appellate court must take the judgment of the trial
court as presumptively correct.
3. This limited review is necessitated because the
grant or denial is almost always based on an
abbreviated set of facts, requiring a delicate
balancing of the probabilities of ultimate success at
final hearing with the consequences of immediate
irreparable injury which could possibly flow from
the denial of preliminary relief.
4. In exercising its limited review of the grant or
denial of preliminary injunctive relief, the appellate
court asks: (a) Did the movant make a strong
showing that it is likely to prevail on the merits? (b)
Did the movant show that, without such relief, it
would be irreparably injured? (c) Would the grant
of a preliminary injunction substantially have
harmed other parties interested in the proceedings?
(d) Where lies the public interest?
5. The applicant for a preliminary injunction bears
the burden of establishing that a right to such
injunctive relief and that irreparable injury will
result to him of it is not granted. Moreover, we
have emphasized the elementary principle that a
preliminary injunction shall not issue except under
a showing of irreparable injury.
A.O. Smith Corp. v. FTC, 530 F.2d 515, 525 (3d Cir. 1976);
see Loretangeli v. Critelli, 853 F.2d 186, 193 (3d Cir. 1988).
I.
In 1886, the phrase "The Sporting News" was granted
federal trademark registration and since that time has been
the banner headline on a weekly publication, entitled The
Sporting News. The mark's present owner, Times Mirror
Magazines, Inc., publishes The Sporting News and operates
an internet website devoted to its publication at
.
3
The Sporting News provides its readers with information
on baseball, basketball, football and hockey, and has a
weekly circulation of approximately 540,000 in the United
States and Canada. The Sporting News does not provide
any information on gambling, because Times Mirror
"believe[s] that there is a portion of the population that is
adamantly opposed to gambling and that they would not
look favorably on any of [its] products if they thought [the
magazine was] promoting gambling in any way." D. Ct. Op.
at 2 (alteration in original). The magazine is advertised on
television, in direct mail solicitations, in promotions and
occasionally on the radio. It is typically sold for $2.99, but
nine special content issues are sold each year for $3.99.
Over the last several years, Times Mirror has invested
millions of dollars in The Sporting News in an attempt to
improve the quality of its magazine and to increase
readership.
LVSN publishes Las Vegas Sporting News, which
contains articles, editorials and advertisements on sports
wagering "for the sports gaming enthusiasts or individuals
that like to take a risk." App. at 41 (Testimony of LVSN
publisher, Dennis Atiyeh). Las Vegas Sporting News is
published 45 times a year and generally has a circulation
of 42,000, but some special editions have had a circulation
of up to 100,000. The publication is sold for $2.99 at
several hundred newsstands across the country, but most
copies are given away in gambling casinos free of charge.
In 1997, LVSN publisher Dennis Atiyeh changed the
name of his publication from Las Vegas Sports News to Las
Vegas Sporting News. The publisher says that he changed
the publication's title for two reasons: (1) the previous
publisher of Las Vegas Sports News had a poor reputation,
having fallen into disrepute with gambling casinos and (2)
the term "sporting" more accurately reflected the
publication's content, because the publication was a"sports
gaming" publication, and not purely a "sports publication."
D. Ct. Op. at 3. Atiyeh admits that at the time he changed
the name of his publication, he was familiar with Times
Mirror's publication The Sporting News. Since the 1997
name change to Las Vegas Sporting News, circulation of the
publication has increased, but not substantially.
4
Times Mirror first learned that LVSN was publishing Las
Vegas Sporting News in August 1997. On September 24,
1997, Times Mirror sent LVSN a cease and desist letter,
which read in part:
It has recently come to my attention that your
company is marketing a sports magazine entitled Las
Vegas Sporting News. Apparently, this is a relatively
recent change, since the masthead page of your
magazine makes reference to Las Vegas Sports News,
stating, in part, that, "Las Vegas Sports News . . . is
published weekly . . . ."
. . . . It would appear that your company is
attempting to unlawfully appropriate the good will that
is associated with our federally registered trademark.
In view of the likelihood of consumer confusion, we
hereby demand that you (1) immediately cease and
desist from any further use of the term "Las Vegas
Sporting News," and (2) select a name to identify your
product that is not confusingly similar to our "The
Sporting News" trademark.
App. at 263-264 (citations omitted).
LVSN had not ceased using the phrase "Sporting News"
in connection with its weekly publication. In October 1998,
after settlement negotiations between Times Mirror and
LVSN proved unsuccessful, Times Mirror retained Glenn
Hauze, a private investigator in Pennsylvania, "to gain as
much information as possible regarding the availability of
the Las Vegas Sporting News," in anticipation of litigation.
App. at 31. Hauze began his investigation by visiting three
newsstands in or around Lehigh Valley, Pennsylvania. The
first newsstand he visited was in Plumsteadville, and it
carried both The Sporting News and Las Vegas Sporting
News. Las Vegas Sporting News "was up on the shelf with
the other sporting magazines," but The Sporting News "was
down amongst the tabloids." D. Ct. Op. at 6. The following
day, Hauze found copies of Las Vegas Sporting News for
sale at newsstands in Allentown and Quakerville. At the
Allentown newsstand, Las Vegas Sporting News and The
Sporting News were displayed within inches of each other in
5
a bay window in front of the store, along with a large
number of other sporting type publications.
John Kastberg, vice-president of Times Mirror's The
Sporting News, conducted his own investigation in
December 1998, during which he visited three newsstands
in New York City:
I went to a newsstand in Penn Station which is a train
terminal in New York, I went to Barnes & Noble in New
York and I went to a newsstand in Grand Central
Terminal which is another train station in New York.
. . . [W]hen I went to Penn Station I asked the guy "Do
you have the Las Vegas Sporting News," and he
handed me the Times Mirror Sporting News. . . . I went
to the Barnes & Noble, asked the same question, got
Times Mirror Sporting News and the same thing
happened at Grand Central. All three times I was
handed the Times Mirror Sporting News when I asked
for Las Vegas Sporting News.
App. at 24-25.
Two weeks after Hauze's investigation, Times Mirrorfiled
a complaint in district court, charging LVSN with infringing
Times Mirror's registered mark in violation of section 32 of
the Lanham Act, 15 U.S.C. S 1114(1); with false designation
of origin in violation of section 43(a) of the Lanham Act, 15
U.S.C. S 1125(a); with trademark dilution in violation of
section 43(c) of the Lanham Act, 15 U.S.C. S 1125(c); and
with common law unfair competition and infringement.
On December 3, 1998, both parties participated in an
evidentiary hearing on Times Mirror's motion for a
preliminary injunction, in which it sought to enjoin LVSN
from using the phrase "Sporting News" on its publication.
In its March 4, 1999 Order and Memorandum Opinion, the
district court concluded that Times Mirror was likely to
succeed on the merits of its federal trademark dilution
claim and consequently granted Times Mirror's request for
a preliminary injunction, thereby enjoining LVSN from
using the phrase "Sporting News" in connection with its
weekly publication. The district court granted the
preliminary injunction solely on trademark dilution by
blurring grounds and did not consider Times Mirror's other
6
claims. The parties subsequently agreed inter alia that the
preliminary injunction would be stayed pending appeal to
this court.
II.
The Federal Trademark Dilution Act of 1995 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.
15 U.S.C. S 1125(c)(1).
The federal cause of action for trademark dilution 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. 4 McCarthy on
Trademarks and Unfair Competition S 24:70 (4th ed. 1997).
The dilution doctrine is founded upon the premise that a
gradual attenuation of the value of a famous trademark,
resulting from another's unauthorized use, constitutes an
invasion of the senior user's property rights in its mark and
gives rise to an independent commercial tort for trademark
dilution. Id.
To establish a prima facie claim for relief under the
federal dilution act, the plaintiff must plead and prove:
1. The plaintiff is the owner of a mark that qualifies
as a "famous" mark in light of the totality of the
eight factors listed in S 1125(c)(a),
2. The defendant is making commercial use in
interstate commerce of a mark or trade name,
3. Defendant's use began after the plaintiff 's mark
became famous, and
7
4. Defendant's use causes dilution by lessening the
capacity of the plaintiff 's mark to identify and
distinguish goods or services.
See 4 McCarthy, supra, S 24:89; see also Hershey Foods
Corp. v. Mars, Inc., 998 F. Supp. 500, 504 (M.D. Pa. 1998)
(quoting 4 McCarthy, supra). A court may consider the
following eight non-exclusive factors in determining the
famousness vel non of a mark:
(A) the degree of inherent or acquired distinc tiveness
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 are a in
which the mark is used;
(E) the channels of trade for the goods and se rvices
with which the mark is used;
(F) the degree of recognition of the mark in t he
trading areas and channels of trade used by the
marks' owner and the person against whom the
injunction is sought;
(G) the nature and extent of use of the same o r
similar marks by third parties; and
(H) 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. S 1125(c)(1)(A)-(H).
The district court held Times Mirror established a
likelihood of success on the merits of its federal dilution
claim against LVSN, because (1) Times Mirror's mark"The
Sporting News" was famous; (2) LVSN made commercial use
in interstate commerce of the name "Las Vegas Sporting
News"; (3) Times Mirror's mark became famous before LVSN
began using the name "Las Vegas Sporting News" and (4)
LVSN's use of that name diluted the strength of"The
8
Sporting News" mark. Because Appellant only challenges
the first and last prongs of Times Mirror's prima facie claim
for dilution, we focus our attention on the district court's
findings that "The Sporting News" is a famous mark under
the Act and that LVSN's use diluted the strength of Times
Mirror's mark.
III.
LVSN argues that the district court erred in granting
Times Mirror a preliminary injunction because its mark
"The Sporting News" is not famous and because the court
did not make a separate finding as to the distinctiveness of
Times Mirror's trademark.
A.
Appellant contends that "The Sporting News" cannot be
famous under the Act because it is not famous to the
general public, and "substantial case law indicates that
marks famous in a specialized market, rather than well-
known to the general public, should not be considered
`famous' under the federal dilution statute." Appellant Br.
at 23 (citing Washington Speakers Bureau, Inc. v. Leading
Authorities, Inc., 33 F. Supp.2d 488, 503 (E.D. Va. 1999)).
However, in the case Appellant cites for its theory, the court
did not specifically adopt or reject a niche market theory for
fame. See Washington Speakers Bureau, Inc., 33 F. Supp.2d
at 503 ("In the instant case, it is ultimately unnecessary to
resolve this still-unsettled question, since even if fame in a
niche market were sufficient to establish fame under the
Act, consideration of the statutory factors reveals that [the
plaintiff] has failed to make even this demonstration.").
Thus, this case is not particularly helpful to our analysis.
We recognize that not all courts' decisions have been
precise in addressing the question whether a mark can be
famous in a niche market. The Court of Appeals for the
Seventh Circuit has addressed the niche market debate:
At an initial glance, there appears to be a wide
variation on this issue [of whether a mark famous in a
niche market is entitled to protection under the FTDA].
9
Some cases apparently hold that fame in a niche
market is insufficient for a federal dilution claim, while
some hold that such fame is sufficient. However, a
closer look indicates that the different lines of authority
are addressing two different contexts. Cases holding
that niche-market fame is insufficient generally
address the context in which the plaintiff and
defendant are using the mark in separate markets. On
the other hand, cases stating that niche-market
renown is a factor indicating fame address a context
. . . in which the plaintiff and defendant are using the
mark in the same or related markets.
Syndicate Sales, Inc. v. Hampshire Paper Corp. , 192 F.3d
633, 640 (7th Cir. 1999) (internal footnotes omitted); see
also Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 222 (2d
Cir. 1999) ("[D]ilution can occur where the[defendant's] use
competes directly with the [plaintiff 's] as well as where the
[defendant] is in a non-competing market. In general, the
closer the products are to one another [in the marketplace],
the greater the likelihood of both confusion and dilution.").
The Restatement (Third) of Unfair Competition lends
further support to the theory that niche market fame is
sufficient to protect a mark from dilution within that
market:
A mark that is highly distinctive only to a select class
or group of purchasers may be protected from diluting
uses directed at that particular class or group. For
example, a mark may be highly distinctive among
purchasers of a specific type of product. In such
circumstances, protection against a dilution of the
mark's distinctiveness is ordinarily appropriate only
against uses specifically directed at that particular
class of purchasers . . . .
Restatement (Third) of Unfair Competition S 25 cmt. e (1995
Main Vol.); see 4 McCarthy, supra,S 24:112. We are
persuaded that 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.
10
The district court determined that Times Mirror and
LVSN competed in the same, or at least significantly
related, markets--namely, the sports periodicals market.
LVSN contends that its readers, who essentially are
interested in wagering on sports, are distinct from the
readers of The Sporting News, who are interested in sports
generally. We find such a distinction to be without merit.
Surely many, if not the vast majority, of those individuals
who gamble on sports in Las Vegas also follow the sports
on which they are wagering. We conclude therefore that the
district court did not err by finding that LVSN and Times
Mirror shared a common market. Because a mark can be
famous in a niche market where the mark has a high
degree of distinctiveness within the market and where the
plaintiff and defendant operate within or along side that
market, we hold that the district court did not commit an
obvious error by holding that the mark "The Sporting News"
was famous in its niche and therefore entitled to protection
under the FTDA against LVSN's use of a similar mark in
the same market.
B.
LVSN also argues that "The Sporting News" is not famous
because it is merely a descriptive mark and does not satisfy
the eight statutory factors for fame listed in 15 U.S.C.
S 1125(c)(1)(A)-(H). Because Appellant disputes the district
court's factual findings with regard to fame and its
application of the S 1125(c)(1) fame factors, we review each
factor of the district court's analysis and will not reverse
unless the district court committed an obvious error in
applying the law or made a serious mistake in considering
the proof presented. See A.O. Smith, 530 F.2d at 525.
The district court concluded that "The Sporting News"
mark was famous under S 1125(c)(1) for the following
reasons:
First, "The Sporting News" is a federally registered
trademark. Because a mark does not qualify for federal
trademark registration unless it is distinctive, see 15
U.S.C. S 1052, federal registration goes a long way
toward proving that the mark has inherent or acquired
11
distinctiveness. Second, "The Sporting News" has been
used on the magazine's banner headline since 1886.
Third, The Sporting News is advertised on television, in
direct mail solicitations and promotions, and,
occasionally, on the radio. In recent years, Times
Mirror has spent millions of dollars improving the
magazine. Fourth and finally, Times Mirror uses"The
Sporting News" trademark throughout the United
States and Canada and on the internet.
D. Ct. Op. at 8-9 (internal quotation marks, footnotes and
citations omitted). We now review the district court's
analysis of the famousness of the mark "The Sporting
News" and its application of the eight non-exclusive
statutory factors for famousness set forth in Part II, supra.
1.
Applying the first factor under 15 U.S.C. S 1125(c)(1), the
district court determined that "The Sporting News" had a
high degree of distinctiveness in the sports periodicals
market. Although the district court did not elaborate on
this finding, its factual conclusion was not erroneous.
The degree of acquired or inherent distinctiveness of a
mark bears directly upon the issue of whether that mark is
famous. See 15 U.S.C. S 1125(c)(1)(A). The mark "The
Sporting News" is not inherently fanciful or creative, and
thus the mark does not have a high degree of inherent
distinctiveness. We must therefore examine the degree to
which the mark has acquired distinctiveness by gaining
secondary meaning over time in the marketplace. To
determine whether a trademark has acquired
distinctiveness by the attachment of secondary meaning,
we examine the following considerations: (1) the length or
exclusivity of use of the mark; (2) the size or prominence of
the plaintiff 's enterprise; (3) the existence of substantial
advertising by the plaintiff; (4) established place in the
market and (5) proof of intentional copying. I.P. Lund
Trading v. Kohler Co., 163 F.3d 27, 42 (1st Cir. 1998). The
district court concluded that "The Sporting News," although
not a fanciful or arbitrary trademark, has acquired
secondary meaning, and thus distinctiveness in the sports
12
periodicals market, because it has been used in commerce
since 1886 and because Times Mirror has expended
millions of dollars in advertising and promoting their mark
through various media outlets. Times Mirror presented
evidence to support several of the considerations for
acquired distinctiveness set forth in I.P. Lund . We therefore
conclude that the district court did not err byfinding that
"The Sporting News" had gained secondary meaning and a
high degree of distinctiveness in its market.
2.
The district court also found that the second statutory
factor--extent and duration of use of the mark--weighed in
favor of finding the mark famous, because The Sporting
News has been continuously published since 1886. See
S 1125(c)(1)(B). We find that the district court did not err in
this respect.
3.
The district court found that the third statutory factor--
extent and duration of advertising--weighed in favor of
finding the mark famous, because Times Mirror presented
credible proof of extensive advertising and additional
publicity from the Internet. See S 1125(c)(1)(C). Here, too,
the district court did not err.
4.
The fourth factor is the geographical extent of the trading
area in which the mark is used. See S 1125(c)(1)(D). Since
1886, The Sporting News has grown to a circulation of over
540,000 in both Canada and the United States, as well as
a recent internet site. The district court found this evidence
supported a finding that the mark was famous and we will
not disturb it.
5.
The fifth and sixth factors for fame are the degrees of
recognition of the mark in its channels of trade and the
13
degree of recognition of the mark in the trading areas, see
S 1125(c)(1)(E)-(F), and the seventh factor is the nature and
extent of the use of a same or similar mark by third parties,
see S 1125(c)(1)(G). The district court did not explicitly
address these factors in its opinion. Nevertheless, the FTDA
does not require that courts strictly apply every factor in
the statute. See S 1125(c)(1) (providing that "a court may
consider factors such as, but not limited to") (emphasis
added). It was not an abuse of its discretion for the court
to omit explicit discussion of these factors in its analysis,
because the majority of the other fame factors weighed in
favor of finding the mark famous.
6.
Finally, the district court determined that the eighth
factor--whether the mark was registered--favored Times
Mirror, because "The Sporting News" was registered in
1886. See S 1125(c)(1)(H).
Accordingly, we hold that the district court did not err by
concluding that "The Sporting News" mark was famous in
the sports periodicals market.
IV.
As a final argument against the district court'sfinding
that "The Sporting News" mark was famous, LVSN contends
that S 1125(c)(1) requires that a mark be subject to a test
for fame and a separate test for distinctiveness under the
FTDA. Although some courts agree with Appellant's
contention,1 we are persuaded that this interpretation is
inconsistent with the language and construction of the
statute.
To be sure, S 1125(c)(1) does state that a court may
consider eight statutory factors, among others,"[i]n
determining whether a mark is distinctive and famous." 15
_________________________________________________________________
1. See, e.g., Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 216 n.2 (2d
Cir. 1999) ("McCarthy's treatise contends that the statute does not
include an independent requirement of distinctiveness. . . . We
disagree.")
14
U.S.C. S 1125(c)(1) (emphasis added). We believe, however,
that "distinctiveness" as used in S 1125(c)(1) is only a
synonym for "fame." Any other reading of the statutory
language will result in the statute being redundant because
the first statutory factor for fame is "the degree of inherent
or acquired distinctiveness" of the mark. See S 1125(c)(1)(A);
see also 4 McCarthy, supra, S 24:91 ("[T]here is . . . no
separate statutory requirement of `distinctiveness,' apart
from a finding that the designation be a `mark' that is
`famous.' `Distinctiveness' is used here only as a synonym
for `fame.' ").2 If a mark is famous, then it is presumed
distinctive. See Viacom, Inc. v. Ingram Enterprises, Inc., 141
F.3d 886, 890 n.6 (8th Cir. 1998). We conclude that there
is no separate statutory requirement of distinctiveness
apart from a finding of fame.
V.
LVSN argues also it was obvious error for the district
court to apply Judge Sweet's test for "dilution by blurring"
found in Mead Data Central, Inc. v. Toyota Motor Sales, Inc.,
875 F.2d 1026, 1035 (2d Cir. 1989) (Sweet, J., concurring).
Before discussing the mechanics of Judge Sweet's Mead
Data test for dilution, we first explain how trademark
dilution can occur. A trademark can be diluted two
different ways: by blurring or by tarnishment. Only dilution
by blurring is at issue in this appeal. "Blurring" in this
context means "to make dim, indistinct or indefinite."
Webster's Third New International Dictionary 243 (1968).
Blurring occurs when the defendant's use of its mark
causes the public to no longer associate the plaintiff 's
famous mark with its goods or services; the public instead
begins associating both the plaintiff and the defendant with
the famous mark. See I.P. Lund, 163 F.3d at 47-48; 4
_________________________________________________________________
2. The Trademark Review Commission Report, the impetus behind the
FTDA, stated: "The same type of evidence which is traditionally used to
prove distinctiveness can be used to prove fame. Although the registrant
is not required to prove distinctiveness apart from the import of
registration, any additional evidence of distinctiveness will ordinarily be
entitled to substantial weight." Report of the Trademark Review
Commission, 77 Trademark Rep. 375, 459-460 (1987).
15
McCarthy, supra, S 24:70. Dilution by blurring takes place
when the defendant's use of its mark causes the identifying
features of the plaintiff 's famous mark to become vague
and less distinctive. To prove dilution by blurring, the
owner of a famous mark must prove that the capacity of its
mark to continue to be strong and famous would be
endangered by the defendant's use of its mark. See 4
McCarthy, supra, S 29:94.
To determine whether LVSN's use blurred, and therefore
diluted, Times Mirror's mark for "The Sporting News," the
district court applied the dilution factors set forth in Judge
Sweet's concurrence in Mead Data:
1. similarity of the marks
2. similarity of the products covered by the marks
3. sophistication of consumers
4. predatory intent
5. renown of the senior mark
6. renown of the junior mark
Mead Data, 875 F.2d at 1035 (Sweet, J., concurring); see
D. Ct. Op. at 10-11.
Several courts and commentators have criticized Judge
Sweet's dilution test as the offspring of classical likelihood
of confusion analysis and not particularly relevant or
helpful in resolving issues of dilution by blurring. See, e.g.,
4 McCarthy, supra, S 24:94.1; see also, e.g., I.P. Lund, 163
F.3d at 49-50 (reiterating the criticisms of Judge Sweet's
dilution by blurring test). Instead of outright rejection of the
Sweet factors, most courts have improved upon the test's
shortcomings by supplementing the Sweet test with other
considerations more pertinent to the issue of dilution. See,
e.g., Nabisco, 191 F.3d at 227 ("We think it would be a
serious mistake at the outset of our consideration of the
new federal antidilution statute to limit ourselves to these
six factors or to any other putatively definitive list."). In
Nabisco, the Court of Appeals for the Second Circuit
articulated a more complete set of factors for dilution by
blurring, including
16
actual confusion and likelihood of confusion, shared
customers and geographic isolation, the adjectival
quality of the junior use, and the interrelated factors of
duration of the junior use, harm to the junior user,
and delay by the senior user in bringing the action.
Id. at 228. Because we consider the dilution analysis in
Nabisco helpful, we apply it to facts found by the district
court.
The district court concluded that
[t]his criticism [of Judge Sweet's dilution test]
notwithstanding, blurring sufficient to constitute
dilution requires a case-by-case factual inquiry, and in
this case, the Court finds that the Sweet factors are
useful in evaluating the likelihood that LVSN's use of
Las Vegas Sporting News lessens the capacity of The
Sporting News to identify and distinguish Times
Mirror's goods or services.
D. Ct. Op. at 11-12 (internal quotation marks and citations
omitted). Applying the Sweet factors, the district court
concluded that Times Mirror was likely to prevail on its
dilution claim based on the following facts:
First, the two marks are similar. Not only do the two
marks use dominant identical words, i.e., the words
"Sporting News," but they both print those words in
red lettering on a single line that spans horizontally
across the publication's cover, which generally features
a well-known sports figure. Las Vegas Sporting News
and The Sporting News use different type styles, and
LVSN outlines its mark in black whereas Times Mirror
outlines its mark in black and white. The lettering thus
is distinguishable, but similar nevertheless. Second,
both LVSN and Times Mirror use their mark to cover a
weekly publication. Third, the undisputed testimony
indicated that consumers do not purchase [these]
publications in a sophisticated manner, but tend to
select their purchase on "impulse," largely based on
the publication cover rather than the content. Fourth,
the similarity of the marks and their placement on the
publication cover might be coincidental, but the
evidence showed that the publisher of Las Vegas
17
Sporting News was aware of The Sporting News at the
time he changed the name of his periodical. Finally,
The Sporting News is well known, whereas Las Vegas
Sporting News is not.
D. Ct. Op. at 12-13. We hold that the district court did not
make an obvious error in applying these facts to Judge
Sweet's factors. Although the district court applied Judge
Sweet's test and did not explicitly adopt the Nabisco factors
or any other supplemental dilution factors, our application
of the Nabisco dilution factors to the facts supports the
district court's conclusion that LVSN diluted "The Sporting
News" mark by blurring its distinctive qualities.
Actual confusion has been shown to exist among those
selling the two publications, even though no consumer
surveys were submitted to the district court during the
preliminary injunction hearing. The evidence presented at
the hearing supports the finding that a strong likelihood of
confusion is present, because LVSN's mark and publication
cover are very similar to Times Mirror's mark and the cover
of The Sporting News. Sufficient evidence supports a finding
that customers who purchase these sports publications
are "unsophisticated consumers," because they often
buy on impulse and because the publications are
relatively inexpensive. Unsophisticated buyers lack the
discrimination and "are more vulnerable to confusion,
mistake and misassociations against which the trademark
protects." Nabisco, 191 F.3d at 220. Furthermore, LVSN
has a short duration of use because its first use of its new
publication name was in 1997.
Finally, Times Mirror did not unreasonably delay in
brining an action against LVSN. Times Mirror first
discovered the publication Las Vegas Sporting News in
August 1997. One month later, Times Mirror sent LVSN a
cease and desist letter, thereupon triggering a series of
correspondence and negotiations between the parties.
Times Mirror's delay was attributable to its belief that LVSN
would change the name of its publication. Once
negotiations failed, Times Mirror filed suit. Thus, Times
Mirror did not unduly delay filing an action against LVSN.
After weighing the dilution factors from Judge Sweet's
Mead Data concurrence as supplemented by the Nabisco
18
analysis, we conclude that the district court did not err by
finding that Times Mirror was likely to prevail on the merits
of its dilution claim.
VI.
LVSN contends also that the district court erred by
granting the preliminary injunction, because Times Mirror
failed to show that it would suffer irreparable harm if the
injunction was not issued. On this point, the district court
stated:
In the trademark context, irreparable harm may be
shown even in the absence of actual injury to
plaintiff 's business based on plaintiff 's demonstration
of a likelihood of success on the merits of its claim. The
Court therefore finds that in the absence of an
injunction, Times Mirror will suffer irreparable harm.
D. Ct. Op. at 13-14 (internal quotation marks and citations
omitted).
We have held that a lack of control over the use of one's
own mark amounts to irreparable harm. See Opticians
Ass'n v. Independent Opticians, 920 F.2d 187, 195 (3d Cir.
1990) (stating that potential damage to a mark holder's
reputation or goodwill or likely confusion between parties'
marks constitute irreparable injury for the purpose of
granting a preliminary injunction). LVSN argues that the
15-month delay, beginning when Times Mirror was on
notice of the new name of LVSN's publication and ending
when Times Mirror filed suit against LVSN, necessarily
shows that Times Mirror's injury, if any, is not immediate
and irreparable. This argument does not persuade us,
because the 15-month delay was attributable to
negotiations between the parties. We conclude that the
district court did not err by determining that Times Mirror
would be irreparably harmed if the preliminary injunction
did not issue.
* * *
We have also considered Appellant's contentions that the
district court erred by determining that the benefits from
19
preliminary injunctive relief outweighed the injury such
relief would cause LVSN and that the public interest would
be served by granting Times Mirror's motion for a
preliminary injunction. Neither contention has sufficient
merit to warrant further discussion.
The judgment of the district court will be affirmed.
20
BARRY, Circuit Judge, Dissenting.
How famous a mark must be before it can be afforded
protection under the Federal Trademark Dilution Act
("FTDA") is a question of first impression in this Circuit, a
question which implicates the expansion of trademark
rights under the Lanham Act and one which has received
much judicial attention elsewhere since the passage of the
FTDA. The correct answer to this question is of critical
importance in order that an appropriate balance between
free competition and property rights be maintained. 1 The
majority holds that the District Court did not err in finding
that "The Sporting News" mark was sufficiently famous to
merit protection under the FTDA. Because I conclude that
Times Mirror has not shown and, in my view, cannot show
that it is likely to satisfy the threshold fame requirement, I
respectfully dissent.
I.
Fame means FAME
The FTDA offers little guidance as to what is required to
find a mark famous. Thus, courts must rely on legislative
history and, where helpful, look to dilution theory which
has developed over years of judicial interpretation of state
anti-dilution statutes. Dilution theory in the United States
emanated from a 1927 Harvard Law Review article which
posited that protection against dilution would fill the gap in
trademark law left by infringement theory which only
provided protection when a junior user applied a
deceptively similar mark to similar goods to confuse a
competitor's consumers about the source of the goods. See
_________________________________________________________________
1. Commentators have warned that expansion of a dilution cause of
action could harm competition. See, e.g. , Mark A. Lemley, The Modern
Lanham Act and the Death of Common Sense, 108 Yale L. J. 1687 (May
1999); Glynn S. Lunney, Jr., Trademark Monopolies, 48 Emory L. J. 367
(Spring 1999); William Marroletti, Dilution, Confusion, or Delusion? The
Need for a Clear International Standard to Determine Trademark Dilution,
25 Brook. J. Int'l L. 659 (1999); Robert N. Klieger, Trademark Dilution:
The Whittling Away of the Rational Basis for Trademark Protection, 58 U.
Pitt. L. Rev. 789 (Summer 1997).
21
Frank I. Schechter, The Rational Basis of Trademark
Protection, 40 Harv. L. Rev. 813, 825 (1927). In the absence
of a dilution cause of action, trademark law was unable to
protect mark owners from the unauthorized use of a
deceptively similar mark placed upon dissimilar or non-
competing goods. Before passage of the FTDA, state anti-
dilution statutes attempted to fill this gap in trademark
law. However, because truly famous marks -- and"truly"
will become the operative word here -- are ordinarily used
on a nationwide basis but only half of the states provided
remedies for dilution, Congress recognized the need for a
federal anti-dilution statute. See H.R. Rep. No. 104-374, at
4 (1995), reprinted in 1995 U.S.C.C.A.N. 1029. Accordingly,
the FTDA was passed to fill the gap and "to bring
uniformity and consistency to the protection of famous
marks." See id. at 3.
Historically, the Lanham Act has attempted to balance
the two competing goals of protecting consumers and
protecting a trademark owner's investment. The FTDA,
however, is concerned only with the latter:
It does not have those twin public policy goals of the
laws of trademark infringement[.] As a result there may
be a kind of judicial restraint about the new law. The
perception may be that it does not carry any
compelling need to protect the public, and that it
benefits only a coterie of American business elite, not
the general public.
Jerome Gilson, 2 Trademark Protection & Practice (1999)
S 5.12[1][e] at 5-272 to 5-273 (hereinafter "Gilson").
Moreover, there can be little doubt that Congress sought to
protect only a select and narrow class of truly famous and
well-recognized marks. "Without such a requirement, an
anti-dilution statute becomes a rogue law that turns every
trademark, no matter how weak, into an anti-competitive
weapon." 4 J. Thomas McCarthy, McCarthy on Trademarks
and Unfair Competition, (4th ed. 1999) S 24:108 at 24-210
(hereinafter "McCarthy"). "To save the dilution doctrine from
abuse by plaintiffs whose marks are not famous and
distinctive, a large neon sign should be placed adjacent
wherever the doctrine resides, reading: `The Dilution Rule:
Only Strong Marks Need Apply.' " 4 McCarthy S 24:108 at
22
24-209; see also 2 Gilson S 5.12[1][b] at 5-260 (referring to
class of trademarks protected by FTDA as "Supermarks").
The legislative history of the Act is crystal clear that
Congress intended courts to be highly selective in
determining which marks are famous and accorded those
truly famous marks an unprecedented degree of protection.
A 1987 Report of the Trademark Review Commission of the
United States Trademark Association (USTA) emphasized
how limited this universe should be: "We believe that a
limited category of trademarks, those which are truly
famous and registered, are deserving of national protection
from dilution[.] We therefore urge the adoption of a highly
selective federal dilution statute[.]" Trademark Review
Commission, Report & Recommendations, 77 Trademark
Rep. 375, 455 (1987).2 The Report of the Senate Judiciary
Committee on the precursor to the FTDA stated that the
1988 bill
creates a highly selective federal cause of action to
protect federally registered marks that are truly famous
from dilution of the distinctive quality of the mark. The
provision is specifically intended to address a narrow
category of famous registered trademarks where the
unauthorized use by others, on dissimilar products for
which the trademark is not registered, dilutes the
distinctiveness of the famous work[.]
Section 43(c) of the Act is to be applied selectively and
is intended to provide protection only to those marks
which are both truly distinctive and famous, and
therefore most likely to be adversely affected by
dilution. To protect these special marks, and to ensure
that the bill does not supplant the current protection of
trademarks based on the likelihood of confusion, the
committee amended the legislation to place greater
emphasis on the factors the courts must weigh in
determining whether a mark possesses a sufficient
_________________________________________________________________
2. In 1988, legislation based on the Commission's proposal for a dilution
statute limited only to "famous marks" was approved by the Senate, but
did not survive in the House of Representatives. Subsequently, the
Commission's proposal became, in large part, the basis for the FTDA.
See 4 McCarthy S 24:87.
23
level of fame and distinctive quality to qualify for
federal protection from dilution.
S. Rep. No. 100-515 (reproduced in 6 McCarthy App. A5, at
41-42)(emphasis added). Examples of truly famous marks
cited in a House Report on the FTDA included "Buick",
"Dupont", and "Kodak". See H.R. Rep. No. 104-374, at 4
(1995), reprinted in 1995 U.S.C.C.A.N. 1029, 1031. In a
nutshell, the legislative history amply supports the
conclusion that the FTDA should be restricted to a narrow
category of marks, ensuring that it does not swallow
infringement law by allowing mark owners to end-run a
likelihood of confusion analysis which they fear-- or,
indeed, know -- they cannot win.
Despite Congressional intent that the FTDA protect only
a narrow category of truly famous marks, some early
judicial interpretations of the Act granted dilution
protection after engaging in only a cursory analysis (or no
analysis at all) of the fame of the mark. See , e.g., Gazette
Newspapers, Inc. v. New Paper, Inc., 934 F. Supp. 688,
696-97 (D. Md. 1996)(no separate analysis of fame);
Hasbro, Inc. v. Internet Entertainment Group, Ltd. , No. 96-
130, 1996 WL 84853 (W.D. Wash. Feb. 9, 1996)(entering
preliminary injunction on dilution claim without discussing
fame). Little if any analysis, of course, would be required to
find marks such as "Buick", "Dupont" or "Kodak" truly
famous or, in the context of sports with which we deal here,
that the mark "New York Yankees" is so famous that even
non-sports fans are well aware of it. If, however, marks
which are not such household names can be protected by
the Act -- and, in my view, that is a big "if " -- those marks
must be subjected to a rigorous analysis. As one
commentator has noted with some alarm:
[C]ourts thus far have shown little inclination to limit
protection to the truly famous marks envisioned by the
drafters of the [FTDA]. Instead, the courts, when they
acknowledge the fame requirement at all, simply state
a mark's fame in conclusory terms without attention to
the eight fame factors. Unless courts strictly adhere to
the admittedly vague dictates of the federal dilution
statute, federal dilution protection will surely give rise
to a broad regime of trademark rights in gross.
24
Robert N. Klieger, Trademark Dilution: The Whittling Away
of the Rational Basis for Trademark Protection, 58 U. Pitt. L.
Rev. 789, 68 (Summer 1997).
This concern has not gone unnoticed, and courts are now
taking pains to emphasize the rigor of the fame
requirement. For example, the Ninth Circuit recently set
itself apart from the expansive interpretations of the FTDA
by other courts by vacating a permanent injunction after
finding that plaintiff 's trademarks were not sufficiently
famous for FTDA protection and remanding with
instructions to enter summary judgment for defendant. See
Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir.
1999). There, Avery Dennison, the seller of office supplies
and industrial fasteners, sued an Internet e-mail business
which offered "vanity" e-mail addresses, alleging that
defendant's maintenance of the domain name registrations
and diluted Avery Dennison's
trademarks. The "Avery" mark had been in continuous use
since the 1930s and had been registered since 1963. The
"Dennison" mark had been in continuous use since the late
1800s and registered since 1908. See Avery Dennison, 189
F.3d at 873. Avery Dennison's annual advertising
expenditures exceeded $5 million, and its annual sales
reached $3 billion (although no evidence indicated what
percentage of these dollar figures applied exclusively to the
"Avery" or "Dennison" trademarks as opposed to the
company's other marks). See id. Avery Dennison also
maintained its own website.
After reviewing dilution theory and the legislative intent
behind the FTDA, the Court emphasized the role of the
fame requirement in "reinstating the balance" in the
Lanham Act to avoid "over-protecting trademarks, at the
expense of potential non-infringing uses." Id . at 875.
Despite the fact that the registered marks had acquired
distinctiveness and that four of the eight statutory fame
factors favored a finding that the marks were famous, the
Ninth Circuit held that, as a matter of law, Avery Dennison
had failed to meet its burden of proving fame for two
reasons. Id. at 876-77. First, while recognizing that fame in
a "specialized market segment" might be adequate if the
"diluting uses are directed narrowly at the same market
25
segment," the Court noted that Avery Dennison provided no
evidence of customer overlap or that defendant's customers
possessed any degree of recognition of plaintiff 's marks. Id.
at 877-78. Second, widespread third-party use of the
names "Avery" and "Dennison" undermined the famousness
of the marks. Id. at 878. Thus, the Court held that the
marks were not entitled to protection under the FTDA. See
also I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 46
& 49 (1st Cir. 1998)(finding mark not famous and noting
"mark [must] be truly prominent and renowned"; "courts
should be discriminating and selective in categorizing a
mark as famous"); G. Kip Edwards, Developments in
Dilution Law, 579 PLI/Pat 209, 217 (Nov.-Dec. 1999)(noting
that many early judicial interpretations of the FTDA
neglected to heed Congressional intent that the Act be
applied sparingly to truly famous marks and mistakenly
granted protection to marks that were "famous" only within
a specialized market niche (citing Gazette Newspapers), but
noting that the "pendulum may be swinging back toward
protection only of truly famous marks" (citing Avery
Dennison)).
If one heeds the legislative history, it is simply beyond
the pale to find "The Sporting News" mark to be another
"Buick", "Dupont", or "Kodak", names which have long been
associated in the public's eye with a particular company or
a particular product and which immediately strike one as
being truly famous. Stated somewhat differently, tofind
that "The Sporting News" mark meets the fame
requirement, thus entitling it to the extraordinary
protection the FTDA provides -- a nationwide injunction --
would defeat Congress's deliberate design.
II.
Insufficient evidence of fame
The majority, after paying lip service to the fame
requirement, holds that the District Court did not err by
concluding that "The Sporting News" mark is famous in the
sports periodicals market, a "niche market". I disagree. For
starters, the legislative history does not mention much less
26
embrace a so-called "niche market" theory of fame.3 Beyond
that, the niche market theory risks lowering the bar for
trademark protection unless it is applied prudently to cases
which clearly call for such an analysis, and this is not one.
For one thing, The Sporting News is directed at the general
public via subscriptions and at newsstands, thereby
begging the question: is not the general public the
appropriate universe for assessing the fame of the mark?
But even if fame exclusively within the sports periodicals
market would be enough to establish fame under the FTDA,
the paltry evidence here does not permit any suchfinding.
Moreover, I take issue with the rather cursory discussion
by the majority, and by the District Court, of the eight
statutory factors for fame.
The fundamental problem with the majority's application
of the niche market theory, sometimes known as the"big
fish in a small pond theory," to the facts of this case is that
it is hard to conceive of any consumer goods or services
that are not in a narrow market of some type, be it luxury
cars, cameras, or sporting publications.
Courts approving the "big fish in a small pond" theory
of trademark dilution fail to recognize that it threatens
to overrun trademark infringement law. Trademark
_________________________________________________________________
3. The only reference in the legislative history that even comes close to
suggesting a so-called "niche-market" theory is found in a discussion of
the degree of a mark's recognition, where the Trademark Review
Commission noted that dilution might occur with respect to one universe
of consumers, but not necessarily to another. "For example, if a mark is
famous at the industrial level but not at the consumer level, protection
may be appropriate at the industrial level but not at the consumer level."
77 Trademark Rep. at 461. This reasoning may provide the basis for the
application of a niche market theory within a specialized industrial
niche. See, e.g., Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d
633, 640 (7th Cir. 1999)(finding niche market fame sufficient under
circumstances in which both parties operated within the narrow
wholesale market for plastic baskets used for funeral floral bouquets);
Avery Dennison, 189 F.3d at 877-78 (involving markets for office
products, industrial fasteners and e-mail addresses); Teletech Customer
Care Management (California), Inc. v. Tele-Tech Co., Inc., 977 F. Supp.
1407 (C.D. Cal. 1997)(involving "teleservicing industry" where both
parties provided services for large corporate clients).
27
infringement law permits similar, or even identical,
marks to coexist on non-competing goods. If even a
locally famous mark can preclude all other marks in
every channel of trade, then conceivably every
trademark can be used to create a monopoly in a word
or symbol -- a proposition clearly contrary to the intent
and practice of trademark law. It is possible tofind
virtually any mark to be "famous" within some market,
depending on how narrowly that market is defined.
Courtland L. Reichman, State and Federal Trademark
Dilution, 17 Franchise L. J. 111, 133 (Spring 1998).
If marks can be "famous" within some market, depending
on how narrowly that market is defined, then the FTDA will
surely devour infringement law. Indeed, the unauthorized
use of a mark in the same or a similar market is precisely
what good old-fashioned infringement principles have
traditionally been there to remedy once actual confusion or
likelihood of confusion has been shown, and there is simply
no need for dilution principles. Can one imagine a clearer
case for application of those principles than if one were to
begin manufacturing automobiles and calling those
automobiles "Buick"? Similarly, if the parties here operate
within the sports periodicals market, then this case, at
least in my view, is a garden variety infringement case, and
the complaint alleges just that.
Congress was quite clear, however, that the FTDA was
not designed for situations in which ordinary infringement
law provided a remedy but, rather, for those situations in
which a truly famous mark on dissimilar products deserves,
but cannot receive, protection under infringement law --
those situations in which, for example, no one would ever
confuse that truly famous mark with the goods or services
to which it has been wrongly attached. Congress was
explicit as to where protection was warranted: "DUPONT
shoes, BUICK aspirin, and KODAK pianos." H.R. Rep. No.
104-374, at 4 (1995), reprinted in 1995 U.S.C.C.A.N. at
1030. The extensive relief the FTDA authorizes, which gives
the owner of the famous mark a virtual monopoly by
precluding all others from using the mark "regardless of the
presence or absence of . . . competition between the owner
of the famous mark and other parties, or likelihood of
28
confusion," is itself something federal trademark law had
not before seen, and surely was not meant to be accorded
to any marginally "famous" mark. 15 U.S.C.S 1127. It
follows inexorably that if a mark is famous in the general
public, it is also famous in its niche market and, in such a
case, dilution and infringement theories need not be
mutually exclusive. Before, however, a Court categorically
adopts the theory that a mark that is not generally
renowned, but famous only in its niche market, is entitled
to protection under the FTDA, the evidence of fame should
be rigorously examined. Had such an examination been
performed here, only one conclusion could have been
reached: the evidence of fame is woefully lacking.
A. Factor (F)
The FTDA lists eight non-exclusive statutory factors for
fame which a court may but is not required to consider.
The "may" is important because it would make little sense
to require that a mark which immediately strikes one as
truly famous -- again, "Buick", "Dupont", or "Kodak" -- be
analyzed for fame in accordance with these factors,
although certainly such an analysis would confirm the
immediate impression of fame. The less truly famous a
mark is, however, the more rigorous the analysis of the
statutory factors must be in light of the evidence of record.
It is Factor (F), "the degree of recognition of the mark in
the trading areas and channels of trade used by the marks'
owner and the person against whom the injunction is
sought," which gives the FTDA's fame requirement its
"teeth." As the majority notes, however, the District Court
did not explicitly address this factor -- and neither did the
majority.
The guidance which Factor (F) affords to courts is
somewhat murky. The Act, for example, does not define
"channels of trade," although presumably that phrase
means the chain of distribution of the goods featuring the
mark in question, i.e. the route by which the goods travel
to the ultimate consumer -- here, from the publisher to the
reader. Importantly, although Factor (F) focuses the
analysis on the channels of trade in which the parties
29
operate, it does not dictate the conclusion that fame solely
within those channels of trade is enough for protection
under the FTDA.
According to the legislative history, a finding of fame
"requires substantial renown or fame within both the
trading area of the mark and the trading area of the other
party to the dilution suit." S. Rep. No. 100-515 (reproduced
in 6 McCarthy App. A5, at 43)(emphasis added); see also 77
Trademark Rep. at 461 (advocating that a mark"should be
well known to a substantial portion of the relevant
purchasers of the goods or services.")(emphasis added).
This, I note, is a higher standard than the"appreciable
number of persons" standard applied in an infringement
action in which a plaintiff may prevail only if it shows that
an appreciable number of ordinarily prudent purchasers of
the type of product in question are likely to become
confused as to the source of the goods by the defendant's
use of the mark. See 77 Trademark Rep . at 461; 4
McCarthy S 24:92 at 24-163.
The crux of any discussion of Factor (F) is whether Times
Mirror is likely to prove that its mark is recognized by a
substantial portion of LVSN's potential consumers. Again,
the FTDA does not quantify the requisite "degree of
recognition". Consequently, some commentators have called
for a clear percentage cut-off for consumer recognition.
McCarthy, for example, recommends that a plaintiff 's mark
must be known by more than 50% of the defendant's
potential customers in order to be considered "famous". See
4 McCarthy S 24:92 at 24-164; see also Xuan-Thao N.
Nguyen, The New Wild West: Measuring and Proving Fame
and Dilution Under the Federal Trademark Dilution Act, 63
Albany L. Rev. 201, 233 (1999)(advocating a 40% rate of
recognition among defendant's potential customers in a
nationwide survey). While I am not wed to any specific
minimum percentage for consumer recognition, I do take
issue with the fact that Times Mirror has been granted a
preliminary injunction without offering any evidence
whatsoever of consumer recognition in LVSN's channel of
trade.4
_________________________________________________________________
4. The majority averts its gaze from what little evidence does exist
relating to either party's channel of trade. The majority of LVSN copies
30
In the absence of evidence indicating that consumers in
LVSN's channel of trade recognize Times Mirror's mark, it
was wrong, in my view, for the District Court and the
majority to conclude that the publications share a common
market and that the mark is famous within that market.
The Sporting News, moreover, is available at newsstands to
members of the general public, just as Buick automobiles
and Kodak film are available to the general public.
Accordingly, to be entitled to a preliminary injunction, it
was incumbent upon Times Mirror to demonstrate that it is
likely to succeed in proving that its mark is truly famous
among members of the general public and, although this
should follow almost automatically, that its mark is
recognized by a substantial portion of LVSN's consumers --
those who like to gamble, who read gambling publications,
or who frequent casinos. Such a showing is typically
achieved through a properly-conducted recognition survey.5
_________________________________________________________________
(approximately 22,000 out of 42,000 in circulation) are made available at
no charge in Nevada. Many others are available at no charge at casinos
in Mississippi, Louisiana, Atlantic City, New Jersey and Foxwood,
Connecticut. Only a small percentage of copies is sold at newsstands. Of
the approximately 10,000 to 11,000 copies sent to a couple of hundred
newsstands in a handful of states, only approximately 1,500 are actually
sold; the rest are returned to the publisher. By contrast, The Sporting
News is available nationwide through subscriptions and at newsstands.
In addition, the record does not evidence much if any overlap in
advertising revenues or readership. Because LVSN is given away at
casinos, it survives primarily on its advertising revenues. LVSN's
advertisers tend to be "casinos, paging companies, [and] handicappers."
Times Mirror, 1999 WL 124416, *2. The Sporting News, on the other
hand, advertises, inter alia, sports memorabilia, collectibles,
commemorative collections, apparel, sporting equipment, tobacco
products and automobiles. LVSN's competitors for advertising dollars
and readership are not sports magazines, but gambling publications,
such as Gaming Today, Atlantic City Magazine and Casino Player. The
Sporting News reports on the six major spectator sports; LVSN reports
not only on sports gambling, but also on gambling on horse racing, car
racing, roulette, craps, blackjack, slots -- and presidential elections.
5. See, e.g., Star Markets, Ltd. v. Texaco, Ltd., 950 F. Supp. 1030, 1033
& 1035 (D. Haw. 1996)(secondary meaning survey found 75% of
respondents associated mark "Star" with plaintiff 's grocery stores;
recognition survey found that over 96% of respondents recalled
31
Certainly, Times Mirror had ample time and notice (sixteen
months passed between its discovery of LVSN's title and the
preliminary injunction hearing) to conduct a recognition
survey of its mark and/or a survey to determine whether its
mark would be affected by the presence of LVSN's title in
the marketplace.6
Assuming, arguendo, that a showing of fame only within
the sports publication market suffices for protection under
the FTDA, Congress's intent to reserve dilution protection
for a select and narrow category of truly famous marks
cannot be glossed over, as the majority has done, by an
unsupported finding that "The Sporting News" mark is
famous within its niche and recognized by a significant
portion of Las Vegas Sporting News readers."A preliminary
injunction may not be based on facts not presented at a
hearing, or not presented through affidavits, deposition
testimony, or other documents, about the particular
situation [ ] of the moving part[y]." Adams v. Freedom Forge
Corp., 204 F.3d 475, 487 (3d Cir. 2000). Times Mirror has
simply not come forward with any evidence of "the degree
of recognition of the mark in the trading areas and
channels of trade used by the marks' owner and the person
against whom the injunction is sought." 15 U.S.C.
S 1125(c)(1)(F). This failure weighs formidably against any
conclusion that Times Mirror is likely to succeed on its
dilution claim.
_________________________________________________________________
plaintiff 's mark when asked to name any grocery store); Ringling Bros.-
Barnum & Bailey Combined Shows, Inc. v. Utah Div. Of Travel
Development, 955 F. Supp. 605, 612 n.4 (E.D. Va. 1997)(40% of
respondents to recognition survey associated phrase"Greatest Show on
Earth" with plaintiff 's circus), aff 'd, 170 F.3d 449 (4th Cir. 1999), cert.
denied, 120 S. Ct. 286 (1999); Hershey Foods Corp. v. Mars, Inc., 998 F.
Supp. 500, 517 (M.D. Pa. 1998) (94% of respondents recognized orange,
brown and yellow packaging of non-labeled peanut butter candy as
Reese's brand).
6. Between 1997 and 1998, The Sporting News spent $500,000 to study
the market's perception of its title. See"In Brief: The More, The Merrier,"
Media Daily, Mar. 2, 1998. The results of this study were not, however,
introduced into evidence.
32
B. The remaining factors
Examination of the remaining statutory factors
underscores the inadequacy of the evidence offered by
Times Mirror. Factor (A), the degree of inherent or acquired
distinctiveness of the mark, encompasses more than simply
whether "The Sporting News" mark has inherent
distinctiveness or has acquired distinctiveness through
secondary meaning, as it must to be eligible for protection
under the Lanham Act. This factor suggests that the degree
of the mark's distinctiveness is relevant to the fame inquiry.
As discussed below with regard to Factor (G), the degree of
a mark's distinctiveness is weakened by third party use of
the mark and by the descriptive nature of the mark.
Therefore, while this factor favors Times Mirror, it does so
only slightly.
Factor (B), the duration and extent of the use of the
mark, means more than simply the length of time"The
Sporting News" mark has been in use, but also the breadth
of its distribution. Times Mirror did not introduce evidence
of The Sporting News's sales figures either in toto or broken
down by source, i.e. newsstand, subscription, advertising,
or Internet, relying only on its weekly circulation of half a
million copies in Canada and the United States. It cannot
be seriously argued that this weekly circulation is not small
relative to other major publications, including sports
magazines, and not small period given the population of
those countries.7 Thus, despite over one hundred years of
publication of an inexpensive product distributed in
countries in which there is a huge interest in, and
concomitant market for, anything to do with sports, the
relatively limited extent of The Sporting News 's circulation
certainly does not compel the conclusion that the mark has
generated a mental association among consumers sufficient
to support a finding of fame.
_________________________________________________________________
7. See Bill Wallace, "Web Hits Becomes Baseball's New Statistic, Knight-
Ridder Tribune Business News, Feb. 22, 2000, available at 2000 WL
14920170 (comparing distribution rates of sports publications -- 3.2
million weekly distribution of Sports Illustrated, for example -- and
noting "second-tier" Sporting News's half million "static circulation" rate.)
33
Factor (C) addresses how widely and frequently a mark
has been advertised or publicized which, in turn, suggests
the public's familiarity with the mark. See 4 McCarthy
S 24:92. Times Mirror presented evidence that it advertises
primarily by direct mail, but also on television and
"occasionally" on the radio in "selected markets". It did not,
however, provide evidence of its annual advertising
expenses, nor did it detail where, when, or how the mark
has been advertised. Moreover, the unadorned fact that
Times Mirror has an Internet website, a fact the majority
noted, is of little significance because there is no evidence
regarding the extent of sales or advertising on the Internet,
nor is there any evidence regarding, for example, the
number of "hits" received from visitors to the website which
would assist in determining the degree of consumer
recognition of the mark.8
The FTDA, I note, does not specify quantitative
measurements for Factors (B) and (C), such as a basic
minimum for sales or advertising. When, however, the
evidence supporting these factors in this case is compared
to that in dilution cases in which the mark has been
deemed "famous", Times Mirror's evidence of sales revenue
and advertising expenditures falls short.9
_________________________________________________________________
8. The District Court's fame analysis appears to have added an
additional factor to the eight statutory factors in emphasizing that
"Times Mirror has spent millions of dollars improving the magazine."
Times Mirror, 1999 WL 124416, *5. Large expenditures aimed at
retooling a product do not contribute to establishing fame unless it can
be shown that those efforts were effective among the relevant group of
consumers. While it is possible that a company's investment in its
product may result in the heightened fame of its mark, it is far from
clear whether that has occurred here.
9. See, for example: Eli Lilly & Co. v. Natural Answers, Inc., ___ F. Supp.
2d ___, No. 99-1600, 2000 WL 223585, *2, 16 (S.D. Ind. Jan. 20,
2000)(finding "Prozac" famous; $12 billion in sales over twelve year
period and "massive" unsolicited publicity rendering mark part of the
"popular lexicon"); Planet Hollywood (Region IV), Inc. v. Hollywood Casino
Corp., 80 F. Supp. 2d 815, 840 (N.D. Ill. 1999)(finding "Planet
Hollywood" mark famous and noting annual sales of more than $195
million in merchandise bearing mark); NBA Properties v. Untertainment
Records, L.L.C., No. 99-2933, 1999 WL 335147, *7 (S.D.N.Y. May 26,
34
Factor (G) clearly favors LVSN. Factor (G) takes into
account the possibility that third party use of the mark or
elements of the mark has already diluted the mark's
strength, thereby rendering the mark less famous. See 77
Trademark Rep. at 461 ("Third party uses of the same or
similar marks are relevant in determining the fame and
distinctiveness of the mark, since the mark must be in
substantially exclusive use. If a mark is in widespread use,
it may not be famous for the goods or services of one
business.").10
_________________________________________________________________
1999)(finding NBA logo famous; logo appeared on $1.6 billion of
merchandise over three year period and mark was widely promoted);
Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir. 1999) (finding
Pepperidge Farm Goldfish crackers famous; $120 million three year
marketing campaign and $200 million annual net sales); Ringling Bros.,
955 F. Supp. at 609 (finding slogan "Greatest Show on Earth" famous;
over $103 million in annual sales derived from goods bearing slogan and
over $19 million in annual advertising expenditures); American Exp. Co.
v. CFK, Inc., 947 F. Supp. 310, 312 (E.D. Mich. 1996)(finding slogan
"Don't Leave Home Without It" famous; over $600 million in marketing
expenditures over six years).
10. See, e.g., Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir.
1999); Carnival Corp. v. SeaEscape Casino Cruises, Inc., 74 F. Supp. 2d
1261, 1271 (S.D. Fla. 1999)("the word `fun' is used by many other
businesses in the travel, gaming, and entertainment industries . . .
cut[ting] against Carnival's dilution claim"); Michael Caruso & Co., Inc. v.
Estefan Enterprises, Inc., 994 F. Supp. 1454, 1463 (S.D. Fla.
1998)(extensive third party use of word "bongo" undermines inherent
distinctiveness of mark), aff 'd without opinion, 166 F.3d 353 (11th Cir.
1998); Hershey, 998 F. Supp. at 517 (finding trade dress not sufficiently
famous and noting several examples of third party's trade dress in food
industry similar to plaintiff 's color combination and lettering); Sports
Authority v. Abercrombie & Fitch, Inc., 965 F. Supp. 925, 941 (E.D. Mich.
1997)(third-party use of "authority," whether or not in the relevant
market, diminishes any distinctive or famous aspects of mark rendering
it "not so famous as to deserve protection" under the FTDA); Trustees of
Columbia University v. Columbia/HCA Healthcare Corp. , 964 F. Supp.
733, 744 & 750 (S.D.N.Y. 1997)(fame of mark "Columbia" for healthcare
services "has been seriously undermined by third party use of the same
or similar marks" both within the health care industry and in other
industries); Star Markets, 950 F. Supp. at 1035 (noting multiple third
party uses of "Star" and "Star Markets" in food industry and unrelated
industries); Golden Bear Int'l, Inc. v. Bear U.S.A., Inc., 969 F. Supp. 742,
749 (N.D. Ga. 1996)(third parties extensively used both the word "bear"
and a bear design in connection with the sale of sporting goods and
clothes).
35
The words "sporting" and "news" are commonplace words
in our vocabulary appearing on many items, not only
publications. The majority does not acknowledge that at
least six other publications use the word "sporting" in their
titles: Grays Sporting Journal, Southern Sporting Journal,
Sporting Thoughts, The Sporting Scene, The Sporting Life
and Sporting Green. LVSN's use of the word"sporting" in its
title describes the magazine's content. "Sporting" is defined,
in this record, as "involving betting or gambling as sporting
men. Involving or inducing the taking of risk as a sporting
proposition." In Viacom, Inc. v. Ingram Enters., 141 F.3d
886 (8th Cir. 1998), the Eighth Circuit held that while the
trademark "Blockbuster" for a chain of video stores was
strong for purposes of an infringement analysis, the mark's
strength was not necessarily sufficient to sustain a claim
for dilution-by-blurring due to the ordinariness of the word
"Blockbuster". See 141 F.3d at 891-92. The court noted
that "the fact that Viacom is seeking a complete monopoly
on the use of a rather common word with multiple
meanings would make us hesitate to uphold summary
judgment on its dilution-by-blurring claim." Id. (citing 3
McCarthy S 24:114 at 24-208) (dilution"is a potent legal
tool, which must be carefully used as a scalpel, not a
sledgehammer."). Third party use of the commonplace
elements of Times Mirror's mark weakens its fame. Factor
(G), therefore, strongly favors LVSN.
The legislative history indicates that the eight factors
should be weighed independently "and it is the cumulative
effect of these considerations which will determine whether
a mark qualifies for federal protection from dilution." S.
Rep. 100-515 (reproduced in 6 McCarthy App. A5, at 42).
Moreover, the factors should be interpreted flexibly "so that
their relative weight in any given case can be balanced."
Hershey Foods Corp. v. Mars, Inc., 998 F. Supp. 500, 504
(M.D. Pa. 1998). In Hershey, for example, the District Court
found that even though six of the eight enumerated
statutory factors favored Hershey (inherent distinctiveness,
degree of consumer recognition, duration and extent of use,
advertising and publicity, geographical extent of trading
area and widespread distribution channels), Hershey's
trade dress was unlikely to meet the statute's stringent
fame requirement because of third party use of the same
36
aspects of the trade dress and because it was not
registered. Here, Factors (B), (D) and (H) favor Times Mirror
because "The Sporting News" is a registered mark used
continuously for over 100 years nationwide. However, there
is little evidence going to Factor (B)'s extent of sales. Times
Mirror has offered little or no evidence going to factors (C),
(E) and (F). Factor (G) weighs strongly against Times Mirror.
Finally, because third party use and the descriptive nature
of the mark tend to weaken its distinctiveness, Factor (A)
only slightly favors Times Mirror.
In my view, the District Court failed to sufficiently
evaluate the mark -- it did not consider several of the
statutory factors, nor did it qualitatively weigh those factors
it did consider. Even if a mark not immediately recognizable
by the general public can, nonetheless, meet the fame
requirement of the FTDA, and I do not believe it can, at this
preliminary stage, based upon the inadequate record before
us, I cannot agree that Times Mirror is likely to succeed in
proving the fame of its mark.11
_________________________________________________________________
11. My disagreement with the majority rests primarily on my conclusion
that Times Mirror has not come close to satisfying the threshold
requirement of fame to qualify for protection under the FTDA. It goes
without saying, therefore, that I would also disagree that Times Mirror
was likely to prevail on its dilution claim. One observation: the majority
holds that the District Court did not err in applying what have become
known as the "Sweet factors" to determine whether LVSN's use blurred
and, therefore, diluted, Times Mirror's mark for"The Sporting News". In
addition to the Sweet factors, which have been roundly criticized, the
majority appears to have adopted the multiple factor test articulated in
Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir. 1999), which
includes the factor of likelihood of confusion, a factor which is required
in a standard infringement analysis, but not in a dilution analysis. While
I have no difficulty with adopting an appropriate list of factors for
consideration, I note that we are the only Circuit to have considered the
applicability of the Sweet factors -- and the Nabisco factors -- which has
not articulated a specific critique or rejected some or all of the factors.
We should do so as well.
The majority also holds that the District Court did not err in finding
that irreparable injury may be shown even in the absence of actual
economic harm, presumably siding with the Second Circuit and rejecting
the Fourth Circuit's position on the issue. Compare Ringling Bros.-
37
III.
Conclusion
The FTDA grants broad discretion to the federal courts
and, as one commentator has remarked, "it is up to the
judiciary to apply such potent laws with care and common
sense lest they damage the competitive systems they are
designed to enhance." 4 McCarthy S 24:114 at 24-222. Lax
interpretation of FTDA requirements forecasts easier
lawsuits for trademark owners who will use a dilution
cause of action as a "tack-on" to an infringement claim in
the event that likelihood of confusion cannot be shown, and
even when, as perhaps here, it can. See Klieger, Trademark
Dilution, 58 U. Pitt. L. Rev. at 64 ("It may just be a matter
of time before dilution eclipses confusion as the gravamen
of most federal trademark actions and trademark rights in
gross displace consumer protection as the defining feature
of United States Trademark law."); I.P. Lund Trading ApS v.
Kohler Co., 163 F.3d 27, 48 (1st Cir. 1998)("Dilution laws
are intended to address specific harms; they are not
intended to serve as mere fallback protection for trademark
owners unable to prove trademark infringement.").
Naturally, when a court rules on a motion for a
preliminary injunction, it makes an initial judgment based
on an incomplete factual record; its findings of fact and
conclusions of law are subject to revision based on
additional discovery. The stakes are, nonetheless, high;
here, for example, had the injunction not been stayed with
the consent of the parties, lowering the bar for the fame
_________________________________________________________________
Barnum & Bailey Combined Shows, Inc. v. Utah Div. Of Travel
Development, 170 F.3d 449, 461 (4th Cir. 1999), cert. denied, 120 S. Ct.
286 (1999), with Nabisco, 191 F.3d at 223-24. I agree, and note only that
it would be well-nigh impossible for a widely sold product such as Kodak
to show that its sales have been impacted by a diluting use of its mark.
Indeed, Kodak's sales might well be increasing even as the
distinctiveness of its truly famous mark is being whittled away by an
unauthorized user. See S. Rep. No. 100-515, at 108 (noting that
distinctive quality of a mark "could be materially reduced during a period
of rising sales").
38
requirement would have forced LVSN to alter its publication
at great cost or cease publishing altogether.12
Yet again, we have recently stressed our respect for the
extraordinary nature of the preliminary injunction power
and the fact that "the use of judicial power to arrange
relationships prior to a full determination on the merits is
a weighty matter" to be reserved for extraordinary
situations. Adams v. Freedom Forge Corp., 204 F.3d 475,
487 (3d Cir. 2000). This is surely not such a situation. I
would vacate the preliminary injunction.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
12. A District Court's review of the merits of a dilution claim at the
preliminary injunction stage may also be significant because, as at least
one court has held, the cause of action is essentially equitable in nature
and may not provide a right to a jury trial. See Ringling Bros., 955 F.
Supp. 598, 605 (E.D. Va. 1997), aff 'd on other grounds, 170 F.3d 449
(4th Cir. 1999)(reserving constitutional issue for another day), cert.
denied, 120 S. Ct. 286 (1999); see also 25 U.S.C. SS 1116(a), 1117(a),
1118; 2 Gilson S 5.12[1][c][vii].
39