936 F2d 580 Tse Saiget Watanabe and McClure Inc v. Gentlecare Systems Inc

936 F.2d 580

Unpublished Disposition

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.

TSE, SAIGET, WATANABE AND McCLURE, INC., aba Gentle Dental,
Plaintiff-Appellee,
v.
GENTLECARE SYSTEMS, INC., Gentlecare Dental Centers, et al,
Defendants-Appellants.

No. 90-35364.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Sept. 13, 1990.
Decided June 19, 1991.

Before CANBY, KOZINSKI and TROTT, Circuit Judges.

1

MEMORANDUM*

2

GentleCare Systems, Inc. ("GentleCare") appeals a preliminary injunction entered in favor of Tse, Saiget, Watanabe and McClure, Inc. ("Gentle Dental") in this trademark infringement action. We conclude that the district court did not abuse its discretion in entering the injunction, nor did it make errors of law or clearly erroneous findings of fact. Consequently, we affirm.

BACKGROUND

3

Gentle Dental is the owner, by assignment, of the registered trademark "Gentle Dental." Under that name, it has provided dental services in the Portland, Oregon metropolitan area since 1984, and had some eight offices there at the time of commencement of this suit. It has expended some $600,000 in advertising under the Gentle Dental name.

4

In 1989, GentleCare began offering dental services in the Portland area, and it advertised under the name "GentleCare Dental Centers." According to the district court, GentleCare expended $32,000 in such advertising.

5

In January 1990, Gentle Dental brought this action charging that GentleCare's use of the name "GentleCare Dental Centers" constituted unfair competition and infringement of its prior and registered trademark, "Gentle Dental." Gentle Dental moved for, and the district court granted, a preliminary injunction against the continued use of "GentleCare Dental Centers" as a trade name, requiring GentleCare to use, instead, the name "Dental Ben's Gentle Dentistry."

6

The district court based its grant of this preliminary injunction on its conclusion that Gentle Dental had shown a likelihood of success on the merits and the possibility of irreparable injury, as well as a balance of hardships tipping in its favor. The district court's conclusion that Gentle Dental was likely to succeed was based on its finding that "plaintiff has shown a likelihood of confusion between defendants' 'GentleCare Dental' mark and plaintiff's 'Gentle Dental' mark and that this confusion is probable and not simply a possibility." Opinion (CR 62) at 3. The district court's finding of likelihood of confusion was based on its application of the five-part test enunciated in Miss World (U.K.) Ltd. v. Mrs. America Pageants, 856 F.2d 1445, 1448 (9th Cir.1988), and some of our other cases.

7

GentleCare charges that the district court made numerous errors of law and clearly erroneous findings of fact in applying that test, and that it also erred in finding a likelihood of irreparable injury and a balance of hardships tipping in favor of Gentle Dental. None of these charges succeed in the face of the deference we accord to the district court's findings of a likelihood of confusion, or to its discretion in granting or denying preliminary injunctions.

ANALYSIS

8

To prevail on its motion for preliminary injunction, Gentle Dental had to show either (1) a likelihood of success on the merits and the possibility of irreparable injury, or (2) the existence of serious questions going to the merits and the balance of hardships tipping in its favor. Miss World (U.K.) Ltd. v. Mrs. America Pageants, 856 F.2d 1445 (9th Cir.1988). We will reverse the district court's grant of Gentle Dental's motion only if we conclude that the district court abused its discretion, applied an erroneous legal standard, or based the injunction on clearly erroneous findings of fact. Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215 (9th Cir.1987).

9

The primary focus of the district court's determination was Gentle Dental's likelihood of success on the merits. The district court's conclusion that success was likely was based on its finding of a "likelihood of confusion" between the two trademarks. We must uphold that finding unless it was clearly erroneous. Eclipse Associates Ltd. v. Data General Corp., 894 F.2d 1114 (9th Cir.1990). We cannot review that ultimate finding by isolating the separate constituent parts and finding error when one component weighs against the court's decision. Rather, we recognize that such a determination involves numerous factors, and any decision the district court makes will be based on the aggregate weight of those factors. Eclipse, 894 F.2d at 1118. The clearly erroneous standard of review is designed to respect that multifaceted determination and avoid its duplication by us.

10

I. "Likelihood of Confusion"

11

In finding a likelihood of confusion, the district court weighed the five factors set out in Miss World:

12

(1) the strength of the registered service mark; (2) the relationship between the services identified by the competing service marks; (3) the similarity of the competing service marks; (4) the evidence of actual confusion; and (5) the junior user's intent in adopting its service mark.

13

Miss World, 856 F.2d at 1448. GentleCare contends that the district court went astray in assessing three of these factors: the strength of the "Gentle Dental" mark, the similarities between the two marks, and the evidence of actual confusion.

14

a. The "strength" of the Gentle Dental mark.

15

The first factor that the district court analyzed in finding likelihood of confusion was the strength of the registered service mark. Opinion (CR 62) at 3. The strength of a mark rests on its distinctiveness, which in turn depends upon "the degree to which the public associates the mark with a particular source." Miss World, 856 F.2d at 1448. Inherent strength of marks varies "along a continuum stretching from arbitrary, inherently strong marks, to suggestive marks, to descriptive marks, to generic, inherently weak marks." Rodeo Collection, 812 F.2d at 1218. A descriptive mark can be protected only when it has acquired a secondary meaning. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir.1979).

16

The district court found that Gentle Dental's trademark was "relatively strong," for the following reasons. The mark had attained a high degree of recognition in the relevant consumer class. While it took little imagination for the consumer to associate the mark with the service identified, there was little need for competitors to identify their services with the terms "Gentle" and "Dental" in close proximity in their office names. Finally, the mark had acquired a secondary meaning by which the public associated the name with its source. Opinion, pp. 3-4.

17

GentleCare contends that the district court committed several errors in so ruling. GentleCare asserts that these errors are not only factual--reviewable under the "clearly erroneous" standard--but also legal and, thus, reviewable de novo. We have made it clear, however, that the issue of "likelihood of confusion" presents a mixed question of law and fact, to be reviewed by us under the "clearly erroneous" standard. Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1355 (9th Cir.1985); Eclipse, 894 F.2d at 1116. We deal with GentleCare's contentions in turn.

1. The "imagination" and "need" tests

18

As aids in measuring the strength of a trademark, we have employed the "imagination" and "need" tests. Rodeo Collection, 812 F.2d at 1218. The first focuses on "the amount of imagination required in order for the consumer to associate a given mark with the goods or services it identifies"; the second on "the extent to which a mark is actually needed by competitors to identify their goods or services." Id.

19

The district court was clearly correct in stating that it takes little imagination for the consumer to associate "Gentle Dental" with the plaintiff's dental services, and GentleCare naturally does not argue with that finding. It takes issue, however, with the district court's statement that there is "correspondingly" little need for competitors to identify their services with the same terms. GentleCare contends that the district court must have misunderstood and misapplied the "imagination" and "need" tests because the less imagination that is required, the more descriptive and therefore "needed" is the term by competitors.

20

It is true that the two tests generally produce results inversely related to each other. Id. But the relationship is not a rigid or mathematical one; it is simply an expression of the fact that the more imagination is needed to associate the mark with the product, " 'the less likely the words will be needed by competitors to describe their products [or services].' " Id. (quoting Union Carbide Corp. v. Ever-Ready Inc., 531 F.2d 366, 379 (7th Cir.), cert. denied, 429 U.S. 830 (1976)) (emphasis added). In this instance the "likely" relationship did not exist; there was no great need for competitors to use the terms "Gentle" and "Dental" in close proximity in their office names. Or at least, the district court did not clearly err in so finding.1

21

2. GentleCare's evidence of a "crowded field" of marks

22

A mark that exists in a "crowded field" of similar marks is relatively weak, because consumers may have learned to pick carefully from among the marks. Miss World, 856 F.2d at 1449. GentleCare contends that the district court ignored its voluminous evidence of Yellow Pages listings and State trademark registrations of the word "gentle" in the naming and description of dental services in the same geographical area. It contends that this evidence makes clearly erroneous the district court's finding that "Gentle Dental" was a strong mark. This is GentleCare's strongest point, but in order for this evidence to have the force that GentleCare attributes to it, GentleCare must also submit evidence of how that third-party advertising or registration was actually used or perceived in the marketplace. See Scarves by Vera v. Todo Imports, Ltd., 544 F.2d 1167 (2d Cir.1976); 1 T. McCarthy, Trademarks and Unfair Competition, (2d ed. 1984) at 515. GentleCare has not provided that evidence; it has presented evidence showing little more than the fact that numbers of dentists use the term "gentle" in their copy describing their services. They do not show common use of "Gentle" as part of a mark. We cannot take it as established that consumers in Gentle Dental's service area were selecting from a crowded field.

23

Even if GentleCare's evidence of a could be taken to suggest the coexistence of some similar marks in Gentle Dental's market, that fact by itself would not compel us to overturn the district court's finding of a "likelihood of confusion." In light of the evidence of actual confusion found by the district court, we do not find that this evidence of a "crowded field" made its finding of "likelihood of confusion" clearly erroneous.

3. Secondary Meaning

24

In the course of finding that Gentle Dental's mark was "relatively strong," the district court found that "Gentle Dental" had acquired secondary meaning. Opinion (CR 62) at 4. GentleCare contends the court erroneously based this conclusion solely on Gentle Dental's continuous use of that name, and that, even if secondary meaning had attached, it could not indicate a "strong" mark unless the court also determined a "high degree of consumer association."

25

It is true that "[t]he basic element of secondary meaning is ... the mental association by a substantial segment of consumers and potential consumers 'between the alleged mark and a single source of the product.' " Levi Strauss, 778 F.2d at 1354 (quoting 1 J. McCarthy, Trademarks and Unfair Competition, Secs. 15:2 at 659, 15:11(B) at 686 (1984). It is also true that the mere existence of secondary meaning does not make a mark strong. Miss World, 856 F.2d at 1448-49. Secondary meaning does, however, entitle the mark to protection commensurate with the degree of consumer association proven. Sleekcraft, 599 F.2d at 349 n. 12. Here the district court expressly found that "the [Gentle Dental] trademark has a high degree of recognition in the minds of the relevant customer class," Opinion (CR 62) at 3, and that " 'Gentle Dental' has acquired a 'secondary meaning' in which the public generally associates that name with plaintiff." Id. at 4 (emphasis added). These findings, coupled with the evidence of actual confusion, adequately support the district court's conclusion that "Gentle Dental" was a "relatively strong" mark. See McCarthy Sec. 15.3. They also tend to negate GentleCare's contention that the district court misunderstood the relation of secondary meaning to the mark's strength. We conclude that no such misunderstanding has been demonstrated.

26

b. The Similarity of the Two Marks

27

GentleCare disagrees with the district court's conclusionary finding that "the competing service marks ... are extremely similarly [sic] in terms of their 'sight, sound and meaning." Opinion at 4. Again, we are not willing to conclude that this extremely fact-specific comparison is clearly erroneous. Certainly there are differences in the visual logos of Gentle Dental and GentleCare. But the sounds of "Gentle Dental" and "GentleCare Dental Centers" are certainly similar, as are the meanings. Whether or not we would have characterized the two marks as similar, we are not convinced that the district court was wrong in doing so. Nor can we insist that the district court enumerate with a high degree of specificity all of the reasoning it employed in evaluating all of the factors it considered. In Eclipse, we pointed out that the five- or eight-part tests are merely "helpful guidelines to the district court [rather than] requirements or hoops that a district court need jump through to make the determination [of likelihood of confusion]." Eclipse, 894 F.2d at 118. Eclipse was an appeal from a final judgment. We can hardly be more exacting in the present review of a grant of a preliminary injunction.

28

c. Evidence of Actual Confusion

29

Finally, GentleCare contends that the district court erroneously relied on Gentle Dental's proffered evidence of actual confusion, as strong evidence of likelihood of confusion. GentleCare questions the value of much of this evidence, and also asserts that it is de minimis in light of the amount of business that Gentle Dental does.

30

In essence, GentleCare contends that the district court's finding of "likelihood of confusion" was simply wrong. Indeed, the question is a close one, but there was evidence of multiple instances of consumer confusion in responding to, or inquiring about, advertisements. Evidence of actual confusion is certainly persuasive that future confusion is likely. Sleekcraft, 599 F.2d at 352. We cannot say that the district court's finding was clearly erroneous.

31

II. Irreparable Injury and Balance of Hardships

32

The district court found that without a preliminary injunction Gentle Dental would likely suffer irreparable injury and that the balance of hardships tipped in its favor. GentleCare contends that both findings were clearly erroneous. Our review of the former finding is foreordained by our affirmance of the district court's finding of likelihood of confusion. Gentle Dental has introduce independent evidence of what is presumed to follow from confusion between two similar marks--the possibility of injury which cannot be compensated. Rodeo Collection, 812 F.2d at 1220. In this case that potential injury to Gentle Dental includes loss of patients and dilution of its trademark. The district court's finding of such potential injury is not clearly erroneous, nor was the issuance of an injunction to prevent that injury an abuse of discretion.

33

We do not address GentleCare's charge that the district court's finding of balance of hardships was clearly erroneous. That finding constituted an alternative ground for granting a preliminary injunction. The district court's findings of likelihood of success on the merits and possibility of irreparable injury were sufficient to warrant its grant of a preliminary injunction. Our review of those findings is sufficient to affirm the district court's action.

CONCLUSION

34

The district court's grant of a preliminary injunction against the continued use of the name "GentleCare" was not based on erroneous legal standards or clearly erroneous findings of fact. Neither was it an abuse of discretion. Applying the deferential standards appropriate to this review of interim relief, we affirm the order of the district court.

35

AFFIRMED.

KOZINSKI, Circuit Judge, dissenting:

36

I must respectfully dissent. I cannot agree that the scant evidence in the record supports the conclusion that plaintiffs are likely to prevail on the merits. Indeed, if I had to make a prediction based solely on the evidence before us, I think it is likely that they will not.

A. Strength of Mark

1. Secondary Meaning

37

I see "Gentle Dental" as a merely descriptive, inherently weak mark. Everyone agrees it takes virtually no imagination to associate the word "gentle" with dentistry. Normally, where little imagination is required, there is a correspondingly greater need for competitors to use the word.

38

The majority asserts that this is not the normal case because competitors have no great need to use the terms "gentle" and "dental" in close proximity. But it doesn't explain how it arrives at this conclusion; nor does it tell us what evidence, if any, it relies on. As I see it, competitors who practice this particular type of dentistry have a very strong need to use these terms in close proximity. Plaintiffs and GentleCare occupy virtually the same niche in the dentistry market; that is, they sell the same type of dental services and cater to the same customers--those who are particularly concerned about the pain associated with dental work. They both have chosen trade names including the word "gentle" that successfully convey the image they want to project. I'm not sure that GentleCare could as successfully convey the desired image if it couldn't use this unique word. The majority fails to suggest a synonym that might do the job; I don't think one exists.

39

Admittedly, even inherently weak marks can be strengthened by the acquisition of secondary meaning. A mark has acquired secondary meaning if consumers think uniquely of the mark owner or his product when they hear the trademark. See Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1218 (9th Cir.1987) ("A secondary meaning arises if one of the connotations that a mark evokes is the particular good or service that it identifies.") Where a mark is merely descriptive and very little imagination is required to connect it with the service it describes, as here, the owner of the mark bears a particularly heavy burden in establishing that is has acquired secondary meaning: "[T]he less distinctive the term, the greater the quantity and quality of evidence of secondary meaning needed to prove" it. 1 J.T. McCarthy, Trademarks and Unfair Competition Sec. 15.10, at 683 (2d ed 1984).

40

The district court found that the mark had acquired secondary meaning, based on the fact that plaintiffs have continually used the mark since 1984. District court opinion, CR 62, at 4. But continuous use does not in itself establish that consumers have come to associate the mark with the product. Moreover, plaintiffs had not submitted the type of evidence that could establish secondary meaning, e.g., a consumer survey establishing that the mark had gained significant public recognition, affidavits from customers or evidence of extensive and effective advertising campaigns. See 1 J.T. McCarthy Secs. 15.13-15.20 (listing ways of demonstrating secondary meaning).

41

Plaintiffs did submit affidavits showing that individual consumers had confused the Gentle Dental mark with the GentleCare mark, but these affidavits do not establish that the community at large had come to associate the name distinctly with plaintiffs' services, as opposed to anyone else's. The district court opinion and the majority disposition fail to distinguish the concept of secondary meaning from that of confusing similarity. They are, in fact, quite different. Two or more marks may be confusingly similar, yet neither may have acquired secondary meaning. The type of evidence plaintiff presented--that people who wanted to reach Gentle Dental got GentleCare instead--merely tends to show confusion; it does not establish that consumers generally associate the term "gentle" with plaintiff but not with defendant.

42

Since the record contains no evidence that the mark had acquired secondary meaning, the district court's finding that Gentle Dental was a strong mark because it had acquired secondary meaning is clearly erroneous.1

2. Crowded Field

43

As I see it, the Yellow Pages listings and state trademark registrations presented by GentleCare strongly suggest a crowded field. The majority all but admits the existence of a crowded field, but upholds the district court because GentleCare did not submit evidence of how third-party advertising was actually used or perceived in the marketplace and because some of the dentists use "gentle" in their advertising copy, rather than as part of a trademark.

44

But this was a preliminary injunction; GentleCare merely had to submit enough evidence to preclude a finding that plaintiffs are likely to prevail on this issue at trial. Although some dentists use the term "gentle" as part of advertising copy, several clearly use it as part of a trade name. See, e.g., CR 45, Exhibit 6, at 3 ("Gentle Dentistry") & 4 ("Gentle Dental Care"). Given this evidence that similar marks were used in the marketplace, the district court clearly erred in finding that plaintiffs were likely to prevail on the crowded field issue. At the very least, GentleCare established that this would be a close issue at trial.

45

B. The Similarity of the Two Marks (Sight, Sound & Meaning)

46

It's not at all clear that plaintiffs are likely to prevail on this issue. The two marks are much different visually, particularly as the logos are nothing alike: One uses a teddy bear and the other uses a tooth. The sounds are somewhat similar, but differ in significant respects. "Gentle Dental" is a rhyming 4-syllable phrase, while "GentleCare Dental Systems" is a non-rhyming 6-syllable phrase. The meanings of the two names are obviously similar. But that cuts both ways. It contributes to the overall similarity between the two marks. Yet it also supports the argument that GentleCare had a strong need to use this mark; it was using the only term that could successfully convey the image it wanted. See p 2 supra.

C. Evidence of Actual Confusion

47

Plaintiffs did document some incidents of actual confusion. But their evidence did not suggest that the confusion was particularly common or widespread. Indeed, any company that does a reasonable amount of business can cite some instances in which consumers or vendors confused it with a competitor. It's unclear, based on this evidence, that plaintiffs will prevail on the issue that the public is actually confusing the two marks.

D. Multifactor Analysis

48

I disagree with the majority's assertion that we cannot overturn the district court's decision just because we find error in any one component of its analysis. In Eclipse Associates Ltd. v. Data General Corp., 894 F.2d 1114, 1118 (9th Cir.1990), we simply held that the district court need not recite or apply specific factors in evaluating the likelihood of confusion, and that our task is to review the district court's ultimate factual determination. But if we find the district court's analysis of any one factor improper, we can no longer defer to the court's ultimate factual determination. In my view, the district court made several errors in reasoning, any one of which merits reversal of its ultimate conclusion that plaintiffs showed a likelihood of success on the merits.

Conclusion

49

The record in this case was not well-developed, due to the early stage of the proceedings and the fact that the parties waived an oral hearing. In my view, the court clearly erred in ruling that the plaintiffs were likely to prevail on the merits. I would reverse and remand with direction that the district court vacate its preliminary injunction.

*

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3

1

Nor do we conclude that the district court mistakenly thought that a finding of little need for imagination compelled a finding of little need for use by competitors. We cannot place that much emphasis on the district court's unfortunate use of the word "correspondingly." The court stated that "while" there was little need for imagination, there was "correspondingly" little need for use of the term by competitors. We cannot read "while" as meaning "because"; indeed, "while" suggests a meaning to the contrary. We conclude that the district court's fact findings of little need for imagination and little need for use by competitors, which are not clearly erroneous on this record and which can coexist without logical contradiction, are not tainted by any misunderstanding of the relationship between the two factors

1

Even if the name "Gentle Dental" had acquired secondary meaning, I don't think protection would extend beyond exact reproduction of the name. For example, Burger King is a mark with secondary meaning; but Burger King certainly does not have a monopoly over the word "Burger" or the word "King" in the fast food market. Because it chose to use two common everyday words, it must co-exist with Burger Chef and Hot Dog King, not to mention Crown Burger and Dairy Queen. Similarly, Gentle Dental is entitled to protection against exact reproduction of its mark, but should not have a monopoly over the word gentle in the dentistry market