Cellular Sales, Inc. And John Webb v. Rick MacKay D/B/A Cellular Sales North

942 F.2d 483, 19 U.S.P.Q. 2d (BNA) 1712, 1991 U.S. App. LEXIS 18458, 1991 WL 152456
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 13, 1991
Docket90-2473
StatusPublished
Cited by33 cases

This text of 942 F.2d 483 (Cellular Sales, Inc. And John Webb v. Rick MacKay D/B/A Cellular Sales North) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Cellular Sales, Inc. And John Webb v. Rick MacKay D/B/A Cellular Sales North, 942 F.2d 483, 19 U.S.P.Q. 2d (BNA) 1712, 1991 U.S. App. LEXIS 18458, 1991 WL 152456 (8th Cir. 1991).

Opinion

ROSS, Senior Circuit Judge.

Plaintiffs Cellular Sales, Inc. and John Webb filed this action charging that defendant Rick Mackay, by doing business as Cellular Sales North, is misappropriating *485 plaintiffs’ trade name. The district court agreed and issued a preliminary injunction enjoining Mackay from using the name “Cellular Sales” in the future. Because we conclude that the name “Cellular Sales” is generic in nature and therefore not entitled to trade name protection, we reverse the decision of the district court.

I.

In October 1986, plaintiff John Webb became an agent for a company named Cellular One, a regional cellular telephone company that is licensed by the Federal Communications Commission to provide cellular telephone services. In May 1987, Mackay agreed to work with Webb as a salesman and installer of cellular phones. Both Webb and Mackay had salesmen working for them and each earned commissions on sales. Mackay alleges that the two operated in a joint venture, while Webb alleges that he operated as a sole proprietorship until February 1989 when he formed the corporation Cellular Sales, Inc., in which he was the only shareholder and officer. Webb assigned right to the name “Cellular Sales” to the corporation.

On July 23,1987, Webb filed a “Registration of Fictitious Name” with the Missouri Secretary of State for the name, “Cellular Sales.” Missouri law requires the registration of any fictitious name under which someone is doing business in Missouri, but the law does not provide for any trade name protection as a result of such filings. Mo.Rev.Stat. §§ 417.200-417.230.

In mid-1989, Mackay decided that there was a potential for development of cellular phone sales in North Kansas City, but Webb was not interested in opening a north office. In August 1989, Mackay eventually leased a north office location on his own. He obtained a phone for that location and immediately began using the name, “Cellular Sales North.” On October 10, 1990, an advertisement was placed in the Kansas City Times under the name “Cellular Sales,” listing telephone numbers for both the north office and the original office.

In November 1989, Mackay began making arrangements to obtain his own agent’s contract with Cellular One, the regional cellular air carrier. Mackay eventually obtained his own agents’s contract with Cellular One effective December 1, 1989. On December 2, 1989, Webb and Mackay agreed to end their business relationship. Thereafter, Webb filed suit against Mackay alleging trade name infringement.

The district court found that the name, “Cellular Sales,” has a unique significance and that the use of the name “Cellular Sales North” would likely mislead some members of the public into believing that Mackay was operating a branch or franchised office affiliated with Webb. The district court found that Mackay had not proven his joint venture theory and concluded that “defendant has a likelihood of success of no more than 40% or 45% in establishing equal rights to the name ‘Cellular Sales.’ ” The court also found that there was a threat of irreparable harm because confusion of the name could cause lost business which would be extraordinarily difficult to ascertain and evaluate. The lower court entered a preliminary injunction against any future use by Mackay of the business name “Cellular Sales” and Mackay was instructed to begin use of a clarifying name, such as “Cellular North,” in response to incoming calls.

II.

Whether a preliminary injunction should issue involves consideration of (1) the threat of irreparable harm to the movant; (2) whether the threatened injury outweighs damage to the opposing party; (3) the probability that the movant will succeed on the merits; and (4) the public interest. Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir.1981) (en banc).

In determining whether a trade name is entitled to protection, it must first be classified into one of four categories: (1) generic, (2) descriptive, (3) suggestive, or (4) arbitrary or fanciful. Vision Center v. Opticks, Inc., 596 F.2d 111, 115 (5th Cir. 1979), cert. denied, 444 U.S. 1016, 100 S.Ct. 668, 62 L.Ed.2d 646 (1980). A generic term is the name of a particular type, kind, ge *486 nus or class of goods in which an individual article or service is but a member. Id. It is well established that generic terms are not entitled to trademark protection because such words are in “the public domain and available for all to use,” Hallmark Cards, Inc. v. Hallmark Dodge, Inc., 634 F.Supp. 990, 997 (W.D.Mo.1986), and because such terms “describ[e] not only a particular product or service but also a type or kind of product or service.” First Fed. Sav. & Loan Ass’n of Council Bluffs v. First Fed. Sav. & Loan Ass’n of Lincoln, 929 F.2d 382, 383 (8th Cir.1991).

The standard of proof that must be met by the plaintiff in seeking injunctive relief varies depending upon the type of mark at issue. If the mark is the strongest possible mark — an arbitrary or fanciful mark — it is “entitled to maximum legal protection and do[es] not require proof of secondary meaning.” Hallmark Cards, supra, 634 F.Supp. at 998. If the mark is the weakest protectable mark — a descriptive trademark or trade name — the plaintiff must prove that the mark has an accepted “secondary meaning.”

Secondary meaning refers to a mark that “has become distinctive of the applicant’s goods in commerce, i.e., to a mark that consumers associate with a producer or distributor rather than with the product itself.” Best Buy Warehouse v. Best Buy Co., 920 F.2d 536, 537 (8th Cir. 1990) (citations omitted), cert. denied, — U.S.-, 111 S.Ct. 2893, 115 L.Ed.2d 1058 (1991). As evidence that a mark has acquired secondary meaning, courts will accept direct evidence of customer confusion, or, because direct evidence may be difficult to find, evidence from consumer surveys showing likelihood of confusion. Id.

“Cellular Sales” falls within the definition of a generic trade name. The terms “cellular” and “sales” individually are generic in nature. Moreover, even when combined, “cellular sales” does not describe a particular product, but instead describes the sale of cellular telephone equipment, which is a genus or class of products, and in no way describes the particular cellular phones sold by Webb. In fact, the record shows that there are eight unrelated firms, in addition to Cellular Sales and Cellular Sales North, listed in the Kansas City phone book that use the term “cellular” in their names. Further, Webb himself has listed Cellular Installation, Cellular Rental, Cellular Repair and Cellular Service in the white pages of the phone book, all of which are answered at Webb’s phone number.

In First Federal, supra,

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942 F.2d 483, 19 U.S.P.Q. 2d (BNA) 1712, 1991 U.S. App. LEXIS 18458, 1991 WL 152456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cellular-sales-inc-and-john-webb-v-rick-mackay-dba-cellular-sales-ca8-1991.