Platinum Home Mortgage Corporation v. Platinum Financial Group, Incorporated

149 F.3d 722, 1998 WL 416881

• Court: Court of Appeals for the Seventh Circuit
• Decided: August 18, 1998
• Docket: 97-3336
• Status: Published

Opinions

BAUER, Circuit Judge.

Platinum Home Mortgage Corporation (“Platinum Mortgage”) filed suit against Platinum Financial Group, Incorporated (“Platinum Financial”) for unfair competition under Section 43 of the Lanham Act, 15 U.S.C. §§ 1125(a)(1)(A) and (B), for common law trademark infringement, and for deceptive trade practices under the Uniform Deceptive Trade Practices Act, 815 ILCS 510/1-7 (1996). Platinum Mortgage filed a motion for preliminary injunctive relief, requesting the district court to enjoin Platinum Financial from using the term “platinum” in its name. The district court denied the motion, and Platinum Mortgage now appeals. For the reason set forth below, we affirm.

BACKGROUND

In January of 1994, Platinum Mortgage began to offer home mortgage services, including certain government-sponsored mortgage loans, and it currently maintains offices throughout Illinois in Aurora, Chicago, Lib-ertyville, River Grove, Rolling Meadows, and also in the State of Colorado. In January of 1997, Platinum Financial began to offer various financial services, including limited mortgage services for the purpose of developing long-term strategies in financial planning, and currently its office is located in Lake Forest, Illinois. Platinum Financial does not provide, nor does it intend to provide the government-sponsored loans offered by Platinum Mortgage. Both firms have submitted that they have incurred various advertising costs and promotional expenses to publicize their businesses; of course, these advertisements and promotions use the word “platinum” to identify each company’s services.

William Giambrone, the Chief Financial Officer for Platinum Mortgage, first became aware of Platinum Financial when he noticed an advertisement for its mortgage services in the Chicago Tribune. Giambrone objected to Platinum Financial’s use of “platinum” and was concerned that consumers interested in obtaining a mortgage would be confused by the similarity of their names. Platinum Mortgage filed this suit against Platinum Financial on July 15,1997 for unfair competition, common law trademark infringement, and deceptive trade practices, objecting to Platinum Financial’s use of “platinum” in its name. Then, on August 1, 1997, Platinum Mortgage filed a motion for preliminary in-junctive relief.

In a memorandum opinion and order issued on September 4,1997, the district court refused to grant the preliminary injunction, finding that Platinum Mortgage does not have more than a negligible chance of success on the merits of its trademark infringement claim. First, the court determined that its trade name is merely descriptive, and second that it is quite unlikely Platinum Mortgage could show its name has acquired secondary meaning. Accordingly, the district court concluded that Platinum Mortgage would not be entitled to trademark protection for its trade name under the Lanham Act and, therefore, denied its motion for preliminary injunctive relief.

Platinum Mortgage filed a timely notice of appeal and now argues that the district court erroneously found that “platinum,” as a trademark, is only descriptive when used in connection with its mortgage services. Again, Platinum Mortgage contends that its mark is suggestive and entitled to protection without evidence of secondary meaning. Alternatively, Platinum Mortgage argues that even if evidence of secondary meaning is required, it nonetheless submitted substantial evidence of actual confusion that demonstrates “platinum” has acquired secondary meaning. With these facts as background, we now turn to the issues presented for review.¹

Analysis

In reviewing the grant or denial of a preliminary injunction, we review a district court’s findings of fact for clear error, its balancing of the factors of a preliminary injunction for an abuse of discretion, and its legal conclusions de novo. Meridian Mut. Ins. Co. v. Meridian Ins. Group, Inc., 128 F.3d 1111, 1114 (7th Cir.1997). The purpose of preliminary injunctive relief is “to minimize the hardship to the parties pending the ultimate resolution of the lawsuit.” Faheem-El v. Klincar, 841 F.2d 712, 717 (7th Cir.1988). When evaluating the merits of a motion for preliminary injunctive relief, a district court must determine whether the party seeking the preliminary injunction has demonstrated that: (1) it has a reasonable likelihood of success on the merits of its claim; (2) no adequate remedy at law exists; (3) it will suffer irreparable harm if preliminary injunc-tive relief is denied; (4) the irreparable harm it will suffer without preliminary injunctive relief outweighs the irreparable harm the nonmoving party will suffer if the preliminary injunction is granted; and (5) the preliminary injunction will not harm the public interest. Rust Environment & Infrastructure, Inc. v. Teunissen, 131 F.3d 1210, 1213 (7th Cir.1997). The threshold consideration in a motion for a preliminary injunction is the moving party’s likelihood of success on the merits of the underlying claim. Id.

“Trademark law aims to aid consumers in identifying the source of goods by allowing producers the exclusive right to particular identifying words or symbols which they may attach to their products as a designator of source.” Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 657 (7th Cir.1995). Accordingly, the protection afforded to a trademark attempts to prevent consumer deception and confusion. However, that trademark protection should not interfere with the traditional policies of a competitive market, and courts have generally recognized that the public substantially benefits from competition. August Storck K.G. v. Nabisco, Inc., 59 F.3d 616, 619 (7th Cir.1995). In the context of a motion for a preliminary injunction in a trademark infringement claim, a likelihood of success exists if the party seeking the preliminary injunctive relief demonstrates that it has a “better than negligible” chance of succeeding on the merits of the underlying infringement claim. Curtis v. Thompson, 840 F.2d 1291, 1296 (7th Cir.1988).

In a trademark infringement claim, the plaintiff must demonstrate: (1) the validity of its trademark; and (2) the infringement of that mark. Echo Travel, Inc. v. Travel Associates, Inc., 870 F.2d 1264, 1266 (7th Cir.1989). The validity of a mark pertains to whether a “word, term, name, symbol or device,” 15 U.S.C. § 1125(a)(1), is entitled to protection under trademark law by focusing on whether that mark specifically identifies and distinguishes one company’s goods or services from those of its competitors. The infringement of a mark concerns whether the actions of a subsequent user of a substantially similar or identical mark causes a likelihood of confusion among consumers as to the source of those specific goods or services. Echo Travel, Inc., 870 F.2d at 1266. When the identifying “word, term, name, symbol or device” claimed as a trade name or mark is not registered with the United States Patent and Trademark Office, the burden is on the claimant, Platinum Mortgage in the instant case, to establish that it is entitled to protection under § 43(a) of the Lanham Act. Mil-Mar Shoe Co., Inc. v. Shonac Corp., 75 F.3d 1153, 1156 (7th Cir.1996).

We initially recognize that there are various categories of terms and words that are entitled to trademark protection when consumers rely on those marks to identify and distinguish one company’s goods or services from those of its competitors. Marks are classified into five categories of increasing distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 767-68, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). In general, the level of trademark protection available corresponds to the distinctiveness of the mark. Id. A generic term is one that is commonly used and does not identify any particular source and, therefore, is not entitled to any trademark protection. Liquid Controls Corp. v. Liquid Control Corp., 802 F.2d 934, 936 (7th Cir.1986). A descriptive mark is one that “describes the ingredients, qualities, or characteristics of an article of trade or a service” and, generally, it is not protected as a trademark because a merely descriptive mark is a “ ‘poor means of distinguishing one source of services from another.’ ” Id. (quoting M.B.H. Enters. v. WOKY, Inc., 633 F.2d 50, 54 (7th Cir.1980)). However, a descriptive mark may receive trademark protection if it acquires secondary meaning “in the collective consciousness of the relevant community.” Mil-Mar Shoe, 75 F.3d at 1157 (citing Gimix, Inc. v. JS & A Group, Inc., 699 F.2d 901, 907 (7th Cir.1983)). Finally, terms that are either suggestive, arbitrary, or fanciful are automatically entitled to trademark protection because they are inherently distinctive. Two Pesos, 505 U.S. at 767-68, 112 S.Ct. 2753.

Platinum Mortgage first asserts that the district court clearly erred in finding that “platinum” is only descriptive of its services, arguing instead that the mark is suggestive and therefore entitled .-to full trademark protection. A district court’s determination that a trademark is either descriptive or suggestive is a finding of fact that is reviewed for clear error. Meridian Mut. Ins. Co., 128 F.3d at 1114. A finding of fact is clearly erroneous only if, based on the entire record, we are “left with the definite and firm conviction that a mistake has been committed.” Rust Environment, 131 F.3d at 1216 (citations omitted). Accordingly, “ ‘[i]f the district court’s account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.’ ” Id. (quoting Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1429 (7th Cir.1985) (citation omitted)).

The district court first considered various uses of the word: (1) the general use and definition of “platinum” to indicate either a precious metal or quality and excellence; (2) the plaintiff’s use of “platinum” as an alleged trade name or mark of its services; and (3) other businesses’ use of “platinum” as a component in their trade names, both within the scope of the mortgage industry and beyond that profession to businesses not related to or connected with mortgage services. To identify the difference between descriptive and suggestive words and to appreciate the inherent distinctiveness of a suggestive mark as compared to one that is merely descriptive, the district court applied the “degree of imagination test” as articulated by this court in Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947 (7th Cir.1992):

[I]f a mark imparts information directly it is descriptive. If it stands for an idea which requires some operation of the imagination to connect it with the goods, it is suggestive.

978 F.2d at 952. Ultimately, the district court concluded that “platinum” is only descriptive of Platinum Mortgage’s services, finding that “the mental leap ... is nearly instantaneous” and that it requires little imagination to associate “platinum” with superiority and quality service. Platinum Home Mortgage, Corp. v. Platinum Financial Group, Inc., No. 97 C 5293, 1997 WL 567909, at *3-4 (N.D.Ill. Sept. 4, 1997).

We agree with the district court’s conclusion that “platinum” is a “self-laudatory term” and that Platinum Mortgage is merely a descriptive trade name, id. at *4, and we find that the court’s “account of the evidence is plausible in light of the record viewed in its entirety.” Anderson v. City of Bessemer City, North Carolina, 470 U.S. 564, 574, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). In this instance, “platinum” describes the quality of plaintiffs mortgage services and suggests that it provides a superior service, but the word does not identify one particular source or designate the specific origin of those services without proof of secondary meaning. See In re Omaha Nat’l Corp., 819 F.2d 1117 (Fed.Cir.1987). The record clearly supports the district court’s finding that “platinum” is a weak mark and that “not much imagination is required to associate the term with any business.” Platinum Home Mortgage, 1997 WL 567909, at *4. As such, the district court’s determination is not clearly erroneous.

In following course with its first argument that “platinum” is suggestive, on appeal Platinum Mortgage next argues that the district court clearly erred by requiring it to prove secondary meaning. Platinum Mortgage contends that the mark is protect-able regardless of whether it acquires secondary meaning. However, this argument necessarily fails because, as discussed above, we agree with the district court’s preliminary finding that “platinum” is only a descriptive term. Id. To be entitled to protection under trademark law, a claimant must demonstrate that its descriptive trade name has acquired secondary meaning that identifies the inherent distinctiveness of its mark. Mil-Mar Shoe, 75 F.3d at 1157. Secondary meaning refers to the manner in which a consumer identifies a specific business or a business’s reputation by a particular trademark. Vaughan Mfg. Co. v. Brikam Int’l, Inc., 814 F.2d 346, 348 (7th Cir.1987).

To establish secondary meaning, a court may consider several factors to decide whether secondary meaning has been acquired or established:

(1) the amount and manner of advertising; (2) the sales volume; (3) the length and manner of use; (4) consumer testimony; and (5) consumer surveys. Int’l Kennel Club of Chicago, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1085 (7th Cir.1988). A mark acquires secondary meaning when it has been used so long and so exclusively by one company in association with its products or services in that particular industry that the “word, term, name, symbol, or device” has come to mean that those products or services are the company’s trademark. Gimix, Inc., 699 F.2d at 907. Accordingly, Platinum Mortgage alternatively argues that the district court erroneously concluded that it is unlikely Platinum Mortgage could establish it has acquired secondary meaning. Specifically, Platinum Mortgage asserts that consumers associate “platinum” with its reputation and the mortgage services it offers and, therefore, has acquired secondary meaning. The district court’s determination of secondary meaning is a finding of fact that is reviewed for clear error. Meridian Mut. Ins. Co., 128 F.3d at 1114.

The district court first noted that Platinum Mortgage did not submit any consumer testimony or consumer surveys to support its assertion that it has acquired secondary meaning. While not fatal to its request, the absence of that evidence weighs against Platinum Mortgage. Then, the court discussed Platinum Mortgage’s advertising efforts and its public recognition, in addition to the length and manner of its use of the mark. The district court initially recognized that Platinum Mortgage has used its name for only three years, and then emphasized that a majority of the evidence indicates that most of its advertising and publicity did not begin until 1996. Although length of time by itself is not a determinative factor, see Echo Travel, 870 F.2d at 1264, the district court determined, after examining the evidence in its totality, that it is unlikely Platinum Mortgage could demonstrate that it has acquired secondary meaning and ultimately concluded that “there is no indication ... that the public has come to associate plaintiffs name with its business or reputation.” Platinum Home Mortgage, 1997 WL 567909, at *5.

We agree with the district court’s conclusion that Platinum Mortgage’s evidence of sales, advertising, and promotions, in the context of the minimal length of time involved, fails to indicate it could establish that it has acquired secondary meaning. Evidence of advertising and sales is entirely circumstantial, and that evidence does not necessarily indicate that consumers associate a mark with a particular source, particularly when the advertisements and promotions do not specifically emphasize the mark. First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1383 (9th Cir.1987). Accordingly, courts have found that this type of evidence may be insufficient to establish that a descriptive mark has acquired secondary meaning. Spraying Systems Co. v. Delavan, Inc., 975 F.2d 387, 393 (7th Cir.1992). The record clearly illustrates that the district court considered sufficient, relevant factors to conclude that it is unlikely Platinum Mortgage could demonstrate it has acquired secondary meaning, and Platinum Mortgage does not persuade us that a mistake has been committed.

Platinum Mortgage then argues that even if it was not clear error for the district court to require evidence of secondary meaning, it nevertheless submitted compelling evidence of actual consumer confusion, and the district court erred as a matter of law by failing to consider that evidence. We recognize that the district court did not specifically analyze the evidence offered to show actual confusion. However,, in accordance with the district court’s conclusion, we also agree that consumer confusion does not exist within the scope of an infringement claim when the mark is not entitled to trademark protection. Platinum Home Mortgage, 1997 WL 567909, at *6. Nonetheless, we consider Platinum Mortgage’s argument that the court erred by not examining its evidence of actual confusion.

As an initial matter, de minimus evidence of actual confusion does not necessarily establish a likelihood of consumer confusion. Universal Money Centers v. Am. Tel. &. Tel. Co., 22 F.3d 1527, 1535 (10th Cir.1994). The evidence may indicate that consumers have a general knowledge that Platinum Mortgage provides mortgage services, but it fails to show that consumers identify “platinum” as the designator of a specific source. Also, evidence of actual confusion must refer to the confusion of reasonable and prudent consumers, and not confusion among sophisticated members of the mortgage service industry. See, e.g., Estee Lauder, Inc. v. The Gap, Inc., 108 F.3d 1503 (2d Cir.1997); Int’l Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819 (9th Cir.1993). At this stage in the proceedings, we hesitate to conclude that Platinum Mortgage has sufficiently established it could demonstrate “platinum” has acquired secondary meaning. The record clearly demonstrates that the district court examined sufficient evidence to reasonably conclude that “platinum” has not acquired secondary meaning and therefore is not entitled to trademark protection, notwithstanding the evidence of actual confusion.

Finally, Platinum Mortgage argues that the district court failed to consider the additional factors required for the issuance of a preliminary injunction, and therefore, its denial of preliminary injunctive relief should be reversed. We review a district court’s consideration of the elements of a preliminary injunction and its balancing of those elements for an abuse of discretion. Meridian Mut. Ins. Co., 128 F.3d at 1114. Under an abuse of discretion standard, we will not second guess the decision of a district court judge that is “ ‘in conformity with established legal principles and, in terms of the court’s application of those principals to the facts of the case, is within the range of options’” from which a reasonable trial judge would select. Am. Nat’l Bank & Trust Co. of Chicago v. Reg'l Transp. Auth., 125 F.3d 420, 431 (7th Cir.1997) (quoting United States v. Hamilton, 19 F.3d 350, 354 n. 3 (7th Cir.1994)).

In its memorandum opinion, the district court explained, albeit in a footnote, that in general, several of the elements a plaintiff must demonstrate to obtain preliminary injunctive relief are easily decided in the context of unfair competition and trademark infringement. Platinum Home Mortgage, 1997 WL 567909, at *2 n. 1. In fact, Judge Zagel specifically identified a court hearing when he discussed with the- parties some of those issues involved in,Platinum Mortgage’s request for a preliminary injunction. The district court cited Seventh Circuit cases that discuss, in the context of a preliminary injunction, (1) the lack of adequate remedies at law, (2) the inevitable harm that either party suffers by an adverse decision, and (3) the fundamental interest of the public, to support its conclusion that the grant or denial of preliminary injunctive relief ultimately pertains to Platinum Mortgage’s likelihood of success in the underlying trademark infringement claim. Id.; see also Int’l Kennel Club, 846 F.2d at 1092; August Storck, 59 F.3d at 619. When the district court concluded that it was unlikely Platinum Mortgage could demonstrate it has acquired secondary meaning at this stage, the court denied the motion for preliminary injunctive relief. Without proof that “platinum” has acquired secondary meaning, Platinum Mortgage has failed to demonstrate the validity of its right to use Platinum Home Mortgage Corporation as a trade name.

With the present record, we agree with the district court’s conclusion that Platinum Mortgage did not have more than a negligible chance to prevail on the merits of its claim. This conclusion does not suggest an abuse of discretion; instead, it obviated the need for the district court to continue further with its analysis. In the preliminary injunction context, where time is often of the essence, this court has emphasized that it is advisable for district courts to examine, if only briefly, all four preliminary injunction considerations. Meridian Mut. Ins. Co., 128 F.3d at 1121. Such a practice expedites this court’s review of the grant or denial of a preliminary injunction and protects the interests of the parties. Id. However, in accordance with our decision in Ping v. Nat’l Educ. Ass’n, 870 F.2d 1369 (7th Cir.1989), we also have recognized that a district court may decline to address the remaining elements of a preliminary injunction if a plaintiff fails to demonstrate a reasonable likelihood of prevailing on the merits of the underlying claim. 870 F.2d at 1371.

Accordingly, we find that the district court’s examination of the necessary, elements for a preliminary injunction, within the scope of ah infringement claim and its application of the principals of trademark law, are reasonable and fall within the range of a district court’s discretion and the' available options from which a reasonable trial judge may select in the adjudication and ultimate resolution of those issues. Am. Nat’l Bank & Trust Co. of Chicago, 125 F.3d at 431. At this point in the case, the district court properly denied Platinum Mortgage’s motion for a preliminary injunction. It may be that after a full trial seeking a permanent injunction, the record will support Platinum Mortgage’s claim; the current record does not.

Conolusion

We AffiRM the district court’s decision to deny the plaintiffs request for preliminary injunctive relief and REMAND to the district court with a recommendation that, to the extent practicable, the district court should expedite the proceedings in this matter.

1 . At this point in the opinion, we will reiterate a point emphasized by the district court. Although plaintiff has consistently described this action throughout its pleadings and briefs as one for trademark infringement, the actual subject of this dispute is the trade name of each party. The term "trademark" can be used in a broad and generic sense to denote the entire field of trademarks, service marks, trade names, and trade dress. Section 45 of the Lanham Act, 15 U.S.C. § 1127, defines "trade name” as "any name used by a person to identify his or her business or vocation.”

Although trade names and trademarks are distinct names and symbols, analogous actions for trade name and trademark infringement are properly asserted under § 43(a) of the Lanham Act. Accuride Int'l, Inc. v. Accuride Corp., 871 F.2d 1531 (9th Cir.1989). In this opinion, we use "trade name” and "mark” interchangeably to refer to the subject in dispute.