Opinion
Civ. No. 03-1362-AA.
July 23, 2004
Robert A. Shlachter, Steve D. Larson Christina L. Beatty-Walters Stoll Stoll Berne Lokting Shlachter, P.C. Portland, OR, Attorneys for plaintiff.
Steven T. Lovett, Stoel Rives, LLP Portland, OR, Richard J. O'Brien Sidley Austin Brown Wood, LLP Chicago, IL, Attorneys for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Plaintiff Edge Wireless, LLC filed suit against defendant U.S. Cellular Corporation, alleging trademark infringement arising from defendant's introduction of a new wireless data service called "easyedgeSM." Plaintiff alleges that the similarities between its marks and the easyedgeSM mark will cause confusion as to the source or association of easyedgeSM. Plaintiff seeks a permanent injunction enjoining defendant from using easyedgeSM in connection with its wireless services in the markets in which the parties compete.
From May 18 through May 20, 2004, the court conducted a bench trial and heard testimony from ten witnesses and received 257 exhibits into evidence. By stipulation, the parties also submitted designated deposition testimony from twenty witnesses. Upon review of the testimony, exhibits, and arguments, the court issues the following findings of fact and conclusions of law.
FINDINGS OF FACT
1. Plaintiff is an Oregon wireless telecommunications company founded in 1999 and headquartered in Bend, Oregon. Plaintiff provides wireless telecommunications services in rural areas of southern Oregon, central and eastern Idaho, northwest Wyoming, and northern California. Joint Pretrial Order (PTO), p. 2. Plaintiff has annual revenues of $78 million. Expert Witness Report of Lynn B. Upshaw (Upshaw Report), p. 3.
2. Plaintiff federally registered the trade mark "Edge Wireless" on June 4, 2002. PTO, p. 2; Plaintiff Exhibit (Pl. Ex.) 90. Plaintiff disclaimed any right to the word "wireless." Defendant Exhibit (Def. Ex.) 133 at EW02360, EW02363.
3. Since January 2001, plaintiff has used the edgeWIRELESS® logo in connection with its wireless services. PTO, p. 3. Plaintiff uses other marks to identify its various rate plans: NationalEdge, WesternEdge, LocalEdge, SharedEdge, and AccessEdge. Pl. Exs. 50-56. National Edge is a national calling plan, Western Edge is a calling plan for western states, Shared Edge is a plan for multiple phones on one account, and Access Edge is a prepaid calling plan. PTO, p. 3.
4. Plaintiff has spent over seven million dollars promoting its brand, marks, and services through television, radio, and newspaper advertisements, brochures and fliers, direct mailings, and a company website. PTO, p. 3; Pl. Exs. 95, 200; Def. Ex. 100BB; Upshaw Report, p. 5.
5. Plaintiff has never conducted brand awareness research regarding its edgeWIRELESS® or rate plan marks. Testimony of Donald Castleman (Castleman Testimony), Transcript of Proceedings (TP) 222-23; Designated Testimony of Jeff Keller, pp. 9-10.
6. Plaintiff is a member of the ATT Wireless Network, meaning that plaintiff's customers have access to wireless services via ATT's network when outside of plaintiff's service area. See Testimony of Wayne Perry (Perry Testimony), TP 70-71; Designated Testimony of Donald F. Castleman (Castleman Designated Testimony), pp. 56-57. Plaintiff is not an affiliate of ATT Wireless, although ATT Wireless possesses a minority ownership interest in plaintiff. PTO, p. 4; Designated Testimony of Kevin Keillor (Keillor Designated Testimony), p. 8 (November 26, 2003).
7. Plaintiff is the only member of the ATT Wireless network offering wireless services in its markets, and ATT Wireless does not sell its services to retail consumers within plaintiff's markets. PTO, p. 4; Castleman Designated Testimony, p. 131.
8. Pursuant to a licensing agreement with ATT Wireless, plaintiff almost always displays its edgeWIRELESS® and rate plan marks with the globe logo of ATT Wireless, along with the phrase "Member of the ATT Wireless Network." See, Pl. Ex. 202; Def. Exs. 131, 136; Castleman Testimony, TP 229-31; Keillor Designated Testimony, pp. 25-27 (November 26, 2003). The ATT Wireless logo and phrase are included on promotional materials, in print and television advertisements, in plaintiff's retail stores, on plaintiff's web site, and on Edge Wireless business cards and employee handbooks. See Pl. Exs. 50-56, 65, 66, 74, 77, 88, 202, 203, 206; 207; Def. Exs. 100BB, 101A-101L, 101N-101HH, 502; Castleman Testimony, TP 231; Designated Testimony of Polly Johnson, pp. 10, 12, 15.
9. From 2001 through the first quarter of 2004, the number of subscribers to plaintiff's wireless services has increased to approximately 120,000. Pl. Ex. 249; Perry Testimony, TP 71.
10. Plaintiff sells its services through its own retail stores and independent dealers, with plaintiff's edgeWIRELESS® mark prominently displayed. Pl. Exs. 254, 268; Def. Ex. 101E.
11. Defendant has been in the telecommunications business since 1985. Defendant provides wireless services in Oregon, southern Washington, northern California, portions of Idaho, and several other markets nationwide. PTO, p. 5; Def. Ex. 135. Defendant has annual revenues of $2.2 billion. Upshaw Report, p. 3.
12. Defendant was the original wireless carrier in most of the service areas it now shares with plaintiff, beginning in the mid-1980s. PTO, p. 5; Testimony of Alan Ferber (Ferber Testimony), TP 413; Castleman Testimony, TP 232.
13. In May 1999, defendant introduced its U.S. Cellular house mark and star logo. Ferber Testimony, TP 413. Defendant has spent over $400 million dollars to promote its mark to insure that it is easily and immediately recognized by consumers. Ferber Testimony, TP 414.
14. Market research on defendant's brand equity reflects that defendant is the most dominant brand in its markets, with brand awareness of 90%. Def. Ex. 148, p. 8; Ferber Testimony, TP 415. Plaintiff agrees that defendant is one of the most well-known wireless providers in their shared markets. Castleman Designated Testimony, p. 42.
15. Defendant promotes its mobile wireless services through television, radio, and newspaper advertisements, direct mailings, and a company website, all of which prominently display the U.S. Cellular house mark and star logo. See Def. Exs. 100AA, 100J-100L, 100N, 100P-100R, 100W, 176, 180A, 180D, 180E, 180H-180K, 187, 196, 197, 198; Designated Testimony of Alan Ferber (Ferber Designated Testimony), p. 31.
16. Defendant sells its services primarily through retail stores operated either by defendant or its agents. PTO, p. 5. The stores have prominent signage displaying the U.S. Cellular mark and star logo. See Def. Ex. 506. Currently, defendant has approximately four and one-half million customers. Ferber Testimony, TP 413.
17. Since 2001, plaintiff and defendant have provided wireless voice services in the same markets in southern Oregon, northern California, and central and eastern Idaho.
18. On June 28, 2002, plaintiff announced an expansion and enhancement of its network to provide advanced voice and data wireless services. The data features allow consumers to download data onto compatible mobile phones and to send pictures and text messages. Plaintiff's rate plans for its advanced wireless services are called NationalEdge+ and LocalEdge+. PTO, p. 3; Pl. Exs. 52, 54.
19. In November 2002, defendant decided to offer a wireless data feature along with its wireless voice services. Testimony of Kathryn Volpi (Volpi Testimony), TP 246. Defendant retained Landor Associates (Landor), an agency that specializes in branding and name development, to develop a brand for its wireless data services. Volpi Testimony, TP 248. Landor proposed several names, including "easyedge." Def. Exs. 104-109, 163; Testimony of Mary Zalla, TP 309; Volpi Testimony, TP 250-51.
20. Defendant selected the name "easyedge" after an intensive consumer research process and investigation into other registered uses of the name. Def. Ex. 173. Defendant found no registrations of "easyedge" as a trademark in the telecommunications industry. Pl. Ex. 48; Def. Exs. 109-126; 163; Volpi Testimony, TP 251. Executives involved in the preliminary selection of easyedgeSM were not aware of plaintiff prior to and during the selection process. Volpi Testimony, TP 253.
21. Landor designed the easyedgeSM logo, which includes a smaller U.S. Cellular house mark below the word "easyedge." See Def. Ex. 124. Defendant's guidelines governing the use of the easyedgeSM mark mandate that it always be accompanied by the U.S. Cellular house mark and star logo. Def. Exs. 109, 128; Volpi Testimony, TP 254-55.
22. Defendant's top executives, including its President and Chief Executive Officer (CEO) and Executive Vice President of Operations (Operations VP), were aware of plaintiff prior to the launch easyedgeSM, but they were not concerned about confusion between plaintiff's marks and easyedgeSM and did not consider plaintiff's marks as a barrier against using easyedgeSM. Pl. Exs. 276 (Deposition Testimony of Jack Rooney), 275 (Deposition Testimony of Jay Ellison).
23. Jack Rooney, U.S. Cellular President and CEO, learned of the easyedgeSM name and logo at a senior leadership meeting where the launch campaign for easyedgeSM was introduced. Pl. Ex. 276. Rooney inquired whether the easyedgeSM mark had been researched and "cleared," and he was assured that it had. Id. Rooney also asked whether a problem would arise with a wireless technology known as "EDGE," and he was told no. Id. Jay Ellison, U.S. Cellular Operations VP, met with the easyedgeSM team and approved the easyedgeSM logo and marketing campaign. Pl. Ex. 275. Ellison was assured that a trademark search had been conducted and that no conflicts with the easyedgeSM mark were found. Id.; Def. Ex. 163.
24. In July 2003, Kathryn Volpi, U.S. Cellular marketing and product management director for wireless data, was asked whether there was concern about plaintiff or EDGE technology. Volpi Testimony, TP 295. At a wireless data services leadership workshop in August 2003, a participant asked whether easyedgeSM was going to be marketed differently in plaintiff's territories. Pl. Ex. 1, p. 3; Volpi Testimony, TP 295; Designated Testimony of John Cregier, p. 21. Another participant inquired whether there would be any issues with EDGE technology. Volpi Testimony, TP 296. At an Idaho leadership meeting in July 2003, an employee expressed concern whether plaintiff's employees would refer consumers to U.S. Cellular if they entered an Edge Wireless store and inquired about easyedgeSM. Designated Testimony of Glenn Simmons, pp. 25-33.
25. In August 2003, Marijohn Kirsch, regional advertising manager for U.S. Cellular, was shown an advertisement promoting Edge Wireless — which she believed to be a subsidiary of ATT — and became aware of EDGE technology. Designated Testimony of Marijohn Kirsch (Kirsch Designated Testimony), pp. 6, 9, 13; Pl. Ex. 37. Kirsch expressed concern to another U.S. Cellular executive that branding easyedgeSM could be a "nightmare" in light of plaintiff and EDGE technology. Pl. Ex. 37; Kirsch Designated Testimony, p. 13; Designated Testimony of Peter Cremer, pp. 57-58, 66. However, Kirsch was unaware at the time that the easyedgeSM mark would always be accompanied by the U.S. Cellular house mark. See Kirsch Designated Testimony, pp. 16-17.
26. Defendant conducted several legal reviews and determined that the manner in which it intended to use easyedgeSM would not create a possibility of consumer confusion between plaintiff's marks and easyedgeSM, because the U.S. Cellular house mark would always be displayed with easyedgeSM and clearly identify defendant as the source of easyedgeSM. Def. Exs. 109, 128; Ferber Testimony, 431; Designated Testimony of Kathryn Volpi (Volpi Designated Testimony), p. 23.
27. On September 22, 2003, defendant formally launched easyedgeSM, and defendant since has made it available in Illinois, Tennessee, Iowa, and Wisconsin. PTO, p. 5. Defendant plans to launch easyedgeSM in the markets shared with plaintiff by the fall of 2004. Id.; Pl. Ex. 83.
28. Defendant's easyedgeSM service offers the same or similar data features as plaintiff's LocalEdge+ and NationalEdge+ plans, including downloading capabilities, picture and text messaging, and wireless modem features for use with a laptop computer or personal digital assistant (PDA). Volpi Testimony, TP 267. The easyedgeSM service is an "add-on feature" to basic wireless services and incurs additional charges. Volpi Testimony, TP 268.
29. Plaintiff's registered mark "Edge Wireless" is senior to the easyedgeSM mark.
30. Plaintiff's edgeWIRELESS® mark displays two words as a single word, with the term "edge" in lower case letters. The easyedgeSM mark displays two words as a single word, all in lower case letters.
31. Plaintiff has not consistently displayed "edge" in all of its marks. The word "edge" appears in both capital and lower case letters, as a two word combination and as part of a compound word, and as a prefix and suffix, in a variety of colors and typefaces. Pl. Exs. 50-57, 59, 64, 71, 73, 202; Def. Exs. 156-160, 502; Def. Trial Memorandum (doc. 106), Apps. A, 1-45. Plaintiff displays "edge" with a capital "E" in its rate plan marks — NationalEdge, LocalEdge, SharedEdge, AccessEdge — although sometimes AccessEdge is displayed with a lower case "e" in "edge." Pl. Exs. 50-56, 202; Def. Exs. 156-160.
32. The average revenue per unit (ARPU) in the wireless telecommunications industry is approximately $50.00 per month, meaning that the average wireless customer spends at least $600 a year for wireless services. Castleman Designated Testimony, p. 95.
33. Defendant's ARPU is around $40. Ferber Testimony, TP 430. The easyedgeSM service adds another charge of up to $10 per month. Volpi Testimony, TP 269.
34. Plaintiff's ARPU is $38.50, with postpay customers accounting for approximately 97% of plaintiff's subscriber revenues. Designated Testimony of Gregory Dean Simons, pp. 5, 18. Plaintiff requires all post-pay customers to enter into a contract of at least one year. PTO, p. 4; Castleman Testimony, TP 234. If a customer terminates service before the end of the contract, plaintiff charges a cancellation fee of $25 for every month remaining on the contract. Def. Ex. 101S; Castleman Testimony, TP 235.
35. In response to the Canadian Intellectual Property office's objection to plaintiff's application to register the "Edge Wireless" service mark, plaintiff stated:
[T]he costs to the customer over the life of the service agreement which often accompanies cell phone services are significant enough to urge the consumer to undertake some careful consideration before subscribing for the services. As such, the cell phones services in association with which the Trade-mark is used are also unlikely to be subject to hasty purchases where the true identity of the source of the services is not known.
Def. Ex. 133 at EW02367.
36. The wireless services industry is relationship-driven. Castleman Testimony, TP 227; Castleman Designated Testimony, pp. 34-35.
The majority of new wireless customers switch from one wireless provider to another. Ferber Testimony, TP 417. Other customers are considered "add-ons," i.e., current subscribers adding services or additional phone numbers on the same account. Def. Ex. 134; Ferber Testimony, TP 417.
37. Consumers generally choose wireless services after careful consideration of the competing services and several instore visits. Def. Ex. 146; Ferber Testimony, TP 422-23; Castleman Testimony, TP 227; Castleman Designated Testimony, pp. 70-71.
38. "EDGE" is an acronym for Enhanced Data rates for GSM Evolution (or Environment). EDGE is a type of technology that allows faster transmission of wireless data. Castleman Designated Testimony, pp. 77-78; Pl. Ex. 276 (Rooney Deposition Testimony). Nokia, Ericsson, T-Mobile, and ATT Wireless offer wireless services supported by EDGE technology. Def. Exs. 169-71.
39. ATT Wireless has launched a nationwide marketing campaign to promote its wireless data services with EDGE technology. Def. Exs. 137, 161-62; Declaration of Kenneth A. Willner, ¶¶ 4-11; Declaration of Rebecca A. Shaw (Shaw Decl.) ¶ 4; Designated Testimony of Don Adams (Adams Designated Testimony), pp. 42-43. ATT Wireless promotes EDGE as having features superior to alternate technologies. Def. Exs. 137, 161-62; Willner and Shaw Declarations. As of November 18, 2003, EDGE network promotional materials were made available to approximately 250 ATT Wireless stores nationwide. Shaw Decl. ¶ 5; Def. Exs. 161, 162.
40. Plaintiff is in the process of upgrading its network to utilize EDGE technology. Castleman Testimony, TP 232-33; Adams Designated Testimony, p. 19.
41. In February 2004, ATT Wireless signed a merger agreement with another wireless services provider, Cingular, under which Cingular intends to acquire ATT Wireless. Perry Testimony, TP 71.
42. Plaintiff did not conduct a consumer survey to assess whether a likelihood of confusion would occur between easyedgeSM and edgeWIRELESS® or plaintiff's rate plan marks. Instead, plaintiff obtained the services of Lynn Upshaw, a brand marketing consultant with over twenty years experience in advertising. Testimony of Lynn Upshaw (Upshaw Testimony), TP 148.
43. Upshaw was asked to render an opinion regarding whether defendant's introduction of easyedgeSM in plaintiff's markets would likely result in confusion between the parties' marks or services. See generally Upshaw Report.
44. Specifically, Upshaw was asked to address three questions:
1. Does plaintiff have a viable brand in the marketplace?
2. If easyedgeSM was introduced into plaintiff's markets, would there be a likelihood of confusion?
3. If so, what would be the likely effect on plaintiff?
Upshaw Report, p. 6; Upshaw Testimony, TP 151.
45. Upshaw concluded that confusion between easyedgeSM and plaintiff's marks was likely to occur, although Upshaw could not render an opinion on the level of confusion. Upshaw Report, pp. 9-10; Upshaw Testimony, p. 152.
46. Defendant retained the services of Dr. Susan McDonald, a survey expert and the Chief Executive Officer of National Analysts, a marketing research and consulting firm that conducts hundreds of surveys each year. McDonald has over thirty years experience in surveying and market research. Testimony of Susan McDonald (McDonald Testimony), TP 320; Expert Report of Susan A. McDonald (McDonald Report), Appendix A. McDonald was asked to design a survey to determine whether consumers exposed to easyedgeSM advertisements would accurately attribute the services to defendant or another competitor. McDonald Report, p. 5.
47. National Analysts designed and directed a quantitative survey of wireless customers using field survey agencies. McDonald Report, p. 5. The survey was conducted from March 11 through March 14, 2004, at three locations: Twin Falls, Idaho; Fort Bragg, California; and North Bend, Oregon. McDonald Report, p. 5, Appendix B.
48. The survey was double-blinded, meaning that neither the survey participants nor the survey administrators knew of the survey's sponsor or purpose. McDonald Report, pp. 8-9; McDonald Testimony, TP 330; Designated Testimony of Hugh Miller, pp. 14, 26, 32. 49. The survey exposed 304 current or potential wireless consumers to either radio or newspaper advertising of easyedgeSM. McDonald Report, p. 11, Appendix G. The respondents were then asked three questions:
1. What message is this commercial/advertisement communicating to you?
2. What company do you think is the sponsor of this commercial/advertisement?
3. Why do you say that?
McDonald Report, pp. 9-10; McDonald Testimony, TP 332-36.
50. The respondents' answers were reviewed and coded under McDonald's direction by National Analysts data collection and processing staff. McDonald Report, pp. 5, 11-12; McDonald Testimony, TP 337-38. According to McDonald's analysis, the survey reflected a 95% probability that the net level of source confusion associated with easyedgeSM advertisements would be much less than 10%, a level McDonald deemed "negligible." McDonald Report, pp. 12-13, 15; McDonald Testimony, TP 348-49.
51. On April 27, 2004, Kelly Dresen, an Edge Wireless customer, entered an Edge Wireless retail store and asked about a service called "easyedge." Testimony of Amy Anderson (Anderson Testimony), TP 140-41. Dresen was told by a relative that either Edge Wireless or U.S. Cellular provided a wireless data service called "easyedge" that could link her cellular phone to the internet via her computer. Anderson Testimony, TP 141-42; Designated Testimony of Kelly Dresen, pp. 6-8.
52. Defendant could launch easyedgeSM under a new name, but it would be extremely expensive and burdensome. Ferber Testimony, TP 434-36. If prohibited from using the easyedgeSM mark, defendant would likely launch its wireless data services under a generic name rather than incur the costs of a new mark. See Ex. 275; Declaration of Laura Rankin, Ex. A, p. 4 (Jay Ellison Deposition); Ferber Testimony, TP 434.
CONCLUSIONS OF LAW
53. Plaintiff alleges claims of trademark infringement under the Lanham Act, 15 U.S.C. § 1114 and 1125(a). Plaintiff also alleges unfair competition under Oregon common law. Plaintiff relies on the same facts for all claims and seeks the same remedies.
54. "The limited purpose of the trademark protections set forth in the [Lanham Act] is to avoid confusion in the marketplace by allowing a trademark owner to prevent others from duping consumers into buying a product they mistakenly believe is sponsored by the trademark owner." Mattel, Inc. v. Walking Mountain Productions, 353 F.3d 792, 806 (9th Cir. 2003) (internal quotation marks, brackets, and citation omitted). Thus, "[t]rademark law aims to protect trademark owners from a false perception that they are associated with or endorse a product."Id.
55. To establish a claim for trademark infringement under the Lanham Act and Oregon law, a plaintiff must prove "the existence of a trademark and the subsequent use of that mark by another in a manner likely to create consumer confusion." Comedy III Prods., Inc. v. New Line Cinema, 200 F.3d 593, 594 (9th Cir. 2000); Classic Instruments, Inc. v. VPO-Argo Instruments, Inc., 73 Or. App. 732, 736-37, 700 P.2d 677, 684 (1985) (applying principals of federal trademark law to state law claims of trademark infringement and unfair competition).
56. "The core element of trademark infringement is whether the similarity of the marks is likely to confuse customers about the source of the products." Interstellar Starship Servs. Ltd. v. Epix, Inc., 304 F.3d 936, 941 (9th Cir. 2002). "The test for likelihood of confusion is whether a `reasonably prudent consumer' in the marketplace is likely to be confused as to the origin of the good or service bearing one of the marks."Dreamwerks Production Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129 (9th Cir. 1998). Put another way, a "[l]ikelihood of confusion exists when customers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service identified by a similar mark.") Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1265 (9th Cir. 2001) (internal quotation marks and citation omitted).
57. A finding of a likelihood of confusion requires that such confusion be probable and "not simply a possibility." Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987). Thus, plaintiff bears the burden of establishing that consumer confusion is likely as a result of defendant's introduction of easyedgeSM in plaintiff's markets.
58. Plaintiff argues that if defendant is allowed to introduce easyedgeSM, consumers will mistakenly assume that plaintiff is the source of easyedgeSM or that plaintiff is somehow associated with easyedgeSM or defendant. Plaintiff also relies, to a lesser extent, on initial interest confusion, arguing that consumers would become interested in easyedgeSM based on the belief that it was a service associated with plaintiff. See Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1063 (9th Cir. 1999).
59. To evaluate the likelihood of confusion, courts generally apply the so-called Sleekcraft factors, which include: 1) the similarity of the marks; 2) the relatedness or proximity of the two parties' products or services; 3) the strength of the registered mark; 4) the marketing channels used; 5) the degree of care likely to be exercised by the purchaser in selecting goods; 6) the accused infringers' intent in selecting its mark; 7) evidence of actual confusion; and 8) the likelihood of expansion in product lines. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979).
60. The Sleekcraft factors are intended to provide guidance rather than dictate a particular result, and the "relative importance of each factor is case-specific." Brookfield, 174 F.3d at 1054. Thus, while "the Sleekcraft test plays an important role in the analysis of whether a likelihood of confusion exists, `[i]t is the totality of facts in a given case that is dispositive.'" Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1140 (9th Cir. 2002) (quoting Rodeo Collection, 812 F.2d at 1217).
61. I do not find the potential expansion of product lines to be relevant to this case. The parties are already direct competitors, and easyedgeSM is the mark for a specific add-on wireless feature rather than a company offering wireless services. Neither party has produced evidence or suggested that defendant intends to introduce another service using the term "edge."
62. Additionally, several Sleekcraft factors, though relevant, are not particularly significant under the facts of this case. These factors include defendant's intent in choosing easyedgeSM, evidence of actual confusion, and the strength of plaintiff's marks.
63. No evidence suggests that defendant intended to deceive consumers or derive a benefit associated with plaintiff's goodwill in choosing easyedgeSM as the brand for its wireless data services. See Entrepreneur Media, 279 F.3d at 1148-49. Defendant engaged in a legal review and trademark search of the easyedgeSM mark. Def. Ex. 163. Defendant concluded in good faith that it would not infringe plaintiff's marks, because the easyedgeSM mark would always be displayed with the U.S. Cellular house mark. Def. Exs. 109 — 26, 163; Volpi Designated Testimony, p. 23; Ferber Designated Testimony, p. 73.
64. Further, common sense dictates that defendant would not choose a nationwide brand in order to deceive consumers in a small percentage of its markets. I thus find no intent to deceive based on the fact that defendant retained the easyedgeSM mark after several of defendant's employees raised questions over the selection of the name "easyedge." At most, defendant took a calculated risk of litigation. Regardless, this factor does not weigh in favor of plaintiff.
65. Next, plaintiff did not introduce survey evidence showing actual confusion, and I find no actual confusion arising from the events of April 27, 2004.
66. Kelly Dresen and Amy Anderson testified that the reason Dresen asked an Edge Wireless associate whether plaintiff offered the easyedgeSM service was because she was an Edge Wireless customer. Anderson Testimony, TP 140, 143, 145; Dresen Designated Testimony, pp. 7-8, 12. Dresen also testified that had she been a U.S. Cellular customer, she would have inquired at a U.S. Cellular store instead. Dresen Designated Testimony, pp. 8-9. In other words, Dresen asked an Edge Wireless associate about easyedgeSM because of her existing customer relationship with plaintiff, not because of a mental association between plaintiff and easyedgeSM. Therefore, I find no evidence of actual confusion, and this factor does not weigh in either party's favor.
67. Similarly, I do not find that the strength of plaintiff's marks weighs heavily in finding a likelihood of confusion. "The strength of a mark is determined by its placement on a continuum of marks." E. J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1291 (9th Cir. 1992) (citation and internal quotation marks omitted), with "stronger marks receiving greater protection than weak ones." Entrepreneur Media, 279 F.3d at 1141. "This is so because a strong mark is `inherently distinctive,' and therefore it is more likely that consumers will be confused by another's use of the same or similar mark." Id. (quoting Sleekcraft, 599 F.2d at 349). In addition to conceptual strength, courts may consider a mark's commercial strength. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1207 (9th Cir. 2000).
68. The strongest marks receiving the maximum trademark protection are "arbitrary" or "fanciful." Entrepreneur Media, 279 F.3d at 1141. Marks that are weaker but still deserving of moderate protection are "suggestive" or "descriptive," with suggestive marks considered stronger. Id.; E J Gallo Winery, 967 F.2d at 1291. The weakest marks, entitled to no trademark protection, are "generic." Id.
69. Plaintiff contends that its marks are arbitrary, because they have no intrinsic connection to the services offered. See Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1390 (9th Cir. 1993) ("An arbitrary mark consists of common words arranged in an arbitrary way that is non-descriptive of any quality of the goods or services."). I disagree. Although the term "edge" may not be descriptive, "it is the mark in its entirety that must be considered — not simply individual elements of that mark."GoTo.com, 202 F.3d at 1207. Taken as a whole, plaintiff'sedgeWIRELESS® and rate plan marks describe some aspect of plaintiff's wireless services and cannot be considered arbitrary.
70. Defendant, on the other hand, argues that plaintiff's marks are entitled to no greater protection than descriptive marks. "Descriptive marks define qualities or characteristics of a product in a straightforward way that requires no exercise of the imagination to be understood." Entrepreneur Media, 279 F.3d at 1141-42 (quoting Kendall-Jackson Winery, Ltd. v. E J Gallo Winery, 150 F.3d 1042, 1047 n. 8 (9th Cir. 1998)). Again, I disagree.
71. I find that plaintiff's marks are deserving of protection commensurate to that afforded suggestive marks. A suggestive mark "does not describe the product's features, but suggests them." Id. at 1142 (quoting Kendall-Jackson Winery, 150 F.3d at 1047 n. 8). Here, the term "edge" when coupled with "wireless," suggests "innovative, high-tech, or technologically advanced," i.e., "cutting edge." See Opinion and Order dated December 24, 2003, pp. 8, 14. The same is true of plaintiff's rate plan marks.
72. I recognize that defendant's trademark registry search reveals numerous registrations of the word "edge" in the telecommunications industry, evoking the same or similar meaning as plaintiff's use of "edge." See, e.g., Def. Ex. 173, pp. 7 ("Frontier Edge"), 35 ("Digital Edge"), 36-39 ("Mobile Edge," "Digital Edge Gold," "Digital Edge USA," "Digital Edge East"), 75 ("New Edge Networks").
73. Further, several wireless companies, including ATT Wireless, have increased their promotional efforts of EDGE technology, which increases the speed of wireless data transmissions. Def. Exs. 161-62, 168-71, 184-85. In fact, plaintiff intends to upgrade its network and utilize EDGE technology. Castleman Testimony, TP 232-33.
74. While these uses of the word "edge" do not render plaintiff's mark generic or one in a "crowded field" undeserving of trademark protection, see Entrepreneur Media, 279 F.3d at 1143-44, they support the court's conclusion that plaintiff's mark is not so inherently strong as to warrant maximum protection.
75. Commercial strength, i.e., market recognition, may be shown by intensive marketing efforts, longevity of the mark, or wide consumer recognition of the mark. See Homeowner's Group, Inc. v. Home Marketing Specialists, Inc., 931 F.2d 1100, 1107-08 (6th Cir. 1991); AH Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 224 (3d Cir. 2000). Plaintiff has spent millions of dollars marketing the Edge Wireless brand within its small, rural markets, and it continues to grow and attract increasing numbers of subscribers. See Pl. Ex. 95; Testimony of Patti Widmer (Widmer Testimony), TP 95-96, 136; Upshaw Testimony, TP 151-52. However, plaintiff has used the edgeWIRELESS® logo for only three years in the wireless industry, and plaintiff submitted no brand awareness studies to support its claim of commercial strength. Therefore, the overall strength of plaintiff's marks does not weigh heavily in favor of finding a likelihood of confusion.
76. The remaining four Sleekcraft factors bear more significance to the question of whether it is likely that the easyedgeSM mark will cause confusion among consumers.
77. Weighing in plaintiff's favor is the fact that both plaintiff and defendant provide similar wireless voice and data services to retail customers in many of the same markets. Thus, the parties' services are related and in close proximity.
78. Likewise, both parties utilize the same or similar marketing channels to promote their services, including newspaper, radio, and television advertising. PTO, pp. 5-6; Pl. Exs. 202, 203-206.
79. Weighing in defendant's favor is the high degree of care exercised by consumers when obtaining wireless services.
80. With basic monthly charges of $35 to $40, wireless service charges can total a substantial amount of money over the span of a contractual term, and even more if a consumer wishes to terminate the contract. Castleman Designated Testimony, p. 95; Castleman Testimony, TP 235. Furthermore, the parties agree that consumers "shop around" and compare services before choosing a service provider. Perry Testimony, TP 90; Castleman Testimony, TP 227-28; Castleman Designated Testimony, pp. 70-71; Def. Ex. 146.
81. I therefore reaffirm my previous conclusion that wireless service customers are highly sophisticated consumers who exercise a corresponding degree of care when choosing wireless voice and data services. See Def. Ex. 133 at EW02637; Ferber Testimony, TP 422-26; Castleman Testimony, TP 227; Castleman Designated Testimony.
82. Accordingly, a reasonably prudent consumer is less likely to be confused when purchasing a wireless service, and this factor weighs more heavily in finding no likelihood of confusion.
83. The final Sleekcraft factor is the similarity between easyedgeSM and plaintiff's marks. I find this factor significant given that the parties promote similar services through similar marketing channels. See GoTo.com, 202 F.3d at 1207 ("This trinity constitutes the most crucial body of theSleekcraft analysis. . . .")
84. When determining the similarity of the marks, three axioms apply: 1) marks should be considered in their entirety and as they appear in the marketplace; 2) similarity is best adjudged by appearance, sound, and meaning; and 3) similarities weigh more heavily than differences. Id. at 1206.
85. Although plaintiff does not display the word "edge" consistently in its marks, plaintiff's marks nevertheless share similarities with easyedgeSM in terms of appearance, sound, and meaning. The edgeWIRELESS® and easyedgeSM marks both contain the word "edge" in lower case letters and combine two words as one. The parties also use similar colors in many of their respective advertisements, brochures and products. See Pl. Exs. 57, 59, 60, 63, 72, 74, 81, 88, 202; Def. Ex. 138. Plaintiff's rate plan marks — SharedEdge, NationalEdge, LocalEdge, and AccessEdge — use "edge" as a suffix, and thus the easyedgeSM mark has a similar sound as plaintiff's rate plan marks. Pl. Exs. 50-56. Finally, the marks are similar in meaning, because they suggest the cutting "edge" in wireless services or technology.
86. Despite these similarities, defendant argues that the distinctive U.S. Cellular house mark always accompanying or displayed with the easyedgeSM mark negates any confusion based on the similarities of the marks, particularly when considered with the high degree of care exercised by wireless consumers.
87. It is well-established that the presence of a prominent housemark may negate the likelihood of confusion, even if the marks are similar. See Cohn v. Petsmart, 281 F.3d 837, 842 (9th Cir. 2002) (no confusion where distinctive house mark displayed and accused mark used as "tagline"); Walter v. Mattel, Inc., 210 F.3d 1108, 1111 (9th Cir. 2000) (no confusion in light of dissimilarity between products and defendant's prominently displayed house mark); Universal Money Centers, Inc. v. American Tel. Telegraph Co., 22 F.3d 1527, 1531 (10th Cir. 1994) (defendant's mark as a whole was not "confusingly similar" to plaintiff's mark in light of "distinctive" house mark "prominently displayed"); Lindy Pen Co. v. Bic Pen Corp., 725 F.3d 1240, 1245 (9th Cir. 1984) (similarity of identical marks negated by prominent display of house marks on products); EA Engineering Science Tech., Inc. v. Environmental Audit, Inc., 703 F. Supp. 853, 857 (C.D. Cal. 1989) (defendant's use of "EA" with full corporate name minimized similarity with plaintiff's mark).
88. I find that the manner in which easyedgeSM appears in television and radio advertisements will not cause a likelihood of confusion, because the dominance of the U.S. Cellular mark clearly identifies defendant as the source of easyedgeSM.See Def. Exs. 176, 196, 197, 198.
89. In each television advertisement submitted as evidence, defendant's distinctive house mark is displayed prominently across the television screen for several seconds. Def. Exs. 100N, 176, 196, 197. Defendant's celebrity spokesperson, Joan Cusack, appears in most commercials, and the advertisements feature the same distinctive background music. Id. The easyedgeSM service is usually mentioned and displayed in a "tag" promotion, after defendant is established as the source of the services advertised. See Def. Exs. 100N ("Pigeon" ad); 176, 196 ("Skywriter" and "Voice Activator" ads), 197 ("Construction" ad). Even in advertisements featuring easyedgeSM, U.S. Cellular is mentioned numerous times and its house mark is always featured prominently. Def. Exs. 196 ("Construction" ad); 197 ("Office" ad).
90. In contrast, plaintiff's television advertisements prominently display the ATT globe logo along with theedgeWIRELESS® mark and emphasize plaintiff's ability to provide wireless services in rural or remote areas. Pl. Ex. 203. Viewed as a whole, plaintiff's advertisements appear and sound differently that defendant's, and the parties' marks bear little similarities in this context. Therefore, I cannot find any likelihood of confusion based on defendant's television advertising of easyedgeSM.
91. Likewise, the radio advertisements submitted by defendant and plaintiff do not evince confusing similarities between their marks. Like its television advertisements, defendant's radio advertisements feature Joan Cusack and mention U.S. Cellular several times while introducing easyedgeSM. Def. Exs. 100N ("Weather/Rowboat," "Directions," "Movies," "Pictures" ads); 198 ("Sports/Ballet" ad). More importantly, the radio advertisements all emphasize the word "easy" and the ease of the easyedgeSM service. Id. Plaintiff's radio advertisements feature a male spokesperson and bear no similarities with easyedgeSM advertisements such that a reasonably prudent consumer would be confused. Pl. Exs. 202, 204-206.
92. I further find no likelihood confusion resulting from the promotion of easyedgeSM on defendant's website or in defendant's retail stores. Defendant's website is dissimilar from plaintiff's and clearly identifies U.S. Cellular as the source of easyedgeSM. Def. Exs. 100J-100L, 100AA, 100BB. No evidence suggests that a web browser would be directed to defendant's web site when using "edge wireless" search terms or to plaintiff's web site when using "easyedge" search terms. And, certainly, no reasonable consumer would confuse easyedgeSM with plaintiff while frequenting a U.S. Cellular retail outlet. See Def. Exs. 100N (in-store easyedgeSM video); 506.
93. Finally, I find no likelihood of confusion at the point of sale. Defendant's easyedgeSM service is an add-on feature; that is, a consumer must have either an existing account or establish an account with defendant in order to obtain easyedgeSM services. A customer who is not an existing U.S. Cellular subscriber would be required to cancel an existing service, subscribe with defendant, sign a contract, and purchase a new mobile phone from defendant, while a new customer must enter into a contract with defendant. Given that most new wireless customers are "switchers" and aware of competing wireless providers, a consumer obtaining easyedgeSM would know that the source of easyedgeSM is defendant rather than plaintiff.
94. However, I become more convinced of a likelihood of confusion based on the manner in which easyedgeSM is displayed in many print advertisements, fliers, and brochures.
95. As part of the easyedgeSM mark, the U.S. Cellular house mark is minimized rather than emphasized, appearing more faintly and much smaller than the word "easyedge." In some advertisements, the U.S. Cellular mark within the easyedgeSM mark is not clearly visible. See Pl. Exs. 60, 62, 63, 72, 99; Def. Exs. 100A-100D, 100F-100H, 100U, 100V, 100Y, 100Z, 180A, 180G, 180P, 180U-180X. Thus, the easyedgeSM mark does not unequivocally identify defendant as its source when displayed in print materials.
96. Given the similarities between easyedgeSM and plaintiff's marks, I therefore conclude that the U.S. Cellular mark included as part of the easyedgeSM mark does not sufficiently dispel the likelihood of confusion in print materials. See Sleekcraft, 599 F.2d at 351 (house mark did not render accused mark dissimilar when "down-played in the brochures and advertisements").
97. However, a separate and more prominent U.S. Cellular mark is often displayed with the easyedgeSM mark in print advertisements and brochures. See Pl. Exs. 246, 258; Def. Exs. 100J-100L, 100N, 100P, 100W-100X, 180D, 180E, 180H-180M, 180R-180T, 180AA-180CC, 181. In those advertisements, I find that defendant is identified clearly as the source of easyedgeSM.
98. I am thus persuaded that when a separate U.S. Cellular house mark is prominently displayed with the easyedgeSM mark, or when U.S. Cellular is otherwise clearly identified as the source of easyedgeSM, consumers will know that plaintiff is not the source of easyedgeSM and no confusion is likely to occur.
99. Supporting the court's conclusion is the survey evidence presented by defendant. "Surveys are commonly introduced as probative evidence of actual confusion." Playboy Enterprises, Inc. v. Netscape Comm. Corp., 354 F.3d 1020, 1026 n. 28 (9th Cir. 2004). Here, survey respondents were exposed to a radio advertisement that mentioned U.S. Cellular several times and a print advertisement that included a separate U.S. Cellular mark displayed more prominently than the easyedgeSM mark. McDonald Report, Appendix C; Pl. Ex. 246; Def. Ex. 198. According to McDonald's analysis of the survey results, well under 10% of respondents were confused as to the source of easyedgeSM, thus weighing against a likelihood of source confusion. McDonald Testimony, TP 348-53; see Sara Lee Corp. v. Kayser-Roth Corp, 81 F.3d 455, 467 n. 15 (4th Cir. 1996).
100. Plaintiff argues that the survey design, methodology, and implementation were flawed and led to biased, unreliable results. Plaintiff complains that at the Twin Falls, Idaho, location, the survey was conducted within view of a U.S. Cellular kiosk. See Pl. Exs. 273, 277. However, McDonald testified that this location would not have resulted in bias. McDonald Testimony, TP 395-96. Although the survey would have been better conducted at a more neutral location, plaintiff does not present evidence that the Twin Falls location skewed the survey results.
101. Plaintiff also contends that the survey was little more than a memory test, that survey respondents were not screened for residence within the relevant markets or for their awareness of plaintiff, that the survey results were not "validated," and that the easyedgeSM advertisements were not displayed within a "clutter" of advertisements. However, even plaintiff's expert testified that the survey methodology was valid. Upshaw Testimony, TP 208; see also Upshaw Rebuttal Report, pp. 1, 3, 5. Moreover, in light of McDonald's impressive credentials and extensive experience in the surveying and marketing research field, I give great weight to her testimony and conclusions regarding the validity of the survey and her analysis of its results. McDonald Testimony, TP 320-21; 328-42, 348-62, 401, 403-07.
102. Finally, plaintiff argues that the survey is not a valid indicator of confusion resulting from introductory or "launching" advertisements. Upshaw testified that the easyedgeSM advertisements used in the survey are not effective for launching or promoting a new brand or service, and that they cannot be relied upon to determine whether introductory advertisements of easyedgeSM would cause confusion. Upshaw Testimony, TP 164-66, 171-72; Upshaw Rebuttal Report, pp. 4, 8-9. I, too, noted that defendant did not provide McDonald with print advertisements prominently displaying the easyedgeSM mark, and I agree that the survey results cannot establish no likelihood of confusion with respect to these types of advertisements. However, even though the advertisements chosen for the survey may limit the reach of McDonald's conclusions, it does not negate them.
103. Based on her analysis of the survey results, McDonald concludes that if defendant were to advertise easyedgeSM in the markets where it competes with plaintiff, the level of resulting confusion would be "negligible, truly nominal." McDonald Testimony, TP 352-53; McDonald Report, p. 15. Thus, defendant's survey evidence weighs against finding a likelihood of confusion when a separate U.S. Cellular house mark is displayed prominently with the easyedgeSM mark in print materials.
104. I further disagree with plaintiff's contention that the survey results have no bearing on associational or initial interest confusion, i.e., whether easyedgeSM is likely to cause consumers to believe that the parties or their services are associated in some manner or that plaintiff gave permission to defendant to use the term "edge." See Pebble Beach Co. v. Tour 18I, Ltd., 942 F. Supp. 1513, 1542 (S.D. Tex. 1996). While plaintiff may have raised serious questions as to the merits of associational or initial interest confusion at the preliminary injunction stage of the proceedings, it failed to carry its burden at trial that any use of the easyedgeSM mark would cause such confusion.
105. Plaintiff relies on Upshaw's opinion that the survey results cannot support McDonald's conclusion that any type of confusion would be negligible, because the survey did not test for associational confusion. Upshaw Rebuttal Report, pp. 2-3. Therefore, plaintiff argues that the survey evidence is not probative of whether associational confusion is likely to occur. Upshaw Testimony, TP 170-72, 177.
106. McDonald conceded that the survey did not test for associational confusion. McDonald Testimony, TP 343, 370. However, viewing the evidence in its totality, I find no substantive distinction between "associational" and "source" confusion under the facts of this case. See Walter, 210 F.3d at 1110. Defendant enjoys a 90% brand awareness in its markets, and defendant was the original wireless services provider in most of markets it now shares with plaintiff. PTO, p. 5; Def. Ex. 148; Ferber Testimony, TP 414-15.
107. Further, plaintiff's mark is almost always accompanied by the ATT Wireless globe logo and the phrase, "A Member of the ATT Wireless Network". ATT Wireless's mark is just as distinctive, if not more so, as defendant's. In recognition of this fact, plaintiff promotes its close association with ATT Wireless to increase its brand awareness and create a "national footprint." Perry Testimony, TP 70-71, 91; Castleman Testimony, TP 229; Castleman Designated Testimony, pp. 56-57, 137; Widmer Testimony, TP 96-97; Designated Testimony of Christopher Paul Schweppe, p. 52. Moreover, plaintiff is the only ATT Wireless network member in its service area, and ATT Wireless does not sell its services in plaintiff's markets. Plaintiff is thus the equivalent of the ATT Wireless service provider in its markets. Therefore, the manner in which the edgeWIRELESS® and easyedgeSM marks are displayed leave little room for confusion between them when a prominent U.S. Cellular house mark accompanies the easyedgeSM mark.
108. Plaintiff emphasizes that once the sale between ATT Wireless and Cingular closes, it will no longer be associated with ATT Wireless. However, the court must base its decision on the evidence currently before it, which reflects plaintiff's close identification with ATT Wireless. Further, even if plaintiff's association with ATT Wireless ends, plaintiff has been established as a wireless service provider distinct from defendant.
109. Therefore, it is reasonable to conclude that wireless consumers are familiar with both defendant and plaintiff and are aware that they are competitors, particularly in light of the high degree of care exercised by such consumers. See Def. Exs. 134 (memo to plaintiff stating that target customers were those who already had wireless services from another provider), 142 (memo to plaintiff explaining that focus group members have a good awareness of wireless service providers in the markets despite recent name changes). Accordingly, if defendant is clearly identified as the source of easyedgeSM, I find that no associational confusion is likely to occur.
110. Likewise, I find that plaintiff fails to establish a likelihood of initial interest confusion when defendant displays easyedgeSM with a prominent U.S. Cellular house mark.Interstellar Starship, 304 F.3d at 943-44. When the source of easyedgeSM is clearly identified, defendant will not promote easyedgeSM in a manner that "impermissibly capitalizes on the goodwill associated" with plaintiff's marks,Playboy Enterprises, 354 F.3d at 1025, because a reasonably prudent consumer would never be confused regarding the source or affiliation of easyedgeSM. See id. at 1034-35 (Berzon, J., concurring) ("I do not think it is reasonable to find initial interest confusion when a consumer is never confused as to source or affiliation but instead knows, or should know, from the outset that a product . . . is not related to that of the trademark owner. . . .").
111. With respect to reverse confusion, plaintiff presents no evidence that defendant will "saturate" the market with its promotion of easyedgeSM to the extent that consumers will believe that defendant is the source of plaintiff's services.Murray v. Cable Nat'l Broadcasting Co, 86 F.3d 858, 861 (9th Cir. 1996). Defendant does not intend to focus its marketing efforts on the easyedgeSM service, because defendant relies more heavily on wireless voice services to attract customers. Volpi Testimony, TP 258-59.
112. Finally, the presence of defendant's house mark when displayed with easyedgeSM does not "aggravate" confusion by implicating defendant as the source of plaintiff's services. No reasonable consumer would confuse defendant as the source of plaintiff's services, given defendant's strong brand awareness and plaintiff's close association with ATT Wireless.
113. Plaintiff's expert report does not alter the court's conclusion that no confusion is likely to occur when the U.S. Cellular mark is displayed prominently with the easyedgeSM mark. In his report, Upshaw rendered the opinion that some consumers would expect plaintiff to be the source of easyedgeSM rather than defendant, because both marks contain the word "edge" and look similar as displayed in print materials provided by plaintiff. Upshaw Report, pp. 9-10. Thus, Upshaw concluded that defendant's promotion of easyedgeSM would cause some likelihood of associational confusion, although Upshaw could not estimate or quantify the level of confusion. Upshaw Testimony, TP 152, 170, 173; Upshaw Report, p. 12.
114. However, Upshaw did not base his opinion on survey evidence, marketing research, or other empirical data. See generally Upshaw Report; Upshaw Testimony, TP 185, 188. Upshaw did not conduct a brand awareness study of plaintiff's marks, and Upshaw failed to consider plaintiff's close association with ATT Wireless or defendant's strong brand awareness when considering the likelihood of confusion. Upshaw Testimony, TP 175-76, 186. Instead, Upshaw testified that his conclusion was an "educated estimate based on my experience." Upshaw Testimony, TP 197.
115. Moreover, Upshaw concedes that the presence of the U.S. Cellular house mark mitigates the likelihood of confusion. Upshaw Report, p. 11; Upshaw Testimony, TP 174, 212-13. In fact, Upshaw agreed that confusion is not likely if easyedgeSM is displayed in a manner similar to the print advertisement used in defendant's survey. Upshaw Rebuttal Report, pp. 8-9; Upshaw Testimony, TP 171, 209.
116. Finally, plaintiff failed to provide survey or other empirical evidence showing a likelihood of confusion. Plaintiff explained that it lacked the resources and time to conduct such a survey. Testimony of Kevin Keillor, TP 465-67. However, plaintiff repeated stressed the importance of this case to its continued viability, and plaintiff clearly possesses the resources to pursue a survey, particularly in light of the resources it expended in prosecuting this case. Had plaintiff requested, the court would have entertained a continuance of trial to allow plaintiff to obtain survey evidence given its significance.
117. Although I do not find that the lack of survey evidence warrants a presumption that the results would have been unfavorable to plaintiff, the fact remains that defendant's survey evidence stands uncontroverted. Plaintiff essentially relies on its belief that the use of the word "edge" by any other wireless provider in its markets will cause confusion and harm its brand Perry Testimony, TP 77; Castleman Testimony, TP 224; Castleman Designated Testimony, pp. 84-86. It often appears that plaintiff's bigger concern is that of brand dilution rather than confusion. See e.g., Widmer Testimony, TP 113 (testifying that easyedgeSM "would dilute our brand in the marketplace. We have worked really hard to develop our brand and our name as Edge Wireless, and to have another company marketing a product that has our name in their product is really — could be very detrimental to us."); Castleman Designated Testimony, p. 87.
118. Regardless, plaintiff cannot establish trademark infringement based on a proprietary claim to the word "edge," given the level of defendant's brand awareness, the survey evidence presented, and the sophistication of wireless consumers. Rather, these factors, along with plaintiff's association with ATT Wireless, lead the court to conclude that plaintiff fails to meet its burden of showing a likelihood of confusion when the U.S. Cellular house mark is prominently featured in easyedgeSM advertisements, brochures, or fliers.
119. I am mindful of defense counsel's comment that he has "to wonder what we are doing here" if this case comes down to "splitting fine hairs over the difference between these ads." TP 52. However, defendant cannot argue that there is no difference between the print advertisement used in the survey and those displaying only the easyedgeSM mark. Compare Pl. Ex. 246; Def. Exs. 100P, 100W, 181, 198 with Pl. Exs. 60, 63, 69; Def. Exs. 100A-100D, 180U-180X. Defendant chose to limit the type of advertisements provided to McDonald, thus limiting the scope of her, and ultimately the court's, conclusions. McDonald Testimony, TP 386-91.
120. Furthermore, courts are often required to "split" such "hairs" in cases of trademark infringement. See Entrepreneur Media, 279 F.3d at 1140, 1152-53 (finding potential likelihood of confusion as to use of the accused mark on publication cover but not as a business or domain name); Lindy Pen Co., 725 F.2d at 1245-46 (affirming district court finding of no likelihood of confusion with respect to print advertisements, but reversing and remanding for further findings with respect to telephone solicitation). Given the evidence presented, this case boils down to the prominence of the U.S. Cellular mark and logo when displayed with the easyedgeSM mark.
121. Accordingly, I find that the display or promotion of easyedgeSM in the absence of a separate and prominent U.S. Cellular house mark will create a likelihood of confusion, because the marks are similar in appearance, sound and meaning, the marks identify related services offered in the same markets and promoted through similar marketing channels, and defendant is not identified clearly as the source of easyedgeSM.
122. I find that no likelihood of confusion will occur when the U.S. Cellular house mark and star logo are displayed prominently with the easyedgeSM mark. Defendant's high level of brand recognition, plaintiff's close association with ATT Wireless, the high degree of care exercised by wireless service consumers when choosing wireless services, and the survey evidence presented by defendant show that no confusion is likely when the distinctive U.S. Cellular house mark clearly identifies defendant as the source of easyedgeSM.
123. In proposing alternate remedies at the request of the court, plaintiff provided no real alternative other than prohibiting defendant from using the word "edge" in connection with its wireless data service in plaintiff's markets. TP 496-97. I find that plaintiff's proposed disclaimers would create rather than dispel any confusion between the marks. TP 497. Plaintiff's final alternative — requiring defendant to pay plaintiff an amount of money equal to that spent on easyedgeSM advertising — is likely beyond the court's authority and not related to any harm suffered by plaintiff. TP 497-98.
124. Defendant offered several options that are pertinent to the court's conclusions, such as darkening the U.S. Cellular house mark contained within the easyedgeSM mark and displaying the U.S. Cellular house mark one and one-half times larger than the easyedgeSM mark. TP 522.
125. Although these alternatives are quite reasonable and comport with the court's conclusions, I decline to impose such specific restrictions, finding that they would be an unwarranted intrusion into defendant's marketing decisions and likely lead to the necessity of future court intervention. However, I will impose the proffered remedy that defendant shall not utilize the term "edge" by itself in advertising or external print materials.See TP 522. Otherwise, the court is confident that defendant will promote easyedgeSM with a separate and dominant U.S. Cellular house mark, using as guidelines the easyedgeSM advertisements utilized in the survey.
126. Both parties seek attorney fees. The Lanham Act provides for an award of attorneys' fees only in "exceptional" trademark cases. 15 U.S.C. § 1117(a); see also Mattel, 353 F.3d at 816. A trademark case is exceptional and an award of fees appropriate where the infringement is malicious, fraudulent, deliberate, or willful, Playboy Enterprises, Inc. v. Baccarat Clothing Co., Inc., 692 F.2d 1272, 1276 (9th Cir. 1982), or where the plaintiff's case is "groundless, unreasonable, vexatious, or pursued in bad faith." Mattel, 353 F.3d at 816 (quotingStephen W. Boney, Inc. v. Boney Servs., Inc., 127 F.3d 821, 827 (9th Cir. 1997)).
127. Here, I find no evidence that defendant's actions were malicious, fraudulent, deliberate, or willful. Even if defendant's actions could be considered deliberate or willful, they do not rise to the level of an exceptional case for the purpose of attorney's fees.
128. Similarly, I do not find that plaintiff's case was unreasonable, groundless or pursued in bad faith. Reasonable minds could differ as to the degree of similarity between the marks, and thus an award of fees to defendant is not appropriate.
CONCLUSION
I conclude that defendant's easyedgeSM mark will not create a likelihood of confusion between the parties' marks with respect to all types of advertising and promotion except for print advertising and promotional materials. In print materials, defendant shall display the easyedgeSM mark with a separate and dominant U.S. Cellular house mark and star logo, with the U.S. Cellular house mark featured more prominently than the easyedgeSM mark. Defendant shall also refrain from using the word "edge" in isolation when promoting or advertising easyedgeSM.Judgement shall be entered accordingly. Each party shall bear its own costs and attorney fees.
IT IS SO ORDERED.