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HARLEM WIZARDS ENTERTAINMENT BASKETBALL, INC. v. N

January 10, 1997

HARLEM WIZARDS ENTERTAINMENT BASKETBALL, INC., Plaintiff,
v.
NBA PROPERTIES, INC.; NATIONAL BASKETBALL ASSOCIATION; and, CAPITAL BULLETS BASKETBALL CLUB, INC., Defendants.



The opinion of the court was delivered by: WALLS

 WALLS, District Judge

 Plainfiff, Harlem Wizards Entertainment Basketball, Inc. ("Harlem Wizards") is a theatrical basketball organization that performs "show basketball" in the tradition established by the world famous Harlem Globetrotters. Defendant, the Capital Bullets Basketball Club, commonly known as the "Washington Bullets," is a member team of the National Basketball Association ("NBA"), the world's preeminent professional basketball league, also a named defendant in this action. The third defendant is NBA Properties, Inc. ("NBA Properties"), the entity which holds the licensing rights of the names of NBA member teams.

 On February 22, 1996, the Washington Bullets publicly announced that beginning the 1997-1998 NBA season, the team would formally change its name to the "Washington Wizards." Soon after, Harlem Wizards filed this lawsuit against the Washington Bullets and the other mentioned defendants, alleging that the proposed name change infringed its trademark in violation of Section 43 of the Lanham Act, The New Jersey Trademark Act, N.J.S.A. 56:4-1 and common law. Plaintiff seeks a permanent injunction enjoining these defendants from using the trademark WIZARDS and various damage awards. *fn1"

 At the outset, plaintiff acknowledges that the issues raised in this action do not conform to the traditional pattern of trademark infringement. Plaintiff, for example, does not allege that if the Washington Bullets team becomes the Washington Wizards a significant number of basketball fans will be confused into believing that the Washington team is actually the Harlem Wizards. Nor does plaintiff assert that it has already lost income as a result of the name change or that the Washington Bullets have, as of yet, earned any profits from their adoption and use of the mark WIZARDS. Instead, plaintiff frames this action as a classic case of "reverse confusion," a theory of trademark infringement recently recognized by this circuit. See Fisons Horticulture, Inc. v. Vigoro, Inc., 30 F.3d 466, 31 U.S.P.Q.2D (BNA) 1592 (3d Cir. 1994). Reverse confusion occurs when a larger, more powerful junior user infringes on the trademark of a smaller, less powerful senior user causing confusion as to the source of the senior user's goods and services. Id. Because the junior user saturates the market with promotion of the mark as its own, the senior user loses its trademark value and its ability to expand into new markets because consumers assume that the senior user's goods or services are those of the junior user or that the senior user is the infringing party. Fisons, 31 U.S.P.Q.2D (BNA) at 1598 (citing Ameritech, Inc. v. American Information Technologies Corp., 811 F.2d 960, 964 (6th Cir. 1987)). This opinion analyzes the trademark infringement claims pressed by plaintiff in light of the reverse confusion doctrine, other applicable law and the evidence.

 THE RECORD

 At the bench trial, plaintiff offered seven fact witnesses and one expert witness: Todd Davis, president of the Harlem Wizards since 1980 and son of the team's founder; Sam Worthen, assistant coach of the Harlem Wizards and a former NBA player; Dwion Brown, Jay Griffin, Claude Henderson, and Sean Tartt, all current members of the Harlem Wizards; Stephanie Ebron, executive director of the Perry School Community Center in Washington, D.C., who hired Plaintiff to perform at a fundraising event in Washington earlier this year; and Dr. Michael Rappeport, who conducted a consumer survey on behalf of plaintiff and gave expert testimony.

 Defendants presented six fact witnesses and one expert witness: Stephen Board, manager of interactive events for the NBA; Paula Hanson, vice president of team services for the NBA; Susan O'Malley, president of the Washington Bullets' franchise; George Mitchell, owner of the Harlem Rockets, a show basketball team; Glen Morrill, assistant director of customer service for Washington Sports and Entertainment, the organization which owns the Washington Bullets and the Washington Capitals hockey team; Wesley Unseld, general manager of the Washington Bullets; and an expert witness, Dr. Jacob Jacoby, who conducted a consumer survey.

 The following are the relevant facts of this controversy. In this case, because such evidence is uncontroverted, its credibility and that of the witnesses from whom it was adduced is absent. However, the parties vigorously challenge the legal significance of this evidence, which the Court reviews together with its findings in the Discussion section of this opinion.

 From its founding in 1962, Harlem Wizards has promoted itself as a show basketball team. In its advertisements and promotional materials, Harlem Wizards frequently compares itself to the better known Harlem Globetrotters, which developed and popularized the show basketball genre. For example, Harlem Wizards bills itself as the "Avis of comedy basketball," the Harlem Globetrotters clearly being Hertz, and also as the "grassroots version of the Harlem Globetrotters." Although Harlem Wizards' biggest market is in the Northeast, the team has traveled throughout the United States and, to some extent, internationally. For the past three years, Harlem Wizards has actually consisted of two teams: one team which actively tours the country and a local team which performs mostly in the New York City metropolitan area.

 Harlem Wizards generally performs at high schools, colleges, summer camps, and charitable events. Plaintiff has no home arena where it regularly plays before fans who can regularly attend its games nor does it participate in any formalized basketball league competitions. Unlike a traditional professional competitive sports team, plaintiff does not advertise its services directly to consumers through the media, but instead promotes itself through direct mail solicitation to its typical customers -- schools, camps and charities, at trade shows for performance acts, and in "amusement business" trade magazines such as the "Cavalcade of Acts and Attractions." Schools and other organizations can purchase plaintiff's services for a flat fee of $ 3,500.00 and travel expenses, although plaintiff will sometimes accept a smaller fee in exchange for a portion of game proceeds.

 In a typical Harlem Wizards "game," plaintiff plays against a "team" selected by the organization which purchased the team's services. Opposing team members are not professional athletes but ordinary citizens such as plumbers, teachers, police officers, coaches, politicians and students. A resulting game combines competitive basketball, trick basketball and comedic basketball entertainment. During the first and third quarters of the game, the Harlem Wizards mostly play competitive basketball against their opponents, moderating its level of competitiveness to the opposing team's athletic prowess. During the second and fourth quarters, the team players engage in comedic antics such as passing the ball between their legs, throwing water at their opponents, rolling down their opponents' socks and befuddling the other team's members by handing them the ball and then quickly snatching it away. In addition to these game performances, Harlem Wizards makes frequent paid appearances at fairs, festivals, parties, school assembly programs, pep rallies, and bar mitzvahs. Over the years, the Harlem Wizards team has on at least two occasions played during the half-time intermissions of NBA basketball games.

 In connection with its games and appearances, plaintiff sells a variety of merchandise bearing the team's name. There, spectators can purchase t-shirts, sweatshirts, caps, basketballs, posters, banners, and pictures as souvenirs but none of the merchandise is available in retail stores. Plaintiff has used both the marks HARLEM WIZARDS and WIZARDS as its logo on merchandise and team uniforms. During the mid-1980s, the team used WIZARDS on its uniforms and it plans to use WIZARDS as its mark during its 1996-1997 season. Plaintiff does not have specific color scheme or a design that it uses continuously as part of its logo.

 Washington Bullets is a NBA member team owned and operated by Capital Bullets Basketball Club. Founded in 1961, the franchise originated in Chicago, where it was first known as the Chicago Packers and later, the Chicago Zephyrs. It then moved to Baltimore, Maryland in 1963 and became known as the Baltimore Bullets. In 1973, the team moved to Washington, D.C. and changed its name to the Capital Bullets. The following year, the team adopted the name the Washington Bullets.

 The NBA, which celebrates its fiftieth anniversary this year, is made up of twenty-nine member teams that play annually against each other from November until June. The league is divided into two conferences, Eastern and Western, and four divisions, Atlantic, Midwest, Central and Pacific. The NBA has strict rules governing the games as well as player conduct on and off the court. As an NBA franchise, the Bullets play eighty-two games -- forty-one at "home" and forty-one "away" -- against other NBA member teams from November until mid-April. Games are divided into four twelve minute quarters. Following regular season play, sixteen teams compete in the NBA championship playoffs.

 Fans can regularly attend Washington Bullets games or watch them on television. NBA basketball is promoted directly to its fans through television advertisements, regular television programming such as "Inside Stuff" and "Inside NBA," and other media sports coverage. The NBA also has a series of grants, licenses to manufacturers to produce various products bearing the NBA logo and those of its twenty-nine member teams. Specific labeling and tagging is used to identify all NBA and NBA team products; the NBA logo of a ball-dribbling player appears on all of its products. NBA merchandise is widely available for sale in retail outlets throughout the United States.

 For the past few years, Abe Pollin, owner of the Washington Bullets, had been considering changing the name of the franchise out of concern that the term "Bullets" had a negative connotation. In January 1995, the Washington Bullets first informed the NBA that it was considering changing the team name, logo and uniform beginning the 1997-1998 season. In August 1995, Susan O'Malley, president of the Washington Bullets, sent the NBA's Paula Hanson a letter which listed eight possible new names for the team, including the name WIZARDS. Hanson forwarded the letter to Kathryn Barrett, the NBA's in-house trademark counsel, and requested that she arrange for a preliminary trademark search to determine if for any reason any of the names listed were not be available for use. A few days later Hanson forwarded the preliminary search results to O'Malley. The use of WIZARDS was not interdicted.

 Along with its name change, the Washington Bullets unveiled a new anti-violence initiative that concentrated on Washington, D.C. junior high and middle schools. To publicize the name change and anti-violence initiative, the Washington Bullets staged a contest in conjunction with Boston Market Restaurants, "The Washington Post," NBC4, the local NBC affiliate and other media sponsors, inviting fans to take part in the name-change process. The contest, called "Boston Market Renames the Bullets," occurred in two phases. From November 1, 1995 until December 15, 1995, fans could suggest new names for the team by completing entry ballots at Boston Market restaurants. Then, from early February until February 22, 1996, fans could vote on one of five names selected from the earlier submissions selected by a "Blue Ribbon Panel" by calling a 900 telephone number. The contest culminated with a live network announcement of the winning name by Abe Pollin on February 22, 1996.

 After the Washington Bullets announced that its new name would be the Washington Wizards on February 22, 1996, the NBA in-house creative services designed several different potential logos for the team. As of yet, no final decision has been made regarding a final logo but defendants claim that the final logo will be unique, and like all other NBA logos, have a distinct color scheme. On February 8 and February 29, 1996, Plaintiff filed trademark applications first for HARLEM WIZARDS and then WIZARDS.

 Plaintiff elicited testimony that sought to prove that defendants adopted the name Washington Wizards in bad faith. For example, Stephen Board, Manager of Interactive Events for the NBA, hired Sean Tartt, a Harlem Wizards' player, to participate in a slam dunk exhibition in San Antonio, Texas earlier this year. Tartt testified that he told Board that he played for the Harlem Wizards. Board acknowledged that he spoke with Todd Davis who identified himself as Tartt's coach at the Harlem Wizards and who asked him whether he wanted to hire any other Harlem Wizards' players. Plaintiff also introduced testimony that Davis had contacted Glenn Morrill in 1993 and 1994 to see if he would be interested in hiring Harlem Wizards to perform at NBA half-time programs and elicited testimony from Wesley Unseld, General Manager of the Washington Bullets, that he had first heard of the Harlem Wizards during the late 1960s or early 1970s.

 Evidence of Actual Confusion and Likelihood of Confusion

 1. Individual Testimony

 At trial, plaintiff offered testimony by two current Harlem Wizards' players regarding incidents that purportedly showed the existence of actual consumer confusion between the Harlem Wizards and Washington Wizards. Dwion Brown testified that while he was in Baltimore, Maryland and Washington, D.C. strangers approached him because they thought that the Harlem Wizards' shirt that he was wearing was actually a Washington Wizards' shirt. Claude Henderson testified regarding several incidents of actual confusion. First, he testified that in April 1996, four people told him that they thought he was a member of the Washington Wizards when he played at the Perry School Community Service Center fundraiser at Gonzaga High School in Washington, D.C. In July 1996, when he made an appearance at a children's camp with Terry Harris, a Harlem Wizards' player who happens to be seven feet and five inches tall, several young campers remarked to him that they did not realize that the Washington Bullets had two of the tallest players in the NBA. Henderson also testified that when he played at another community center several youngsters asked him whether the Wizards would be playing in the NBA in the coming year. Stephanie Ebron, Executive Director of the Perry School Community Service Center, an organization that hired plaintiff to perform at a fundraising event on April 29, 1996 in Washington, D.C., testified that more than twenty people who attended or expressed interest in attending the fundraiser had thought that the Washington Bullets were playing and not the Harlem Wizards. Before plaintiff performed, Ebron told Todd Davis about the confusion and he brought along questionnaires that were distributed at the game in order to document incidents of actual confusion.

 Both parties commissioned consumer surveys and presented their results at trial. Plaintiff offered results from two related surveys conducted by Dr. Michael Rappeport of RL Associates in May 1996 to support its assertion that the Washington Bullets' name change would result in the likelihood of confusion between the Harlem Wizards and the Washington Wizards. Dr. Rappeport conducted one survey in Northern New Jersey and the other in the Washington, D.C. area. Combined, the 309 respondents who participated in both studies were aged eighteen or older and had either attended a basketball event or watched a televised basketball event at least twice in the past year. The two surveys were a shirt study and a name study. The shirt study involved showing respondents a series of four shirts: (1) a red Chicago Bulls' number 23 shirt, (2) a white "Champion" shirt, (3) a blue New York Knicks' shirt and (4) a Harlem Wizards' shirt. Upon showing a respondent each shirt, the interviewer asked the respondent whether she or he had ever seen or heard of the team before. If the respondent answered affirmatively, the interviewer then asked the respondent what, if anything, she or he knew about the team.

 Six of the fifty-nine New Jersey respondents who participated in the shirt survey recognized the Harlem Wizards' shirt as the new name of the Washington Bullets. Six or seven New Jersey respondents identified the shirt as belonging to the Harlem Wizards. Out of 100 Washington D.C. respondents to the shirt survey, fifty-nine identified the Harlem Wizards' shirt as the new name of the Washington ...


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