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Colonial Electric & Plumbing Supply of Hammonton, LLC v. Colonial Electric Supply

December 27, 2007

COLONIAL ELECTRIC & PLUMBING SUPPLY OF HAMMONTON, LLC, PLAINTIFF,
v.
COLONIAL ELECTRIC SUPPLY, LTD, DEFENDANT.



The opinion of the court was delivered by: Hillman, District Judge

OPINION

This matter has come before the Court on Defendant's motion for summary judgment on Plaintiff's trademark infringement and unfair competition claims. Also before the Court is Defendant's motion to seal its papers filed in connection with the summary judgment motion. For the reasons expressed below, Defendant's motion to seal will be granted, but its motion for summary judgment will be denied.

I. BACKGROUND

This suit was brought by Colonial Electric & Plumbing Supply of Hammonton, LLC against The Colonial Electric Supply Company, Inc. (improperly plead as Colonial Electric Supply, LTD) for infringement of the alleged trade name "Colonial Electric Supply."*fn1

Defendant has moved for summary judgment as to all counts of the Complaint, arguing: (1) the alleged trade name, "Colonial Electric Supply," is not arbitrary and fanciful as Plaintiff argues but rather descriptive, such that Plaintiff must establish secondary meaning to be afforded protection; (2) Plaintiff cannot establish use of the name "Colonial Electric Supply" prior in time to Defendant and thus cannot establish ownership and superior rights to Defendant; (3) Plaintiff cannot establish a likelihood of confusion; and (4) even assuming Plaintiff could establish the protectability of the mark and initial superior rights, Plaintiff abandoned use of the subject name, as evidenced by the use of its current name "Colonial Electric & Plumbing Supply Co., Inc.," and has therefore surrendered all rights to the mark it may have otherwise had.

Plaintiff disputes all of Defendant's arguments, and contends that summary judgment should be denied because there are genuine issues of material fact that must be decided by the fact finder.

II. JURISDICTION

This Court has original jurisdiction over Plaintiff's claims arising under federal law pursuant to 28 U.S.C. § 1331, and supplemental jurisdiction over Plaintiff's state law claims pursuant to 28 U.S.C. § 1367.

III. DISCUSSION

A. Summary Judgment Standard

Summary judgment is appropriate where the Court is satisfied that "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(c).

An issue is "genuine" if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id.

In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence "is to be believed and all justifiable inferences are to be drawn in his favor." Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir. 2004)(quoting Anderson, 477 U.S. at 255).

Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 256-57. A party opposing summary judgment must do more than just rest upon mere allegations, general denials, or vague statements. Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).

B. Count 1 - Federal Unfair Competition

Plaintiff claims that Defendant violated the Lanham Act, 15 U.S.C. § 1125(a), by willfully using its trade name, "Colonial Electric Supply," in the operation of its business in the same town as Plaintiff. As a primary matter, trademarks and trade names are technically distinct, although the precise difference is not often material, because analogous actions for trade name infringement can be brought under the Lanham Act, 15 U.S.C. § 1125(a).*fn2 Accuride Intern., Inc. v. Accuride Corp., 871 F.2d 1531, 1534 (9th Cir. 1989) (citations omitted). Trade name infringement is based on considerations similar to trademark infringement, and both preclude one from using another's distinctive mark or name if it will cause a likelihood of confusion or deception as to the origin of the goods. Id. (citation omitted). Thus, the Court will apply the standard for trademark infringement to Plaintiff's trade name infringement claims.*fn3

To prove infringement under the Lanham Act, a plaintiff must show: (1) that the name is valid and legally protectable; (2) that the name is owned by Plaintiff; and (3) that Defendant's use of the name to identify goods or services is likely to create confusion concerning the origin of the goods or services. Fisons Horticulture, Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 472 (3d Cir. 1994) (citing Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 291 (3d Cir. 1991), cert. denied, 502 U.S. 939 (1991)). Each element will be addressed in turn.

1. Whether the Trade Name Is Valid And Legally Protectable

In order to maintain a Lanham Act claim for trademark infringement, the first two requirements, validity and legal protectability, are proven where a mark has been federally registered and has become "incontestible" under the Lanham Act, 15 U.S.C. §§ 1058 and 1065. Ford Motor Co., 930 F.2d at 291 (citation omitted). Trade names, however, cannot be registered. Accuride, 871 F.2d at 1534. Thus, validity of a trade name (or a trademark which is not registered or is not incontestible) depends on proof of secondary meaning, unless the unregistered mark or trade name is inherently distinctive. Ford Motor Co., 930 F.2d at 291 (citation omitted).

Here, even though Plaintiff claims a violation of its trade name "Colonial Electric Supply," Defendant filed an application with the United States Patent and Trademark Office to register as a trademark the name "Colonial Electric Supply" with a design of a man in "Colonial" attire lighting a street lamp. Defendant's application was approved for publication, but it has not been registered due to an opposition that was filed on November 7, 2005. Plaintiff has never filed an application with the PTO for registration. Thus, because "Colonial Electric Supply" has neither been federally registered nor achieved incontestability, in order for it to be a valid and legally protectable trade name, it must be either inherently distinctive or have a secondary meaning.

Defendant argues that "Colonial Electric Supply" is not inherently distinctive because at least 271 New Jersey businesses incorporate the term "Colonial" in their trade name. Additionally, Defendant contends that the alleged mark is simply descriptive, and Plaintiff has not alleged any secondary meaning. As such, Defendant argues that "Colonial Electric Supply" cannot be afforded protection. Plaintiff counters that its alleged trade name is not descriptive, but rather distinctive, and accordingly, it does not need to demonstrate a secondary meaning.

To determine whether a mark is inherently distinctive, the trademark must be classified with respect to its degree of distinctiveness as: (1) generic (such as "Diet Chocolate Fudge Soda"), (2) descriptive (such as "Security Center"), (3) suggestive (such as "Coppertone"), or (4) arbitrary or fanciful (such as "Kodak").*fn4 Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992); Freedom Card, Inc. v. JPMorgan Chase & Co., 432 F.3d 463, 472 (3d Cir. 2005); Vision Center v. Opticks, Inc., 596 F.2d 111, 115 (5th Cir. 1979) (citing Miller Brewing Co. v. G. Heilman Brewing Co., 561 F.2d 75, 79 (7th Cir. 1977), cert. denied, 434 U.S. 1025 (1978)). A generic mark "refer[s] to the genus of which the particular product is a species" and may not be registered as a trademark. Two Pesos, 505 ...


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