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Parks LLC v. Tyson Foods, Inc.

United States Court of Appeals, Third Circuit

July 6, 2017

PARKS LLC, Appellant
v.
TYSON FOODS, INC; HILLSHIRE BRANDS COMPANY

          ARGUED March 22, 2017

         On Appeal from the United States District Court for the Eastern District of Pennsylvania D.C. No. 5-15-cv-00946 District Judge: Hon. Joseph F. Leeson, Jr.

          Roberta Jacobs-Meadway, Jeffrey P. Lewis [ARGUED], Eckert Seamans, Cherin & Mellott, Theodore H. Jobes, Ronald J. Shaffer Fox Rothschild, James C. McConnon, Alex R. Sluzas Paul & Paul Counsel for Appellant.

          Daniel T. Brier Myers Brier & Kelly, Mark H. Churchill Holland & Knight, John J. Dabney [ARGUED], Mary D. Hallerman, McDermott Will & Emer Counsel for Appellees.

          Before: SMITH, Chief Judge, JORDAN, and ROTH, Circuit Judges.

          OPINION

          JORDAN, Circuit Judge.

         This case concerns a trademark that once enjoyed widespread recognition but has since grown considerably weaker. Since the 1950s, Parks Sausage Company has manufactured or licensed sausage under the brand name "PARKS."[1] At one point, PARKS was placed on the Principal Register of trademarks at the United States Patent and Trademark Office ("USPTO"), but, sometime in the early 2000s, Parks failed to renew the registration. In 2014, Tyson Foods, Inc. and Hillshire Brands Company (collectively, "Tyson"), [2] the owners of the frankfurter brand BALL PARK, launched a premium frankfurter product called PARK'S FINEST. Parks sued, arguing that Tyson was engaged in false advertising and was infringing Parks's trademark.

         The District Court determined that Parks's claim for false advertising was really a repetition of its trademark claim, and that the PARKS mark was too weak to merit protection against Tyson's use of the PARK'S FINEST name. We agree with the District Court and will affirm in all respects.

         I. Background

         A. Parks and PARKS

         Parks was founded in the 1950s by Henry G. Parks, Jr., a pioneering African-American businessman. The company had the distinction at one point of being the first African-American-owned company to be publicly traded on the New York Stock Exchange. Parks engaged in radio and television advertising directed to consumers and developed a well-known slogan, "More Parks Sausages, Mom, Please[.]" (Opening Br. at 29.) Though the PARKS brand had likely developed prominence sufficient for common law trademark protection earlier than 1970, the name was not registered at the USPTO until that year.

         Following the death of Mr. Parks in 1989, the company he built fell on hard times. It eventually went bankrupt and was purchased by its current owners. Parks stopped making and selling PARKS products and instead entered into a licensing agreement in 2000 with Dietz & Watson, a Philadelphia-based producer of delicatessen meats, to make and sell PARKS-branded products. Around that time, the USPTO registration of the mark lapsed. In 2002, Parks also granted a license to Super Bakery, Inc., a supplier of baked goods that is related to Parks by common ownership, to sell PARKS-branded products in military commissaries. At least since the licensing agreement with Dietz & Watson 17 years ago, PARKS-branded products have been advertised primarily through grocery store handbills and circulars rather than through television and radio advertising.

         From 2008 through 2014, Dietz & Watson sold over $38 million worth of PARKS-branded products. In 2014, PARKS sales through Dietz & Watson increased 40% from the previous year. In addition, from 2003 through August 2013, Super Bakery sold some $31 million in PARKS products.

         B. Tyson, BALL PARK, and PARK'S FINEST

         BALL PARK brand frankfurters are well known, accounting for 23% of the revenue of all franks sold in the United States.[3] Parks, LLC v. Tyson Foods, Inc., Civ. No. 5:15-00946, 2015 WL 4545408, at *4 (E.D. Pa. July 28, 2015). Tyson owns the BALL PARK mark and claims that the brand is recognized by 90% of American adults over the age of eighteen. Id. In 2014, Tyson introduced a line of "super-premium" frankfurters that it decided to call "[PARK'S FINEST]." Parks, LLC v. Tyson Foods, Inc., 186 F.Supp.3d. 405, 412 (E.D. Pa. 2016). It says it chose that name after conducting extensive consumer research. According to Tyson, surveys showed that the name "conveys premium quality in a clever, memorable way that should be ownable for the [BALL PARK] brand." (App. at 375.)

         Packaging for the frankfurters includes the BALL PARK logo superimposed over the words PARK'S FINEST.

         (Image Omitted)

         (App. at 11.) Tyson says that it designed the packaging to "strongly convey[]" the BALL PARK mark so that consumers would make the connection between BALL PARK and the PARK'S FINEST product. (App. at 390.) In advertisements, the product would be referred to as "[PARK'S FINEST] from [BALL PARK], " Parks, 2015 WL 4545408 at *2, or sometimes "BALL PARK'S FINEST." (Opening Br. at 17.) Before the product was launched, Tyson's attorneys undertook a trademark search, discovered the lapsed PARKS mark, and confirmed the cancellation of the mark with the USPTO.

         C. Procedural Background

         Parks filed suit against Tyson in 2015, asserting false advertising, false association, and trademark dilution claims under the Lanham Act, as well as Pennsylvania common law and statutory claims.[4] It requested a nationwide injunction and an accounting of the sales of PARK'S FINEST franks.

         The District Court denied Parks's motion for a preliminary injunction because it concluded that Parks was unlikely to succeed on the merits of its false advertising claim. Parks, 2015 WL 4545408 at *16. Once discovery ended, Tyson moved for summary judgment on all of Parks's claims. Parks conceded that its trademark dilution claim and its state law claims should be dismissed, and they were. The Court then granted summary judgment on the remaining Lanham Act claims of false association and false advertising, concluding that "no reasonable factfinder could find in Parks's favor[.]" Parks, 186 F.Supp.3d. at 413 (footnote omitted). Parks timely appealed.

         II. Discussion[5]

         Section 43(a) of the Lanham Act, codified at 15 U.S.C. § 1125(a), creates "two distinct bases of liability: false association … and false advertising." Lexmark Int'l, Inc. v. Static Control Components, Inc., U.S., 134 S.Ct. 1377, 1384 (2014); see also J. Thomas McCarthy, 5 McCarthy on Trademarks and Unfair Competition § 27:9 (4th ed. 2017) [hereinafter "McCarthy on Trademarks"] (describing "two major and distinct types" of claims under § 1125(a)). Section 1125(a)(1)(A) prohibits "false or misleading" claims that are "likely to cause confusion, or to cause mistake, or to deceive as to … the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person[.]" That provision is "the foremost federal vehicle for the assertion of … infringement of … unregistered marks, names and trade dress[.]"[6] 5 McCarthy on Trademarks § 27:9. Claims made under it are often called "false designation of origin" or "false association" claims. Id. at n. 1.05. We will use the latter term here. To establish a false association claim, the owner of an unregistered mark "has the burden ... of proving the existence of a protectable mark." E.T. Browne Drug Co. v. Cococare Prod., Inc., 538 F.3d 185, 191 (3d Cir. 2008). When, as in this case, the mark is a surname, a necessary step in showing that it is eligible for protection as a trademark is demonstrating that it has acquired secondary meaning. Id. at 191-92. "Secondary meaning" is a term of art in trademark law that refers to "a mental association in buyers' minds between the alleged mark and a single source of the product." 2 McCarthy on Trademarks § 15:5.

         Another portion of the statute, subsection (a)(1)(B), forbids "commercial advertising or promotion" that "misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities[.]" 15 U.S.C. § 1125(a)(1)(B). Claims under that provision are called "false advertising" claims. 5 McCarthy on Trademarks § 27:9. False advertising claims do not require proof of secondary meaning, so litigants may be tempted to frame a false association claim as a false advertising claim, to ease their evidentiary burden. Cf. Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc., 653 F.3d 241, 247 & n.8 (3d Cir. 2011) (noting that, in that case, the "false advertising dispute [was] a proxy for the real fight the parties want[ed] to have, which [was] over the right to the …use of … a trademark" and observing that "[t]his [was] not the first time the false advertising provision of the Lanham Act has been asked to stand in for a trademark action"). That is what seems to have happened here, and we take this opportunity to clarify the distinction between claims brought under § 1125(a)(1)(A) and § 1125(a)(1)(B). As the District Court recognized, Parks's false advertising claim fails because it is essentially a false association claim in disguise. The false association claim is also infirm, for the reasons described by the District Court.

         A. False Advertising

         As noted above, the statement at issue in a false advertising claim must "misrepresent[] the nature, characteristics, qualities, or geographic origin" of a product.[7] 15 U.S.C. § 1125(a)(1)(B); see Kehoe Component Sales Inc. v. Best Lighting Prods., Inc., 796 F.3d 576, 590 (6th Cir. 2015) ("Absent a false statement about geographic origin, a misrepresentation is actionable under § 1125(a)(1)(B) only if it misrepresents the characteristics of the good itself- such as its properties or capabilities. The statute does not encompass misrepresentations about the source of the ideas embodied in the object (such as a false designation of authorship)[.]" (internal quotation marks and citation omitted)). Parks's false advertising claim fails because it depends upon the purported false association between Tyson's PARK'S FINEST brand and the PARKS mark. So the false advertising claim rises and falls with the false association claim, which we will subsequently address. For now, we note simply that the primary argument Parks advances is that the name PARK'S FINEST falsely implies that Tyson's product is one of Parks's products. As Parks puts it, Tyson marketed PARK'S FINEST as "Parks' sausages." (Opening Br. at 21.) In other words, PARK'S FINEST is only misleading in the way that Parks suggests if a consumer makes the connection between PARK'S FINEST and PARKS and has in mind a pre-existing association between PARKS and high quality products. This is a false association claim and nothing more.

         Parks also argues that PARK'S FINEST is misleading with respect to the "nature, characteristics, [or] qualities, " 15 U.S.C. § 1125(a)(1)(B), of the product. Parks alleges that the name PARK'S FINEST will imply to consumers that it is a sausage when in reality it is a frankfurter - an item consumers may see as inferior. Again, that contention largely duplicates the one that we have already found wanting. Unless a consumer knows that PARKS is a mark for sausages, the name PARK'S FINEST does not carry any such implications. At bottom, then, this too is a false association claim.[8]

         To the extent that Parks is advancing the related argument that the name "PARK'S FINEST" is misleading because it blurs the distinction between frankfurters and sausages and is therefore confusing to consumers, that argument falters on two grounds.[9] First of all, because the packaging for PARK'S FINEST displays "a factually accurate, unambiguous statement" that the product is a frankfurter, "[n]o reasonable consumer could be misled by those statements, and the rest of the label does not put those statements in doubt." See Pernod Ricard, 653 F.3d at 252 (reaching the same conclusion with regards to a rum called Havana Club that was actually made in Puerto Rico but informed consumers on the packaging that it was made in Puerto Rico).[10] Second, Parks has undercut its own argument by repeatedly saying both at the District Court and before us on appeal that hot dogs and sausages are actually not distinctive.[11] If a frankfurter is a kind of a sausage, as Parks suggests, then there is nothing false or misleading if the advertising for PARK'S FINEST suggests that to consumers.

         Parks's final argument is that the name PARK'S FINEST is misleading with regard to "origin." (Opening Br. at 15-16.) To a large extent that argument falters because it repeats the same mistakes we have already discussed. But it also fails for another reason. Section 1125(a)(1)(B) focuses specifically on statements that are false with regard to "geographic origin" and not other types of "false designation[s] of origin, " § 1125(a)(1).[12] So, § 1125(a)(1)(B) can be the proper vehicle for bringing a challenge to, for example, a Swiss army knife not made in Switzerland, Black Hills gold jewelry that is not made in the Black Hills, or Scotch whiskey not manufactured in Scotland. Cf. Forschner Grp., Inc. v. Arrow Trading Co. Inc.,30 F.3d 348, 355 (2d Cir. 1994) (concluding that the term "swiss" in swiss army knife was not a geographic term of origin but adjudicating the claim under § 1125(a)(1)(B)); Black Hills Jewelry Mfg. Co. v. Gold Rush, Inc.,633 F.2d 746, 750 (8th Cir. 1980) (noting that the Lanham Act's prohibition on false advertising "continue[s] [a] tradition of providing protection against outsiders who use the same geographical designation"); Scotch Whiskey Ass 'n v. Barton Distilling Co.,489 F.2d 809, 811 (7th Cir. 1973) (applying an earlier version of the Lanham Act to resolve a geographic origin claim). But that subsection is not the right vehicle for addressing claims of false designation of origin that are not concerned specifically with geographic origin. See Pernod Ricard, 653 F.3d at 250 n.11 (noting that the most natural meaning of "geographic origin" would extend only to "the place of a product's manufacture, not a broad inquiry into the ...


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