Dicks Sporting Goods v. Dicks Clothing ( 1999 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
DICK'S SPORTING GOODS,
INCORPORATED,
Plaintiff-Appellant,
and
GARY SHANK, d/b/a Dick's Sporting
Goods, Incorporated,
Plaintiff,
No. 98-1653
v.
DICK'S CLOTHING AND SPORTING
GOODS, INCORPORATED; RICHARD'S
CLOTHING AND SPORTING GOODS,
INCORPORATED, d/b/a Dick's Clothing
and Sporting Goods, Incorporated,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Benson E. Legg, District Judge.
(CA-96-320-L)
Argued: March 3, 1999
Decided: August 20, 1999
Before TRAXLER, Circuit Judge,
VOORHEES, United States District Judge
for the Western District of North Carolina,
sitting by designation, and
FABER, United States District Judge for the
Southern District of West Virginia,
sitting by designation.
_________________________________________________________________
Affirmed by unpublished opinion. Judge Voorhees wrote the opinion,
in which Judge Traxler and Judge Faber joined.
_________________________________________________________________
COUNSEL
ARGUED: Richard Michael McMahon, Sr., SCALLY, SCALLY &
MCMAHON, P.C., Upperco, Maryland, for Appellant. Steven Keith
Fedder, RUDNICK & WOLFE, Washington, D.C., for Appellees.
ON BRIEF: Caroline E. Petro, RUDNICK & WOLFE, Washington,
D.C., for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
VOORHEES, District Judge:
Plaintiff-Appellant, Dick's Sporting Goods, Inc. sued Defendant-
Appellee Dick's Clothing & Sporting Goods, Inc. alleging trade name
infringement and unfair competition.1 Dick's Clothing & Sporting
Goods, Inc. filed a counterclaim against Dick's Sporting Goods, Inc.
alleging infringement of its federally licensed trade name, "Dick's
Clothing & Sporting Goods, Inc." See 15 U.S.C. § 1051, et seq. The
district court granted Dick's Clothing & Sporting Goods, Inc.'s
motion for summary judgment on the complaint and on its counter-
claim. We affirm.
_________________________________________________________________
1 Appellant also alleged intentional infliction of emotional distress and
conversion. Upon motion of Appellee, the district court dismissed those
claims. Appellant has not appealed those dismissals.
2
I. FACTS
Dick's Sporting Goods, Inc. ("Sporting") is a small retail sporting
goods business founded in 1971 by Richard Shank. At all times,
Sporting operated out of a single location on Stemmers Run Road in
Essex, Maryland. The store sold hunting and fishing gear including
clothing, hunting and fishing licenses, bait, archery equipment, guns,
and ammunition. In May 1998, Sporting closed its store.
In January 1948, Richard Stack founded Dick's Clothing & Sport-
ing Goods, Inc. ("Clothing") and opened its first store in Binghamton,
New York. As of 1995, Clothing operated approximately 51 stores
across several states including New York, Connecticut, Pennsylvania,
Massachusetts, Illinois, Ohio, Kentucky, New Jersey, Michigan, and
Maryland. Clothing's stores sell general sports apparel, sporting
goods, and children's apparel.
On May 9, 1988, Clothing applied to the United States Patent and
Trademark Office seeking registration for the trade name "Dick's
Clothing & Sporting Goods, Inc." On June 27, 1989, Clothing's pro-
posed trade name was published in the federal register. On September
19, 1989, the United States Patent and Trademark Office issued regis-
tration number 1557325 for "Dick's Clothing & Sporting Goods." In
1994, the trade name "Dick's Clothing & Sporting Goods" became
incontestible under the Lanham Act. At no time has Sporting con-
tested the trademark sought by Clothing or obtained a federally regis-
tered trademark of its own.
On October 6, 1995, Clothing opened retail stores in the State of
Maryland. Upon seeking to register as a foreign corporation with the
state, Clothing learned that Sporting had filed articles of incorporation
with the Maryland State Department of Assessment and Taxation in
July 1995, gaining incorporation as "Dick's Clothing & Sporting
Goods, Inc." Sporting sought and gained incorporation in the name of
"Dick's Clothing & Sporting Goods, Inc." although the record con-
tains no evidence that Sporting had ever conducted business in that
name. Thereafter, Clothing registered with the state as "Richard's
Sporting & Goods, Inc. a/k/a Dick's Clothing and Sporting Goods,
Inc." Although Sporting concedes that it incorporated a shell entity,
it denies infringing upon Clothing's federally registered trade name
3
and contends that it registered the shell corporation preemptively
merely to avoid confusion of its business name with that of Clothing.
To promote the opening of its Maryland stores, Clothing organized
an advertising campaign in which it employed the names "Dick's"
and "Dick's Sporting Goods." Sporting claims that it was barraged
with over 7,500 misdirected telephone calls and a plethora of misdi-
rected mail as a result of Clothing's advertising campaign. In addi-
tion, Sporting asserts that several customers visited its store believing
they were visiting Clothing's store.
We review de novo the holding of the district court that Sporting
failed to demonstrate that its trade name, "Dick's" or "Dick's Sporting
Goods" had acquired secondary meaning in the minds of a substantial
portion of the consuming public as of 1989, the year in which Cloth-
ing registered its trademark.
II. STANDARD OF REVIEW
We review a district court's grant of summary judgment de novo
and apply the same standards employed by the district court. See Felty
v. Graves-Humphreys Co., 818 F.2d 1126, 1127-28 (4th Cir. 1987).
Summary judgment is appropriate only where there is"no genuine
issue as to any material fact and that the moving party is entitled to
judgment as a matter of law." Fed. R. Civ. P. 56(c). In other words,
to grant summary judgment the court must determine that no reason-
able jury could find for the nonmoving party on the evidence before
it. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "In
passing on a summary judgment motion, the court must view the
record and draw inferences most favorably to the opposing party."
Pignons S.A. de Mecanique v. Polaroid Corp., 657 F.2d 482, 486 (1st
Cir. 1981).
III. TRADEMARK PROTECTION AND CLASSIFICATION
Section 43(a) of the Lanham Act, prohibiting the use of false
descriptions, representations, or designations of origin, has been con-
strued to protect against trademark, service mark, and trade name
infringement even though the mark or name has not been federally
4
registered. 15 U.S.C. § 1125(a); Lois Sportswear, U.S.A., Inc. v. Levi
Strauss & Co., 799 F.2d 867, 871 (2d Cir. 1986). In order to prevail
in an action for trademark infringement and unfair competition under
sections 32(1) and 43(a) of the Lanham Act, respectively, "a com-
plainant must demonstrate: (1) that it has a valid, protectable trade-
mark; and (2) that the defendant's use of a colorable imitation of the
trademark is likely to cause confusion among consumers." Lone Star
Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 930 (4th
Cir. 1995); see also 15 U.S.C. § 1114(1).
In the instant appeal, Sporting merges the above requirements in its
arguments to the Court despite the fact that the district court did not
hinge its ruling on a finding of likelihood of confusion. Rather, the
district court found that Sporting did not own common law rights to
the trade name, "Dick's" or "Dick's Sporting Goods" in that Sporting
had failed to demonstrate that the trade name had acquired secondary
meaning in the minds of the consuming public by 1989, the year
Clothing registered its trademark. For this reason, the district court
was not required to examine the issue of likelihood of confusion. See
Spartan Food Systems, Inc. v. HFS Corp., 813 F.2d 1279, 1284 (4th
Cir. 1987); Thompson Medical Co. v. Pfizer, 753 F.2d 208, 216 (2d
Cir. 1985). Such an inquiry would have been superfluous because a
determination that a mark is ineligible for protection establishes that
consumers do not associate that mark with a particular source.
The Lanham Act affords nationwide trademark protection to regis-
tered users, regardless of the area in which the registrant actually uses
the mark. 15 U.S.C. § 1072; Armand Subway, Inc. v. Doctor's Asso-
ciates, Inc., 604 F.2d 849, 849 (4th Cir. 1979). However, the protec-
tion is only potential in areas where the registrant does not do
business. A competing user could use the mark in those areas until the
registrant extended its business to the area in question. Thereupon, the
registrant would be entitled to exclusive use of the mark in that area
unless the prior user could show that it acquired a local, common law
right to the mark before the date of the mark's registration. 15 U.S.C.
§ 1065; see also Armand Subway, 604 F.2d at 849-50; First Bank v.
First Bank System, Inc., 84 F.3d 1040, 1044 (8th Cir. 1996). Accord-
ingly, Clothing may prevent Sporting from using the trade name
"Dick's" or "Dick's Sporting Goods" in the Baltimore, Maryland area
5
unless Sporting can show that it acquired a local, common law right
in the trade name by 1989.
The protection accorded trademarks is directly related to the
mark's distinctiveness. In Abercrombie & Fitch Co. v. Hunting
World, Inc., 537 F.2d 4 (2d Cir. 1976), the Court classified the word
"marks" into four categories: (1) generic; (2) descriptive; (3) sugges-
tive; and (4) arbitrary or fanciful. Id. at 9. If a term is generic (the
common descriptive name for a thing), then it is ineligible for trade-
mark protection as the public has an inherent right to call a product
by its generic name. Kellogg Co. v. Nat'l Biscuit Co., 305 U.S. 111,
119 (1938). If terms are suggestive (words partially descriptive and
partially fanciful), arbitrary (common words applied in unfamiliar
ways), or fanciful (words invented solely for their use as trademarks),
then the association between the mark and its source is presumed and
the mark is eligible for trademark protection. Abercrombie & Fitch,
537 F.2d at 9-11.
However, if a mark is merely descriptive, then proof of secondary
meaning in the marketplace is required for the mark to be eligible for
protection. Thompson Medical, 753 F.2d at 212-13 & n.9. Both sur-
names and first names are regarded as descriptive terms and, there-
fore, one who claims federal trademark rights in a name must prove
that the name has acquired a secondary meaning. Tonawanda Street
Corp. v. Fay's Drug Co., 842 F.2d 643, 648-49 (2d Cir. 1988). "Sec-
ondary meaning" is defined as "the consuming public's understanding
that the mark, when used in context, refers not to what the descriptive
word ordinarily describes, but to the particular business that the mark
is meant to identify." Perini Corp. v. Perini Constr., Inc., 915 F.2d
121, 125 (4th Cir. 1990). In the case of a trade name, secondary
meaning is "[t]he power of a name ... to symbolize a particular busi-
ness." Ideal Toy Corp. v. Kenner Products Div'n of General Mills
Fun Group, Inc., 443 F. Supp. 291, 305 n. 14 (S.D.N.Y. 1977). If a
trade name has not acquired secondary meaning, the purchaser will
not make an association with a particular producer and thus will not
be misled by an identical or similar mark.
A. Secondary Meaning
Proof of secondary meaning entails a rigorous evidentiary standard.
"The burden of proving secondary meaning is on the party asserting
6
it, whether he is the plaintiff in an infringement action or the applicant
for federal trademark registration." Yamaha Int'l. Corp. v. Hoshino
Gakki Co., Ltd., 840 F.2d 1572, 1578-79 (Fed. Cir. 1988); accord 815
Tonawanda Street Corp. v. Fay's Drug Co., Inc., 842 F.2d 643, 647-
48 (2d Cir. 1988) (noting that the burden of proving secondary mean-
ing is on the party seeking to obtain legal protection for its mark).
Moreover, a certificate of registration constitutes prima facie evidence
of the validity of the registered mark and relieves the holder of the
burden of proving secondary meaning. 15 U.S.C. § 1057(b) (1997);
Qualitex Co. v. Jacobson Products Co., Inc., 13 F.3d 1297, 1301 (9th
Cir. 1994), rev'd on other grounds, 514 U.S. 159 (1995). The burden
of proof, therefore, is on Sporting to prove that it is entitled to com-
mon law trademark protection.
The Second Circuit has promulgated six factors adopted by this
Court as relevant to, though not dispositive of, secondary meaning:
(1) advertising expenditures; (2) consumer studies linking the mark to
a source; (3) sales success; (4) unsolicited media coverage; (5)
attempts to plagiarize the mark; and (6) the length and exclusivity of
the mark's use. Thompson Medical, 753 F.2d at 217; Perini, 915 F.2d
at 125. "In assessing the existence of secondary meaning, no single
factor is determinative ... and every element need not be proved. Each
case, therefore, must be resolved by reference to the relevant factual
calculus." Thompson Medical, 753 F.2d at 217.
B. Evaluation of the Evidence
Sporting concedes that the district court properly relied upon Perini
as the relevant law. In support of its claim, Sporting proffered the fol-
lowing evidence to the district court: (1) a trade name survey con-
ducted by Robert L. Mead ("Mead Report"); (2) the expert witness
opinion of Gary D. Krugman ("Krugman Opinion"); (3) its gross sales
and advertising figures for the years 1984 through 1989; (4) fifteen
customer affidavits; (5) sixty five customer checks made payable to
"Dick's"; (6) details regarding a waterfowl calling seminar organized
in 1982; and (7) a 1982 newspaper article mentioning its store in
reporting on the increasing use of decoys by Maryland hunters. For
the reasons explained below, we affirm the district court's grant of
summary judgment to Clothing on the complaint and on Clothing's
counterclaim.
7
Evaluating Sporting's evidence separately, the Court will first
address the Mead Report. The Mead Report is a telephone survey
conducted by the staff of Robert L. Mead on November 26 and 27,
1996. Mead's staff interviewed 200 men over the age of 25 who had
lived in the Baltimore area for more than three years and who
expressed an interest in hunting or fishing. Mead submits that 48 of
these men were licensed hunters and 22 of them associated the name
"Dick's" with Sporting's store. In addition, Mead reports that 32% of
126 men who bought hunting and/or fishing licenses (i.e., 40 individ-
uals) associated the name "Dick's" with Sporting's store. Finally,
Mead claims that 56% of 18 gun permit buyers (i.e., 10 individuals)
associated the name "Dick's" with Plaintiff's store.
In the proceedings below, Clothing moved to exclude the Mead
Report from evidence. In a Memorandum dated March 31, 1998, the
district court found that the Mead Report fell short of establishing
secondary meaning for the following reasons: (1) it failed to address
the relevant time period (1989); (2) it focused unjustifiably on license
and gun permit buyers; and (3) it excluded substantial portions of the
relevant population. Mem. at 9. Consequently, the district court dis-
counted Mead's findings, but did not rule on the report's admissibil-
ity.
Survey evidence is admissible as an exception to the hearsay rule
only if the survey is "material, more probative on the issue than other
evidence and if it has guarantees of trustworthiness." Harold's Stores,
Inc., et al. v. Dillard Dept. Stores, Inc., 82 F.3d 1533, 1544 (10th Cir.
1996) (citing Brunswick Corp. v. Spinit Reel Co. , 832 F.2d 513, 522
(10th Cir. 1987)); accord 5 Jack B. Weinstein & Margaret A. Berger,
Weinstein's Evidence ¶ 901(b)(9)[03] at 901-140 (1995) ("The
admissibility of survey or sampling results depends upon two factors:
necessity and trustworthiness."). "A survey is trustworthy if it is
shown to have been conducted according to generally accepted survey
principles." Brunswick Corp., 832 F.2d at 522. "The survey should
sample an adequate or proper universe of respondents." Harold's
Stores, 82 F.3d at 1544 (citing Exxon Corp. v. Texas Motor Exchange
of Houston, Inc., 628 F.2d 500, 507 (5th Cir. 1980)). "[T]hat is, the
persons interviewed must adequately represent the opinions which are
relevant to the litigation." Amstar Corp. v. Domino's Pizza, Inc., 615
F.2d 252, 264 (5th Cir.), cert. denied, 449 U.S. 899 (1980). The dis-
8
trict court should exclude the survey "when the sample is clearly not
representative of the universe it is intended to reflect." Harold Stores,
82 F.3d at 1544 (citing Bank of Utah v. Commercial Sec. Bank, 369
F.2d 19, 27 (10th Cir. 1966), cert. denied, 386 U.S. 1018 (1967)).
After careful review of the Mead Report, this Court finds that the
district court would have abused its discretion had it admitted the
report into evidence. See Eisenstadt v. Centel Corp., 113 F.3d 738,
742 (7th Cir. 1997) (noting that hearsay is inadmissible in summary
judgment proceedings save affidavits and depositions). An analysis of
the Mead Report reveals that its findings are unreliable for purposes
of establishing secondary meaning. For example, only 126 of the 200
men surveyed were aware of a store named "Dick's" in the Baltimore
area, and only 19 of the original 200 men surveyed identified goods
sold by "Dick's" as hunting or fishing equipment. Mead Report at 10.
In addition, only 21 individuals overall (i.e., 10.5% of the original
200) identified Essex, Maryland as the location of a"Dick's" store in
the Baltimore area. Id.In addition, the fact that the Mead Report excluded men under the
age of 25 and all women regardless of age from its sample of 200
individuals contributes to its unreliability. The report's unreliability is
corroborated by the findings of Marshall G. Greenberg, Ph.D., who
found that nearly 38% of all prospective buyers of hunting and fishing
gear and guns were female and 9% of all prospective buyers were
males between the ages of 18 and 24. Greenberg Op. at 3. Dr. Green-
berg's survey also revealed that awareness of Sporting's store was
extremely low. In 1997, fewer than 2% of 414 potential customers in
the Baltimore area were aware of Sporting's store on an unaided
basis, and only 9.9% of potential customers indicated awareness of
the store after its location was disclosed. J.A. at 489.
Dr. Greenberg also discovered that only 1.7% of Sporting's poten-
tial customers indicated an awareness of Sporting's store prior to Feb-
ruary 1995. Id. Based upon this evidence, the district court reasoned
that the only reasonable inference was that there was low awareness
of Sporting's store among potential consumers in 1989. This Court
agrees. For the foregoing reasons, we find the Mead Report to be
inadmissible hearsay and note that the record fails to contain any
9
other consumer study linking Sporting's trade name to its Essex,
Maryland store.
The opinion of trademark attorney Gary D. Krugman also fails to
bolster Sporting's claim that its trade name had acquired secondary
meaning by 1989. On October 3, 1996, Krugman opined in an expert
witness report that the mark "Dick's Sporting Goods" had acquired
secondary meaning and was entitled to protection from an infringing
mark or name likely to cause confusion. Krugman Report at 8. Krug-
man based his opinion upon the fact that Sporting had been selling
and advertising sporting goods for "some 25 years" and upon the
"substantial sales volume" enjoyed by Sporting"for at least the last
six years. . . ." Id. This Court is unpersuaded by Krugman's opinion
and finds that it lacks the foundation necessary to render it probative
of secondary meaning for the following reasons.
First, Krugman concedes in his deposition that he failed to famil-
iarize himself with the sporting goods market prior to rendering his
opinion. Second, he admits that he failed to consider any consumer
studies or other pertinent information relevant to the sporting goods
industry, the sporting goods market, or Sporting's prospective buyers.
Third, he admits that he did not attempt to ascertain the amount of
money expended by Sporting on advertising, the frequency of Sport-
ing's advertising, or the effectiveness of Sporting's advertising.
Fourth, he concedes that he did not consider media coverage of any
kind. Finally, Krugman admits that in evaluating Sporting's "substan-
tial sales volume," he obtained no information regarding the total
sales volume of sporting goods in the Baltimore area or elsewhere,
but simply believed that annual gross profits of $100,000 must be
"substantial." Krugman Dep. at 97-100. In short, Krugman failed ade-
quately to evaluate the factors articulated by this Court in Perini as
relevant to secondary meaning. As a result, his opinion that the trade
name "Dick's Sporting Goods" had acquired secondary meaning must
be rejected. Even if this Court were to accept Krugman's opinion, he
has presented no evidence that Sporting's trade name acquired sec-
ondary meaning as of the year in question, 1989.
Likewise, Sporting's advertising expenditures fail to establish that
its trade name had acquired secondary meaning in the minds of a sub-
stantial portion of the consuming public by 1989. In accordance with
10
Perini, the district court properly held that "substantial advertising
expenditures may establish a retailer's name in the market and, under
appropriate circumstances, support an inference that such advertising
had been successful at creating name recognition among a significant
portion of the consuming public." Mem. at 12. In the instant case,
however, Sporting spent only $14,206.00 on advertising from 1984 to
1989. Of that amount, Sporting spent less than one thousand dollars
annually from 1987 to 1989. Based upon this evidence, the district
court held that Sporting may have been a "healthy local retail store"
but that its advertising expenditures did not suggest "the kind of cam-
paign that would create secondary meaning in a trade name." Mem.
at 13-14.
On appeal, Sporting argues that the district court failed to consider
its advertisements featured in the Yellow Pages and on the cover of
a retail sporting goods catalog. However, it is clear that the district
court not only considered Sporting's Yellow Pages advertisements,
but also Sporting's advertisements featured in local brochures. Find-
ing that Sporting has presented no evidence that its advertising expen-
ditures exceeded a total of $14,206.00 for the years 1984 through
1989, inclusive of costs for advertising in the Yellow Pages or other-
wise, this Court concludes that Sporting's advertising expenditures
were de minimis.
Even if this Court were to conclude that Sporting's advertising
expenditures were significant, Sporting has failed to show that its
expenditures were effective in causing consumers in the Baltimore,
Maryland geographic area to associate the trade name"Dick's" or
"Dick's Sporting Goods" with Sporting's business. See FM 103.1,
Inc. v. Universal Broadcasting of New York, Inc., et al., 929 F. Supp.
187, 196 (D.N.J. 1996) ("Large advertising or promotional expendi-
tures do not contribute to establish a secondary meaning unless the
moving party explains how its efforts were effective in causing the
relevant group of consumers to associate the mark with itself.").
"While evidence of advertising may be relevant,"the mere expendi-
ture of money is not, in itself, determinative of the actual result in
buyers' minds." 2 J. Thomas McCarthy, MCCARTHY ON TRADEMARKS
AND UNFAIR COMPETITION, § 15:51 (4th ed. 1997).
11
A third factor cited by Perini as relevant to the establishment of
secondary meaning is sales success. The record in this case shows that
Sporting failed to achieve a level of sales from which secondary
meaning may be inferred. For example, a national survey submitted
by Sporting shows that Marylanders spent approximately $111 mil-
lion on fishing equipment and $78 million on hunting equipment in
any given year.2 By contrast, Sporting's tax returns reflect gross sales
of $641,976 in 1984, $658,782 in 1985, $684,765 in 1986, $609,664
in 1987, $557,358 in 1988, and $558,177 in 1989. The district court
held that these figures revealed that Sporting's sales "were a small
portion of total sales of hunting and fishing equipment in Maryland,"
and, therefore, "did not suggest the kind of market penetration which
would reasonably support an inference of secondary meaning." Mem.
at 13-14. For the following reasons, this Court concurs with the find-
ing of the district court.
Sporting argues that it enjoyed substantial sales for over 18 years
in the retail sporting goods industry prior to Clothing's registration of
its trade name. While one may concede that Sporting maintained a
thriving local business during the years in question, its sales simply
do not constitute a significant portion of the $111 million and $78
million Marylanders spent on fishing and hunting equipment, respec-
tively. Indeed, the record reflects that Sporting's sales decreased from
$684,765 in 1986 to $558,177 in 1989, nearly twenty percent. More-
over, Sporting's gross sales decreased from $509,206 in 1990 to
$367,562 in 1994. In other words, from its high water mark in 1986,
Sporting's sales diminished by nearly half without any competition
from Clothing. Based upon this evidence, this Court cannot find that
Sporting's gross sales support a reasonable inference that the trade
name "Dick's" or "Dick's Sporting Goods" had acquired secondary
meaning in the minds of actual or prospective consumers by 1989.
As evidence of unsolicited media coverage, Sporting asserts that it
received frequent, unsolicited media attention on the radio and in var-
_________________________________________________________________
2 1991 National Survey of Fishing, Hunting and Wildlife Associated
Recreation (J.A. at 754). Although 1991 is the only year for which the
parties have submitted information of this kind, the Court finds that it is
reasonable to assume that annual fluctuations, if any, have not been sig-
nificant.
12
ious Baltimore newspapers prior to 1990. Specifically, Sporting
argues that its business was featured in the Sun Paper, News
American, Bill Burton's Reports, and in Fishing in Maryland. Cloth-
ing argues that this Court should exclude Sporting's allegations of
unsolicited media attention because Sporting failed to disclose any
publicity, other than paid advertising, in its response to interrogato-
ries. Clothing also asserts that Sporting never supplemented or cor-
rected its response. Because Clothing's arguments are persuasive, we
find that evidence of Sporting's alleged incidents of unsolicited media
coverage is not properly before this Court. Moreover, we note that the
district court's order of November 24, 1997, did not grant Sporting
leave to supplement the record with evidence of unsolicited media
coverage.
Therefore, the only evidence concerning unsolicited media cover-
age properly before this Court is public attendance at a waterfowl
calling seminar organized by Sporting in 1982 and a newspaper arti-
cle mentioning the Sporting's store on January 17, 1982. After careful
consideration, the Court concludes that neither event is probative of
secondary meaning. First, both events occurred well before 1989.
Second, the record is devoid of evidence indicating that Sporting
organized any other seminar or was featured in any other newspaper
articles after 1982. Accordingly, the only reasonable inference is the
one reached by the district court: that these events were isolated inci-
dents. Had Sporting's trade name acquired secondary meaning by
1989, one would have expected similar events to have occurred after
1989. The fact that future events did not occur undermines Sporting's
claim of secondary meaning and tends to indicate that Sporting did
not enjoy widespread recognition in the minds of the consuming pub-
lic, as alleged.
As additional evidence of secondary meaning, Sporting asserts that
Clothing attempted to plagiarize its mark, a fifth factor relevant to
secondary meaning under Perini. From this proposition, Sporting also
argues that the district court erred in refusing to shift the burden of
proof to Clothing to show a lack of secondary meaning. For the fol-
lowing reasons, we conclude that these arguments must fail.
In trademark infringement cases, "the courts have held that evi-
dence of deliberate copying establishes a prima facie case of second-
13
ary meaning, subject to rebuttal by the defendant, with the defendant
bearing the ultimate burden of proof once deliberate copying is
proven." M. Kramer Mgf. Co. v. Andrews, 783 F.2d 421, 449 (4th Cir.
1986); Audio Fidelity, Inc. v. High Fidelity Recording, Inc., 283 F.2d
551, 558 (9th Cir. 1960) (quoting My-T Fine Corp. v. Samuels, 69
F.2d 76, 77 (2d Cir. 1934) (L. Hand, Jr.)), cert. denied, 371 U.S. 934(1962). "The rationale for this presumption is that when a defendant
copies the trademark of a competitor, it is likely that he intended to
appropriate some commercial advantage or benefit that his competitor
derived from the use of the mark." M. Kramer Mfg., 783 F.2d at 449;
Chevron Chemical Co. v. Voluntary Purchasing Groups, Inc., 659
F.2d 695, 704 (5th Cir. 1981) (quoting American Chicle Co. v. Topps
Chewing Gum, Inc., 208 F.2d 560, 563 (2d Cir. 1953) (L. Hand, J.)),
cert. denied, 457 U.S. 1126 (1982).
A review of the record evidence compels the conclusion that Cloth-
ing did not deliberately copy Sporting's alleged common law trade
name. Generally, intentional copying must involve more than simply
using the same name. For example, in Polo Fashions, Inc. v. Extra
Special Productions, Inc., 451 F. Supp. 555 (S.D.N.Y. 1978), the dis-
trict court held that while the defendant could not be enjoined from
using the descriptive name "Polo" on its clothing products, it had
engaged in intentional copying by labeling its clothing "POLO by
Marco Polo" and utilizing the image of a polo player in a manner
strikingly similar to that used in the plaintiff's"POLO BY RALPH
LAUREN" clothing line. Therefore, the fact that Clothing utilizes the
trade name "Dick's" to promote its sporting goods merchandise does
not, standing alone, support a finding of intentional copying.
Moreover, the record reveals no evidence that Clothing intended to
palm off the reputation or goodwill of Sporting by employing the
trade name "Dick's" or "Dick's Sporting Goods." The fact that Cloth-
ing has been in business for over 40 years and operates in excess of
50 retail stores nationwide renders Sporting's argument weak from
the outset. Because no evidence exists that Clothing intentionally cop-
ied Sporting's trade name, the district court properly refused to shift
the burden to Clothing to show a lack of secondary meaning.
As to the final Perini factor, length and exclusivity of the mark's
use, the district court found that Sporting had been"neither specific
14
nor consistent in identifying the area for which it claims to have
acquired common law rights to its trade name." Mem. at 7. Sporting
does not contest this finding but attempts to minimize its failure to do
so:
The Sporting accepts this point as to the lack of consistent
identification up to the point in time of Sporting's Cross
Motion for Summary Judgment filed June 24, 1997. The
market area claimed by the Sporting was well defined by
specific by (sic) zip code in that document.
Sporting's Br. at 32.
Contrary to this argument Sporting did not assert in its Cross
Motion for Summary Judgment that its use of the trade name "Dick's"
or "Dick's Sporting Goods" had been exclusive in any geographic
region. Rather, Sporting argued in that document only that its use of
the trade name had been continuous. It was not until Sporting filed its
Supplemental Memorandum in Support of its Motion for Summary
Judgment on January 16, 1998, that it argued that its use had been
both continuous and exclusive in the Baltimore, Maryland area.
Sporting also argued that Clothing had an affirmative duty to rebut
Sporting's claim of exclusivity. Supplemental Mem. in Supp. of
Plaintiff's Motion for Summary Judgment at 11. Sporting's argument
is unpersuasive for the following reasons.
In Celotex Corp. v. Catrett, 477 U.S. 317 (1986), the district court
had entered summary judgment for the defendant. The D.C. Circuit
Court reversed because the defendant had failed to support its motion
for summary judgment with evidence tending to negate the plaintiff's
claim. The Supreme Court reversed, upholding the district court's
entry of summary judgment. As a leading treatise on federal proce-
dure explains, under Celotex, "the moving party on a summary judg-
ment motion need not produce evidence, but simply can argue that
there is an absence of evidence by which the nonmovant can prove
his case." 10A Charles Alan Wright, Arthur R. Miller & Mary Kay
Kane, FEDERAL PRACTICE ANDPROCEDURE § 2720, at 10 (2d ed. Supp.
1994); see Celotex, 477 U.S. at 325 ("[T]he burden on the moving
party may be discharged by ``showing' -- that is, pointing out to the
district court -- that there is an absence of evidence to support the
15
nonmoving party's case."); accord Cray Communications, Inc. v.
Novatel Cmptr. Systems, Inc., 33 F.3d 390 (4th Cir. 1994). In sum, it
is clear under Celotex and Cray that Clothing bears no burden of pro-
duction. Instead, Clothing may simply assert, as it has done, that
Sporting has presented insufficient evidence to establish secondary
meaning.
Moreover, this Court notes that the district court's order of Novem-
ber 24, 1997, did not grant Sporting leave to present evidence regard-
ing exclusivity. That order granted Sporting limited leave to
supplement the summary judgment record with evidence of the fol-
lowing only:
1. Copies of newspaper advertisements from 1989;
2. Copies of Plaintiff's tax returns for the years 1985 to
1989;
3. An affidavit from an attendee to a waterfowl confer-
ence; and
4. Supplemental affidavits from 18 affiants already con-
tained in the record.
J.A. at 572.
Notwithstanding the district court's order, Sporting argued in its
Supplemental Memorandum that its use of the trade name "Dick's"
or "Dick's Sporting Goods" had been exclusive. Specifically, Sport-
ing paints the picture that it guarded its trade name by compelling a
competing business, Dick's Sports Center, Inc., to cease using the
trade name "Dick's." As a result, Sporting contends, the competitor
went out of business. Supp. Mem. at 8-9. In other words, Sporting
would have this Court believe that but for a short interval of time, it
alone utilized the trade name "Dick's" in the Baltimore, Maryland
geographic region. To the contrary, records from the Maryland
Department of Assessments and Taxation reveal that Dick's Sports
Center, Inc. conducted business in the State of Maryland for 11 years
and was dissolved for failure of its owner to file a personal property
16
tax return. J.A. at 798. Because Dick's Sports Center, Inc. utilized the
trade name "Dick's" simultaneously with Sporting from 1985 to 1996,
Sporting's claim of exclusivity must fail. Although Sporting utilized
the trade name "Dick's" for many years, length of use and exclusivity
are not synonymous.
Sporting also argues on appeal that the district court "abused its
discretion by refusing to allow [it] discovery of supplemental proof
of name recognition offered to show secondary meaning as of
1989...." Sporting's Br. at 33. A review of the record shows that
Sporting argued in its original Motion for Summary Judgment that its
trade name had acquired secondary meaning as of 1995-- the year
Clothing opened its first store in Maryland. Clothing argued in
response that Sporting's proof of secondary meaning was inadequate
in that it had failed to proffer evidence of secondary meaning as of
the relevant year, 1989. Following a telephone conference with the
parties, the district court entered the order of November 24, 1997,
granting Sporting limited leave to supplement the summary judgment
record with the specific items noted heretofore. Sporting now asserts
that the district court erred in refusing to allow it to supplement the
record with the following additional evidence: (1) consumer studies;
(2) expert witness reports; (3) the market area claimed by Sporting;
and (4) "a review of any additional factors." Sporting's Br. at 33.
This Court finds that the district court acted within its discretion in
refusing to allow Sporting to start over from square one. "District
courts enjoy nearly unfettered discretion to control the timing and
scope of discovery...." Hinkle v. City of Clarksburg, 81 F.3d 416, 426
(4th Cir. 1996). In fact, had the district court allowed Sporting to sup-
plement the summary judgment record more extensively, it may have
abused its discretion. In Cray Communications, Inc. v. Novatel Cmptr.
Systems, Inc., 33 F.3d 390 (4th Cir. 1994), this Court affirmed the
exercise of the district court's discretion in refusing to consider new
evidentiary matters and reasoned:
Novatel contends, in essence, that dismissal of its fraud
claim because of its counsel's mistake imposes an unjust
penalty on the client. As Justice Harlan once explained, such
contentions are "wholly inconsistent with our system of rep-
resentative litigation, in which each party is deemed bound
17
by the acts of [its lawyer]...." Keeping this suit alive merely
because plaintiff should not be penalized for the omissions
of his own attorney would be visiting the sins of plaintiff's
lawyer upon the defendant.
Id. at 395 (emphasis in original).
Similarly, in the instant case, it appears that Sporting's failure to
submit cogent evidence in its original motion for summary judgment
may have been attributable to oversight. It is well settled law and
undisputed by Sporting that the appropriate date for proof of second-
ary meaning in this case is 1989, the date Clothing obtained federal
registration of its trademark. See Armand's Subway, Inc. v. Doctor's
Assocs., 604 F.2d 849, 849-50 (4th Cir. 1979) (noting that registration
constitutes constructive notice to competing users). Accordingly, the
district court granted Sporting only limited leave to supplement the
summary judgment record and did not abuse its discretion in refusing
to allow Sporting to reopen the entire record.
Because Sporting has failed to satisfy any of the factors relevant to
secondary meaning under Perini, we find that Sporting's trade name
is ineligible for trademark protection. Sporting's evidence of 65 cus-
tomer checks made payable to "Dick's" and 15 customer affidavits
does not change our conclusion. No reasonable juror could find that
65 checks and 15 affidavits connote that a substantial portion of the
consuming public associated the trade name "Dick's" or "Dick's
Sporting Goods" with Sporting's business as of 1989. We note that
none of the checks proffered by Sporting were written before the year
1996, and only some of the affiants claim to have patronized Sport-
ing's store on or before 1989. For these reasons, Sporting's checks
and affidavits are insufficient to establish secondary meaning. Indeed,
none of Sporting's admissible evidence, considered separately or in
the aggregate, suffices to establish secondary meaning under Perini.
Finally, we address Sporting's argument that the doctrine of
reverse confusion is applicable to lower or shift Sporting's burden of
proving secondary meaning. "Reverse confusion occurs when a
larger, more powerful company uses the trademark of a smaller, less
powerful senior owner and thereby causes likely confusion as to the
source of the senior user's goods or services." Fisons Horticulture,
18
Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 474 (3d Cir. 1994). To
date, this Court has not adopted the doctrine of reverse confusion.
However, even if we were we to adopt the doctrine, it would not
apply to the instant case because Sporting is not a"trademark holder."
In DeCosta v. Viacom International, Inc., 981 F.2d 602 (1st Cir.
1992), the United States Court of Appeals for the First Circuit dis-
cussed the leading case on reverse confusion, Big O Tire Dealers, Inc.
v. Goodyear Tire & Rubber Co., 561 F.2d 1365 (10th Cir. 1977), cert.
dismissed, 434 U.S. 1052 (1978), and noted that only a "trademark
holder could base a claim on ... ``reverse confusion.'" DeCosta, 981
F.2d at 608 (emphasis added). In other words, the doctrine of reverse
confusion is a damages theory, expanding the relief available to a
plaintiff who has already established exclusive right to its trade name.
Because Sporting has failed to establish that its trade name acquired
secondary meaning in the minds of a substantial portion of the con-
suming public as of 1989, Sporting is not a "trademark holder" and
cannot avail itself of the doctrine of reverse confusion.
Because Sporting has failed to establish that its trade name
acquired secondary meaning in the minds of the consuming public by
1989, we affirm the district court's denial of summary judgment to
Sporting on the Complaint and grant of summary judgment to Cloth-
ing on the Complaint and on Clothing's counterclaim.
AFFIRMED
19