AutoZone Inc v. Tandy Corp ( 2004 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
ELECTRONIC CITATION: 2004 FED App. 0200P (6th Cir.)
File Name: 04a0200p.06 _________________
COUNSEL
UNITED STATES COURT OF APPEALS
ARGUED: Alan S. Cooper, SHAW PITTMAN,
FOR THE SIXTH CIRCUIT Washington, D.C., for Appellants. Jane Michaels,
_________________ HOLLAND & HART, Denver, Colorado, for Appellee.
ON BRIEF: Alan S. Cooper, SHAW PITTMAN,
AUTOZONE, INC. and X Washington, D.C., Robb S. Harvey, WALLER, LANSDEN,
SPEEDBAR, INC., - DORTCH & DAVIS, Nashville, Tennessee, for Appellants.
Jane Michaels, HOLLAND & HART, Denver, Colorado,
Plaintiffs-Appellants, - Timothy P. Getzoff, HOLLAND & HART, Boulder,
- No. 01-6571
- Colorado, Douglas R. Pierce, KING & BALLOW, Nashville,
v. > Tennessee, for Appellee.
,
- _________________
TANDY CORP ., -
Defendant-Appellee. - OPINION
- _________________
N
Appeal from the United States District Court KAREN NELSON MOORE, Circuit Judge. This case
for the Middle District of Tennessee at Nashville. springs from a trademark dispute between two large
No. 99-00884—Thomas A. Wiseman, Jr., District Judge. nationwide retailers in the seemingly disparate markets of
automotive parts and electronics. Plaintiff-Appellant
Argued: April 21, 2004 AutoZone, Inc. (“AutoZone”) is a nationwide retailer of
consumer automotive products that uses the mark
Decided and Filed: June 29, 2004 AUTOZONE. AutoZone and its wholly owned subsidiary
Speedbar, Inc. brought an action against Defendant-Appellee
Before: BATCHELDER and MOORE, Circuit Judges; Tandy Corporation (“Tandy” or “Radio Shack”), which owns
CALDWELL, District Judge.* the Radio Shack chain, after Tandy began using its
POWERZONE mark to promote a section of its retail outlets
dedicated to selling various power-related items, such as
batteries, extension cords, and chargers for electronics.
AutoZone alleged that Tandy’s use of POWERZONE
constituted trademark infringement, tradename infringement,
unfair competition, breach of contract, and trademark
dilution. The United States District Court for the Middle
*
District of Tennessee granted Tandy’s motion for summary
The Honorable Karen K. Caldwell, United States District Judge for judgment and dismissed all of AutoZone’s claims. Because
the Eastern District of Kentucky, sitting by designation.
1
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AutoZone has not presented enough evidence such that a switches, radar detectors, alarms, and citizen’s band radio
reasonable jury could conclude that there existed a receivers. AutoZone also sells commonly available consumer
“likelihood of confusion” between POWERZONE and items, such as batteries, extension cords, power strips, and
AUTOZONE or that Tandy’s use of POWERZONE diluted tools, all of which a consumer could find at Radio Shack, as
the AUTOZONE mark, we AFFIRM the judgment of the well as at a variety of convenience stores, supermarkets, and
district court. department stores. Depending on the size of the store, an
AutoZone outlet carries either 21,500 different products (as
I. FACTS AND PROCEDURE measured by stock keeping units, or SKUs) or 55,100
different products. Of the 325 products sold by Radio Shack
A. The 1982 Litigation in its POWERZONE section, 132 products are also carried by
AutoZone. Thus, less than 1% of all the products offered by
Although this particular round of legal action was instigated AutoZone overlap with those sold in the POWERZONE
by Tandy’s adoption of the POWERZONE mark, AutoZone section.
and Tandy’s litigious relationship dates back two decades. In
1979, AutoZone’s predecessor Malone & Hyde, Inc. The AUTOZONE mark consists of the word “AutoZone”
(“M&H”) opened a chain of retail-auto parts stores in slanted to the right and spelled with a capital “A” and “Z.”
Tennessee and Arkansas under the name “Auto Shack.” The mark also features a “speedbar” design, which consists of
Tandy brought a trademark infringement action against M&H diagonal bars of decreasing thickness intended to convey an
for the use of the AUTO SHACK mark. Tandy Corp. v. impression of rapidity or movement. When in color, the word
Malone & Hyde, Inc., 581 F. Supp. 1124, 1126-27 (M.D. “AutoZone” is red, and the speedbar design is orange. When
Tenn. 1984), rev’d, 769 F.2d 362 (6th Cir. 1985). The parties color advertising is not available, the AutoZone mark
settled in 1987: M&H ceased using AUTO SHACK, Tandy naturally appears in black and white. Generally, the speedbar
agreed to M&H’s use of AUTOZONE, and Tandy was design is located either to the left or to the right of the word
contractually barred from using AUTOZONE or any other “AutoZone,” but occasionally the speedbar design appears on
name or mark confusing similar to AUTOZONE. both sides of the name. There is no dispute that AutoZone
properly registered the name and the speedbar design with the
B. AutoZone, Tandy, and the Disputed Trademarks Patent and Trademark Office (“PTO”).
1. AutoZone 2. Tandy
In the years following the settlement, AutoZone blossomed Tandy is largest nationwide retailer of consumer
into a large, successful national chain, which currently owns electronics. Through its 7,186 Radio Shack outlets, it
or franchises more than 3,000 stores in forty-two states and reported $4.1 billion in sales in 1999. As a marketing tactic,
Mexico and which reported $4.5 billion in sales in 2000. Radio Shack pursued a “store within a store concept”: it
AutoZone sells a wide variety of automotive parts and physically grouped its core target products into separate
supplies, including car batteries, tires, engine parts, and sections within its retail outlets. For example, within a Radio
assorted automotive peripherals. Some products sold at Shack outlet a consumer might find a Sprint Communications
AutoZone are also sold at Radio Shack, including automobile Store, an RCA Digital Entertainment Center, a Microsoft
power adapters, car stereos, amplifiers, cables, connectors, Information Center, and a Compaq Creative learning center.
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 5 6 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
At some point in the mid-1990s, Radio Shack sought to create Shack mark on Radio Shack’s website. In this example, the
a store-within-a-store for one of its primary anchors — “the words “Radio Shack” and “RadioShack.com” appear multiple
business of connecting things,” which includes batteries, times in close proximity to the word POWERZONE, and a
power supplies, cords, connectors, and resistors. Joint consumer would not see the word POWERZONE without
Appendix (“J.A.”) at 168 (David Edmondson Dep.). Market either purposely going to or being directed to
research conducted by Radio Shack demonstrated that RadioShack.com.
consumers preferred POWERZONE as the name for the new
power-related store-within-a-store. Before launching the C. Procedural Background
POWERZONE concept, Radio Shack hired a trademark
search firm, which discovered a Georgia business that used Shortly after Radio Shack began using the POWERZONE
the POWERZONE mark and sold various types of batteries. mark, AutoZone requested that Radio Shack stop and retract
Radio Shack purchased the rights to the POWERZONE mark its application to register the mark. AutoZone sent Radio
from this firm and began using the mark on July 2, 1998. Shack a formal cease-and-desist letter on February 1, 1999.
Radio Shack refused to comply. AutoZone filed this action
The POWERZONE mark features the word “PowerZone,” in the United States District Court for the Middle District of
spelled with a capital “P” and a capital “Z,” bookended by Tennessee on September 15, 1999. It asserted five claims for
graphic elements consisting of same-sized diagonal lines relief: 1) service mark and trademark infringement, see
slanting to the right. The word “PowerZone” generally 15 U.S.C. § 1114(1); 2) tradename infringement, see id.;
appears on a clearly defined, cylindrical object that closely 3) unfair competition, see 15 U.S.C. § 1125(a); 4) service
resembles a battery and is centered in between the slanted mark and trademark dilution under both federal and
lines moving outward from the battery. The words Radio Tennessee statutes, see 15 U.S.C. § 1125(c) and Tenn. Code
Shack and an “R” with a circle around it, which is a Radio Ann. § 47-25-513; and 5) breach of contract. The district
Shack trademark, also appear on the battery. In some court properly asserted jurisdiction over claims one through
advertisements, the battery, containing the word four pursuant to 15 U.S.C. § 1121(a) and 28 U.S.C. §§ 1331,
“PowerZone” and the Radio Shack mark, appears without the 1338(a) (trademark claim), 1338(b) (unfair competition). The
slanted lines. Additionally, in some advertisements, the word court also properly exercised jurisdiction over AutoZone’s
“PowerZone” is depicted without any accompanying breach of contract claim and Tennessee state dilution claim
graphics. The POWERZONE mark almost always appears in pursuant to 28 U.S.C. §§ 1332(a)(1), 1367(a).1 As part of the
black and white. However, in color advertisements, the word discovery that took place through 2000 and 2001, AutoZone
PowerZone is written in white, and the battery has a coppery commissioned a consumer survey from its expert, Michael
yellow-orange color. Rappeport (“Rappeport”). The purpose of the survey, the
With limited exceptions, Radio Shack uses POWERZONE
either as a complement to or in close physical proximity with 1
AutoZone is a Nevada corporation, which has its principal place of
the Radio Shack name and the Radio Shack house mark, such busine ss in Memp his, Te nnesse e. Speedbar, Inc. (“Sp eedbar”), which is
that a consumer would be unlikely to see one without the wholly owned by AutoZ one, is also captioned as a named plaintiff-
other whether in advertising or at an actual Radio Shack app ellant. Speedbar is a Nevada corporation, which has its principal place
outlet. AutoZone uncovered at least one example in which of business in the Cayman Islands. Speedbar actually owns the
AUTOZONE mark and licenses its use to AutoZo ne. Tandy is a
POWERZONE appeared without the accompanying Radio Delaware corporation, which has its principal place of business in Texas.
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 7 8 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
methodological validity and significance of which are highly 1997); see also 15 U.S.C. § 1114(1)(a) (“Any person who
disputed, was to demonstrate the strength of the AUTOZONE shall, without the consent of the registrant . . . use in
mark, although AutoZone also believes that the study commerce any reproduction, counterfeit, copy, or colorable
demonstrates actual confusion between AUTOZONE and imitation of a registered mark in connection with the sale,
POWERZONE. Additionally, for the purposes of offering for sale, distribution, or advertising of any goods or
demonstrating that third-party use of trademarks containing services on or in connection with which such use is likely to
ZONE was pervasive, Radio Shack discovered that as of cause confusion, or to cause mistake, or to deceive . . . shall
March 16, 2001, there were 745 active trademarks that used be liable in a civil action by the registrant. . . .”). The unfair
or incorporated ZONE. At least sixteen of the registered competition claim entails the same analysis. Section 43(a) of
marks were used in the automotive or travel-related the Lanham Act imposes liability on:
industries. At least forty-three entities operated websites that
use ZONE either alone or in conjunction with other words. Any person who, on or in connection with any goods or
services . . . uses in commerce any word, term, name,
Radio Shack filed a motion for summary judgment on symbol, or device, or any combination thereof, or any
March 19, 2001, which the district court granted in its entirety false designation of origin, false or misleading
on November 9, 2001. The district court held that there were description of fact, or false or misleading representation
no genuine issues of material fact regarding the likelihood of of fact, which — (A) is likely to cause confusion, or to
confusion between the AUTOZONE and POWERZONE cause mistake, or to deceive . . . shall be liable in a civil
marks. AutoZone, Inc. v. Tandy Corp., 174 F. Supp. 2d 718, action by any person who believes that he or she is likely
726-33 (M.D. Tenn. 2001). The district court also ruled that to be damaged by such act.
summary judgment was proper as to AutoZone’s dilution
claim. Id. at 734-39. AutoZone timely appealed, and we 15 U.S.C. § 1125(a)(1)(A) (emphasis added); see Wynn Oil
have jurisdiction pursuant to 15 U.S.C. § 1121(a) and Co. v. Am. Way Serv. Corp., 943 F.2d 595, 604 (6th Cir 1991)
28 U.S.C. § 1291. (“Wynn II”) (applying “likelihood of confusion” test to an
unfair competition claim brought pursuant to § 1125).
II. ANALYSIS Additionally, AutoZone premises its breach of contract claim
on Radio Shack’s violation of Section III.D of the 1987
Although AutoZone asserted five separate claims against Settlement, which prohibited Radio Shack from using “any
Radio Shack, the claims can be grouped into two umbrella name or mark . . . which is likely to cause confusion.” J.A. at
claims: the “likelihood of confusion” claims and the dilution 35 (1987 Settlement, § III.D). Our analysis of the dilution
claim. The trademark infringement, tradename infringement, claim is separate and distinct.
unfair competition, and breach of contract claims all require
us to employ a “likelihood of confusion” analysis. The A. Standard of Review
essence of a trademark or tradename infringement claim
brought pursuant to 15 U.S.C. § 1114(1) is “whether the We review de novo the district court’s grant of summary
defendant’s use of the disputed mark is likely to cause judgment in a trademark infringement case. See Daddy’s, 109
confusion among consumers regarding the origin of the goods F.3d at 280. Summary judgment is appropriate “if the
offered by the parties.” Daddy’s Junky Music Stores, Inc. v. pleadings, depositions, answers to interrogatories, and
Big Daddy’s Family Music Ctr., 109 F.3d 275, 280 (6th Cir. admissions on file, together with the affidavits . . . show that
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 9 10 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
there is no genuine issue as to any material fact and that the Exxon Corp., 209 F.3d 562, 568 (6th Cir. 2000) (applying the
moving party is entitled to a judgment as a matter of law.” Frisch factors); Daddy’s, 109 F.3d at 280 (same). “These
Fed. R. Civ. P. 56(c). The panel “may affirm the grant of factors imply no mathematical precision, but are simply a
summary judgment to defendant only if the record, when guide to help determine whether confusion is likely. They are
viewed in the light most favorable to the plaintiff, contains no also interrelated in effect. Each case presents its own
genuine issue[s] of material fact.” Daddy’s, 109 F.3d at 280. complex set of circumstances and not all of these factors may
“[T]he mere existence of some alleged factual dispute be particularly helpful in any given case. . . . The ultimate
between the parties will not defeat an otherwise properly question remains whether relevant consumers are likely to
supported motion for summary judgment; the requirement is believe that the products or services offered by the parties are
that there be no genuine issue of material fact.” Anderson v. affiliated in some way.” Homeowners Group, Inc. v. Home
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). With the Mktg. Specialists, Inc., 931 F.2d 1100, 1107 (6th Cir. 1991)
benefit of having all evidence and justifiable inferences drawn (emphasis added). A focus on the “ultimate question” is
from such evidence in its favor, the nonmoving party “must critical when we review a district court’s grant of summary
set forth specific facts showing that there is a genuine issue,” judgment; a genuine dispute of material fact on any one of the
id. at 250 (quoting Fed. R. Civ. P. 56(e)), such that a jury eight factors does not demonstrate that a grant of summary
could reasonably find for the nonmoving party. judgment was improper when there is not enough total
evidence for a jury to conclude that the junior mark is likely
B. The “Likelihood of Confusion” Claims to confuse consumers. See id. (“To resist summary judgment
in a case where the likelihood of confusion is the dispositive
The district court did not err in granting summary judgment issue, a nonmoving party must establish, through pleadings,
on the trademark infringement, tradename infringement, depositions, answers to interrogatories, admissions and
unfair competition, and breach of contract claims because affidavits in the record, that there are genuine factual disputes
AutoZone failed to show that there existed a genuine issue of concerning those of the [] factors which may be material in
material fact concerning the likelihood of confusion. When the context of the specific case.”).
evaluating the likelihood of confusion, we analyze and
balance the following factors: Neither party disputes three of the eight Frisch factors —
marketing channels used, likely degree of purchaser care, and
1. strength of the senior mark (AutoZone) likelihood of product-line expansion. First, the “marketing
2. similarity of the marks channels used” factor looks at “the parties’ predominant
3. relatedness of the goods or services customers and their marketing approaches.” Therma-Scan,
4. evidence of actual confusion Inc. v. Thermoscan, Inc., 295 F.3d 623, 636 (6th Cir. 2002).
5. marketing channels used “Where the parties have different customers and market their
6. likely degree of purchaser care goods or services in different ways, the likelihood of
7. the intent of Radio Shack in selecting the confusion decreases.” Id. As national retail outlets, both
POWERZONE mark AutoZone and Radio Shack cater to the same general public
8. the likelihood of expansion of the product lines. and use the same marketing channels. Second, in analyzing
the likely degree of purchaser care, “the standard used by the
Frisch’s Rests., Inc. v. Elby’s Big Boy of Steubenville, Inc., courts is the typical buyer exercising ordinary caution.”
670 F.2d 642, 648 (6th Cir. 1982); see also Kellogg Co. v. Daddy’s, 109 F.3d at 285 (quotation omitted). Customers are
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 11 12 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
unlikely to use any more than ordinary caution when descriptive and (2) merely descriptive to (3) suggestive and
purchasing the items offered by Radio Shack and AutoZone. (4) arbitrary or fanciful.” (quotations and citations omitted)).
Both of the above factors weigh in favor of the likelihood of AUTOZONE is either a suggestive or a descriptive mark
confusion. Third, “a strong possibility that either party will because it either suggests some quality of the AutoZone chain
expand [its] business to compete with the other or be (“Fulfill all your automotive needs here!”) or describes the
marketed to the same consumers will weigh in favor of AutoZone stores (“Enter a Zone filled with all things auto!”).
finding that the present use is infringing.” Homeowners, 931 The mark is weaker than a fanciful mark (Exxon) or an
F.2d at 1112 (quotation and citation omitted). Neither party arbitrary mark (Starbucks), particularly because it uses a word
intends to expand its business into the other’s sphere. This — ZONE — that is commonly found in other trademarks.
factor accordingly weighs against the likelihood of confusion. See Daddy’s, 109 F.3d at 281 (“[T]he more common a word
or phrase is, the less inherent trademark strength it may have,
1. Strength of Senior Mark even when the mark has an arbitrary relation to the good or
service to which it applies.”); see also Amstar Corp. v.
The district court had resolved this factor in AutoZone’s Domino’s Pizza, Inc., 615 F.2d 252, 260 (5th Cir. 1980)
favor, concluding that as a matter of law, the AUTOZONE (noting that although application of DOMINO to sugar is
mark was strong. “The strength of a mark is a factual arbitrary, the mark faces limited protection outside the food-
determination of the mark’s distinctiveness. The more products industry because DOMINO is relatively common
distinct a mark, the more likely is the confusion resulting word).
from its infringement, and therefore, the more protection it is
due. A mark is strong and distinctive when the public readily Even though AUTOZONE is a suggestive or descriptive
accepts it as the hallmark of a particular source; such mark, and thus is less likely to cause confusion, there is no
acceptance can occur when the mark is unique, when it has dispute that AUTOZONE is incontestable. “Incontestable”
received intensive advertisement, or both.” Daddy’s, 109 trademarks — those that have not been successfully
F.3d at 280 (internal quotations and citations omitted). In challenged within five years of registration, see 15 U.S.C.
general, “[t]he stronger the mark, all else equal, the greater § 1065 — are presumed to be strong marks. When a mark is
the likelihood of confusion.” Homeowners, 931 F.2d at 1107. incontestable, “an infringement action may not be defended
“Trademarks are generally categorized as fanciful, arbitrary, on the ground that the mark is merely descriptive.” Jet, Inc.
suggestive or descriptive.” Little Caesar Enters., Inc. v. Pizza v. Sewage Aeration Sys., 165 F.3d 419, 422 (6th Cir. 1999)
Caesar, Inc., 834 F.2d 568, 571 (6th Cir. 1987). “Fanciful (quotation omitted). While Jet prevents Radio Shack from
and arbitrary marks are considered to be the ‘strongest’ or arguing that AUTOZONE is weak simply by virtue of its
most distinctive marks. . . . ‘Suggestive’ and ‘descriptive’ descriptive or suggestive nature, Radio Shack can rebut the
marks either evoke some quality of the product (e.g., Easy presumption of AUTOZONE’s strength by proving extensive
Off, Skinvisible) or describe it directly (e.g., Super Glue). third-party use of similar marks. Data Concepts, Inc. v.
Such marks are considered ‘weaker,’ and confusion is said to Digital Consulting, Inc., 150 F.3d 620, 625 (6th Cir. 1998)
be less likely where weak marks are involved.” Id.; see also (“[A] mark is weakened outside of the context in which it is
Champions Golf Club, Inc. v. The Champions Golf Club, Inc., used if there is third-party use of the mark.”).
78 F.3d 1111, 1116-17 (6th Cir. 1996) (“A term for which
trademark protection is claimed will fit somewhere in [a] Radio Shack contends that extensive third-party use of
spectrum which ranges through (1) generic or common ZONE-related marks saps the strength of the AUTOZONE
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mark. Radio Shack presented evidence that 745 trademarks baseless; AutoZone has not pointed to any case in which we
registered with the U.S. Patent and Trademark Office have stated that the strength-of-mark factor predominates over
(“PTO”) use the term ZONE in various combinations. the other seven Frisch factors. Contrary to AutoZone’s
Sixteen registered marks use ZONE in the automotive-goods- position, the fact that a mark is strong does not impact our
and-services industry. Furthermore, in excess of forty analysis of the similarity of the marks, the relatedness of the
websites use ZONE for a variety of services. “[M]erely products and services, or any of the other factors in the
showing the existence of marks in the records of the [PTO] likelihood-of-confusion test.
will not materially affect the distinctiveness of another’s mark
which is actively used in commerce.” Homeowners, 931 F.2d 2. Similarity of the Marks
at 1108. Rather, “to be accorded weight a defendant must
show what actually happens in the marketplace.” Id. at 1108. The similarity of the senior and junior marks is “a factor of
Radio Shack has succeeded in showing widespread use of considerable weight.” Daddy’s, 109 F.3d at 283. “When
ZONE by presenting nearly 200 pages of evidence analyzing similarity, courts should examine the
highlighting the active use of ZONE in a variety of industries. pronunciation, appearance, and verbal translation of
conflicting marks.” Id. A side-by-side comparison of the
While ZONE may be used pervasively in the marketplace, litigated marks is not appropriate, although naturally the
Radio Shack has not demonstrated that AUTOZONE is so commonalities of the respective marks must be the point of
similarly employed. “[T]he validity and distinctiveness of a emphasis. Instead, “courts must determine whether a given
composite trademark is determined by viewing the trademark mark would confuse the public when viewed alone, in order
as a whole, as it appears in the marketplace.” Official Airline to account for the possibility that sufficiently similar marks
Guides, Inc. v. Goss, 6 F.3d 1385, 1392 (9th Cir. 1993). The may confuse consumers who do not have both marks before
unit of analysis in considering the strength of the mark is the them but who may have a general, vague, or even hazy,
entire mark, not just a portion of the mark. There is scant impression or recollection of the other party's mark.” Id.
evidence that AUTOZONE is a commonly used mark. (quotations omitted).
Indeed, AutoZone has spent hundreds of millions of dollars
in advertising its mark, and there is widespread consumer Radio Shack distorts this analysis slightly: it requests that
recognition of AutoZone’s use of the mark, as even Radio we delete ZONE because of the word’s common usage and
Shack concedes. Thus, Radio Shack has failed to overcome consider only the similarity between AUTO and POWER, of
the presumption that incontestable marks are strong. The which there is none. By doing so, Radio Shack asks us to
district court properly concluded that AutoZone’s mark was violate the “anti-dissection rule,” whereby we “view marks in
strong. their entirety and focus on their overall impressions, not
individual features.” Id.; see also Therma-Scan, 295 F.3d at
AutoZone asserts that the district court erred by not giving 633; 3 J. Thomas McCarthy, McCarthy on Trademarks and
enough weight to the strength-of-mark factor in the overall Unfair Competition § 23:41, at 23-123 (2003) (hereinafter
eight-factor test. AutoZone suggests that the court “did not “McCarthy”) (“Conflicting composite marks are to be
accord AUTOZONE the broad protection to which strong compared by looking at them as a whole, rather than breaking
marks are entitled,” AutoZone Br. at 38, because the court the marks up into their component parts for comparison. . . .
failed to evaluate the other factors in light of the ruling that The rationale for the rule is that the commercial impression of
AUTOZONE was a strong mark. AutoZone’s contention is
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 15 16 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
a composite trademark on an ordinary prospective buyer is prominent part of AEROB-A-JET is not the shared term JET
created by the mark as a whole, not by its component parts.”). but the initial syllables AEROB-A . . . .”). In Daddy’s, we
ruled that “Daddy’s Junky Music Store” and “Big Daddy’s
The AUTOZONE and POWERZONE marks have some Family Music Center” were similar because both firms often
visual and linguistic similarities, but ultimately their advertised using only the nickname “Daddy’s” and because
differences outnumber their similarities such that the “Daddy’s” was not just a component of the mark, but was in
likelihood of confusion is small. For both, the mark appears fact the mark itself. Daddy’s, 109 F.3d at 283-84. This case
as a single word, with the first letter and the “Z” in ZONE is more similar to Jet than to Daddy’s: if both AutoZone and
capitalized. They each have three syllables, although the Radio Shack often used the nickname “Zone” or “the Zone,”
pronunciation of the first two syllables is not similar. Daddy’s might control, but instead the differences between
Additionally, both marks are generally featured with a series the first syllables of POWERZONE and AUTOZONE cannot
of slanting lines bookending the main word. That is where be ignored, particularly giving the ubiquity of ZONE. See
the similarities end. Aside from the clear differences in the also Little Caesar, 834 F.2d at 571-72 (LITTLE CAESARS
accentuation of the first syllables, the AUTOZONE font (soft- and PIZZA CAESAR are dissimilar because “Caesar” is often
edged or rounded) is distinct from the POWERZONE font used in selling Italian food and because of the differences in
(more angular). The word AUTOZONE is slanted whereas sound and appearance); Streetwise Maps, Inc. v. Vandam,
POWERZONE is not. When viewed in conjunction with the Inc., 159 F.3d 739 (2d Cir. 1998) (finding a dissimilarity
slanted lines of decreasing thickness that emanate from the between STREETWISE and STREETSMART when both
word AUTOZONE, the entire design gives an impression of were used to sell maps), Gruner & Jahr USA Publ’g v.
momentum or speed. By contrast, the slanted lines on either Meredith Corp., 991 F.2d 1072, 1079-80 (2d Cir. 1993)
side of the word POWERZONE are all of the same size, (PARENTS magazine and PARENT’S DIGEST magazine
perhaps symbolizing the flow of power. Occasionally, not confusingly similar).
POWERZONE appears without the slanted lines.
POWERZONE is almost always featured on a cylindrical Furthermore, the POWERZONE mark’s consistent
object that closely resembles a battery, particularly given the proximity to Radio Shack’s house mark is significant. The
clear depiction of a battery’s positive node on the right side of use of a challenged junior mark together with a house mark or
the object. AUTOZONE has no such aspect in its design. house tradename can distinguish the challenged junior mark
For the AUTOZONE mark, the word AUTOZONE appears from the senior mark and make confusion less likely.
in red and the slanted lines of decreasing width appear in 3 McCarthy § 23:43, at 23-129; see Nabisco, Inc. v. Warner-
orange. POWERZONE generally appears in black and white, Lambert Co., 220 F.3d 43, 46 (2d Cir. 2000) (“[Defendant]’s
but when it is in a color advertisement, POWERZONE is prominent use of its well-known house brand therefore
written in white, the slanted lines are black, and the battery is significantly reduces, if not altogether eliminates, the
a coppery-yellow color. likelihood that consumers will be confused as to the source of
the parties’ products.”); Luigino’s, Inc. v. Stouffer Corp., 170
Several cases provide points of comparison. In Jet we ruled F. 3d 827, 831 (8th Cir. 1999) (“[T]he prominent display of
that the marks JET and AEROB-A-JET were dissimilar. We the house marks convey[s] perceptible distinctions between
noted that the two marks differed visually and verbally, the products.”). The co-appearance of a junior mark and a
partially because the first syllables of the marks received house mark is not dispositive of dissimilarity, but it is
distinct emphasis. Jet, 165 F.3d at 423-24 (“The most persuasive. See 3 McCarthy § 23:43, at 23-130.
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 17 18 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
POWERZONE almost never appears without its F.2d at 600, two slightly different types of oxygenating septic
accompanying Radio Shack house mark. The Radio Shack filters, see Jet, 165 F.3d at 422, and sit-down and carry-out
mark appears on the battery slightly above the POWERZONE pizza establishments, see Little Caesar, 834 F.2d at 571, are
mark. The only deviation from this pattern is a webpage for related enough to create a likelihood of confusion. However,
RadioShack.com. However, multiple references to infrared thermal-imaging devices and ear thermometers, see
RadioShack.com and Radio Shack accompany this slightly Therma-Scan, 295 F.3d at 623, and real-estate brokers and
different use of the POWERZONE mark, such that it would marketing services for real-estate brokers, see Homeowners,
nearly impossible for an internet user to see POWERZONE 931 F.2d at 1108-09, are not related enough to cause a
without simultaneously recognizing its connection to Radio likelihood of confusion. In Toucan Golf, Kellogg claimed
Shack. that a golf-equipment manufacturer infringed the famous
“Toucan Sam” trademark when the golf firm used a mark that
In conclusion, the marks are not similar enough to create a featured a toucan “perched upon a golf iron” alongside the
likelihood of confusion. There are considerable visual and word “Toucan Gold.” Kellogg Co. v. Toucan Golf, Inc., 337
linguistic differences. Furthermore, the use of the Radio F.3d at 621-22. Kellogg asserted that even though it
Shack house mark in proximity to POWERZONE reduces the primarily manufactured breakfast cereal, its products were
likelihood of confusion from any similarity that does exist. related to the golf industry because it offered golf balls and
golf shirts featuring the visage of Toucan Sam and because it
3. Relatedness of Goods or Services had run advertisements featuring Toucan Sam on a golf
course. Id. at 624. We ruled that Kellogg’s connection with
The parties vigorously dispute the relatedness of their the golf industry was tenuous, and consequently confusion
goods and services. We have employed three criteria for was unlikely: “We find that no consumer would associate
testing the relatedness factor: Kellogg with top-line golf equipment based on Kellogg’s
extremely limited licensing of its characters of novelty
First, if the parties compete directly, confusion is likely items.” Id. at 625.
if the marks are sufficiently similar; second, if the goods
and services are somewhat related, but not competitive, AutoZone and Radio Shack do not fit neatly into our
then the likelihood of confusion will turn on other tripartite system. On the one hand, common sense suggests
factors; finally, if the products are unrelated, confusion AutoZone and Radio Shack do not directly compete: few
is highly unlikely. consumers would make the mistake of traveling to Radio
Shack to purchase an oil filter or would enter an AutoZone to
Kellogg Co. v. Toucan Golf, Inc., 337 F.3d 616, 624 (6th Cir. buy a DVD player. See J.A. at 950 (Sum. J. Hr’g Tr.) (the
2003). “The relatedness inquiry therefore focuses on whether district court brusquely, but aptly asking, “What idiot who
goods or services with comparable marks that are similarly wants to buy an automobile part is going to go to a Radio
marketed and appeal to common customers are likely to lead Shack?”). On the other hand, the products offered by
consumers to believe that they come from the same source, or AutoZone and Radio Shack are not completely unrelated.
are somehow connected with or sponsored by a common AutoZone and Radio Shack compete directly in selling certain
company.” Therma-Scan, 295 F.3d at 633 (quotation products, even though these products comprise less than 1%
omitted). In a variety of other cases, we have held that bulk of AutoZone’s total stock and AutoZone does not extensively
car wash products and car wash franchises, see Wynn II, 943 advertise the types of products also sold in Radio Shack’s
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 19 20 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
POWERZONE area. Unlike Kellogg, in which the cereal would share only five products of the approximately 55,000
manufacturer had made only superficial and extremely limited offered by AutoZone.
in-roads to the golf industry, AutoZone and Radio Shack,
which generally occupy distinct niches, converge in the area In sum, although there is a minuscule overlap between the
of power sources and power connections. We are presented products offered by AutoZone and Radio Shack, which
with a competitive context that combines elements of the first appears larger when limiting the analysis to only the
and third criteria: the parties compete directly in a very POWERZONE store-within-a-store, the products offered by
limited fashion, but for the most part, the products offered by the two companies are not related enough such that this factor
each company are unrelated and their marks are not very tilts in AutoZone’s direction.
similar.
4. Evidence of Actual Confusion
AutoZone believes the degree of relatedness presents a
genuine issue of material fact. AutoZone contends that the “Evidence of actual confusion is undoubtedly the best
district court erred in focusing on the fact that the total evidence of likelihood of confusion.” Wynn Oil Co. v.
overlap between the stores (number of products in Thomas, 839 F.2d 1183, 1188 (6th Cir. 1988) (“Wynn I”).
common/total number of AutoZone products) was less than “[A] lack of such evidence is rarely significant, and the factor
one percent when AutoZone offers 40% of the products sold of actual confusion is weighted heavily only when there is
by Radio Shack in its POWERZONE area. There is no evidence of past confusion, or perhaps, when the particular
factual dispute, however, because both figures are accurate circumstances indicate such evidence should have been
and undisputed. The pertinent question is which method of available.” Daddy’s, 109 F.3d at 284 (quotation omitted).
examining the overlap best describes the relatedness of the AutoZone has failed to present any evidence of actual
products as a matter of law. The reality is that both figures confusion. AutoZone and Radio Shack have simultaneously
inform the analysis by demonstrating that there is generally used their marks for three years, but AutoZone has been
no overlap, except when considering a limited subset of unable to demonstrate even one instance of actual confusion.
products. It is also significant that most of these overlapping AutoZone’s reliance upon the study conducted by Michael
products are not unique to either Radio Shack or AutoZone, Rappeport is misguided. Even on the undeserved assumption
as batteries and power cords are generally offered by many that Rappeport’s study is methodologically sound,2 the study
different kinds of retailers, including grocery stores,
pharmacies, and hardware stores. Furthermore, the 40%
2
figure preferred by AutoZone is deceptive. We have no There are several problems with Rappeport’s study. The study
information about the percentage of Radio Shack products attempted to show the strength of the AutoZo ne ma rk by giving survey
sold in the POWERZONE area. We also note that the participants in various malls one p art of a well-known retail chain (WAL
existence of a high percentage of overlap when considering an ____ or __ __ D EP OT ) and asking them to fill in the b lank. One of the
questions was “AUTO ____.” Of 110 respondents, 48% answered ZONE,
extremely small subset of products does not demonstrate a 14% answered PARTS, 25% offered various other answers, and 12% did
high degree of relatedness: by AutoZone’s logic, if not offer any response. First, it is questionable whether the results are
POWERZONE stocked only five types of batteries all of statistically significant given the small number of respondents. Second,
which were also sold by AutoZone, the overlap would be the surveyors to ld participants at the outset that the survey sought to test
100%, even though in reality Radio Shack and AutoZone their knowledge of retail chains. This preliminary statement limited the
universe of po tential answers to the fill-in-the-blanks questions.
Rappep ort has been criticized by other courts for the employment of
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 21 22 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
neither provides evidence of actual confusion nor creates a knowledge of the protected mark at issue, is sufficient to
genuine issue of material fact on the matter. The study support an inference of intentional infringement where direct
ostensibly sought to discern the strength of AutoZone’s mark. evidence is not available.” Therma-Scan, 295 F.3d at 638-39.
J.A. at 101 (Rappeport Study) (labeling the study as an The intention factor naturally is considered in light of the
attempt “to test the strength and perception of the mark other factors; a bad-faith intent to infringe upon another mark
AUTOZONE.”). No aspect of the study actually tested may not increase the likelihood of confusion if the other
whether randomly chosen survey participants were confused seven factors suggest that confusion is improbable.
between the two marks. In fact, the study did not even
mention POWERZONE or Radio Shack. Because AutoZone AutoZone has presented no direct evidence of an intent by
presented no evidence of actual confusion, this factor should Radio Shack to infringe upon the AUTOZONE mark.
not have any bearing on the analysis. AutoZone does not dispute Radio Shack’s assertion that it
“did not copy the AUTOZONE mark or intend to trade off
5. Radio Shack’s Intent any of [AutoZone]’s goodwill in AUTOZONE when it chose
the POWERZONE mark.” J.A. at 784 (Pl. Local Rule 8(b)(7)
Finally, AutoZone argues that the district court erred Statement). Indeed, there is simply no evidence that Radio
because there is a genuine dispute over whether Radio Shack Shack chose the POWERZONE mark in order to steal
intentionally infringed upon the AUTOZONE mark. Proving customers from AutoZone. Radio Shack apparently selected
intent is not necessary to demonstrate likelihood of confusion, POWERZONE based solely upon the results of a consumer
but “the presence of that factor strengthens the likelihood of survey.
confusion.” Wynn II, 943 F.2d at 602; see also Wynn I, 839
F.2d at 1189 (“While . . . we do consider intention to be AutoZone instead argues that circumstantial evidence of
relevant when a plaintiff shows that a defendant knowingly copying supports an inference of intentional infringement. As
copied the contested trademark, . . . absent such a showing, proof that Radio Shack was carelessly or negligently
intentions are irrelevant.”). “If a party chooses a mark with indifferent to AutoZone’s trademark rights, AutoZone points
the intent of causing confusion, that fact alone may be to Radio Shack’s knowledge of the AUTOZONE mark in
sufficient to justify an inference of confusing similarity.” conjunction with Radio Shack’s failure to consult an attorney
Homeowners, 931 F.2d at 1111. “Circumstantial evidence of knowledgeable in trademark law before adopting
copying, particularly the use of a contested mark with POWERZONE. Radio Shack concedes that as a corporation
it was aware of the AUTOZONE mark when it chose the
POWERZONE mark, which is unsurprising given that Radio
Shack itself agreed to the use of AUTOZONE as part of the
faulty methodologies and the presentation of unreliable results. See 1987 Settlement. This circuit has not yet decided whether
Indianapolis Colts, Inc. v. Metro. Ba ltimore Fo otba ll Club , Ltd. P ’Ship, evidence of carelessness or negligence with regards to
34 F.3d 410 , 415 (7th C ir. 199 4) (“T he de fendants’ [study] was . . .
summarized in a perfunctory affidavit by Dr. Rappeport to which the
searches for preexisting marks suffices as circumstantial proof
district judge gave little weight. T hat was a kindness. The heart of of an intent to infringe. We do not decide this issue today,
Rap pep ort’s study was a survey that consisted of three loaded questions although our decision in Daddy’s implies the potential
asked in one Baltimore mall. Rappeport has been criticized before for his difficulty of employing such a standard. See Daddy’s, 109
metho dolo gy, and we ho pe that he will take these criticisms to heart in his F.3d at 286-87 (“Plaintiff is incorrect to the extent that it is
next courtroom appearance.”) (citing Jaret Int’l, Inc. v. Pro mo tion in
Motion, Inc., 826 F. Supp. 69, 73 -74 (E.D.N.Y . 1993)).
suggesting that the mere prior existence of a registered mark
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 23 24 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
demonstrates that the alleged infringer intentionally copied for one relatively small portion of their respectively enormous
that mark; otherwise, presumably all trademark infringement inventories. It is true that AutoZone’s mark is strong, that
cases could result in a finding of intentional copying.”); see AutoZone and Radio Shack use common marketing channels,
also A&H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., and there is a low degree of purchaser care, all of which
237 F.3d 198, 226, 232-33 (3d Cir. 2000) (stating that “mere weigh in favor of a likelihood of confusion. Yet, these factors
carelessness” is not enough to prove intent). Even if we were are not enough to tip the balance. In considering the
to assume that carelessness or negligence is sufficient to touchstone question of “whether relevant consumers are likely
create an inference of an intent to infringe, there is no to believe that the products or services offered by the parties
evidence that Radio Shack was careless or negligent in are affiliated in some way,” Homeowners, 931 F.2d at 1107,
choosing POWERZONE. Radio Shack conducted two AutoZone has simply not presented sufficient evidence that
separate trademark searches — one through a trademark consumers are likely to be confused by Radio Shack’s use of
search company (Thompson & Thompson) and another POWERZONE.
through in-house counsel. Radio Shack chose
POWERZONE, even though it knew about the AUTOZONE C. The Dilution Claim
mark, because it believed that there was no infringement
given the dissimilarity of the marks and the unrelatedness of AutoZone also contests the district court’s grant of
the products offered by each company. summary judgment on its dilution claim. AutoZone
principally argues that the district court erred as a matter of
AutoZone has not presented any evidence of bad intent. law because it employed the wrong test in assessing
Nor has it presented any circumstantial evidence of AutoZone’s dilution claim. While we decline to rule
negligence or carelessness, if such evidence suffices to create definitively on the propriety of the test used by the district
an inference of intent to pilfer the goodwill in the court, we affirm the district court’s grant of summary
AUTOZONE mark. This factor weighs against the likelihood judgment as proper because AutoZone failed to present any
of confusion. evidence of actual dilution.
6. Conclusion 1. Dilution As Distinct From Infringement
The district court did not err in granting Radio Shack’s The law governing dilution is independent from the law
motion for summary judgment because AutoZone did not attendant to claims of trademark infringement. Kellogg Co.
present enough evidence for a jury to conclude that there was v. Exxon Corp., 209 F.3d at 576. “Dilution law, unlike
a likelihood of confusion. Most of the factors weigh against traditional trademark infringement law . . . is not based on a
the likelihood of confusion: there is no evidence of actual likelihood of confusion standard, but only exists to protect the
confusion, the marks are not similar, there is no evidence that quasi-property rights a holder has in maintaining the integrity
Radio Shack intended to cause confusion over the marks, and and distinctiveness of his mark.” Kellogg Co. v. Toucan Golf,
neither party plans to expand its product lines into the other’s Inc., 337 F.3d at 628. “Courts recognize two principal forms
at any point in the near future. The relatedness-of-products of dilution: tarnishing and blurring. . . . Dilution by blurring,
factor at best does not aid the analysis and at worst suggests the injury at issue here, occurs when consumers see the
that the likelihood of confusion is small, given that AutoZone plaintiff’s mark used on a plethora of different goods and
and Radio Shack offer completely disparate products except services . . . raising the possibility that the mark will lose its
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 25 26 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
ability to serve as a unique identifier of the plaintiff’s become famous and causes dilution of the distinctive
product.” Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d quality of the mark, and to obtain such other relief as is
456, 466 (7th Cir. 2000) (quotations and citation omitted) provided in this section.
(second alteration in original).
Tenn. Code Ann. 47-25-513(a). There are no Tennessee cases
The Federal Trademark Dilution Act of 1995 (“FTDA”), that analyze this statute, and in the past we have
Pub. L. No. 104-98, 109 Stat. 985 (1995), “seeks to prevent interchangeably analyzed the Tennessee and federal
both of these forms of dilution by protecting the trademark antidilution statutes. Kellogg Co. v. Exxon Corp., 209 F.3d
owner from the erosion of the distinctiveness and prestige of at 577.
a trademark caused by . . . a proliferation of borrowings, that
while not degrading the original seller’s mark, are so 2. The Federal Dilution Test
numerous as to deprive the mark of its distinctiveness and
hence impact.” Id. (quotations omitted) (alteration in We have repeatedly employed a five-part dilution test. To
original). Section 43(c) of the amended Lanham Act succeed in a federal dilution claim:
provides,
[T]he senior mark must be (1) famous; and
The owner of a famous mark shall be entitled, subject to (2) distinctive. Use of the junior mark must (3) be in
the principles of equity and upon such terms as the court commerce; (4) have begun subsequent to the senior mark
deems reasonable, to an injunction against another becoming famous; and (5) cause dilution of the
person’s commercial use in commerce of a mark or trade distinctive quality of the senior mark.
name, if such use begins after the mark has become
famous and causes dilution of the distinctive quality of Kellogg Co. v. Toucan Golf, Inc., 337 F.3d at 616; see also
the mark, and to obtain such other relief as is provided in Kellogg Co. v. Exxon Corp., 209 F.3d at 577; Nabisco, Inc. v.
this subsection. PF Brands, Inc., 191 F.3d 208, 215 (2d Cir. 1999) (creating
the test adopted by the Sixth Circuit); 4 McCarthy § 24:89, at
15 U.S.C. § 1125(c)(1). Dilution is defined by the FTDA as 24-146 (outlining a similar test for a prima facie case of
“the lessening of the capacity of a famous mark to identify trademark dilution). Neither party disputes the application of
and distinguish goods or services, regardless of the presence the first, third, and fourth factors: AUTOZONE is famous,
or absence of [] (1) competition between the owner of the Radio Shack uses the junior mark POWERZONE in
famous mark and other parties, or (2) likelihood of confusion, commerce, and Radio Shack commenced its use of
mistake, or deception.” 15 U.S.C. § 1127. The Tennessee POWERZONE after AUTOZONE attained widespread
state dilution statute is similar to the federal dilution statute. recognition.
It reads,
a. Distinctiveness
The owner of a mark which is famous in this state shall
be entitled, subject to the principles of equity and upon In the court below, Radio Shack disputed the
such terms as the court deems reasonable, to an distinctiveness of the AUTOZONE mark, but the district
injunction against another person's commercial use of a court held that the mark was distinctive. AutoZone, 174 F.
mark or trade name, if such use begins after the mark has Supp. 2d at 736. Radio Shack has not appealed this ruling,
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 27 28 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
and an evaluation of the eight statutory factors of 319 F.3d 243, 257-58 (6th Cir. 2003) (referencing the ten-
distinctiveness, see 15 U.S.C. § 1125(c)(1)(A)-(H), factor test, but declining to employ it because the issuance of
demonstrates that the district court reached the correct an injunction was proper for other reasons). The district court
conclusion. The extent of AutoZone’s use of the mark, the proceeded through the analysis and held that “[a]fter
pervasive and geographically widespread advertising of the concluding that the AUTOZONE and POWERZONE marks
mark, the high recognition of the mark, and AutoZone’s are not sufficiently similar given the heightened similarity
registration of its mark, which entitles AutoZone to a requirement in the dilution context, the other factors weighing
presumption of distinctiveness, all highlight the distinctive in favor of dilution are inadequate to preclude summary
nature of the AUTOZONE mark. However, a finding that the judgment on AutoZone’s dilution claim.” AutoZone, 174 F.
mark was distinctive does not address the degree of Supp. 2d at 739.
distinctiveness, which is part of the test for determining
whether the use of a junior mark causes dilution. On appeal, AutoZone asks us to reject the district court’s
holding and its application of the Nabisco test. AutoZone
b. The Fifth Factor criticizes the Nabisco test for erroneously duplicating several
factors of the likelihood-of-confusion test and for incorrectly
The central dilution issue in this appeal is how to analyze shifting the burden of proving several affirmative defenses
the fifth and final factor, which measures whether the junior onto the plaintiff. In assessing AutoZone’s arguments, we
mark caused actual dilution of the distinctive quality of the must initially determine whether V Secret incorporated the
senior mark. The district court, acting properly at the time, Nabisco test into the law of this circuit such that we are bound
relied on our opinion in V Secret Catalogue, Inc. v. Moseley, by the decision of a prior panel. It is only if V Secret adopted
259 F.3d 464 (6th Cir. 2001) (“V Secret”), rev’d, 537 U.S. the Nabisco test that we must assess what effect the Supreme
418 (2003). In V Secret, we applied a ten-factor, Court’s reversal of V Secret has upon our application of the
nonexclusive test to determine whether dilution had occurred. ten Nabisco factors.
Id. at 476; see Nabisco, Inc. v. PF Brands, Inc., 191 F.3d at
217-22. The ten factors are: (1) V Secret’s Treatment of the Nabisco Test
distinctiveness; similarity of the marks; proximity of the AutoZone contends that we never expressly adopted the
products and the likelihood of bridging the gap; Nabisco test, instead preferring to leave the issue open for
interrelationship among the distinctiveness of the senior “further explication on a ‘case-by-case’ basis.” AutoZone Br.
mark, the similarity of the junior mark, and the proximity at 12. AutoZone is partially correct. This court stated in
of the products; shared consumers and geographic V Secret:
limitations; sophistication of consumers; actual
confusion; adjectival or referential quality of the junior We find that these factors effectively span the breadth of
use; harm to the junior user and delay by the senior user; considerations a court must weigh in assessing a claim
and the effect of [the] senior’s prior laxity in protecting under the FTDA, from the inherent qualities of the marks
the mark. themselves, to the behavior of the corporate entities in
introducing a mark into commerce, to the highly practical
V Secret, 259 F.3d at 476 (quotations omitted) (alteration in and subjective considerations of the effect of the marks
original); see also PACCAR, Inc. v. TeleScan Techs., L.L.C.,
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 29 30 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
on the actual consumers who will consider them, and Supreme Court addressed the discrete issue of whether a
find them persuasive to our analysis. dilution claim required proof of actual dilution or whether
proof of a likelihood of dilution would suffice. Id. at 428; see
V Secret, 259 F.3d at 476. We agreed with the Second V Secret, 259 F.3d at 476 (adopting likelihood of dilution
Circuit’s statement that the ten-factor list was “nonexclusive” standard); Nabisco, 191 F.3d at 223-24 (adopting likelihood
and was intended to “develop gradually over time and with of dilution standard); Ringling Bros.-Barnum & Bailey
the particular facts of each case.” Id. (quotation omitted). Combined Shows, Inc. v. Utah Div. of Travel Dev., 170 F.3d
V Secret was decided on the basis of only two Nabisco factors 449, 464 (4th Cir. 1999) (requiring proof of actual dilution).
(distinctiveness and similarity). The other factors were not Analyzing the text of § 1125(c)(1), the Court held that the
discussed in any depth thus leaving “further explication for statute “unambiguously requires a showing of actual dilution,
later development gradually over time, on a case-by-case rather than a likelihood of dilution.” Moseley, 537 U.S. at
basis.” Id. at 477 (quotation omitted). Therefore, AutoZone 433. Actual dilution “does not mean that the consequences of
is correct that V Secret did not evaluate and apply all ten dilution, such as an actual loss of sales or profits, must also be
Nabisco factors. The opinion simply noted that the ten proved.” Id. However, “where the marks at issue are not
Nabisco factors represent a broad array of inquiries that can identical, the mere fact that consumers mentally associate the
help a court assess whether dilution has occurred. junior user’s mark with a famous mark is not sufficient to
establish actionable dilution . . . [because] such mental
AutoZone is incorrect, however, when it claims that association will not necessarily reduce the capacity of the
V Secret did not adopt the Nabisco test. V Secret explicitly famous mark to identify the goods of its owner, the statutory
adopted the general framework and thrust of the Nabisco requirement for dilution under the [antidilution act].” Id. The
inquiry, but it did so with the recognition that the test is Court recognized that proof of actual dilution may be difficult
variable and subject to both maturation and refinement. We to obtain, although it noted that circumstantial evidence can
imported the Nabisco test with the expectation that it would be used to show actual dilution under certain circumstances,
evolve. As the Nabisco court itself exhorted, “We make no such as the “obvious” case when the marks are identical. Id.
suggestion that the factors we have focused on exhaust the at 434. The Supreme Court reversed because the evidence
test of what is pertinent. New fact patterns will inevitably was not sufficient to support summary judgment given the
suggest additional pertinent factors. . . . [N]o court should, at stricter standard adopted by the Court. Id.
least at this early stage, make or confine itself to a closed list
of the factors pertinent to the analysis of rights under the new Nothing in the Supreme Court’s opinion in Moseley
antidilution statute.” Nabisco, 191 F.3d at 228. adressed the efficacy of the ten-factor test; the Supreme Court
did not criticize the Second Circuit for creating the test or the
(2) The Supreme Court and Nabisco Sixth Circuit for adopting it. The Supreme Court in essence
made it more difficult for dilution claims to succeed because
The Supreme Court’s reversal of V Secret calls into doubt plaintiffs face a much higher hurdle of demonstrating actual
the continued vitality of the Nabisco test. Between the dilution, but the Court was silent as to the manner in which
district court’s grant of summary judgment and the parties’ courts must evaluate plaintiffs’ success in overcoming that
oral argument before us, the Supreme Court reversed hurdle. This silence could imply that a test designed to
V Secret. See Moseley v. V Secret Catalogue, Inc., 537 U.S. measure likelihood of dilution may not be appropriate to
418 (2003) (“Moseley”). To resolve a circuit split, the
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 31 32 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
evaluate actual dilution, but we are left without firm guidance conceded at oral argument that actual confusion is not a
on the issue. pertinent consideration.
(3) AutoZone’s Failure to Present Evidence of No matter the remaining vitality of the Nabisco test, the
Actual Dilution district court properly granted summary judgment because
AutoZone has not presented enough evidence of actual
We need not resolve whether the Nabisco factors may be dilution such that there exists a genuine dispute of material
useful in future cases because AutoZone here has presented fact for a jury to resolve. Coupled with AutoZone’s failure to
no evidence of actual dilution.3 However, we note that provide any evidence that the PowerZone mark blurred the
several of the Nabisco factors are particularly unhelpful in distinctiveness of the AutoZone mark, the dissimilarity
cases such as this one. Given that the FTDA authorizes between the two marks by itself demonstrates why
dilution claims no matter whether there exists competition AutoZone’s claim cannot succeed. The “similarity” test for
between the owners of the respective marks or whether there dilution claims is more stringent than in the infringement
is a strong likelihood of confusion between the marks, the milieu:
factors measuring “proximity of the products,” Nabisco, 191
F.3d at 218-19, “shared consumers and geographic The . . . test of similarity used in the traditional
limitations,” id. at 220, and actual confusion, id. at 221, seem likelihood of confusion test cannot be the guide [for
irrelevant to the dilution analysis.4 Even Radio Shack dilution], for likelihood of confusion is not the test of
dilution. For blurring . . . to occur, the marks must at
least be similar enough that a significant segment of the
3 target group of customers sees the two marks as
Our sole post-Moseley dilution case did not explicitly cite to the
Nabisco test when the plaintiff failed to provide evidence showing that
essentially the same. Blurring is one mark seen by
actual dilution occu rred. Kellogg Co. v. Toucan Golf, Inc., 337 F.3d 616, customers as now identifying two sources. But two
628 (6th Cir. 2003). In Tou can Go lf, the plaintiff could no t demonstrate different marks identifying two different sources is not
that the defendant’s use of its junior mark reduced consumers’ association blurring and will not cause dilution.
between the senior mark and K ellogg’s prod ucts. Id.
4
4 McCarthy § 24:90:2, at 24-160. In V Secret, we considered
Other circuits have exc luded these an d certain additiona l Nabisco it important that the “two marks in questions are highly
factors in analyzing dilution claims and adopted simpler tests. See Eli similar.” V Secret, 259 F.3d at 476 (emphasis added); see
Lilly & Co. v. Na tural An swers, Inc., 233 F.3d 4 56, 468-69 & n.7 (7th Cir.
2000) (ado pting a two-part test, which focused so lely on sim ilarity
between the marks and renown of senio r mark ); Luigino’s, Inc v. Stouffer
Corp., 170 F.3d 8 27, 832-33 (8 th Cir. 1999) (adopting a two-part test that even pursue dilution claims because the Nabisco test makes accurate
measures the similarity of the marks and whether consumers connect the predictions of victory difficult. 4 M cCarthy § 24:94.4, at 24-211. The
defendant’s product with the plaintiff’s famous mark); I.P. Lund Trading same commentator urges that certain factors, such as the similarity of the
ApS v. Kohler Co., 163 F.3d 27, 49-50 (1st Cir. 1998) (criticizing the prod ucts, the sophistication o f consumers, and actual confusion, are not
Nabisco test’s prec ursor, Mead Data Cental, Inc. v. Toyo ta Mo tor Sales, only irrelevant but also misinterpret the purpose of anti-dilution law s. Id.
U.S .A., Inc., 875 F.2d 102 6, 10 35 (2d C ir. 198 9) (Sweet, J., concurring), at § 24:94.4, at 24-211 to 24-214. Nonetheless, at least one other circuit
and Mead’s use of certain factors that are also found in the Nabisco test, has not only adopted the Nabisco test, but also has expanded it. See Times
such as the similarity of products). A leading commentator disapproves Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157,
of the Nabisco test, believing that it fashions such a complex test that not 168-69 (3d Cir. 2000), cert. denied, 531 U.S. 107 1 (2001 ) (adopting a
only will few mark owners succeed in their dilution claims, but few will sixteen-part test).
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 33 34 AutoZone, Inc. et al. v. Tandy Corp. No. 01-6571
also id. at 476-77 (finding that “Victoria’s Secret” and LEAN ‘N TASTY are not similar enough because the sight
“Victor’s Little Secret” are “semantically almost identical” and sound of the marks are different and the common use of
and “graphically similar as well.”). In Jet, we stated, “The the word “lean” does not make the marks similar); Nabisco,
purpose of anti-dilution laws is to provide a narrow remedy 191 F.3d at 218 (stating that “[t]he marks must be of
when the similarity between two marks is great enough that sufficient similarity so that, in the mind of the consumer, the
even a noncompeting, nonconfusing use is harmful to the junior mark will conjure an association with the senior,” but
senior user. . . . The degree of similarity required for a not requiring that marks be completely identical); I.P. Lund
dilution claim must be greater than that which is required to Trading ApS v. Kohler Co., 163 F.3d 27, 50 (1st Cir. 1998)
show likelihood of confusion.” 165 F.3d at 425. We held (adopting the standard that customers must view the marks as
that because JET and AEROB-A-JET were not similar “essentially the same”). Following our precedent and the
enough even to satisfy the likelihood of confusion test, the guidance of other circuits, we require a plaintiff to
plaintiff’s dilution claim could not succeed.5 Despite demonstrate a higher degree of similarity than is necessary in
AutoZone’s contention that the level of similarity required is infringement claims in order to prove that actual dilution has
not higher in the dilution context, every federal court to occurred.
decide the issue has ruled that a high degree of similarity,
ranging from “nearly identical” to “very similar,” is required AutoZone’s dilution claim must fail because the absence of
for a dilution claim to succeed. See Playboy Enters., Inc. v. a high degree of similarity between AUTOZONE and
Welles, 279 F.3d 796, 806 (9th Cir. 2002) (stating that marks POWERZONE underscores AutoZone’s failure to provide
must be “identical or nearly identical”); Eli Lilly, 233 F.3d at any evidence of actual dilution. Given that there is not even
469 (holding that HERBROZAC and PROZAC were “highly enough similarity between the two marks to demonstrate a
similar”); Ringling Bros., 170 F.3d at 458 (requiring “a likelihood of confusion, the marks are certainly not highly
sufficient similarity between the junior and senior marks to similar or nearly identical such that AutoZone can prove that
evoke an instinctive mental association of the two” (quotation actual dilution has occurred. The two marks look different;
omitted) and affirming lower court’s factual finding that they are written in different fonts and colors. They utilize
GREATEST SHOW ON EARTH and GREATEST SNOW different designs (slanted versus nonslanted tradename) and
ON EARTH were not similar enough to sustain dilution are meant to convey different messages. They also sound
claim); Luigino’s, 170 F.3d at 832 (LEAN CUISINE and different because there is little acoustic similarity between
AUTO and POWER. As a comparison, AUTOZONE and a
hypothetical AUDIOZONE would have a higher level of
acoustic similarity. Additionally, the common word between
5
AutoZone protests that Jet is not relevant here because we applied AUTOZONE and POWERZONE is pronounced second and
the stronger similarity threshold only in the midst of a discussion of the is consequently deemphasized.
Ohio state antid ilution statute. Ho wever, Jet also evaluated the plaintiff’s
motion to amend its complaint to add a federal dilution claim under
§ 1125(c). In ruling that such an amendment would be futile, we spoke
Because we hold that AUTOZONE and POWERZONE are
directly to the degree of similarity needed to succeed in a federal dilution not similar enough to pass the higher threshold required to
claim: “[T]he federal dilution claim would fail because the marks are not prove actual dilution, and because AutoZone has produced no
sufficiently similar. Although some aspects of this claim would be other evidence of actual dilution, AutoZone cannot
different under the federal statute than under Ohio common law, we w ould demonstrate that Radio Shack’s use of POWERZONE caused
still require a greater degree of similarity than is needed under the
likelihood o f confusion test.” Id. (emphasis added).
No. 01-6571 AutoZone, Inc. et al. v. Tandy Corp. 35
“dilution of the distinctive quality of the senior mark.”
Kellogg Co. v. Toucan Golf, Inc., 337 F.3d at 628.
c. Conclusion Regarding Dilution Claim
In sum, we affirm the district court’s grant of summary
judgment because there are no genuine issues of material fact
regarding AutoZone’s dilution claim. AutoZone failed to
present evidence satisfying the fifth and ultimate factor in our
five-part test for dilution. AutoZone also contends that
because the Supreme Court altered the standard for dilution
claims we must remand the case so that the district court can
reevaluate its decision in light of Moseley. AutoZone’s
argument falls wide of the mark. Moseley raised the bar for
dilution claims. If AutoZone failed in its efforts to show
dilution under the more generous “likelihood of dilution”
standard, it will not find success under a more stringent test.
See Kellogg Co. v. Toucan Golf, Inc., 337 F.3d at 628-29
(refusing to remand on account of Moseley’s change in the
standard because we considered plaintiff’s “proffered
empirical evidence insufficient even to meet the lesser
standard”). Furthermore, because we analyze the federal and
Tennessee dilution claims in the same manner, AutoZone’s
failure to succeed in its federal claim also extinguishes its
state dilution claim.
III. CONCLUSION
We AFFIRM the district court’s grant of summary
judgment in favor of Radio Shack. AutoZone did not present
any genuine issues of material fact regarding the likelihood of
confusion between AUTOZONE and POWERZONE. Nor
did AutoZone provide evidence that would allow a jury to
conclude that the POWERZONE mark actually diluted the
AUTOZONE mark. Under these circumstances none of
AutoZone’s claims can withstand Radio Shack’s summary
judgment motion. We AFFIRM.