Frosty Treats, Inc. v. Sony Computer Entertainment America, Inc. , 426 F.3d 1001 ( 2005 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 04-2502
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Frosty Treats, Inc.; Frosty Treats *
of Louisville, Inc.; Frosty Treats *
Wholesale, Inc.; Frosty Treats of *
Atlanta, Inc., *
*
Appellants, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
Sony Computer Entertainment *
America, Inc. *
*
Appellee. *
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Submitted: March 16, 2005
Filed: July 25, 2005
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Before MORRIS SHEPPARD ARNOLD, BOWMAN, and RILEY, Circuit Judges.
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MORRIS SHEPPARD ARNOLD, Circuit Judge.
A group of affiliated companies, Frosty Treats, Inc., Frosty Treats of
Louisville, Inc., Frosty Treats Wholesale, Inc., and Frosty Treats of Atlanta, Inc.,
collectively known as "Frosty Treats," sued Sony Computer Entertainment America,
Inc., (SCEA) asserting, inter alia, claims under state and federal law for trademark
infringement and dilution, and for unfair competition. Frosty Treats premised these
claims upon SCEA's depiction of an ice cream truck and clown character in SCEA's
Twisted Metal video game series. Frosty Treats contends that because the ice cream
truck in those games bears a clown graphic that it alleges is similar to the one on its
ice cream trucks, and, in the final game, is labeled with its brand identifier, "Frosty
Treats," the games create a likelihood of confusion as to Frosty Treats's sponsorship
of or affiliation with the games. See 15 U.S.C. § 1125(a). The district court1 granted
SCEA's motion for summary judgment on all of Frosty Treats's claims, and Frosty
Treats appeals. We affirm.
Frosty Treats asserts that the district court erred by finding that there were no
genuine issues of material fact and holding as a matter of law that the "Frosty Treats"
mark was not protectible; that the "Safety Clown" graphic was functional and
therefore not entitled to trademark protection; that there was no likelihood of
confusion between any of the Twisted Metal games and the "Frosty Treats" mark,
Safety Clown mark, or the trade dress of Frosty Treats's vehicles; and that Frosty
Treats failed to make out actionable trademark dilution claims under both federal and
Missouri law.
We review a grant of summary judgment de novo, applying the same standards
as the district court. Insty*Bit, Inc. v. Poly-Tech Indus., Inc., 95 F.3d 663, 666 (8th
Cir. 1996), cert. denied, 519 U.S. 1151 (1997). We will affirm when the record,
viewed in the light most favorable to the non-moving party, demonstrates that there
are no genuine issues of material fact and that the moving party is entitled to
judgment as a matter of law. Id. Upon motion and after adequate discovery,
summary judgment should be entered "against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party's case, and on
which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). Because none of the marks at issue has been federally
1
The Honorable Scott O. Wright, United States District Judge for the Western
District of Missouri.
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registered by Frosty Treats, it bears the burden of establishing that its marks are
protectible under trademark law. See Anheuser-Busch, Inc. v. Stroh Brewery Co., 750
F.2d 631, 638 (8th Cir. 1984); Filipino Yellow Pages, Inc. v. Asian Journal Publ'ns,
Inc., 198 F.3d 1143, 1146 (9th Cir. 1999). We "may uphold a grant of summary
judgment for any reason supported by the record, even if different from the reasons
given by the district court." Johnson v. Outboard Marine Corp., 172 F.3d 531, 535
(8th Cir. 1999).
I.
Frosty Treats argues first that the district court erred by holding that its "Frosty
Treats" mark is not entitled to trademark protection because it is generic, or, in the
alternative, descriptive without secondary meaning. Frosty Treats asserts that the
mark is suggestive, or, at worst, descriptive with an acquired secondary meaning, and
therefore protectible. We disagree. At best, the "Frosty Treats" mark is descriptive,
and there is no basis for concluding that it has acquired secondary meaning.
The stylized words "Frosty Treats" appear toward the rear of the passenger's
side of plaintiffs' ice cream vans as pink capital letters with frost on the upper portion
of each letter. See Figure 1 (depicting the "Frosty Treats" decal). The decal on which
these words appear is approximately nine inches wide by four inches high and is
surrounded by decals of the frozen products that the Frosty Treats vans sell. See
Figure 2 (depicting a typical Frosty Treats van).
Figure 1.
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Figure 2.
To determine whether this mark is protectible, we must first categorize it. "A
term for which trademark protection is claimed will fall in one of four categories:
(1) generic, (2) descriptive, (3) suggestive, or (4) arbitrary or fanciful." WSM, Inc.
v. Hilton, 724 F.2d 1320, 1325 (8th Cir. 1984). A generic mark refers to the common
name or nature of an article, and is therefore not entitled to trademark protection. Co-
Rect Prods., Inc. v. Marvy! Adver. Photography, Inc., 780 F.2d 1324, 1329 (8th Cir.
1985). A term is descriptive if it conveys an "immediate idea of the ingredients,
qualities or characteristics of the goods," Stuart Hall Co., Inc. v. Ampad Corp., 51
F.3d 780, 785-86 (8th Cir. 1995) (internal quotations omitted), and is protectible only
if shown to have acquired a secondary meaning. Co-Rect Prods., 780 F.2d at 1329.
Suggestive marks, which require imagination, thought, and perception to reach a
conclusion as to the nature of the goods, and arbitrary or fanciful marks, are entitled
to protection regardless of whether they have acquired secondary meaning. See id.
If it is not generic, the phrase "Frosty Treats" is, at best, descriptive. Frosty
Treats is in the business of selling frozen desserts out of ice cream trucks. "Frosty
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Treats" conveys an immediate idea of the qualities and characteristics of the goods
that it sells. No imagination, thought, or perception is required to reach a conclusion
as to the nature of its goods. To prevail, therefore, Frosty Treats must demonstrate
that the mark has acquired a secondary meaning. "Secondary meaning is an
association formed in the minds of consumers between the mark and the source or
origin of the product." Id. at 1330. To establish secondary meaning, Frosty Treats
must show that "Frosty Treats" serves to identify its goods and distinguish them from
those of others. Id. Secondary meaning does not require the consumer to identify a
source by name but does require that the public recognize the mark and associate it
with a single source. Stuart Hall, 51 F.3d at 789; see Heartland Bank v. Heartland
Home Fin., Inc., 335 F.3d 810, 818-19 (8th Cir. 2003) (Smith, J., concurring).
The record, when viewed in favor of Frosty Treats, demonstrates that SCEA
is entitled to judgment as a matter of law on this issue. Frosty Treats has failed to put
forth more than a scintilla of evidence that the public recognizes its "Frosty Treats"
mark and associates it with a single source. Frosty Treats claims that its survey
evidence demonstrates that the term "Frosty Treats" has acquired secondary meaning,
but, if anything, it indicates the opposite. In the survey, respondents were shown
images of the Frosty Treats ice cream van and asked, "Are you familiar with or have
you ever seen or heard of this before?" Forty-seven percent responded affirmatively.
They were then asked what they knew about the van. The respondents most
frequently mentioned that it sold ice cream. Only one percent of the respondents in
the survey mentioned Frosty Treats by name. There is no indication in the record that
the survey respondents (apart from the one percent) were familiar with the vans
because of the small nine-by-four-inch "Frosty Treats" decal on the rear portion of the
side of the van, the only place where the phrase "Frosty Treats" appears on the
vehicle. This decal, moreover, is surrounded by numerous other decals comprising
the van's menu board. See Figure 2. Frosty Treats's survey provides no basis to
conclude that the respondents associated the van with a single source as opposed to
simply a generic ice cream truck.
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Although direct evidence such as consumer testimony or surveys are most
probative of secondary meaning, it can also be proven by circumstantial evidence.
See Heartland Bank, 335 F.3d at 819-20 (Smith, J., concurring). Circumstantial
evidence such as the exclusivity, length and manner of use of the mark; the amount
and manner of advertising; the amount of sales and number of customers; the
plaintiff's established place in the market; and the existence of intentional copying
could also establish secondary meaning. See id. (citing 2 J. Thomas McCarthy,
McCarthy on Trademarks & Unfair Competition §§ 15:30, 15:60, 15:61, 15.66, 15.70
(4th ed. 1999)). But the circumstantial evidence that Frosty Treats offered to
establish secondary meaning also fails to raise a genuine issue of material fact.
We recognize that the application of some of these criteria to the facts of this
case may militate in favor of a finding of secondary meaning in the mind of a
reasonable juror. For instance, there is evidence that Frosty Treats has used the term
in a continuous and substantially exclusive manner since 1991. Cf. Stuart Hall, 51
F.3d at 789-90. Furthermore, the record reflects that Frosty Treats, although a
relatively small company, is nevertheless one of the largest ice cream truck street
vendors in the nation.
On the other hand, there is no evidence that SCEA intentionally copied the
term. Most significantly, the record does not contain sufficient evidence for a juror
to conclude that Frosty Treats engages in advertising or publication of the "Frosty
Treats" mark to an extent that would be effective in having the public recognize it and
equate it with a single source. See Co-Rect Prods., 780 F.2d at 1330; Heartland
Bank, 335 F.3d at 820 (Smith, J., concurring). In fact, Frosty Treats does not even
prominently display the "Frosty Treats" mark on its street-vending vans, which
according to its brief is the primary way that it advertises the phrase. As mentioned
earlier, the phrase appears on the vans as a nine-by-four-inch decal that is surrounded
by numerous other decals of frozen desserts.
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Furthermore, SCEA submitted indirect evidence that the term "Frosty Treats"
has not acquired secondary meaning. SCEA's expert conducted a survey of 204
children and 200 adults who had purchased ice cream from an ice cream truck in
Frosty Treats's largest markets. When asked to volunteer the names of any ice cream
trucks that they had purchased ice cream from, not one recalled the name "Frosty
Treats." The evidence as a whole simply does not provide a sufficient basis for
concluding that the phrase "Frosty Treats" has acquired a secondary meaning.
Accordingly, it is not protectible under trademark law.
II.
Frosty Treats also maintains that the district court erred in holding that its
Safety Clown graphic is functional and therefore not eligible for protection under the
trademark laws. The Safety Clown graphic appears on the passenger's side door of
plaintiffs' vans as well as the rear panel. It consists of a clown with black eyebrows,
blue eyes with a black pupil, a bulbous red nose, white forehead, yellow cheeks and
chin, and a mouth with a black center, outlined by a series of concentric red, white,
and orange lips. The clown wears a blue ruffled collar and a yellow pointed hat with
red polka-dots that is topped with a red pom-pom. A tuft of orange hair appears
under the hat on each side of the clown's head. The clown's hand points to the rear
of the van with the thumb and index finger extended. Below the clown appear the
words "watch for cars – cross at rear." See Figure 3 (depicting the Safety Clown
graphic). The clown's purpose is to promote safety by directing children to cross at
the rear of the vehicle.
Figure 3.
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The district court held that because the clown serves a purpose, namely to
enhance safety by directing children to cross at the rear, the graphic is functional and
therefore not protectible. We respectfully disagree. We believe that the district court
evaluated the issue using the colloquial meaning of "functional" rather than the
specialized meaning that it has in trademark law. In trademark law, " 'a product
feature is functional, and cannot serve as a trademark, if it is essential to the use or
purpose of the article or if it affects the cost or quality of the article.' " TrafFix
Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32 (2001) (quoting Qualitex
Co. v. Jacobson Prods. Co., Inc., 514 U.S. 159, 165 (1995)) (internal quotations
omitted).
"The functionality doctrine serves as a buffer between patent law and
trademark law by preventing a competitor from monopolizing a useful product feature
in the guise of identifying itself as the source of the product." Home Builders Ass'n
of Greater St. Louis v. L & L Exhibition Mgmt., Inc., 226 F.3d 944, 948 (8th Cir.
2000). Furthermore, " 'to be functional in the trade dress sense, the feature must be
necessary to afford a competitor the means to compete effectively.' " Id. (quoting
Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277, 297 (7th Cir. 1998), cert.
denied, 525 U.S. 929 (1998)). There is no evidence that the exclusive use of the
Safety Clown graphic would deny Frosty Treats's competitors the ability to compete
effectively or place competitors at any non-reputational disadvantage. See Gateway,
Inc. v. Companion Prods., Inc., 384 F.3d 503, 508 (8th Cir. 2004). At the very least,
whether the Safety Clown graphic is functional presents a factual issue not
appropriate for resolution upon a motion for summary judgment. See Insty*Bit, 95
F.3d at 673-74. We therefore conclude that the district court erred in granting
summary judgment on the ground that the clown was functional.
III.
Apart from finding that the "Frosty Treats" and Safety Clown marks were
unenforceable, the district court ruled that Frosty Treats in any event did not have
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actionable trademark infringement or unfair competition claims based on those marks,
or on the trade dress of its trucks, because it did not create a triable issue that SCEA's
use of the marks and trade dress created a likelihood of confusion as to Frosty Treats's
sponsorship of or affiliation with the video games. We now consider Frosty Treats's
assertion that this was error. But since we have already held the "Frosty Treats" mark
unenforceable as a matter of law, we need only address the arguments pertaining to
the trade dress of the trucks and the Safety Clown mark.
We evaluate six criteria to determine whether a likelihood of confusion exists:
"(1) the strength of the owner's mark; (2) the similarity between the owner's mark and
the alleged infringer's mark; (3) the degree to which the products compete with each
other; (4) the alleged infringer's intent to 'pass off' its goods as those of the trademark
owner; (5) incidents of actual confusion; and (6) the type of product, its costs and
conditions of purchase." Co-Rect Prods., 780 F.2d at 1330. "These factors do not
operate in a mathematically precise formula; rather, we use them at the summary
judgment stage as a guide to determine whether a reasonable jury could find a
likelihood of confusion." Duluth News-Tribune v. Mesabi Publ'g Co., 84 F.3d 1093,
1096 (8th Cir. 1996). "Factual disputes regarding a single factor are insufficient to
support the reversal of summary judgment unless they tilt the entire balance in favor
of such a finding." Id.
To begin, we examine the strength of Frosty Treats's marks. In SquirtCo. v.
Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980), we stated that, "A strong and
distinctive trademark is entitled to greater protection than a weak or commonplace
one." There can be little dispute that the Safety Clown mark and the trade dress of
Frosty Treats's trucks are weak. The use of a clown on ice cream trucks is hardly
novel: It is undisputed that other ice cream vendors utilize a clown design on their
trucks. Similarly, the trade dress of Frosty Treats's vans resembles that of a generic
ice cream truck and therefore lacks distinctiveness within the marketplace. There is,
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moreover, no evidence to indicate that Frosty Treats's Safety Clown mark and trade
dress are well known.
With respect to the second criterion, the Safety Clown mark and trade dress of
Frosty Treats's vans are visually distinct from the relevant depictions in the Twisted
Metal games and no reasonable juror could find that they are similar. Frosty Treats
contends that because the ice cream truck in those games bears a clown graphic, and,
in the final game, is labeled with its brand identifier, "Frosty Treats," a reasonable
juror could find similarity. Of the six games in the Twisted Metal series, however,
the words "frosty treats" appear only in the final game, Twisted Metal: Small Brawl.
(Although plaintiffs nominally assert that this appeal covers all six games, they focus
their arguments on the Small Brawl game.) The appearance of the words "frosty
treats" in Small Brawl, moreover, is quite different from their appearance on Frosty
Treats's vans. As mentioned earlier, the plaintiffs' vans display a nine-by-four-inch
decal featuring the words "frosty treats" in pink capital letters with frost on the upper-
portion of the letters. This decal is surrounded by decals picturing the different types
of frozen deserts for sale. See Figure 2. In contrast, the phrase appears in Small
Brawl on the side of a remote-controlled truck written in light aqua print in a mixture
of upper and lower case letters ("FrOsTy TReAtS"), without frost and surrounded by
pink polka-dots. See Figure 4 (depicting the remote-controlled vehicle in Small
Brawl as it appeared in an advertisement for the game in Mad Magazine).
Figure 4.
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Depictions of clown heads appear throughout the Twisted Metal video games
and game manuals. The record reflects that a purple-nosed, black-eyed clown with
a light aqua cap appears on the side of the remote-controlled truck in Small Brawl.
Another clown head appears atop the antenna of the remote-controlled vehicle in
Small Brawl. See Figure 4. These clowns bear virtually no resemblance to Safety
Clown. All of the games in the Twisted Metal series feature a devious clown named
Sweet Tooth or Needles Kane that drives or controls the ice cream truck. But those
depictions are very different from the Safety Clown graphic. As Frosty Treats's CEO
Carl Long stated at his deposition, "They don't look the same way, but ... if the Safety
Clown had a brother who was nasty and mean, it would look somewhat like Sweet
Tooth."
Regarding the third and fourth considerations for determining the likelihood
of confusion, SCEA's products do not compete with Frosty Treats's and there is no
evidence that SCEA intends to pass off Frosty Treats's marks as its own. Each
Twisted Metal video game clearly indicates that it is produced by SCEA.
"[W]hen determining whether there exists a likelihood of confusion, weight is
given to the number and extent of instances of actual confusion." Life Tech., Inc. v.
Gibbco Scientific, Inc., 826 F.2d 775, 777 (8th Cir. 1987). Frosty Treats contends
that it provided significant evidence of actual confusion in the testimony of Roger
Pool, its Louisville, Kentucky, branch manager, and the consumer survey conducted
by its expert witness. We disagree. Mr. Pool testified that during a period of two
years about five to ten people had inquired as to whether Frosty Treats sponsored the
Twisted Metal games. But Mr. Pool cannot specifically recall what they said to him,
the names of the individuals who questioned him, or the dates or locations of the
inquiries. Even if this testimony is not inadmissible hearsay, see Duluth News-
Tribune, 84 F.3d at 1098; Vitek Sys., Inc. v. Abbott Labs., 675 F.2d 190, 193 (8th Cir.
1982), it amounts to no more than a scintilla of evidence. More is needed to establish
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the likelihood of confusion than the ambiguous testimony of an interested person that
there were several inquiries over a two-year period.
Frosty Treats's survey also fails to create a genuine issue of material fact
regarding the likelihood of confusion. In the survey, participants who had played the
Twisted Metal games were shown a picture of the Frosty Treats ice cream truck and
told, "Please take a look at this. Feel free to comment on anything that strikes you
about it, positively or negatively." Seventeen percent of the participants mentioned
that it reminded them of or looked like images from the Twisted Metal games. As a
follow-up question they were asked, "Specifically, does this or does this not remind
you in any way of an ice cream truck or character that you have seen before or are
aware of?" Thirty-four percent of those surveyed indicated that it reminded them of
something from the Twisted Metal games. But these responses are not probative of
confusion. A leading trademark treatise states, " 'Confusion' means more than that
the junior user's mark merely 'calls to mind' the senior user's mark. ... While the junior
user's mark may call to mind the senior user's famous mark, this alone is not sufficient
for a likelihood of confusion." 3 J. Thomas McCarthy, McCarthy on Trademarks &
Unfair Competition § 23:9 at 23-34 to 23-35 (4th ed. 2005). The survey fails to
address the relevant inquiry, which is whether consumers are confused as to the
existence of any sponsorship of or affiliation or association with the Twisted Metal
games by Frosty Treats.
The last criterion, which addresses the type of product, the price, and the
conditions of purchase, is more important in confusion-of-source cases where the
degree of care that the purchaser exercises in purchasing a product can eliminate the
confusion that might otherwise exist. See SquirtCo., 628 F.2d at 1091. But Frosty
Treats's action is based on confusion of sponsorship, and thus the customers' degree
of care is of diminished importance. See King of the Mountain Sports, Inc. v.
Chrysler Corp., 185 F.3d 1084, 1090 (10th Cir. 1999). Although Frosty Treats's
customers are unlikely to exercise significant care in their purchasing decisions, this
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fact alone cannot tilt the balance here regarding the likelihood of confusion. Cf.
Duluth News-Tribune, 84 F.3d at 1096.
For all of the above-mentioned reasons, we agree with the district court that
Frosty Treats failed to present sufficient evidence to create a triable issue as to the
likelihood of confusion between the trade dress of Frosty Treats's trucks or its Safety
Clown on the one hand and any depictions of trucks or clowns in SCEA's Twisted
Metal games on the other.
IV.
Finally, Frosty Treats asserts that it has actionable claims for trademark
dilution under both federal and Missouri law. The district court entered summary
judgment on Frosty Treats's federal dilution claim because the marks and trade dress
at issue are not famous as required by 15 U.S.C. § 1125(c). Frosty Treats argues that
niche market fame is sufficient to establish a federal dilution claim, an issue that we
have not yet decided. See Everest Capital Ltd. v. Everest Funds Mgmt., L.L.C., 393
F.3d 755, 763 (8th Cir. 2005). But those circuits that do provide protection for marks
that have achieved niche market fame generally do so "only when a mark is famous
within a niche market and the alleged diluter uses the mark within that niche." Thane
Int'l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 908 (9th Cir. 2002); see also Times
Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157, 164 (3d Cir.
2000), cert. denied, 531 U.S. 1071 (2001); cf. 15 U.S.C. § 1125(c)(1)(E), (F).
Accordingly, even if we were to recognize niche fame, Frosty Treats would be unable
to make out a claim under 15 U.S.C. § 1125(c).
The Missouri Anti-Dilution Act, see Mo. Rev. Stat. § 417.061(1), however,
does not require proof of fame. It provides that "[l]ikelihood of injury to business
reputation or of dilution of the distinctive quality of a mark ... shall be a ground for
injunctive relief." Id. Courts applying that statute have required that a plaintiff
establish that the mark or trade dress is distinctive and registered under state statute,
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see Mo. Rev. Stat. §§ 417.005-417.066, or valid at common law, and that the
defendant's use of the plaintiff's mark creates a likelihood of dilution of the distinctive
quality of the plaintiff's mark. Cf. Gilbert/Robinson, Inc. v. Carrie Beverage-
Missouri, Inc., 758 F. Supp. 512, 527 (E.D. Mo. 1991), aff'd, 989 F.2d 985 (8th Cir.
1993), cert. denied, 510 U.S. 928 (1993). In affirming a district court's rejection of
a claim under the Missouri anti-dilution statute we explained, "The gravamen of a
dilution complaint is that the [defendant's] continuing use of a mark similar to the
plaintiff's mark will inexorably have an adverse effect upon the value of the plaintiff's
mark, and that ... the plaintiff's mark will eventually be deprived of all
distinctiveness." WSM, Inc., 724 F.2d at 1332 (internal quotation omitted); see 3
Louis Altman, Callman on Unfair Competition, Trademarks and Monopolies § 22:13
at 22-132 (4th ed. 2004); see also Gilbert/Robinson, Inc., 758 F. Supp. at 527.
Plaintiffs' Missouri-law dilution claim fails because the marks and trade dress at issue
are so dissimilar that it would be clearly erroneous to hold that there was a likelihood
of dilution.
Accordingly, we affirm the judgment of the district court.
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