Yellow Cab of Sacramento v. Yellow Cab of Elk Grove , 419 F.3d 925 ( 2005 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
YELLOW CAB COMPANY OF 
SACRAMENTO, a California
corporation,
No. 03-16218
Plaintiff-Appellant,
v.  D.C. No.
CV-02-00704-FCD
YELLOW CAB OF ELK GROVE, INC.,
OPINION
a California corporation; MICHAEL
P. STEINER, an individual,
Defendants-Appellees.

Appeal from the United States District Court
for the Eastern District of California
Frank C. Damrell, District Judge, Presiding
Argued and Submitted
November 4, 2004—San Francisco, California
Filed August 9, 2005
Before: Betty B. Fletcher, Sidney R. Thomas, and
Carlos T. Bea, Circuit Judges.
Opinion by Judge Thomas
10253
10256 YELLOW CAB v. YELLOW CAB
COUNSEL
Andrea M. Miller, Benjamin D. Kinne, Nageley, Meredith &
Miller, Inc., Sacramento, California, for the plaintiff-
appellant.
Jeffrey S. Kravitz, Kravitz Law Office, Sacramento, Califor-
nia, for the defendants-appellees.
OPINION
THOMAS, Circuit Judge:
In this Lanham Act case, plaintiff-appellant Yellow Cab of
Sacramento appeals from the district court’s grant of sum-
mary judgment in favor of defendant-appellee Yellow Cab of
Elk Grove. We conclude that there are issues of material fact
as to (1) whether the mark “Yellow Cab” has become generic
through widespread use in the marketplace, and (2) if descrip-
tive, whether the mark has acquired secondary meaning. We
therefore reverse the judgment of the district court. We also
determine that the burden of proof as to validity and protecta-
bility of an unregistered mark lies with the party claiming
trademark protection.
I
Perhaps the Yellow Cab Company of Sacramento didn’t
know what it had until it was gone.1 It had operated in the
1
See JONI MITCHELL, BIG YELLOW TAXI (Siquomb Publishing Corp.
1970).
YELLOW CAB v. YELLOW CAB 10257
Sacramento area, including the suburb of Elk Grove, since
1922. At the time this suit was filed, it operated approxi-
mately 90 cabs, had approximately 700 business accounts,
and was the only authorized taxicab provider to the Red Lion
Hotel, Doubletree Hotel, Radisson Hotel, Holiday Inn Capital
Plaza, Marriott Hotel Rancho Cordova, and the Amtrak Depot
in the Sacramento area. In the fall of 2001, a cloud appeared
over the Sacramento yellow cab empire when Michael Steiner
started a one-cab taxi operation in Elk Grove and operated it
under the name of “Yellow Cab of Elk Grove.” Determined
to “catch that yellow cab,”2 Yellow Cab of Sacramento filed
this action against Yellow Cab of Elk Grove, alleging trade-
mark violation under the Lanham Act and related state law
claims for unfair competition, false advertising, and inten-
tional interference with prospective business advantage. The
district court granted Yellow Cab of Elk Grove’s motion for
summary judgment, holding that “yellow cab” is a generic
term, and, alternatively, that even if “yellow cab” is a descrip-
tive term, Yellow Cab of Sacramento failed to show second-
ary meaning and is therefore not entitled to trademark
protection. Yellow Cab of Sacramento timely appealed. We
review a district court’s grant of summary judgment in a
trademark infringement claim de novo, with all reasonable
inferences drawn in favor of the non-moving party. Dream-
werks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129
(9th Cir. 1998).
II
There are five categories of trademarks: (1) generic; (2)
descriptive; (3) suggestive; (4) arbitrary; and (5) fanciful. KP
Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408
F.3d 596, 602 (9th Cir. 2005). “The latter three categories are
deemed inherently distinctive and are automatically entitled to
protection because they naturally ‘serve[ ] to identify a partic-
ular source of a product . . . .’ ” Id. (quoting Two Pesos, Inc.
2
CHUCK BERRY, NADINE (Chess 1964).
10258 YELLOW CAB v. YELLOW CAB
v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992)). Descriptive
marks “define a particular characteristic of the product in a
way that does not require any exercise of the imagination.”
Surfvivor Media, Inc. v. Survivor Productions, 406 F.3d 625,
632 (9th Cir. 2005). A descriptive mark can receive trademark
protection if it has acquired distinctiveness by establishing
“secondary meaning” in the marketplace. Filipino Yellow
Pages, Inc. v. Asian Journal Publ’ns, Inc., 198 F.3d 1143,
1147 (9th Cir. 1999). “Generic marks give the general name
of the product; they embrace an entire class of products.”
Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery, 150
F.3d 1042, 1047 n.8 (9th Cir. 1998). “Generic marks are not
capable of receiving protection because they identify the
product, rather than the product’s source.” KP Permanent
Make-Up, 408 F.3d at 602.
In the present case, Yellow Cab of Sacramento seeks trade-
mark protection for the term “yellow cab,” which is not a fed-
erally registered trademark, and Yellow Cab of Elk Grove
asserts that the term “yellow cab” is either generic or descrip-
tive without acquired secondary meaning, and therefore not
entitled to trademark protection.
A
[1] Under the circumstances presented by this case, the dis-
trict court correctly allocated the burden of proof to Yellow
Cab of Sacramento to establish that the mark was not generic.
When a plaintiff pursues a trademark action involving a prop-
erly registered mark, that mark is presumed valid, and the bur-
den of proving that the mark is generic rests upon the
defendant. Filipino Yellow Pages, 198 F.3d at 1146. How-
ever, if the disputed term has not been federally registered,
and the defendant asserts genericness as a defense, the burden
shifts to the plaintiff to show that the mark is nongeneric. Id.Yellow Cab of Sacramento argues that the district court
misallocated the burden of proof, claiming that a trademark
YELLOW CAB v. YELLOW CAB 10259
challenger must establish that the term was generic prior to
the proponent’s use before the burden of proof can be shifted
to the mark’s proponent. We have not recognized such a rule,
and it is not supported by trademark theory.
The plaintiff bears the ultimate burden of proof in a trade-
mark infringement action. Tie Tech, Inc. v. Kinedyne Corp.,
296 F.3d 778, 783 (9th Cir. 2002). “A necessary concomitant
to proving infringement is, of course, having a valid trade-
mark; there can be no infringement of an invalid mark.” Id.(citing Yarmuth-Dion, Inc. v. D’ion Furs, Inc., 835 F.2d 990,
992 (2nd Cir. 1987)). The validity of the trademark is “a
threshold issue” on which the plaintiff bears the burden of
proof. Id. Federal registration of a mark constitutes prima
facie evidence of the validity of the mark. 15 U.S.C.
§ 1057(b). For this reason, a plaintiff alleging infringement of
a federally-registered mark is entitled to a presumption that
the mark is not generic. Anti-Monopoly, Inc. v. General Mills
Fun Group, Inc., 684 F.2d 1316, 1319 (9th Cir. 1982). “In
essence, the registration discharges the plaintiff’s original
common law burden of proving validity in an infringement
action.” Tie Tech, Inc., 296 F.3d at 783 (citing Vuitton et Fils
S.A. v. J. Young Enters., Inc., 644 F.2d 769, 775 (9th Cir.
1981)). The defendant may, of course, overcome the pre-
sumption “by a showing by a preponderance of the evidence
that the term was or has become generic.” Anti-Monopoly,
684 F.2d at 1319.
[2] However, when a mark is not registered, the presump-
tion of validity does not apply; therefore, the plaintiff is left
with the task of satisfying its burden of proof of establishing
a valid mark absent application of the presumption. Generic
marks lack any distinctive quality, and therefore are not enti-
tled to trademark protection. Interstellar Starship Servs., Ltd.
v. Epix, Inc., 304 F.3d 936, 943 n.6 (9th Cir. 2002) (citing
TCPIP Holding Co. v. Haar Communications, Inc., 244 F.3d
88, 93 (2d Cir. 2001)). Therefore, when a defendant raises the
defense of genericness in an infringement case involving an
10260 YELLOW CAB v. YELLOW CAB
unregistered mark, the plaintiff has the burden of proof to
show that the mark is valid and not generic. Filipino Yellow
Pages, 198 F.3d at 1146. Even a registered mark may become
generic and subject to cancellation. “Generic terms are not
registrable, and a registered mark may be canceled at any time
on the grounds that it has become generic.” Park ‘N Fly, Inc.
v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 (1985). Com-
petitors may use a term that was once distinctive if it has
become generic over time. Nora Beverages, Inc. v. Perrier
Group of Am., Inc., 164 F.3d 736, 744 (2d Cir. 1998) (citing
Park ‘N Fly, 782 F.2d at 1509). The crucial date for the deter-
mination of genericness is the date on which the alleged
infringer entered the market with the disputed mark or term.
Id. Thus, Yellow Cab of Sacramento’s argument that the
plaintiff should not have to assume the burden of proof until
the defendant proves that the term in question was generic
prior to the plaintiff’s use runs counter to trademark theory,
and we must reject it.
[3] The Second Circuit has created an exception to the gen-
eral rule, upon which Yellow Cab of Sacramento also relies,
that “where the public is said to have expropriated a term
established by a product developer, the burden is on the
defendant to prove genericness.” Murphy Door Bed Co. v.
Interior Sleep Systems, Inc., 874 F.2d 95, 101 (2nd Cir. 1989).
However, even if we were to recognize that exception in our
Circuit, it would not afford plaintiff relief. The Murphy Door
Bed Co. exception applies to protect a product innovator —
in that case, the originator of the Murphy bed. The term “yel-
low cab” was not originally coined by Yellow Cab of Sacra-
mento, nor was the concept of the taxi cab. John Hertz
developed the “Yellow Cab” name in Chicago in 1915, a
decade before the term was associated with a taxicab com-
pany in Sacramento. Using an analysis prepared by the Uni-
versity of Chicago, Hertz decided that yellow was the most
distinctive color for a fleet of taxicabs. He continued use of
the color in his subsequent business, Hertz Rent-A-Car. In
contrast, the Yellow Cab of Sacramento’s use was derivative.
YELLOW CAB v. YELLOW CAB 10261
The narrow Second Circuit exception for product developers
does not apply.
[4] For these reasons, we agree with the district court that
the plaintiff bore the burden of proof of establishing that the
name was not generic, subject to the usual rules pertaining to
the grant of summary judgments.
B
[5] Although the district court properly allocated the burden
of proof, it erred in determining that there were no genuine
issues of material fact concerning genericness. “Whether a
mark is generic is a question of fact.” Stuhlbarg Int’l Sales
Co., Inc. v. John D. Brush & Co., Inc., 240 F.3d 832, 840 (9th
Cir. 2001). “To determine whether a term has become
generic, we look to whether consumers understand the word
to refer only to a particular producer’s goods or whether the
consumer understands the word to refer to the goods them-
selves.” KP Permanent Make-Up, Inc., 408 F.3d at 604. If
buyers understand the term as being identified with “a partic-
ular producer’s goods or services, it is not generic.” Surgi-
centers of Am., Inc. v. Medical Dental Surgeries Co., 601
F.2d 1011, 1016 (9th Cir. 1979). “But if the word is identified
with all such goods or services, regardless of their suppliers,
it is generic.” Id. (citing King Seeley Thermos Co. v. Aladdin
Indus., Inc., 321 F.2d 527, 579 (2d Cir. 1963)).
[6] We have often determined whether a mark is generic
using the “who-are-you/what-are-you” test: “A mark answers
the buyer’s questions ‘Who are you?’ ‘Where do you come
from?’ ‘Who vouches for you?’ But the generic name of the
product answers the question ‘What are you?’ ” Filipino Yel-
low Pages, 198 F.3d at 1147 (quoting Official Airline Guides,
Inc. v. Goss, 6 F.3d 1385, 1391 (9th Cir. 1993) (quoting 1 J.
Thomas McCarthy, Trademarks and Unfair Competition,
§ 12.01 (3d ed. 1992))) (alterations omitted).
10262 YELLOW CAB v. YELLOW CAB
Analyzing the undisputed evidence, we conducted the
“who-are-you/what-are-you” test and held that “Filipino yel-
low pages” answered the “what are you?” question, and was
thus a generic term. Id. at 1151. We noted in Filipino Yellow
Pages that if asked, “What are you?” the three competing
companies could all answer “a Filipino yellow pages.” Id.
[7] In the present case, there is a genuine issue of material
fact as to the genericness of the term “yellow cab.” If one asks
“What are you?” to companies called, for example, Checker
Cab Co. or City Cab Co., one would expect the response “a
taxicab company” or “a cab company.” Posing the question:
“Could you refer me to a yellow cab company?”, one would
expect these same companies to point not to themselves, but
to a business operating under the name “Yellow Cab.” “Yel-
low cab” thus appears to answer the “who are you?” rather
than the “what are you?” question, demonstrating its non-
genericness. Because Yellow Cab of Sacramento came for-
ward with evidence demonstrating the existence of a genuine
issue of material fact about whether the term “yellow cab”
was generic, summary judgment was inappropriate on this
issue.
C
The district court held, in the alternative, that if the term
“yellow cab” was not generic, then Yellow Cab of Sacra-
mento had failed to meet its burden to establish secondary
meaning. Yellow Cab of Sacramento has put forth evidence
raising a genuine issue of material fact on this issue as well.
[8] “[T]he question of secondary meaning is one of fact.”
Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1355
(9th Cir. 1985) (en banc). To determine whether a descriptive
mark has secondary meaning, a finder of fact considers: “(1)
whether actual purchasers of the product bearing the claimed
YELLOW CAB v. YELLOW CAB 10263
trademark associate the trademark with the producer, (2) the
degree and manner of advertising under the claimed trade-
mark, (3) the length and manner of use of the claimed trade-
mark, and (4) whether use of the claimed trademark has been
exclusive.” Levi Strauss, 778 F.2d at 1358 (quoting Transgo,
Inc. v. AJAC Transmission Parts Corp., 768 F.2d 1001, 1015
(9th Cir. 1985)) (alteration omitted).
[9] Here, Yellow Cab of Sacramento presented to the dis-
trict court various declarations detailing the history of the
Yellow Cab of Sacramento, customer confusion concerning
the companies, advertising data and other evidence addressing
the Levi Strauss factors. This evidence, when viewed in the
light most favorable to Yellow Cab of Sacramento, creates a
genuine issue of material fact concerning whether the descrip-
tive mark in this case had acquired secondary meaning. Yel-
low Cab of Elk Grove relies heavily on Filipino Yellow
Pages, but the record in this case is far different and far
stronger than the record in that case.3 Therefore, the entry of
summary judgment on this question was inappropriate.
3
Japan Telecom, Inc. v. Japan Telecom Am., Inc., 287 F.3d 866 (9th
Cir. 2002), is also distinguishable. There, the plaintiff brought a trademark
infringement action against the defendant; the district court granted sum-
mary judgment for the defendant. Id. at 870. We affirmed, holding that
although plaintiff’s name was descriptive, the plaintiff failed to establish
a genuine issue of material fact regarding secondary meaning because the
plaintiff presented only a few misdirected mailings which were ambiguous
as to secondary meaning, and an affidavit from the plaintiff’s president
which the district court correctly found lacked foundation. Id. at 873-74.
As noted above, however, Yellow Cab of Sacramento presented direct evi-
dence (e.g., evidence of customer confusion and advertising data relevant
to the Levi Strauss factors) sufficient to present a genuine issue of material
fact for trial.
10264 YELLOW CAB v. YELLOW CAB
III
The district court correctly allocated the burden of proof to
the plaintiff. However, because the plaintiff tendered evidence
creating genuine issues of material fact, the district court’s
grant of summary judgment is reversed.4 Each party shall bear
its own costs on appeal.
REVERSED AND REMANDED.
4
Because we determine that a genuine issue of material fact exists as to
both issues, we need not address appellant’s argument that the district
court erred in considering evidence pertaining to a national market rather
than a local one. On remand, the district court should take into consider-
ation the territorial scope of common law trademark rights in deciding
what evidence is relevant to the determination. See 4 J. THOMAS
MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION 26:25-
30. However, we must reject the specific argument tendered by the defen-
dant that the use of the term “yellow cab” in the New York City metropol-
itan area is dispositive in determining the distinctiveness of a mark used
by a small business claiming territorial rights in Sacramento, California.
Since the 1960’s, New York City has required its licensed medallion cabs
to be painted yellow. 34 R.C.N.Y. § 4-01(b) (defining “taxi” as “a motor
vehicle used for the carriage of passengers for compensation, equipped
with a taxi meter, painted yellow, and displaying a current medallion
issued by the New York City Taxi and Limousine Commission”). This is
to distinguish taxis, which can be hailed from the street, from “for hire
vehicles,” which must be hired “by prearrangement only.” Id. It also dis-
tinguishes licensed medallion cabs from so-called “gypsy” cabs, which do
not operate with government authorization. In short, the unique New York
City government regulation of taxicabs is irrelevant to the trademark
issues presented by this case, and in particular, deciding the significance
of the voluntary use of marks in commerce in different geographic areas.