Opposition Brief — Enterprise Rent-A-Car Co. v. Advantage Rent-A-Car, Inc.

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No. 03-536

In The

Supreme Court of the Anited States

ENTERPRISE RENT-A-CAR COMPANY,

Petitioner,

WV.

ADVANTAGE RENT-A-CAR, INC.,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

RESPONDENT?’S BRIEF IN OPPOSITION

DEBORA B. ALSUP

Counsel of Record

WILLIAM D. RAMAN

THOMPSON & KNIGHT, L.L.P.

98 San Jacinto Boulevard

Suite 1900

Austin, Texas 78701

(512) 469-6100

Counsel for Respondent

COCKLE LAW BRIEF PRINTING CO) (800) 225 6964

K CALL COLLECT (402) 342-2451

PARTIES TO THE PROCEEDING

The Petition accurately lists the parties to the pro-

ceeding.

Advantage Rent-A-Car, Inc. is a fully-owned subsidi-

ary of Walker Resources, Inc., a privately held Texas

corporation.

TABLE OF CONTENTS

Page

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Table of Authorities ..................... iiatice nahn aaaae iv

Opinions Below........«:+v»s0sxssiessegsedeeena anaes aaa 1

Statement of the Came ....csiesss0s0saee eee 1

Reasons for Denying the WTit...................cseceecseceeeees 7

IT.

Ill.

IV.

The Intent And Purpose Of The Lanham Act

Is, In Part, To Provide A Registration And

Notice System For Trademark Owners That

Secures Rights Free From Interference By

State Or Territorial Legislation; Enterprise’s

Position Is Totally Contrary To That Intent

And PUPDOOO «.0sicccccssemseeeneeee

Enterprise’s Argument That State Dilution

Was Added As A Basis For Opposition And

Cancellation Is Not Supported By The Con-

gressional Record Or By Logic...................066

Enterprises Attempts To Analogize The

FTDA To Trademark Common Law Are Mis-

guided And Would Wreak Havoc On Trade-

mark Jurisprudence If Foliowed..... roisuamumtlee

The Present Action Is Illustrative Of The

Potential For Endless, Successive Litigation

That Enterprise’s Theories Would Engender;

The Federal Circuit Prop2rly Rejected Such

TROT IOB «...0000500000sernceereceeenenienene

ill

TABLE OF CONTENTS -— Continued

Page

V. Enterprise’s Criticism Of The Federal Cir-

cuit’s Reference To The Concurrent Use Pro-

visions Of The Lanham Act Demonstrates

Enterprise’s Misunderstanding Of Trade-

mark Law And The Lanham Act.................... 22

TABLE OF AUTHORITIES

Page

CASES CITED:

Advantage Rent-A-Car, Inc. v. Enterprise Rent-A-

Car Co., A98CA 372 (W.D. Tex. Oct. 25, 1999)........ 1, 2,3

Advantage Rent-A-Car, Inc. v. Enterprise Rent-A-

Car Co., 238 F.3d 378, 57 USPQ.2d 1561 (5th Cir.

EF cocdesaacaeh coerce pheevasaeemacresniaeseaeasureucaoaaes 1, 6, 19, 21

Babson Brothers Co. v. Surge Power Corp., 39

RFE. Be CE ARID BOD os cccrnssaceisinxecancenvontvanennientenin 13

Geo. A. Dickel Co. v. General Mills, Inc., 317 F.2d

954, 137 USPQ 891 (CCPA 1963) .........c...secersesssessoees 9,13

Hanover Star Milling Co. v. Metcalf, 240 U.S. 403,

36 S.Ct. 357, 60 L.Ed. 713 (1916) .........0cessessesseors 7, 16, 22

K2 Corp. v. Philip Morris, Inc., 192 USPQ 174

(TTAB 1976), aff’d, 555 F.2d 815, 194 USPQ 81

“8 2 | 7 g ) Sain on ance nnn Gilaccceaemaeencnes 9,13

Max Factor & Co. v. Clairol, Inc., 163 USPQ 240

a MEE iisasichvaviasdichatenianscatacinaeaaokien 9,13

Moseley v. V. Secret Catalogue, Inc., 537 U.S. 418,

123 S.Ct. 1115, 155 L.Ed.2d 1, 12 (2003)................... 7,17

Qualitex Co. v. Jacobson Products Co., 514 U.S.

159, 131 L.Ed.2d 248, 115 S.Ct. 1300 (1995)................. 17

Robinson v. Shell Oil Co., 519 U.S. 337, 117 S.Ct.

BGT, LOG Le Be ee Oe (LED vevvnsvcssexciycertecennvevenesansesssoves 18

U.S. v. Ron Pair Enters., Inc., 489 U.S. 235, 109

S.Ct. 1026, 103 L..d.2d ZOO (19GB) ..essecccercsersesennsenessrees 18

Viacom, Inc. v. Ingram Enterprises, Inc., 141 F.3d

ee Ce Gt, EE cd cencusoncachacvencsstassnsscndsacsuvedseniaaveiancsian 10

TABLE OF AUTHORITIES — Continued

Page

STATUTES CITED: |

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15 U.BAG. 5 WG vvsscscccccticoemiiannannnenraene 5, 7, 9, 10

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Pub. L. No. 106-43, 113 Stat. 218...........0.... 5, 10, 13, 14, 15

OTHER AUTHORITIES:

House Congressional Report (H.R. Rep. No. 250,

106th Comm., 106 BOG8. CERIO Pivcicisisernsveeecnennn 15

OPINIONS BELOW

The Trademark Trial and Appeal Board (“TTAB”) and

the Federal Circuit Court of Appeals (“Federal Circuit”)

correctly decided that Enterprise’s opposition based on the

Federal Trademark Dilution Act (“FTDA”), Section 43(c) of

the Lanham Act, 15 U.S.C. § 1125(c), was barred by res

judicata. Opinions from prior litigation between these

same parties rendered by the United States District Court

for the Western District of Texas (“Western District”) and

by the United States Court of Appeals for the Fifth Circuit

(“Fifth Circuit”) precluded Enterprise’s opposition. See,

Advantage Rent-A-Car, Inc. v. Enterprise Rent-A-Car Co.,A

98CA 372, slip. op. at 1 (W.D. Tex. Oct. 25, 1999), and

Advantage Rent-A-Car, Inc. v. Enterprise Rent-A-Car Co.,

238 F.3d 378, 57 USPQ.2d 1561 (5th Cir. 2001). The

opinion of the Western District is attached in the Respon-

dent’s Appendix at pp. 6 to 23. The opinion of the Fifth

Circuit is attached in the Respondent’s Appendix at pp. 24

to 31. Indeed, Enterprise made essentially the same

arguments concerning the FTDA to the Western District

that it now presents to this Court, and failed to re-urge

them on appeal to the Fifth Circuit. This raises a serious

question of whether it was entitled to re-raise them to the

TTAB or the Federal Circuit, and whether it is entitled to

present them to this Court.

STATEMENT OF THE CASE

Respondent disagrees strongly with Petitioner’s

presentation of the so-called “undisputed background

facts.” Petition for Writ of Certiorari at pp. 2-5. Petitioner’s

rendition is often unsupported by the record, mischarac-

terizes facts, and, in part, is flatly inaccurate.

Enterprise had its full day in court on the issue of

dilution under the FTDA in 1999 during which Enterprise

was afforded every opportunity to prove that its mark was

“famous.” Enterprise could not prove that its slogan “We'll

Pick You Up” had the requisite recognition to be accorded

the same protection under dilution theories as marks such

as KODAK, EXXON, STEINWAY cr BUICK. Petitioner’s

misstatement of the facts is representative of its continu-

ing attempt to relitigate that which it has already lost.

This Petition illustrates the mischief that Enterprise’s

theories would wreak, if accepted.

At least as early as 1990, Advantage began using the

slogan “We'll Even Pick You Up” ito identify and distin-

guish its rental car services from the services of others.

The slogan has been promoted through v in a television

advertisement that aired primarily on the San Antonio

Spurs Network and, more recently, on sports programming

on the Fox Sports Network. Respondent’s Appendix at p. 8.

Contrary to Petitioner’s representation, see Petition for

Writ of Certiorari at p. 3, Enterprise’s own trial exhibit

demonstrated that the advertisement had been aired in

every year since its first use in 1990 until trial. Enter-

prise’s Trial Exhibit 7, Respondent’s Appendix at p. 33.

Advantage and Enterprise are direct competitors in

the rental car industry. Four years after Advantage began

use of its slogan and during the peak of Advantage’s use,

Enterprise began use of the composite slogan “Pick Enter-

prise. We'll Pick You Up.” Respondent’s Appendix at pp. 8-

9; see Enterprise’s Trial Exhibit 7, Respondent’s Appendix

at p. 33. Contrary to Enterprise’s representation, see Petition

for Writ of Certiorari at p. 1, Enterprise introduced no

trademark search into evidence and no opinion of counsel.

Moreover, it is almost inconceivable that managers for

Enterprise working in the broadcast area of the San

Antonio Spurs Network (which extends throughout Texas

and into surrounding states and which testimony at trial

demonstrated was available by satellite throughout the

United States) were unaware of the use by Advantage — a

direct competitor — of its slogan. For Enterprise, who was

the second party to use the slogans at issue, to try to

characterize Advantage as the “copyist” is disingenuous, at

best.

Enterprise, in its “undisputed background facts,” tries

to attach a negative inference (as “undisputed”) to the

meeting of Advantage’s management and lawyers in 1997.

Petition for Writ of Certiorari at p. 3. The Western District,

who heard all the witnesses and judged their credibility,

attached the most logical inference to that meeting — that

it was held by Advantage to determine whether Advantage

could take action against the second-comer Enterprise. As

noted by the Western District: “In January 1997, Advan-

tage discussed this use by Enterprise at an executive

meeting, but Advantage did not take any action at that

time.” Respondent’s Appendix at p. 10. Advantage was first

in time and first in rights.

At trial, Enterprise had every opportunity to present

evidence to show that its slogan was famous, or even

sufficiently distinctive under state law, but failed. Enter-

prise mischaracterizes the Western District’s treatment of

Enterprise’s survey evidence by asserting that the Western

District found that Enterprise “missed the mark by 0.4%.”

Petition for Writ of Certiorari at p. 4. To the contrary, the

Western District noted that the survey (which was com-

pleted in 1999) was a highly aided survey that prompted

the respondents with Enterprise’s name and the slogan at

issue. As a result, the Western District observed that the

survey provided no indication of the real level of recogni-

tion that the slogan would have enjoyed without such

prompting. Respondent’s Appendix at p. 19. At that time,

Enterprise had spent over 100 million dollars on its

advertising, but the advertising has always emphasized

Enterprise and not the slogan. The effect of this emphasis

is reflected by the fact that despite the aided nature of

Enterprise’s survey, recognition of the slogan with Enter-

prise did not even make the 50% threshold viewed by some

as a bare minimum for asserting fame.

Enterprise’s assertions of having spent another 150

million dollars are unsupported by any evidence that has

been subjected to cross-examination or scrutiny as .o the

effect of such efforts. In short, the slogan was not famous

in 1999 and there has been no cogent evidence or finding

that it is famous today.

Significantly, in May 1999, prior to trial, Enterprise

stipulated that the respective uses of the respective

slogans was not likely to cause confusion anywhere in the

United States — thereby disposing of Advantage’s and

Enterprise’s trademark infringement and unfair competi-

tion claims against each other throughout the United

States. See the Partial Consent Judgment at Respondent’s

Appendix 1 to 4: This stipulation left only Enterprise’s

dilution counts in the litigation.

Advantage thereafter filed a motion for summary

judgment on the dilution claims under the FTDA. In

responding to Advantage’s motion for summary judgment

on the FTDA, Enterprise presented the identical argu-

ments to the district court concerning the construction of

the word “begins” in the FTDA and possible territorial

application of the FTDA as a reason why all relief under

the FTDA should not be denied. The Western District took

this motion under advisement and ultimately denied it as

moot in view of the district court’s denial of all relief under

the FTDA because Enterprise’s mark was not sufficiently

distinctive or famous.

Enterprise appealed the decision of the Western

District to the Fifth Circuit and raised issues attacking

the findings and conclusions of the district court relative

to the FTDA. Enterprise, however, failed to reiterate its

arguments concerning the possible territorial application

of the FTDA as a ground for reversal of or limitation of the

total denial of all relief under the FTDA.

On August 5, 1999, amendments to Sections 13 and 14

of the Lanham Act, 15 U.S.C. §§ 1063 and 1064, to allow

assertion of the FTDA as grounds for opposition and/or

cancellation became effective as law. Trademark Amend-

ments Act of 1999, Pub. L. No. 106-43, 113 Stat. 218

(hereinafter often referred to as the “Trademark Amend-

ments Act of 1999”).

On August 15, 2000, Advantage’s trademark applica-

tion, which had been filed in 1999, was published for

opposition. On August 18, 2000, Enterprise concurrently

filed its notice of opposition to Advantage’s application

alleging dilution under the FTDA as its only basis for the

opposition. Enterprise concurrently moved to stay the

opposition on the grounds that the disposition by the Fifth

Circuit of Enterprise’s FTDA dilution claim would be

“dispositive” of the opposition.

In doing so, Enterprise represented to the TTAB that

the opposition should be stayed because the issues upon

which the opposition was based were duplicative of and

identical to the issues that had been tried and were on

appeal to the Fifth Circuit. Hence, Enterprise represented

that the decision of the Fifth Circuit would be (and was)

dispositive of the dilution issues in the opposition.

On January 22, 2001, the Fifth Circuit affirmed the

district court’s holding that Enterprise’s slogan is not

sufficiently famous (even in the relevant niche market) for

protection under the FTDA. Respondent’s Appendix at p.

24-31; Advantage Rent-A-Car, 238 F.3d at 381.

After Enterprise lost its case under the FTDA before

the Fifth Circuit, it failed to file a Petition for Writ of

Certiorari thereby rendering all matters in the litigation

final. Notwithstanding this result, Enterprise has now

tried to resurrect before the TTAB the same arguments

regarding construction of the FTDA that it tried on the

Western District. It also moved for leave to add state

dilution claims to its opposition (with absolutely no sup-

porting authority). The TTAB denied Enterprise’s motion

for leave to amend to add state law dilution claims as a

ground for opposition and granted summary judgment

dismissing Enterprise’s opposition with prejudice on the

grounds of res judicata.

On appeal, the Federal Circuit affirmed the decision of

the TTAB finding Enterprise’s argument to be contrary to

the clear intent of the FTDA that any prior use defeats a

claim of dilution as a ground for opposition.

In short, the copyist Enterprise had its day in court

and lost. Notwithstanding its loss, Enterprise has improp-

erly sought a second bite of the apple and has lost again.

This litigation should be concluded.

REASONS FOR DENYING THE WRIT

The decision of the Federal Circuit Court of Appeals is

consistent with the expressly stated intent of the Lanham

Act “to protect registered marks ... from interference by

State, or territorial legislation,” 15 U.S.C. § 1127. It is also

consistent with the plain language of the Lanham Act and

the FTDA which allows opposition and cancellation

proceedings based on dilution only “under Section 43(c),”

15 U.S.C. §§ 1063 and 1064; and which provides dilution

protection under the FTDA only if the mark at issue is

famous before a defendant “begins” use, 15 U.S.C.

§ 1125(c). Moreover, the decision comports with fundamen-

tal public policy. The Federal Circuit’s decision does not

eliminate state anti-dilution laws or statutes, or otherwise

affect such state laws, except as is necessary to harmonize

the state laws with the expressed intent of the Lanham

Act. Finally, the decision properly rejects construing the

FTDA by analogy to the common law territorial treatment

of trademarks under cases such as Hanover Star Milling

Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713

(1916), as is urged by Enterprise because “[uJnlike tradi-

tional infringement law, the prohibitions against trade-

mark dilution are not the product of common-law

development, and are not motivated by an interest in

protecting consumers.” Moseley v. V. Secret Catalogue, Inc.,

537 U.S. 418, 429, 123 S.Ct. 1115, 1122, 155 L.Ed.2d 1, 12

(2003).

The case was correctly decided below. This is a private

trademark dispute between competitors that contains no

issues of substantial public significance. Accordingly, the

Petition should be denied.

I. The Intent And Purpose Of The Lanham Act

Is, In Part, To Provide A Registration And No-

tice System For Trademark Owners That Se-

cures Rights Free From Interference By State

Or Territorial Legislation; Enterprise’s Posi-

tion Is Totally Contrary To That Intent And

Purpose.

Section 45 of the Lanham Act, 15 U.S.C. § 1127,

states, in pertinent part, as follows:

“The intent of “his Act is ... to protect registered

marks used in... commerce from interference by

State, or territorial legislation . . .”

Consistent with this intent, the Lanham Act provides

a registration system whereby a small, regional business

may adopt a mark and apply for a federal registration in

order to secure for itself the right to expand use of the

mark nationwide if the registration issues. See Lanham

Act §§ 1-3 and 7, 15 U.S.C. §§ 1051, 1052, 1053, and 1057.

This system ser.2s two important public purposes.

First, it secures for the trademark owner its investment in

its mark by enabling the owner to expand nationwide,

subject only to rights that pre-existed the filing of the

application for registration. See 15 U.S.C. § 1052(d) (which

provides that a mark alleged to be conflicting on the

grounds of likelihood of confusion must have been “previ-

ously used in the United States by another and not aban-

doned”). This provides a degree of certainty that fosters

and supports investment and free enterprise. Second, it

provides a means for the trademark owner to provide

notice of its claim of rights throughout the United States.

Recognizing that mistakes could be made in the

registration process, the Lanham Act provides that an

application can be opposed before registration, 15 U.S.C.

§ 1063, and a registration can be cancelled after issuance,

under appropriate circumstances. 15 U.S.C. § 1064. The

available grounds for opposing a registration or seeking to

cancel a registration are generally identical. See Lanham

Act §§ 13 and 14, 15 U.S.C. §§ 1063 and 1064. Prior to

passage of the FTDA, consistent with the intent that the

federal registrations not be interfered with by state laws,

these grounds never inciuded state dilution statutes. See

Max Factor & Co. v. Clairol, Inc., 163 USPQ 240, 243

(TTAB 1969); Geo. A. Dickel Co. v. General Mills, Inc., 317

F.2d 954, 956, 137 USPQ 891, 892 (CCPA 1963); K2 Corp.

v. Philip Morris, Inc., 192 USPQ 174, 177 (TTAB 1976),

aff’d, 555 F.2d 815, 194 USPQ 81 (CCPA 1977).

The provisions of the FTDA, as construed by the

Federal Circuit, are totally consistent with the intent of

the Lanham Act and the registration system provided

under the Lanham Act. The FTDA provides that the owner

of an allegedly famous mark is entitled to relief against an

allegedly diluting use by another only if the use by the

other “begins after the mark has become famous.” 15

U.S.C. § 1125(c). The construction of this language by the

Federal Circuit to find that “begins” means any use,

provides certainty to the small business that if it adopts

and uses a mark before another person’s mark becomes

famous, it can continue to invest in that mark and expand

use of the mark throughout the United States without fear

that after-acquired fame can cause liability under the

FTDA. The statute reads “begins.” It does not read “ex-

pands,” “changes,” “alters,” etc.

The FTDA also provides that ownership of a valid

registration is a complete bar to an action against the

registrant under the common law or statute of a state tnat

seeks to prevent dilution. See Lanham Act § 43(c)(3), 15

U.S.C. § 1125(c)(3). This provision is critical to the imple-

mentation of the intent of the Lanham Act to protect

registered marks used in commerce from interference by

state legislation. Contrary tc the suggestion by Enterprise

in its Petition, Petition for “ .. of Certiorari at p. 8, the

statute expressly preempts the state law of dilution from

interference with the use of federally registered marks.

The district court cases cited by Enterprise, Petition for

Writ of Certiorari at p. 8, did not consider Section 43(c)(3)

or its effect. It is clear that Section 43(c)(3) preempts the

state law of dilution from interfering with the rights of a

federal registrant. Viacom, Inc. v. Ingram Enterprises, Inc.,

141 F.3d 886, 890-891 (8th Cir. 1998).

On this framework in which the state law of dilution

had never been a basis for opposition or cancellation of

registrations and in which the state law of dilution is

expressly preempted from interfering with the use of a

federally registered mark, Congress enacted the Trade-

mark Amendments Act of 1999 to provide that dilution

“under Section 43(c)” was a basis for both opposition,

Lanham Act § 13, 15 U.S.C. § 1063, and for cancellation,

Lanham Act § 14, 15 U.S.C. § 1064. The fact that the

identical language was used for both oppositions in Section

13 and cancellations in Section 14 unequivocally estab-

lishes that Congress did not implicitly intend to make

state dilution a basis for opposing or attacking registra-

tions. It would turn the Lanham Act on its head to make

every federal registration subject to cancellation based on

differing laws of dilution of the various states, especially

when the existence of the registration bars any action

under state dilution law.

Contrary to the arguments of Enterprise, this statu-

tory scheme does not “effectively abolish all state law

remedies relating to trademark dilution.” Petition for Writ

of Certiorari at p. i. Rather, it only preempts them in the

narrow situation in which a party is able to get 2 federal

registration because its mark is not likely to cause confu-

sion with another’s mark and its use was begun before the

other’s mark became famous. That narrow exception is

- consistent with, and necessary to, the intent of the

Lanham Act. It leaves the state laws of dilution e~ailable

for all other situations that might arise.

Accordingly, the Lanham Act and the FTDA, as

construed by the Federal Circuit in the decision below,

provides a statutory framework that fully implements and

enforces the expressly stated intent of the Lanham Act. A

small business can adopt a mark that is not likely to cause

confusion with the mark of another, and does not dilute

another’s mark that is famous at the time of adoption

and first use, and register that mark. Thereafter, the

small business can expand use of the mark throughout the

United States with the certainty that its investment in its

mark and the corresponding goodwill will not be jeopard-

ized or interfered with by a state statute or by a large

company who happens to have the resources to develop

fame after the small business has begun its investment.

The case was correctly decided by the Federal Circuit, and

is consistent with the intent of the Lanham Act and

fundamental public policy.

II. Enterprise’s Argument That Dilution Under

: State Law Was Added As A Basis For Opposi-

tion And Cancellation Is Not Supported By

The Congressional Record Or By Logic.

The expressly stated intent of the Lanham Act is “to

protect registered marks used in such commerce ;rom

interference by State, or territorial legislation ...” 15

U.S.C. § 1127. Consistent with this expressly stated

intent, the FTDA provides that ownership of a valid

registration is a complete bar to an action against the

registrant under state common or statutory dilution laws.

See 15 U.S.C. § 1125(c)(3). Enterprise’s proposition that

the TTAB should entertain state anti-dilution claims in

opposition and cancellation proceedings therefore runs

directly counter to the stated intent of the Lanham Act

and the express provisions of the FTDA itself. If Enter-

prise’s position were adopted, the federal registration of

any mark could be opposed or cancelled based upon any

state dilution law. This would offer up every federal

registration that is less than five years old to being held

hostage to opposition or cancellation (contrary to the plain

meaning of Section 43(c)(3) of the FTDA) under any of the

various state dilution statutes or laws — no matter how

much the state law differed frorn the FTDA. Such a posi-

tion is clearly unfounded.

Enterprise claims that the Lanham Act does not limit

the type or nature of the damage that can provide the

basis for opposition, apparently ignoring the expressly

stated intent of the Lanham Act. Enterprise also deftly

ignores the fact that the only dilution basis for opposition

provided in the statute specifically states “dilution under

Section 43(c)” as the basis for opposition. 15 U.S.C. § 1063.

As noted by the Federal Circuit, there is nothing in the

legislative history of the Trademark Amendments Act of

1999 to suggest that the intent of the amendment was to

add any other basis besides federal dilution under the

FTDA as a ground for opposition or cancellation. More

importantly, the legislative history is void of any sugges-

tion that Congress intended to allow interference with

federal registrations by the laws of the fifty states contrary

to the expressly stated intent of the Lanham Act.

Prior to the Trademark Amendments Act of 1999, the

Lanham Act did not specifically address whether dilution

under the FTDA could serve as the basis for an opposition

or cancellation proceeding.’ In Babson Brothers Co. v.

Surge Power Corp., 39 USPQ.2d 1953 (TTAB 1996), the

TTAB reviewed the Lanham Act and found that it did not

authorize a trademark owner to oppose or petition to

cancel the registration of a mark on the basis of dilution

under the FTDA. The Board also found nothing in the

legislative history of the Lanham Act that suggested that

dilution under the FTDA was intended to provide a basis

for opposition or cancellation. This ruling led to the situa-

tion in which owners of famous marks could not oppose a

published application that diluted their mark, but rather

had to wait until the mark was registered and then bring

a dilution action in federal court.

' Prior to the FTDA, it was clear that state dilution law could not

provide the basis for opposition or cancellation of a registration. Max

Factor & Co. v. Clairol, Ine., 168 USPQ 240, 243 (TTAB 1969); Geo. A.

Dickel Co. v. General Mills, Inc., 317 F.2d 954, 956, 137 USPQ 891, 892

(CCPA 1963); K2 Corp. v. Philip Morris, Inc., 192 USPQ 174, 177 (TTAB

1976), aff’d, 555 F.2d 815, 194 USPQ 81 (CCPA 1977).

7 Section 2 of the Trademark Amendments Act of 1999

was enacted to alter this scenario by specifically allowing

an opposition or cancellation based on Section 43(c) of the

Lanham Act, the FTDA, in the following language:

“(a) Registrable Marks. — Section 2 of the Act en-

titled ‘An Act to provide for the registration and

protection of trade-marks used in commerce, to

carry out the provisions of certain international

conventions, and for other purposes’ (in this Act

referred to as the “Trademark Act of 1946”) (15

U.S.C. 1052) is amended by adding at the end

the following flush sentences: “A mark which

when used would cause dilution under section

43(c) may be refused registration only pursuant

to a proceeding brought under section 13. A reg-

istration for a mark which when used would

cause dilution under section 43(c) may be can-

celed pursuant to a proceeding brought under ei-

ther section 14 or section 24.”

Trademark Amendments Act §2 (1999).

Enterprise alleges, however, that its position is

justified by the absence of an indication in the legislative

history of the Trademark Amendments Act of 1999 of an

intent to preclude state law claims. Petition for Writ of

Certiorari at p. 9. But, given the expressly stated intent of

the Lanham Act to protect registered marks from interfer-

ence by state legislation, Congress would have no reason

to consider or comment on state laws at all because the

expressed intent is that the state laws should have no

effect whatsoever. For Enterprise’s argument to have any

merit, Congress would have had to expressly state that the

legislation was intended to be contrary to the previously

stated intent of the statute. This did not happen. Rather,

the legislative history makes numerous references to the

FTDA and the intent to allow dilution under “Lanham Act

43(c)” — under federal law — to be asserted as a basis for

opposition and cancellation proceedings.

In the section entitled “Background and Need for the

Legislation” of the House Congressional Report (H.R. Rep.

No. 250, 100th Cong., 1st Sess. (1999)), the motivation

behind adopting the Trademark Amendments Act of 1999

is explained as follows:

“Section two provides holders of famous marks

with a right to oppose or seek cancellation of a

mark that would cause dilution as provided in

the Dilution Act. In 1996, the ‘Federal Trade-

mark Dilution Act of 1995’ became effective. Pub.

L. No. 104 98, 109 Stat. 985 (1996), Lanham Act

43(c), 15 U.S.C. 1125(c).”

The legislative history clearly demonstrates that

Section 2 of the Trademark Amendments Act was meant

only to clarify the Federal Trademark Dilution Act of 1995,

Section 43(c) of the Lanham Act, by expressly making it a

basis for cancellation and opposition proceedings. There is

no indication anywhere in the legislative history that the

Trademark Amendments Act of 1999 was intended to

expand the jurisdiction of the TTAB beyond federal issues.

There is simply no reasonable basis for Enterprise’s

position.

In short, the Federal Circuit correctly decided that

state dilution law does not provide a basis for opposition or

cancellation of a federal registration.

III. Enterprise’s Attempts To Analogize The FTDA

To Trademark Common Law Are Misguided

And Would Wreak Havoc On Trademark Ju-

risprudence If Followed.

Enterprise attacks the Federal Circuit’s construction

of the word “begins” in the FTDA by attempting to draw

an analogy to the common law of trademarks. Enterprise

argues that traditional common law trademark rights are

territorial and that rights under the FTDA should simi-

larly be territorial. Under Enterprise’s theory, once Enter-

prise’s mark becomes “famous,” the acquisition of such

fame should freeze even senior users of similar marks

from any expansion into new territories.

To begin, Enterprise’s reliance on the common law of

trademarks for analogy is totally misplaced. The FTDA is

a statutory creature which should be interpreted consis-

tent with its plain language and common sense. As ex-

plained by this Court:

“Traditional trademark infringement law is a

part of the broader law of unfair competition, see

Hanover Star Milling Co. v. Metcalf, 240 U.S.

403, 413, 60 L.Ed. 713, 36 S.Ct. 357, 1916 Dec.

Comm’r Pat. 265 (1916), that has its sources in

English common law, and was largely codified in

the Trademark Act of 1946 (Lanham Act). See B.

Pattishall, D. Hilliard, & J. Welch, Trademarks

and Unfair Competition 2 (4th ed. 2000) (“The

United States took the [trademark and unfair

competition] law of England as its own”). That

law broadly prohibits uses of trademarks, trade

names, and trade dress that are likely to cause

confusion about the source of a product or ser-

vice. See 15 U.S.C. §§ 1114, 1125(a)(1)(A). In-

fringement law protects consumers from being

misled by the use of infringing marks and also

protects producers from unfair practices by an

‘imitating competitor.’ Qualitex Co. v. Jacobson

Products Co., 514 U.S. 159, 163-164, 131 L.Ed.2d

248, 115 S.Ct. 1300 (1995).

Unlike traditional infringement law, the prohibi-

tions against trademark dilution are not the

product of common-law development, and are not

motivated by an interest in protecting consum-

ers.

Moseley, 537 U.S. at 428-429, 123 S.Ct. at 1122.

The plain language of the statute provides that the

owner of the allegedly famous mark is entitled to relief

only if the use by the other “begins after the mark has

become famous.” The statute does not say “begins or

alters” or “begins or expands” or “begins or changes.” It

just says “begins.”

The interpretation by the Federal Circuit of this plain

language to mean that any use prior to acquisition of fame

is sufficient to preclude relief is an interpretation that is

consistent with public policy and common sense. This

interpretation means that when a small, regional business

adopts and uses a mark, its ability to continue and expand

its use will be subject only to rights that truly existed prior

to such adoption and use.

To construe the FTDA as urged by Enterprise would

turn the FTDA into the “Big Company Act.” Any company

with the resources to sufficiently advertise and promote a

designation so as to create an argument that the mark is

famous could thereafter go after smaller regional competi-

tors and limit the smaller competitors’ ability to grow their

use, regardless of who was the first to use the marks at

issue and regardless of when the big company’s mark

allegedly became famous. All that would matter under

Enterprise’s theory is that the small company is trying to

expand into a new territory after the big company’s mark

allegedly became famous.

As evidenced by the present Petition, Enterprise’s

theory would also provide no end to litigation. Under

Enterprise’s theory, if Enterprise is unable to prove fame

in 2003, it would not be precluded from either bringing

suit or bringing an opposition or cancellation proceeding in

2004, or 2005, or 2006, or 2007, etc. So long as the smaller

competitor, Advantage, was trying to expand into new

territory, such expansion would be a new “beginning”

(under Enterprise’s theory) that would entitle Enterprise

to bring a new suit against Advantage. Common sense

mandates that the FTDA cannot be construed as urged by

Enterprise.

The construction of 15 U.S.C. § 1125(c) by the Federal

Circuit is consistent with the plain meaning of the statute

and is the only possible construction that is consistent

with logic and reason. This should end all inquiry. See

Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843,

846, 136 L.Ed.2d 808, 813 (1997) (“Our inquiry must cease

if the statutory language is unambiguous and the ‘statu-

tory scheme is coherent and consistent.’”) (quoting U.S. v.

Ron Pair Enters., Inc., 489 U.S. 235, 240, 109 S.Ct. 1026,

103 L.Ed.2d 290 (1989)). The Federal Circuit correctly

construed the FTDA and the Petition should be denied.

IV. The Present Action Is Illustrative Of The

Potential For Endless, Successive Litigation

That Enterprise’s Theories Would Engender;

The Federal Circuit Properly Rejected Such

Theories

After a full trial on the merits and a full appeal,

Enterprise was denied all relief under the FTDA. In

affirming the Western District, the Fifth Circuit stated:

“To prevail on its federal dilution claim, Enter-

prise must prove that its slogan is ‘famous and

distinctive; that Advantage adopted its mark

after Enterprise’s had become ‘famous and dis-

tinctive;’ and that Advantage caused dilution of

Enterprise’s mark.”

Advantage Rent-A-Car, 238 F.3d at 380 (emphasis added);

Respondent’s Appendix at p. 27. |

As discussed above, this construction of the FTDA is

consistent with the language and the corresponding plain

meaning of the statute. Enterprise was unable to prove

that its slogan was sufficiently famous, even within the

car rental market, to invoke the FTDA.

Consistent with the rulings of the Western District

and the Fifth Circuit, the TTAB dismissed Enterprise’s

opposition on the grounds of res judicata. Yet Enterprise

continues to relitigate the fame of its mark long after

Advantage began use of its mark and after the law of the

case had been established against Enterprise.

As part of its effort to relitigate its claims, Enterprise

resurrects and presents as an alleged issue of first impres-

sion the argument that Advantage’s allegedly geographically

limited use of a trademark without a trademark registration

can only be a defense to a claim under the FTDA for a

correspondingly geographically limited area. Enterprise’s

argument is essentially that each use in a new geographic

area is a new “beginning” subject to a new right for a plain-

tiff to assert a new action under the FTDA. But Enterprise

previously submitted the identical argument to the Western

District in the prior proceedings in Defendant’s Opposition to

Plaintiff's Motion for Partial Summary Judgment on Defen-

dant’s Federal Dilution Counterclaim. In particular, Enter-

prise argued for its construction of the word “begins” the

following:

“Rights under the Lanham Act are territorial for

non-registered marks; Advantage’s argument

that the FTDA should be construed to preclude

enforcement due to Advantage’s prior, limited use

is contrary to the trademark policy under the

Lanham Act and is contrary to trademark prece-

dent...

Advantage badly misconstrues the plain language

of the FTDA in arguing that so long as its use of

“We'll Even Pick You Up” began somewhere prior

to Enterprise’s mark becoming famous, Advantage

should be allowed to later expand its use at will.

Advantage Memo at 9-10. First, the statute does

not say what Advantage contends. Second, this in-

terpretation is inconsistent with the territorial re-

strictions on non-federally registered trademarks

when confronted by a subsequently obtained feder-

ally registered trademark. Advantage cites no

cases to support its position .-. Enterprise seeks

an injunction against Advantage’s use in commerce

of ‘We'll Even Pick You Up’ for all area or states

where its use began after Enterprise’s federally

registered slogans became famous. That is exactly

what the statute states.”

Opposition to Motion for Summary Judgment at p. 18.

In the prior proceedings, the Western District with-

held ruling on Advantage’s motion for summary judgment

pending trial. After a full trial on the merits, the district

court found that Enterprise’s mark was not famous under

the FTDA and denied all relief without limitation as to

territory. The clear implication of the Western District’s

ruling is that the Western District accepted that “begins”

in 15 U.S.C. §1125(c) means just that — begins anywhere —

and rejected Enterprise’s arguments regarding limited

geographic usage. Enterprise did not appeal this implicit

ruling by the Western District or otherwise seek clarifica-

tion of the Western District’s denial of all relief.

On appeal, the Fifth Circuit affirmed the district

court’s holding that “We’ll Pick You Up” is not sufficiently

famous for the FTDA, but remanded for a determination of

fame only under Texas and Louisiana law. In doing so, the

Fifth Circuit reiterated that “begins” means just that, by

explaining that Enterprise must prove “that Advantage

adopted its mark after Enterprise’s had become ‘famous

and distinctive.’” Advantage Rent-A-Car, 238 F.3d at 380

(emphasis added). Enterprise did not file a Petition for

Writ of Certiorari from the Fifth Circuit’s decision. Hence,

all issues relating to the FTDA became final. The matter

was raised and foreclosed. Enterprise should now be

barred by res judicata from again presenting their argu-

ments regarding the meaning of “begins.”

As the TTAB noted in dismissing Enterprise’s opposi-

tion on the grounds of res judicata, “[iJn opposing the

motion for summary judgment, opposer takes issue with

the conclusions of the district court and the Fifth Circuit.

If opposer disagreed with the outcome in the district court

and the Fifth Circuit, the Board is not the appropriate

forum to obtain relief. Opposer may not collaterally attack

the judicial proceedings in this forum.” Petitioner’s Appen-

dix at p. 38. Enterprise’s assertion that the dilution claims

in the current case are based on a different set of transac-

tional facts than its claims in the prior litigation is nothing

more than an improper attempt to relitigate what it has

already lost. This case is a classic example of the mischief

that Enterprise’s legal theories would yield.

V. Enterprise’s Criticism Of The Federal Cir-

cuit’s Reference To The Concurrent Use Pro-

visions Of The Lanham Act Demonstrates

Enterprise’s Misunderstanding Of Trademark

Law And The Lanham Act.

Enterprise criticizes the Federal Circuit’s reference to

the concurrent use provisions of the Lanham Act, stating

that “[nJeither party raised that issue.... ” Petition for

Writ of Certiorari at p. 19. Apparently, Enterprise is unaware

that the concurrent use provisions are the Lanham Act

codification of the common law doctrines set forth in Hanover

Star Milling, 240 U.S. 403 (1916) and its progeny. Hence,

Enterprise, itself, implicitly raised the concurrent use

provisions by trying to draw an analogy to Hanover and the

“nearly a century” of common law. The Federal Circuit

therefore properly looked to concurrent use proceedings as a

basis to clarify Enterprise’s arguments:

“While Enterprise’s argument is less than clear,

apparently Enterprise contends that it should be

treated like a junior user that has obtained

registration, entitling it to priority of use

throughout the United States, except where

Advantage was the prior user. It is, therefore,

supposedly entitled to defeat a nationwide ©

registration of the mark by Advantage. It is

clear that Congress rejected this approach.

There is no provision in the Lanham Act to

allow for concurrent use registration in the

dilution context.”

Petitioner’s Appendix at p. 21.

The Federal Circuit then properly noted that the

concurrent use provisions did not contemplate concurrent

use registrations in the dilution context. Petitioner’s

Appendix at p. 21. Instead, the section of the Lanham Act

that addresses concurrent use registrations was amended

consistent with the construction of the Lanham Act given

by the Federal Circuit. Petitioner’s Appendix at mp. 21-22.

15 U.S.C. § 1052(f) (2000). The Federal Circuit properly

addressed and rejected Enterprise’s arguments.

CONCLUSION

The decision below is in accord with the intent of the

Lanham Act, with the plain language of the FTDA and the

Lanham Act, and with public policy. There is no issue of

significant public moment for this Court to address. The

Petition should be denied.

Respectfully submitted,

DEBORA B. ALSUP

Counsel of Record

WILLIAM D. RAMAN

THOMPSON & KNIGHT, L.L.P.

98 San Jacinto Boulevard

Suite 1900

Austin, Texas 78701

(512) 469-6100

Counsel for Respondent

Advantage Rent-A-Car, Inc.

App. 1

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

ADVANTAGE RENT-A-CAR,

INC.,

Plaintiff,

V. ; CASE NO. A98CA 372 SS

ENTERPRISE RENT-A-CAR ;

COMPANY,

Defendant.

PARTIAL CONSENT JUDGMENT

(Filed May 24, 1999)

The parties hereto having agreed to the entry of the

following findings of fact and conclusions of law finally

disposing of the three counts asserted by Advantage

Rent-A-Car, Inc. (“Advantage”) and the first four and

seventh counterclaims asserted by Enterprise, Rent-A-

Car Company (“Enterprise”), it is hereby ORDERED,

ADJUDGED and DECREED that:

1. The use by Enterprise of “PICK ENTERPRISE.

WE’LL PICK YOU UP.”; PICK THE COMPANY THAT

PICKS YOU UP; and WE’LL PICK YOU UP in connec-

tion with the advertising to date and/or promotion to

date of the rental and leasing of vehicles and of the

arranging for the rental and leasing of vehicles is not

likely to cause confusion, or to cause mistake, or to

deceive as to the affiliation, connection, or association of

Enterprise with Advantage or as to the origin, sponsor-

ship or approval of Enterprise’s goods, services or

App. 2

commercial activities by Advantage; and does not consti-

tute use in commerce of a false designation of origin or

false or misleading representation of fact.

2. The use by Advantage of WE’LL EVEN PICK

YOU UP in connection with the advertising to date

and/or promotion to date of the rental and leasing of

vehicles and of the arranging for the rental and leasing

of vehicles is not likely to cause confusion, or to cause

mistake, or to deceive as to the affiliation, connection, or

association of Advantage with Enterprise or as to the

origin, sponsorship or approval of Advantage’s goods,

services or commercial activities by Enterprise; does not

constitute use in commerce of a false designation of

origin or false or misleading representation of fact; and

does not constitute use in commerce of a reproduction,

counterfeit, copy of colorable imitation of any of Enter-

prise’s registered slogans in connection with the sale,

offering for sale, distribution, or advertising of the

rental and leasing of vehicles or of the arranging for

rental and leasing of vehicles which is likely to cause

confusion, or to cause mistake, or to deceive.

3. Factors taken into account in reaching the

conclusion of paragraphs 1 and 2 include: the adver-

tisements of each of the parties prominently feature the

house mark of the respective party and do not use other

marks or indicia of the other party or that refers to the

other party. It is also not.J that both of the parties

feature a person being picked up in order to emphasize

the respective double entendre of the respective slogans

of the parties, but this additional common feature does

not create a likelihood of confusion in the advertising to

date.

App. 3

4. Subject only to the possibility of a violation of

the Federal Trademark Dilution Act, 15 U.S.C.

§ 1125(c), if properly applicable, or the possibility of a

violation of state dilution law, if properly applicable, the

use by Advantage of WE’LL EVEN PICK YOU UP in

connection with the advertising and/or promotion of the

rental and leasing of vehicles and of the arranging for

the rental and leasing of vehicles in its advertising to

date does not violate any rights of Enterprise in its

slogans, if any, under the Lanham Act or under the law

of any state or territory of the United States that is

based on likelihood of confusion.

5. The use by Enterprise of WE’LL PICK YOU UP;

“PICK ENTERPRISE. WE’LL PICK YOU UP.”; and

PICK THE COMPANY THAT PICKS YOU UP in con-

nection with the advertising and/or promotion of the

rental and leasing of vehicles and of arranging for the

rental and leasing of vehicles in its advertising to date

does not violate any rights of Advantage in its slogan, if

any, under the Lanham Act or under the law of any

state or territory of the United States that is based on

likelihood of confusion.

6. This ruling is based upon the use to date by the

parties of their respective advertisements and does not

foreclose actions based on future use of the slogans in

combination with or alteration of features, wherein such

combination or alteration of features creates a likelihood

of confusion.

7. Advantage’s “Complaint for Unfair Competition

And Trademark Cancellation” is hereby dismissed with

prejudice.

App. 4

8. Enterprise’s First, Second, Third, Fourth and

Seventh Counterclaims are hereby dismissed with

prejudice.

9. Jurisdiction and venue in this District are

proper for Enterprise’s Fifth and Sixth Counterclaims

relating to dilution, and these counterclaims remain in

the case for further consideration and are not dismissed

by this Partial Consent Judgment.

10. Each of the parties pursued its claims based on

likelihood of confusion in good faith. The pursuit of

these claims by either party does not render this an

exceptional case under 15 U.S.C. § 1117. Each party.

shall therefore bear its own attorney fees.

SIGNED and ENTERED this 24th day of May, 1999.

/s/ Sam Sparks

UNITED STATES

DISTRICT JUDGE

AGREED:

Advantage Rent-A-Car, Inc. Enterprise Rent-A-Car

Company

/s/ Pike Powers

Rudolph A. Telscher, Jr.

Christopher M. Goff

Edward J. Hejlek

SENNINGER, POWERS,

LEAVITT & ROEDEL

One Metropolitan Square,

/s/ William D. Raman

William D. Raman

State Bar No.16492700

ARNOLD, WHITE &

DURKEE

1900 One American Center

600 Congress Avenue

Austin, Texas 78701-3248

(512) 418-3000 Telephone

(512) 474-7577 Facsimile

16th Floor

St. Louis, Missouri 63102

(314) 231-5400 Telephone

(314) 231-3432 Facsimile

App. 5

John C. Cain

State Bar No. 00783778

ARNOLD, WHITE &

DURKEE

750 Bering Drive

Houston, Texas 77057-2198

(713) 787-1400 Telephone

(713) 787-1440 Facsimile

Attorneys for Advantage

Pike Powers, Jr.

State Bar No. 16220000

Brian S. Greig

State Bar No. 08439800

FULBRIGHT & JAWORSKI,

LLP

600 Congress Avenue,

Suite 2400

Austin, Texas 78701-3271

(512) 474-5201 Telephone

(512) 320-4598 Facsimile

Attorneys for Enterprise

App. 6

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

ADVANTAGE RENT-A-CAR, §

INC. §

§ NO. A 98 CA 372 SS

vs. §

ENTERPRISE RENT-A-CAR §

COMPANY : §

FINDINGS OF FACT and CONCLUSIONS OF LAW

(Filed Oct. 25, 1999)

BE IT REMEMBERED that on the 21st day of July

1999 the Court called the above-styled cause for trial, and

the parties appeared by designated representative and by

representation of counsel. All parties announced ready for

trial, and trial proceeded before the Court. Enterprise

Rent-A-Car Company (“Enterprise”) claims that Advan-

tage Rent-A Car, Inc. (“Advantage”) is diluting Enter-

prise’s trademark in violation of the Federal Trademark

Dilution Act, 15 U.S.C. § 1125(c), as well as the anti-

dilution statutes of Texas, Arkansas, New Mexico, and

Louisiana. Enterprise seeks injunctive relief as well as

compensatory damages and attorneys fees. Having consid-

ered all of the evidence presented at trial, the oral argu-

ments and written briefs of counsel, and the applicable

law, the Court concludes Enterprise is not entitled to relief

because the slogan at issue is not sufficiently famous or

distinctive to receive protection under the Federal Trade-

mark Dilution Act. Accordingly, the Court enters the

following findings and order.

App. 7

Findings of Fact.

Advantage is a Texas corporation with its principal

place of business in San Antonio, Texas. Advantage

currently has business operations in Texas, New Mexico,

Arizona, California, Nevada, Washington, Utah, Colorado,

and Oklahoma. See Defendant’s Exhibit 131. Enterprise is

a Missouri corporation with its principal place of business

in St. Louis, Missouri. Enterprise has business operations

in all fifty states. Both companies serve the rental car

markets. This market is divided into two segments — one

that caters primarily to business and leisure travelers and

one that provides replacement cars to drivers whose cars

are in the shop for repair. Historically, Advantage focused

primarily on the business and leisure traveler market, and

Enterprise focused on the replacement market. Currently,

both companies are active in both segments of the rental

car market.

Most companies in the replacement market provide

some type of pick-up service to their customers and use

various slogans or phrases to connote this service. Since

1965, Advantage has used over thirty different phrases to

inform consumers about its pick-up service, including

“We'd Love To Pick You Up,” “They Pick You Up At The

Garage,” and “We'll Pick You Up From The Garage or Car

Dealer And Drop You Off At The Nearest Advantage

Location.”

In 1990, Advantage produced a television commercial

which depicted an actor holding onto a steering wheel.’ A

* Throughout the trial, this commercial was referred to as “Steer-

ing Wheel.”

App. 8

voice-over discussed the various reasons the actor might

need to obtain a rental car, such as an accident or for a

special occasion. At the end of the commercial, a much

taller actor entered the frame and lifted the “driving” actor

off the ground and into his arms, while the voice-over

stated “We’ll even pick you up.” See Plaintiffs Exhibits

148 (text of commercial), 205 (videotape). This commercial

aired on the Spurs Network at least 24 times in 1992, and

at least 12 times in 1993, at least 17 times in 1994, and at

least 49 times by the end of the professional basketball

season in May 1995. From August 1997 to April 1998, the

commercial aired 289 times on Fox Sports Southwest. This

commercial is the only form of advertising in which Ad-

vantage used the phrase “We'll Even Pick You Up.” Al-

though Advantage has_ received’ several federal

registrations for various slogans, Advantage did not file an

application to register the phrase “We'll Even Pick You

Up” until May 3, 1999. See Plaintiffs Exhibit 174.

Advantage has produced a total of four television

commercials. The other three commercials include a car or

other feature that would indicate the relative age of the

commercial. Because the Steering Wheel commercial does

not depict a specific make or model of vehicle, it is argua-

bly Advantage’s only “timeless” commercial. Advantage

estimates it has spent over one million dollars on advertis-

ing that includes the slogan “We'll Even Pick You Up.”

Meanwhile, Enterprise developed the phrases “Pick

The Company That Picks You Up” and “Pick Enterprise,

We'll Pick You Up” which it began using in advertising on

App. 9

June 22, 1994.” See Plaintiffs Exhibit 17, at 2. Enterprise

began using “We’ll Pick You Up” on August 17, 1995. See

Plaintiffs Exhibit 16, at 2. Enterprise obtained federal

service mark registrations for each of these slogans.’ See

Plaintiffs Exhibits 16 & 17. Enterprise has been operating

nationally since the mid-1980s and has continuously

advertised nationwide since June 1994. Enterprise esti-

mates it has spent over $130 million on advertising that

includes the slogan, “We'll Pick You Up.” See Plaintiffs

Exhibits, 1, 168. Enterprise has used this slogan in all of

the media forms in which Enterprise advertises including

print ads, yellow pages, radio ads, and commercials shown

on prime time national television on major broadcast

networks and cable stations as well as during high-profile

sporting events such as the Final Four tournament. See

Plaintiffs Exhibits 5, 6, 168. According to Steven Smith,

the director of advertising, the bulk of Enterprise’s adver-

tising dollars are spent on television ads because it is the

most powerful medium and 40% of the budget is spent on

yellow pages advertising. Approximately 75% of Enter-

prise’s advertising includes the phrase “We'll Pick You

Up.” The phrase is not used on billboards or on many of

the items with logos, such as caps and t-shirts. See Defen-

dant’s Exhibit 143.

* Enterprises’ director of advertising testified that Enterprise first

used the phrase “We'll Pick You Up” in 1989 in a commercial titled

“Keys,” see Plaintiffs Exhibit 201la, and again in 1993 in a commercial

titled “Special Delivery Service,” see Plaintiffs Exhibit 201b, but that

the phrase was not used as the company slogan until September 1994.

See Plaintiff's Exhibit 203b.

* US. Registration Nos. 1,953,083; 1,948,828, and 2,085,472 respec-

tively.

App. 10

In early 1995, Advantage became aware of Enter-

prise’s yellow page advertisement using the slogan “Pick

Enterprise. We’ll Pick You Up.” Advantage became aware

of Enterprise’s television advertising using the slogan

“We'll Pick You Up” in late 1996 or early 1997. In January

1997, Advantage discussed this use by Enterprise at an

executive meeting, but Advantage did not take any action

at that time. .

In late 1997, Enterprise became aware of Advantage’s

use of the slogan “We'll Even Pick You Up” and sent a

cease and desist letter to Advantage on March 30, 1998.*

After exchanging letters with Enterprise, Advantage filed

a complaint on June 16, 1998 seeking money damages and

equitable relief against Enterprise for false designation of

origin under 15 U.S.C. § 1125(a), common law unfair

competition, and cancellation of the trademark registra-

tion. See Complaint [#1], at 1. In its answer, Enterprise

asserted four affirmative defenses. and seven counter-

claims. See Corrected First Amended Answer, Affirmative

Defenses, and Counterclaims [#32]. On May 24, 1999, the

undersigned entered a Partial Consent Judgment [#51]

which disposed of Advantage’s three counts for relief and

five of Enterprise’s counterclaims. The parties stipulated

that the concurrent use of the disputed slogans was not

likely to cause confusion, mistake, or deception as to the

origin of the goods and services, in part because each party

prominently displayed its housemark in connection with

the slogans. On May 26, 1999, Enterprise was granted

* Since at least April 1998, Enterprise has regularly attempted to

prohibit use of the phrase “We'll Pick You Up” by other rental car

companies. See Plaintiffs Exhibits 34-39, 41-45.

App. 11

leave to amend its answer and assert counterclaims under

the anti-dilution statues of New Mexico, Arkansas, and

Louisiana.

At trial, Enterprise presented a report prepared by

Dr. Daniel J. Howard, a professor of marketing at South-

ern Methodist University. Dr. Howard has a Ph.D. in

marketing from Ohio State University. See Plaintiffs

Exhibit 48. Dr. Howard has conducted more than two

hundred previous surveys and has conducted nine other

surveys for litigation in which he was certified as an

expert. Using five interviewers during January and

February 1999, Dr. Howard conducted a telephonic survey

of 1210 respondents across four markets. See Plaintiff's

Exhibit 50, at 1. The Austin/San Marcos metropolitan

statistical area was selected because it was exposed to

Advantage commercials containing variations of the “We'll.

Pick You Up” phrase and Advantage rented cars in the

area. The Tulsa, Oklahoma and New Orleans, Louisiana

metropolitan statistical areas were selected because both

received broadcasts of Advantage’s commercials, but

Advantage did not rent cars in the area. The Phoe-

nix/Mesa metropolitan statistical area was selected be-

cause Advantage commercials containing a variation of the

“We'll Pick You Up” phrase were not broadcast in the area,

but Advantage did offer rental services. See Plaintiffs

Exhibit 50, at 6. Respondents were randomly selected from

these areas who were between 25 and 54 years of age with

at least some college education. See Plaintiffs Exhibit 50,

at 7. These parameters were provided by Enterprise as

their consumer base, and Dr. Howard found them to be

supported by the MRI Doublebase, which is a highly

regarded research corporation whose data would be relied

upon by experts in the field. See Plaintiffs Exhibit 74. The

App. 12

names of potential respondents were provided by Ameri-

can Business Lists, a company that Dr. Howard had found

to be reliable in the past.

When asked “Which of the following car rental com-

panies have you heard of,” 96.9% of the respondents were

aware of Enterprise and only 75.8% of the respondents

were aware of Advantage. See Plaintiffs Exhibit 50, at 14-

15. When asked “Do you remember ever hearing or seeing

the phrase ‘We'll pick you up’ used in connection with car

rental advertising,” 65.5% responded affirmatively. These

respondents were then asked which car rental company or

companies, if any, they associated with the phrase “We'll

pick you up,” and 49.6% of the total sample indicated

Enterprise, while only 8% of the total sample indicated

Advantage. See Plaintiff's Exhibit 50, at 16-17.

Conclusions of Law

Trademarks have traditionally been offered less

protection than other types of intellectual property. While

copyrights and patents have been recognized as the

property of their creators, trademarks have traditionally

been protected from infringing use only to the extent

necessary to protect consumers from deception. See Bonito

Boats, Inc. v. Thunder Craft Boats, Inc., 109 S. Ct. 971,

981 (1989) (“[The law of unfair competition]’s general

concern is with protecting consumers from confusion as to

source. While that concern may result in the creation of

‘quasi-property rights’ in communicative symbols, the

focus is on the protection of consumers, not the protection

of producers as an incentive to product innovation.”); see

also Robert N. Klieger, Trademark Dilution: The Whittling

Away of the Rational Basis for Trademark Protection, 58

App. 13

U.PiTT.L.REV. 789 (1997) (arguing that the traditional

focus on consumer confusion has enabled trademarks to

promote market efficiency and consumer welfare and

criticizing dilution protection as creating trademark rights

in gross with anticompetitive results).

For nearly fifty years, various states have enacted

antidilution statutes, which break away from the con-

sumer protection model of trademark rights. See id. at

n.18 (listing statutes). In 1996, Congress enacted a federal

antidilution statute. See Federal Trademark Dilution Act

of 1995, Pub. L. No. 104-98, 109 Stat. 985 (codified at 15

U.S.C. §§ 1125(c), 1127); see also J. Thomas McCarthy,

The 1996 Federal Anti-Dilution Statute, 16 CARDOZO ARTS

& ENTERPRISE. L.J. 587, 587 (1998) (describing the statute

as “radical and fundamental break with prior federal

trademark law”). Dilution occurs when a second party

lessens the capacity of a famous mark to identify and

distinguish goods or services, regardless of whether the

second party competes with the owner of the famous mark

or the likelihood of confusion, mistake, or deception. See 15

U.S.C. § 1127; 141 Cong. Rec. S19306, S19310 (daily ed.

Dec. 29, 1995) (statement of Sen. Hatch) giving as exam-

ples of actionable dilution the use of “DuPont shoes, Buick

aspirin, and Kodak pianos”). The underlying rationale for

a dilution cause of action is the idea that a “gradual

attenuation or whittling away of the value of a trademark,

resulting from use by another, constitutes an invasion of

the senior user’ property right in its mark and gives rise

to an independent commercial tort.” 4 J. THOMAS MCCARTHY,

McCARTHY ON TRADEMARKS AND UNFAIR COMPETITION

(“MCCARTHY ON TRADEMARKS”), § 24:70 (4th ed. 1999).

The mental association that must be made by con-

sumers before dilution can occur is somewhat subtle and

App 14

evasive. Consumers must make some mental connection

between the marks used by the plaintiff and the defen-

dant. “The connection, however, is not that which serves

as the basis of liability for trademark infringement — the

mistaken belief that the plaintiff is in some way associated

with defendant’s goods — but rather is the accurate recog-

nition that a mark associated with the plaintiff is now also

in use as an identifying symbol by another.” RESTATEMENT

(THIRD) OF UNFAIR COMPETITION § 25, comment f (1905).

Thus, the appropriate mental association to support a

dilution claim must be somewhat less than the type of

strong mental connection that would give rise to a likeli-

hood of confusion, but somewhat more than no connection

at all. See Fruit of Loom Inc. v. Girouard, 994 F.2d 1359

(9th Cir. 1993) (citing MCCARTHY ON TRADEMARKS § 24:70).

To succeed on its claim under the Federal Trademark

Dilution Act, Enterprise must prove (1) its mark was

“famous,” (2) Advantage adopted its mark after Enter-

prise’s mark has become famous, and (3) Advantage’s

mark diluted Enterprise’s mark by blurring the distinct-

iveness of the mark or by tarnishing or disparaging it. See

15 U.S.C. § 1125(c). The statute contains a laundry list of

non-exclusive factors the Court may use to determine

whether a mark is “distinctive and famous,” including

(A) the degree of inherent or acquired distinctive-

ness of the mark;

(B) the duration and extent of use of the mark in

connection with the goods or services with which the

mark is used;

licity of the mark;

App. 15

(D) the geographical extent of the trading area in

which the mark is used;

(E) the channels of trade for the goods or services

with which the mark is used;

(F) the degree of recognition of the mark in the trad-

ing areas and channels of trade used by the mark’s

owner and the person against whom the injunction is

sought;

(G) the nature and extent of use of the same or simi-

lar marks by third parties; and

(H) whether the mark was registered under the Act

of March 3, 1881, or the Act of February 20, 1905, or

on the principal register.

If successful, Enterprise may be given injunctive relief

“subject to principles of equity and upon such terms as the

court deems reasonable.” See 15 U.S.C. § 1125(c)(1). If the

owner of the famous mark proves the dilutor acted will-

fully with the intent to “trade on the owner’s reputation or

to cause dilution of the famous mark,” the owner may also

recover the dilutor’s profits, any damages suffered by the

owner, and costs of the suit and in exceptional cases,

reasonable attorney fees. See 15 U.S.C. § 1125(c)(2),

1117(a); see also Rolex Watch USA, Inc. v. Meece, 158 F.3d

816, 824 (5th Cir. 1998) (“[TJhe exceptional case is one in

which the defendant’s trademark infringement can be

characterized as malicious, fraudulent, deliberate, or

willful, and . . . it has been interpreted by courts to require

a showing of a high degree of culpability.”), cert. denied,

119 S. Ct. 1808 (1999). The Court can also order all offend-

ing materials be destroyed. See 15 U.S.C. § 1118.

This is not a well-developed or clear area of the law.

See Robert N. Klieger, Trademark Dilution: The Whittling

App. 16

Away of the Rational Basis for Trademark Protection, 58

U. Pitt. L. REv. 789 (1997) (“Dilution is an amorphous

concept, and no antidilution statute addresses exactly

what dilution is or how it can be proven.”). The definition

of dilution and fame remain nebulous concepts and the

meaning of § 1125(c), as well as its individual elements,

have been debated among the circuits. See Ringling Bros.-

Barnum & Bailey Combined Shows, Inc. v. Utah Division

of Travel Development, 170 F.3d 449, 451 (4th Cir.) (la-

menting the “dauntingly elusive concept” of federal trade-

mark dilution), cert. denied, 1999 WL 412763 (1999). The

First Circuit has reasoned that dilution protection is more

readily available for noncompeting products and should

not be a fallback for competing products that fail to prove

infringement. See J.P. Lund Trading Co. v. Kohler Co., 163

F.3d 27, 48 (1st Cir. 1998). The Fifth Circuit has empha-

sized that dilution protection is only available for “strong,

well-recognized marks.” Exxon Corp. v. Oxxford Clothes,

Inc., 109 F.3d 1070, 1081 n.14 (5th Cir.) (citing Accuride

Int'l Inc. v. Accuride Corp., 871 F.2d 1531 (9th Cir. 1989),

which found the tradename “Accuride” not sufficiently

distinctive to merit protection under California’s antidilu-

tion statute), cert. denied, 116 F.3d 1479 (1997); see also

Sykes Laboratory, Inc. v. Kalvin, 610 F.Supp. 849, 858

(C.D.Cal.1985) (“The dilution doctrine is only available to

protect distinctive marks as exemplified by such famous

names as ‘Tiffany,’ ‘Polaroid,’ ‘Rolls Royce,’ and ‘Kodak’ ”).

The degree of similarity between the marks must be

greater than that which is required to show a likelihood of

confusion, otherwise a dilution cause of action would

subsume the concept of infringement. See Jet, Inc. uv.

Sewage Aeration Sys., 165 F.3d 419, 424 (6th Cir. 1999)

(citing MCCARTHY ON TRADEMARKS as explaining that state

App. 17

dilution statutes generally require the marks to be “virtu-

ally identical”).

Although the federal dilution act and the New Mexico

anti-dilution statute explicitly require a mark to be “fa-

mous,” the other state anti-dilution acts do not. However,

the Court has determined that fame is an element of each

of Enterprise’s causes of action. See MCCARTHY ON TRADE-

MARKS § 24:108 (“Without such a requirement, an anti-

dilution statute becomes a rogue law that turns every

trademark, no matter how weak, into an anti-competitive

weapon.”); Exxon Corp., 109 F.3d at 1081 n.14 (“I]t is

clear that anti-dilution statutes ... are designed to protect

only strong, well-recognized marks.”).

Whether a mark is “famous” is a fact intensive issue

that must be decided on a case by case basis. Different

commentators have offered various tests for determining

fame. According to the Restatement, only marks that

retain their strength and distinction when considered

outside the context of the goods or services with which the

mark is typically used are famous enough to receive

protection under a dilution theory. RESTATEMENT (THIRD)

OF UNFAIR COMPETITION § 25, comment e (1995) (“A mark

that evokes an association with a specific source only

when used in connection with the particular goods or

services that it identifies is ordinarily not sufficiently

distinctive to be protected against dilution.”), J. Thomas

McCarthy, a leading authority on trademark law, has

opined that a mark is not “famous” unless it is known to

more than fifty percent of the defendant’s potential cus-

tomers. MCCARTHY ON TRADEMARKS § 24:92 (borrowing

from trademark law the concept that a designation can not

be a trademark unless at least a majority of the customer

group so perceives it).

App. 18

Examples of marks that courts have found to be

sufficiently famous to receive protection under the Federal

Trademark Dilution Act include “Budweiser” beer,

“Candyland” children’s game, “Don’t Leave Home Without

Us,” “The Greatest Show On Earth,” “Panavision” movie

and television cameras, “Porsche” automobiles, “Toys ‘R

Us” toy stores, “Nike” and “Just Do It,” and the “Hard

Rock Cafe” logo. See Anheuser-Bush, Inc. v. Andy’s

Sportswear, Inc., 40 U.S.P.Q.2d 1542 (N.D. Cal 1996)

(granting a TRO against the use of “Buttweiser” on t-

shirts); Hasbro, Inc. v. Internet Entertainment Group, Ltd..,

40 U.S.P.Q.2d 1479 (W.D. Wash. 1996) (finding dilution by

tarnishment by a web site showing sexually explicit

pictures); American Express Co. v. CFK, Inc., 947 F. Supp.

310 (E.D. Mich. 1996) (declining to grant summary judg-

ment against “Don’t Leave Home Without Me Pocket

Address Book”); Ringling Bros.-Barnum & Bailey Com-

bined Shows, Inc. v. B.E. Windows Corp., 937 F. Supp. 204

(S.D.N.Y. 1996) (finding no dilution by “The Greatest Bar

on Earth” on other grounds); Panavision Intl L.P. uv.

Toeppen, 945 F. Supp. 1296 (C.D. Cal. 1996) (finding

dilution by cybersquatter’s use as a domain name), affd,

141 F.3d 1316 (9th Cir. 1998); Porsche Cars North America

Inc. v. Manny’s Porshop, Inc., 972 F. Supp. 1128 (N.D. IIl.

1997) (finding infringement and dilution by independent

repairers “Porshop”); Toys “R” Us, Inc. v. Akkaoui, 40

U.S.P.Q.2d 1836 (N.D. Cal. 1996) (finding dilution by

tarnishment by use of “adultsrus.com” for web site offering

adult sexual products); Nike, Inc. v. “Just Did It” Enters.,

799 F.Supp. 894, 899 (N.D. Ill. 1992) (describing these

marks as famous); Hard Rock Cafe Licensing Corp. v.

Pacific Graphics, Inc., 776 F.Supp. 1454, 1461 (W.D.

Wash. 1991) (granting an injunction), rev’d on other

grounds, 6 F.3d 1225 (7th Cir. 1993).

App. 19

The Court is unpersuaded that the phrase “We'll Pick

You Up” has the type or amount of fame ascribed to these

types of marks. See [.P. Lund Trading ApS Kroin, Inc. v.

Kohler, 163 F.3d 27, 46 (1st Cir. 1998) (meeting the fame

standard requires an “elite” or “very unique” mark). The

phrase at issue here connotes a common feature of rental

car services — providing some type of pick-up service,

either at the customer’s home or business or from the

repair shop. Dr. Howard’s survey revealed that only 49.6%

of the respondents — less than half — associated this

extremely generic phrase with Enterprise, and these were

people who had already indicated their familiarity with

Enterprise and with the phrase. Dr. Howard’s survey does

not indicate how many people would recognize the phrase

“We'll Pick You Up” if théy were not already prompted

with the information that the phrase should be associated

with rental car companies. The Court is persuaded by the

district court’s reasoning in American Dairy Queen Corp.

v. RTO, Inc., 16 U.S.P.Q.2d 1077 (N.D. Ill. 1990). In that

case, the court declined to enter an injunction in favor of

Dairy Queen’s slogan “We Treat You Right.” The court

explained, “We see no advance to the public interest in

permitting an enterprise to monopolize one form of an-

nouncing ‘Hey, we are good.’” Similarly, this Court de-

clines to allow Enterprise to monopolize, especially in light

of the absence of confusion and the fact that the parties are

direct competitors, one way of conveying their pickup service.

The Court is also persuaded by the following authori-

ties. In Sports Authority, Inc. v. Abercrombie & Fitch, Inc.,

965 F. Supp. 925 (E.D. Mich 1997), the court found that

Abercrombie’s use of phrase “Original Outdoor Authority”

did not dilute the plaintiff's trade name “Sports Author-

ity” for a sporting goods retail store. The court determined

App. 20

that the term “Authority” was not sufficiently famous to

deserve protection under the federal dilution. In Columbia

University v. Columbia/HCA Healthcare Corp, 964 F. Supp.

733 (S.D.N.Y. 1997), the court found the mark “Columbia”

to be too weak in the healthcare industry to be diluted,

even though the mark was relatively strong in the educa-

tional field both for Columbia University and its medical

school. See also Genovese Drug Stores, Inc. v. TGC Stores,

Inc. , 939 F. Supp. 340, 350 (D.N.J. 1996) (determining that

a grocery store’s mark “We'll Take Good Care of You”

lacked the requisite fame to be diluted by a competitor’s

“Takegood Care” stores).

The Court has also considered the Ninth Circuit’s

recent decision, Avery Dennison Corp. v. Sumpton, 1999

WL 637085 (9th Cir. 1999). In that case, Avery Dennison

Corporation had been selling office products under the

registered trademarks “Avery” and “Dennison” for over

sixty years. The company spent more than $5 million per

year advertising its products and made approximately $3

billion in sales annually. The company sued an internet e-

mail provider who had registered the domain names

“avery.net” and “dennison.net.” Finding the defendant’s

domain names to dilute the plaintiff's registered trade-

marks, the district court entered an injunction ordering

the defendant to transfer the domain name registrations

to the plaintiff. The Ninth Circuit reversed, finding that

the plaintiff's marks were not sufficiently famous to merit

protection under the federal dilution statute. The Court

explained that a dilution cause of action treads close to

granting “rights in gross” in a trademark and creates a

danger of over-protecting trademarks at the expense of

potential non-infringing uses. The Court emphasized that

the famousness prong of the dilution analysis reinstated

App. 21

the balance by assuring that only a limited class of trade-

marks was eligible for dilution protection. See id. at *4, *5.

While analyzing the statutory factors, the Court discussed

three market research studies the plaintiff had presented

to show evidence of extensive advertising and sales,

international operations, and consumer awareness. The

pool of participants in one survey was created by using the

plaintiff's client lists and the otier two surveys were

administered mostly to users and purchasers of office

products. The Court found these market reports did not

provide any evidence of whether consumers in general had

any brand association with “Avery” and “Avery Dennison”

or whether the product awareness related specifically to

the Dennison trademark.

In its attempt to show the requisite fame, Enterprise

has repeatedly emphasized both the size of its advertising

budget and the notoriety of the programs during which

Enterprise has run its commercials. However, the mere

fact that Enterprise has spent a significant amount of

money in advertising does not necessarily lead to the

conclusion that the mark is famous. See Carter-Wallace,

Inc. v. Procter & Gamble Co., 434 F.2d 794 (9th Cir. 1970)

(stating that a “large expenditure of money does not in

itself create legally protectable rights”); Aloe Creme Labs.,

Inc. v. Milsan Inc., 423 F.2d 845, 850 (5th Cir.) (emphasiz-

ing that the question is the effectiveness of the promo-

tional efforts in shaping the impression of the consuming

public, not merely the extent of the promotional efforts),

cert. denied, 398 U.S. 928 (1970).

Enterprise has failed to present any evidence that the

phrase “We'll Pick You Up” is sufficiently famous to

receive protection under the anti-dilution statutes. Dr.

Howard’s findings are simply insufficient. The Court has

A-22

deliberate choice made by Congress. It is not the

province of this court or of the Board to read a new

provision into the FTDA to the effect that the Board may

grant concurrent use registrations to avoid trademark

dilution.

Our conclusion that any prior use, even in a

limited geographic area, defeats a claim of dilution in a

civil action under section 1125(c) leads to the conclusion

that it defeats an opposition to registration based on

dilution under section 1063. Section 1063 explicitly

incorporates the definition of dilution from section

1125(c), allowing for the filing of an opposition by “[a]ny

person who believes that he would be damaged by the

registration of a mark upon the principal register,

including as a result of dilution under section 1125(c).”

15 U.S.C. § 1063(a) (2000) (emphasis added). This is

confirmed by the legislative history, which states that the

law “provides holders of famous marks with a right to

oppose or seek cancellation of a mark that would cause

dilution as provided in the [FTDA].” H.R. Rep. No. 106-

250, at 4 (1999). Because there can be no dilution under

the FIDA where the allegedly famous mark did not

achieve fame prior to any use by the accused infringer,

there can be no opposition based on dilution under such

circumstances.

. Even if Congress had extended the Lanham Act

provisions on concurrent use to the FTDA, it would not lead to the

result Enterprise seeks - prevention of Advantage’s federal

registration. Rather, the proceeding would be converted to a

concurrent use proceeding, in which Advantage would be eligible

to receive federal concurrent use registration. See, e.g., Faces, Inc.

v. Face’s, Inc., 222 USPQ 918, 919 (TTAB 1983).

A-23

Because Advantage used the mark in the San

Antonio, Texas, area in 1990, before Enterprise’s mark

allegedly became famous,7”] the Board correctly

rejected Enterprise’s opposition and registered the

Advantage mark.

Enterprise’s final contention is that the Board

improperly refused to allow it to amend its opposition to

include claims of dilution under state dilution statutes.

Some of these statutes appear to apply without regard to -

the fame of the mark, and so Enterprise would not be

barred by res judicata from pressing these claims before

the Board. The Board refused the motion to amend,

holding that the Trademark Amendments Act did not

add dilution under state statutes as a ground for

opposition. Enterprise, 62 USPQ2d at 1858-59. We agree

with the Board.

The new statute provides for oppositions based

on “dilution under section 1125(c),” not based on

dilution under state law. And as discussed above, the

legislative history indicates that Congress enacted this

provision in response to the Board’s decision in Babson

which dealt with the question of whether opposition

could be based on dilution under the FTDA. See H.R.

Rep. No. 106-250, at 5; Babson, 39 USPQ2d at 1953. The

House Judiciary Committee explicitly stated, “[s]ection

two provides holders of famous marks with a right to

oppose or seek cancellation of a mark that would cause

4 In fact, the district court found that Enterprise did not

even use its mark as the company slogan until 1994, four years

after Advantage’s prior use began in 1990. Advantage, No. A

98CA 372, slip op. at 3 & n.2.

A-24

dilution as provided in the ‘Federal Trademark Dilution

Act of 1995.’” H.R. Rep. No. 106-250, at 4 (emphasis

added). There is nothing in the language or in the

legislative history of the Trademark Amendments Act of

1999 to suggest that Congress added to the statute any

grounds for opposition other than dilution under the

FIDA, much less dilution under state statutes. And

rejecting such an opposition is consistent with one of the

. Enterprise argues that by overruling Babson, Congress

intended to overrule the longstanding Board rule mentioned in

Babson that violations of state dilution statutes do not constitute

aground for opposition or cancellation. This argument is

unsupported.

Babson presented the question of first impression of

whether dilution under the FTDA constituted a ground of

opposition, and merely noted by way of a passing footnote the

well-established Board rule regarding state dilution causes of

action. Babson, 39 USPQ2d at 1954 n.4 (citing Devries v. NCC

Corp., 227 USPQ 705, 706 n.3 (TTAB 1985); and K2 Corp. v. Philip

Morris Inc., 192 USPQ 174 (TTAB 1976), aff'd, Philip Morris Inc. v.

K2 Corp., 555 F.2d 815, 194 USPQ 81 (CCPA 1977)). There is no

suggestion in the legislative history of the Trademark

Amendments Act of 1999 that Congress was concerned with the

state law aspect of Babson. Babson was uniformly described in

the legislative history as a case that rejected dilution under the

FTDA as a ground for opposition. See, e.g., H.R. Rep. No. 106-250,

at 5 (quoting Babson, 39 USPQ2d at 1954) (stating that Babson

“illuminated the need for further legislation,” because “the Board

held, ‘Based on the provisions of the Federal Dilution Act... we

hold that the framers of the law did not intend to provide a new

statutory ground for opposition and cancellation.’”); 145 Cong.

Rec. S7,452-56 (daily ed. June 22, 1999) (statement of Sen. Hatch)

(“In Babson Bros. Co. v. Surge Power Corp, 39 USPQ2d 1953

(TTAB 1996), the TTAB held that it was not authorized by the

Federal Trademark Dilution Act to consider dilution as grounds

for opposition or cancellation of a registration. Thus, under

current law a trademark owner may seek relief under the federal

dilution statute only after dilution of the mark has occurred.”).

A-25

stated purposes of the Lanham Act, “to protect

registered marks used in such commerce from

interference by State, or territorial legislation.” 15 U.S.C.

§ 1127 (2000); see also H.R. Rep. No. 104-374, at 7.

To be sure, the statute allows oppositions to be

filed by “[aJny person who believes that he would be

damaged by the registration of a mark upon the

principal register, including as a result of dilution under

section 1125(c).” 15 US.C. § 1063(a) (2000). Enterprise

argues that this provision allows for the filing of an

opposition based on alleged damage as defined by state

causes of action. We held in Young v. AGB Corp., 152

F.3d 1377, 47 USPQ2d 1752 (Fed. Cir. 1998), however,

that this language merely states the requirement for

Standing. Id. at 1379-80, 47 USPQ2d at 1754. Once

standing is established, in order to state a claim, an

Opposer must base its ground of Opposition on a

Statutory claim found in the Lanham Act. Id. at 1380, 47

USPQ2d at 1754. But the Lanham Act does not’create a

ground for opposition based on state dilution law.

Enterprise in this case sought to amend its

opposition to add claims under state law; the Board did

not abuse its discretion in refusing those amendments.

CONCLUSION

For the foregoing reasons, the judgment of the

Board is \

AFFIRMED |

COSTS |

No costs.

A-26

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

NOTICE OF ENTRY OF

JUDGMENT ACCOMPANIED BY OPINION

OPINION FILED AND JUDGMENT ENTERED:

05/30/03

The attached opinion announcing the judgment

of the court in your case was filed and judgment was

entered on the date indicated above. The mandate will

issue in due course.

Information is also provided about petitions for

rehearing and suggestions for rehearing en banc. The

questions and answers are those frequently asked and

answered by the Clerk’s Office.

No costs were taxed in this appeal.

Regarding exhibits and visual aids: Your

attention is directed to FRAP 34(g) which states that the

clerk my destroy or dispose of the exhibits if counsel

does not reclaim them within a reasonable time after

the clerk gives notice to remove them. (The clerk

deems a reasonable time to be 15 days from the date

the final mandate is issued.)

JAN HORBALY

Clerk

cc: RUDOLPH A. TELSCHER, JR.

WILLIAM D. RAMAN

ENTERPR RENT-A-CAR V ADV RENT-A-CAR, 02-1444

PTO-120,101

A-27

United States Court of Appeals for the Federal Circuit

02-1444

(Opposition no. 120,101)

ENTERPRISE RENT -A-CAR COMPANY,

Appellant,

ADVANTAGE RENT-A-CAR, INC,

Appellee.

JUDGMENT

Appealed from:

United States Patent and Trademark Office

Trademark Trial and Appeal Board

in CASE NOS).

This CAUSE having been heard and considered, it is

ORDERED and ADJUDGED:

AFFIRMED

ENTERED BY

ORDER OF THE COURT

/s/ Jan Horbaly

Jan Horbaly

DATED MAY 30 2003

A-28

THIS OPINION IS CITABLE

AS PRECEDENT OF

THE T.T.A.B.

UNITED STATES DEPARTMENT

OF COMMERCE ;

Patent and Trademark Office

Trademark Trial and Appeal Board

2900 Crystal Drive

Arlington, Virginia 22202-3513

Mermelstein

Mailed: March 26, 2001

[Entered: March 26, 2001]

Opposition No. 120,101

Enterprise Rent-A-Car Company

Advantage Rent-A-Car Inc.

Before Bucher, Rogers, and Drost,

administrative trademark judges.

- A-29

By the Board.

On March 26, 2001, applicant filed a "motion to

dismiss for failure to state a claim." Because applicant's

motion relied upon matters outside of the pleadings,

the Board notified the parties by order dated April 2,

2001, that the motion would be treated as one for

summary judgment.? See Fed. R. Civ. P. 12(b). With its

brief in opposition to applicant's motion for judgment,

opposer filed a motion to amend its notice of

opposition to add claims for relief under state dilution

statutes. Applicant filed a reply in support of its

motion for summary judgment (which we have

considered) and an opposition to opposer's motion to

amend. Finally, on July 2, 2001, opposer filed a motion

to file a surreply to the motion for summary judgment,

along with its proffered surreply.

MOTION FOR LEAVE TO FILE SURREPLY

Trademark Rule 2.127(e)(1) states that "The

Board may, in its discretion consider a reply brief. * * *

No further papers in support of or in opposition to a motion

for summary judgment will be considered by the Board."

(emphasis added. ) See also, No Fear Inc. v. Rule, 54

USPQ2d 1551, 1553 (TTAB 2000) (reply briefs are

disfavored; no further papers may be considered under

Board's rules).

1 Specifically, applicant relies on the opinion and judgment

on appeal in a civil action between the parties herein, Advantage

Rent-A-Car Inc. v. Enterprise Rent-A-Car Co., 238 F.3d 378, 57

USPQ2d 1561, 1562-63 (5th Cir. 2001).

2 To avoid confusion, applicant's motion is referred to

herein as a motion for summary judgment.

A-30

The quoted language of Rule 2.127(e)(1) leaves

the Board with no discretion in this matter. Even if it

did, however, we would not exercise it to consider the

surreply in this case. There must be an end to every

argument and a party's desire to have the last word is

not a sufficient ground to ignore the Board's rules for

briefing. Opposer's motion is DENIED, and its surreply

has not been considered.

MOTION FOR LEAVE TO AMEND PLEADING

Opposer now seeks leave to amend its notice of

opposition to add claims for dilution based on state

law.3 Under Fed. R. Civ. P. 15(a), once a responsive

pleading is filed, a party may amend a pleading only

by leave of the court, "and leave shall be freely given

when justice so requires."

Consistent with the exhortation in Fed. R. Civ. P.

15(a), the Board is liberal in granting leave to amend,

provided the amendment would not violate settled law

or be prejudicial to the rights of the adverse party. E.g.,

Polaris Industries Inc. v. DC Comics, 59 USPQ2d 1798,

1799 (TTAB 2000); TBMP § 507.01 (and cases cited

therein). However, the Board will deny a motion for

leave to amend if the proffered pleading is itself legally

insufficient, or would serve no useful purpose. Polaris,

59 USPQ2d at 1798.

: Specifically, opposer wishes to plead grounds for opposition

arising under the anti-dilution statutes of Alabama, California,

Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois,

Iowa, Louisiana, Maine, Massachusetts, Minnesota, Mississippi,

Missouri, Montana, Nebraska, New Hampshire, New York, Oregon,

Pennsylvania, Rhode Island, Tennessee, Texas, Washington, West

Virginia, and Wyoming. Motion, May 14, 2001, p. 2.

A-31

Prejudice to applicant is not an issue in this case.

Trial has not yet begun, and the Board could easily

ameliorate any difficulty resulting from amendment by

extending the discovery period. See, e.g., Buffett v. Chi-

Chi's, Inc., 226 USPQ 428, 431 (TTAB 1985).

Nonetheless, we deny opposer's motion, because the

Board has no jurisdiction to decide issues arising under

state dilution laws.

A review of the history of dilution claims before

the TTAB is instructive. Prior to 1995, many states

recognized claims for trademark dilution. It had long

been held, however, that claims for dilution were not a

cognizable ground for opposition or cancellation before

the Board. E.g., Max Factor & Co. v. Clairol Inc., 163

USPQ 240, 243 (TTAB 1969); Geo. A. Dickel Co. v.

General Mills, Inc., 317 F.2d 954, 137 USPQ 891, 892

(CCPA 1963); K2 Corp. v. Philip Morris Inc., 192 USPQ

174, 177 (TTAB 1976), aff'd,555 F.2d 815, 194 USPQ 81

(CCPA 1977).

In 1995, in order to provide a federal cause of

action for trademark dilution, Congress passed the

Federal Trademark Dilution Act of 1995 (FTDA). Pub.

L. No. 104-98, 109 Stat. 985. The FTDA amended

Trademark Act § 43 to provide a remedy for dilution.4

In Babson Bros. Co. v. Surge Power Corp., 39 USPQ2d

1953 (TTAB 1996), the Board held that while the FTDA

provided "a federal cause of action in courts," it did not

explicitly or implicitly provide a new ground for

opposition or cancellation before the Board. Babson, 39

USPQ2d at 1954-55.

‘ The FTDA also amended Trademark Act § 45 by inserting

a definition of "dilution."

A-32

Finally, pursuant to the Trademark

Amendments Act of 1999 ("TAA"), Pub. L. No. 106-43,

113 Stat. 218, Congress amended the Trademark Act

to provide that dilution is a ground for opposition

or cancellation proceedings before the Board. In doing

so, the legislative history specifically referred to the

Board's decision in Babson, see, e.g., Cong. Rec. June 22,

1999, S7453-54 (1999) (statement of Sen. Hatch). To the

extent relevant here, the TAA amended Trademark Act

§ 13 as follows> (wording added by TAA underlined):

(a) | Any person who believes that he

would be damaged by the registration of

a mark upon the principal register,

including as a result of dilution under section

43(c), may .. . file an opposition in the

Patent and Trademark Office, stating the

grounds therefor. . . .

Opposer essentially contends that the term

"including" in the TAA has dramatically expanded the

Board's jurisdiction in opposition or cancellation

proceedings to consider as grounds for Board

proceedings any claim asserting a theory by which a

"person . . . believes that he would be damaged,"

including those arising under state dilution statutes.

Neither the language of the statute, nor its legislative

history supports such a result.

. Trademark Act § 14, governing cancellation proceedings,

was similarly amended by the TAA.

App. 33

Advantage Rent-A-Car

300 -—_——------ -----

290

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ane

95/96 96/97

91/92 92/93 93/94

Number of Steering Wheel Commercial Airings

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.