Petition for Writ of Certiorari — Eastern Union Union, Inc. v. Western Union Union Holdings, Inc. (No. 08-706)

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Eapreme Court, U8

FILED’

\4 7 08-706 NOV 24 2008

OFFICE OF THE CLERK

Wier K. Suter, Clerk

IN THE

Supreme Court of the United States

EASTERN UNION, INC., ET AL.,

Petitioners

WESTERN UNION HOLDINGS, INC., ET AL.,

Respondents

On Petition For Writ Of Certiorari

To The United States Court of Appeals

For The Eleventh Circuit

PETITION FOR WRIT OF CERTIORARI

MATTHEW F. MCGAHREN, ESQ.

Counsel of Record

CHRISTOPHER J. YORK, ESQ

MCGAHREN, GASKILL & YORK, LLC

6171 CROOKED CREEK Rv., Suite A

PEACHTREE CORNERS, GA 30092

(770) 729-1779

QUESTIONS PRESENTED

1. Whether a lack of evidence of actual confusion in a

trademark infringement analysis under the Lanham

Act should be weighed as a factor against a finding of

likelihood of confusion, as held by most federal

circuits, or simply disregarded as having no bearing

on the analysis, as held by other circuits, including

the Eleventh Circuit in this case.

2. Whether the proper standard of review of a

district court’s finding of likelihood of confusion in a

trademark infringement analysis under the Lanham

Act is the “clearly erroneous’ standard normally

applied to a strictly factual determination, as held by

several federal circuits, including the Eleventh

Circuit, or a combination of the “clearly erroneous”

standard for foundational facts and the de novo

standard for the weighing and balancing of those

foundational facts and the ultimate finding of

likehhood of confusion, as held by other circuits.

RULE 14.1(b) LIST OF PARTIES

Defendants-Appellants Below

(Petitioners in this Court):

1. EASTERN UNION, INC.

2. EU FINANCIAL SERVICES, INC.

3. YOUNG CHOE, individually and d/b/a Check Cash Plus

4. EVIAN GROUP, INC. |

5. ERIC YOUNG

Plaintiffs-Appellees Below

(Respondents in this Court):

1. WESTERN UNION HOLDINGS, INC.

2. WESTERN UNION FINANCIAL SERVICES, INC.

3. INTEGRATED PAYMENT SYSTEMS, INC.

RULE 29.6 STATEMENT

Pursuant to Supreme Court Rule 29.6,

Petitioners Eastern Union, Inc., EU Financial

Services, Inc. and Evian Group, Inc. state that they

have no parent corporations and there are no

publicly held companies that own ten (10%) percent

or more of their stock.

TABLE OF CONTENTS

Questions Presented

Rule 14.1(b) List of Parties

Rule 29.6 Statement

Table of Authorities

Opinions Below

Jurisdiction

Statutes Involved

Staternent of the Case

Pre-Litigation Background

The Litigation and the Preliminary

Injunction

The Ruling on Summary Judgment

The Decision of the Court of Appeals

Reasons for Granting the Petition

Circuit Law is in Conflict as to the

Proper Treatment of a Lack of Evidence

of Actual Confusion

. A Lack of Evidence of Actual Confusion

Should Weigh Against a Finding of

Likelihood of Confusion

_ The Circuits are Divided as to the

Proper Standard of Review for a

Finding of Likelihood of Confusion

Likelihood of Confusion Should be

Reviewed as a Mixed Question of Fact

and Law 31

E. This Case Was Decided Incorrectly 35

Conclusion 38

Appendix

A. Opinion of the U.S. Court of Apneais

for the Eleventh Circuit (Jun. 20, 2008) la

B. Order of the U.S. District Court for the

Northern District of Georgia (Sep. 7, 2007) 31a

C. Eleventh Circuit Order Denying Rehearing

and Rehearing En Banc (Aug. 25, 2008) 39a

D. Order of the U.S. District Court for the

Northern District of Georgia (Dec. 20, 2006) 40a

TABLE OF AUTHORITIES

Cases: Page(s)

Adventis, Inc. v. Consolidated Property

Holdings, Inc., 124 Fed.Appx. 169

(4th Cir, 2005)......ccccccccceceseseecseeseesesseeseeees 27, 29

Aktiebolaget Electrolux v. Armatron Int], Inc.,

900 F.2d 1 (1* Cir. 1903)............5....5455. 13, 14, 36

Alliance Metals, Inc. v. Hinely Industries, Inc.,

po BE AOR Se re 6

Alpha Industries, Inc. v. Alpha Steel Tube

& Shapes, Inc., 616 F.2d 440 (9th Cir.1980)....... 26

Anheuser-Busch, Inc. v. L. & L. Wings, Inc.,

O62 F.2d SiG (atin Cie 1007)... 0c. oc ccc ccc cssoseee 28

Beer Nuts, Inc. v. Clover Club Foods Co.,

805 F.2d 920 (10% Cir. 1986).................0665. $5, 27

Bristol-Myers Squibb Co. v. McNeil-P.P.C.,, Inc.,

973 F.2d 1033 (24 Cir. 1992).........00000.00002.. 26, 30

CAE, Inc. v. Clean Air Engineering, Inc.,

267 F.3d GOO 17 Cm. DOOD)... 0. occcccecceccecsscooen 18

Cardtoons, L.C. v. Mayor League Baseball Players

Ass'n, 95 F.3d 959 (10th Cir.1996)..........0....000.. 27

CareFirst of Marvland, Inc. v. First Care, P.C.,

434 F.3d 263 (4" Cir. 2006)...................400 17, 21

Century 21 Real Estate Corporation v.

Lendingtree, Inc., 425 F.3d 211

ee a iti ec uscd cu Osa use 16

Clamp Manufacturing Co. v. Enco

Manufacturing Co., 870 F.2d 512

a, EES nn eo ne 24

Daddy's Junky Music Stores, Inc. v. Big Daddy's

Family Music Center,

109 F.3d 275 (6 Cir. 1997).............0..0000000 20, 22

Elby's Big Boy of Steubenville, Inc. v. Frisch's

Restaurants, Inc., 459 U.S. 916, 103 S.Ct. 231,

76 UTED TOE TODD 5.5 onsen is ieceessacsevenns 24, 25

E. Remy Martin & Co., S.A. v. Shaw-Ross Int?

Imports, Inc., 756 F.2d 1525 (11'» Cir. 1985)......29

Euroquilt, Inc. v. Scandia Down Corp.,

475 U.S. 1147, 106 S.Ct. 1801,

OCT, Tk SOG FIG ino vin ses vicseecceseccencesss 24, 26

Frehling Enterprises, Inc. v. Int'l Select Group,

Inc., 192 F.3d 1330 (11'» Cir. 1999).............. 18, 22

Frisch's Restaurants, Inc. v. Elby's Big Boy of

Steubenville, Inc., 670 F.2d 642

NN oe ease es ae 26

Han Beauty, Inc. v. Alberto-Culver Co.,

236 F.3d 1333 (Fed, Cir, 2001).....................0:.. 19

Heartsprings, Inc. v. Heartspring., Inc.,

143 F.3d 550 (10' Cir. 1998).................27, 28, 29

Holiday Inns, Inc. v. 800 Reservation, Inc.,

86 F.3d 619 (6' Cir. 1996).....0.0 0c eee 30

In re Majestic Distilling Co., Inc..,

315 F.3d 1311 (Fed.Cir.2003)................ 19, 28, 30

Vil

Jet, Inc. v. Sewage Aeration Sys.,

165 F.3d 419 (6th Cir.1999)..................0cceceeeee 28

J.M. Huber Corporation v. Lowery Wellheads, Inc.,

778 F.2d 1467 (10 Cir. 1985)...............0..0.00%.. 31

Keebler Co. v. Rovira Biscuit Corp.,

624 F.2d 366 (1* Cir. 19G0)................0cc0.sse00. 15

Levi Strauss & Co. v. Blue Bell, Inc.,

778 F.2d 1352 (9th Cir. 1985)............ 24, 29, 31, 33

McMonagle v. Northeast Women’s Center, Inc.,

493 U.S. 901, 110 S.Ct. 261,

107 L.Bd.2d 210 (1989)..............c0.0.secceeseees 23, 28

Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208

PO Cie, TI riiccccnec ee 15, 36

Oreck Corp. v. U.S. Floor Systems, Inc.,

803 F.2d 166 (5'» Cir. 1986).......0.... eee 17, 2

Pignons S.A. v. Polaroid Corp., 657 F.2d 482

03a CATON, oiaciiicdiceas cee 14

Seven Elephants Distributing Corp. v. Earthquake

Sound Corp., 2007 WL 977391 (C.D.Cal., CV 06

4761 GAF (RZX), Jan. 11, 2007).................. 13, 21

Statutes and Rules:

13 UB BI ns cence 1, 32

iS TBC. € 110A... Gi 10

15 GO BC. 9 STI ko cosececcen eee 24

9B US.C. 0 TRGEL...nchnsvcce ee 1

Fed R.Cw?. M....0cacic eee 33

vill

Other Authorities:

3J.Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition § 23:73 (4th ed.2001)....... 28

PETITION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

The opinion of the U.S. Court of Appeals for the

Eleventh Circuit (App., infra, 31a-38a) is unreported.

The Order of the U.S. Court of Appeals for the

Eleventh Circuit denying rehearing (App., infra, 39a)

is unreported. The Order of the U.S. District Court

for the Northern District of Georgia granting

summary judgment, (App., infra, 1a-30a), is

unreported. The Order of the U.S. District Court for

the Northern District of Georgia granting a

preliminary injunction, (App., infra, 40a-65a), is

unreported. |

JURISDICTION

The judgment of the U.S. Court of Appeals for the

Eleventh Circuit was entered on June 20, 2008. A

timely Petition for Rehearing and Rehearing £n

Banc was denied on August 25, 2008 The

jurisdiction of this Court 1s invoked under 28 U.S.C.

§ 1254(2).

STATUTES INVOLVED

Section 32 of the Lanham Act (15 U.S.C. § 1114)

provides in relevant part that:

(1) Any person who shall, without the consent of

the registrant-

(a) use in commerce any _ reproduction,

counterfeit, copy, or colorable imitation of a

registered mark in connection with the sale,

offering for sale, distribution, or advertising of

any goods or services on or in connection with

which such use is likely to cause confusion, or to

cause mistake, or to deceive; or

(b) reproduce, counterfeit, copy, or colorably

imitate a registered mark and apply such

reproduction, counterfeit, copy, or colorable

imitation to labels, signs, prints, packages,

wrappers, receptacles or advertisements intended

to be used in commerce upon or in connection

with the sale, offering for sale, distribution, or

advertising of goods or services on or in

connection with which such use is likely to cause

confusion, or to cause mistake, or to deceive,

shall be liable in a civil action by the registrant

for the remedies hereinafter provided.

STATEMENT OF THE CASE

A. Pre-Litigation Background

Eastern Union, Inc. (hereinafter “Eastern Union”)

was a Georgia corporation formed in late 2003 that

provided financial services in the consumer market,

including traveler’s checks, money order and limited

money transfer services, with a focus’ on

international consumer money service products and

the Korean-American consumer market.

Eric Young is the founder and principal of

Eastern Union, and Young Choe is the owner and

operator of four money services stores doing business

under the trade name “Check Cash Plus’ in the

Atlanta Metropolitan area. Eastern Union sold its

products through Young Choe’s storefronts, in

conjunction with its affiliates, EU Financial

Services, Inc., which provided tax related consumer

services including tax return advances/loans and tax

preparation services, and Evian Group, Inc., which

developed, manufactured and distributed equipment

and software to provide technical business solutions

in the areas of cash management, security and

biometrics.

With the initial provision of its first traveler's

checks in 2003, Eastern Union began using the

trademark “EASTERN UNION” in the marketing

and sale of its financial products.! On June 17, 2004,

Eastern Union first filed a trademark application

with the United States Patent and Trademark Office

for the word mark “EASTERN UNION” in

connection with traveler's check issuance, pavroll

accounting services and tax preparation services.”

'R. Vol. 5, Doe. 91-2, p. 3, 9 11 (Affidavit of Eric Youny).

“RK. Vol. 1, Doe. L- 10 (Complaint, Ex. D

On February 27, 2006, Eastern Union filed an

additional trademark application for the word mark

“EASTERN UNION?” in connection with banking and

financing services with a “first use” date listed as

May 2005.3

Meanwhile, on or about January 21, 2004, Young

Choe, doing business as Check Cash Plus, entered

into an agreement with an affiliate of Western Union

Holdings, Inc. (hereinafter “Western Union”) to

become an agent for the provision of Western

Union’s money transfer services and the issuance of

Western Union branded money orders. During the

period this agreement was in effect, until May 2006,

there is evidence that Western Union’s products

were sold side by side with the products of Eastern

Union in Young Choe’s Check Cash Plus stores.‘

Western Union claims that it did not become

aware of the “EASTERN UNION” mark until after it

was published in the Official Gazette in January

2006, and did not learn of the use of the “EASTERN

UNION” mark until the spring of 2006, despite

evidence that Western Union’s_ representatives

inspected the Check Cash Plus locations prior to this

time and in so doing gave instructions regarding the

appropriate placement of Western Union signs in

SR. Vol. 1, Doe. 1-11 (Complaint, Ex. J).

' See R Vol. 5, Doc. 91-2, p. 3, 9 11 &14, p. 6-7. § 28 & 30

(Affidavit of Eric Young); R. Vol. 4, Doe. 85-38, p. 7-8. (Plaintiffs’

Briel in Support of Summary Judgment).

relation to the signs of other products offered at the

stores, including Eastern Union branded products.®

B. The Litigation and the Preliminary Injunction

Eventually, Western Union terminated its agency

agreement with Young Choe and filed an action in

the U.S. District Court for the Northern District of

Georgia alleging, inter a/ia, trademark infringement -

under Section 32 of the Lanham Act (15 U.S.C. §

1114), and seeking, among other relief, a permanent

injunction barring the use of the “EASTERN

UNION” mark.® This action, Civil Action File No.

1:06-CV-1408-RWS was filed on June 12, 2006.7

On July 19, 2006, Western Union filed a Motion

for Preliminary Injunction, and after full briefing

and a hearing, the District Court found that Western

Union had adequately demonstrated a substantial

likelihood of success on the merits, a substantial

threat of irreparable injury, that the balance of

harms weighed in its favor and that the requested

injunction would not disserve the public interest,

and the court granted the Motion by an Order

> See R. Vol. 5. Doe. 91-2, p. 7-8. 9 35 - 36 (Affidavit of Erie

Young).

® Plainuffs’ other claims are referenced in the opinions and

orders of the lower courts. but are not relevant to this Petition

* Jurisdiction was predicated on 28 USC. §§ 1331 & 1388(a)

entered on December 20, 2006. The injunction itself

was entered by Order dated January 18, 2007.8

C. The Ruling on Summary Judgment

Thereafter, on February 21, 2007, Western Union

attempted to file an untimely Motion for Summary

Judgment on All Counts in the Complaint. This

Motion was ultimately allowed by the District Court

and was redocketed as timely filed on July 11, 2007.

Defendants opposed this Motion by Response filed on

August 20, 2007, and the Motion was heard by the

court on August 28, 2007.

By Order entered on September 7, 2007, the

District Court denied summary judgment on

Western Union’s claim for trade dress infringement,

but granted its motion for summary judgment on the

trademark infringement claim.

In reaching this conclusion, the District Court

evaluated the likelihood of confusion between

Western Union’s mark and Eastern Union’s mark

under the Eleventh Circuit’s seven factor test as

enunciated in Adliance Metals. Inc. v. Hinely

Industries, Inc., 222 F.3d 895, 907 (11t* Cir. 2000).

With regard to the first factor, strength of the

Plaintiffs mark, the court found that “WESTERN

UNION” was an arbitrary mark entitled to very

tal

The preliminary injunction was later modified, but that

modification has no bearing on the issues presented herein

strong protection, and that there was no genuine

issue of material fact on this point. As a result, this

was a factor weighing heavily in Plaintiffs’ favor.

As to the second factor, similarity of the marks,

Plaintiffs argued that “only the first two letters of

the first word are different, the second word is

identical, the first words of both marks are

‘directional indicators’ which each end in the same

five letters, and that Defendants have displayed

their mark in yellow block font on a_ black

background which is virtually identical to the trade

dress utilized by Plaintiffs.” Defendants pointed out

that the names are in fact directional opposites, and

that the “EASTERN UNION” mark appears in

various formats on different products, including

“purple block letters on a pixel screen ... red block

letters — money orders, fancy blue letters — travelers

checks, and on flyers/web pages, the shape and color

of the mark depends on the design of the

flyer/website.”® Nevertheless, the court concluded

that no reasonable juror could find other than that

the marks were similar, and this factor therefore

weighed in favor of Western Union.

For the third factor, similarity between the

products and services offered under the marks,

Defendants argued that their products and services

differed from those of Western Union because (1)

* See App., rafra, Va (Summary Judgment Order): R. Vol 5,

Doc. 91-2. p. 9, § 39 (Affidavit of Eric Young)

Eastern Union money orders were only offered in

Georgia. compared with worldwide money order

services with Western Union: (2) Eastern Union’s

money transfer services were primarily limited to

international money transfers to and from South

Korea for Korean clientele; (3) Eastern Union’s

money transfer services were strictly bank to bank

transfers, not point to point transfers, for which

Western Union is known; ane (4) Eastern Union

offered traveler’s checks, a «ervice which is not

provided by Western Union.!° Notwithstanding these

differences, the court concluded that no reasonable

juror could find that the products and services were

not similar and thus this factor weighed strongly in

favor of Plaintiffs.

On the fourth factor, similarity of sales methods,

the court found that the retail outlets and

predominant customers for both Plaintiffs and

Defendants were virtually identical, and that there

was no genuine issue of disputed fact on this point.

As a result, this was a factor weighing heavily in

Plaintiffs’ favor.

As for the fifth factor, similarity of advertising

methods, the court found that both parties

advertised through the internet, through signage at

store locations and through brochures available at

10 See App., zafra, 1a -— 21la(Summary Judgment Order): R.

Vol. 5, Doc. 91-1, p. 13-15 (Defendants’ Response to Summary

Judgment): R. Vol. 5, Doc. 91-2, p. 2, @ 7-9, p. 3, © 10, p. 6-7, ¢

30 (Affidavit of ric Young)

those stores, and that there was no genuine issue of

disputed fact on this point. As a result, this was a

factor that weighed in favor of Western Union.

On the sixth factor, intent, the court inferred that

Eastern Union intended to derive benefit from the

Western Union mark based on the agency

relationship of Young Choe, the failure of

Defendants to timely comply with preliminary

injunctive orders of the court, and the failure of

Defendants to offer an independent rationale for the

adoption of the mark. However, the evidence

indicated that the “EASTERN UNION” mark was

actually adopted prior to the beginning of Young

Choe’s agency agreement!'. Of course, Defendants’

conduct relative to the court’s orders would, at most,

be probative of Defendants’ state of mind as to being

forced to abandon the mark, not their intent in

initially choosing it years before those orders were

ever entered. Moreover, the burden of production on

intent was clearly Plaintiffs’ burden, not

Defendants, and in the absence of evidence on

intent, having no independent rationale other than

sound business judgment should not necessarily

have been held against Eastern Union. Nevertheless,

the court concluded that there was no genuine issue

of material fact as to intent, and weighed this factor

strongly in favor of Plaintiffs.

"R. Vol. 5, Doe. 91-2, p. 3. 11 CAffidavit of Erie Young).

Finally, with regard to the seventh factor, actual

confusion, the court noted that there was a lack of

probative evidence on this issue and therefore simply

disregarded this factor in its analysis. !?

Thus, based on only the first six factors, the court

determined that Plaintiffs had established a

likelihood of confusion and granted the Motion for

Summary Judgment on this claim. Pursuant to that

ruling, the court granted Western Union's request

for a permanent injunction, and also, without

explanation, determined that this was an

“exceptional case” within the meaning of 15 U.S.C. §

1117(a) and awarded Plaintiffs attorneys fees.

D. The Decision of the Court of Appeals

This Order of the District Court was timely

appealed to the Eleventh Circuit Court of Appeals by

Notice of Appeal entered on October 5, 2007.'* In

their brief, Defendants-Appellants argued, znter alia,

that the absence of evidence of actual confusion

should have been considered a factor in Defendants’

favor as tending to show that confusion is unlikely!*,

2 App., infra, 25a — 26a (Summary dudgment Order).

4 Junsdiction was predicated on 28 U.S.C. §§ 1291 and/or

12924a) 1).

" Western Union Holdings, Inc, et al vo Bastern Union, Ine., et

al, Appeal No 07-15379-d (i1' Cir. Jun. 20, 2008), Brief of

Appellant, pp. 27-31.

and that the appellate court should review all of the

District Court’s findings on a de novo basis".

On June 20, 2008, the Court of Appeals issued a

per curiam opinion in which it nominally reviewed

the District Court’s findings on a de novo basis, but

in which it actually engaged in no discernable review

of its own, and instead simply recited the lower

court’s findings and concluded that “[t]he district

court did not err.”

Defendants-Appellants filed a timely Petition for

Rehearing and Rehearing En Banc on July 11, 2008,

and the Eleventh Circuit entered its Order denying

rehearing on August 25, 2008. Thereafter, the

Plaintiffs moved to dismiss their remaining claims

and a Final Judgment of Permanent Injunction and

Monetary Relief was entered by the District Court on

November 4, 2008.

Petitioners now seek review by this Court on the

grounds, and for the reasons, set forth below.

REASONS FOR GRANTING THE PETITION

The decision below perpetuates two circuit

conflicts as to vitally important and frequently

recurring issues of federal law:

dd. at 12.

(1) whether a lack of evidence of actual confusion

in a trademark infringement analysis under the

Lanham Act should be weighed as a factor

against a finding of likelihood of confusion, as

held by most federal circuits, or simply

disregarded as having no bearing on the analysis,

as held by other circuits, including the Eleventh

Circuit in this case; and

(2) whether the proper standard of review of a

district court’s finding of likelihood of confusion

in a trademark infringement analysis under the

Lanham Act is the “clearly erroneous” standard

normally applied to a_ strictly factual

determination, as held by several federal circuits,

including the Eleventh Circuit, or a combination

of the “clearly erroneous” standard for

foundational facts and the de novo standard for

the weighing and balancing of those foundational

facts and the ultimate finding of likelihood of

confusion, as held by other circuits.

A. Circuit Law is in Conflict as to the Proper

Treatment of a Lack of Evidence of Actual

Confusion

Federal case law regarding the proper treatment

of a lack of evidence of actual confusion divides

ecnerally into two camps: (1) the majority of circuits,

including the First, Second. Third, Fourth and Fifth

Circuits, in which such a lack of evidence is weighed

as a factor against a finding of likelihood of

confusion; and (2) those few circuits, including the

Seventh, Ninth and Eleventh Circuits, where a lack

of evidence of actual confusion is generally

disregarded as having no bearing on the analysis. In

other circuits, including the Sixth and Federal

Circuits, the case law is somewhat inconsistent and

it is difficult to discern a clear policy.

This conflict was recognized recently by the

Central District of California in Seven Elephants

Distributing Corp. v. Earthquake Sound Corp., 2007

WL 977391 (C.D.Cal., CV 06 4761 GAF (RZX), Jan.

11, 2007). In holding in that case that a lack of

evidence of actual confusion should be treated as

only a neutral factor, the court noted as follows:

Seven Elephants cites out of circuit authority for

the proposition that “[w]hile a showing of actual

confusion is not required’ to establish

infringement, an absence of actual confusion, or a

negligible amount of it, between two products

after a long period of coexistence on the market is

highly probative in showing that little likelihood

of confusion exists.” Aktrebolaget Electrolux v.

Armatron Int'l, Inc., 999 F.2d 1, 3 (1st Cir.1993).

As indicated above, however, the Ninth Circuit.

apparently disagrees, and its view is of course

controlling here.'*

In that First Circuit case, Aktiebolaget Electrolux

v. Armatron Int’, Inc., 999 F.2d 1 (1* Cir. 1993), the

court noted that “Appellant made only a weak

showing of actual confusion through an equivocal

survey, showing at best name association confusion.

Appellant was unable to produce any instances of

actual consumer confusion after both products

coexisted on the market for six years.”'’ In

evaluating this factor in the likelihood of confusion

analysis, the court went on to hold that:

the weak evidence of actual confusion weighs

quite heavily against a finding of likelihood of

confusion. While a showing of actual confusion is

not required to establish infringement, an

absence of actual confusion, or a_ negligible

amount of it, between two products after a long

period of coexistence on the market is highly

probative in showing that little likelihood of

confusion exists. Pignons S.A. v. Polaroid Corp.,

657 F.2d 482, 490 (Ist Cir.1981) (coexistence for

Seven Elephants Distributing Corp. v. Farthquake Sound

Corp., 2007 WL 977391 at *), n. 2 (C.D .Cal., CV 06 4761 GAF

(RZX), Jan. 11, 2007).

" Aktiebolaget Electrolux v. Armatron Int?, Ine, 999 F.2d 1.3

(is! Cir. 19933)

four years); Keebler, 624 F.2d at 377 (coexistence

for three and one half years).!8

Similarly, in the Second Circuit, in Nabisco, Inc.

v. PF Brands, Inc., 191 F.3d 208 (2"' Cir. 1999), the

court clarified for the district court the proper

treatment of a lack of evidence of actual confusion,

stating that:

The presence or absence of actual confusion can

be highly effective in showing a high, or a low,

likelihood of confusion if there has been ample

opportunity for consumer confusion. If consumers

have been exposed to two allegedly similar

trademarks in the marketplace for an adequate

period of time and no actual confusion is detected

either by survey or in actual reported instances of

confusion, that can be powerful indication that

the junior trademark does not cause a meaningful

likelihood of confusion. !9

In the Nabisco case however, the junior mark had

not yet appeared on the market, and the party

alleging infringement did not have access to samples

of the allegedly infringing product. In those

le Jef at 4

Nabisco, Inc. vo PF Brands, Inc... 191 F.3d 208, 228 (24 Cir

OO)

circumstances, where there had been no opportunity

for actual confusion to manifest itself, and the

alleged victim of infringement had had _ no

opportunity to conduct its own consumer surveys,

the Second Circuit made it clear that no reasonable

inference could be drawn from the lack of evidence of

actual confusion. Under those facts, “the ‘actual

confusion’ factor simply drops out of the picture

because it can have no relevance.””°

The Third Circuit, in Century 21 Real Estate

Corporation v. Lendingtree, Inc., 425 F.3d 211 (3

Cir. 2005), addressed a lack of evidence of actual

confusion in the slightly modified, but materially

equivalent, context of a likelihood of confusion

analysis where the defendant had asserted a

nominative fair use defense. In that case, the marks

had been used for “at least five years with little

evidence of actual consumer confusion.”2! Moreover,

“{iJn this case, [plaintiffs] presented no evidence of

actual confusion before the District Court. In fact, as

the District Court noted, from the Court’s first

meeting with the parties, they had agreed that they

would offer no evidence of actual confusion to the

Court. Therefore, this factor should clearly weigh in

favor of [the defendant].”22

2. Ja.

2! Century 21 Real Estate Corporation v. Lendingtree, Inc., 425

BPi3d 211, 227 (4 Cir, 2005)

22 Jaf

In CareFirst of Maryland, Inc. v. First Care, P.C.,

434 F.3d 263 (4 Cir. 2006), the Fourth Circuit noted

that “evidence of actual confusion is ‘often

paramount’ in the likelihood-of-confusion analysis””*,

and in that case weighted a lack of evidence of actual

confusion “heavily against” the plaintiff on its

trademark infringement claim, holding — that

“{aJlthough proof of actual confusion is not necessary

to show a likelihood of confusion, the absence of any

evidence of actual confusion over a_ substantial

period of time-here, approximately nine years-

creates a strong inference that there is no likelihood

of confusion,”*"

Likewise, the Fifth Circuit, in Oreck Corp. v. U.S.

Floor Systems, Inc., 803 F.2d 166 (5' Cir. 1986), on

review of a jury verdict, and in ultimately reversing

it, noted that the plaintiff had produced at trial no

evidence of any actual confusion and “[iln light of the

concurrent use of the STEAMEX DELUXE 15 XL

name and Oreck’s XL mark for seventeen months,

Oreck’s inability to point to a single incident of

actual confusion is highly significant.”2°

8 CareFirst of Marviland, Inc. vo First Care, PC, 434 F38d 268,

268 (4'» Cir, 2006)

=) Td at 269

Oreck Corp. vo US) Floor Svstems, Inc, 803 F.2d 166, 173

(5'h Cir, 1986)

In contrast, the Eleventh Circuit in Frehling

Enterprises, Inc. v. Int'l Select Group, Inc., 192 F.3d

1330 (11% Cir. 1999), did not consider a lack of

evidence of actual confusion as a factor that would

tend to show that confusion is unlikely. In that case,

there was evidence that the two marks in question

had been in concurrent use for a period of years,

however the plaintiff only produced one admissible

instance of actual confusion that the district court

deemed unpersuasive. On appeal, the Eleventh

Circuit gave this instance of confusion somewhat

more weight, but ultimately concluded that the lack

of evidence of actual confusion did not favor either

party.“

Similarly, the Seventh Circuit, in CAE, Inc. v.

Clean Air Engineering, Inc., 267 F.3d 660 (7'» Cir.

2001), held that lack of evidence of actual confusion

is entitled to little or no weight, even in the context

of a decades long co-existence. In so holding, the

court stated that

Because, as the district court noted, instances of

actual confusion may be difficult to discover, the

most that the absence of evidence of actual

confusion can be said to indicate is that the

record does not contain any evidence of actual

confusion known to the parties. ... Other than its

1330, 1340-41 11 Cir, 1999).

reliance on a twenty-five-year history without

reported incidents of actual confusion, Clean Air

has not come forward with hard evidence to

demonstrate a genuine issue of material fact that

consumeérs are not likely to be confused by the

parties' simultaneous use of the CAE mark in

connection with their businesses.27

In the Federal Circuit, the court in Han Beauty, |

Inc. v. Alberto-Culver Co., 236 F.3d 1333 (Fed. Cir.

2001) acknowledged that “extended periods of side-

by-side sales without actual confusion may tend to

refute a likelihood of confusion’25, however the court

seemed to place relatively little significance on the

lack of evidence of actual confusion in that case.

Although this result in Han Beauty may be

explained by the fact that there was also a

corresponding lack of evidence as to how long, and in

what manner, the two marks were concurrently

sold*9. the Federal Circuit’s view that lack of

evidence of actual confusion is generally

insignificant is reflected in other rulings. See, e.g., Jn

re Mayestic Distilling Co., 315 F.3d 1311, 1317 (Fed.

27 CAKE, Ince. ve Clean Air Engineering, Inc., 267 F.3d G60, 686

(7'* Cir, 2001).

2° Han Reautyv. Ine. vo Alberta-Culver Co, 236 F 38d 1333, 1339

(Fed. Cir. 2001)

2 Td

Cir. 2003) (“A showing of actual confusion would of

course by highly probative, if not conclusive, of a

high likelihood of confusion. The opposite is not true,

however. The lack of evidence of actual confusion

carries little weight ...”)

In Daddy’s Junky Music Stores, Inc. v. Big

Daddy's Family Music Center, 109 F.3d 275 (6" Cir.

1997), the Sixth Circuit enunciated principles that

seem to comport, generally, with the position of most

other circuits on this issue, however in implementing

those principles in that case, the court indicated a

somewhat inconsistent approach. Specifically, the

Sixth Circuit stated that “[dlue to the difficulty of

securing evidence of actual confusion, a lack of such

evidence is rarely significant, and the factor of actual

confusion ‘is weighted heavily only when there is

evidence of past confusion, or perhaps, when the

particular circumstances indicate such evidence

should have been available.”“° Moreover, the court

further stated that “isolated instances of actual

confusion after a significant period of time of

concurrent sales or extensive advertising do not

always indicate an increased likelihood of confusion

and may even suggest the opposite.”*!' Nevertheless,

in analyzing the circumstances actually present in

the Daddy’s case, the court ultimately remanded for

® Daddy's Junky Music Stores, Inc. v. Big Daddy's Famils

Music Center, 109 F.3d 275, 284 (6" Cir, 1997).

" dd

further consideration of the significance of a single

instance of actual confusion, but did so with the

implication that this evidence, and the lack of any

further evidence of actual confusion, while it cou/d

favor a finding of likelihood of confusion, it could, at

most, have only a neutral effect.*2

B. A Lack of Evidence of Actual Confusion Should

Weigh Against a Finding of Likelihood of

Confusion

As shown above, the weight of authority clearly

favors according alleged infringers the benefit of a

significant, favorable inference from a lack of

evidence of actual confusion. Nevertheless, there are

clear disparities and disagreements among the

circuits on this issue, as acknowledged by the

Central District of California in Seven Elephants.

Accordingly, parties defending against infringement

claims are faced with inconsistent treatment of this

critical factor depending on the jurisdiction in which

the claims are brought.

Actual confusion is generally considered the most

important factor in making a determination of a

likelihood of confusion. See, eg., CareFirst of

Marviand, Inc. v. First Care, P.C., 434 F.3d at 268

(“Not all of these factors are of equal importance,

‘nor are they always relevant in any given case. ...

= Id

However, evidence of actual confusion is ‘often

paramount’ in the lkelihood-of-confusion analysis,

...); Oreck Corp. v. U.S. Floor Systems, Inc., 803

F.2d at 173 (“Although evidence of actual confusion

is not necessary to a finding of likelihood of

confusion, it is nevertheless the best evidence of

likelihood of confusion.”); Frehling Enterprises, Inc.

v. Int? Select Group, Inc., 192 F.3d at 1340 (It is

undisputed that evidence of actual confusion is the

best evidence of a likelihood of confusion.”); Daddy's

Junky Music Stores, Inc. v. Big Daddy’s Family

Music Center, 109 F.3d at 284 (“Evidence of actual

confusion is undoubtedly the best evidence of

likelihood of confusion.”)

This is not surprising, since the evaluation as to

whether the vague <e!lective of the consuming public

is lhkely to be confused by a particular trademark

will always contain some level of subjective

inference. There is simply no way to snow whether

particular consumers will be confused, or even

whether they are likely to be confused. That is why

evidence of actual confusion is so crecial. It

minimizes the natural guesswork inherent in any

determination as to whether confusion is “likely to

happen”. There is no better proof that confusion is

likely to occur than an instance of actual occurrence.

Conversely, the absence of actual occurrences when

they should be seen, if confusion «* likely, can be a

strong, objective indication that confusion is, in fact,

not likely.

This Court’s intervention is necessary to ensure a

uniform application of these widely accepted

principles in the analysis of likelihood of confusion,

not only to _ bring’ consistency to _ federal

jurisprudence, but from a more practical standpoint,

to ensure a certain level of fairness in the

enforcement. of trademark rights. This case is a

perfect example of a well established senior mark

holder flexing its economic advantage over a small

business competitor, who, at the very least, should

be entitled to the proper inference to be drawn from

an appreciable period of concurrent sales without

any meaningful evidence that the mark caused

actual consumer confusion. After all, a fear of

confusion that may look legitimate on paper, may in

fact be unfounded in practice. For these reasons, this

Court should grant review.

C. The Circuits are Divided as to the Proper

Standard of Review for a Finding of Likelihood of

Confusion

A further circuit conflict presented by this case is

that regarding the proper standard of appellate

review for district court determinations of likelihood

of confusion in the analysis of trademark

infringement claims.

In McMonagle v. Northeast Women’s Center, Inc.,

493 U.S. 901, 110 S.Ct. 261, 107 L.Ed.2d 210 (1989),

Justice White. in his dissent from the denial of

certiorari in the matter of Clamp Manufacturing Co.

v. Enco Manufacturing Co., 870 F.2d 512 (9* Cir.

1989), cert. denied, 493 U.S. 872, 110 S.Ct. 202, 107

L.Ed.2d 155 (1989), recognized the existence and

importance of this conflict, stating that:

A question presented in this case is whether a

district court's finding of a likelihood of confusion

in a trademark infringement matter under §

43(a) of the Lanham Trade-Mark Act, 60 Stat.

449, as amended, 15 USC. § 1125(a), is

reviewable under the “clearly erroneous”

standard, as a finding of fact, or de novo, as a

conclusion of law. 870 F.2d 512 (CA9 1989). I

have noted before that federal courts disagree

over this question. See Euroguilt, Inc. v. Scandia

Down Corp., 475 U.S. 1147, 106 S.Ct. 1801, 90

L.Ed.2d 346 (1986) (WHITE, J., dissenting from

denial of certiorari); Elby's Big Boy of

Steubenville, Inc. v. Frisch's Restaurants, Inc.,

459 U.S. 916, 103 S.Ct. 231, 74 L.Ed.2d 182

(1982) (same). We should resolve the conflict.**

Other courts have acknowledged the conflict and

have noted its persistence over time. In Levi Strauss

& Co. v. Blue Bell, Inc., 778 F.2d 1352 (9'* Cir. 1985)

(en banc), the Ninth Circuit stated that:

“* MeMonagle v. Northeast Women’s Center, Inc., 493 US. 901,

904, TIO S.Ct. 261. 263 1989)

A review of trademark cases in other circuits

demonstrates that the clearly erroneous standard

predominates for review of a district court's

determination on likelihood of confusion. ... In

dissenting from the denial of certiorari for a case

in which the Sixth Circuit adopted the two-level

test, Justice White partially documented the

disparity in the standards employed by the

various circuits. Elby's Big Boy of Steubenville,

Inc. v. Frisch's Restaurants, 459 U.S. 916, 103

S.Ct. 231, 74 L.Ed.2d 182 (1982) (White, J.,

dissenting).*4 (citations omitted)

Similarly, in Beer Nuts, Inc. v. Clover Club Foods

Co., 805 F.2d 920 (10th Cir. 1986), the Tenth Circuit

stated that:

In this circuit, likelihood of confusion is a

question of fact subject to the clearly erroneous

standard of review. ... Ordinarily, when

presented with a trademark case involving both

questions of law and questions of fact, we review

the legal questions de novo and, if there are legal

errors, we remand the case for further factual

determinations. ... Some reviewing courts do not

remand the case in such a situation but instead

4 hey Strauss & Co. v. Blue Bell Inc., 778 F.2d 1352, 1356, n.

6G (9 Cir 1984)

decide the issue of likelihood of confusion as a

matter of law. Frisch's Restaurants, Inc. v. Elby's

Big Boy of Steubenville, Inc., 670 F.2d 642, 650-

51 (6th Cir.) (citing A/pha Industries, Inc. v.

Alpha Steel Tube & Shapes, Inc., 616 F.2d 440,

443-44 (9th Cir.1980)), cert. denied, 459 U.S. 916,

103 S.Ct. 231, 74 L.Ed.2d 182 (1982) (White, J.,

dissenting on the ground that there is a split in

the circuits as to whether a district court's finding

of likelihood of confusion is reviewable under the

clearly erroneous standard as a question of fact or

de novo as a question of law).> (citations omitted)

The Second Circuit acknowledged the conflict in

Bristol-Myers Squibb Co. v. McNeiul-P.P.C., Inc., 973

F.2d 1033 (2"4 Cir. 1992), stating that:

The standard of appellate review of a district

court's conclusion regarding the likelihood of

confusion between two products has split the

courts of appeals. See Euroguult, Inc. v. Scandia

Down Corp., 475 U.S. 1147, 106 S.Ct. 1801, 90

L.Ed.2d 346 (1986) (White, J, dissenting from the

denial of certiorari to resolve whether the

determination of likelihood of confusion under

section 43(a) is subject to de novo review as a

Beer Nuts. Inc. v. Clover Club Foods Co., 805 F.2d 920, 923,

n 2(10% Cir, 1986)

conclusion of law or “clearly erroneous” review as

a question of fact).36

The Tenth Circuit reiterated its position and

again noted the circuit split in Heartsprings, Inc. v.

Heartspring, Inc., 143 F.3d 550 (10'> Cir. 1998),

stating that:

Likelihood of confusion is a question of fact we

review for clear error. Cardtoons, L.C. v. Major

League Baseball Players Ass'n, 95 F.3d 959, 967

(10th Cir.1996); see also Beer Nuts, Inc. v. Clover

Club Foods Co., 805 F.2d 920, 923 n. 2 (10th

Cir.1986) (discussing the circuit split regarding

appropriate standard of review for likelihood of

confusion and reaffirming Tenth Circuit's general

rule of treating the issue as a question of fact

subject to review for clear error).*7

More recently, the Fourth Circuit acknowledged

the division and its persistence over time in

Adventis, Inc. v. Consolidated Property Holdings,

Inc., 124 Fed. Appx. 169 (4' Cir. 2005), stating that:

36 Bristol-Myers Squibb Co. v. MceNeil-P.P-C.. Ine., 973 F.2d

1033, 10438 (24 Cir, 1992).

37 Heartsprings, Inc. v. Heartspring Inc., 143. F.3d 550, 553

(10% Cir. 1998).

This court has consistently held that the

likelihood of confusion issue in an infringement

claim is an inherently factual determination. See,

e.g., Anheuser-Busch, Inc. v. L. & L. Wings, Inc.,

962 F.2d 316, 318 (4th Cir.1992). We recognize,

however, that a minority of other circuits regard

the issue as a mixed question of fact and law, see,

e.g., In re Majestic Distilling Co., Inc., 315 F.3d

1311, 1314 (Fed.Cir.2003) (describing likelihood

of confusion “as a question of law based on>

findings of relevant underlying facts”); Jet, Inc. v.

Sewage Aeration Sys., 165 F.3d 419, 422 (6th

Cir.1999) (“[Wle review a trial court's underlying

factual findings for clear error but review de novo

whether these facts indicate a likelihood of

confusion.”); see also, 3 J. Thomas McCarthy,

McCarthy on Trademarks and _ Unfair

Competition § 23:73 (4th ed.2001), and that the

split over this issue continues, see, e.g,

McMonagle v. Northeast Women's Center, Inc.,

493 U.S. 901, 904, 110 S.Ct. 261, 107 L.Ed.2d 210

(1989) (WHITE, J., dissenting from denial of

certiorari); Heartsprings, Inc. v. Heartspring,

Inc., 143 F.3d 550, 553 (10th Cir.1998).38

Thus, today many circuits, including the Fourth,

Ninth, Tenth and Eleventh Circuits, review district

38 Adventis, Inc. v. Consolidated Property Holdings. Inc., 124

Fed Appx. 169, 171, 1.38 (4 Cir, 2005).

court findings of likelihood of confusion under the

clearly erroneous standard as a strictly factual

determination. See, eg, Adventis, Inc. v.

Consolidated Property Holdings, Inc., 124 Fed.Appx.

at 171, n. 3 (4 Cir. 2005) (This court has

consistently held that the likelihood of confusion

issue in an infringement claim is an inherently

factual determination.”); Levi Strauss & Co. v. Blue

Bell, Inc., 778 F.2d at 1355 (9! Cir. 1985) (en banc)

(“We hold that henceforth the clearly erroneous

standard should be applied in reviewing a trial

court's determination concerning likehhood of

confusion.”); Heartsprings, Inc. v. Heartspring, Inc.,

143 F.3d at 553 (10'» Cir. 1998) (“Likelihood of

confusion is a question of fact we review for clear

error.”); and & Remy Martin & Co., S.A. v. Shaw-

Ross Int'l Imports, Inc., 756 F.2d 1525, 1529 (11th

Cir. 1985) (In this circuit a determination of

likelihood of confusion, mistake, or deception is a

matter of fact that we may overturn only if clearly

erroneous.”).

However, there remain an influential minority,

including the Second, Sixth and Federal Circuits,

that instead engage in what is essentially a two part

analysis, reviewing the foundational factfinding of

the district court for clear error®®, but reviewing de

Federal Circuit cases reviewing determinations by the

Trademark Trial and Appeal Board apply a “substantial

evidence” standard.

novo the weighing and balancing of the foundational

facts and the ultimate finding ot likelihood of

confusion. See, e.g., Bristol-Myers Squibb Co. v.

McNeil-P.P.C., Inc., 973 F.2d at 1043 (2.4 Cir. 1992)

(“In this Circuit, a district court's determination of

the individual Polaroid factors are subject to review

as findings of fact, subject to reversal only if clearly

erroneous, while the ultimate balancing of all the

Polaroid factors to determine the likelihood of

confusion in any given case is done de novo by this

Court.”); Holiday Inns, Inc. v. 800 Reservation, Inc.,

86 F.3d 619, 623 (6 Cir. 1996) (“This court

considers the question of whether there is a

"likelihood of confusion" as a mixed question of fact

and law. Thus, when reviewing a district court's

decision, we apply a clearly erroneous standard to

findings of fact supporting the existence of these

"likelihood of confusion" factors, but review de novo

the legal question of whether those foundational

facts actually establish a "likelihood of confusion.");

and /n Re Majestic Distilling Co., 315 F.3d at 1314

(Fed. Cir. 2003) (“We review a determination of

likelihood of confusion as a question of law based on

findings of relevant underlying facts. ... Although we

review the Board’s ultimate legal conclusion de novo,

... we review the Board’s underlying findings of fact

under the substantial evidence standard.”)

D. Likelihood of Confusion Should be Reviewed as a

Mixed Question of Fact and Law

Thus, it is clear that this conflict in federal law as

to the proper standard of review of a district court's

finding of likelihood of confusion is entrenched and

persistent, and gives no indication of being resolved

by time or the evolution of legal principles. in JAZ

Huber Corporation v. Lowery Wellheads, Inc., 778 -

F.2d 1467 (10'* Cir. 1985), the Tenth Circuit noted

that “there appears to be an evolving trend toward

treating the fact finder’s determination of the

underlying factors as a question of fact, but treating

the ultimate issue of ‘likelihood of confusion’ as a

question of law.”4° Although this trend has not taken

hold in many circuits, neither has the trend reversed

in over two decades. It is a recognized, long standing

division between the circuits that can only be

resolved by the intervention of this Court.

The conflict exists because the determination of

likelihood of confusion is inherently ambiguous as to

whether it is a factual question or a legal question.

“Whether confusion is likely is a_ factual

determination woven into the law.” Lew Strauss &

Co. v. Blue Bell, Inc., 778 F.2d at 1356.

OPM. Huber Corporation v. Lowerv Wellheads, Inc., 778 2d

1467, 1471, note (0 Cir, 1985). The law of the Ninth Circuit,

through Levi Strauss, infra, changed mght around the time

that this opinion was tssued.

On the one hand, any determination of likelihood

of confusion is necessarily fact dependent since every

mark is unique in its form, purpose and the manner

in which it is used, and no general rule can govern

the outcome of particular cases. This is one reason

advanced for treating it as a purely factual

determination, i.e. that appellate review of such

determinations would have limited precedential

value because they are so fact specific. Jd.

On the other hand, the likelihood of confusion

test is clearly a legal standard derived from the

statutory language of, inter alia, 15 U.S.C. § 1114.

When a judge or jury is asked to evaluate likelihood

of confusion, they are not simply being asked to

conduct an analysis under the ordinary meaning of

that term as understood by the fact finder. The

determination of likelihood of confusion is an

elaborate legal test comprised of varying numbers of

factors, from seven in the Eleventh Circuit*!, to eight

in the Sixth Circuit4?, to ten in the Third Circuit4®,

While there is clearly no dispute that the underlying

foundational facts relevant to the evaluation of each

factor are properly categorized as being the result of

factual determinations, it is certainly reasonable to

'l See Frehling Enterprises, Inc. v. Int’) Select Group, Inc., 192

8d at. 1535.

* See Daddy's Junky Music Stores. Inc v. Big Daddy's Family

Music Center, 109 F.3d at 280.

3 See Century 21 Real Estate Corporation v. Lendingtree. [nc.,

125 F.3d at 224.

conclude, as several circuits have done, that the

complex weighing and balancing of those facts is

ultimately the application of a legal standard to

reach a legal conclusion.

Moreover, the continued viability of “clearly

erroneous” review for the entire determination of

likelihood of confusion engenders its own confusion

in practice, particularly in the summary judgment

setting. For example, in the Ninth Circuit prior to

Levi Strauss, the court applied different standards

depending on whether the foundational facts were

disputed or undisputed, i.e. it reviewed de novo any

determinations based on undisputed facts. Levi

Strauss & Co. v. Blue Bell, Inc., 778 F.2d at 1355, n.

4. The Ninth Circuit then ultimately abandoned de

novo review of likelihood of confusion entirely, in

favor of “clearly erroneous” review. /ad. However, in

the summary judgment setting, the facts are

ultimately undisputed, but it is fundamental that

the appellate court must review the determinations

of the district court de novo, since the grant or denial

of a motion for summary judgment is a judgment “as

a matter of law”. Fed.R.Civ.P. 56(c). To the extent

that determinations of likelihood of confusion based

on undisputed facts are subject to “clearly erroneous”

review, the proper approach in a summary judgment

context is thus clouded.

Ideally, on review of summary judgment, the

appellate court will review the record to decide if the

district court properly determined that no genuine

issues of material fact remained for trial with

respect to all of the underlying, foundational facts

necessary for evaluation of the likelihood of

confusion. If the appellate court concurs with the

district court’s analysis, however, there is then at

this stage a natural danger to review for clear error

the finding of likelihood of confusion from those

undisputed facts, as it appears that the Eleventh

Circuit may have done in this case.

Nevertheless, if the determination of likelihood of

confusion is a fully factual analysis, then the

“factual” weighing and balancing of even undisputed

facts, must, in and of itself, be free of dispute in

order for there to be a proper disposition on

summary judgment. In other words, reasonable

persons who agree on the underlying facts, could

nonetheless disagree as to the weighing and

balancing of those facts and the ultimate conclusion

of likelihood of confusion. thus, no matter how the

issue is approached, on review of summary judgment

on a trademark infringement claim, the appellate

court will always be required to engage in a two part,

de novo analysis of the district court’s conclusion.

However, if a circuit court is constrained by a

“clearly erroneous” standard of review for likelihood

of confusion, it is more likely that this second stage

analysis of the weighing and balancing of

foundational facts could, even unintentionally, be

overlooked.

The conflict between “clearly erroneous” and de

novo review of district court findings of likelihood of

confusion is bound to continue, unless this Court

takes action. This persistent division among the

federal circuits perpetuates a lack of uniformity in

the application of federal law and has repercussions

beyond the trademark infringement _ setting,

affecting all statutory frameworks requiring a

demonstration of likelihood of confusion. For these

reasons, the Court shou d grant review.

E. This Case Was Decided Incorrectly

In this case, there was evidence that the

“EASTERN UNION” mark was used in the same

stores as “WESTERN UNION”, advertised and sold

side-by-side for a period of at least two years*4, and

Western Union was unable to provide any probative

evidence of actual confusion among consumers.*> The

only evidence it proffered was the statement of a

paralegal employed by its counsel, who allegedly

“heard another customer ask the clerk, ‘Who will be

handling my money transfer, Western Union or

Eastern Union?”46 However, as the District Court

41 See R. Vol. 5, Doc. 91-2, p. 3, 4 11 &14, p. 6-7, J 28 & 30

(Affidavit of Eric Young): R. Vol. 4, Doc. 85-3, p. 7-8. (Plaintiffs’

Brief in Support. of Summary Judgment).

App., sofra, 26a (Summary Judgment Order).

ss)

correctly noted in its Preliminary Injunction Order,

“thlis] single statement of a patron is of little value,

and if anything tends to show an absence of

confusion, as the customer apparently was able to

distinguish between the two money transfer service

providers. ’4* .

Unfortunately, this significant lack of evidence of

actual confusion was ultimately ignored and

disregarded by both the District Court and the

Eleventh Circuit as having no bearing on the

likelihood of confusion analysis. This approach is in

sharp contrast to the majority of circuits, and should

not be allowed to stand. Here, as in Aktiebolaget, “it

seems to us that the Jack of confusion is all the more

persuasive because the products are sold side-by-

side, at the same price, using the same advertising

media, and to the same consumers.”48

In fact, the lack of evidence of actual confusion in

this case should have counted, and should have been

weighted heavily in favor of the Defendants. This is

clearly not one those cases in which an exception to

this rule apphes. As explained in Nabisco, the

circumstances under which a reasonable inference

may not be drawn from a lack of evidence of actual

confusion, i.e. where it would be appropriate to

disregard it, would be where the allegedly infringing

product is not yet on the market and/or where the

Jed

"Ss Akuebolaget Electrolux ve Armatron Int'l, lne., 999 F.2d at 4.

alleged victim of infringement does not have access

to samples in order to conduct its own consumer

surveys.’? This is not such a case.

Moreover, given the critical importance of this

factor in the likelihood of confusion analysis, it is not

unreasonable to expect that the result may be

different if Western Union’s distinct lack of evidence

on this point is properly considered.

If the appropriate standard of review is held to be

“clear error’, the Eleventh Circuit could remand for

further factual] evaluation, and the District Court,

upon drawing the correct inference from the lack of

evidence of actual confusion, could certainly conclude

that while there may be no disputed issue as to the

foundational facts®°, there is indeed a genuine

factual dispute with regard to the weighing and

balancing of those facts and the _ ultimate

determination of likelihood of confusion.

Likewise, if the proper standard of review is held

to be “de novo’, the Court of Appeals, if it did not

remand, could certainly weigh the lack of evidence of

actual confusion against Western Union’s evidence

on the remaining factors and conclude that the

conspicuous absence of any objective proof of actual

confusion should control.

"Nabisco, Ine. v. PF Brands, Inc... V1 F.3d at 228.

disputes as to material foundational facts that should not. have

been resolved on summary judgment

Either way, Petitioners would receive the benefit

of a full analysis of all of the factors relevant to

determining the likelihood of confusion, a benefit to

which they are, and should be, entitled.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

Matthew F. McGahren, Esq.

Counsel of Record

Christopher J. York, Esq.

McGahren, Gaskill & York, LLC

6171 Crooked Creek Rd., Suite A

Peachtree Corners. GA 30092

(770) 729-1779

Eric J. Marlett, Esq.

Of Counsel

Law Office of Eric J. Marlett, LLC

P.O. Box 77070

Atlanta, GA 30357

(404) 308-1319

COUNSEL FOR PETITIONERS

NOVEMRER 2008

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

United States District Court,

N.D. Georgia,

Atlanta Division.

WESTERN UNION HOLDINGS, INC., Western

Union Financial Services, Inc., and Integrated

Payment Systems, Inc., Plaintiffs,

. ie

EASTERN UNION, INC., EU Financial Services,

Inc., Young Choe, Individually and d/b/a/ Check

Cash Plus, Evian Group, Inc., and Eric Young,

Defendants.

Civil Action No. 1:06-CV-01408-RWS.

Sept. 7, 2007.

Erin Cranman Witkow, Patricia B. Cunningham,

Troy R. Covington, Sutherland Asbill & Brennan,

Atlanta, GA, for Plaintiffs.

Jerome D. Lee, Hernan Taylor & Lee, Roswell, GA,

for Defendants.

ORDER

RICHARD W. STORY, United States District Judge.

*2 Before the Court are three issues: (i) the

determination of whether to hold Defendants in

contempt for violation of the Modified Preliminary

Injunction Order [84],£N! Gi) Plaintiffs’ Motion for

Sanctions [89], and (iii) Plaintiffs’ Motion for

Summary Judgment [85]. After reviewing the entire

record, the Court enters the following Order.

FN1. As a preliminary matter, let it be noted that

Plaintiffs' Motion for Order to Show Cause [88] was

granted by way of the Court's Notice of Hearing on

Motions [90] issued on Aug. 17, 2007.

Background

I. Factual Background!\?

FN2. Because Defendants failed to submit any

response to Plaintiffs’ Statement of Undisputed

Material Facts [85-4], the Court shall deem these

facts admitted in accordance with Local Rule 56.1

B(2).

Plaintiff Western Union Financial Services, Inc.

offers financial services including money transfer

services, money orders, bill payment services, gift

checks, electronic payment services, and printed

money orders. Plaintiff Western Union Holdings,

Inc. (collectively with Western Union Financial

Services “Western Union”) is the owner of a number

of federal trademark and service mark registrations,

applications, and common law marks for the

“WESTERN UNION” word mark alone and/or in

combination with other wording, and/or the “double

bar” logo and design, and/or the yellow and black

trade dress (collectively the “WESTERN UNION

Marks’).

Defendant Choe is the owner of Check Cash Plus.

Defendant Eastern Union is a Georgia Corporation

that offers for sale money transfer services, money

orders, and travelers checks. Defendant EU

Financial Services is a Georgia Corporation which

purportedly provides tax return advances/loans and

tax preparation services. Choe is listed in the records

on file with the Georgia Secretary of State as the

President and Chief Executive Officer of Defendant

Eastern Union, Inc., as the Chief Executive Officer,

Chief Financial Officer, President, Vice President,

Secretary, and Treasurer of Defendant EU Financial

Services, Inc., and serves as the registered agent for

both corporations. Defendant Young is a Georgia

resident who filed at least two trademark

applications with the United States Patent and

Trademark Office (“USPTO”) for the mark

EASTERN UNION. Young is listed in that

application as Eastern Union's Chief Executive —

Officer. The address listed with the Georgia

Secretary of State for Choe as the registered agent of

Eastern Union and EU Financial Services is

identical to one of Choe's Check Cash Plus locations.

The same address is listed with the Georgia

Secretary of State as the principal office of EU

Financial Services.

In January 2004, Defendant Choe d/b/a Check

Cash Plus entered into a written agency agreement

with Western Union North America, a unit of

Western Union Financial Services, and Integrated

Payment Systems, Inc. (“IPS”) under which Choe

d/b/a Check Cash Plus was appointed an agent of

Western Union Financial and IPS to offer money

transfer and money order services for a term of five

years. Under the agency agreement, as amended,

Choe d/b/a Check Cash Plus was granted a non:

exclusive license to use the WESTERN UNION

Marks for the purpose of advertising and promoting

Western Union money transfer and money order

services at four Check Cash Plus locations in the

Atlanta area. Additionally, during the term of the

agreement and for ninety days thereafter, Choe

d/b/a/ Check Cash Plus agreed not to offer for sale

any money order products or services other than

those of Western Union.

*2 On June 17, 2004, Young filed a trademark

application on behalf of Eastern Union with the

USPTO for the word mark EASTERN UNION for

travelers check issuance, payroll accounting services,

and tax preparation services. On February 27, 2006,

Young filed a trademark application with the

USPTO on behalf of Eastern Union for the word

mark EASTERN UNION for banking services

(collectively the “EASTERN UNION Marks’).

At some point during the term of the agency

agreement between Choe d/b/a Check Cash Plus and

Western Union, Check Cash Plus began advertising

and selling check cashing services, money order

services, money transfer services, and travelers

checks under the name and mark EASTERN

UNION. In addition to the word mark EASTERN

UNION, at least one of the signs placed at the Check

Cash Plus locations depicted the EASTERN UNION

Marks in ae_ée yellow. block font and_ black

background. EN

FN3. Defendants have stated to the Court that they

have voluntarily ceased using the yellow and black

color scheme.

In the spring of 2006, Plaintiffs became aware that

Choe was offering Eastern Union money orders,

money transfer services, and travelers checks at the

four Check Cash Plus locations in violation of the

agency agreement. By letter dated May 12, 2006,

Plaintiffs demanded that Choe cease and desist from

using the EASTERN UNION Marks and the black

and yellow trade dress in connection with these

services. No response was received. As a result, on or

about May 31, 2006, Plaintiffs terminated the

agency agreement.

Finally, in June 2006, Plaintiffs initiated this

action, claiming that Defendants were liable for

trademark and trade dress infringement, breach of

contract, and breach of the duty of loyalty. In their

Answers [16, 17, 18, 19, 20], Defendants asserted

antitrust counterclaims based on Plaintiffs’ alleged

violations of the Sherman Act. Plaintiffs submitted a

Motion to for Summary Judgment on Defendants’

Antitrust Counterclaims [56], and in an Order issued

on July 11, 2007[84], the Court granted that motion.

Discussion

I. Contempt

As a preliminary matter, the Court shall determine

whether Defendants should be held in contempt for

violation of the Modified Preliminary Injunction

Order. After commencement of this suit, Plaintiffs

moved for a preliminary injunction asking the Court

to order Defendants to cease their use of the

EASTERN UNION Mark in connection with certain

financial services [21]. The Court granted this

motion on December 20, 2006(52]. According to the

terms of the preliminary injunction, Defendants

were ordered to

[clease use of any name, designation or mark

containing the phrase “EASTERN UNION” or any

combination of the words “EASTERN” and

“UNION”, either alone or in combination with other

words or symbols, in connection with check-cashing

stores, check cashing services, money orders, money

transfer services, gift checks, travelers checks, tax

services, tax preparation services, tax return

advances/loans, payroll accounting services, banking

services, financing services, and any other financial

Services...

*3 (Order of Jan. 18, 2007 at 2.)

On February 8, 2007, Plaintiffs moved for an Order

requiring Defendants to appear and show cause why

they should not be held in contempt of the January

18, 2007 Preliminary Injunction Order [64].

Plaintiffs asserted that Defendants had continued to

use the EASTERN UNION Mark in connection with

the prohibited financial goods and services. The

Court concluded that Plaintiffs had stated a case for

noncompliance with the preliminary injunction and

ordered Defendants to appear to stow cause why

they should not be held in civil contempt. ( See Order

of Feb 23, 2007.)

After the Court entered an Order to Show Cause

[68] but before a hearing could be held, Defendants’

use of the EASTERN UNION Mark changed, as they

began to intermittently replace the EASTERN

UNION Mark with the initials “E.U.” 4 Thus, the

EASTERN UNION Mark and the initials E.U. (the

“K.U. Mark”) were being used concurrently in

connection with the sale of money transfer services,

money orders, travelers checks, and gift checks.

FN4. While Defendants have alternately utilized the

initials “EU” and “E.U.,” the Court sees no material

difference between the two sets of initials and will

refer only to the use of “E.U. Marks” in this Order.

At the first show cause hearing, held on Feb. 27,

2007, Plaintiffs argued that Defendants’ conduct

violated the terms of the preliminary injunction and

requested that the Court impose sanctions. The

Court, however, chose not to impose sanctions,

noting that “use of the letters ‘E.U.” [did] not run

afoul of the express terms of the Preliminary

Injunction Order.” (Order of Mar. 1, 2007 at 11.) But

the Court did note that should Defendants “continue

to use the letters ‘E.U.” in connection with the sale of

money transfer services, money orders, travelers

checks, gift checks,- or other similar services,

Plaintiffs remain free to move the Court to modify

the terms of the preliminary injunction in this case.”

( Jd. at 12-13.)

Following this hearing, the Court's Order found

Defendants in willful contempt of the preliminary

injunction [75] for their continued use of the

EASTERN UNTON Mark. After the issuance of this

Order. Defendants’ use of the E.U. Mark in

connection with their financial goods and services

expanded substantially. On March 23, 2007,

Plaintiffs moved to amend the _ preliminary

injunction to enjoin Defendants from using the

initials “EU” in connection with money orders,

money transfer services, and other financial service

[78]. The Court granted Plaintiff's Motion to Amend

the Preliminary Injunction Order on July 11, 2007

[84]. Under the Modified Preliminary Injunction

Order, Defendants were ordered to

cease all use of any name, designation or mark

containing the initials “E.U.” or “EU”, either alone or

in combination with other words or symbols, in

connection with check cashing stores, check cashing

services, money orders, money transfer services, gift

checks, travelers checks, tax services, tax

preparation services; tax return advances/loans,

payroll accounting services, banking services,

financing services, and any _ other financial

services....

(Order of July 11, 2007 at 22.)

*4 Roughly one month later, Plaintiffs filed yet

another Motion for Order to Show Cause [88]

alleging that Defendants had failed to comply with

the Modified Preliminary Injunction Order. The

Court reviewed Plaintiffs’ filings, concluded that

Plaintiffs had again successfully stated a case for

noncompliance, and ordered Defendants to appear

before the Court to show cause why they should not

be held in civil contempt of the Modified Preliminary

Injunction Order and sanctioned. The parties

appeared at a second show cause hearing held before

the Court on Aug. 28, 2007.

“Courts have inherent power to enforce compliance

with their lawful orders through civil contempt.”

Citronelle-Mobile Gathering, Inc. v. Watkins, 943

F.2d 1297, 1301 (11th Cir. 1991). “A party seeking

civil contempt bears the initial burden of proving by

clear and sonyincing evidence that the alleged

contemnor he*® wolated an outstanding court order.”

Commodity Futures Trading Comm'n v. Wellington

Precious Metals, Inc., 950 F 2d 1525, 1529 (ith

Cir.1992). “Once a prima facie showing of a violation

has been made, the burden of production shifts to

the alleged contemnor, who may defend his failure

on the grounds that he was unable to comply.” Jd.

“Parties subject to a court's order demonstrate an

inability to comply only by showing that they have

made ‘in good faith all reasonable efforts to comply.’

Citronelle-Mobile, 943 F.2d at 1301 (quoting

United States v. Ryan, 402 U.S. 530, 534, 91 S.Ct.

1580, 1583, 29 L.Ed.2d 85 (1971)). To meet this

burden, the contemnor must do more than merely

assert an inability to comply. /d. Rather, the

contemnor must “produce detailed evidence

specifically explaining why he cannot comply” with

the court's order. Parker v. Scrap Metal Processors,

Inc., 468 F.3d 733, 740 (11th Cir.2006). If, and only

if, the alleged contemnor makes a_ sufficient

evidentiary showing, then the burden shifts back to

the party seeking contempt to prove the ability to

comply. Wellington Precious Metals, 950 F.2d at

1529.

In this case, there can be little doubt that

Defendants have failed to comply with the terms of

the Court's Modified Preliminary Injunction Order.

The Modified Order explicitly calls for the immediate

cessation of all use of the E.U. Mark in connection

with check cashing stores, check cashing services.

money orders, money transfer services, and other

financial services. (Order of July 11, 2007 at 22.)

Plaintiffs have presented evidence establishing

Defendants' continued use of the E.U. Mark in

connection with the expressly prohibited goods and

services. Specifically, on Aug. 4, 2007, the E.U. Mark

was still being displayed on signs at two of the Cash

Check Plus locations. Defendants' counsel even

admitted at the Aug. 27, 2007 hearing that they had

failed to take down these two signs. Plaintiffs have

certainly met their burden in making a prima facie

showing of a violation, shifting the burden to

Defendants to make a specific showing of why they

were unable to comply.

*5 Defendants admit that they failed to comply

with the modified preliminary injunction, yet they

offer no evidence showing an inability to comply with

the Order.® Indeed, they offer no justification

whatsoever for their failure to take down the two

signs bearing the E.U. Marks. In view of Defendants'

failure to show that they tried in good faith to

comply with the Court's Order, the Court concludes

that Defendants are in willful contempt of its

Modified Preliminary Injunction Order.

FN5. Plaintiffs also allege that Defendants were

continuing to sell money orders bearing the “E.U.”

Mark. Defendants claim that the remaining “E.U.”

money orders had been modified using white-out and

markers and that these modified forms were only

being used until new ones could be ordered; printed,

and delivered to their stores.

A. Fines

In view of Defendants’ noncompliance with the

Court's Modified Preliminary Injunction Order.

1Oa

Defendants will be assessed a fine of $1,000.00 to be

paid into the registry of the Court. This fine is in

addition to the sanctions imposed pursuant to the

Court's Order of March 1, 2007[75], which resulted

in fines levied against Defendants totaling

$20,000.00, also to be paid into the registry of the

Court.

B. Attorney's Fees

The Court finds that Plaintiffs are entitled to

recover reasonable attorney's fees associated with

their motion to enforce the terms of the preliminary

injunction in this case. See Sizzler Family Steak

Houses v. Western Sizzlin Steak House, 793 F.2d

1529, 1535 (11th Cir.1986) (explaining that district

courts have discretion to award costs and fees to

party seeking contempt). The Court hereby awards

Plaintiffs attorney's fees in the amount of $1,500 to

be paid by Defendants.

II. Motion for Sanctions

Plaintiffs have moved for sanctions to be imposed

on Defendants for their allegedly frivolous

counterclaims. After considering all arguments

raised by both parties, the Court finds that

Defendants’ conduct with regard to their antitrust

counterclaims does not warrant the imposition

sanctions by the Court. Therefore Plaintiffs’ Motion

for Sanctions is DENIED.

ITI. Motion for Summary Judgment

Also before the Court is Plaintiffs’ Motion for

Summary Judgment on their claims for trademark

infringement and = trade dress infringement.

Plaintiffs seek only the relief of a permanent

injunction and the recovery of attorneys' fees. FX&

FN6. Plaintiffs do not seek any money damages. See

Pl.'s Brief in Support of Pl.'s Mot. for Summary

Judgment [85-3] at 23. Because Plaintiffs seek only a

permanent injunction and attorneys’ fees, the Court

will treat their breach of contract and breach of duty

of loyalty claims as voluntarily dismissed, as these

are claims for damages, not injunctive relief.

A. Standard for Summary Judgment

Federal Rule of Civil Procedure 56(c) provides that

a district court shall grant summary judgment if “the

pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits,

if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to

judgment as a matter of law.” Fed.R.Civ.P. 56(c). The

applicable substantive law identifies which facts are

material, and a fact is not material if a dispute over

that fact will not affect the outcome of the suit under

the governing law. Anderson v. Liberty Lobby, Inc.,

77 U.S. 247, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202

(1986). In determining whether the movant has met

this burden, the district court must view the

evidence and all factual inferences in the light most

favorable to the non-moving party. /d. at 255;

Adickes v.. S.J. Kress & Co.. 398 U.S. 144, 158-59, 90

S.Ct. 1598, 26 L.Ed. 142 (1970): Clark v. Coats &

Clark, Inc., 929 F.2d 604, 606 (11th Cir.1991).

“6 If the movant meets this burden, the non-

moving party then has the burden of showing that

summary judgment is not appropnate by setting

forth “specific facts showing that there is a genuine

issue for trial.” Fed.R.Civ.P. 56(e). An issue is

genuine when the evidence is such that a reasonable

jury could return a verdict for the non-moving party.

Anderson, 477 U.S. at 248; Thornton v. EJ. du Pont

de Nemours & Co., 22 F.3d 284, 288 (11th Cir.1994).

The non-moving party cannot rely on his pleadings,

but must file a response that includes other evidence

showing that there is a genuine issue for trial.

Fed.R.Civ.P. 56(e): Combs v. Plantation Patterns,

106 F.3d 1519, 1526 (11th Cir.1997): Jsenbergh v.

Knight-Ridder Newspaper Sales, Inc, 97 F.3d 436,

439 (11th Cir.1996). Mere conclusory allegations and

assertions are insufficient to create a disputed issue

of material fact. Ear/ey v. Champion Int'l Corp., 907

F.2d 1077, 1081 (11th Cir.1990).

B. Summary Judgment for Trade Dress

Infringement

As to Plaintiffs' Motion for Summary Judgment for

trade dress infringement, the Court concludes that

issues of material fact exist with regard to Plaintiffs’

exclusive right to use yellow and black block

lettering in connection with financial services. Thus,

Plaintiffs’ Motion for Summary Judgment for trade

dress infringement is DENIED.

C. Summary Judgment for Trademark

Infringement“:

FN7. Since the Court had already made a

determination of Plaintiffs’ likelihood of success on

the merits for their trademark infringement claim

pursuant to the Court's rationale in issuing a

Preliminary Injunction. and since very few new facts

or legal arguments have arisen since that time, the

Court's reasoning in its Order of Dec. 20, 2006

issuing the original Preliminary Injunction is largely

applicable to its present inquiry.

Under the Lanham Act, a defendant is liable for

infringement if, without consent, he uses “in

commerce any reproduction, counterfeit, copy, or

colorable imitation of a registered mark” which “is

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

deceive.” 15 U.S.C. § 1114(1)(a). “A plaintiff seeking

to prevail on a trademark infringement claim must

show 1) that he had a valid trademark and 2) that

the defendant had adopted an identical or similar

mark such that consumers were likely to confuse the

two.” Gift of Learning Foundation, Inc. v. TGC, Inc.,

329 F.3d 792, 797 (11th Cir.2003) (per curiam)

(quoting 15 U.S.C. § 1127). It is undisputed that the

WESTERN UNION Mark is a valid trademark and

has priority over the EASTERN UNION Marks and

E.U. Marks. The Court now turns to determine

whether there is a likelihood of confusion.

In assessing likelihood of confusion, courts in the

Eleventh Circuit consider seven factors:

(1) the strength of the plaintiffs mark; (2) the

similarity between the plaintiff's mark and the

allegedly infringing mark: (3) the similarity between

the products and services offered by the plaintiff and

defendant: (4) the similarity of the sales method: (5)

the similarity of advertising methods: (6) the

defendant's intent, e .g., does the defendant hope to

gain competitive advantage by associating his

product with the plaintiff's established mark: and (7)

actual confusion.

Alliance Metals, Inc. v. Hinely Indus., Inc., 222 F.3d

895, 907 (11th Cir.2000). The Court will now address

each factor in turn.

1. Strength of the Mark

*7 In assessing likelihood of confusion, the first

factor for the Court to consider is the strength of the

plaintiff's mark. “The stronger the mark, the greater

the scope of protection accorded it, the weaker the

mark, the less trademark protection it receives.” -

Frehling Enters., Inc. v. Int'l Select Group Inc., 192

F.3d 1330, 1335 (11th Cir.1999). “The primary

indicator of trademark strength measures the logical

correlation between a name and a product.” Freedom

Sav. and Loan Ass'n v. Way, 757 F.2d 1176, 1182

(11th Cir.1985). “The relationships between names

and products fall into several classifications, each

one more heavily protected than the last: generic,

descriptive, suggestive, arbitrary or fanciful, and

coined.” Jd. “The categories are based on the

relationship between the name and the service or

good it describes.” FreA/ing, 192 F.3d at 1335.

Generic marks are the weakest and not entitled to

protection-they refer to a class of which an

individual service is a member (e.g., “liquor store”

used in connection with the sale of liquor).

Descriptive marks describe a characteristic or

quality of an article or service (e.g., “vision center”

denoting a place where glasses are sold). Suggestive

terms suggest characteristics of the goods and

services and require an effort of the imagination by

the consumer in order to be understood as

descriptive. For instance, “penguin” would be

lda

suggestive of refrigerators. An arbitrary mark is a

word or phrase that bears no relationship to the

product (e.g., “Sun Bank” is arbitrary when applied

to banking services). Arbitrary marks are the

strongest of the four categories.

Id. (internal citations and quotations omitted).

Here, Plaintiffs contend that the WESTERN

UNION Marks are arbitrary and entitled to broad

protection. The Court determined in its Order of Dec.

20, 2006[52] that the WESTERN UNION Marks

were arbitrary and deserving of very strong

protection. While Defendants admit in their brief

that the strength of a mark is one of the two most

important factors in determining likeliheod of

confusion, they fail to raise any argument

whatsoever with regards to this factor. ( See Def.'s

Br. in Opp. to Pl.'s’ Mot. for Summ. J. [91] at 9-10 .)

As there is no genuine issue of material fact with

regard to the strength of the mark, the Court

determines that this factor weighs heavily in favor

granting Plaintiffs' Motion for Summary Judgment.

2. Simuarity Between the Marks

The second factor the Court must consider is the

similarity between the plaintiffs mark and that of

the alleged infringer. In evaluating the similarity of

marks. the Court must consider “the overall

impression created by the marks, including a

comparison of the appearance, sound and meaning of

the marks, as well as the manner in which they are

displayed.” &. Remy Martin & Co., S.A. v. Shaw-Ross

Intern. Imports, Inc.. 756 F.2d 1525, 1531 (11th

Cir.1985). “The underlying purpose in considering

the similarity of marks as an indicator of likelihood

of confusion is that the closer the marks are, the

more likely reasonable consumers will mistake the

source of the product that each mark represents. The

probability of this potential confusion is the

touchstone.” FreAling, 192 F.3d at 1337.

*8 Plaintiffs contend that the marks at issue here

are extremely similar. In support of this position,

Plaintiffs point to the fact that only the first two

letters of the first word are different, the second

word is identical, the first words of both marks are

“directional indicators” which each end in the same

five letters, and that Defendants have displayed

their mark in yellow block font on a_ black

background which is virtually identical to the trade

dress utilized by Plaintiffs. In response, Defendants

argue that the marks are not literally similar, as the

words “Eastern” and “Western” are literal opposites

of one another. Defendants even go so far as to assert

that a jury could find that the EASTERN UNION

Marks are the opposite of the WESTERN UNION

Marks, regardless of the marks' color schemes. EN8

FN8. Defendants point to Board of Regents of the

University System of Georgia v. Buzas Baseball,

Inc., 176 F.Supp.2d 1338 (N.D.Ga.2001), as a case

where a court found a genuine dispute as to whether

phonetically-similar word marks were similar. ( See

Def.'s Br. in Opp'n. to Mot. for Summ. J. at 11-12.)

Defendants insist that since other courts have “found

similar sounding marks to be dissimilar for the

purposes of evaluating a summary judgment

motion,” this Court should find that “Eastern Union’

(or “FE.U.") and “Western Union” are not similar.

However, Defendants' reliance on this case is

misplaced. Defendants claim that the court in Buzas

Baseball found a genuine issue of material fact as to

whether the word marks “Buzz” and “Buzzy” were

similar. ( See Def.'s Br. in Opp'n. to Mot. for Summ.

J. at 11-12.)

But in fact, two sets of marks were at issue in the

Buzas Baseball case: (1) the word marks “Buzz” and

“Buzzy” and (2) the design marks depicting Georgia

Tech's “Yellow Jacket Design” mark and Buzas

Baseball's “bee-like logo.” Jd. at 1344-45. A careful

reading of the case shows that the court found with

regard to the word marks “that the two ‘Buzz’ marks

are similar in their sound, their appearance, and the

manner in which they are used” and that “this factor

favors [the plaintiff].” Buzas Baseball, 176 F.Supp.2d

at 1352. The court then went on to find that the two

design marks depicting bee-like characters were only

vaguely similar and that a genuine issue of material

fact existed as to whether these design marks were

similar. Jd.

As the Court has previously stated, the marks at

issue in this case, while not identical, are decidedly

similar. ( See Order of Dec. 20, 2006 at 13-14.) As

noted above, it is “the overall impression created by

the marks, including a comparison of the

appearance, sound and meaning of the marks, as

well as the manner in which they are displayed,”

that guides this inquiry. As this Court put it, “[elach

mark consists of two words, differing only by two

letters. While they differ in some degree aurally, the

overall impression created by attaching a directional

indicator to the word ‘union’ is remarkable.” (Order

LRu

of Dec. 20, 2006 at 13.) Defendants have not

presented sufficient evidence to convince the Court

that a reasonable jury could find that the two marks

are not similar. Thus, while the marks are not

identical, this factor certainly weighs in favor of

Plaintiffs due to the noted similarity between the

marks. ;

3. Similarity Between the Products and Services

The third factor the Court must consider is the

similarity between the products and services offered

by the plaintiff and the defendant. “This factor

requires a determination as to whether the products

are the kind that the public attributes to a single

source.” Freh/ing, 192 F.3d at 1338. The issue is not

whether the purchasing public can readily

distinguish between the products of the respective

parties, but rather whether the products are so

related in the minds of consumers that they get the

sense that a single producer is likely to produce both.

Id.

Here, the Court has already determined that

Plaintiffs and Defendants offer “virtually identical

products and services.” (Order of Dec. 20, 2006 at

14.) Both Plaintiffs and Defendants offer money

orders and money transfer services under their

respective marks. The Court is unconvinced by

Defendants’ argument that the money order services

differ in that Plaintiffs’ services extend worldwide

while Defendants’ are only available in Georgia. The

fact remains that the purchasing public could still

attribute these services to one source, even if the one

service extended worldwide while the other was

tailored for use within the state of Georgia.

19a

*9 Defendants also argue that the money transfer

services differ in that Plaintiffs' services extend

worldwide while Defendants' are only utilized to

transfer money to Korea for its Korean clientele. As

previously determined, this contention is

unsupported by any evidence and is contrary to

representations that were made on Defendants'

website, which offered domestic and international

money transfer services. (Order of Dec. 20, 2006 at

14; see Cunningham Decl. Ex. 1 [30-7] at 2.)

Defendants have failed to come forward with any

evidence supporting this contention.

Furthermore, Defendants argue that the products

are substantially different in that Eastern Union

offers travelers checks for sale, while Western Union

does not. In its Order of Dec. 20, 2006, the Court

noted a product offered on Defendants' website

denominated “Travelers Cheque / Gift Cheque,” and

the Court further noted that Western Union also

offers gift check services (Order of Dec. 20, 2006 at

16 (citing Cunningham Decl. [30] Ex. I at 2 and

Norden Decl. [33] {| 2).) Thus, contrary to

Defendants’ arguments, on the record before this

Court there is a high degree of similarity between

the products and services offered.

And finally. Defendants assert that their money

transfer services differ from those of Western Union

because Defendants offer only bank wire transfers,

while Western Union “is synonymous with ... near

real time, point to point money transfers.” (Def.'s Br.

in Opp. to Mot. for Summ. J. at 14.) The Court once

again finds this argument unpersuasive. Contrary to

20a

Defendants’ contention, the facts show that Western

Union offers bank wire services identical to those of

Defendants. Moreover, even if the purchasing public

could discern between bank wires and the point-to-

point transfer services Defendants contend are

offered by Plaintiffs, those services are of the type

that consumers would likely attribute to a single

source.

None of Defendants’ arguments convince the Court

that a reasonable jury could find that the products

and services offered by the parties are not similar.

Thus, as there is no genuine dispute of material fact,

this Court concludes that there is a high degree of

similarity between the products and services offered

and that this factor weighs strongly in favor of

Plaintiffs.

4. Similarity of the Sales Methods

The fourth factor the Court must consider is the

similarity between the sales methods employed by

the plaintiff and defendant. “This factor takes into

consideration where, how, and to whom the parties'

products are sold.” Frehling, 192 F.3d at 1339. As

related to this inquiry, “[dJissimilarities between the

retail outlets for and the predominant customers of

plaintiff's and defendant's goods lessen’ the

possibility of confusion, mistake, or deception.” Jd.

(quoting Amstar Corp. v. Domino's Pizza, Inc ., 615

F.2d 252, 262 (5th Cir.1980)). While direct

competition between the parties is not required,

“evidence that the products are sold in the same

stores is certainly strong.” /d. Moreover, the parties’

outlets and customer bases need not be identical, but

some degree of overlap should be present. Jd.

2Zla

*10 In this case, the retail outlets and predominant

customers for tne products and services offered by

Plaintiffs and Defendants are virtually identical.

Both offer their money transfer and money order

services through small, independently-owned check

cashing stores. Indeed, Defendant Choe d/b/a Check

Cash Plus was an authorized agent of Western

Union and simultaneously offered both Eastern

Union and Western Union money transfer and

money order’ services out of the same

establishments. There is certainly a geographic

overlap in the relevant markets, and the Court has

been presented with no credible evidence that the

relevant consumer groups differ. Moreover, the

Court's conclusion that the products and services

offered are identical compels the conclusion that the

predominant consumers’ of _ Plaintiffs’ and

Defendants' products are the same. Defendants offer

no evidence to challenge this conclusion. Therefore,

this factor, too, weighs heavily in Plaintiffs’ favor.

5. Similarity of Advertising Methods

The fifth factor the Court must consider requires

an examination of “each party's method of

advertising.” /d. In this case, both parties advertise

their products through internet websites, through

signage posted in retail locations, and brochures

distributed at those locations. ( See Foster Decl. [35]

Exs. A, E, F, H, Q: Cunningham Decl. [30] Exs. I, M,

O, P.) Defendants have offered no evidence disputing

this point. Thus, this factor similarly weighs in

Plaintiffs' favor.

6. Defendants' Intent

“That a latecomer adopts another's name or mark,

deliberately seeking to capitalize on the other's

reputation and benefit from the confusion, is an

important factor for any court.” Sun Banks of Fila.,

Inc. v. Sun Fed. Sav. and Loan Ass'n, 651 F.2d 311,

318-19 (11th Cir.1981). Indeed, “{ilf it can be shown

that a defendant a !opted a plaintiff's mark with the

intention of deriving a benefit from the plaintiff's

business reputation, this fact alone may be enough

to justify the inference that there is confusing

similarity.” FreAling, 192 F.3d 1340.

Here, Defendant Choe was an authorized agent for

Plaintiffs and was granted a non-exclusive license to

use the WESTERN UNION Marks in connection

with the sale of Western Union products in the four

Check Cash Plus stores. During the period of her

agency, and in direct contravention of the contract

between herself and Western Union, Choe began to

offer for sale money transfer and money order

services under the EASTERN UNION Marks. Thus,

Choe was certainly aware of the use of the

WESTERN UNION Marks in connection with these

financial services.

As this litigation has proceeded, Defendants have

obstinately failed to comply with this Court's

instructions to move away from prohibited uses of

the EASTERN UNION and E.U. Marks. Defendants

began by creating a mark that not only sounded like

the WESTERN UNION Marks but also had a similar

appearance to the WESTERN UNION Marks,

emulating the yellow-and-black, block-lettered

design. Subsequently, Defendants began to employ

23a

EASTERN UNION Marks with other colors and

other lettering styles concurrently with their original

design. Following the issuance of the _ initial

Preliminary Injunction, Defendants failed to comply

with this Court's order to cease all use of the

EASTERN UNION Marks but instead continued to

use the mark while gradually introducing the E.U.

Mark. This concurrent use of the EASTERN UNION

Marks and the E.U. Marks helped the Defendants to

maintain the connection in consumers' minds

between the original mark and _ its initials.

Recognizing that the use of such tactics must be

forestalled, the Court issued a Modified Preliminary

Injunction directing Defendants to immediately

cease use of the E.U. Marks in connection with their

financial services. But, as determined above,

Defendants violated this order as well, displaying

the E.U. Marks concurrently with their newly chosen

marks. Thus at every step along the way,

Defendants have attempted to carry with them the

good will derived from the potential confusion

between the WESTERN UNION Marks and the

EASTERN UNION Marks.

*11 Defendants insist that they did not intend to

create consumer confusion. In support of this

contention, they point to the fact that they clearly

demarcate their products and services with the

EASTERN UNION Mark, to alert customers to that

particular product's origin. What Defendants fail to

realize is that it is precisely this demarcation that

gives rise to the potential for consumer confusion.

Defendants have labeled their products and services

with a mark that looks and sounds likes Plaintiffs.

Defendants insist that consumers recognize the

24a

difference between the two marks, but they offer no

evidence to support this assertion. Furthermore,

Defendants have not offered any independent

rationale for their choice of mark that might

demonstrate that it was chosen for some reason

other than the desire to benefit from the good

reputation associated with Plaintiffs' marks.

As there is no genuine issue of material fact with

regard to Defendants’ intent, the Court can only

conclude that Defendants used the EASTERN

UNION Marks in connection with money transfer

and money order services with the desire to derive

benefit from the well-established services and

products offered by Western Union. Accordingly, this

factor, as has each of the preceding ones, militates

strongly in favor of finding a likelihood of confusion.

7. Actual Confusion

The final factor the Court must consider is any

evidence of actual confusion in the marketplace. “It

is undisputed that evidence of actual confusion is the

best evidence of a likelihood of confusion.” Freh/ing,

192 F.3d at 1340. But, such evidence is not a

prerequisite. /d@., Domino's Pizza, 615 F.2d at 263

(stating that “evidence of actual confusion is not

necessary to a finding of likelihood of confusion’).

“Instead, actual confusion is merely one of several

factors that may be relevant in analyzing whether

there is a likelihood of confusion between two

marks,” Montgomery v. Noga, 168 F.3d 1282, 1302

(11th Cir.1999), and courts must assess this factor in

light of the particular facts of each case. Freh/ing,

192 F.3d at 1340.

On this point, neither party has submitted much

evidence. Plaintiffs offer as evidence the declaration

of Carla Foster, a paralegal employed by Plaintiffs'

counsel. Ms. Foster has stated that while visiting a

Check Cash Plus store to purchase a money order,

she “heard another customer ask the clerk, ‘Who will

be handling my money transfer, Western Union or

Eastern Union?’ “ (Foster Decl. [35] at 4] 3.) For their

part, Defendants had previously submitted evidence

in the form of an informal survey, which the Court

rejected due to flaws in its methodology. No further ©

admissible evidence has been offered by Defendants.

FN9. Defendants did retain an expert who conducted

a survey, but since the Defendants never identified

any survey expert prior to the close of discovery, any

evidence offered through him is inadmissible. See

Fed.R.Civ.P. 26(a)(2)(A) (“{A] party must disclose to

the other parties the identity of any witness it may

use at trial under Federal Rule of Evidence 702, 703,

or 705.”)

Despite the lack of probative evidence on this

point, the law is clear that Plaintiff need not

establish actual confusion in order to make a

sufficient showing of likelihood of confusion. And

because each of the other six factors weighs so

heavily in Plaintiffs’ favor, the Court concludes that

Plaintiffs have established likelihood of confusion

and are entitled to summary judgment on their claim

of trademark infringement. Defendants have

asserted conclusory allegations and assertions that

are largely unsupported by any actual evidence and

thus have failed to raise sufficient evidence to create

26a

a genuine issue of material fact. For the foregoing

reasons, Plaintiffs’ Motion for Summary Judgment

on their claim for trademark infringement is hereby

GRANTED.

IV. Relief Sought

A. Permanent Injunction

*12 Under the principles of equity, a plaintiff

requesting a permanent injunction must satisfy a

four-factor test:

(1) that [the plaintiff] has suffered an irreparable

injury; (2) that remedies available at law, such as

monetary damages, are inadequate to compensate

for that injury; (3) that, considering the balance of

hardships between the plaintiff and defendant, a

remedy in equity is warranted: and (4) that the

public interest would not be disserved by a

permanent injunction.

eBay, Inc. v. MercExchange, L.L.C., 126 §.Ct. at

1837, 1839 (2006). Thus, the standard for a

permanent injunction is essentially the same as for a

preliminary injunction except that the movant must

show actual success on the merits instead of a

likelihood of success on the merits. Siege/ v. Lepore,

234 F.3d 1163, 1213 (11th Cir.2000). Plaintiffs had

already succeeded in gaining a_ preliminary

injunction. ( See Order of Dec. 20, 2006, Order of

Jan. 18, 2007, and Order of July 11, 2007.) As

determined above, they have also shown actual

success on the merits of their trademark

infringement claim.

Accordingly, Defendants Eastern Union, Inc., EU

Financial Services, Inc., Young Choe, individually

and d/b/a Check Cash Plus, Evian Group, Inc., and

Eric Young, and their respective officers, agents,

employees, successors and assigns, and any other

person or entity in active concert or participation

with them are hereby PERMANENTLY ENJOINED

from:

(1) All use of any name, designation or mark

containing the phrase “EASTERN UNION” or any

combination of the words “EASTERN” and

“UNION,” either alone or in combination with other

words or symbols, in connection with check cashing

stores, check cashing services, money orders, money

transfer services, gift checks, travelers checks, tax

Services, tax preparation services, tax return

advances/loans, payroll] accounting services, banking

services, financing services, and any other financial

services;

(2) All use of any name, designation or mark

containing the phrase “WESTERN UNION,” or any

other mark, word, designation or name similar to the

WESTERN UNION Marks which is likely to cause

confusion, mistake or to deceive, in connection with

check cashing stores, check cashing services, money

orders, money transfer services, gift checks,

travelers checks, tax services, tax preparation

services, tax return advances/loans, payroll

accounting services, banking services, financing

services, and any other financial services; and

(3) All use of any name, designation or mark

containing the initials “E.U.” or “EU” either alone or

28a

in combination with other words or symbols, in

connection with check cashing stores, check cashing

services, money orders, money transfer services, gift

checks, travelers checks, tax services, tax

preparation services, tax return advances/loans,

payroll accounting services, banking services,

financing services, and any other financial services.

B. Attorney's Fees and Costs

*13 The Court also finds that Plaintiffs are entitled

to recover their costs and reasonable attorney's fees

associated with bringing this action for trademark

infringement. Plaintiffs shall file a statement of their

costs and fees with the Court not later than ten (10)

days from the date this Order is entered on the

docket. Defendants shall then have five (5) days in

which to file any response. If a response is filed,

Plaintiffs shall have an additional five (5) days from

the date of that filing in which to file a reply.

Conclusion

For the reasons stated herein, Plaintiffs' Motion for

Order to Show Cause [88] having been previously

GRANTED, and the Court having found Defendants

in contempt of the Court's. previous. orders,

Defendants are assessed a fine of $1000.00 for this

most recent contempt. This fine is in addition to the

$20,000.00 in fines arising from Defendants’

previous contempt. Further, Defendants shall pay to

Plaintiffs $1500.00 as attorney's fees for the bringing

of their motion. Plaintiffs’ Motion for Sanctions [89]

is DENIED. Plaintiffs’ Motion for Summary

Judgment [85] is DENIED, in part, and GRANTED,

29a

in part. The Motion is denied as to the claim of trade

dress infringement and granted as to the claim of

trademark infringement. Plaintiffs are entitled to

attorney's fees for the claim of trademark

infringement claim and shall submit their statement

of costs and fees as provided above.

SO ORDERED, this 7'» day of September, 2007.

/s/

Richard W. Story

United States District Judge

30a

United States Court of Appeals,

Eleventh Circuit.

WESTERN UNION HOLDINGS, INC., Western

Union Financia! Services, Inc., Intergrated Payment

Systems, Inc., Plaintiffs-Counter-Defendants-

Appellees,

EASTERN UNION, INC., EU Financial Services,

Inc., Young Choe, individually and d/b/a Check Cash

Plus, Evian Group, Inc., Eric Young, Defendants:

Counter-Claimants-Appellants.

No. 07-15379

Non-Argument Calendar.

June 20, 2008.

Jerome D. Lee, Hernan Taylor & Lee, Roswell, GA,

for Defendants-Counter-Claimants-Appellants.

Patricia B. Cunningham, Troy Robert Covington,

Sutherland Asbill & Brennan LLP, Atlanta, GA, for

Plaintiffs-Counter-Defendants-Appellees.

Appeal from the United States District Court for the

Northern District of Georgia. D.C. Docket No. 06-

01408-CV-RWS-1.

Before CARNES, BARKETT and PRYOR, Circuit

Judges.

PER CURIAM:

*J] Eastern Union, EU Financial Services, Young

Choe, Evian Group, and Eric Young appeal the

summary judgment in favor of Western Union. The

district court concluded that Eastern Union

sla

infringed the trademarks of Western Union. We

affirm.

I. BACKGROUND

Western Union owned a number of registered

trademarks for the “WESTERN UNION” mark

depicted in a yellow block font on a black background

associated with money transfer and money order

services. Young Choe was the owner of Check Cash

Plus, a Georgia corporation that offered money

transfer services and sold money orders and

travelers checks. Choe entered an agency contract

with Western Union that allowed Choe to sell

Western Union money transfer and money order

services and to use the marks owned by Western

Union at four stores of Check Cash Plus. Choe

agreed not to sell any other money order products or

services.

Choe was registered with the Secretary of State of

Georgia as the president and chief executive officer

of Eastern Union, a Georgia corporation that offered

money transfer services, and as holding all corporate

officer positions of EU Financial Services, a Georgia

corporation that offered tax preparation and loan

services. Choe was the registered agent for both

corporations and _ accepted. service for’ the

corporations at the address of one of her Check Cash

Plus stores. The same address was also listed with

the Secretary of State as the principal office of EU

Financial! Services.

Five months after Choe contracted with Western

Union, Eric Young filed a trademark application for

the mark EASTERN UNION and listed himself as

the chief executive officer of Eastern Union. Young

stated on the application that the mark was

associated with the issuance of travelers checks and

services for payroll accounting and tax preparation.

Check Cash Plus later advertised money orders,

money transfers, and travelers checks under the

name and mark EASTERN UNION. At one Check

Cash Plus store and in a Check Cash Plus brochure,

the EASTERN UNION mark was depicted in a

yellow block font on a black background. When it

learned that Check Cash Plus was selling products of

Eastern Union, Western Union notified Choe that

the sales violated the agency contract and demanded

that Choe cease use of the EASTERN UNION marks

and black and yellow trade dress.

When Choe did not respond to its demand,

Western Union terminated the agency agreement

and filed a complaint that Choe, Eastern Union, and

Young had committed unfair trade practices in

violation of the Lanham Act and Georgia law. 15

U.S.C. §§ 1114, 1125(a), 1125(c); Ga.Code Ann. §§

10°1°371-73, 10°1°451(b), 23-2-55. Western Union

alleged that the defendants had committed

trademark and trade dress infringement by using

the EASTERN UNION mark in combination with a

yellow and black trade dress similar to that used by

Western Union. Western Union sought to enjoin the

defendants from using “any name, designation or

mark containing the phrase EASTERN UNION or

any other mark, word, designation, trade dress or

name similar to the WESTERN UNION” marks.

*2 After a hearing, the district court entered a

preliminary injunction that the defendants cease

using the EASTERN UNION mark. The district

court later held the defendants in contempt for

failing to comply with the injunction but declined to

impose sanctions for their use of the marks EU and

E.U. The district court amended the preliminary

injunction to bar defendants from using the marks

EU and E.U. The district court later held the

defendants in contempt for violating the amended

preliminary injunction.

Western Union filed a motion for summary

judgment. The district court denied the summary

judgment for trade dress infringement, but granted

summary judgment for trademark infringement. The

district court concluded that Eastern Union used a

mark “decidedly similar” to the mark owned by

Western Union and there was a_ substantial

likelihood of consumer confusion. The district court

entered a permanent injunction prohibiting the use

of the EASTERN UNION, EU, and E.U marks.

II. STANDARDS OF REVIEW

We review summary judgment de novo and view

the evidence in the light most favorable to the

nonmoving party. A/liance Metals, Inc. v. Hinelyv

Industries, Inc., 222 F.3d 895, 897 (11th Cir.2000).

Summary judgment should be entered when there is

no genuine issue of material fact and the moving

party is entitled to judgment as a matter of law.

Fed. R.Civ.P. 56(c). We review the exclusion of an

44a

affidavit of an undisclosed expert for abuse of

discretion. Cooper v. Southern Co., 390 F.3d 695, 728

(11th Cir.2004).

Ill. DISCUSSION

The defendants, to whom we will refer collectively

as Eastern Union, argue that Western Union was

not entitled to summary judgment for trademark

infringement. Eastern Union argues that the district

court erroneously applied the same legal standard as

it used to evaluate the request for the preliminary

injunction, overlooked genuine issues of material

fact, and erroneously excluded an affidavit of an

undisclosed expert. We disagree.

Western Union had to establish that its mark had

priority and the mark used by Eastern Union was

confusingly similar to the mark owned by Western

Union so that it “created a likelihood of confusion

among consumers as to the origin of goods sold.”

Alliance, 222 F.3d at 906. Eastern Union does not

dispute the priority of Western Union to the

trademark, but Eastern Union denies that there was

a likelihood that consumers would confuse the

WESTERN UNION and EASTERN UNION marks.

We agree with the district court that there was no

genuine issue of material fact regarding the

likelihood of confusion between the WESTERN

UNION and EASTERN UNION marks.

To resolve this controversy, the district court

assessed seven factors: the strength of the mark: the

similarity of the sales methods of the parties: the

similarity of the advertising methods used by the

parties; the similarity of the two marks; the

similarity of the products and services offered by the

parties; the defendants’ intent when using the mark:

and actual confusion between the marks. See

Alhance, 222 F.3d at 907. Eastern Union offered no

evidence to create an issue of fact as to the first three

factors. The evidence established that the Western

Union mark was arbitrary and deserved strong

protection; both parties marketed their products

through small retail outlets targeted to reach the

same group of consumers; and the parties employed

the same advertising mediums. The district court

also concluded that there was no genuine issue of

material fact regarding the remaining factors. The

marks WESTERN UNION and EASTERN UNION

were patently similar in “appearance, sound and

meaning ... as well as the manner in which they

[were] displayed.” FE. Remy Martin & Co. SA. v.

Shaw-Ross Int'l Imports, Inc., 756 F.2d 1525, 1531

(llth Cir.1985): see, e.g, Frehling Enters., Inc. v.

Int'l Select Group, Inc., 192 F.3d 1330, 1337 (11th

Cir.1999). The parties also advertised virtually

identical money order and money transfer services

that customers could easily attribute to one source.

See Frehling, 192 F.3d at 1338; Remy Martin, 756

F.2d at 1530.

*3 The undisputed familiarity of Eastern Union

with the WESTERN UNION mark and its well-

known affiliation with money transfer services,

imitation of the WESTERN UNION mark, and

repeated refusals to discontinue use of a mimetic

mark established that Eastern Union intended to

capitalize on the reputation and infringe on the

market created by Western Union. See Frehling, 192

F.3d at 1340 (If it can be shown that a defendant

adopted a plaintiffs mark with the intention of

deriving a benefit from the plaintiffs business

reputation, this fact alone may be enough to justify

the inference that there is confusing similarity.”).

Although Western Union did not present evidence of

actual customer confusion, the district court

correctly concluded that proof of actual confusion

was not required when the overwhelming evidence

regarding the remaining factors supported a

judgment in favor of Western Union. See

Montgomery v. Noga, 168 F.3d 1282, 1302 (11th

Cir.1999) (refusing to reverse a finding of a

likelihood of confusion between marks “based merely

on the absence of evidence of actual confusion”); see

also Frehling, 192 F.3d at 1340 (evidence of actual

confusion “is not a prerequisite, and thus it is up to

individual courts to assess this factor in light of the

particular facts of each case”). The district court did

not err.

The district court also did not abuse its discretion

when it excluded the affidavit of Jeffrey Shusterman.

Eastern Union failed to disclose Shusterman as an

expert and failed to provide an expert report during

the discovery period as required by Federal Rule of

Civil Procedure 26(a)(2) and Local Rule 26.2C.

“Because the expert witness discovery rules are

designed to allow both sides in a case to prepare

their cases adequately and to prevent surprise, ...

compliance with Rule 26 is not merely aspirational.”

Cooper. 390 F.3d at 728 (citation omitted).

IV. CONCLUSION

The summary judgment in favor of Western Union

is AFFIRMED.

38a

In the United States Court of Appeals

for the Eleventh Circuit

No. 07-15379

WESTERN UNION HOLDINGS, INC., Western

Union Financial Services, Inc., Intergrated Payment

Systems, Inc., Plaintiffs-Counter-Defendants-

Appellees,

EASTERN UNION, INC., EU Financial Services,

Inc., Young Choe, individually and d/b/a Check Cash

Plus, Evian Group, Inc., Eric Young, Defendants-

Counter-Claimants-Appellants.

On Appeal from the United States District Court. for

the Northern District of Georgia

On Petition(s) for Rehearing and Petition(s) for

Rehearing En Banc

Before: Carnes, Barkett and Pryor, Circuit Judges.

Per Curiam:

The Petition(s) for Rehearing are DENIED and no

Judge in regular active service on the Court having

requested that the Court be polled on rehearing en

bane (Rule 35, Federal Rules of Appellate

Procedure), the Petition(s) for Rehearing En Banc

are DENIED.

Entered for the Court: August 25, 2008

/s/

United States Circuit Judge

United States District Court,

N.D. Georgia,

Atlanta Division.

WESTERN UNION HOLDINGS, INC., Western

Union Financial Services, Inc., and Integrated

Payment Systems, Inc., Plaintiffs,

EASTERN UNION, INC., EU Financial Services,

Inc., Young Choe, Individually and d/b/a/ Check

Cash Plus, Evian Group, Inc., and Eric Young,

Defendants.

Civil Action No. 1:06-CV-01408-RWS.

Dec. 20, 2006.

ORDER

Now before the Court is Plaintiffs' Motion for

Preliminary Injunction [21]. After considering the

entire record, and the argument of counsel, the Court

enters the following Order.

Background

Plaintiff Western Union Financial Services,

Inc. offers financial services including but not limited

to money transfer services, money order services, bill

payment services, gift check services, electronic

payment services, and printed money _ orders.

Plaintiff Western Union Holdings, Inc. (collectively

with Western Union Financial Services “Western

Union") is the owner of a number of federal

trademark and_= service mark _ registrations.

applications, and common law marks for the

"WESTERN UNION" word mark alone andWor in

combination with other wording, and/or the "double

bar" logo and design. and/or the yellow and black

4Qa

trade dress (collectively the "WESTERN UNION

Marks").

Defendant Choe is the owner of Check Cash

Plus. Defendant Eastern Union is a Georgia

Corporation which offers for sale money transfer

services, money order services, and travelers checks.

Defendant EU Financial Services is a Georgia

Corporation which purportedly provides tax return

advances/loans and tax preparation services. Choe is

listed in the records on file with the Georgia .

Secretary of State as the President and Chief

Executive Officer of Defendant Eastern Union, Inc.,

as the Chief Executive Officer, Chief Financial

Officer, President, Vice President, Secretary, and

Treasurer of Defendant EU Financial Services, Inc.,

and serves as the registered agent for both

corporations. Defendant Young is a Georgia resident

who filed at least two trademark applications with

the United States Patent and Trademark Office

("USPTO") for the mark EASTERN UNION. Young

is listed in that application as Eastern Union's Chief

Executive Officer. The address listed with the

Georgia Secretary of State for Choe as the registered

agent of Eastern Union and EU Financial Services is

identical to one of Choe's Check Cash Plus locations.

The same address is listed with the Georgia

Secretary of State as the principal office of EU

Financial Services.

In January 2004, Defendant Choe d/b/a Check

Cash Plus entered into a written agency agreement

with Western Union North America, a unit of

Western Union Financial Services, and Integrated

Payment Systems, Inc. ("IPS"), under which Choe

d/b/a Check Cash Plus was appointed an agent of

dla

Western Union Financial and IPS to offer money

transfer and money order services for a period of five

years. Under the agency agreement, as amended,

Choe d/b/a Check Cash Plus was granted a non-

exclusive license to use the WESTERN UNION

Marks for the purpose of advertising and promoting

Western Union money transfer and money order

services at four Check Cash Plus locations in the

Atlanta area. Additionally, during the term of the

agreement and for ninety days thereafter, Choe

d/b/a/ Check Cash Plus agreed not to offer for sale

any money order products or services other than

those of Western Union.

On June 17, 2004, Young filed a trademark

application on behalf of Eastern Union with the

USPTO for the word mark EASTERN UNION for

travelers check issuance, payroll accounting services,

and tax preparation services. On February 27, 2006,

Young filed a trademark application with the

USPTO on behalf of Eastern Union for the word

mark EASTERN UNION for banking services

(collectively the "EASTERN UNION Marks").

At some point during the term of the agency

agreement between Choe d/b/a Check Cash Plus and

Western Union, Check Cash Plus began advertising

and selling check cashing services, money order

services, money transfer services, and travelers

checks under the name and mark EASTERN

UNION. In addition to the word mark EASTERN

UNION, some of the signs placed at the Check Cash

Plus locations depicted the EASTERN UNION

Marks in a yellow block font and black background. !

In the spring of 2006, Plaintiffs became aware

that Choe was offering Eastern Union money order

services, money transfer services, and travelers

check services at the four Check Cash Plus locations

in violation of the agency agreeinent. By letter dated

May 12, 2006, Plaintiffs demanded that Choe cease

and desist from using the EASTERN UNION Marks

and the black and yellow trade dress in connection

with these services. No response was received. Asa

result, on or about May 31, 2006, Plaintiffs

terminated the agency agreement. Finally, in June

2006, Plaintiffs initiated this action, alleging that

Defendants' use of the EASTERN UNION Marks in

connection with the sale of money transfer, money

order, and travelers check products and services

violated the Lanham Act, as well as applicable state

law. Plaintiffs have now moved for preliminary

injunctive relief, and the Court turns to the question

of whether such relief would be appropriate in this

case.

Discussion

I. Preliminary Injunction Standard

A preliminary injunction is an “extraordinary

and drastic remedy[.]" Zardui-Quintana v. Richard,

768 F.2d 1213, 1216 (11th Cir. 1985). To obtain such

relief, a movant must demonstrate:

(1) a substantial likelihood of success on the

1 Defendants have stated to the Court that they have

voluntarily ceased using the yellow and black color scheme

A8a

merits of the underlying case, (2) the movant

will suffer irreparable harm in the absence of

an injunction, (3) the harm suffered by the

movant in the absence of an injunction would

exceed the harm suffered by the opposing

party if the injunction issued, and (4) an

injunction would not disserve the public

interest.

Johnson & Johnson Vision Care, Inc. v. 1-800

Contacts, Inc., 299 F.3d 1242, 1246-47 (11th Cir.

2002). To determine whether Plaintiffs have met

their burden in this case, the Court begins by

examining the substantive law applicable to this

controversy and evaluating Plaintiffs’ likelihood of

success in light of that authority.

Il. Substantial Likelihood of Success

A. Trademark Infringement

Plaintiffs contend that Defendants infringe

the WESTERN UNION Marks by advertising and/or

offering for sale various financial services and

products, including check cashing services, money

orders, money transfers, gift checks, and travelers

checks under the EASTERN UNION Marks.

Under the Lanham Act, a defendant is lable

for infringement, if, without consent, he uses "in

commerce any reproduction, counterfeit, copy, or

colorable imitation of a registered mark" which "is

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

deceive." 15 U.S.C. § 11140))(a). “To prevail on a

trademark infringement claim, a plaintiff must show

(1) that its mark has priority and (2) that the

defendant's mark is likely to cause consumer

{da

confusion." Carnival Brand Seafood Co. v. Carnival

Brands, Inc., 87 F.3d 1307, 1309 (11th Cir. 1999).

The parties do not dispute the priority of the

WESTERN UNION Marks. As such, the Court turns

first to Defendant's argument that Plaintiffs’

Lanham Act claims fail because Defendant's use of

the Western Union Marks was permissive, and

second, to the question of whether use of Defendants’

marks is likely to cause confusion.

i, Defendants’ license to use the Western Union

Marks

In defense of Plaintiffs' motion, Defendants

raise the argument that Plaintiffs' claims of

trademark infringement and dilution fail as a matter

of law because Defendants were granted a license to

use the WESTERN UNION Marks. (See Br. in

Opp'n to Mot. for Prelim. Inj. [44] at 14-16.) Without

question, the agency agreement granted a license to

use the WESTERN UNION Marks for the purpose of

advertising and promoting Western Union Money

Transfer and Western Union Money Order services.

(See Dragovich Decl. Ex. A § 4.3.) That agreement,

however, provided no license to use the EASTERN

UNION Marks in connection with the same or

similar services. As Defendants seek relief on the

grounds that the use of the EASTERN UNION

Marks infringed, diluted, and tarnished the

WESTERN UNION Marks. Defendants’ argument

that the license agreement precludes relief under the

Lanham Act is without merit.

2. Likelihood of confusion

To determine likelihood of confusion, courts in

the Eleventh Circuit look to seven factors:

(1) the strength of the plaintiff's mark: (2) the

similarity between the plaintiff's mark and the

allegedly infringing mark: (3) the. similarity

between the products and services offered by

the plaintiff and defendant; (4) the similarity

of the sales method: (5) the similarity of

advertising methods; (6) the defendant's

intent, e.g., does the defendant hope to gain

competitive advantage by associating his

product with the plaintiff's established mark;

and (7) actual confusion.

Alliance Metals, Inc. v. Hinely Indus.. Inc., 222 F.3d

895, 907 (11th Cir. 2000). The Court addresses each

in turn.

a. Strength of the mark

In assessing Plaintiffs' likelihood of success,

the first factor the Court must consider is the

strength of the mark. "The stronger the mark, the

greater the scope of protection accorded it, the

weaker the mark, the less trademark protection it

receives." Frehling Enters., Inc. v. Int'l Select

Group, Inc., 192 F.3d 1330, 1335 (11th Cir. 1999).

“The primary indicator of trademark strength

reasures the logical correlation between a name and

— product." Freedom Sav. and Loan Ass'n v. Way,

757 F.2d 1176, 1182 (11th Cir. 1985). "The

relationships between names and products fall into

several classifications, each one more _ heavily

protected than the last: generic, descriptive,

suggestive, arbitrary or fanciful, and coined." Id.

"The categories are based on the _ relationship

AGa

between the name and the service or good it

describes." Frehling, 192 F.3d at 1335.

Generic marks are the weakest and not

entitled to protection-they refer to a class of

which an individual service is a member (e.g.,

"liquor store" used in connection with the sale

of liquor). Descriptive marks describe a

characteristic or quality of an article or service

(e.g., "vision center" denoting a place where

glasses are sold). Suggestive terms suggest

characteristics of the goods and services and

require an effort of the imagination by the

consumer in order to be understood as

descriptive. For instance, "penguin" would be

suggestive of refrigerators. An arbitrary mark

is a word or phrase that bears no relationship

to the product (e.g., "Sun Bank" is arbitrary

when applied to banking services). Arbitrary

marks are the strongest of the four categories.

Id. (internal citations and quotations omitted).

In this case, Plaintiffs contend that the

WESTERN UNION Marks are arbitrary and entitled

to broad protection. Defendants offer no argument

on this point. While the Court recognizes that both

words individually are commonly used, and as

Defendants point out in an unrelated argument, the

word "union" has been employed by companies

offering different financial services (e.g., First Union,

Trans Union), the phrase "Western Union" has

achieved broad recognition. The mark is distinctive

and well-known as it relates to the transfer of funds,

issuance of money orders, and other financial

services offered by Plaintiffs. Cf. Amstar Corp. v.

AV7a

Domino's Pizza, Inc., 615 F.2d 252, 260 (5th Cir.

1980) (recognizing "Domino" as famous in connection

with sugar and related products, and explaining that

third-party uses and registrations of words in a mark

merely limit the protection to be accorded outside of

the uses to which plaintiff has already put its mark).

Finally, the phrase "Western Union" bears no

connection with those goods or services. Accordingly,

the Court considers the Western Union Marks to be

arbitrary, and this factor weighs’ in favor of

Plaintiffs.

b. Similarity between the marks

The second factor the Court must consider is

the similarity between the plaintiffs mark and that

of the alleged infringer. In evaluating the similarity

of marks, the Court must consider "the overall

impression created by the marks, including a

comparison of the appearance, sound and meaning of

the marks, as well as the manner in which they are

displayed." E. Remy Martin & Co., S.A. v. Shaw-

Ross Intern. Imports, Inc., 756 F.2d 1525, 1531 (11th

Cir. 1985). "The underlying purpose in considering

the similarity of marks as an indicator of likelihood

of confusion is that the closer the marks are, the

more likely reasonable consumers will mistake the

source of the product that each mark represents.

The probability of this potential confusion is the

touchstone.” Frehling, 192 F.3d at 1337.

Plaintiffs contend that the marks at issue in

this case are extremely similar. In support of this

position, Plaintiffs point to the fact that only the first

two letters of the first word are different, the second

word is identical, the first words of both marks are

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"directional indicators" which each end in the same

five letters, and that Defendants have displayed

their mark in yellow block font on a_ black

background which is virtually identical to the trade

dress utilized by Plaintiffs.2 In response, Defendants

argue that the marks are not literally similar, that

the words "Eastern" and "Western" stand[] in direct.

opposition to the other, i.e., 'Eastern' is the opposite

of 'Western'.” (Resp. in Opp'n at 17.)

In the Court's opinion, the marks at issue in

this case are similar. Certainly, Defendants are

correct in that the marks are not identical. But, as

explained above, it is "the overall impression created

by the marks, including a comparison of the

appearance, sound and meaning of the marks, as

well as the manner in which they are displayed,"

that governs this inquiry. When the marks are

compared in this manner, the Court can but only

2 In addition, Plaintiffs cite Federal Circuit authority for the

proposition that. a lesser degree of similarity is required when

the plaintiffs mark is famous. (Br. in Supp. of Mot. for Prelim.

Inj. [31] at 28, 24-25.) But, the fame of the mark in question is

an express factor the Federal Circuit relies upon in determining

whether a likelihood of confusion exists. See, e.g., Century 21

Real Estate Corp. v. Century Life of Am., 970 F.2d 874, 877

(1992) (This court has acknowledged that. fame of the prior

mark ... ‘plays a dominant role in eases featuring a famous or

strong mark.’ " (quoting Kenner Parker Toys v. Rose Art Indus.,

963 F.2d 350, 3852 (ed. Cir. 1992))). The Eleventh Circuit,

however, has not adopted this factor in its likelihood of

confusion analysis, and as such, the Court declines to rely on

the fame of the Western Union Marks in making a finding of

similarity.

19a

conclude that the marks are exceeding similar. Each

mark consists of two words, differing only by two

letters. While they differ in some degree aurally, the

overall impression created by attaching a directional

indicator to the word "union" is _ remarkable.

Moreover, while not determinative, the possibility

that the marks are confusingly similar is multiplied

by the manner in which Defendants chose to display

their marks, electing to use identical lettering and

colors. Although Defendants claim to have

abandoned the black and yellow color scheme,

apparently in response to this litigation, the Court

finds the initial (and possible future) similarity in

appearance significant. Finally, as is discussed

below, the marks are used in the sale of identical

products and services. While the similarity between

the products and services constitutes a separate

factor in the likelihood of confusion inquiry, the

Court. is of the view that the similarity required for

this factor to tilt in Plaintiffs' favor is somewhat

reduced where the marks in question are used in an

identical manner for identical services.

In sum, while the marks do differ, the Court

finds the marks to be sufficiently similar for this

factor to weigh in favor of Plaintiffs.

c. Similarity between the products and services

The third factor the Court must consider is the

similarity between the products and services offered

by the plaintiff and the defendant. "This factor

requires a determination as to whether the products

are the kind that the public attributes to a single

source." Frehling, 192 F.3d at 1338. The issue 1s not

whether or not the purchasing public can readily

distinguish between the products of the respective

parties, but rather whether the products are so

related in the minds of consumers that they get the

sense that a single producer is likely to produce both.

Id.

In this case, the Court concludes that

Plaintiffs and Defendants offer virtually identical

products and _ services. Plaintiffs offer money

transfer services and money orders under the

WESTERN UNION Mark; Defendants offer money

transfer services and money orders under the

EASTERN UNION Mark.

The Court is unconvinced by Defendants'

arguments to the contrary. First, insofar as

Defendants contend that their money transfer

services differ from those of Western Union because

Defendants offer only bank wire transfers, while

Western Union "is synonymous with . . . near real

time, point to point money transfers," the facts show

that Western Union offers bank wire services

identical to those of Defendants. Moreover, even if it

were true that Defendants offered only bank wires,

while Plaintiffs offered some other form of money

transfer service, that fact would not preclude a

finding that the services were more than sufficiently

related to tilt this factor heavily in Plaintiffs’ favor.

See E. Remy Martin & Co, 756 F.2d at 1530

(reversing district court's conclusion that wine and

cognac were not related, explaining that the

purchasing public can readily distinguish wine from

cognac but the question is whether the products are

the kind the public attributes to a single source).

Certainly, even if the purchasing public could discern

between bank wires and the point-to-point transfer

Dla

services Defendants contend are offered by Plaintiffs,

those services are of the type that consumers would

likely attribute to a single source.

Second, insofar as Defendants argue that

Eastern Union only provides international money

transfers to Korean clients in the form of bank wires

to.and from South Korean banks, that contention is

unsupported by any evidence, and indeed, contrary

to the evidence before this Court. For example,

Defendants’ website purports to offer domestic and

international money transfer services. (See

Cunningham Decl. Ex. I [30-7] at 2.)

Finally, the Court finds Defendants' argument

that the products are substantially different because

Eastern Union offers travelers checks for sale, while

Western Union does not, unpersuasive. As an initial

matter, like the wine and cognac at issue in E. Remy

Martin, travelers checks are so closely related to the

myriad financial services offered by Plaintiffs that

travelers checks are the type of financial service that

consumers would reasonably expect to originate with

Plaintiffs. What is more, the product offered on

Defendants' website is denominated "Travelers

Cheque / Gift Cheque". (Cunningham Decl. [30] Ex. I

at 2.) Western Union offers gift check services. (See

Norden Decl. [33] {| 2.) Thus, contrary to Defendants’

arguments, on the record before this Court there is a

high degree of similarity between the products and

services offered.

d. Similarity of the sales method

The fourth factor the Court must consider is

the similarity between the sales methods employed

by the plaintiff and defendant. "This factor takes

into consideration where, how, and to whom the

parties’ products are sold." Frehling, 192 F.3d at

1339. As related to this inquiry, "[d]issimilarities

between the retail outlets for and the predominant

customers of plaintiff's and defendant's goods lessen

the possibility of confusion, mistake, or deception."

Id. (quoting Amstar Corp. v. Domino's Pizza, Inc.,

615 F.2d 252, 262 (5th Cir. 1980)). While direct

competition between the parties is not required,

stores is certainly strong.” Id. Moreover, the parties’

outlets and customer bases need not be identical, but

some degree of overlap should be present. Id.

In this case, the retail outlets and

predominate customers for the products and services

offered by Plaintiffs and Defendants are virtually

identical. Both offer their money transfer and money

order services through small, independently-owned

check cashing stores. Indeed, Defendant Choe d/b/a

Check Cash Plus was an authorized agent of

Western Union and simultaneously offered both

Eastern Union and Western Union money transfer

and money order services out of the same

establishments. Moreover, in light of the geographic

overlap in the relevant markets, and the fact that

the Court has been presented with no credible

evidence that the relevant consumer group differs,

the Court's conclusion that the products and services

offered are identical compels the conclusion that the

predominant consumers of Plaintiffs and Defendants’

products are the same. Therefore, the Court must

conclude that this factor similarly weighs heavily in

Plaintiffs’ favor.

e. Similarity of advertising methods

"This factor looks to each party's method of

advertising." Id. In this case, both parties advertise

their products through internet websites, through

signage posted in retail locations, and brochures

distributed at those locations. (See Foster Decl. [35]

Exs. A, E, F, H, Q; Cunningham Decl. [30] Exs. I, M,

O, P.) Thus, this factor similarly weighs in Plaintiffs'

favor.

f. Intent

"That a latecomer adopts another's name or

mark, deliberately seeking to capitalize on the

other's reputation and benefit from the confusion, is

an important factor for any court." Sun Banks of

Fla., Inc. v. Sun Fed. Sav. and Loan Ass'n, 651 F.2d

311, 318-19 (11th Cir. 1981). Indeed, "[ilf it can be

shown that a defendant adopted a plaintiff's mark

with the intention of deriving a benefit from the

plaintiff's business reputation, this fact alone may be

enough to justify the inference that there is

confusing similarity." Frehling, 192 F.3d 1340.

In this case, Defendant Choe was an

authorized agent for Western Union. As such, Choe

was granted a non-exclusive license to use the

WESTERN UNION Marks in connection with the

sale of Western Union products in the four Check

Cash Plus locations. During the period of that

agency, and in direct contravention of the agency

agreement between Choe and Western Union, Choe

began to offer for sale money transfer and money

order services under the EASTERN UNION Marks.

Thus, it is beyond dispute that Choe was aware of

the use of the WESTERN UNION Marks in

connection with these services. Moreover, it is

apparent that from the outset, Choe and Eastern

Union adopted a black and yellow, block-lettered

design which was, at the least, remarkably similar to

the trade dress employed in connection with the

WESTERN UNION Marks. As there is no evidence

in the record to the contrary*, from this the Court

can only conclude that Defendants used the

EASTERN UNION Marks in connection with money

transfer and money order services in an attempt to

derive benefit from the well-established services and

products offered by Western Union. Accordingly,

this factor, as has each of the preceding ones,

militates strongly in favor of finding a likelihood of

confusion.

g. Actual confusion

The final factor the Court must consider is any

evidence of actual confusion. "It is undisputed that

evidence of actual confusion is the best evidence of a

likelihood of confusion." Frehling, 192 F.3d at 1340.

But, such evidence is not a prerequisite. Id.;

Domino's Pizza, 615 F.2d at 263 ("Although evidence

of actual confusion is not necessary to a finding of

likelihood of confusion, it is nevertheless the best

3 No Defendant offered testimony at the preliminary injunction

hearing. As such, the only evidence in the record in opposition

to Plaintiffs' Motion is the purported affidavit of Eric Young.

(Dkt. No. [45].) That “affidavit,” however, is facially defective as

it is neither signed by the affiant nor notarized, and as such,

the Court declines to consiler the statements therein in

resolving this matter.

evidence of likelihood of confusion."). "Instead, actual

confusion is merely one of several factors that may

be relevant in analyzing whether there is a

hkelihood of confusion between two marks,"

Montgomery v. Noga, 168 F.3d 1282, 1302 (11th Cir.

1999), and courts must assess this factor in light of

the particular facts of each case. Frehling, 192 F.3d

at 1340.

In this case, the parties have submitted only

minimal evidence on the issue of actual confusion.

Plaintiffs' evidence in this regard consists entirely of

the declaration of Carla Foster, a paralegal employed

by Plaintiffs' counsel. She states that while she was

inside a Check Cash Plus establishment purchasing

a money order, she "heard another customer ask the

clerk, 'Who will be handling my money transfer,

Western Union or Eastern Union? " (Foster Decl.

[35] at 4 3.) Defendants, for their part, have

submitted a “preliminary survey" conducted by

Defendants' counsel.

In the Court's view, the evidence submitted by

the parties is not significantly probative, if it is

probative at all, on the issue of actual confusion.

With respect to Plaintiffs' evidence, the single

statement of a patron is of little value, and if

anything tends to show an absence of confusion, as

the customer apparently was able to distinguish

between the two money transfer service providers.

With respect to Defendants’ evidence, the Court finds

that survey, which was designed and conducted by

Defendants’ counsel], contained flaws in

Dba

methodology’, and which had a sample size of less

than thirty, to be similarly unpersuasive.

That being said, the law is clear that Plaintiff

need not establish actual confusion in order to make

a sufficient showing of likelihood of confusion.

Because each of the other six factors weighs: so

heavily in Plaintiffs' favor, the Court concludes that

Plaintiffs have demonstrated a sufficient likelihood

of confusion to establish a substantial likelihood of

success on the merits of their trademark

infringement claim.

IU. Irreparable Harm

"[T]rademark actions 'are common venues for

the issuance of preliminary’ injunctions.' "

McDonald's Corp. v. Robertson, 147 F.3d 1301, 1310

(11th Cir. 1998) (quoting Foxworthy v. Custom Tees,

Inc., 879 F. Supp. 1200, 1219 (N.D. Ga. 1995)).

+ For example, Defendants argued at the preliminary injunction

hearing that the relevant consumer group constitutes a

"shadow market"—that. is, to say, the market is comprised of

individuals who, by virtue of their economic status, language

barriers, etc., are difficult to accurately target with traditional

survey methods. More specifically, Defendants argued that.

their relevant market consisted of Korean immigrants who do

not. possess a bank account. However, Defendants conducted

their survey ata free Latin music concert—a place which the

Court. would not expect to find the Korean immigrants

Defendants claim utilize their — services. Moreover,

approximately half of the less than thirty individuals surveyed

did in fact have a bank account. Thus, if Defendants are

correct. about their relevant market, it does not appear to the

Court that. individuals in that market. were actually surveyed.

Indeed, "[wlhen a plaintiff makes a prima facie

showing of trademark infringement, irreparable

harm is ordinarily presumed." Foxworthy, 879 F.

Supp. at 1219; see also E. Remy Martin, 756 F.2d at.

1530 ("a sufficiently strong showing of likelihood of

confusion may by itself constitute a showing of

substantial likelihood of prevailing on the merits

and/or a substantial threat of irreparable harm");

Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d

137, 142 (2d Cir. 1997) ("a showing of likelihood of

confusion .. . establishes irreparable harm"); Abbott

Labs. v. Mead Johnson & Co., 971 F.2d 6, 16 (7th

Cir. 1992) (recognizing the "well-established

presumption that injuries arising from Lanham Act

violations are irreparable, even absent a showing of

business loss”).

On the issue of irreparable harm, Defendants

argue almost exclusively that Plaintiffs’ delay in

seeking injunctive relief negates any presumption

that irreparable harm will result. As it relates to

this issue, Defendants contend that Plaintiffs had

knowledge of their use of the EASTERN UNION

Marks as early as June of 2004 when they filed their

trademark application with the USPTO.

Additionally, Defendants argue that because

employees of Western Union regularly monitored the

business establishments of its agents, Plaintiffs

should have known of Defendants’ use of the

EASTERN UNION Marks by the fall of 2004.

Defendants are certainly correct that delay in

seeking preliminary injunctive relief has been held

sufficient to preclude preliminary injunctive relief.

See, e.g., Citibank, N.A. v. Citytrust, 756 F.2d 273,

276 (2d Cir. 1985) ("Significant delay in applying for

injunctive relief in a trademark case tends to

neutralize any presumption that infringement alone

will cause irreparable harm pending trial, and such

delay alone may justify denial of a preliminary

injunction for trademark infringement."). In the

context of this case, however, the Court finds both

arguments unpersuasive. First, Defendants cite no

authority for the proposition that the mere filing of

an intent-to-use application constitutes constructive

notice, and indeed, the law appears otherwise. See

15 U.S.C. § 1072 ("Registration of a mark on the

principal register ... shall be constructive notice of

the registrant's claim of ownership thereof.").

Moreover, it appears that the EASTERN UNION

Mark io which Defendants refer was not published in

the Official Gazette until January of this year.

(Lyons Decl. 4 3.) Finally, where, as_ here,

Defendants filed an intent-to-use application, that

application in no way provides notice to Plaintiffs

that the marks are currently being used in

commerce, and as such, the Court declines to charge

Plaintiffs with knowledge of their use. Thus, it

appears from the record before this Court that

Plaintiffs had constructive knowledge of Defendants

intent to use the EASTERN UNION Marks only as

early as January 2006. Second, it does not appear

that the low-level employees who monitored

Defendants establishments had any responsibility

for reporting potential trademark infringement.

A corporation is not charged with notice if

business dealings with defendant were

conducted by lower echelon employees who

had no duty to report instances of trademark

infringement. . . . In order to impute an

99a

agent's knowledge to a principal, it must be

shown that the agent had duties with respect

to trademark matters, although the agent

need not have acquired his knowledge in

connection with those duties.

McCarthy on Trademarks and Unfair Competition §

31:39 (4th ed.).

Contrary to Defendants’ assertions, the record

shows that Plaintiffs acted in a reasonably diligent

manner in protecting their trademark rights. In the

spring of 2006, Plaintiffs learned that the owner of

the application for the EASTERN UNION Marks

was. affiliated with Defendant Choe, their

authorized agent. Plaintiffs took steps to investigate

and, shortly thereafter, in April to early May of 2006,

obtained photographs demonstrating that Defendant

Choe was using the EASTERN UNION Marks in

connection with money transfer and money order

services. Plaintiffs filed a Notice of Opposition in the

USPTO on May 3, 2006, sent a cease and desist

letter on May 12, 2006, and filed this action thirty

days later, on June 12, 2006. On these facts, the

Court declines to conclude that the delay preceding

Plaintiffs’ initiation of this action is sufficient to

preclude a grant of preliminary injunctive relief.

Moreover, in view of the substantial showing of

hkelihood of success on the merits, the Court

declines to limit the availability of preliminary

injunctive relief. Cf. Kason Industries, Inc. _v.

Component Hardware Group, Inc., 120 F.3d 1199,

1207 (11th Cir. 1997) (explaining that “if the

likelihood of confusion is inevitable, or so strong as to

outweigh the effect of the plaintiff's delay in bringing

a suit, a court may in its discretion grant injunctive

60a

relief," citing Restatement (Third) of Unfair

Competition § 31, cmt. e (1995): "[Blecause of the

public interest in preventing the deception of

consumers, delay by the trademark owner will not

ordinarily disable it from obtaining an imunction if

there is strong evidence of likely or actual

confusion.").

In sum, Plaintiffs have made a strong showing

that they are likely to succeed on the merits of their

trademark infringement claim. Finding no delay

sufficient to preclude preliminary injunctive relief,

the Court concludes that they are entitled to a

presumption of irreparable harm in this case.®

> Plaintiffs alsv seek relief on a tarnishment theory. While the

Court need not address the merits of that claim because

Plaintiffs are entitled to injunctive relief on their trademark

infringement claim, one aspect. of tarnishment, in the Court's

view, is relevant to the irreparable harm inquiry. "{Tlarnishing

occurs when a junior mark's similarity to a famous mark causes

consumers mistakenly to associate the famous mark with the

defendant's inferior or offensive product." Eli Lilly & Co. vy.

Natural Answers, 233 F.3d 456, 466 (7th = Cir. 2000).

Similarly, a trademark infringement plaintiff may show

irreparable harm by showing that it will lose control over the

reputation of its mark pending trial. McDonald's, 147 F.3d 1310

(citing Power Test Petroleum Distribs. v. Caleu Gas, 754 F.2d

91, 95 (2d Cir. 1985)). In this case, Western Union charges a

service charge on all money orders not presented for payment

within three years in the amount of $0.25 per month. (Cowell

Second Decl. [48-3] 4 3.) In contrast, Eastern Union imposes a

service charge of $28.00 per month if a money order is not

presented for payment in six months. (Lyons Decl. [48-2] 9§

10-11.) In the Court's view, the possibility that such

exorbitant fees might be linked in the minds of consumers

Gla

IV. Balance of the Harms

The balance of the harms in this case favors

Plaintiffs. First, the WESTERN UNION Marks have

been in use for a significant period of time, while

Defendants use of the EASTERN UNION Marks

began recently. Second, Defendants adopted the

EASTERN UNION Marks with full knowledge of the

WESTERN UNION Marks and with an apparent eye

toward capitalizing on the good will of Plaintiffs.

Where that is the case, the Court will not hear

Defendants complain that they would — suffer

substantial hardship if they are forced to cease their

infringing activity. "There is ample support for the

proposition that a second user of a mark has a duty

to avoid confusion with a first user's mark."

SunAmerica Corp. v. Sun Life Assur. Co., 77 F.3d

1325, 1345 (11th Cir. 1996). Having adopted the

EASTERN UNION Mark with full knowledge of the

WESTERN UNION Marks, Defendants "cannot now

complain that having to mend its ways will be too

expensive." Ty, Inc. v. Jones Group, Irc., 237 F.3d

891, 903 (7th Cir. 2001). Third, insofar as

Defendants argue that they have invested millions of

dollars into the development of their business

enterprise, the only factual support for that assertion

comes from the unsigned, unnotarized "affidavit" of

Defendant Young, and the Court declines to credit

that filing. Fourth, as noted above, Defendants have

elected to adopt what is at best an unsavory business

practice with respect to the fees charged for their

money order services. Where there is the possibility

to Plaintiffs’ Marks also counsels in favor of finding irreparable

harm,

G2a

that this business practice, which stands in stark

contrast to the practices of Plaintiffs, might be

imputed to Plaintiffs through confusion in the

marketplace and thereby damage their reputation

and goodwill, the balance of the hardships tilts even

more strongly in Plaintiffs’ favor.

V. Public Interest

In the trademark infringement context, it is

well-established that "the public interest is served by

preventing consumer confusion in the marketplace."

Davidoff & CIE, S.A. v. PLD Intern. Corp., 263 F.3d

1297, 1304 (11th Cir. 2001): see also S & R Corp. v.

Jiffy Lube Intern., Inc., 968 F.2d 371, 379 (3d Cir.

1992) ("In a trademark case, the public interest is

most often a synonym for the right of the public not

to be deceived or confused." (internal quotation

omitted). In this case, Plaintiffs have demonstrated

likelihood of confusion. Accordingly, the public's

interest in avoiding confusion in the relevant

market will be best served by enjoining use of the

mark causing that confusion.

Finally, the Court addresses one point raised

by Defendants. Specifically, Defendants argue that

Plaintiffs have been investigated for anti-competitive

behavior, and that granting injunctive relief in this

case would harm the public interest because it would

have the effect of curtailing competition. But, this

argument is fundamentally flawed: Competition in

the marketplace serves the public interest: confusion

in the marketplace does not. In this case, the public

interest is served by eliminating the confusion that is

likely to result from Defendants' use of the

EASTERN UNION Marks,’ while _ allowing

63a

Defendants to remain free to compete using any

other non-infringing mark.

VII. Injunction

In conclusion, Plaintiffs have demonstrated a

substantial likelihood of success on the merits on

their trademark infringement claim, that Plaintiffs

will suffer irreparable harm in the absence of an

injunction, that the harm suffered by Plaintiffs in

the absence of an injunction would exceed the harm

suffered by Defendants, and that issuance of the

injunction would not disserve the public interest.

Accordingly, the Court concludes that preliminary

injunctive relief is appropriate and Plaintiffs' Motion

for Preliminary Injunction is hereby GRANTED.

Plaintiffs are hereby DIRECTED to submit to the

Court a proposed order setting out the proposed

terms of the injunction not later than twenty (20)

days from the date this Order is entered on the

docket. Defendants shall then have five (5) days to

file any objections to Plaintiffs' proposed order.

Conclusion

For the foregoing reasons, Plaintiffs’ Motion

for Preliminary Injunction [21] is GRANTED.

Plaintiffs are hereby DIRECTED to file a proposed

order setting out the proposed terms not later than

twenty (20) days from the date this Order is entered

on the docket. Defendants shall then have five (5)

days to file any objections to Plaintiffs' proposed

order.

64a

SO ORDERED, this 20‘ day of December, 2006.

Is/

Richard W. Story

United States District Judge

Hoa

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