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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2008

## Text

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

A.
B.

C.
D.

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

A.

D.

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

12

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

V)

ee

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,

te

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

G

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.

10

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

12

a

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

1G

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

*© Frehling Enterprises, Inc. v. Int? Select Group. Inc., 192 F.3d
1330, 1340-41 11 Cir, 1999).

18

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 (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)

26

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.

eo

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.”)

30

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.

31

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

33

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.

34

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).

© App., wafra, 56a (Preliminary [njunction 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.

36

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.

© Defendants continue to assert that there are indeed genuine
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

38

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

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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.

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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

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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

6a

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

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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.

tN
as

te

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,

v.

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

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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,

V.

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,

v.

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

4a

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

18a

"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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_0843%3A1. Public record. Not legal advice.