Rehearing and Rehearing In Banc Denied May 20, 1991.
OPINION OF THE COURT
SEITZ, Circuit Judge.
The Institute For Scientific Information ("plaintiff") filed a complaint alleging, inter alia, violations of the Federal Trademark laws, 15 U.S.C. §§ 1051 et seq. (1988), by Gordon and Breach, Science Publishers Inc. ("Gordon") and its subsidiary, Scientific Technical Book Service, Ltd. (collectively the "defendants"). After filing their answer, defendants moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c).
On September 21, 1989, plaintiff filed a complaint alleging federal and common law trademark infringement, false designation of origin, common law unfair competition, unjust enrichment, dilution and breach of agreement. On December 15, defendants filed an answer, and thereafter moved for judgment on the pleadings pursuant to Rule 12(c).
To rule on defendants' Rule 12(c) motion, the district court was required to view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to plaintiff, the nonmoving party. Society Hill Civic Ass'n v. Harris, 632 F.2d 1045, 1054 (3d Cir.1980); see also 5A C. Wright & A. Miller, Federal Practice and Procedure, § 1368, at 519 (1990) [hereinafter "5A Federal Practice" ]. We turn to the facts as they are alleged in plaintiff's complaint.
Plaintiff is in the business of developing and marketing information retrieval services. These services are used by researchers to locate and obtain relevant information published worldwide in scholarly, scientific and technical journals and books. Plaintiff is the owner of an incontestable trademark, "CURRENT CONTENTS," that was registered in the U.S. Patent and Trademark Office on December 23, 1958, Registration No. 671,569.
Defendants are also in the business of publishing books and journals. Defendants publish a journal entitled "SCAN" which lists the contents of defendants' publications on certain scholarly, scientific and technical subjects. SCAN is in direct competition with plaintiff's CURRENT CONTENTS periodicals.
In early 1985, the subtitle of SCAN described it as "a guide to current contents of journals published by Gordon & Breach." On February 27, 1985, plaintiff's senior vice president of finance and administration sent the president of Gordon a letter requesting defendants to voluntarily cease and desist from using the phrase "current contents" in light of plaintiff's incontestable mark, CURRENT CONTENTS. On September 17, 1985, after several months of negotiations, plaintiff's attorney sent another letter to Gordon confirming an oral agreement (the "agreement") whereby defendants agreed to discontinue all use of
From September 1985 to February 1989, Gordon did not use the phrase "current contents" within the subtitle of SCAN. The February 24, 1989 issue of Science, however, contained an advertisement for SCAN which described it as "... a free guide to the current contents of books and journals published by Gordon and Breach Science Publishers and Harwood Academic Publishers." Upon learning of this advertisement, plaintiff's senior vice president telephoned Gordon and notified it that plaintiff considered defendants' use of "current contents" a breach of their agreement. Plaintiff's representative was told that the use of "current contents" was due to an oversight by new employees and that defendants would cease to use those words. On March 29, 1989, plaintiff sent a letter to Gordon confirming the details of this telephone conversation. Plaintiff never received a response to the March 29 letter, and defendants continue to use "current contents" in the description of SCAN.
On August 30, 1990, the district court granted defendants' Rule 12(c) motion. Plaintiff filed a timely notice of appeal.
Initially, we note that "the Rule 12(c) motion is little more than a relic of the common law and code era," 5A Federal Practice at 537, and it "only has utility when all the material allegations of fact are admitted in the pleadings and only questions of law remain." Id. at 510. Granting a Rule 12(c) motion results in a determination on the merits at an early stage in the litigation, and thus this court requires "the movant [to] clearly establish[ ] that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law." Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290-91 (3d Cir.1988). (quotation omitted).
Defendants' Rule 12(c) motion was based on the contention that the words "current contents" were used fairly and in good faith as permitted by the Lanham Act, 15 U.S.C. § 1115(b)(4).
Plaintiff's primary cause of action was for trademark infringement. To dismiss this claim, the district court had to conclude that no set of facts could be adduced
Plaintiff's allegation that it is the owner of an incontestable trademark is sufficient to plead a factual basis for (1) and (2). Therefore, the only issue with respect to the trademark infringement claim is whether plaintiff alleged facts that, if proved, would establish that there was a likelihood of confusion.
The district court did not address the issue of likelihood of confusion. Instead, it turned to whether defendants used the phrase "current contents" fairly and in good faith. Concluding that defendants had made fair use of "current contents," the district court dismissed all of plaintiff's trademark related claims.
Plaintiff asserts that the district court erred by granting defendants judgment on the pleadings because (1) the complaint alleged facts that, if proved, would show that defendants' use of "current contents" was likely to cause confusion among CURRENT CONTENTS customers; (2) the pleadings raised a material issue of fact as to whether defendants used the words "current contents" fairly and in good faith; (3) the district court's determination that CURRENT CONTENTS is "clearly descriptive" is inconsistent with United States Supreme Court precedent; and (4) the district court should not have taken judicial notice of the fact that the Library for the Third Circuit Court of Appeals uses the phrase "current contents" to refer to materials circulated to members of the judiciary.
A. Likelihood of Confusion
Plaintiff asserts that the complaint alleged facts that if proved, would demonstrate that there was a likelihood of confusion among its customers.
Defendants contend that "the facts as alleged in the complaint conclusively establish that there could be no likelihood of confusion." (Defendants' brief at 22). As we understand this contention, the defendants challenge the factual sufficiency of plaintiff's complaint and argue that because they were entitled to judgment as a matter of law on the issue of likelihood of confusion, judgment on the pleadings was proper.
The district court did not rule on the sufficiency of plaintiff's complaint or determine whether plaintiff alleged facts that, if proved, would permit a finding that defendants' use of "current contents" was likely to cause confusion. Nonetheless, we see no reason why in the interest of judicial economy and in light of our plenary review of Rule 12(c) rulings, see Jablonski, 863 F.2d at 290, we cannot address this issue. After all, the defendants' Rule 12(c) motion provided a means by which the sufficiency of plaintiff's complaint could be challenged, see Thomason v. Nachtrieb, 888 F.2d 1202, 1204 (7th Cir.1989); 5A Federal Practice, at 514 (Rule 12(c) may be used to raise several of the Rule 12(b) defenses), and defendants' answer charged that plaintiff failed to state a claim. Moreover, there is nothing unfair about our addressing this issue because plaintiff, the nonmoving party, urges that we do so and both parties
Plaintiff's complaint alleges that the defendants' uses
(App. at 8).
Plaintiff's complaint also alleges the following facts: (1) defendants used the exact words, "current contents," for which plaintiff had a registered trademark; (2) plaintiff has been the owner of the CURRENT CONTENTS mark since 1958; (3) plaintiff has used the mark, CURRENT CONTENTS, continuously since 1958; (4) defendants adopted the phrase "current contents" after plaintiff registered its CURRENT CONTENTS mark; (5) "current contents" is confusingly similar to plaintiff's CURRENT CONTENTS mark; (6) CURRENT CONTENTS periodicals enjoy substantial sales success; (7) CURRENT CONTENTS has become a widely known mark throughout the United States; (8) defendants use "current contents" to describe goods that are identical to plaintiff's CURRENT CONTENTS periodicals; (9) defendants sell their goods through the same channels of trade as plaintiff; (10) defendants sell their goods to the identical end purchasers as plaintiff; (11) defendants' use of "current contents" is likely to conjure up consciously and/or unconsciously plaintiff's CURRENT CONTENTS mark; (12) defendants' publication directly competes with CURRENT CONTENTS periodicals; (13) defendants chose to use the phrase "current contents" with the intent to infringe upon the CURRENT CONTENTS mark and dilute its goodwill; and (14) plaintiff notified defendants of the purported infringing use immediately upon learning of it. (App. at 3-17).
Plaintiff's complaint goes well beyond the requirements of notice pleading. See 2 J. McCarthy, Trademarks and Unfair Competition, §§ 32:57 and 32:59, at 794-95, 797-99 (offering form complaint for trademark infringement that satisfies requirements of notice pleading) [hereinafter "Trademarks" ]. It contains allegations that, if proved, would permit a finding of likelihood of confusion, see Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1229 (3d Cir.1978) (listing ten factors relevant to determination), and perhaps the most important of which is plaintiff's allegation that defendants intended to cause confusion, deception or mistake. See American Home Prods. Corp. v. Barr Laboratories, Inc., 834 F.2d 368, 371 (3d Cir.1987) (stating that a plaintiff's "intent to confuse might be highly probative of likelihood of confusion"); see also Life Technologies, Inc. v. Gibbco Scientific, Inc., 826 F.2d 775, 777 (8th Cir.1987) ("Intent [to infringe] raises an inference of likelihood of confusion...."); Oreck Corp. v. U.S. Floor Sys., Inc., 803 F.2d 166, 173 (5th Cir.1986) ("If such an intent [to infringe] can be shown ... it may provide compelling evidence of likelihood of confusion."), cert. denied, 481 U.S. 1069, 107 S.Ct. 2462, 95 L.Ed.2d 871 (1987).
Thus, we cannot say at this stage that if plaintiff proved the factual allegations in the complaint, it would not show that customers are likely to purchase SCAN, which uses "current contents" in the subtitle, because they believe that SCAN is one of or associated with plaintiff's CURRENT CONTENTS publications. See Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir.1987) ("A likelihood of confusion exists not only when a consumer viewing a service mark is likely to purchase the identified services under the mistaken belief that they are services of another service provider, but also when the consumer would be likely to assume that the identified services are in some way associated with another service-provider."). Thus, we cannot affirm the district court's Rule 12(c) ruling on the ground that plaintiff
We note that defendants' denial of plaintiff's allegations does not warrant a different conclusion. That denial, of course, simply raised likelihood of confusion as a material issue of fact that could not, in the context of a Rule 12(c) motion, be resolved in defendants' favor. See General Conference Corp. v. Seventh-Day Adventist Church, 887 F.2d 228, 231 (9th Cir.1989) (defendant's factual assertions denying likelihood of confusion created a question of material fact precluding judgment on the pleadings), cert. denied, ___ U.S. ___, 110 S.Ct. 1134, 107 L.Ed.2d 1039 (1990); see also Hal Roach Studios v. Richard Feiner and Co., 896 F.2d 1542, 1550 (9th Cir.1990) (stating that "judgment on the pleadings is improper when the district court goes beyond the pleadings to resolve an issue"). Consequently, unless defendants' fair use defense entitled them to judgment as a matter of law, the district court erred by granting judgment on the pleadings. Jablonski, 863 F.2d at 290-91.
B. Fair Use
Plaintiff asserts that even if a fair use defense can justify granting judgment on the pleadings, the pleadings here raised material issues of fact as to whether defendants used the words "current contents" fairly and in good faith.
To demonstrate fair use, defendants were required to prove that they (1) used "current contents" merely to describe their product; (2) did not use "current contents" as a trademark; and (3) used "current contents" in good faith. See Munters Corp. v. Matsui America, Inc., 730 F.Supp. 790, 800 (N.D.Ill.1989), aff'd, 909 F.2d 250 (7th Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 591, 112 L.Ed.2d 595 (1990). Plaintiff contends that a material issue of fact existed as to each of these elements. We shall, however, only review the pleadings relating to defendants' good faith use of the words "current contents" because we believe that issue is dispositive.
Plaintiff asserts that defendants' use of the words "current contents" was not in good faith. Plaintiff supports this claim by pointing to the fact that the defendants entered into an agreement not to use the words "current contents," abided by the terms of that agreement for over three and one half years, and then breached that agreement.
The district court rejected plaintiff's argument, stating:
(App. at 392).
We believe that the district court was not warranted in relying exclusively upon Andy Warhol to reject plaintiff's argument. The defendant in that case continued the alleged infringing use after being notified by a trademark owner that the owner believed that defendant's use was a violation of the trademark laws. Id. at
Defendants contend that their breach is not evidence of bad faith. In support of their position, defendants cite Munters wherein the court stated that an "intentional use of a mark that [the defendant] had every right to use is not itself a ground on which to draw an adverse inference [of bad faith]," Munters, 730 F.Supp. at 799 (quoting M-F-G Corp. v. EMRA Corp., 817 F.2d 410, 412 (7th Cir.1987)).
Defendants' reliance on Munters is misplaced. The unambiguous terms of the agreement alleged require defendants to refrain from using the words "current contents," possibly to avoid a trademark infringement action.
The defendants' breach of contract is not the only fact that plaintiff alleged in support of its contention that defendants acted in bad faith. Plaintiff also alleged that defendants'
(App. at 6-7) (emphasis added). We read the quoted allegation as stating that defendants intentionally infringed upon plaintiff's CURRENT CONTENTS mark.
We cannot say, as defendants suggest, that this allegation of intentional infringement is merely conclusory. Plaintiff's complaint states that defendants agreed to use "A guide to the contents of current issues of journals published by Gordon & Breach" as the description for SCAN, used the non-infringing description for three and one
We conclude that plaintiff's allegations raised material issues of fact as to the defendants' good faith. Consequently, the defendants were not entitled to judgment as a matter of law, and the district court erred by granting judgment on the pleadings. See Hal Roach Studios, 896 F.2d at 1550 (stating that "judgment on the pleadings is improper when the district court goes beyond the pleadings to resolve an issue").
C. Incontestability and Descriptive Trademarks
Plaintiff's third contention of error is that the district court erred by concluding that CURRENT CONTENTS was clearly descriptive because that determination is inconsistent with the Supreme Court's ruling in Park 'N Fly v. Dollar Park 'N Fly, 469 U.S. 189, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985).
Although disposition of plaintiff's appeal does not require us to address this contention, we believe that this legal issue will arise again on remand. Thus, in the interest of judicial economy, we consider plaintiff's contention that Park 'N Fly foreclosed the district court from determining that plaintiff's incontestable mark, CURRENT CONTENTS, is "clearly descriptive."
In Park 'N Fly, the Supreme Court held that "the holder of a registered trademark may rely on incontestability to enjoin infringement and that such action may not be defended on the grounds that the mark is merely descriptive." Id. 469 U.S. at 205, 105 S.Ct. at 667 (emphasis added). The district court did not, however, conclude that plaintiff's mark was "merely descriptive," and was not addressing the validity or incontestability of plaintiff's CURRENT CONTENTS mark.
The district court determined that CURRENT CONTENTS was "clearly descriptive" (App. at 391), as this was necessary before deciding whether defendants could avail themselves of the fair use defense. See 1 Trademarks, at 475 (the fair use defense presupposes that the mark is descriptive); see also Ringling Bros.-Barnum & Bailey v. Celozzi-Ettelson Chevrolet, 855 F.2d 480, 484 (7th Cir.1988) (stating that the fair use defense requires that the defendant's use merely describe the goods or services offered); Cullman Ventures, Inc. v. Columbian Art Works, Inc., 717 F.Supp. 96, 133 (S.D.N.Y.1989) (fair use defense unavailable when mark was suggestive). That defense is one of the seven enumerated defenses in the Lanham Act explicitly recognized by the Supreme Court as exceptions to the registrant's exclusive right to use an incontestable mark. Park 'N Fly, 469 U.S. at 196, 199 n. 6, 105 S.Ct. at 662, 664 n. 6 ("If one of the defenses is established, registration constitutes only prima facie and not conclusive evidence of owner's right to exclusive use of the mark."); see also Ringling Bros., 855 F.2d at 483; 1 Trademarks, § 11:17 at 479. Thus, the district court's conclusion that CURRENT CONTENTS was "clearly descriptive" is not inconsistent with the Supreme Court's holding in Park 'N Fly, and the district court did not commit legal error.
D. Judicial Notice
Plaintiff's final contention of error is that the district court erred by taking judicial notice of the fact that the Third Circuit Library uses the label "current contents"
E. Breach of Contract
Finally, at oral argument, plaintiff's counsel contended that the district court's dismissal of its separate breach of contract claim was appealed. In support of that position, counsel directed this court to the following passage in plaintiff's opening brief:
(Appellant's brief at 20-21) (emphasis added).
The quoted passage contains plaintiff's argument that the district court erred by not assuming the "validity" of the agreement. The district court, however, assumed that a valid agreement existed, and determined that plaintiff's contract claim should be dismissed because any agreement was "terminable at will" and only remediable by a trademark infringement action, which plaintiff had brought. (App. at 395-96.) Nowhere in the "Statement of the Issues Presented" or the "Argument" section of plaintiff's appellate brief are those conclusions questioned. We conclude, therefore, that under Fed.R.App.P. 28(a)(2)-(4), plaintiff abandoned its breach of contract claim. See Dagget v. Kimmelman, 811 F.2d 793, 795 n. 1 (3d Cir.1987) (stating that "[b]y failing to raise this issue in their original briefs, appellants simply did not appeal the district court's conclusion"); see also 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure, § 3975, at 421-22 (1977) ("to assure consideration of an issue by the court, the appellant must both raise it in the `Statement of the Issues' and pursue it in the `Argument' portion of the brief").
Our conclusion here does not mean that the existence of the agreement is not relevant to whether the defendants used the words "current contents" fairly and in good faith, an argument plaintiff does raise. See supra at note 8.
The judgment of the district court will be vacated and the matter remanded for further proceedings consistent with this opinion.
Neither party contends that the district court treated defendants' motion as one for summary judgment.
Id. § 1115(b)(4) (emphasis added).
15 U.S.C. § 1114 (1988).