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The question of whether the term “Hokie” is a generic term for someone or something affiliated with a public university located in Blacksburg, Va., could not be resolved in the context of a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the U.S. District Court for the Western District of Virginia ruled March 15 ( Virginia Polytechnic Institute v. Hokie Real Estate, W.D. Va., No. 7:10-cv-00466-gec-mfu, 03/15/11).
Denying a real estate brokerage firm's motion to dismiss a suit brought by the university, the court ruled that, at this stage of the proceeding, it could not conclude that the company and the university did not provide similar services. Further, the court said that the university had used the relevant marks for many years and that the real estate company's use came after the marks had become famous.
The court also denied the university's preliminary injunction motion, as it was unable to show at this stage that it would suffer irreparable harm. Further, the court rejected the motion as to its dilution claim, stating that a showing that multiple other businesses used the Hokie mark undercut the school's argument.
Virginia Polytechnic Institute and State University, located in Blacksburg, Va., and popularly known as “Virginia Tech,” registered the mark “Hokies” with the Patent and Trademark Office for jewelry, paper articles, leather goods, drinking glasses, and clothing. The term “Hokies” is extensively used to refer to students and alumni of the school.
Virginia Tech operates an active licensing program with respect to all of its marks and, since 2005, it has been working with an architectural firm to develop the “Hokie Home” program, which consists of home design plans that are to be marketed and sold to Virginia Tech alumni and fans.
Hokie Real Estate is a Blacksburg real estate brokerage firm operated a Virginia Tech alumnus, John Wilburn.
In October, Virginia Tech sued Hokie Real Estate, asserting claims of false designation of origin, dilution by blurring, and a Virginia common law claim of unfair competition. Hokie Real Estate moved to dismiss the lawsuit under Fed. R. Civ. P. 12(b)(6), and Virginia Tech filed a response to the motion and a motion for preliminary injunction.
Hokie Real Estate first asserted that all three Virginia Tech claims were subject to dismissal because the term “Hokie” was generic, and thus, ineligible for trademark protection.
To support its argument, the defendant relied on American Online Inc. v. AT&T Corp.,243 F.3d 812 (4th Cir. 2001), which ruled that when words are used in a context that suggests only their common meaning, they are generic and may not be appropriated as exclusive property. Hokie Real Estate thus argued that Virginia Tech had acknowledged that “Hokie” could be defined as a supporter of Virginia Tech and thus, that the term was generic when used to refer to a supporter of the university.
Virginia Tech, however, maintained that to hold that this definition rendered the Hokie mark generic would emasculate trademark rights held by every university, sports team, and business.
Chief Judge Glen E. Conrad said that the issue of whether the term “Hokie” was entitled to trademark protection could not be resolved in the context of a motion to dismiss, stating that it was “too early in the case.” As such, Conrad said that Virginia Tech had asserted sufficient facts to permit it to offer evidence on the validity of the Hokie mark.
Next, the court rejected the real estate company's argument that Virginia Tech had never registered the term “Hokie” as opposed to “Hokies” and thus it could not prevent third parties from using the term in its singular form. The court said that, as this case was not one of registered trademark infringement, the mere fact that Virginia Tech had not federally registered the term “Hokie” in its singular form did not preclude the school from attempting to prevent others from using it. The court was also “unpersuaded” by the defendant's suggestion that its use of the singular term form was legally distinguishable from the registered term “Hokies” as used by Virginia Tech.
Hokie Real Estate also argued that the goods and services for which Virginia Tech uses the Hokie mark were completely unrelated to the real estate brokerage services that it offered.
In response, Virginia Tech argued that Hokie Real Estate's efforts to distinguish the services offered by the parties ignored the Fed. R. Civ. P. 12(b)(6) standard that the allegations of the complaint are to be accepted as true and that Virginia Tech did not have to engage at this point in the factual battle about the real estate services that it offered for sale in commerce in connection with the Hokies mark. The court said that it agreed with Virginia Tech, but hinted that it “may not 'ultimately prevail' on this issue.”
Finally, Hokie Real Estate argued that Virginia Tech had failed to plead all of the elements required to state a claim for trademark dilution. Specifically, it argued that Virginia Tech failed to allege that the defendant's use of the Hokie mark had commenced after the mark became famous or that Virginia Tech had used the Hokie mark in commerce. The court also rejected this argument, stating that Virginia Tech had emphasized in its response that the complaint alleged that the university had used the Hokies and Hokie marks for many years and that the defendant's use came after the marks became famous. Further, the complaint said that Hokie Real Estate was using the Hokie mark in connection with its offer for sale of real estate services; and thus Virginia Tech had alleged adequate facts to establish junior use and use in commerce.
Thus, the court denied Hokie Real Estate's motion to dismiss.
Turning to Virginia Tech's preliminary injunction motion, the court said that a party seeking such relief must make a clear showing that it is likely to suffer irreparable harm in the absence of preliminary relief; that the balance of equities tips in its favor; that it is likely to succeed on the merits; and that an injunction is in the public interest.
Virginia Tech failed to present evidence of pecuniary harm, actual injury, or that it would suffer injury absent an injunction; instead, it relied solely on the presumption of irreparable injury that has been applied in Lanham Act cases involving trademark infringement and dilution. However, under Fourth Circuit precedent, such a presumption was not automatic, the court said.
To prevail on a claim of false designation of origin, a plaintiff must show that it possesses a protectable mark and that the use of the mark by the defendant is likely to confuse the public, the court said. The relevant factors are: (1) the strength or distinctiveness of the plaintiff's mark as actually used in the marketplace; (2) the similarity of the two marks to consumers; (3) the similarity of the goods or services that the marks identify; (4) the similarity of the facilities used by the parties; (5) the similarity of advertising used by the parties; (6) the defendant's intent; (7) actual confusion; (8) the quality of the defendant's product; and (9) the sophistication of the consuming public. George & Co. v. Imagination Entertainment Ltd.,575 F.3d 383, 91 USPQ2d 1786 (4th Cir. 2009) (78 PTCJ 435, 8/7/09).
First, the court said that it was undisputed that Virginia Tech did not offer real estate services. At best, Virginia Tech's Hokie Home program--a joint endeavor with an architectural and engineering firm--was only in the initial planning stages and Virginia Tech had failed to demonstrate that the services would be sufficiently related to the defendant's services to give rise to a likelihood of confusion.
Likewise, the court rejected Virginia Tech's arguments that the facilities used by it and Hokie Real Estate were similar and that they also had similar advertising. The court said that, while both parties used the internet to advertise, Hokie Real Estate maintained a website merely to offer a useful way to convey basic information about its business; whereas, Virginia Tech relied heavily on its website.
Further, the court said that it was unable to conclude from the record that Virginia Tech could establish the requisite intent on the part of the defendant.
As to the actual confusion factor, which the court said was the most significant factor, the court found that it weighed in Hokie Real Estate's favor, as Virginia Tech had acknowledged that it was unaware of any actual confusion as a result of the defendant's use of the Hokie mark.
After ruling that there has been no suggestion that the services provided by the real estate company were of questionable quality, the court ruled that the final factor, sophistication, favored Hokie Real Estate. The court said it agreed with Hokie Real Estate that it was highly unlikely that any consumer would choose to engage its services based on the mistaken belief that the company was somehow affiliated with the school.
Thus, the court said that Virginia Tech had failed to make a clear showing as to the likelihood of confusion required, which undermined its claim that its reputation and marks would be irreparably harmed absent the issuance of a preliminary injunction.
Next, the court also concluded that Virginia Tech had failed to establish a likelihood of dilution by blurring.
To determine whether there is a likelihood of dilution through blurring, the court said that it considers a number of factors, including: (1) the degree of similarity between the mark or trade name and the famous mark; (2) the degree of inherent or acquired distinctiveness of the famous mark; (3) the extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark; (4) the degree of recognition of the famous mark; (5) whether the user of the mark or trade name intended to create an association with the famous mark; and (6) any actual association between the mark or trade name and the famous mark.
The court said that, even if it assumed that the Hokie mark was famous, the third, fifth, and six factors weighed against a finding of likelihood of dilution.
First, Virginia Tech was unable to show that it was engaging in substantially exclusive use of the Hokie mark, because a multitude of restaurants and other businesses were using the Hokie mark without permission from the university, the court said. Further, the owner of Hokie Real Estate said in a hearing that he had decided to use the term because he considered himself a Hokie. Finally, as stated above, Virginia Tech was unable to show any actual confusion or association.
Thus, the court said that it was unable to conclude, based on the current record, that Hokie Real Estate's use of the term Hokie was likely to cause dilution or consumer confusion.
Finally, the court ruled that Virginia Tech had failed to establish that the balance of equities tipped in its favor.
“Whereas Virginia Tech has not presented any evidence of irreparable harm, the court finds that the defendant would suffer considerable harm if the court was to grant a preliminary injunction,” the court said. A preliminary injunction would “break the continuity” of Hokie Real Estate's business and cause members of the community to suppose that it had ceased doing business.
Virginia Tech contended that the defendant had brought upon itself any harm an injunction might inflict by choosing to use the Hokie mark and, thus, that any such harm should be disregarded.
The court disagreed, stating that such an argument was contrary to Fourth Circuit precedent, which bars courts from giving “short shift” to the harm a defendant might suffer merely because it is self-inflicted.
“In sum, because Virginia Tech has failed to make a clear showing that it is likely to suffer irreparable harm in the absence of preliminary injunctive relief or that it is likely to succeed on the merits, and since the balance of equities tips in the defendant's favor, the court concludes that Virginia Tech is not entitled to a preliminary injunction,” the court concluded.
Virginia Tech was represented by John Harrold Thomas of Thomas & Karceski, Richmond, Va. Hokie Real Estate was represented by Keith Finch of the Creekmore Law Firm, Blacksburg, Va.
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