Blinded Veterans Assn. v. Blinded American Veterans Found.

GINSBURG, RUTH B., Circuit Judge.
. . .

I.

Appellee Blinded Veterans Association is a nonprofit organization founded in 1945 by a group of blinded World War II veterans. . . . BVA provides services for veterans who originally could see but have lost their sight, even if their blindness is not service-connected. . . .

Appellant BAVF is a nonprofit District of Columbia corporation founded in September 1985 by three former officials of BVA. . . .

BAVF's charter defines the Foundation's purpose broadly as assisting veterans with "sensory disabilities such as visual impairment, hearing impairment, speech impediments, etc." . . .

According to BAVF's president, it never occurred to the three BAVF founders that the name "Blinded American Veterans Foundation" resembles the name of the founders' former employer, "Blinded Veterans Association." . . . There can be no doubt, however, that the names are similar. BAVF's original logo -- "BAV" in large type, followed by "foundation" in small type below -- also bore a marked resemblance to the Association's "BVA." . . .

On June 5, 1986, BVA filed an action in the district court under section 43(a) of the Lanham Act, seeking to enjoin the Foundation "from using the words 'Blinded' and 'Veterans' in its name, and from using the initials 'BAV' to describe itself." . . . BVA alleged that BAVF's "deliberate choice of a too-similar name . . . constitutes unfair competition, false representation and description, false advertising, palming off, and deception of the public, and injures the good will of [BVA]."

On March 8, 1988, the district court decided that BAVF had infringed BVA's trademark. The court therefore enjoined BAVF from using the name "Blinded American Veterans Foundation," the initials "BAV" or "BAVF," and any name in which "veterans" and "blind" or "blinded" appear as noun and modifying adjective.

The district court ruled first that the term "blinded veterans" is not a "generic term . . . incapable of acquiring trademark significance." Rather, the term is "at the least, a 'descriptive term' in trademark parlance, which is entitled to protection against infringement if it has, over time, acquired in the mind of the relevant public a 'secondary meaning.'" . . .

BAVF appealed, arguing that "blinded veterans" is a generic term incapable of acquiring trademark protection even if the term has acquired secondary meaning. Alternately, if secondary meaning is relevant, the Foundation faults the district court for not requiring survey evidence and for focusing on the duration of BVA's use of its name and logo and the efforts and expense that have gone into the Association's self-promotion rather than on the effects of those factors on the public's perceptions. . . .

II.

. . .

Even if "blinded veterans" is generic, BVA asserts, BAVF may be enjoined from passing itself off as BVA. Case law in this area is not perspicuous; there is, however, support for BVA's contention. For the reasons stated herein, we conclude that BVA may, dependent upon further proceedings in the district court, succeed in obtaining limited relief to prevent BAVF from passing off.

If the name of one manufacturer's product is generic, a competitor's use of that name, without more, does not give rise to an unfair competition claim under section 43(a) of the Lanham Act. . . . Nevertheless, such a claim "might be supportable if consumer confusion or a likelihood of consumer confusion arose from the failure of the defendant to adequately identify itself as the source of the product." . . . Analogously, if an organization's own name is generic, a competitor's subsequent use of that name may give rise to an unfair competition claim if the competitor's failure adequately to identify itself as distinct from the first organization causes confusion or a likelihood of confusion. . . .

In either situation, the subsequent competitor cannot be prevented from using the generic term to denote itself or its product, but it may be enjoined from passing itself or its product off as the first organization or its product. Thus, a court may require the competitor to take whatever steps are necessary to distinguish itself or its product from the first organization or its product. In the paradigm case, Kellogg Co. v. National Biscuit Co., for example, the Supreme Court held that the term "shredded wheat" is generic; the National Biscuit Company therefore was not entitled to exclusive use of the term. Because National Biscuit had been the only manufacturer of shredded wheat for many years, however, the public had come to associate the product and the term "shredded wheat" with that company. The Court therefore stated that the Kellogg Company, which also produced a shredded wheat cereal, could be required to "use reasonable care to inform the public of the source of its product." [S]ee also, e.g., Singer Mfg. Co. v. June Mfg. Co., (holding that "Singer" had become generic denotation of type of sewing machine, but requiring that defendant not use the word on its product or in advertisements "without clearly and unmistakably stating . . . that the machines are made by the defendant, as distinguished from the sewing machines made by the Singer Manufacturing Company"); Metric & Multistandard Components Corp. v. Metric's, Inc.,(finding "metric" generic designation of metric industrial supplies, but nevertheless concluding that section 43(a) of Lanham Act had been violated because mark had become so associated with plaintiff that defendant's use of it created likelihood of confusion); King-Seeley Thermos Co. v. Aladdin Indus., Inc.,(finding "thermos" generic denotation of vacuum-insulated container, but affirming requirement that defendant distinguish its product from plaintiff's by preceding "thermos" with "Aladdin's," by using only the lower case "t", and by never using the words "original" or "genuine" in describing its product); DuPont Cellophane Co. v. Waxed Prods. Co., (finding "cellophane" generic denotation of cellulose transparent wrappings, but requiring defendant to identify itself as source of product in certain instances to avoid confusion with plaintiff's product); O. & W. Thum Co. v. Dickinson, (requiring defendant to qualify and explain its use of the term "sticky fly paper" to differentiate its product from plaintiff's product of the same name); G. & C. Merriam Co. v. Saalfield, (requiring defendant to accompany generic term "Webster's Dictionary" with sufficient explanation to avoid giving false impression that his book was plaintiff's); Reddaway v. Banham, (recognizing defendants' right to use generic term "camel hair belting" but requiring them to "clearly distinguish[] such belting from the belting of the plaintiffs"); cf. Miller Brewing Co. v. Jos. Schlitz Brewing Co., (rejecting claim of passing off because defendant had adequately identified itself as source of product by preceding generic name of product, "Light Beer," with producer's name, "Schlitz," and had not engaged in potentially confusion-generating practices such as using a similar label or misleading advertisements) . . .

Under the approach set forth in these cases, a court will not act to remedy or prevent "confusion generated by a mere similarity of names." . . . If a consumer confuses two manufacturers' shredded wheat cereal, for example, because both products share the same name and the consumer has a general appetite for crunchy, pillow-shaped wheat biscuits, there is no cause for judicial action. Such confusion results merely from the manufacturers' concurrent use of a generic term to designate their products, and the late entrant into the shredded wheat field cannot be said to have engaged in unfair competition. If, however, the consumer associates "shredded wheat" with a particular manufacturer, perhaps because that manufacturer enjoyed a de facto (or de jure) monopoly for many years, there is a risk that the consumer may erroneously assume that any product entitled "shredded wheat" comes from that manufacturer. [FOOTNOTE 22] A second manufacturer may increase the risk of confusion by, for example, using a similar label, similar packaging, misleading advertisements, or simply by failing to state the product's source. Only when there is a likelihood that the newcomer might thus pass its product off as the original manufacturer's may a court require the newcomer to distinguish its product or to notify consumers explicitly that its product does not come from the original manufacturer.

=====FOOTNOTE 22=====
Commentators sometimes refer to this association between a generic term and one particular source, arising normally from that source's monopoly for an extended period, as "de facto secondary meaning." See, e.g., MCCARTHY Sec. 12:15 at 562-65. A generic term that acquires de facto secondary meaning is still not afforded trademark protection. See id. Nevertheless, as the cases cited above establish, a generic term with de facto secondary meaning may be protected against passing off, e.g., by requiring fair notice that a newcomer's product or service does not come from the original source.
=====End Footnote=====

In speaking of "passing off," we do not mean to insinuate that the complaining party must prove intent on the part of the passer off. Because passing off developed as an offshoot of the common law of fraud and deceit, some courts in the past required proof that the defendant intended to deceive consumers. . . . Today, however, the predominant view is that, "when used in connection with passing off, the term 'fraud' is understood to mean the result of the defendant's act, i.e., deception of the public, rather than his intent." . . . Intent to deceive, nevertheless, retains potency; when present, it is probative evidence of a likelihood of confusion. . . .

Although the district court did not credit the testimony advanced by BAVF concerning the Foundation's conception, that court reported no conclusion, drawn from the evidence, that BAVF passed itself off as BVA. The court stated only that it disbelieved BAVF's president's testimony that it "never occurred" to him that BAVF's name was similar to BVA's and that BAVF did not plan to compete with BVA:

The Court . . . finds that BAVF was deliberately named, and presently refuses to change its name, to enable it to capitalize upon the association in the mind of the charitable public between the words "blinded" and "veterans" (and the understandable sympathy they engender), and, thus, to compete with [BVA] for the funds of those inclined to give to such a cause.

680 F. Supp. at 444-45.


The Lanham Act, of course, does not proscribe competition per se. Nor is the competition described by the district court unfair merely because BAVF intended to capitalize upon the public's sympathetic association of the words "blinded" and "veterans." Only if BAVF was capitalizing on the public's association of "blinded" and "veterans" with BVA, and therefore reaping the benefits of BVA's goodwill, would the Foundation's actions constitute unfair competition.

True, the district court's opinion is somewhat ambiguous on this score. In a footnote, for example, the district court adverted to the evident similarity of BAVF's original logo -- "'BAV' in large type, followed by the word 'foundation' in small-type subscript" -- to BVA's logo. The court also noted that, while the Foundation "professes to be concerned with veterans' 'sensory disabilities' generally, its founders selected a name which adverts only to blindness." Although these findings, along with the fact that BAVF's founders all had worked for BVA, suggest that BAVF's founders purposely sought to create confusion, the court did not expressly find so.

Moreover, even if BAVF's founders had intended to pass BAVF off as BVA, such an intent, although probative, would not conclusively establish unfair competition. . . . Ultimately, to succeed on its passing off claim, BVA must prove that the likely effect of BAVF's actions is to induce the public to think that BAVF is BVA. The evidence now in the record appears insufficient to establish this type of confusion. The district court noted that local CFC authorities had confused BAVF and BVA in processing their applications to be listed as beneficiary organizations in 1986, that BVA's name is often misstated by intending contributors even without the compounding presence of BAVF, and that college students in three experiments were unable to distinguish between the parties' names. To prevail in this action, however, it is not enough for BVA to show confusion that is the natural consequence of the two organizations' use of generic names. . . . What is essential, we underscore, is evidence that people associate "blinded veterans" with BVA per se [FOOTNOTE 24] and that, because of specific actions by BAVF that increase the risk of confusion, people are likely to think BAVF is BVA.

=====FOOTNOTE 24=====
Because we have ruled out the question of trademark protection, BVA is not called upon to show "secondary meaning" in that setting. BVA nevertheless must show, analogously, what has been called "de facto secondary meaning" -- i.e., that people associate the generic term "blinded veterans" with BVA. See supra note 22.
=====End Footnote=====

Taking into account the opacity of some of the decisional law in this area, and the district court's understandable but incorrect assumption that trademark protection was available, we think it proper to permit the parties to submit additional evidence trained on the question whether people are likely to think that BAVF is actually BVA. . . . It would fill out and sharpen the record to prove (or disprove), for instance, that people who have contributed to BVA in the past have contributed, or are likely to contribute, to BAVF thinking it was BVA, or that people familiar with BVA's long service on behalf of blinded veterans are likely to think any group with a name containing "blinded veterans" or with the letters "B" "A" and "V" in its logo is the same as, or is associated with, BVA. BVA need not show actual confusion, we emphasize, but actual confusion is probative evidence that consumers are likely to confuse the two entities. . . .

If the district court, on remand, finds from the evidence that BAVF is passing itself off as BVA, the court may order that BAVF distinguish itself from BVA to avoid confusion. This case obviously differs from Kellogg and other cases cited above because it involves the name of an organization rather than the name of a particular product. This difference precludes such a ready remedy as attaching the manufacturer's name to the generic name of the product. The district court could, however, require BAVF to attach a prominent disclaimer to its name alerting the public that it is not the same organization as, and is not associated with, the Blinded Veterans Association. . . . Alternatively, the court could order that BAVF adopt another name containing the term "blinded veterans" that is less likely to confuse. Either remedy would assist BVA to retain, and reap the benefits of, the goodwill it has built up over the years, while allowing BAVF to appeal, fairly, to the public's general desire to aid blinded veterans. . . .

CONCLUSION

"Blinded veterans" is a generic term; BVA's name and logo therefore are not entitled to trademark protection. BVA's congressional charter also fails to provide a basis for relief; that charter protects BVA's own name and logo, but it does not prevent BAVF's use of a similar name and logo. BVA may be entitled to protection against passing off, however. If the district court determines that people will likely think that BAVF is BVA, it can fashion equitable relief in accordance with the considerations set forth in this opinion.

For the reasons stated, we vacate the judgment of the district court and remand for further proceedings.

It is so ordered.