Lingo v. Lingo

Citations: 785 F. Supp. 2d 443; 100 U.S.P.Q. 2d (BNA) 1698; 2011 U.S. Dist. LEXIS 53746; 2011 WL 1930410Docket: Civ. 10-624-SLR

Court: District Court, D. Delaware; May 19, 2011; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Archibald Lingo and Archie's Market, Inc. filed a lawsuit against Dinah Lingo, Jessica Lingo, Lingo Bros. LLC, and The Original Lingo's Market on July 2, 2010, alleging violations of the Lanham Act and Delaware trademark law due to improper use of the "Lingo's Market" trademark. Specifically, plaintiffs claimed that the defendants' usage constituted false designation of source, false advertising, and dilution of the mark. A bench trial took place from October 18 to 20, 2010, with jurisdiction established under 28 U.S.C. §§ 1331 and 1121.

Key parties include Archibald Lingo, owner of Archie's Market, and Dinah Lingo, who operates The Original Lingo's Market through her company, Lingo Bros. LLC. Lingo's Market has been in continuous operation for 112 years, initially run by their father, William Lingo, until 1981. After William's death, Archie managed the market until 2009, and Eleanor Lingo, their mother, worked there until her retirement in 2005. Following Eleanor's death in 2009, the property was sold to Dinah.

The document indicates uncertainty regarding the ownership of Lingo's Market after William's death, as no legal documents transferred the trademark or business interests. However, evidence suggests that William intended for Archie to take over the business. After Eleanor's death, her estate was divided between Archie and Dinah, terminating the trust established by William's will.

Eleanor's will and estate documents did not include any provisions regarding Lingo's Market or its trademark, despite specifying other properties. The only reference to Lingo's Market is in the context of Eleanor disinheriting her son Archie, citing his self-serving behavior and lack of support. During divorce proceedings, both Eleanor and Archie testified that Eleanor was the true owner of Lingo's Market, with Archie acting merely as an employee. However, Archie later claimed he had persuaded Eleanor to misrepresent ownership to protect his financial interests in the divorce. Archie incorporated the business as "Archie's Market, Inc." in 1998 and registered the trademark "Lingo's Market" in 2008. Both parties presented documents related to ownership, with Archie's documents being more extensive. The contested trademark "Lingo's Market" is prominently displayed on signs at the business location, indicating its public exposure. Trademark law protects owners' exclusive use of their marks to prevent consumer confusion, requiring plaintiffs to prove the mark's validity, ownership, and likelihood of confusion created by the defendant's use.

Likelihood of confusion arises when consumers may mistakenly associate a product or service with a source different from its actual provider due to similarities in marks. The Third Circuit employs a ten-factor "Lapp test" to evaluate this confusion, which includes factors such as the similarity of marks, strength of the owner's mark, consumer purchasing behavior, duration of use without confusion, intent behind mark adoption, instances of actual confusion, marketing channels, target audience overlap, perceived relationships between goods, and any expectation of the prior owner's market involvement. No single factor is decisive; all must be considered collectively, even if some are deemed inapplicable, requiring the court to justify their exclusion.

In the current case, "Lingo's Market" is recognized as a valid and protectable trademark, with at least one party having established rights through use and secondary meaning. Archie's federal registration provides prima facie evidence of validity and exclusive rights. The case hinges on the ownership of the mark—if Dinah has any ownership interest, her use is non-infringing, despite Archie’s registration. A registrant is subject to defenses from prior users with established market presence. If Archie solely owns the mark, however, likelihood of confusion may warrant an injunction against Dinah's use. Trademarks serve to identify the source of goods, simplifying consumer choices, thus reinforcing that Archie, as the longstanding operator of Lingo’s Market, is perceived as the source of its goods and services.

Evidence supports the court’s conclusion that Archie owns the statutory and common law rights to the "Lingo's Market" trademark, despite not being explicitly mentioned in William or Eleanor Lingo's estate documents. Eleanor's will suggests that Archie claimed ownership when he incorporated the business as "Archie's Market, Inc." Additionally, Archie's registration of the trademark with the USPTO serves as prima facie evidence of his ownership and exclusive right to use the mark in commerce.

Defendants contend Archie disclaimed ownership during his divorce proceedings, but Archie claimed he perjured himself to reduce alimony payments. While the court does not condone this, his explanation aligns with the evidence. The defendants also argue that two leases indicate Archie leased the market from Eleanor rather than owning it. However, the first lease references "Lingo's Market" only to identify the property location and does not suggest Archie was leasing the business rights or trademark. If it were construed as a licensing agreement, it would be a "naked" license, risking abandonment of Eleanor's interest due to a lack of quality control.

The second lease, which does not mention "Lingo's Market" and identifies "Archie's Market, Inc." as the tenant, further supports the notion that Archie only leased the physical space. Eleanor believed Archie had appropriated the market when he incorporated it under his name. Based on Archie’s 30 years of operational management, incorporation of the business, and federal trademark registration, the court finds that Archie owns both the statutory and common law rights to the "Lingo's Market" trademark.

The marks "Lingo's Market" used by both parties are nearly identical, prominently displayed in large gold letters against a dark background on their signs. Despite Dinah's inclusion of "The Original" and "Dinah H. Lingo, Sole Proprietor" in smaller text, these additions do not significantly differentiate her market from Archie's, as the primary focus remains on "Lingo's Market." This similarity strongly supports the plaintiffs’ position.

The strength of the owner's mark is assessed through its inherent distinctiveness and its recognition in the marketplace. The mark's conceptual strength is considered weaker because it contains the proprietor's name, although it has acquired secondary meaning, bolstered by substantial evidence of commercialization, including magazine articles and blog posts. This factor also favors the plaintiffs.

Both parties operate grocery stores under the same trademark, and the low price point of goods means consumers do not typically engage in extensive research before purchase, further favoring the plaintiffs. 

Defendants have used the mark for only a year, during which there has been noticeable consumer confusion, with customers frequently asking about Archie, indicating minimal time has passed without confusion, favoring the plaintiffs.

Evidence suggests bad faith in Dinah's adoption of the mark, as it is undisputed that she directed the duplication of Archie's original sign. This intent further supports the plaintiffs’ claim.

Lastly, there is documented actual consumer confusion, with customers expressing a belief that Dinah and Jessica were continuing Archie's business, reinforcing the plaintiffs' position.

The goods marketed by both parties are sold through identical media, as evidenced by their shared signage on the same building and similar local advertisements, favoring the plaintiffs. Both parties target the same customers—residents and visitors of Rehoboth Beach—strengthening the plaintiffs' position. The goods offered, specifically groceries, are identical, further supporting the plaintiffs' claims. Additionally, defendants' advertisement of "The Original Lingo's Market" as being in its 112th season implies a continuity with the plaintiffs' business, creating a false association that favors the plaintiffs.

The court concludes that plaintiffs have established a valid trademark and that the defendants' use of "Lingo's Market" likely causes consumer confusion, making them liable under the Lanham Act, § 43(a). The standard for false designation of origin aligns with trademark infringement tests in the Third Circuit. Furthermore, the Delaware Deceptive Trade Practices Act (DTPA) prohibits misleading representations that can cause confusion. The court finds that plaintiffs meet the DTPA's lower burden of proof for confusing conduct, leading to the conclusion that defendants are also liable under this statute.

To establish a federal dilution claim, a plaintiff must demonstrate that: (1) they own a mark deemed 'famous' based on the four factors in § 1125(c)(2)(A), (2) the defendant is making commercial use of a mark in interstate commerce, (3) the defendant's use commenced after the plaintiff's mark became famous, and (4) such use causes dilution by impairing the mark's ability to identify the plaintiff's goods or services. A mark is considered famous if recognized by the general public in the U.S. as a source identifier, with factors including advertising reach, sales volume, actual recognition, and registration status.

Liability for dilution occurs if, after the mark's fame is established, a defendant uses a similar mark that likely causes dilution by blurring, regardless of confusion or economic injury. Blurring is defined as the association that diminishes a famous mark's distinctiveness, assessed through factors including similarity to the famous mark, distinctiveness, exclusive use by the owner, recognition level, intent to associate, and actual association.

The plaintiffs failed to demonstrate that the "Lingo's Market" trademark is famous under 15 U.S.C. § 1125(c), particularly lacking evidence of national fame as required by the Trademark Dilution Revision Act (TDRA). They did not provide consumer surveys or advertisements beyond the Rehoboth Beach area, and thus there is no record supporting the claim of national fame, contrasting with cases where extensive promotional efforts led to established fame.

Consequently, the plaintiffs' request for injunctive relief based on trademark dilution is denied. Regarding permanent injunctions, the court evaluates: (1) actual success on the merits, (2) potential irreparable injury to the moving party, (3) possible greater harm to the defendant from granting the injunction, and (4) the public interest.

The court has ruled that the defendants' use of "Lingo's Market" constitutes trademark infringement, affirming the plaintiffs' success on the merits and establishing a likelihood of irreparable harm due to the defendants' continued use of the mark. The defendants did not present evidence of harm they would suffer from a permanent injunction. The court highlighted the public interest in preventing consumer confusion, which would be served by granting the injunction, as continuing use of the mark would damage public interest. 

Regarding liability, the court addressed the defendants' claim that Jessica could not be held liable for trademark infringement, as she lacked ownership interest in Dinah's grocery store. However, the plaintiffs argued that Jessica was actively involved in the infringement. Ultimately, the court found Jessica not liable, citing her status as an employee during the relevant activities.

In conclusion, plaintiffs are recognized as the owners of the "Lingo's Market" trademark, with a permanent injunction against the defendants' use of the mark. If the defendants wish to use the word "Lingo's" for grocery services, they must include Dinah's first name in the same font, color, and size, and cannot use "Market." The court awarded costs and attorney fees to the plaintiffs, with no liability or award attributed to Jessica. The court also noted the terminology of "trademark" used in the opinion, acknowledging the likelihood that "Lingo's Market" is a servicemark. Additionally, the defendants' use of "The Original" was found to exacerbate consumer confusion. The defendants did not raise specific arguments related to the Lanham Act or Delaware Common Law/DTPA.