United States District Court, N.D. Illinois
January 5, 2004.
V & S VIN & SPRIT AKTIEBOLAG, d/b/a THE ABSOLUT COMPANY, Plaintiff,
CRACOVIA BRANDS, INC., et al., Defendants
The opinion of the court was delivered by: MATHEW KENNELLY, District Judge
MEMORANDUM OPINION AND ORDER
V & S Vin & Sprit Aktiebolag ("V & S"), the Swedish
company that makes Absolut vodka, sued a Polish competitor,
Przedsiebiorstwo Polmos Bialystok S.A. ("PPB"), and its Chicago-area
distributor, Cracovia Brands, Inc. In an eight count complaint, V & S
claimed that PPB and Cracovia infringed upon its Absolut trademark by
manufacturing and marketing Absolwent vodka. V & S settled with
Cracovia, and this Court entered a final judgment as to the claims
against Cracovia on April 26, 2002. V & S has moved for summary
judgment against PPB on two counts of its complaint, alleging trademark
infringement and false designation of origin and unfair competition in
violation of the Lanham Act, 15 U.S.C. § 1114 and 1125(a). For the
reasons stated below, the Court denies V & S's motion for summary
As the Seventh Circuit has noted, "[t]he `keystone' of trademark
infringement is `likelihood of
confusion' as to source, affiliation, connection or sponsorship of
goods or services among the relevant class of customers and potential
customers." Sands, Taylor & Wood Co. v. Quaker Oats Co.,
978 F.2d 947, 957 (7th Cir. 1992) (citation omitted). Whether a likelihood of
confusion exists among consumers is a question of fact. CAE, Inc., v.
Clean Air Engineering, Inc., 267 F.3d 660, 677 (7th Cir. 2001).
"Courts are not empowered to make factual findings on motions for summary
judgment." Sands, Taylor & Wood, 978 F.2d at 952. That means
that for the Court to grant the plaintiff's motion for summary judgment,
we must conclude that "even resolving all factual disputes in favor" of
PPB, V & S is entitled to judgment as a matter of law. Id.
In other words, V & S is entitled to summary judgment only if there
is no factual dispute that consumers generally familiar with Absolut
vodka would likely, upon seeing or hearing Absolwent vodka, believe that
Absolwent is "in some way related to, or connected or affiliated with, or
sponsored by" Absolut vodka. See James Burrough Ltd. v. Sign of the
Beefeater, Inc., 540 F.2d 266, 274 (7th Cir. 1976).
To prevail, it is not enough for V & S to show that "confusion is
possible and may even have been desired" by PPB. Rust Env't &
Infrastructure, Inc., v. Teunissen, 131 F.3d 1210, 1216 (7th Cir.
1997) (citation omitted). Confusion "must be likely in order to enjoin
use of the trademark" Id. (citation omitted). To determine
whether confusion is likely, the Seventh Circuit has identified seven
factors for the Court to consider in its analysis: "(1) similarity
between the marks in appearance and suggestion; (2) similarity of the
products; (3) area and manner of concurrent use; (4) degree of care
likely to be exercised by consumers; (5) strength of complainant's mark;
(6) actual confusion; and, (7) intent of defendant to palm-off his
product as that of another." Id. (citation and internal
quotation marks omitted). "[N]one of the seven factors alone are
dispositive, and the weight accorded to each factor
will vary from case to case." Id. at 1217 (citation and
internal quotation marks omitted). All the factors must be analyzed "with
reference to the realities of consumer behavior in the relevant market."
Dorr-Oliver, Inc. v. Fluid-Quip, Inc., 94 F.3d 376, 381 (7th
Three of the factors are not really in dispute and weigh in favor of V
& S. Both parties make and market vodka, though there is some
disagreement as to whether Absolwent is marketed as a "luxury" vodka as
Absolut is. Absolut and Absolwent are purchased in the same settings and
locations. And Absolut is clearly a famous mark, and, as a result, is
entitled to "more legal protection than an obscure or weak mark."
Kenner Parker Toys Inc. v. Rose Art Indus., Inc., 963 F.2d 350,
353 (Fed. Cir. 1992).
But despite the heightened protection afforded famous marks, these
three factors are not enough to find in favor of V & S. The parties
dispute the price at which Absolwent is sold in the Chicago area and the
degree of care potential customers are likely to exercise in choosing or
ordering a vodka. Furthermore, as the Seventh Circuit has noted,
"although no one factor is decisive, the similarity of the marks, the
intent of the defendant, and evidence of actual confusion are the most
important considerations." Eli Lilly & Co v. Natural Answers,
Inc., 233 F.3d 456, 462 (7th Cir. 2000) (citation omitted). PPB has
raised a genuine issue as to each of these three factors.
(1) Similarity of the marks
PPB commissioned a study to measure the degree of confusion when
consumers see the marks side-by-side with other brands of vodka. V &
S argues this study measures only a fraction of the confusion in the
marketplace because vodka is bought by the glass in restaurants and bars,
where the aural rather than the visual similarity between
the two marks is the basis of confusion. Vodka is
purchased both by the bottle in stores and by the glass in
restaurants and bars by placing verbal orders, so both the visual and
aural similarity of the marks must be considered. Because the study
commissioned by PPB provides a measure of actual confusion caused by the
visual similarities between the two marks, the Court defers its
discussion of the visual similarities of the marks to the section on
The parties hotly contest the level of aural similarity between Absolut
and Absolwent. "Slight differences in the sound of similar trademarks
will not protect the infringer." G.D. Searle & Co. v. Chas.
Pfizer & Co., 265 F.2d 385, 387 (7th Cir. 1959) (citation
omitted). Thus the question is whether "went" is so different from "ut"
that confusion is unlikely. Both parties have preferred the testimony of
linguists who agree that Absolut and Absolwent share six letters and have
the same prefix (which is obvious even to non-linguists) but disagree on
everything else including whether the two marks have one syllable
in common or two. V & S's expert Ronald Butters has filed a
declaration stating that the similarity of the marks' prefixes is more
important than the differences in the suffixes; PPB's expert Alan Kaye
argues the opposite. Thus the experts disagree on how similar the words
actually will sound when pronounced. There is no legal rule that
similarity in suffixes is more important than similarity in prefixes, or
vice versa. See G.D. Searle, 265 F.2d at 388-89 (listing
numerous cases involving marks with dissimilar prefixes and similar
suffixes, and noting that in some cases the marks were found confusingly
similar and in others they were not). Thus the Court is left with the
conflicting judgments of the parties' expert witnesses.
V & S has attempted to discredit Kaye's expert report, pointing to
admissions he offered during his deposition. See, e.g., Kaye
Dep. at 157, 160 (stating the two marks are "rather close"). But
when his statements are taken in context and his entire deposition
testimony is viewed in the light most favorable to PPB, as is required
when evaluating V & S's motion for summary judgment, it cannot be
said that the manifest weight of his testimony favors a finding of a
likelihood of confusion. Furthermore, many of V & S's challenges to
Kaye's testimony ask the Court to make credibility determinations, which
are inappropriate on a motion for summary judgment. A genuine issue
exists in this case as to the likelihood of confusion due to the aural
similarities of the marks. Therefore, V & S is not entitled to
(2) Actual confusion
The Seventh Circuit has said that "the plaintiff need not show actual
confusion in order to establish likelihood of confusion."
Sands, Taylor & Wood, 978 F.2d at 960 (citations omitted;
emphasis in original). But evidence of actual confusion "is substantial
evidence of likelihood of confusion." Tisch Hotels, Inc. v. Americana
Inn, Inc., 350 F.2d 609, 612 (7th Cir. 1965). "Actual confusion can
be shown by either direct evidence or by survey evidence." Rust,
131 F.3d at 1218. V & S has offered a declaration including direct
evidence of actual confusion; PPB has commissioned a survey to measure
the lack of actual confusion.
V & S has submitted the declaration of Jacek Dabrowski, chief
operating officer of Cracovia Brands, the Chicago-area distributor of
Absolwent vodka. Dabrowski states that he has "confused the names Absolut
and Absolwent because of their similarity." Dabrowski Decl. ¶ 7. V
& S argues that this declaration constitutes evidence of actual
confusion. PPB challenges Dabrowski's credibility, pointing out that
Dabrowski signed the declaration after the Court had granted V & S's
motion for an order to show cause why Cracovia should not be held in
contempt for violating its settlement with V & S.
The Court cannot make credibility determinations on a motion for
summary judgment. PPB has raised a genuine issue as to whether
Dabrowski's statement constitutes evidence of actual confusion.
Furthermore, even if Dabrowski's statement were accepted, evidence that
one person confused the two products would not entitle V & S to
summary judgment as a matter of law.
Both parties claim that the results of the survey commissioned by PPB
favor their positions even after V & S initially went to
great lengths to discredit the methodology and value of the survey,
arguing that because the study measured visual confusion and not aural
confusion, it only measured a fraction of the confusion in the
marketplace. According to PPB, the survey shows that eight percent of
surveyed vodka drinkers were "likely to have been confused by the
similarities between Absolut and Absolwent." Pl.'s Supp. Reply Ex. B
¶ 16. V & S reads the final survey results as documenting an
eleven percent rate of confusion. But the consultant who conducted the
survey, Robert Reitter, subtracted three percentage points from eleven
percent to control for noise in the study. Id. Because the
survey comes before us on V & S's motion for summary judgment., we
must evaluate the survey results in the light most favorable to PPB and
therefore accept for present purposes Reitter's conclusion that the
survey found an eight percent rate of confusion between the two marks.
Reitter concluded that "[t]his net level of likelihood of confusion, 8%,
is very slight" Id. ¶ 17.
V & S argues that an eight to eleven percent rate of confusion
compels the Court to find a likelihood of confusion. But none of the
cases cited by V & S goes so far as to say that an eight to eleven
percent rate of confusion compels a finding for the plaintiff as a matter
of law, and five of the six cases cited by V & S are inapposite
because of their procedural postures. E.g., Mutual of Omaha Ins. Co.
v. Novak, 836 F.2d 397, 400-01 (8th Cir. 1987) (declining to find
that district court erred in
its decision after a trial on the merits to give evidence of
approximately ten percent of confusion "significant weight"); Humble
Oil & Refining Co. v. American Oil Co., 405 F.2d 803, 817 (8th
Cir. 1969) (finding that in evaluating an application to modify an
injunctive decree an eleven percent rate of actual confusion "may not
[be] dismiss[ed] as de minimis"); Goya Foods, Inc. v. Condal
Distribs., Inc., 732 F. Supp. 453, 457 (S.D.N.Y. 1990) (concluding
at the end of a four-day preliminary injunction hearing that a ten
percent rate of confusion was "statistically meaningful" because an
expert had explained why any survey results yielding more than seven
percent confusion was statistically meaningful); Jockey Int'l v.
Burkard, 185 U.S.P.Q. 201, 205 (S.D. Cal. 1975) (finding
infringement after a bench trial in part because 11.4 percent of adults
will associate the defendant's product with the plaintiffs mark); and
Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway &
Sons, 365 F. Supp. 707, 716 (S.D.N.Y. 1973), aff'd
523 F.2d 1331 (2d Cir. 1975) (concluding after a bench trial that survey results
that twenty-three recent purchasers had some confusion of origin, 7.7
percent of 520 people canvassed perceived a business connection between
the two companies and 8.5 percent confused the names was "strong evidence
of the likelihood of confusion"). Only one case cited by V & S
involves the weight to be given to survey results in deciding a motion
for summary judgment. In James Burrough Ltd. v. Lesher,
309 F. Supp. 1154, 1159 (S.D. Ind. 1969), the Court relied in part on the
defendants' polling evidence, which showed that 37 of 300 polled patrons
(12.3 percent) thought the defendant's restaurant's name was related to
Beefeater gin, to conclude on summary judgment that a likelihood of
confusion existed. The Court notes that the polling data in James
Burrough revealed a rate of confusion that was more than four
percentage points higher than in this case. But more importantly,
James Burrough like the other cases cited by V & S
that evidence of actual confusion may be significant to the Court's
determination; it does not compel a particular result.
Because this case comes before us on V & S's motion for summary
judgment, the Court accepts for present purposes Reitter's interpretation
of the survey results, namely that the likelihood of confusion is slight.
At the least, a genuine issue of fact exists as to how the survey results
should be interpreted. Given the several factual disputes that exist in
this case and the deference we must pay to Reitter's interpretation of
the study, the Court cannot conclude as a matter of law that PPB's survey
results compel a finding for V & S especially since V & S
forcefully argued that aural confusion is more important than visual
confusion and the survey did not measure aural confusion, over which
there is still a great deal in dispute.
(3) Intent of the defendant
As with actual confusion, the plaintiff does not need to prove bad
faith on the part of the defendant to prevail. Lois Sportswear,
U.S.A., Inc., v. Levi Strauss & Co., 799 F.2d 867, 875 (2d Cir.
1986). "[T]he defendant's intent is relevant to the issue of likelihood
of confusion only if he intended to palm off his products as those of
another, thereby profiting from confusion." Sands, Taylor &
Wood, 978 F.2d at 961 (citation and internal quotation marks
omitted). "If a defendant willfully appropriates the mark of another, a
court is more inclined to find likelihood of confusion." Rust,
131 F.3d at 1219. V & S argues that PPB intended to infringe on the
Absolut trademark, pointing out that PPB previously sold vodka in a
bottle that had a shape V & S felt infringed upon the Absolut
trademark PPB responds that once it received a letter from V & S
accusing it of infringement, PPB changed its bottle. PPB further
describes the process by which the company chose to name its new
vodka Absolwent, saying that it initially chose the name "Student"
but then decided on "Graduate," which is "Absolwent" in Polish, because
everyone is a graduate of something. PPB has raised a genuine issue as to
its intent in choosing the name Absolwent.
Because PPB has raised a genuine issue of fact as to the aural and
visual similarities of the two marks, the meaning of the survey it
commissioned, and its intent, summary judgment is not appropriate.
For the reasons stated above, the Court denies V & S's motion for
summary judgment [docket #41-1]. The case is set for a status hearing on
January 14, 2004, at 9:30 a.m. for the purpose of setting a prompt trial
date. Trial counsel are directed to appear.
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