The opinion of the court was delivered by: MORTON DENLOW, Magistrate Judge
MEMORANDUM OPINION AND ORDER
The music radio industry is highly competitive and radio
stations seek to differentiate themselves in a variety of ways.
This case involves a claim for trademark infringement and related
state law claims in which the Plaintiffs claim that their
"PLAYING WHAT WE WANT®" trademark has been infringed by the
Defendant. The Defendant denies that there is a likelihood of confusion in their use of the "70's, 80's . . .
WHATEVER WE WANT!", "70's, 80's . . . WHATEVER WE FEEL LIKE!"
and "TODAY'S NEW MUSIC . . . and WHATEVER WE WANT" slogans, and
denies that it is unfairly competing with Plaintiff.
The Court conducted a bench trial on the papers and heard oral
argument on July 25, 2005. The Court has carefully considered the
numerous declarations filed by the parties,*fn1 the exhibits
introduced into evidence, the briefs and closing arguments of
counsel. The following constitute the Court's findings of fact
and conclusions of law pursuant to Rule 52(a) of the Federal
Rules of Civil Procedure.
1. The Plaintiffs are SparkNet Communications, L.P.
("SparkNet"), a Nevada limited partnership, and SparkNet
Holdings, Inc. ("Holdings), a Nevada corporation, (collectively
referred to as "Plaintiffs").
2. The Defendant is Bonneville International Corporation
("Bonneville" or "Defendant"), a Utah corporation. It has been in
the radio business since the mid-1920's. Horowitz Dec. ¶ 20.
Bonneville owns and operates 38 radio stations including WTMX in
Chicago (also known as "101.9 THE MIX"), KKLT in Phoenix (also
known as "98.7 THE PEAK"), WSSM in St. Louis (also known as
"106.5 THE ARCH"), and KZBR in San Francisco (also known as "95.7 MAX FM"). Id. ¶ 6.
B. JURISDICTION AND VENUE.
3. This is an action brought by Plaintiffs for trademark
infringement under § 32 of the Lanham Act, 15 U.S.C. § 1114,
unfair competition under § 43(a) of the Lanham Act,
15 U.S.C. § 1125(a), dilution under § 43(c) of the Lanham Act,
15 U.S.C. § 1125(c), common law unfair competition, and violation of the
Illinois Consumer Fraud and Deceptive Business Practices Act,
815 ILCS 505/10a. Bonneville filed a counterclaim for service mark
cancellation that has not as yet been tried and is not the
subject of this opinion.
4. This Court has jurisdiction over the subject matter of this
action under 28 U.S.C. § 1331, 15 U.S.C. § 1121,
28 U.S.C. §§ 1338(a) and (b), and pursuant to principles of supplemental
jurisdiction under 28 U.S.C. § 1367. The parties have consented
to a Magistrate Judge's jurisdiction pursuant to
28 U.S.C. § 636(c)(1).
5. Venue is proper in this district pursuant to
28 U.S.C. § 1391 because Bonneville is doing business in this district.
6. Robert Perry ("Perry") originally owned the Registered Mark,
PLAYING WHAT WE WANT® (U.S. Trademark Registration No. 2,884,476)
(the "Mark") for use in connection with internet streaming. Perry
Dec. ¶ 2, Ex. A. Perry first used the Mark on May 1, 2001 and he
registered it with the U.S. Patent and Trademark Office ("PTO")
on September 14, 2004. Id. ¶ 3, Ex. A.
7. On June 16, 2005, Perry assigned to Holdings his entire
right, title and interest to the Mark. Holdings recorded the
assignment with the PTO on June 22, 2005. Accordingly, Holdings owns the Mark and all rights therein. Perry Dec. ¶¶ 5-6;
Comp. ¶ 14. The Mark is used in connection with the JACK FM
programming package. Perry Dec. ¶ 4.
8. SparkNet is the exclusive licensee of the Mark in the United
States. Pursuant to its license, SparkNet has the exclusive right
to sublicense the Mark to broadcasters that make radio
programming available throughout the United States. Wall Dec. ¶
9. Before SparkNet became the exclusive licensee of the Mark,
Perry granted Bohn and Associates ("Bohn") the exclusive right to
use the Mark in the United States. Perry Dec. ¶ 5. Perry's
agreement with Bohn (the "Agreement") allowed Bohn to sublicense
the Mark. Id. Bohn subsequently assigned all rights in the
agreement to SparkNet, and Perry consented to that assignment.
Id. ¶ 6.
10. JACK FM is a radio format that was developed by SparkNet
and its predecessors. THE JACK FM branded radio product contains
a broader and more eclectic music playlist than the typical music
radio stations. Burns Dec. ¶ 7. The playlists of stations
offering the JACK FM product typically contains 1200 or more
songs and the song selections defy easy categorization. Id.
Traditional broadcast models include playlists of only 300-400
songs. Johnson Dec. ¶ 6.
11. THE JACK FM format has strong commercial appeal to
companies such as Infinity Broadcasting Company and has been
described as "fresh, irreverent, and unique." Barnett Dec. ¶ 5;
Strassell Dec. ¶ 5. As a result, Bohn was able to sublicense the
JACK FM product to Infinity Broadcasting Corporation for use in
Dallas, Los Angeles, Seattle, Minneapolis, Baltimore, Buffalo,
New York City, and Chicago. Id. ¶ 7. Infinity has not launched the JACK FM format in San Francisco because Bonneville
started up a MAX FM station in San Francisco on or about May 12,
2005 which uses the slogan "70's, 80's . . . WHATEVER WE FEEL
LIKE." Id. ¶ 8. Infinity did launch the JACK FM format in
Chicago on June 3, 2005, after Bonneville started up its new
format and slogan in March, 2005. Solk Dec. ¶ 13; Strassel Dec. ¶
12. Those stations that have licensed the JACK FM format
consider the PLAYING WHAT WE WANT mark to be an integral part of
the JACK FM product. Strassel Dec. ¶ 6.
13. SparkNet and its predecessor have licensed the JACK FM
format and the related PLAYING WHAT WE WANT trademark for use in
at least 15 cities in the United States and expects to add many
new stations. Wall Dec. ¶ 13. SparkNet and its licensees have
spent and expect to spend millions of dollars to promote the JACK
FM concept and the associated PLAYING WHAT WE WANT Mark. Id. ¶
14. SparkNet fears that it will suffer irreparable harm unless
Bonneville is enjoined from using similar slogans. Id. at ¶¶
37-42. Plaintiffs believe that Bonneville's radio products are
inferior to their JACK FM branded product. Wall Dec. ¶ 41.
Bonneville feels that its radio stations are better than
Plaintiffs. Hevner Dec. ¶¶ 19-25; Kijowski Dec. ¶¶ 141-8; Solk
Dec. ¶¶ 11-17.
D. BONNEVILLE'S USE OF SLOGANS.
15. Bonneville has been in the radio industry since the
mid-1920's. Horowitz Dec. ¶ 6. Bonneville presently operates 38
stations in the United States. Id. Bonneville's primary
competitors include Clear Channel Communications, Infinity
Broadcasting, Emmis Communications, Entercom Communications, Cox Radio, Citadel
Broadcasting, and Susquehanna Radio. Id. ¶ 7.
16. In each city in which Bonneville operates a station, the
program director has discretion to tailor the station and its
slogan to the geographic market. Id. ¶ 8.
17. There are three Bonneville slogans at issue. They are used
in four cities. In Phoenix and St. Louis, Bonneville's stations
use the slogan "70's", 80's. . . . . WHATEVER WE WANT." Hevner
Dec. ¶ 8; Kijowski Dec. ¶ 10. In Chicago, Bonneville uses the
slogan "TODAY'S NEW MUSIC . . . AND WHATEVER WE WANT." Solk Dec. ¶
14. Bonneville's San Francisco station uses the slogan "70's,
80's. . . . WHATEVER WE FEEL LIKE!" Tweedle Dec. ¶ 22. Bonneville
has spent in excess of $1,500,000 to promote, publicize and market
these three slogans. Horowiz Dec. ¶ 23. The slogans were
developed without an intention to copy Plaintiffs' Mark. Solk
Dec. ¶ 11.
18. Bonneville's slogans in Chicago, Phoenix, San Francisco and
St. Louis never appear without the relevant stations' name and
frequency. Horowitz. Dec. ¶ 18.
19. Bonneville has not received any communications from any of
its listerners that have either confused Bonneville's slogans
with Plaintiffs' slogans or associated Bonneville's slogans with
Plaintiffs' stations. Id. ¶ 20.
1. Phoenix 98.7 THE PEAK.
20. Larry Hevner ("Hevner") is the Program Director of 98.7 THE
PEAK, KPKX-FM in Phoenix, Arizona. He was initially hired in
August, 2000 by Emmis Communications, to be the Program Director
for KKLT-FM, which was an Adult Contemporary Radio station.
Hevner Dec. ¶ 4. 21. Hevner is responsible for all programming for 98.7 THE
PEAK. Id. In addition, he consults with 106.5 THE ARCH in St.
Louis, Missouri, and 95.7 MAX-FM in San Francisco, California.
Id. ¶ 5.
22. Bonneville acquired 98.7 THE PEAK on December 1, 2004, from
Emmis Communications. At the time of the acquisition, THE PEAK
was already using its current format and slogan "70's, 80's . . .
WHATEVER WE WANT." Id. ¶ 8.
23. When Bonneville acquired THE PEAK on December 1, 2004,
Bonneville believed that its slogan "70's, 80's . . . Whatever We
Want" had significant value and the reason the acquisition was
made was because of the brand recognition, the ratings and cash
flow of THE PEAK. Solk ¶ 7.
24. The predecessor of THE PEAK was KKLT-FM. KKLT-FM had
operated as an adult contemporary station since the late 1980's.
After Hevner joined the station in August, 2000, he made changes
to the format, broadened the playlist, added personalities to the
station, and spent thousands of dollars in marketing. Despite
these changes, KKLT found itself in a head-to-head battle with
KESZ, another adult contemporary radio station. Id. ¶ 9.
25. In January, 2004, Emmis hired Coleman Research to conduct a
research project for the Phoenix radio market. The research
revealed an opportunity for a format playing music from the 1970s
through today. Coleman Research conducted a music test. Based on
the Coleman research study and Hevner's own experience, Emmis
made the format change and launched THE PEAK on May 28, 2004. The
station adopted the following name and slogan at that time: "98.7
THE PEAK, 70's, 80's . . . WHATEVER WE WANT." Id. ¶ 10. THE PEAK's format was created specifically for the Phoenix market
after research uncovered listerner demand for more 70's classic
hits music. Hevner Supp. Dec. ¶ 21 and Ex. F.
26. At the time, Hevner was monitoring the development of the
"Bob" and "Jack" formats in Canada. Paul Ski at the Chum Group
was using the slogan "80's, 90's and WHATEVER" at his "Bob"
station in Winnepeg. Emmis obtained permission from Ski to use
the "70's, 80's . . . WHATEVER WE WANT" slogan. Id. ¶ 13. The
slogan was developed by Emmis Communications and was first used
on May 28, 2004. Id. ¶ 8. At the time, there was only one JACK
FM station in the United States located in Denver, Colorado.
Hevner Supp. Dec. ¶ 20. The "Bob FM" concept and the "80's, 90's
and WHATEVER" slogan was first used on CFWM in Winnepeg, Canada
on March 4, 2002. Wall Dec. Ex. E.
27. THE PEAK is currently rated by Arbitron as the number one
radio station in Phoenix for adults betwen the ages of 25-54.
Hevner Supp. Dec. ¶ 16.
28. Only a small percentage of THE PEAK's total audience of
approximately 275,000 listens via the internet. Id. ¶ 29. The
overwhelming majority of THE PEAK's listeners ...