American Century Wins Permanent Injunction
October 10, 2008CHICAGO, October 10, 2008 – After a hard-fought battle, the Fifth Circuit ruled last week that American Century Investments ("ACI"), a financial services company based out of Kansas City, Missouri, is entitled to a permanent injunction barring American Century Casualty Company and its subsidiary (jointly, "ACCC"), both Texas companies, from using the "AMERICAN CENTURY CASUALTY COMPANY" and "AMERICAN CENTURY CLAIMS SERVICE" marks in connection with non-standard automobile insurance.
The battle dates back to 2004, when ACI opposed ACCC’s applications for the "AMERICAN CENTURY CASUALTY COMPANY & Design" and "AMERICAN CENTURY CLAIMS SERVICE & Design" marks covering non-standard automobile insurance services. During the course of discovery, ACI learned that ACCC intended to expand the use of its marks, so ACI filed an action with the Southern District of Texas alleging five causes of action: trademark infringement, false designation of origin, trademark dilution in violation of the Lanham Act, trademark dilution in violation of the Texas Anti-Dilution Statute, and unfair competition under Texas common law. ACI based the action on its rights in the "AMERICAN CENTURY" trademark and trade names that include "AMERICAN CENTURY," all of which ACI uses in connection mutual funds and other financial services.
After the close of discovery, ACI sought summary judgment as to ACCC’s liability on all but the federal dilution claim, which would become moot should the district court grant summary judgment on the other claims. On April 12, 2007, U.S. Magistrate Judge Mary Milloy issued a Memorandum and Recommendation, whereby, for purposes of a likelihood of confusion analysis, the Magistrate analyzed (1) the type and strength of the mark; (2) the similarity between the two marks; (3) the similarity between the products and services; (4) the identity of retail outlets and purchasers; (5) the identity of advertising media; (6) the defendants’ intent; and (7) evidence of actual confusion.
Magistrate Milloy held that ACI’s mark was arbitrary and the “strength of the mark” factor weighed in ACI’s favor. She also found that ACCC’s use of the mark cause actual confusion and that “actual confusion” factor weighed in ACI’s favor. The Magistrate also found that, as a matter of law, ACI had priority of use of the "AMERICAN CENTURY" mark.
Notwithstanding these findings, Magistrate Milloy recommended that the Motion for Summary Judgment be denied, finding that several of the digits of confusion, including the similarity of the marks, the similarity of the services, the identity of the retail outlets and purchasers, and the identity of advertising media, did not weigh in favor of a likelihood of confusion. Furthermore, Magistrate Milloy found that genuine issues of material fact precluded summary judgment with regard to ACI’s claim for dilution under the Texas Anti Dilution Statute.
ACI did not agree with the Magistrate’s findings, but it looked as though the parties were headed to trial. To preserve the "de novo" standard of review upon appeal (should an appeal be necessary), and with the hope that the District Court might agree with ACI and not the Magistrate, ACI filed objections to the Magistrate’s Memorandum.
In fact, on May 10, 2007, U.S. District Court Judge Vanessa Gilmore issued an opinion rejecting the Magistrate Milloy’s findings that the marks were not similar and that the services were not related. Judge Gilmore granted ACI’s motion, holding that ACI had established both a likelihood of confusion and a likelihood of dilution as a matter of law. Judge Gilmore subsequently granted an injunction prohibiting ACCC from using the “AMERICAN CENTURY” mark.
The defendants appealed to the Fifth Circuit. The parties submitted briefs and gave oral arguments. On October 3, 2008, Justices William Garwood, Edith Brown Clement, and Jennifer Walker Elrod issued an opinion, affirming the lower court’s ruling. (Judge Garwood issued a decision concurring in part and dissenting in part.) The Fifth Circuit found a likelihood of confusion between the parties’ marks, holding that (1) ACI’s mark is arbitrary and strong, (2) the parties’ marks are similar in sight, sound, and meaning, (3) the parties’ services are related, and (4) the evidence of actual confusion weighed in ACI’s favor, albeit only slightly. The Fifth Circuit also found a likelihood of dilution under the Texas Anti-Dilution Act.
"We are pleased with the ruling, which recognizes that financial services and insurance services are related," said Mark Liss, an attorney at Leydig, Voit & Mayer, Ltd., which is based in Chicago and which represented ACI in this case. "The ruling reflects years of hard work and a reflection of a change in the marketplace, where many companies that sell financial services now also sell insurance products, and vice versa."
In addition to Mr. Liss, Plaintiff was represented by Tamara A. Miller and Caroline L. Stevens of Leydig, Voit, & Mayer, Ltd.
Defendants were represented by Randolph B. Houston, Jr. of Fortkort & Houston P.C. in Austin, Texas.
The case is American Century Proprietary Holdings, Inc. v. American Century Casualty Company and American Century Claims Service, Inc. Case No. 07-20542, in the Fifth Circuit.
