PARENTS was strong since it was an incontestable registered trademark, having necessarily acquired secondary meaning. Thus, [plaintiff's] descriptive registered trademark was correctly found to be strong for purposes of protectability."). Of course, one must draw a distinction between the protectability of a suggestive mark and the mark's strength in the related but discrete context of an action for infringement. "But a finding of suggestiveness does not guarantee a determination that the mark is a strong one. Although a suggestive mark is entitled to registration without evidence of secondary meaning, suggestiveness is not necessarily dispositive of the issue of the strength of the mark." W.W.W. Pharmaceutical Co., 984 F.2d at 572 (citation and internal quotation marks omitted). In that case, the district court found that plaintiff's "sportstick" for lip balm, while incontestable, was "only moderately strong, deserving of trademark protection, but not entitled to the fullest protection available under the law." Id. at 573. Factors militating against strength were modest sales during the pertinent years, indicating "a low national recognition of [plaintiff's] product," and "extensive third-party use of the words sport and stick," which "weighs against a finding that [plaintiff's] trade name is strong." Id.
In the case at bar, the duration and volume of the business that Franklin Resources has done under the name "Franklin" militate in favor of the strength of its mark.
On the other hand, Franklin Credit has shown extensive use of the name "Franklin" by third parties engaged in one aspect or another of the financial service industry. Defendant produced a chart listing 65 such companies culled from the Yellow Pages of telephone directories. Plaintiff says that this list of names proves very little as to what these third parties do or with whom they do it, but the list of names is probative of seemingly widespread usage of the name "Franklin" in connection with such activities or services, prompted, one may reasonably infer, by an esteem third parties share with the plaintiff for Benjamin Franklin. It is well settled that third-party registration and use dilutes the strength of a trademark. Hutchinson, 769 F. Supp. At 548 (citing cases). That dissolution is significant in the case at bar.
I conclude, with respect to this Polaroid factor, that Franklin Resources' mark is moderately strong -- no less than that, but no more.
Similarity of the Mark
This factor "looks to whether the similarity of the marks is likely to provoke confusion among prospective purchasers. In making this determination, a court should look at the general impression created by the marks, taking into account all factors that potential purchasers will likely perceive and remember." Lang v. Retirement Living Publishing Co., Inc., 949 F.2d 576, 581 (2d Cir. 1991) (citation omitted).
In the case at bar, both parties used the name "Franklin" in their marks, and to that limited extent the marks are identical. But I use the phrase "limited extent" because there are significant differences in the overall impressions created by the parties' use of the "Franklin" name.
Franklin Credit simply uses the name on the letterhead of stationery with which it corresponds with non-performing borrowers whose mortgages Franklin Credit has purchased from the original lenders. Franklin Credit, so far as the trial record reveals, does not advertise its services to the general public in the media or otherwise.
Franklin Resources, on the other hand, advertises its investment management services and mutual funds extensively; and, almost invariably, those advertisements are accompanied by the image of Benjamin Franklin. Franklin Credit's stationery contains no such invocation of that Founding Father. Franklin Credit's stationery does contain graphical representations of pillars evocative of Roman or Greek architecture, a quite different form of imagery from that created by the likeness of Benjamin Franklin.
When viewing, as I must, the general and overall impressions created by the parties' trademarks, I conclude that they are more dissimilar than similar.
Proximity of the Products and Sophistication of the Purchasers or Users
In keeping with recent Second Circuit authority, see Cadbury Beverages v. Cott, 73 F.3d 474, 480 (2d Cir. 1996) ("The eighth Polaroid factor, 'sophistication of the buyers,' has been called 'analogous' to the proximity factor"), I will consider the third and eighth factors together. See also Beneficial Corp. v. Beneficial Capital Corp., 529 F. Supp. 445, 449 (S.D.N.Y.) ("The question of the proximity of the products is considered in connection with the question of the sophistication of the buyers because the closeness of the two products is, at least in part, a function of the extent to which purchasers can and do examine and distinguish them.").
That is a particularly significant analysis in the case at bar. The "proximity-of-the-products" inquiry "concerns whether and to what extent the two products compete with each other," an inquiry which leads in turn to examination of "the nature of the products themselves and the structure of the relevant market." Considerations germane to the structure of the market include "the class of customers to whom the goods are sold, the manner in which the products are advertised, and the channels through which the goods are sold. "Sophistication of the buyers" has been called "analogous" to the proximity factor, since the sophistication factor "recognizes that the likelihood of confusion between the products at issue depends in part on the sophistication of the relevant purchasers." Cadbury, 73 F.3d at 480 (citations and internal quotation marks omitted).
In the case at bar, while there is a very limited overlap between the commercial activities of Franklin Resources and Franklin Credit, these two Polaroid factors, viewed separately and in combination with each other, militate strongly against a likelihood of consumer confusion between the trademarks.
As for the proximity of the parties' products, while to a limited extent Franklin Resources pursues other ventures, its primary business has been since its inception and remains today the marketing and administration of mutual funds. As for Franklin Credit, its business has been since its inception and remains today the purchasing at discount of non-performing loans from the original lenders (typically banks or the receivers of failed banks) and then pursuing the borrowers in efforts at collection. The proximity between these products, services, or activities (however one chooses to characterize them) is virtually nil.
On the question of proximity of products, Beneficial Corp. v. Beneficial Capital Corp., supra, a decision by Judge Lasker, applies a fortiori. Both parties were in the business of making commercial loans. In the course of concluding that "the possibility of the confusion against which the trademark laws protect must be characterized as remote," 529 F. Supp. at 450, Judge Lasker engaged in reasoning which it is useful to quote at some length, not only for its own guidance but also for his reliance upon a decision of Judge Weinfeld, equally applicable to the case at bar:
First, plaintiff and defendant serve entirely different markets. Plaintiff's make only consumer loans; defendant's loans may be used for business purposes only, as provided by the SBIA. Plaintiffs' loans are made only to individuals; defendant has made only a few loans to individuals, and those were solely for the purpose of acquiring working capital. Moreover, the differences in average amounts loaned-plaintiffs' loans average $ 1,500, defendant's $ 54,000--is significant evidence of the difference in their respective markets. In addition, plaintiffs and defendant engage in entirely different marketing approaches. Plaintiffs advertise heavily in all of the major media. By contrast, defendant does no advertising or marketing of any kind, relying entirely on referrals. As Judge Weinfeld stated in a recent trademark case, the services offered by the parties "appeal to different customers, are sold in entirely different markets, exist for distinct purposes, and thus, are in no sense proximate products." Information Clearing House, Inc. v. Find Magazine, 492 F. Supp. 147 (S.D.N.Y. 1980).
Under the sophistication of buyers factor, the evidence shows that while Franklin Resources sells a limited number of mutual fund shares directly to investors, by far the major portion of its marketing effort focuses upon independent broker-dealers who in turn recommend Franklin Funds (as well as the products of other companies) to their clients, the individual investors, who become shareholders in the mutual funds. It is hard to imagine a more sophisticated, street-wise, savvy buyer (or, more precisely, conduit) of Franklin Resources' products and services than professional broker-dealers. It is not likely that a broker-dealer, who happens to learn that a company called Franklin Credit is engaged in the loan collection business, would confuse that company with Franklin Resources, linked to the broker-dealer as participants in the mutual funds business.
If one focuses upon the individuals involved, the fund shareholders vis-a-vis Franklin Resources and defaulting mortgagors vis-a-vis Franklin Credit, plaintiff fares no better. There is no evidence that individuals who have fallen behind on their home mortgage payments are at the same time pursuing investment strategies in mutual funds, and the absence of such proof is not surprising.
Moreover, one may reasonably infer that those individuals who come in contact with either Franklin Resources or Franklin Credit have some degree of sophistication. Those who invest in mutual funds, even in relatively minor amounts and under the guidance of a broker-dealer, are individuals with discretionary income, prompted by concerns for their financial security, and determined to do something about it. Those who suddenly encounter Franklin Credit do so because they own homes of sufficient value to stand as security for a mortgage loan, whose terms the individual borrowers presumably negotiated with the original lending bank. These circumstances bring the case at bar within Judge Lasker's analysis in Beneficial Corp., 529 F. Supp. at 450, which considered possible confusion among borrowers from two lending companies, Beneficial Corp. and Beneficial Capital Corp.:
Furthermore, defendant argues reasonably that we may infer at least a moderate amount of sophistication from the fact that its clients are in a position to borrow a minimum of $ 10,000. The fact that use of a particular service entails both substantial funds and a fairly detailed purchasing process is recognized as being a significant index of buyer sophistication (citations and internal quotation marks omitted).