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ISSUE
Discuss Surgicenters of America, Inc. v. Medical Dental Surgeries Co. (9th Cir. 1979) 601 F.2d 1011 and cases following it.
DISCUSSION
1. Surgicenters
Plaintiff Surgicenters was formed in Arizona in 1968 to provide turn-key outpatient surgical facilities to doctors. Plaintiff acquired land, handled zoning and license applications and permits, drew up building plans and leased buildings, trained personnel, managed facilities, provided operations manuals and offered quality control and billing services. It registered "Surgicenter" as a mark in 1970, soon after opening the first facility, and licensed the mark to those who contracted with it. It promoted the concept heavily and licensed it to users in other states.
Defendant operated in Portland, Oregon. In 1972 it changed its name from Medical Dental Hospitals to Medical Dental Surgeries and in 1975 to Medical Dental Surgicenters.
Plaintiff, who actively policed the mark, promptly sued defendant for infringement, accounting and damages. The parties cross-moved for summary judgment. The trial court granted summary judgment to defendants on the grounds that the mark was generic and, alternatively, that even if it were descriptive, plaintiff had not shown secondary meaning in Oregon. The court relied on two kinds of evidence: (1) the dictionary meanings of "surgical" and center," which, it held, were generic terms that when combined still had the generic meaning of "a concentration of facilities relating to surgeons or surgery"; and (2) generic usage of "surgicenter," including usage by plaintiff's founders in trade magazine articles intended to promote the concept, by the D.H.E.W. in preliminary regulations, by the Library of Congress, and by numerous practitioners (all of whom--except defendant--were willing to recognize plaintiff's service mark claim when plaintiff wrote to them).
The Ninth Circuit affirmed, although in a split decision.
A. MajorityThe majority opinion acknowledged that a registered mark is presumed valid, but held that the presumption was rebutted. It acknowledged the difficulties courts have had in applying the four-part classification of generic, descriptive, suggestive and arbitrary terms, but adopted the classification as set forth and explained in Abercrombie & Fitch v. Hunting World (2d Cir. 1976) 537 F.2d 4, 9-11.
The court explained the "ultimate test" for the right to exclusive use of a mark (taken from Kellogg Co. v. National Biscuit Co. (1938) 305 U.S. 111, 113): plaintiff must show that the mark's "primary significance in the minds of the consuming public is not the product but the producer." Significantly, the court endorsed the view that a generic term cannot be made into a descriptive term by promoting it as a mark because to allow such capture "`would grant the owner of the mark a monopoly, since a competitor could not describe his goods as what they are.'" 601 F.2d at 1017, quoting CES Pub. Corp. v. St. Regis Publication, Inc. (2d Cir. 1975) 531 F.2d 11, 13 ("Consumer Electronics" magazine); see also J. Kohnstam, Ltd. v. Louis Marx & Co., Inc. (CCPA 1960) 280 F.2d 437, 440 ("Matchbook Series" of toys in small boxes).
The court accepted the district court's analysis of "Surgicenter" as a compound that remains generic because its meaning is immediately plain (like Turbodiesel or Lock O Seal; unlike Eveready or Startgrolay). As confirming evidence, it accepted the district court's view of the evidentiary exhibits. The exhibits established plaintiff's success at getting others to recognize its mark--but also proved that those others had previously considered the term to be generic.
Closing its discussion of genericness, the court quoted from another case on compound terms, this one on a preparation called "Coco-Quinine":
A name which is merely descriptive of the ingredi- ents, qualities or characteristics of an article of trade cannot be appropriated as a trademark and the exclusive use of it afforded legal protection. The use of a similar name by another to truthfully describe his own product does not constitute a legal or moral wrong, even if its effect be to cause the public to mistake the origin or ownership of the product.Even if "Surgicenter" were considered a descriptive mark, the court held, there was a failure of proof of secondary meaning. There were no consumer surveys. There was no showing of likelihood of confusion. Even though 200 physicians used plaintiff's facilities in Arizona, and some of these undoubtedly connected the mark with plaintiff, this was not enough to establish secondary meaning. 601 F.2d at 1017.Warner & Co. v. Lilly & Co. (1924) 265 U.S. 526, 528.
B. Dissent (Goodwin, J.)The dissenting opinion posited that the presumption of validity arising from registration is strong, especially where the defendant's mark is identical and its use began only after plaintiff's mark was registered. The dissent suggested that classifying a term as generic on the basis of the meanings of its components was a discredited approach, no longer followed in the Ninth Circuit, even if the compound itself is found in standard dictionaries. 601 F.2d at 1020, citing United States Jaycees v. San Francisco Junior Chamber of Commerce (9th Cir. 1975) 513 F.2d 1226 ("chamber of commerce" is not generic). "The dictionary test is wrong because it is irrelevant. How or whether the dictionary defines a single word is not probative of what consumers understand by a combination of words or a compound term like 'Surgicenter.'" 601 F.2d at 1021. The dissent insisted that the ultimate question--what buyers understand by the term "Surgicenter"--was a question of fact; defendant's burden (arising from the registration presumption) was to "`make a rather clear and convincing showing that the principal significance of the word * * to the public' was generic. E.I. DuPont de Nemours & Co. v. Yoshida International, Inc. 393 F.Supp. at 528." Surgicenters, 601 F.2d at 1022 (dissent).
The dissent suggested that evidence about doctors' perceptions was mixed (especially since many doctors were actually paying plaintiff for the use of the term), and that there was no evidence at all from patients; since defendant had the burden of proof, plaintiff did not need to bring any evidence. Id., at 1023.
2. Citations
According to Shepard's, the majority opinion has been cited often and its reasoning has never been directly criticized; the dissenting opinion has not been cited at all. A check of the citations shows none that really replicates the majority's analysis.
A. Appellate casesIn Anti-Monopoly, Inc. v. General Mills Fun Group (9th Cir. 1979) 611 F.2d 296, 302, the court cited Surgicenters for its four-category classification. The court went on to say (at 304) that "[s]ource identification is the only word function that trademark law is designed to protect," a helpful dictum; but the reasoning of the court's "consumer motivation" test as stated in its later opinion in the same case (684 F.2d 1311 at 1313 and 1326) has been severely criticized.
In Walt-West Enterprises v. Gannett Co., Inc. (7th Cir. 1982) 695 F.2d 1050, 1056, the issue was secondary meaning of a descriptive term ("FM 107"). Surgicenters was cited as one of many cases that use the four-category classification; but the usefulness of the classification itself was queried in dictum, particularly the view that generic terms can never become valid trademarks (see fn. 9).
In Park 'N Fly v. Dollar Park & Fly Inc. (9th Cir. 1983) 718 F.2d 327, 329, rev'd on other grounds 469 U.S. 189 (1985), the four-category scheme was cited and the dictum that a generic term can never become a valid trademark was reasserted.
In California Cooler v. Loretto Winery Ltd. (9th Cir. 1985) 774 F.2d 1451, 1454 (preliminary injunction affirmed based on evidence of secondary meaning), Surgicenters was cited for the proposition that a mark which is "merely descriptive" is not entitled to registration on the principal register unless the Commissioner determines that it has become distinctive through the acquisition of secondary meaning.
In Co-Rect Products v. Marvy Advertising Photography (8th Cir. 1985) 780 F.2d 1324, 1333 fn. 9 (advertising slogan for bartender's shot-measuring device not shown to have acquired secondary meaning), Surgicenters was cited for its dictum that consumer surveys are the most direct and persuasive evidence of secondary meaning.
In Nutri-System, Inc. v. Con-Stan Industries, Inc. (9th Cir. 1987) 809 F.2d 601, 605 (written by Goodwin, J., for a unanimous panel; judgment for defendant affirmed), Surgicenters was cited for its four-category continuum of strong-to-weak marks. The holdings were (1) service mark infringement is measured by the same standard as trademark infringement; (2) there was little likelihood of confusion, since plaintiff's mark was suggestive and weak, the parties' logos were dissimilar, their trade channels did not converge, and defendant had used the contested prefix "Nutri-" long before plaintiff's weight control centers existed and had not acted in bad faith or with intent to confuse; and (3) any actual confusion (misdirection of mail) was de minimis in view of both parties' volume of business.
In Rodeo Collection v. West Seventh (9th Cir. 1987) 812 F.2d 1215, 1218, another secondary meaning case, Surgicenters was once again cited for the continuum of marks.
B. District Court Cases[Omitted.]
CONCLUSION
Surgicenters is cited for a variety of propositions, most often for the four-category continuum of strong-to-weak marks. It has been cited, although not often, for the element that the dissent most strongly criticized: the use of dictionary definitions as persuasive evidence of consumer perceptions at the level of genericness. The dissent's critique, however, has not been cited at all.