Intellectual Property Law

Failure to Allege Factors Leads Court to Find Mark Not Famous Despite Default

By Michael Atkins

In Alfa Corp. v. Alfa Mortgage Inc., the plaintiff alleged that its federally-registered marks containing the word ALFA are famous and that defendant’s use of ALFA constituted dilution, among other trademark-related causes of action. 

Plaintiff is an Alabama-based company that uses ALFA in connection with financial services, including insurance and reinsurance services. Defendant is an Indiana-based company that uses ALFA in connection with mortgages, residential construction loans, and commercial loans.

Defendant did not answer, and plaintiff moved for entry of a default judgment. On June 11, the Middle District of Alabama adopted the magistrate’s recommendation granting plaintiff’s motion with respect to other trademark causes of action but denied it with respect to plaintiff’s claim for dilution under the Alabama dilution statute because it found plaintiff had failed to allege facts supporting all of the factors indicating fame:

“In examining the Complaint, the Court must infer Plaintiff’s allegations.  Plaintiff alleges its marks are famous because Plaintiff has registered its marks, engaged in substantial advertising, and conducts business in some form under the ALFA marks nationwide. But, there are no factual allegations regarding the mark’s distinctiveness, the duration and extent of the use of the mark, or the degree [of] the ALFA marks’ recognition. Based on the absence of these allegations, the Court simply cannot conclude Plaintiff’s ALFA marks are famous. Consequently, Plaintiff has failed to set forth sufficient allegations entitling it to default judgment on Count 5.”

While this result doesn’t strike me as strange, the way the court got there does. It found the burden of proof under the Alabama dilution statute was “essentially the same as under federal law.” It then analyzed the claim applying the criteria for fame set forth in the Federal Trademark Dilution Act, even though plaintiff filed suit on October 25, 2006 — two weeks after the Trademark Dilution Revision Act was enacted. In a footnote, the court even acknowledged that “the Trademark Dilution Revision Act … amended the FTDA effective October 6, 2006…” Why the court did not apply the criteria set forth in the TDRA is a mystery.

The case cite is Alfa Corp. v. Alfa Mortgage, Inc., __ F.Supp.2d __, 2008 WL 2397522, No. 06-962 (M.D. Ala.) (Watkins, J.).

Full post as published by Seattle Trademark Lawyer on June 24, 2008 (boomark / email).