Thursday, December 27, 2018

Actual confusion provides evidence of irreparable harm

Home Comfort Heating and Air Conditioning, Inc. v. Ken Starr, Inc., 2018 WL 3816745, No. 18-cv-00469-JLS-DFM (C.D. Cal. Jul. 24, 2018)

Home Comfort Heating & Air Conditioning provides HVAC services in Los Angeles County and the surrounding area; it asserted rights in marks “wholly or partially comprised of the word elements ‘HOME COMFORT,’ ” including “HOME COMFORT SERVICES,” and “HOME COMFORT HEATING AND AIR CONDITIONING.” It had some registrations.  Ken Starr Inc. subsequently began operating an HVAC business under the name “Home Comfort USA” in Southern California, including Los Angeles County and the surrounding area.

Notable findings: The court found strong evidence of confusion from negative online reviews, including one negative Yelp review, and oral complaints with regard to products and services that were supplied by KSI. In the prior year, Home Comfort received five attempts by customers seeking to return products purchased from KCI, two refund requests arising out of KCI’s services, thirty inquiries about KCI’s special pricing offers, and forty inquiries about available services from customers who saw KCI’s ads. A few of the voicemails were generic requests for quotes, but the majority reference specific accounts, appointments, and issues with prior work done by KCI.

The district court applied the 9th Circuit’s screwed-up “can you determine the product just from knowing the mark?” test to determine that the marks were suggestive.  Twenty-six HVAC businesses around the nation that use some combination of the terms “home” and/or “comfort” in connection with their services didn’t diminish the strength of the mark, especially without more evidence of use and given that “HVAC customers will, necessarily, seek a local source for these products and services.” Of the three businesses that did serve California, each used other distinguishing words as well: “Stephan’s Home Comfort Services,” “Engineered Comfort,” and “US Comfort.” Nor did Home Comfort’s addition of “Heating & Air Conditioning” to its marks, KCI’s slogan “Call the Comfort Guys, We’re There!” or the parties’ different colors deminish the likely confusion. The word marks “Home Comfort” and “Home Comfort USA” were essentially indistinguishable and adding generic words didn’t create a meaningful distinction “from the perspective of a consumer.” The stylized marks included “Home Comfort” as their dominant portion and had a depiction of a house and appeared substantially similar; the colors and the slogan weren’t how consumers would make a primary identification.

Purchaser care was neutral because almost everyone needs HVAC services, making the target market average, but they tend to be expensive, increasing consumer care.

Given that the factors favored a finding of likely confusion, was there irreparable harm? The rule is that “[e]vidence of loss of control over business reputation and damage to goodwill could constitute irreparable harm,” and the court found that the actual confusion shown here satisfied that standard.  However, delay works against a finding of irreparable harm, and Home Comfort delayed 20 months after discovery of the problem to seek relief.  The court found that the delay was sufficiently explained by Home Comfort’s oppositions to KCI’s trademark registration applications and extensive settlement discussions. In addition, the dates of the voicemails indicated that confusion was increasing over time, making delay less probative.  With that, the other requirements for injunctive relief were easily satisfied.

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