Free Order on Motion for Summary Judgment - District Court of Arizona - Arizona

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Century Insurance Group ("CIG") is a trade name. (Dkt. 124, ¶1 at 7.) As such, CIG is not a separate legal entity capable of being sued. See Snowden v. CheckPoint Check Cashing, 290 F.3d 631, 634 (4th Cir. 2002) (a trade name "is not a separate legal entity capable of being sued"); see also Regents of the Univ. of Calif. v. Shalala, 82 F.3d 291, 293 (9th Cir. 1996). Century, as the real party in interest, is the proper defendant. CIG will be dismissed with prejudice from this lawsuit. Document 177 Filed 03/16/2006 Page 1 of 89
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Century 21 Real Estate LLC,

) ) ) Plaintiff , ) ) vs. ) ) ) Century Insurance Group and Century) ) Surety Co., ) ) Defendants. )

No. CIV 03-0053-PHX-SMM MEMORANDUM OF DECISION AND ORDER (FILED UNDER SEAL)

This case involves a dispute over the right to use the word "Century," alone and with other words, in connection with the provision of insurance services. Plaintiff Century 21 Real Estate LLC ("C21") brought this action against Defendant Century Surety Company ("Century"),1 alleging that Century has infringed and diluted the service marks "Century 21," "Century 21 & Design," and "Century 21 Real Estate" (collectively, the "C21 Marks") under the Lanham Act, 15 U.S.C. §§ 1114 and 1125(c), Arizona law, A.R.S. §§ 44-1448.01 and 44-1451, and common law (Claims I-II,IV-VII).

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C21 further alleges that Century has committed unfair competition under federal and common law, 15 U.S.C. § 1125(a), (Claims III, VIII), by infringing and diluting the C21 Marks through its use of the names "Century Surety Group," "Century Insurance Group," "Century Surety," and "Century" (collectively, the "Century Marks") "in connection with the advertising and sale of insurance services [and surety bonds] in commerce."2 (Dkt. 1 ¶¶ 5,12-14,17,22, 29,36,40,45,50,55.) Pending before the Court are Century's sealed Motions for Summary Judgment on Claims I, III, and V-VIII (Dkt. 83) and Claims II and IV (Dkt. 84). Also pending is C21's sealed Motion for Summary Judgment on Claims I, III, and V-VIII. (Dkt. 116.) In addition, three motions to exclude evidence are before the Court: (i) Century's Motion to Exclude Portions of the Declaration of Dale Omer and Various Documents; (ii) C21's Motion to Exclude Late and Irrelevant Declarations, Exhibits and Testimony; and (iii) Century's Motion to Exclude Portions of the Reply Declaration of Dale Omer and Other Exhibits. (Dkts. 129,159,162.) After considering the parties' briefs, and hearing oral argument, the Court issues this sealed Memorandum of Decision and Order. BACKGROUND3 I. Procedural Background On September 9, 1997, Century filed United States Service Mark applications for the marks "Century Surety Group" and "Century Insurance Group" for "underwriting insurance

C21's Complaint does not allege that Century has infringed the marks "New Century Title Company" or "21st Century Insurance Company." (Dkt. 1; Dkt. 124 ¶144 at 64.) Because this lawsuit centers exclusively on whether the Century Marks infringe and dilute the C21 Marks (as defined supra at 1:21-22), the Court excludes all irrelevant arguments and statements of fact referring to New Century Title Company and 21st Century Insurance. Unless otherwise indicated, the facts discussed in connection with the pending summary judgment motions are undisputed. The Court made this determination only after ruling on the parties' Motions to Exclude. Portions of the summary judgment record which the Court has ordered stricken (infra at 56-61) and evidentiary objections that were sustained (infra at 61-79) have been excluded from the Court's analysis and ruling on the pending motions for summary judgment.
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in the fields of surety bonds, environmental bonds, environmental damage, workers' compensation, commercial general liability, and commercial property" ("Century's Applications"). (Dkts. 11 ¶5; 86, Ex.2 at Tabs 20-21; 124, ¶24 at 9.) In March 1999, Century's Applications were published for opposition. C21 filed requests for extensions of time to oppose both Applications. Between September 30, 1999, and January 2000, in an effort to settle their dispute over Century's Applications, the parties engaged in settlement negotiations. Settlement talks were terminated in January 2000. Century now claims that C21 agreed to the terms of a settlement and this lawsuit breaches that agreement. (Dkt. 11, counterclaim ¶¶21-24.) C21 denies that any settlement agreement with Century "was ever reached or executed." (Dkt. 13 ¶10.) In June 2002, Century's Application for "Century Insurance Group" matured into a registered mark. (Dkts. 11¶6; 13¶6.) On January 9, 2003, C21 filed this action against Century, alleging the eight claims at issue in the pending motions for summary judgment. (Dkt. 1 ¶¶1-57.) C21 also asserts a claim of Opposition to registration of the mark "Century Surety Group." (Id., ¶¶ 58-61.) On May 23, 2003, Century answered the complaint, and filed a counterclaim for breach of contract based on the terms of the alleged settlement. (Dkt. 11 ¶¶1-24.) On June 16, 2003, C21 answered the counterclaim and filed a counterclaim for Cancellation of the registered mark "Century Insurance Group." (Dkt. 13 ¶¶1-70.) II. Factual Background A. Century 21 Incorporated in 1971, C21 is a real estate brokerage franchise company that grants franchises to independently owned real estate businesses. (Dkt. 124 ¶34 at 108.) After it was founded, C21 grew into a nationwide organization. (Id. ¶21 at 104.) By 1976, C21 had become and remains today the leading franchisor in the field of real estate brokerage services. (Id. ¶24 at 105.) In October 1985, TransWorld Corporation sold C21 to Metropolitan Life Insurance Co. ("MetLife"). (Id. ¶26 at 106.) In August 1995, MetLife sold

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C21 to Hospitality Franchise Systems, Inc., which subsequently merged with another company and became Cendant Corporation ("Cendant"). (Id. ¶29 at 107.) C21 began using the Century 21 Marks in 1972. (Id. ¶59 at 11.) On April 12, 1977 and February 7, 1978, C21 applied to register the marks "Century 21" and "Century 21 & Design" for "real estate brokerage services." On February 17, 1987, C21 applied to register the mark "Century 21" for "insurance brokerage services." (Id. ¶¶105-06 at 13-14.) All three applications were granted, and the marks have become statutorily "incontestable" under 15 U.S.C. § 1065.4 (Dkt. 123 ¶3 at 7.) C21 also owns rights to the Arizona trademark "Century 21 Real Estate and Design," which covers advertising materials. (Dkt. 1¶¶7-8.) C21 does not underwrite insurance, and is not licensed by any state insurance department to sell insurance in the United States. Moreover, C21 has not provided any documents evincing plans for it to underwrite insurance, market and advertise insurance to general agents, market and sell commercial insurance, or market and sell excess and surplus lines of insurance. (Dkt. 124 ¶¶89-92 at 13.) C21 currently oversees a system of approximately 4,500 independent real estate brokerages, each of which is licensed to use the C21 Marks for real estate services (the "Franchisees").5 (Dkt. 124 ¶61 at 11; ¶39 at 111.) Undisputed evidence demonstrates that C21's Franchise Agreement permits Franchisees to provide real estate services under the C21

Even though all three marks have become statutorily incontestable, "the burden of proving likelihood of confusion (that is, infringement) [remains] on the party charging infringement." KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004). Moreover, the fact that a registration is "incontestable" has no bearing on the strength of the mark. See ThermaScan, Inc. v. Thermoscan, Inc., 295 F.3d 623, 632 (6th Cir. 2002) ("Even where a trademark is incontestable and `worthy of full protection,' the significance of its presumed strength will depend upon its recognition among members of the public."); Miss World (UK) Ltd. v. Mrs. America Pageants, Inc., 856 F.2d 1445, 1448-49 (9th Cir. 1988), abrogated in part by Eclipse Assocs. Ltd. v. Data General Corp., 894 F.2d 1114, 1116 n.1 (9th Cir. 1990). C21 franchises are located throughout Arizona, in each of the other 49 states, and in approximately 24 countries in Latin America, Europe, and Asia. (Id. ¶40 at 111.) Approximately 120,000 agents work for the Franchisees. (Id. ¶62 at 11.)
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Marks, but prohibits them from using the C21 Marks to operate an insurance company or any other kind of business unless C21 grants a written addendum. (Id. ¶85 at 48-50.) C21 has not produced any written addenda demonstrating it allows any Franchisee to use the C21 Marks to operate an insurance agency, nor has it produced any records of franchise fees received from sales of insurance under the C21 Marks, as specifically required by the Franchise Agreement. (Id. ¶¶86-87 at 13, 50-51; see LRCiv. 56.1(a) (duty to point to specific documents).) C21 has not provided any insurance licenses demonstrating that Franchisees sell insurance under the C21 Marks, and there is no record of any entity using the name "Century 21" being licensed to sell insurance in the United States. (Id. ¶¶64-65 at 11.) B. Century Surety Company Century is an Ohio corporation that has been in business since 1978, and was originally formed as a subsidiary to Century Agency, Inc., an insurance agency created in 1965. (Dkt. 124¶¶ 2-3 at 7,24.) Century is an underwriter of surety bonds and specialty commercial insurance geared to non-standard risks not covered by most admitted commercial insurance carriers. (Id.¶9 at 8.) Within the commercial insurance field, insurance for "standard risks" is provided by underwriters admitted to sell insurance in a particular state because standard risks fit parameters defined by state insurance departments. (Id. ¶ 7 at 7.) Standard risk insurance is generally offered from retail agents directly to policyholders. "Non-standard risks" are often called "excess and surplus," because non-standard risks are not within state-defined risk parameters. (Id. ¶ 8 at 8.) Century's specialty non-standard risk commercial insurance is sold by general agents6 to retail agents7 primarily on an excess and surplus lines basis. (Id. ¶9 at 8.) Century is

A "general agent" is a wholesaler who has direct relationships with underwriters and markets insurance to retail agents rather than directly to policyholders. (Id. ¶34 at 33-34.) A "retail agent" also has relationships with underwriters, but markets insurance directly to policyholders. Retail agents do not have direct access to speciality insurance, and thus turn to general agents when such insurance is needed. (Id. ¶37 at 34-35.) Retail agents receive offers from
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authorized to underwrite surety bonds and non-standard risk commercial insurance in 49 states and the District of Columbia, and is an admitted underwriter in six states. (Id. ¶¶9,1314 at 8.) Even in those states where Century is an admitted underwriter, it sells non-standard risk commercial insurance on an excess and surplus lines basis through general agents. (Id. ¶41 at 10.) Century began underwriting surety bonds in 1978, including environmental and coal reclamation bonds. (Id. ¶15 at 8.) In 1981, Century began underwriting inland marine insurance, a type of commercial property insurance. (Id. ¶10 at 8.) In 1984, Century began underwriting an expanded line of non-standard risk commercial property and liability insurance, which it continues today. (Id. ¶¶ 11-12 at 8.) Within the non-standard risks insurance market, Century underwrites commercial property insurance, commercial liability insurance, surety bonds, environmental hazard bonds, and commercial multi-peril insurance, which is a combination of commercial property insurance and commercial liability insurance. (Id. ¶ 4 at 7.) Century's legal name appears on its insurance policies. (Id. ¶31 at 9.) SUMMARY JUDGMENT STANDARD OF REVIEW A court must grant summary judgment if the pleadings and supporting documents, viewed in the light most favorable to the nonmoving party, "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Jesinger v. Nevada Federal Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law determines which facts are material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, mere allegations of a factual dispute between the parties will not defeat an otherwise proper motion for summary judgment. Rather, Rule 56 requires that there be a genuine issue of material fact, which is a dispute capable of affecting the outcome of the case. Id. Therefore, summary judgment is proper if, under governing laws, there is only one

general agents, which they then attempt to sell to policyholders. See Dkt. 86, Ex. 1 ¶10; Ex. 6 ¶19.

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reasonable conclusion as to the verdict; if reasonable finders of fact could resolve a factual issue in favor of either party, summary judgment should not be granted. Id. The movant on a summary judgment motion bears the initial burden of providing a legal basis for its motion and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If the moving party satisfies this burden, the opposing party may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that a genuine issue for trial exists. See Fed.R.Civ.P. 56(e). All inferences drawn from the evidence must be viewed in the light most favorable to the non-moving party. Eastman Kodak Co. v. Image Tech'l Servs., Inc., 504 U.S. 451, 456 (1992). However, inferences must be based on evidence which, if believed, would be sufficient to support a judgment for the nonmoving party. Celotex, 477 U.S. at 322. Moreover, inferences cannot be created by pointing to "some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, deference to the nonmoving party has limits: (i) a plaintiff cannot rest on the allegations in her pleadings to overcome a motion for summary judgment (Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir. 1995)); and (ii) self-serving affidavits will not establish a genuine issue of material fact if they fail to state facts based on personal knowledge or are too conclusory (Rodriguez v. Airborne Express, 265 F.3d 890, 902 (9th Cir. 2001)). MOTIONS FOR SUMMARY JUDGMENT ON INFRINGEMENT AND UNFAIR COMPETITION, CLAIMS I, III, AND V-VIII I. Applicable Trademark Law Generally speaking, a service mark is a distinctive mark used to identify and distinguish services, such as insurance, while a trademark is typically used to identify and distinguish tangible goods. See American Int'l Group, Inc. v. American Int'l Bank, 926 F.2d 829, 830 n.1 (9th Cir. 1991). Service marks are registrable in the same manner and entitled to the same protection under federal law as trademarks. See 15 U.S.C. § 1053. -7Document 177 Filed 03/16/2006 Page 7 of 89

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The Lanham Act is intended to secure to the owner of a service mark the goodwill of his business and to protect the ability of consumers to distinguish among competing services. The Lanham Act fosters these purposes by prohibiting use of a service mark likely to cause confusion, mistake, or deception. A successful trademark infringement claim under the Lanham Act, Arizona law, and the common law, requires a showing that the claimant holds a protectable mark and the alleged infringer's imitating mark is similar enough to "`cause confusion, or to cause mistake, or to deceive.'" Surfvivor Media, Inc. v. Survivor

Productions, 406 F.3d 625, 630 (9th Cir. 2005); Thane Int'l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 900 (9th Cir. 2002). Both parties agree that the "core element of trademark

infringement" ­ the likelihood of confusion ­ lies at the center of this case because, for purposes of the summary judgment motions only, Century does not dispute the seniority of the C21 Marks or their validity. (Dkt. 83 at 1.) Under the Lanham Act, the test for both service mark infringement and unfair competition is whether there is a "likelihood of confusion" on the part of consumers between the competing marks. See 15 U.S.C. §§ 1114, 1125(a). That is, whether a reasonably

prudent consumer in the marketplace is likely to be confused as to the origin of services bearing the accused mark. M2 Software, Inc. v. Madacy Entertainment, 421 F.3d 1073, 1080 (9th Cir. 2005). The Court will apply the likelihood of confusion test to determine whether either party is entitled to summary judgment. To determine whether there is a likelihood of confusion between the parties' marks, the Ninth Circuit requires the Court to consider eight factors, referred to as the Sleekcraft factors: (1) strength of the asserted mark; (2) similarity or relatedness of the parties' services; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used for services; (6) degree of care likely to be exercised by purchasers of services; (7) defendant's intent in selecting the accused marks; and (8) likelihood of expansion of service lines. Surfvivor Media, 406 F.3d at 631, citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979) ("Sleekcraft"), abrogated in part on other grounds by Mattel, Inc. v. Walking -8Document 177 Filed 03/16/2006 Page 8 of 89

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Mountain Prod., 353 F.3d 792, 810 n.19 (2003).8 The likelihood of confusion test is fluid, and every factor need not be shown, provided that strong showings are made with respect to some of them. See Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129-30, 1132 (9th Cir. 1998) (allowing case to proceed to trial where plaintiff overwhelmingly satisfied three Sleekcraft factors). Whether a party "wins" a majority of the Sleekcraft factors is not the point. Nor should "[t]he factors ... be rigidly weighed; we do not count beans." Id. at 1129. Although some factors ­ such as the similarity of the marks and whether the services directly compete ­ will always be important, it is often possible to reach a decision on the likelihood of confusion after considering only a subset of the factors. Id. at 1130-32. As the Court applies the Sleekcraft test, it will "consider what each factor, and--more importantly--what the analysis as a whole, reveals about the ultimate question . . . : the likelihood of consumer confusion as to the origin of . . . service[s] bearing the allegedly infringing mark." Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1141 (9th Cir. 2002). Finally,

"[l]ikelihood of confusion requires that confusion be probable, not simply a possibility." Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987). Likelihood of confusion may be decided as a matter of law. See Abdul-Jabbar v. General Motors Corp., 85 F.3d 407, 413 (9th Cir. 1996) (recognizing that summary judgment is appropriate where a jury could not reasonably conclude that most Sleekcraft factors weigh in non-moving party's favor). However, the Court is mindful of the Ninth Circuit's directive that district courts exercise caution in granting summary judgment regarding the likelihood of confusion, as careful assessment of the factors that go into this determination usually requires a full record. See Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1265 (9th Cir. 2001). Here, the parties have provided an overflowing record. See Dkts. 83-166.

The same "likelihood of confusion" analysis applies to the Arizona and common law claims of service mark infringement and unfair competition. See New West Corp. v. NYM Co. of Cal., 595 F.2d 1194, 1201 (9th Cir. 1979).

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II.

No Reasonable Jury Could Conclude that Century's Use of the Century Marks Creates A Likelihood of Confusion With respect to the likelihood of confusion test, Century contends four factors show

3 it is entitled to judgment as a matter of law: (i) the disparity of the parties' respective 4 services, advertising and trade channels; (ii) the sophistication of relevant consumers; (iii) 5 dissimilarity of the parties' marks; and (iv) over 26 years of coexistence with no marketplace 6 conflict. (Dkt. 83.) C21 contends four factors entitle it to summary judgment: (i) the 7 strength of the C21 Marks; (ii) the similarity of services and customers; (iii) the similarity 8 of the marks; and (iv) Century's deliberate attempts to trade on C21's goodwill. (Dkt. 116.) 9 A. 10 The purpose of examining the strength of the plaintiff's mark is to determine the scope 11 of trademark protection to which the mark is entitled. Entrepreneur Media, 279 F.3d at 1141. 12 The three basic measures of the strength of a service mark are: (i) the inherent nature of the 13 mark itself, (ii) the effect of actual use and advertising of the mark on customer perception, 14 and (iii) the existence of competing uses of other, similar marks. See Accuride Int'l, Inc. v. 15 Accuride Corp., 871 F.2d 1531, 1536 (9th Cir. 1989); Miss World (UK), 856 F.2d at 1449 16 ("The second step is to determine the strength of this mark in the marketplace."); M2 17 Software, 421 F.3d at 1088 ("Use of similar marks by third-party companies in the relevant 18 industry weakens the mark at issue."). 19 1. 20 In descending order by strength and protection, trademarks are grouped into the 21 following categories: fanciful, arbitrary, suggestive, descriptive and generic. Categories are 22 based on the relationship between the mark and the service it describes. The strongest marks 23 that trigger the highest degree of protection are "arbitrary," "fanciful," and "suggestive" 24 marks. Official Airline Guides, Inc.v. Goss, 6 F.3d 1385, 1390 (9th Cir. 1993) ("OAG"). 25 "Arbitrary" marks are common words that have no connection with the actual product ­ for 26 example, "Dutch Boy" paint. See Dreamwerks, 142 F.3d at 1130 n. 7. "Fanciful" marks are 27 28
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Strength of the Century 21 Marks

The "Century 21" Mark is Inherently Strong

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"coined phrases" that also have no commonly known connection with the product at hand. Id.9 "Suggestive" marks do not describe the product's features but suggest them, so that some imagination is required to associate a suggestive mark with a product. Kendall-Jackson Winery v. E. & J. Gallo Winery, 150 F.3d 1042, 1047 n. 8 (9th Cir. 1998).10 Descriptive marks define qualities or characteristics of the product in a way that does not require any exercise of imagination to be understood, such as "Honey Roasted" for nuts roasted with honey, and thus do not receive any trademark protection unless they acquire sufficient "secondary meaning" to create an association between the mark and the product. Id. at 1047 & n. 8. Generic marks give the general name of a product, such as "Wickerware" for wicker furniture and accessories, and thus are not entitled to any protection. Id. Here, there is no material issue of fact that "Century 21" is an arbitrary mark deserving the greatest protection. The line between suggestive and arbitrary terms is often difficult to draw, and both parties disagree on the line here. Century contends "Century 21" is a "suggestive mark that connotes an association with services provided in the `21st Century'"(dkt. 83 at 13 ), while C21 argues that it conveys no information about the services sold (dkt. 95 at 8), and thus is arbitrary. Despite this dispute, the Court agrees with C21 that its mark is arbitrary and deserving of great protection. It cannot reasonably be disputed that the name "Century 21" bears no relationship to franchise services, real estate brokerage services, or insurance services. Moreover, any dispute about whether "Century 21" is suggestive or arbitrary is effectively immaterial because both suggestive and arbitrary marks are inherently strong and entitled to broad trademark protection without establishing secondary meaning. See OAG, 6 F.3d at 1390 ("fanciful, arbitrary and suggestive marks are

Examples of fanciful marks include "Kodak" cameras or "Aveda" skin care products. Id.; see also Aveda Corp. v. Evita Mktg., Inc., 706 F.Supp. 1419, 1428 (D.Minn. 1989). Examples include "Air Care," for a service that maintains medical equipment used for administering oxygen, and "Anti-Washboard," for a soap that makes scrubbing unnecessary when washing clothes. Id..
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`inherently distinctive' and deserving of the greatest protection"). The Court concludes that the C21 Marks are arbitrary and entitled to broad protection. 2. Effect of Actual Use and Advertising

C21 asserts that the C21 Marks "have become commercially strong through 30 years of continuous use by the world's largest real estate organization and through over $1.5 billion dollars in television, radio, and print advertising expenditures." (Dkt. 95 at 8-9.) Century argues that, "[r]egardless of the strength of the entire mark `Century 21,' for real estate brokerage services, it is not strong in connection with commercial insurance services," and thus cannot "monopolize the . . . word `Century'" in the insurance industry. (Dkt. 83 at 1213.) C21 counters that Century "applies the wrong legal standard in analyzing the strength and fame of the C21 Marks," and that the proper analysis is to first determine the strength of C21's Marks in the real estate business and then determine whether "that strength extends to Century's use of CENTURY on insurance." (Dkt. 95 at 8.) The Court finds that C21 too narrowly defines the relevant field for the Court's analysis. Notwithstanding the strength of the C21 Marks in the real estate business, the relevant question here is whether the name "Century," or other derivations of the C21 Marks, are so prevalently used in the insurance industry that the "Century 21"mark is less distinctive, and therefore accorded less weight by insurance consumers. Therefore, the Court will look at consumers' experiences with "Century 21" in the insurance industry. Miss World (UK), 856 F.2d at 1449 ("The second step is to determine the strength of this mark in the marketplace. That is, its degree of recognition in the minds of the relevant customer class.") (emphasis added); M2 Software, 421 F.3d at 1080 (likelihood of confusion tests whether a reasonably prudent consumer in the marketplace is likely to be confused as to the origin of service bearing accused mark); see also Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 260 (5th Cir. 1980) (arbitrary and strong mark "Domino" for sugar not entitled to protection outside sugar and condiments market); A&H Sportswear Inc. v. Victoria's Secret Stores, Inc., 166 F.3d 191, 194-95 (3d Cir. 1999) (no likelihood of confusion between "Miraclesuit" and - 12 Document 177 Filed 03/16/2006 Page 12 of 89

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"Miracle Bra" even though both share dominant portion of "Miracle"; "Miraclesuit" strong in swimsuit market, but not strong in lingerie market). a. Effect of Actual Use: C21 Does Not Use the Name "Century" Alone

Although C21 uses the mark "Century 21" in the real estate brokerage business, C21 is seeking to enjoin Century from using the word "Century" and marks beginning with the word Century. (Dkt. 124 ¶141 at 16.) However, C21 has never registered the term "Century" alone, does not use or advertise the word "Century" alone, and prohibits Franchisees from abbreviating or shortening the name "Century C21" to "Century." (Id. ¶¶109-11 at 14,58-59.) Moreover, C21 has not produced any survey information to demonstrate that customers recognize or associate the word "Century" in isolation with the term "Century 21." (Id. ¶¶108,112 at 14.) Given that C21 seeks to prevent Century from using the word "Century," and that the word "Century"occurs in widespread use as a name in both the insurance and real estate industries (see infra at 15-18), there is no basis to find that consumers automatically associate the word "Century," standing alone, with C21. See Alpha Indus., Inc. v. Alpha Steel Tube & Shapes, Inc., 616 F.2d 440, 445 (9th Cir. 1980) (prefix "alpha" enjoys widespread usage as a trademark and, therefore, is weak); Nutri/System, Inc. v. Con-Stan Indus., Inc., 809 F.2d 601, 605 (9th Cir. 1987) ("Nutri/System" mark weak for purposes of infringement claim; "Nutri" commonly used as prefix in food and health products field); Fruit of the Loom, Inc. v. Girouard, 994 F.2d 1359, 1362-63 (9th Cir. 1993) (dilution case holding that "Fruit of the Loom" is strong, but common word "Fruit" is not strong enough alone to qualify for protection); Paul Sachs Originals Co. v. Sachs, 325 F.2d 212, 215 (9th Cir. 1963) (no likelihood of confusion between "Paul Sachs Originals" and "Sachs of California" because neither party had ever used the term "Sachs" alone). b. Effect of Actual Use: C21 Marks Not Strong in Insurance Industry Similarly, although C21 has demonstrated that its marks are strong in connection with real estate brokerage services (see dkt. 124¶¶72-74 at 123-24), C21 has failed to produce - 13 Document 177 Filed 03/16/2006 Page 13 of 89

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evidence sufficient to create a genuine issue of fact as to whether the C21 Marks are strong in the insurance industry. (Dkt. 124¶¶107,202 at 14,83-84.) Century's evidence reveals that there is essentially no use of the C21 Marks in the insurance industry and that no entity is licensed to sell insurance under the C21 Marks (see id. ¶¶65,85-87,91 at 11,13,48-51). C21, by contrast, has not produced any evidence to dispute these facts, nor has it produced any surveys or other evidence to show that the C21 Marks have developed any significant recognition in the insurance industry. (Id. ¶¶107,202 at 14,83-84.) As a result, Century has satisfied its burden of showing there is no genuine issue of material fact that the C21 Marks are not strong in the insurance industry. See Trustees of Columbia Univ. v. Columbia/HCA Healthcare Corp., 964 F.Supp. 733, 746 (S.D.N.Y. 1997) (no likelihood of confusion because plaintiff not licensed to provide defendant's services); Savin Corp. v. Savin Group, 68 U.S.P.Q.2d 1893, 1898 (S.D.N.Y. 2003) (because plaintiff does not seek to enjoin defendants' use of name "Savin" as applied to photocopiers and related parts and services, but rather as applied to defendants' business of professional engineering, relevant inquiry is whether plaintiff's marks are strong in the market for professional engineering services), aff'd in part, vac'd in part and remanded, 391 F.3d 439 (2d Cir. 2004). "Marks may be strengthened by extensive advertising, length of time in business, public recognition, and uniqueness." Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1179 (9th Cir. 1988). However, evidence that C21 has expended a substantial amount of money over thirty years in advertising real estate services in connection with the "Century 21" marks does not strengthen the "Century 21" mark in the insurance industry. It is undisputed that neither C21 nor the Franchisees advertise in insurance industry magazines, and there is no evidence that C21 or the Franchisees have ever advertised commercial insurance under the C21 Marks. (Id. ¶¶117-19, at 60-63.) Indeed, C21 has presented no evidence demonstrating the amount of money spent by C21 or the Franchisees to advertise insurance under the C21 Marks. (Id. ¶¶115-16 at 14,59-60.) Finally, it is undisputed that, for over 26 years, Century has used the term "Century" in the insurance industry concurrently - 14 Document 177 Filed 03/16/2006 Page 14 of 89

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with C21's advertising in the real estate industry (id. ¶¶3,110,122-23,183 at 7,14,21). See Accuride Int'l, 871 F.2d at 1536 ("AII's advertising and sales are insufficient to convert `Accuride' into a strong mark/name because of the parties' concurrent use of that term as a trademark."). Because C21 has not produced any evidence to dispute that the C21 Marks are not advertised in connection with insurance, there is no genuine dispute that advertising does not increase the strength of C21's Marks in the insurance industry. Cf. Century 21 Real Estate Corp., 846 F.2d at 1179 (evidence that Century 21 had expended several million dollars in advertising for real estate and that Century 21 marks had been used in connection with real estate sales in excess of one billion dollars relevant to finding that Century 21 is a strong mark in the real estate industry). 3. Third Party Use and Registration of "Century" in the Insurance Industry

An important indication of the strength of a mark is the degree to which third parties in the relevant industry use similar marks. M2 Software, 421 F.3d at 1088. In the present case, evidence of existing third-party marks in the real estate and insurance fields that contain a shared term with the C21 Marks renders it is less likely that C21's customers will associate C21's services with those of Century, as opposed to other third parties. Id.; In re Broadway Chicken, Inc., 38 U.S.P.Q.2d 1559, 1565-66 (T.T.A.B. 1996) (evidence of widespread third-party use, in a particular field, of marks containing a certain shared term is competent to suggest that purchasers have been conditioned to look to the other elements of the marks as a means of distinguishing the source services in the field). Century argues that extensive third-party use of the word "Century" in the real estate and insurance industries weakens the C21 Marks and "shows that C21 cannot monopolize the word `Century.'" (Dkt. 83 at 16.) C21 argues that the C21 Marks "have not been weakened by third party use" because there is no admissible evidence of third party use and "[m]ost of the alleged third party users are in fields other than real estate or insurance." (Dkt. 95 at 9-10.) The Court agrees with Century that extensive third-party use of the word "Century" in the real estate and insurance fields weakens the strength of the C21 Marks. - 15 Document 177 Filed 03/16/2006 Page 15 of 89

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It is undisputed that at least 44 businesses in the insurance industry use the term "Century" to promote sales of insurance.11 (Dkt. 124, ¶¶148-150 at 64-69; Dkt. 126, Ex. 60 at ¶2.) It is also undisputed that at least 126 businesses in the real estate industry use the term "Century" to promote sales of real estate. (Dkt. 126, Ex. 61 at ¶¶2,10.) In addition, Century deposed twenty representatives of third-party "Century" insurance businesses who described their company's use of the mark "Century" for insurance services.12 (Id. ¶158 at 17-19.) Nineteen of the third-party deponents
13

did not know that C21 sold, or allegedly sold,

insurance, and had never had a "marketplace conflict"with C21 over the term "Century,"although C21 sent cease and desist letters to some of the third parties after they were identified in this lawsuit. (Id. ¶¶163,166-67 at 20,75-76.) In addition to evidence of third-party use of the term "Century" in the real estate and insurance industries, there is no dispute that at least (i) 11 federal registrations issued by the United States Patent and Trademark Office (the "USPTO"); and (ii) 17 state registrations include the word "Century" but not the term "21" in connection with the provision of real estate and insurance services. (Dkt. 124 ¶¶155-56 at 72-73; Dkt. 86, Ex.10 at ¶¶29,31.) Besides minor factual disputes (supra n.11), C21 responds to Century's third-party use argument with evidentiary objections. None of C21's arguments is well-taken. The Court overrules C21's contention that Century's evidence is "unsubstantiated hearsay and contains little direct evidence of third party use." (Dkt. 95 at 9; Dkt. 124 at 6667,69.) The declarations detailing third-party use are admissible as an exception to the

Although C21disagrees with a small percentage of the names on Century's third-party use list (see Dkt. 97, Ex.39), the Court relies only on the number of undisputed third-party users. The twenty third-party "Century" insurance businesses plus Century account for combined insurance premiums of over $2.35 billion annually, hundreds of thousands of annual insurance policies, and over 600 years of collective experience in the industry. (Id. ¶¶160-62 at 19.) The lone exception is 21st Century Insurance Group, which changed its name from 20th Century Insurance Group in the year 2000. Although C21 had not objected to the name 20th Century Insurance Group from 1958 to 2000, it challenged the name 21st Century Insurance Group on the grounds that "the dominant portion of [C21's] mark is the entire term `Century 21.'" See Dkt. 124¶¶165,172-173,177-176 at 20-21; ¶36 at 109-110. Document 177 - 16 - 03/16/2006 Filed Page 16 of 89
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hearsay rule because C21 has not demonstrated any bias in the databases used to compile the list of third parties or that the databases are not maintained on an ongoing basis for general business use, rather than being prepared for purposes of this case. See In re Broadway Chicken, 38 U.S.P.Q.2d at 1565; cf. Fed.R.Evid. 803(17) (lists, tabulations, directories, or other published compilations generally used and relied upon by the public or persons in particular occupations are not excluded by the hearsay rule). C21's motion to exclude the declaration submitted by the company that maintains the database and the separate declarations explaining how the searches were run is denied. Infra at 81-84. C21's argument that the record provides no evidence about the extent of actual thirdparty use is rejected because the present case concerns service marks and the searches for insurance and real estate companies that use the term "Century" were conducted in a database including white and yellow page business listings (see dkt. 86, ex. 10 at ¶¶17,22 & n.1). See Lloyd's Food Products, Inc. v. Eli's, Inc., 987 F.2d 766, 768 (Fed.Cir. 1993) (Board erred in failing to consider evidence of third-party use of service marks in phone directories because phone directories were distributed to the public and issue involved service marks, for which listing and advertising in phone directories is evidence of use); see also 15 U.S.C. § 1127 (a mark shall be deemed to be in use in commerce on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce). Moreover, the evidence of third-party use was verified by telephone calls to the third parties (dkt. 86, Ex.10 ¶¶26-27 and Ex. 10, Tab 4 at 31-39 ("use" by 56 insurance companies verified), at 117-135 ("use" by 98 real estate companies verified)), and the evidence relied on by the Court reflect the number of third-parties agreed to by both parties. See Dkt. 126, Ex. 60 at ¶2, Ex. 61 at ¶¶ 2, 10. The Court agrees that "[t]hird party use or registrations of marks in unrelated markets is not probative of the strength of a mark" (Dkt. 95 at 9). However, the Court has excluded from its consideration any evidence of third-party use in markets other than real estate and insurance. By contrast, the "[u]se of similar marks by third-party companies in the relevant industry weakens the mark at issue" because consumers are more likely to associate the mark
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with companies and meanings other than the mark holder's company. See M2 Software, 421 F.3d at 1088; Eclipse Assocs. Ltd., 894 F.2d at 1119 ("Evidence of other unrelated potential infringers is irrelevant to claims of trademark infringement and unfair competition under federal law"; affirming court's exclusion of third-party use evidence of the mark "Eclipse"for goods unrelated to the computer field) (emphasis added). Likewise, when determining the strength of a mark in the infringement context, the existence of related third party registrations is relevant and probative. General Mills, Inc. v. Kellogg Co., 824 F.2d 622, 626-27 (8th Cir. 1987) (rejecting argument that "third party registrations without accompanying proof of the extent and length of actual use is of slight evidentiary value"; "evidence of third party usage of similar marks on similar goods is admissible and relevant to show that the mark is relatively weak and entitled to a narrower scope of protection"); Nutri/System, 809 F.2d at 605 (prefix "nutri"enjoys widespread usage in the food and health products field and, therefore, is weak); Alpha Indus., Inc., 616 F.2d at 445 (prefix "alpha" as part of a trademark or tradename is weak because the word alpha is in common usage and occurs in widespread use); Michael Caruso & Co., Inc. v. Estefan Enters., Inc., 994 F.Supp. 1454, 1459-60 (S.D. Fla. 1998) (mark weakened by 75 third party users and 17 state and federal registrations of "bongo"; use of common term combined with extensive third party use of term renders it unlikely that mark is strong). The Court finds that there is no genuine dispute that the cumulative impact of 170 companies' use of the term "Century," including 44 insurance companies, and 28 registered trademarks including the word "Century," dilutes the strength of the C21 Marks in the insurance industry. See M2 Software, 421 F.3d at 1088 (district court properly permitted defendant to present limited evidence of existing third-party marks in the relevant field which were similar to plaintiff's marks to demonstrate that it was less likely that plaintiff's customers would associate plaintiff's products with those of defendant); General Mills, Inc., 824 F.2d at 627 ("an arbitrary mark may be classified as weak where there has been extensive third party use of similar marks on similar goods").

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4.

Conclusion on Strength Factor

The Court holds that the C21 Marks are arbitrary. Nonetheless, substantial third-party use of the term "Century" in the relevant industries and the lack of C21's actual use and advertising of the C21 Marks in the insurance industry weaken the strength of the C21 Marks outside of the franchise and real estate industries. Weighing the inherent strength of the C21 Marks against (i) the effect of C21's actual use and advertising in the insurance industry; and (ii) third-party use and registrations of the term "Century" in the real estate and insurance industries, this factor favors C21but not overwhelmingly. Thus, the C21 Marks may be entitled to only limited protection in the insurance industry. C21's reliance on courts that have previously found its marks to be strong is not determinative of the issue here because neither of those cases involved the strength of the C21 Marks in the insurance field. Century 21 Real Estate Corp. v. Century Resorts Int'l, Inc., 211 U.S.P.Q. (BNA) 227 (N.D.Ill.1981) ("Century 21" mark strong in real estate industry); Century 21 Real Estate Corp. v. 21st Century Construction Corp., slip op. No. 78 C 32218 (N.D.Ill. October 2, 1979) ("likelihood of confusion is increased by the fact that Plaintiff's mark is a strong mark entitled to a broad scope of protection"). Moreover, Century Real Estate Corp. v. Century Life of America, 970 F.2d 874, 877-78 (Fed. Cir. 1992), is distinguishable because the evidence presented there was non-probative third party use evidence in wholly unrelated fields. B. Degree of Similarity between the C21 Marks and the Century Marks14 The similarity of marks must be assessed in terms of "sound, sight, and meaning" based on the entirety of marks, rather than a comparison of the mark's individual features. See Entrepreneur Media, 279 F.3d at 1144; Miss World, 856 F.2d at 1450 ("Miss World" is a composite mark and thus must be examined "in [its] entirety, not piece by piece"); Alpha Indus., Inc., 616 F.2d at 444 (use of the word "Alpha" alone and in a distinctive logo not similar to use of the word "Alpha" always used in conjunction with significant words).

The Court compares only "Century" and "Century 21," as those are the most similar of the parties' marks. See Dkt. 124 ¶141 at 16. Document 177 - 19 - 03/16/2006 Filed Page 19 of 89

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The visual sub-factor favors Century because the two marks look very different when written out in text and considered in their entirety. Century is a single word often accompanied by other words but never accompanied by numerals. (Dkt. 124, ¶¶20, 141 at 9,16.) The Century 21 Marks, by contrast, contain the word Century and are always accompanied by the numeral "21," in that order. (Id. ¶¶ 109-111,141 at 14, 16, 58-59.) Moreover, it is undisputed that when Century uses the Century Marks in its advertisements and on its website, they are always used in context with Century's full company name (Century Surety Company), its trade name (Century Insurance Group), other words, and/or a distinctive logo, and that Century has never used the term "Century 21." (Id. ¶¶20,27 at 9, 32-33.)15 See Trustees of Columbia Univ., 964 F.Supp. at 746 ("In deciding whether the marks are similar as used, [a court does] not look just at the typewritten and aural similarity of the marks, but how they are presented in the marketplace.") (citation omitted). Given that the C21 Marks are always accompanied by the distinctive numeral "21," and the Century Marks are never accompanied by the numeral "21" or any other numeral, it cannot reasonably be disputed that the sight of the marks are not similar. See Paul Sachs Originals, 325 F.2d at 215 (marks "Paul Sachs Original" and "Don Sachs Original" not confusingly similar to mark "Sachs of California" because both "Paul Sachs" and "Don Sachs" have invariably been displayed and shown together and with the word "Original" following so that the two names and the word "Original" have constituted a single integrated trademark). For the same reasons, it cannot reasonably be disputed that the sound of the marks are not similar. "Century 21" and "Century" do not sound similar in a phonetic sense because "Century" has one syllable and "Century 21" has three. Thus, there can be no genuine dispute that the sound factor favors Century. The "meaning" subfactor also favors Century. The word "Century" evokes its commonly understood meaning: a period of one hundred years. See Merriam-Webster's Collegiate Dictionary, 10th ed. at 1187 (1999). However, the numeral "21" used in the C21

15

Century's logo is "Century Insurance Group" with a stylized CI. Dkt. 86, Ex. 2 at 111. Document 177 - 20 - 03/16/2006 Filed Page 20 of 89

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Marks connotes an additional reference that has no precise meaning. Thus, although "Century" is undeniably similar in meaning to the first word in the term "Century 21," the similarity in meaning has less force than it might otherwise, because the casual observer will not know what the reference to 21 signifies. Instead, as C21 argues (dkt. 95 at 8), observers are likely to view the phrase "Century 21" as an arbitrary mark with no inherent meaning.

C21 makes much of the fact that "[l]ikelihood of confusion is enhanced when the marks have a common dominant feature, particularly when that feature is the first word of the mark." (Dkt. 95 at 12-13.) C21 may not rely on this line of precedent, however, because it is undisputed that the name "Century" and the numeral "21," in that order, have invariably been displayed and shown together so that the term "Century 21" constitutes a single integrated trademark (Dkt. 124 ¶¶ 109-111 at 14, 58-59). See M2 Software, 421 F.3d at 1082 (when assessing similarity of marks, "the trademark is not judged by an examination of its parts, but rather `the validity and distinctiveness of a composite trademark is determined by viewing the trademark as a whole, as it appears in the marketplace'") (citation omitted). Indeed, there is no dispute that C21 has never registered the term "Century" alone, and C21 prohibits the Franchisees from abbreviating or shortening the term "Century 21" to "Century." (Dkt. 124 ¶¶ 109-111 at 14,58-59.) Because C21 has previously argued that the dominant portion of the C21 Marks is the entire term "Century 21" (see supra n.13), the names "Century" and "Century 21" are not confusingly similar as a matter of law. See Fruit of the Loom, 994 F.2d at 1362 ("there can be little doubt that its old trademark, `Fruit of the Loom,'is not at all close to TLF's `Fruit Flops' and `Fruit Cups.' The mind of any reasonable purchaser sees the phrase `Fruit of the Loom' as a whole. It is this phrase as a unit that is justly recognized as a famous American trademark."); Paul Sachs Originals, 325 F.2d at 215 (marks "Paul Sachs Original" and "Don Sachs Original" not confusingly similar to mark "Sachs of California" because both "Paul Sachs" and "Don Sachs" have invariably been displayed and shown together and with the word "Original" following so that the two names and the word "Original" have constituted a single integrated trademark); Amstar
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Corp., 615 F.2d at 260 ("Domino's Pizza" created uniquely Italian impression substantially different from impression created by "Domino"standing alone). Moreover, the similarity of the C21 Marks and the term "Century" is not close in light of the usualness of the word "Century" as an identifier of insurance services (see supra at 1518). Cf. Rodeo Collection, 812 F.2d at 1219 (similarity of marks "Rodeo Collection" and "The Collection" especially close in light of the unusualness of the word "collection" as an identifier of shopping center services). Examining the marks in their relative entirety with respect to sound, sight, and meaning, the Court finds that there is no genuine issue of material fact that the mark "Century 21" is not significantly similar to the mark "Century." See Nutri/System, 809 F.2d at 605-06 (Nutri/System and Nutri-Trim logos were dissimilar in appearance, sound and meaning; no error in court's side-by-side advertisement analysis since dominant feature of marks -- "Nutri" ­ is identical and must consider marks and names in entirety and as they appear in marketplace).16 Thus, this Sleekcraft factor favors Century. C. Similarity or Relatedness of Parties' Services 1. Similarity of Services

When dealing with the third Sleekcraft factor, courts assess the level of competitive proximity of the parties' services. See Brookfield Comms., 174 F.3d at 1055-56; Sleekcraft, 599 F.2d at 350. Here, the issue is whether the consuming public is likely to associate Century's insurance services with C21's services. Brookfield Comms., 174 F.3d at 1056. Where the parties' services are identical, related, or complementary, the danger of confusion

Although not determinative of this issue, the Court's conclusion on the similarity factor comports with the USPTO's position, which did not find any conflict between Century's Applications to register "Century Surety Group" and "Century Insurance Group" and any of C21's trademark or service mark registrations (dkt. 124 ¶¶21-24 at 9, 29-31). See Brookfield Comms., Inc. v. West Coast Entm't Corp., 174 F.3d 1036, 1050 (9th Cir. 1999) (citation omitted) ("Our conclusion comports with the position of the PTO, which effectively announced its finding of no likelihood of confusion between `The Movie Buff's Movie Store' and `MovieBuff' when it placed the latter on the principal register despite West Coast's prior registration of `The Movie Buff's Movie Store.'"). Document 177 - 22 - 03/16/2006 Filed Page 22 of 89

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is heightened. Id. at 1055 ("[r]elated goods are generally more likely than unrelated goods to confuse the public as to the producers of the goods"). In the Ninth Circuit, when the allegedly infringing service competes directly with the trademark owner's service, the likelihood of confusion is found more readily, and generally depends upon whether the parties' marks are confusingly similar, without consideration of all eight Sleekcraft factors. Sleekcraft, 599 F.2d at 348; Lindy Pen Co., Inc. v. Bic Pen Corp., 796 F.2d 254, 256-57 (9th Cir. 1986); OAG, 6 F.3d at 1391("The eight factor test applies when the products are related but not in direct competition."); but see Chesebrough-Pond's, Inc. v. Faberge, Inc., 666 F.2d 393, 398 (9th Cir. 1982) (examining all eight factors notwithstanding fact that "Chesebrough concedes that the product lines are identical and that the products move through the same marketing channels to the same outlets for purchase by the same class of customers"). However, "[i]f the goods are totally unrelated, there can be no infringement because confusion is unlikely." Sleekcraft, 599 F.2d at 348; see also Brookfield Comms., 174 F.3d at 1056 ("If, on the other hand, Brookfield and West Coast did not compete to any extent whatsoever, the likelihood of confusion would probably be remote."). As shown below, there is no genuine dispute of fact that C21 and Century are not direct competitors. Indeed, there is not even any minor overlap of the parties' respective services. a. There is No Genuine Dispute that C21 is Not an Underwriter and that Neither C21 Nor The Franchisees Sell Excess and Surplus Lines Insurance

C21 provides franchise services to the 4,500 independent real estate broker Franchisees. It is undisputed that C21 does not underwrite insurance, is not licensed by any state insurance department to sell insurance,17 and is not listed in AM Best, a publication that ranks insurers. (Dkt. 124 ¶¶89, 91-93 at 13.) It is also undisputed that there is no evidence of non-standard risk commercial insurance sales, policies, advertising, or marketing by C21 or the Franchisees. (Id. ¶71 at 12.) Century is an underwriter of surety bonds and

There is no dispute that a license is required in order to sell insurance in the United States. (Id. ¶92 at 13.) Document 177 - 23 - 03/16/2006 Filed Page 23 of 89

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commercial non-standard risk insurance that is sold on an excess and surplus lines basis in all but six states in which it is an admitted underwriter. (Dkt. 124, ¶¶4,9,13-14 at 7-8.) Whether sold on an admitted basis or on an excess and surplus lines basis, however, Century's surety bonds and specialty commercial insurance are marketed by general agents to retail agents, not directly to potential commercial insurance policyholders. (Id. ¶¶34,39-41 at 10, 33-36.) Century does not sell personal lines insurance, although in unusual

circumstances excess and surplus lines insurance is sold to individuals for otherwise uninsurable risks. (Id. ¶¶46-47 at 38-39.) C21 claims that it sells personal lines and commercial insurance through two channels: (i) the Century 21 Connections program ("Connections") and (ii) Franchisees that are licensed to sell insurance. (Dkt. 86, Ex.13 at 1; Dkt. 124 ¶¶66-67 at 11.) No evidence supports either contention. b. There is No Genuine Dispute that Neither C21 Nor the Franchisees Sell Insurance Through the Connections Program C21's contention that Franchisees use the C21 Marks in connection with the sale of insurance-backed home warranties, personal lines insurance, and commercial property and casualty insurance through the Connections program is not supported by any evidence, and thus does not raise a genuine issue of disputed fact with respect to whether C21 directly competes with Century.18 (Dkt. 124 ¶¶66-68 at 11.) First, the component of the Connections program through which C21 claims the Franchisees provide AON home warranties and personal lines insurance is "Homeowner's Select."19 (Id. ¶¶76-77 at 12, 47.) The evidence is undisputed, however, that neither C21 nor

Personal lines insurance includes homeowner's insurance, renter's insurance, condo insurance, automobile insurance, personal umbrella insurance, title insurance, automobile insurance, and life insurance. Dkt. 86, Ex. 13 at 1. The C21 Connections program was not implemented until late 1999. C21's contract with the Homeowner's Select component of the Connections Program expired in late 2003. Since that time, C21 has not had a contract with any insurance company to provide insurance under the Connections program. (Dkt. 86, Ex. 8 at 44; Dkt. 124 ¶82 at 47-48.) Document 177 - 24 - 03/16/2006 Filed Page 24 of 89
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the Franchisees provide actual services through the Connections program, Homeowner's Select, or AON home warranties. Instead, under the Connections program, Franchisees merely refer customers to third party companies, such as Homeowner's Select, that either directly provide insurance services or put the customer in contact with an independent insurance provider. (Dkt. 86, Ex. 8 at 44-49, Ex.18 at 16-17; Dkt. 124 ¶¶ 75,78-79 at 12.) Moreover, while it is undisputed that home warranties are sold under the "Century 21 Home Protection Plan" mark, which is not at issue here, C21 has failed to submit any evidence demonstrating that AON home warranties are "insurance." See Burley v. Homeowners Warranty Corp., 773 F.Supp. 844 (S.D. Miss. 1990) (homeowner warranty company moved for summary judgment contending that under clear provisions of home warranty documents it was not an insurer). (Dkt. 150, Ex. A at ¶5.) C21 does not monitor the insurance underwriters that participate in the Connections program, and its trademark registration for "Century 21 Connections" describes the services as "promoting the goods and services of others." (Id. ¶¶81,83 at 12.) Moreover, C21 has not produced any sales records by Franchisees for the sale of auto, health, life, condominium, renters, personal umbrella, or errors and omissions insurance under the C21 Marks, has not produced any evidence of C21 insurance policyholders, and does not mention on its website that insurance can be purchased from C21 or the Franchisees. (Id. ¶¶97,99,101 at 13, 54-56.) Because referring customers to the Homeowner's Select or AON home warranty components of the Connections program does not constitute the sale of insurance, there is no genuine issue of fact that Franchisees do not sell personal lines insurance under the C21 Marks.20 Second, C21 submitted evidence that when MetLife owned C21 (1985 through1994), Franchisees could obtain commercial insurance from third party underwriters if they requested it (id. ¶69 at 12). However, C21 has produced no records of commercial insurance sales, commercial insurance policies, commercial insurance policyholders, or commercial

Even assuming, arguendo, that Franchisees sell personal lines insurance, it is undisputed that Century does not sell personal lines insurance and, indeed, is not even authorized to sell homeowner's, life, or health insurance. (Dkt. 124 ¶¶46, 48 at 38-40.) Document 177 - 25 - 03/16/2006 Filed Page 25 of 89

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insurance advertising by C21 or the Franchisees. Moreover, commercial insurance was not advertised by C21 or the Franchisees between 1985 and 1994, and Mr. Omer confirmed that Franchisees do not sell or provide commercial insurance. (Id. ¶¶70,72,103 at 42-44, 5657.)21 Thus, C21 has failed to create a genuine dispute of fact as to whether C21 or the Franchisees use the C21 Marks in connection with the sale of commercial insurance. c. There is No Genuine Dispute That Franchisees Do Not Sell Insurance Under the C21 Marks

C21 has not demonstrated a genuine issue of material fact as to whether Franchisees sell insurance under the C21 Marks, such that the use of the C21Marks in the provision of insurance services inures to C21's benefit.22 Indeed, contrary evidence is overwhelming. C21 has not produced any insurance licenses issued by state insurance departments to C21, or to any entity with the term C21 in its name. (Dkt. 124 ¶¶64-65 at 11.) Nor has C21 produced evidence of any filings by it or any Franchisee with state insurance departments. (Id. ¶88 at 13.) None of the Franchisees sell insurance underwritten by C21, C21 has not provided any records of insurance policies ­ either with or without the name C21

After the close of discovery, C21 amended its interrogatory responses to add commercial property and casualty insurance to the list of insurance Franchisees are alleged to "sell" through the Connections program, even though Mr. Omer previously confirmed that Franchisees do not sell commercial insurance. (Dkt. 124 ¶¶69,72 at 12, 43-44.) This assertion (i) does not create a genuine dispute of fact because the amended interrogatories are not verified (see Dkt. 86, Ex. 13 at 12), (ii) contradicts Mr. Omer's deposition testimony, and (iii) is not supported by documentary evidence of commercial insurance sales, policyholders, or advertising by C21 or the Franchisees. See Dkt. 124¶70 at 42-43; infra at 52-61. In opposition to Century's Motion to Exclude Mr. Omer's initial declaration, C21 repeatedly claims that "all use of the Century 21 marks in connection with insurance, by related companies inures to Century 21's benefit under 15 U.S.C. §1055." (Dkt. 151, Ex.C.) This is only true, however, if insurance is both displayed and sold under the C21 Marks. See DaimlerChrysler AG v. Bloom, 315 F.3d 932, 938 (8th Cir. 2003) ("15 U.S.C. § 1055 only answer[s] the question of when the use of a mark by a related company can inure to the benefit of the registrant of the mark"); 15 U.S.C. §1127 ("a mark shall be deemed to be in use in commerce . . . on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce"). In the present case, there is no evidence that any of the Franchisees sell insurance under the C21 Marks, and the different mark "21st Century Insurance Company" is not at issue in this lawsuit. Supra n.2. Document 177 - 26 - 03/16/2006 Filed Page 26 of 89
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-- sold by Franchisees under the C21 Marks, and C21 has not produced any records of insurance policyholders who purchased insurance from Franchisees under the C21 Marks. (Id. ¶¶95,98 at 13,53-54.) More importantly, C21's Franchise Agreement prohibits Franchisees from using the C21 Marks in connection with any business other than real estate unless C21 grants a written addendum, and C21 has not produced any written addenda allowing Franchisees to use the C21 Marks in connection with the sale of insurance. (Id. ¶¶85-86 at 13, 48-50.) Absent a written addendum to the contrary, C21 permits Franchisees to engage in the sale of insurance only if those sales are derived from insurance agencies licensed by state insurance departments under names that do not include the term "Century 21," and do not use the C21 Marks. (Id. ¶¶85-86 at 13, 48-50.) Relying on two Franchisees who own and operate independent insurance agencies not related to C21, C21contends these Franchisees provide insurance brokerage service