Pep Boys v. Aranosian CV-94-354-M 11/30/95 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

The Pep Bovs, Manny, Moe & Jack, Plaintiff,

v. Civil No. 94-354-M

Robert Aranosian, Lynda Aranosian, and Capital City Motors, Inc., Defendants.

DECISION AND ORDER

Plaintiff, The Pep Boys, Manny, Moe and Jack ("Pep Boys"),

a Pennsylvania Corporation, brought this suit asserting various

claims under the Lanham Act,

(1) and 1125(a), as

well as under New Hampshire's statutory and common law.

Essentially, Pep Boys seeks permanent injunctive relief, monetary

damages, and its attorneys' fees based on defendants' alleged

infringement of its federally registered trademarks. The case

was tried to the court.

FINDINGS OF FACT AND RULINGS OF LAW

Pep Boys owns and operates a chain of retail stores through

which it sells automotive parts, products, and accessories, and

also provides vehicle maintenance and repair services. Pep Boys

began operations in 1921 and, since 1934, has successfully registered numerous trade and service marks with the United

States Patent Office relating to the "Pep Boys" name. While its

business expansion into New Hampshire is very recent. Pep Boys

has long operated hundreds of stores throughout the rest of the

country. Past annual sales have exceeded 1 billion dollars and

in much of the country Pep Boys enjoys a reputation as one of the

larger players in the "automotive aftermarket." Pep Boys' stock

is listed and traded on the New York Stock Exchange.

Defendants, Robert Aranosian and his daughter Lynda

Aranosian, operate a car dealership and auto parts supply store.

Capital City Motors, Inc., in Concord, New Hampshire. Robert

Aranosian serves as president of defendant Capital City Motors,

Inc., and is its controlling shareholder; Lynda Aranosian is an

employee and officer of Capital City Motors.

On October 19, 1993, Lynda Aranosian, at the reguest of her

father, successfully registered the trade name "Pep Boys" with

the New Hampshire Secretary of State pursuant to applicable New

Hampshire law. The Aranosians intended to use the name in

connection with the auto parts supply store associated with their

automobile dealership. In the eight months that elapsed between

2 the date on which defendants registered the Pep Boys trade name

for use in New Hampshire, and July 12, 1994, when this suit was

filed, defendants made the following limited uses of the "Pep

Boys" name: 1) they obtained a telephone listing in local White

and Yellow Pages under the name "Pep Boys Auto Parts"; 2) they

printed (but never actually used) invoice forms bearing the mark

"Pep Boys Auto Parts"; 3) they mailed one piece of business

correspondence on computer generated letterhead marked "Pep Boys

Auto Parts" across the top; and 4) they sometimes answered the

phone in the auto parts division of Capital City Motors with the

greeting, "Pep Boys."

By mid-February 1994, defendants were put on notice that

someone else, in fact a national retail auto parts chain, had

been using the name "Pep Boys" for decades. In early June, 1994,

plaintiff tried, unsuccessfully, to register Pep Boys as its

tradename in New Hampshire (due to defendants having filed

first), as part of its plan to expand into New Hampshire. Pep

Boys' legal counsel contacted defendants by phone and in writing

to formally apprise them of the long and colorful history of

"Manny, Moe and Jack - the Pep Boys," as well as to notify them

of plaintiff's superior legal rights to the Pep Boys name.

3 Plaintiff demanded that defendants cease all use of that name in

any form. The Aranosians at first declined to go quietly,

refusing to concede plaintiff's point because they believed they

were entitled to use the name in New Hampshire by virtue of their

local trade name registration, whereupon plaintiff filed suit.

Shortly after suit was filed, defendants sought legal

advice, and, no doubt based on that advice and the fact that

court intervention was imminent, they agreed to cease using the

Pep Boys name. Defendants wrote to the New Hampshire Secretary

of State waiving all claims to the name; consented to plaintiff's

use of the registered trade name instead; signed and filed a

formal Certificate of Discontinuance of the use of the name with

the New Hampshire Secretary of State; transferred the NYNEX

telephone number and listings to plaintiff; and forwarded all

preprinted Pep Boys Auto Parts invoice forms to plaintiff for

destruction. Defendants' white flag was displayed reasonably

prominently and unmistakably, but it was not enough for

plaintiff.

Unsatisfied with the extent of defendants' surrender, Manny,

Moe and Jack forged ahead with this litigation, in order to

4 establish the fact of infringement, obtain injunctive relief, and

recover damages and attorneys' fees. Pep Boys still pursues

numerous claims under the Lanham Act and New Hampshire's

statutory and common law, including trademark infringement, false

representation and designation, deceptive trade practices, injury

to business reputation, and unfair competition. It seeks

permanent injunctive relief, monetary damages, attorneys' fees

and costs.

Count I - Trademark Infringement: Lanham Act.

A. Trademark Infringement

Pep Boys' principal claim alleges trademark infringement

under the Lanham Act. 15 U.S.C § 1114(1). To prevail. Pep Boys

must establish the following: (1) ownership of a registered mark

entitled to trademark protection; (2) use of that mark in

interstate commerce; and (3) use of the mark by another in a

manner likely to cause confusion or mistake when compared with

the plaintiff's registered mark. Bavshore Group Ltd. v. Bay

Shore Seafood Brokers, Inc.,

(D. Mass. 1991).

Defendants concede, and the court finds that plaintiff previously

and validly registered the mark "Pep Boys, Manny, Moe, and Jack"

in various iterations, that it uses the name in interstate

5 commerce, and that plaintiff's federal registrations are

incontestable under Section 15 of the Lanham Act.

. Thus, the dispute related to infringement, such as it

is, focuses on whether defendants' use of the trade name "Pep

Boys Auto Parts" was "likely to cause confusion" when compared

with plaintiff's registered marks.

In this circuit, likelihood of confusion is measured against

eight touchstones: (1) the similarity of the marks; (2) the

similarity of the goods; (3) the relationship between the

parties' channels of trade; (4) the relationship between the

parties' advertising; (5) the classes of prospective purchasers;

(6) evidence of actual confusion; (7) the defendant's intent in

adopting the mark; and (8) the strength of the plaintiff's mark.

Volkswagenwerk Aktienqesellschaft v. Wheeler,

(1st

Cir. 198 7); Astra Pharmaceutical Products, Inc. v. Beckman

Instruments, Inc.,

(1st Cir. 1983). No one

factor conclusively decides the issue and each must be

considered. Aktiebolaget Electrolux v. Armatron Int'l., Inc.,

(1st Cir. 1993)(citing Keds Corp. v. Renee

International Trading Corp.,

(1st Cir. 1989)) .

Turning to those touchstones, the court finds as follows.

6 (1) Similarity of the Marks.

The level of similarity between marks is determined by "the

total effect of the designation, rather than a comparison of

individual features." Piqnons S.A. de Mecanique de Precision v.

Polaroid Corp.,

(1st Cir. 1981) (citations

omitted); see also, Volkswagenwerk,

. In this

case it is obvious, and defendants don't seriously contest, that

"Pep Boys Auto Parts" is identical in every meaningful way to the

various registered marks long employed by plaintiff, including

"Pep Boys," "The Pep Boys Manny Moe and Jack," "The Pep Boys

Manny Moe and Jack of California," and "The Pep Boys Manny Moe

and Jack of California, Inc." The marks are, therefore, similar

under the "total effect" test.

(2) Similarity of the Goods.

The goods sold by the two parties are also similar.

Defendants sell original factory parts for Volvo, Isuzu, and

General Motors automobiles. Plaintiff sells factory and generic

replacement parts for virtually all makes and models of

automobiles found in this country. If distinctions could be

drawn between the parties' goods they would be neither major nor

7 meaningful ones. Both parties sell replacement auto parts that

undeniably overlap in the auto parts market.

(3) The Relationship Between the Parties' Channels of Trade, the Parties' Advertising, and the Classes of Prospective Customers.

The interrelation of these three factors warrants

considering them together. Volkswagenwerk,

;

Astra,

; Piqnons,

. While

defendants do little or no business outside the geographic area

immediately surrounding Concord, New Hampshire, plaintiff

operates retail stores and warehouses throughout the United

States. During the period relevant to this dispute. Pep Boys was

not engaged in any retail business in New Hampshire. The nearest

Pep Boys stores were in neighboring states, well beyond commuting

distance from Concord (e.g.. Providence, Rhode Island, and

Springfield, Massachusetts) .

Since the goods and services sold by each party —

automotive replacement parts and repair services — were

virtually identical, the class of prospective customers targeted

by each was substantially similar and overlapped. See

Volkswagenwerk,

. Both companies also advertised on similar platforms, though

in different markets. One of the few uses to which defendants

actually put the "Pep Boys Auto Parts" name was listing it in the

Yellow Pages, a marketing method regularly employed by plaintiff

in 30 other states, including neighboring Rhode Island and

Massachusetts.

Considering the relevant factors, the court finds that the

parties' channels of trade, means of advertising, and targeted

customers were similar, if not identical. No doubt some portion

of that class of New Hampshire consumers who had access to the

local Yellow Pages and were interested in purchasing replacement

auto parts had heard of Pep Boys as a major player in the

industry — likely through plaintiff's regional or national

advertising — and regarded Pep Boys as a familiar source of

reliable goods.

(4) Evidence of Actual Confusion.

A demonstration of actual confusion, while not strictly

necessary to a finding of infringement, can be "very persuasive

in determining the likelihood of confusion." Bavshore Group,

(citations omitted); see also. Original Appalachian Artworks v. Topps Chewing Gum,

(N.D. G a . 1986). Pep Boys introduced some evidence of

actual confusion, showing that defendants received some bulk mail

addressed to "Pep Boys" which was actually intended for

plaintiff, and that consumers called the defendants' Pep Boys

telephone listing in numbers that would be unusual for a new and

relatively unknown auto supply business with an original name.

However, no actual sales of goods by defendants to people who

thought they were buying plaintiff's goods were proven.

(5) Defendants' Intent in Adopting the Mark.

Robert Aranosian claims to have come by the name "Pep Boys"

after recalling a childhood trip to Fresno, California. While in

Fresno, Aranosian says he visited a general store called "Pep

Boys," liked the name, and recalled it some forty years later

when mulling over possible new names for his expandedparts

store. In 1993 he asked his daughter, Lynda Aranosian, to

register it as a trade name with the New Hampshire Secretary of

State. She did so, and the registration was approved as no

similar names had been registered previously in New Hampshire.

10 While Mr. Aranosian's explanation is possible, and while he

may actually believe that memories of youth were his sole source

of inspiration in coming up with such a unique and original name

(one identical to that employed by a national automotive supply

chain for some fifty years) the more probable and plausible

explanation is rooted in his years of involvement in the

automotive industry and his exposure to the Pep Boys name in that

context. The boyhood memory explanation as the sole source of

inspiration is also undermined by Lynda Aranosian's inclusion of

a banner as part of the Pep Boys logo defendants planned to use.

The intended banner was virtually identical in shape and location

as the banner employed by the plaintiff and, significantly,

plaintiff has only used its banner since 1991, well beyond the

reach of a boyhood experience. (The defendants' intended banner

differed in color only in that plaintiff's banner is solid red

while defendants' was to be checkered in red and white.)

Defendants' mimicry of plaintiff's marks is simply too plain

and obvious to be dismissed as coincidental or based solely on

memories of youth. The court finds that while Robert Aranosian

may well have actually recalled the Pep Boys name from a boyhood

trip, as he testified, he and Lynda Aranosian also undoubtedly

11 had some exposure to, and awareness of, plaintiff's name and its

existence in the national market place when they registered the

Pep Boys name locally.

The court finds that defendants adopted plaintiff's

federally registered mark(s), intending to acguire exclusive

rights to use that mark in New Hampshire. They thought,

mistakenly, that by obtaining a state trade name registration

they would secure exclusive legal rights to the Pep Boys name in

New Hampshire. The adoption was not coincidental.

(6) Strength of the Pep Bovs Mark.

"Three factors are used to determine the strength of a mark:

the length of time it has been in use; the strength of the mark

in plaintiff's field; and the plaintiff's actions in promoting

the mark." Bavshore Group,

(citing Piqnons,

). A "strong" mark will be accorded broader

protection than a "weak" one. Volkswagenwerk,

(citing Piqnons

).

Plaintiff unguestionably established the national strength

of the Pep Boys mark. It first registered the mark in 1934, and

12 the company has since acquired a reputation in most of the

country as a leader in its field, which reputation is of course

inextricably associated with its marks. During the past 15

years, plaintiff spent over $315,000,000 on print, radio, and

television promotion of its business and its marks. There can be

no reasonable question that the protected marks are both unique

and strong ones, and the court so finds.

Considering the enumerated factors as a whole, the court

concludes that defendants' intended and actual use of the name

"Pep Boys Auto Parts," albeit limited, was nevertheless likely to

cause a significant number of consumers (at least those looking

through the local White and Yellow Pages) to confuse defendants'

identity, products, and services with those of Manny, Moe and

Jack, the national chain. Accordingly, the Court finds that

defendants' limited use of the Pep Boys name did amount to

trademark infringement in violation of

(1) and

false designation of origin under

(a). See

W.W.W. Pharmaceutical Co., v. Gillette Co.,

,

13 1019 (S.D.N.Y. 1992) (§1125(a) is broader than § 1114 however

both require plaintiff to prove likelihood of confusion).1

B. Lanham Act Relief

Although Pep Boys established defendants' infringement, it

is not entitled to the relief it seeks. Pep Boys seeks a

permanent injunction enjoining defendants from using any version

of the Pep Boys name in the future. But, defendants have already

unilaterally discontinued their use of the Pep Boys name and,

given the absence of any indication that they might use the name

1 Defendants argue that their entirely intrastate activities are insufficient to support jurisdiction over a Lanham Act claim. But, "jurisdiction exists to grant relief under the Lanham Act if a defendant's activities although wholly intrastate tend to have a damaging effect on plaintiff's federally protected interstate business." Purolator, Inc. v. EFRA Distributors, Inc.,

(1st Cir. 1982) (quoting Tiffany & Co. v. Boston Club, Inc.,

(D. Mass. 1964)). " [A]n adverse effect on the sales or goodwill of one whose trademark is used in interstate commerce is a sufficiently substantial effect on interstate commerce to entitle the registrant to invoke the protection of the Lanham Act . . . ."

(citing cases) . Plaintiff established that numerous calls were made to the telephone number obtained by defendants under the Pep Boys name after the number was transferred. Even allowing for "wrong numbers," surely some consumers anxious to shop at Pep Boys were disappointed to learn that contrary to the hope engendered by the listing's promise, no Pep Boys store was conveniently located in the Concord area, thus eroding at least some amount of the good will plaintiff has developed over the years. Those facts are sufficient to establish an impact on interstate commerce as contemplated by the Lanham Act.

14 in the future, as well as their acknowledgement of plaintiff's

superior and exclusive rights (confirmed by defendants' surrender

of the local trade name registration in favor of plaintiff), the

court is satisfied that defendants have no present intention of

using, and are not likely to use, any iteration of the mark in

the future.

Accordingly, because I find that defendants do not pose any

serious risk of future unauthorized use of the protected marks, I

find injunctive relief to be both unnecessary and inappropriate

in this case. See, e.g. Readers Digest Assoc, v. Conservative

Digest,

(D.C. Cir. 1987) ("When a defendant has

ceased its infringing conduct and shows no inclination to repeat

the offense, a court may not issue an injunction . . . ."); M-F-G

Corp. v. EMRA Corp.,

(7th Cir. 1987) (no abuse

of discretion to withhold injunction based upon defendant's

promise not to infringe in the future); Knickerbocker Toy Co. v.

Azrak-Hamwav International, Inc.,

(2d Cir.

1982) (defendant's voluntary termination of infringing conduct

and assurance that it would not infringe in the future supported

denial of injunctive relief); In re Circuit Breaker Litigation,

(C.D. Cal. 1994) (same) (citing cases).

15 Under the circumstances presented here, the court declines to

grant injunctive relief.

Invoking

, plaintiff also seeks money

damages. Under Section 1117, victims of infringement are

entitled, "subject to the principles of eguity, to recover

(1) defendant's profits, (2) any damages sustained by the

plaintiff, and (3) the costs of the action." Id.; Aktiebolaget

Electrolux,

. The award of Section 1117 damages is

governed by four rules which are fairly summarized as follows:

1) a plaintiff seeking damages must prove actual harm, such as

the diversion of its sales to the defendant; 2) a plaintiff

seeking an accounting of the defendant's profits must show that

the products directly compete, such that defendant's profits

would have gone to plaintiff absent the violation; 3) the general

rule of direct competition is loosened if the defendant acted

fraudulently or palmed off inferior goods, in which case actual

harm is presumed; and 4) where defendant's ineguitable conduct

warrants bypassing the usual rule of actual harm, damages may be

assessed on an unjust enrichment or deterrence theory.

Aktiebolaget Electrolux,

; Valmor Products Co. v.

Standard Products Corp.,

(1st Cir. 1972);

16 Ouabaug Rubber Co. v. Fabiano Shoe Co.,

, 161 n.15

(1st Cir. 1977).

Applying these principles to the facts found here, the court

concludes that plaintiff is not entitled to recover monetary

damages.

Plaintiff has not established that it suffered any actual

harm as a result of defendants' limited use of its marks. It is

very unlikely that any business was diverted from plaintiff's

operations or that its reputation was damaged in any reliably

measurable or meaningful way. It is certainly doubtful, for

example, that but for defendants' limited use of the Pep Boys

name, potential customers of plaintiff would have driven from

Concord, New Hampshire, to either Providence, Rhode Island, or

Springfield, Massachusetts (or to the location of any of

plaintiff's other New England stores) to buy auto parts from Pep

Boys. If some consumers did buy replacement auto parts and

repair services from defendants, thinking they were buying from

plaintiff, those consumers would probably have either still

bought those parts or services from defendants or sought out

defendants' competitors in the Concord area, rather than drive to

17 Rhode Island or Massachusetts to buy authentic Pep Boys auto

parts or services, even absent the violation. In any event, I

find that defendants did not actually make any sales of any

competing goods based on their use of the Pep Boys name, and they

did not "palm off" any goods as Pep Boys' goods (to the contrary,

defendants' goods consisted almost entirely of factory authorized

parts, clearly identified as to automobile manufacturer source).

Accordingly, I do not find that plaintiff suffered actual

harm, Aktiebolaget Electrolux,

, and decline to

award actual damages.

Similarly, Pep Boys is not entitled to an accounting of, or

an award of, profits earned by defendants during the relevant

infringing period. There simply was no causal connection between

defendants' limited use of the Pep Boys name and their general

business profits. Comidas Exquisitos, Inc. v. Carlos McGee's

Mexican Cafe, Inc.,

(S.D. Iowa 1985) . "Where .

. . the plaintiff has only shown a likelihood of confusion . . .

but has failed to prove tangible harm, an award of profits

becomes conjectural . . . ." Aktiebolaget Electrolux v. Armatron

Int'1.,

(D. Mass.), aff'd ,

(1st

18 Cir. 1993); See also. Life Indus. Corp. v. Ocean Bio-Chem,

(E.D.N.Y. 1993) (no evidence that use of mark was

cause of profit); Bigelow v. RKO Radio Pictures, Inc.,

(1946) (damages cannot be based upon speculation).

Here, defendants' profits were not related to the infringement

found, that infringement having been guite limited in time and

scope. Indeed, this case is best characterized as involving

primarily an anticipated rather than realized exploitation of

plaintiff's marks.

While the parties competed with each other in the general

sense that both sold car parts and related automotive items and

services during the relevant period, they never directly competed

in the same market for the same customer at the same time.

Accordingly, I find that what sales defendants made during the

relevant period, virtually all of which were in the Concord, New

Hampshire vicinity and virtually all of which consisted of

factory authorized brand name parts, generated profits that would

not have otherwise gone to plaintiff absent the violation. No

customer was shown to have purchased any goods from defendants

bearing a "Pep Boys" mark, and any goods or services not sold by

defendants would, more likely than not, have been sold by their

19 competitors in the local market. Plaintiff, of course, did not

begin its retail operations in New Hampshire until January of

1995, long after the Aranosians had ceased all use of the name.

See Aktiebolaget Electrolux,

; Raxton Corp. v.

Anania Associates, Inc.,

(1st Cir. 1982) (where

companies did not compete and plaintiff showed no actual damages

court refused to authorize accounting of defendant's profits).

Accordingly, I find that defendants' profits during the

relevant period were not related to their limited use of

plaintiff's marks, and that any attempt to guantify what few

dollars, if any at all, might have been derived from that limited

use would be far too conjectural.

Defendants sold clearly marked goods, did not affix

plaintiff's mark to any goods sold, and did not sell any goods

posing as "Pep Boys." Neither did defendants act "fraudulently."

They were ill-informed and obviously mistaken, if not negligently

ignorant, in asserting exclusive rights to use the Pep Boys name

in New Hampshire, but the fact that they openly registered the

trade name believing they were entitled to do so, and without

actual knowledge of plaintiff's own superior and exclusive legal

20 rights to it, militates against loosening the general rule of

direct competition. See, e.g., Vervfine Products, Inc. v. Colon

Bros., Inc.,

(D.P.R. 1992); Babbit Elecs.

v. Dvnascan Corp.,

(S.D. Fla. 1993) aff'd ,

(11th Cir. 1994); Comidas Exquisitos,

; Aktiebolaget Electrolux,

. Accordingly, I

decline to presume actual harm.

Finally, I decline to assess damages on an unjust enrichment

or deterrence theory under these circumstances. The eguities of

this case militate against affording plaintiff relief based upon

unjust enrichment or deterrence.

There was no measurable

unjust enrichment, and the evidence (including the tone, tenor,

and demeanor of witnesses) convinces the court that while the

Aranosians were hardly blameless in their actions and in their

handling of this matter, still, they did make reasonable and good

faith efforts both to acknowledge plaintiff's superior rights to

the Pep Boys mark and to avoid prolonging this litigation. They

consulted legal counsel after suit was filed and they promptly

transferred the local trade name registration to plaintiff,

relinguished printed material with the Pep Boys name on it,

transferred the telephone number, and abandoned all use of and

21 claims to the name. The court is convinced that the Pep Boys'

aggressive manner in addressing what should have been an easily

resolved problem served to provoke rather than guell what

resistance defendants put up before they eventually sought legal

counsel. Defendants were not right in resisting, to be sure, but

plaintiff's behavior seemed almost designed to guarantee the

continuation of this dispute. While plaintiff is free to choose

the aggressive model of dispute resolution, within limits, that

choice and attendant circumstances are properly considered in

gauging the "feel" of the case and whether principles of eguity

support the extension of relief.

In summary: (1) plaintiff proved no actual harm;

(2) defendants derived no unjust profits from their infringement;

(3) defendants did not act in bad faith but in ignorance; and

(4) it is unlikely that defendants' infringement will be

repeated. Accordingly, even though violations within the purview

of the Lanham Act occurred, an award of monetary damages or

injunctive relief is unwarranted in this case. Principles of

eguity also militate against affording plaintiff its reguested

relief. Readers Digest Asso. v. Conservative Digest, Inc., 642

(D.D.C. 1986) aff'd,

(D.C.

Cir. 1987). See also, Ouabaug Rubber,

.

C. Attorneys' Fees and Costs

Pep Boys also seeks attorneys' fees under

,

which permits fees to be awarded to the prevailing party in

"exceptional" circumstances. Exceptional cases under Section

1117 involve "malicious, fraudulent, deliberate, or willful

infringement." Schroeder v. Lotito,

(1st Cir.

1984). In addition, exceptional cases usually involve a finding

that the plaintiff suffered actual economic harm. Moore Business

Forms, Inc. v. Rvu,

(5th Cir. 1992); Ferrero

U.S.A., Inc. v. Ozak Trading, Inc.,

(3d Cir.

1991); VIP Foods v. Vulcan Pet, Inc.,

(10th

Cir. 1982). Having determined that the Aranosians and Capital

City Motors, Inc., did not act willfully, maliciously,

fraudulently, or deliberately, and that Pep Boys did not suffer

any actual harm, the court finds that this case is far more

ordinary than it is exceptional. That these defendants infringed

is clear, but as infringements go it gualifies as an ordinary

one. Defendants' thought they had staked a legitimate claim to

the Pep Boys name in New Hampshire and acted on the incorrect

23 belief that, in New Hampshire at least, they were the Pep Boys.

The infringement was the product of defendants' ignorance and

mistaken belief in rights they erroneously thought arose from

their local trade name registration, a not uncommon mistake.

This is not a case in which an infringer has knowingly

appropriated another's mark, aware of the other's superior rights

to it, for the express purpose of exploiting it by deceiving

consumers as to origin while palming off inferior goods. Here,

defendants relied on a rather insubstantial claim of right to the

name Pep Boys, but it was a claim nevertheless, and they did

think it valid at the outset. Their purpose was not noble, but

neither was it fraudulent or deliberately malicious.

That defendants did not act fraudulently or in bad faith is

a conclusion further supported by the fact that they openly

registered the name Pep Boys with the New Hampshire Secretary of

State and, when suit was filed, they consulted legal counsel and

took reasonable unilateral steps (i.e., not pursuant to any

settlement agreement) to abandon all use of the name, assist

plaintiff in obtaining the New Hampshire trade name registration,

deliver all offending invoices and materials for destruction, and

24 transfer the phone listings to plaintiff. Of course they could

have and should have consulted counsel earlier, but the totality

of circumstances surrounding this case persuades the court that

this is not an "exceptional" case in which an award of attorneys'

fees pursuant to the Lanham Act is either warranted or

appropriate. See, e.g., Moore Business Forms,

(holding that "exceptional" cases involve a high degree of

culpability on the part of the infringer, for example bad faith

or fraud); Volkswagenwerk,

(an award of

attorneys' fees is committed to the discretion of the court,

which may properly take into account eguitable considerations).

Counts II & V - Deceptive Trade Practices: RSA 358-A.

A. Acts Prohibited by RSA 358-A:2

The New Hampshire Consumer Protection Act, N.H. RSA 358-A,

prohibits "any unfair method of competition [and] any unfair or

deceptive act or practice in the conduct of any trade or commerce

in this state." RSA 358-A:2.2 The statute specifically

enumerates thirteen categories of prohibited conduct.

2 Corporations, as well as natural persons, are "persons" under the terms of the Consumer Protection Act and may bring suit to enforce the provisions of RSA 358-A:2 pursuant to RSA 358- A:10. See Nault's Auto. Sales, Inc. v. American Honda Motor Co.,

(D.N.H. 1993).

25 Second among the thirteen categories of prohibited acts is

"[clausing likelihood of confusion or of misunderstanding as to

affiliation, connection or association with, or the certification

by, another . . . In addition, section 358-A:2 prohibits

"unfair" practices not explicitly included in the statutory list.

"A practice is 'unfair' if (1) it is 'within at least the

penumbra of some common-law, statutory, or other established

concept of unfairness,1 (2) 'it is immoral, unethical,

oppressive, or unscrupulous,1 or (3) 'it causes substantial

injury to consumers.1" Chroniak v. Golden Inv. Corp.,

, 1146 (1st Cir. 1993) (citations omitted).

In interpreting the terms of RSA 358-A, New Hampshire and

federal courts have invited comparison with the analogous

Massachusetts "unfair and deceptive" practices Act, Mass. Gen. L.

ch. 93A.3 Roberts v. General Motors Corp.,

(1994); Chase v. Dorias,

(1982); Chroniak, 983

F.2d at 1146 n.ll. Courts have interpreted the "likelihood of

confusion" reguired by section 93A in a manner consistent with

the "likelihood of confusion" reguired by the Lanham Act. See

R.J. Toomev Co. v. Toomev,

(D. Mass. 1988);

3 N.H. RSA 358-A was modelled on Mass. Gen. L. ch. 93A.

26 Mobil Oil Corp. v. Auto-Brite Car Wash,

(D.

Mass. 1984). In this case, the court has concluded that

defendants' actions created a likelihood of confusion under

Lanham Act standards. See supra p. 13. Therefore, defendants'

actions also created a likelihood of confusion under RSA 358-A:2.

Accordingly, the court finds that defendants engaged in an unfair

or deceptive act or practice in violation of RSA 358-A:2.4

B. Relief

Section 358-A:10 provides, "If the court finds for the

plaintiff [under section 358-A:2], recovery shall be in the

amount of actual damages or $1,000, whichever is greater." RSA

358-A:10. For the same reasons Pep Boys suffered no actual harm

as a result of defendants' Lanham Act violations, the court finds

that Pep Boys suffered no actual harm as a result of defendants'

violation of section 358-A:2. Therefore, defendants' are ordered

4 Even if defendants' actions did not constitute a violation of the explicit terms of section 358-A:2, a violation of the Lanham Act constitutes "unfair" practices under section 358-A:2 because it falls "within at least the penumbra of some common- law, statutory, or other established concept of unfairness." Chroniak, 983 F.2d at 1146 (emphasis added).

27 to pay Pep Boys damages in the statutorily required amount of

$1 , 0 0 0 .5

C. Attorneys' Fees

In contrast to the restrictive terms of the Lanham Act

attorneys' fees provision, RSA 358-A:10 simply states that "a

prevailing party shall be awarded the costs of the suit and

reasonable attorney's fees, as determined by the court." RSA

358-A:10. Pep Boys prevailed in its section 358-A:2 action in

two meaningful ways. First, Pep Boys carried its burden of

proving a violation of RSA 358-A:2. Second, Pep Boys has been

awarded $1,000 in damages according to the terms of the statute.

In addition, the legislature's mandate of a $1,000 award "floor"

establishes that the benefits of section 358-A:10 accrue to any

plaintiff proving a violation of section 358-A:2, even absent a

showing of actual harm. This provision militates against an

5 Section 358-A:10 also states, "If the court finds that the use of the . . . act or practice was a willful or knowing violation of this chapter, it shall award as much as 3 times, but not less than 2 times [the greater of actual damages or $1, 000] ." Pep Boys claims that this provision entitles it to double or treble damages. For the same reasons that defendants' actions do not constitute a willful or malicious infringement of the Lanham Act, see supra p. 22-24, the court finds that defendants' actions do not constitute a willful or knowing violation of section 358- A:2. Therefore, double or treble damages are not justified under section 358-A:10.

28 interpretation of section 358-A:10 that would award reasonable

fees only to a plaintiff proving actual harm. Accordingly,

defendants are liable for plaintiff's costs and reasonable

attorneys' fees, bearing in mind that the reasonableness of fees

turns, in substantial part, on the limited nature of the benefits

bestowed upon the prevailing party in the litigation. Couture v.

Mammoth Groceries, Inc.,

(1977) .

The parties shall make good faith efforts to agree, within

30 days of the date of this order, to an amount of attorneys'

fees that would be reasonable under the circumstances. If the

parties cannot agree, the plaintiff shall within 15 days

thereafter file with the court a well-supported motion for

reasonable attorneys' fees. Defendants may file an appropriate

response not later than 15 days following the filing of

plaintiff's motion, and, if necessary, a hearing will be held on

the motion.

Count III - Injury to Business Reputation: RSA 350-A:12.

Plaintiff claims that it is entitled to the remedies

provided by RSA 350-A:13 as a result of defendants having

unlawfully injured its business and diluted the distinctive

29 quality of its trade mark in violation of RSA 350-A:12.

Plaintiff is, however, plainly mistaken.

As this court (DiClerico, J.) recently noted in Optical

Alignment v. Alignment Servs., No. 95-94-JD (D.N.H. November 1,

1995) :

New Hampshire's codification of the Model State Trademark Act, N.H. Rev. Stat. Ann. 350-A (1984), offers trademark and service mark owners protections beyond those afforded by the Lanham Act. An essential element of an action for infringement brought under the state statute is registration with the New Hampshire secretary of state. See RSA 350-A:ll(I) (1984) (prohibiting the unauthorized use of a mark "registered under this chapter" in connection with the sale of goods or services); RSA 350-A:ll(II) (1984) (proscribing the reproduction and application of "any such mark"). In the instant case, [plaintiff] has not alleged that it has properly registered its mark. Accordingly, the court dismisses [plaintiff's] 350-A claim for failure to plead a necessary element of a claim under the statute.

Similarly, plaintiff in this action had not, at times

relevant to this inquiry, properly registered its mark with the

New Hampshire Secretary of State. Accordingly, it is not

entitled to the protections (or remedies) afforded by RSA 350-

A:12 and 13.

30 Count IV - Fraudulent Registration: RSA 349:10 & 350-A:10.

Plaintiff claims that defendants violated RSA 349:10 and

350-A:10 when they knowingly made false or fraudulent

representations in order to register the "Pep Boys" name and mark

with the New Hampshire Secretary of State. Section 350-A:10

provides:

Fraudulent Registration. Any person who shall for himself or on behalf of any other person, procure the filing or registration of any mark in the office of the secretary of state under the provisions hereof, by knowingly making any false or fraudulent representation or declaration, verbally or in writing, or by any other fraudulent means, shall be liable to pay all damages sustained in conseguence of such filing or registration, to be recovered by or on behalf of the party injured thereby in any court of competent jurisdiction.

RSA 350-A:10 (emphasis added). Section 349-A:10 similarly

proscribes making false or fraudulent representations or

declarations in registering any trade name. Here, there is

absolutely no evidence that defendants made false representations

in registering their mark, and defendants' Application for

Registration of the Pep Boys name, filed with the New Hampshire

Secretary of State, contains nothing more than defendants' names

and addresses and the trade name they sought to register.

(Plaint. Ex. 13.) Defendants made no false or fraudulent

31 representation or declaration, either implicitly or explicitly,

in registering their trade name or mark. While obviously

mistaken, defendants sought and obtained registration of the name

in the good faith belief that they had the right to do so. From

their perspective, the Secretary of State apparently agreed (the

registration was allowed because no prior conflicting

registrations had been granted) . Moreover, plaintiff failed to

prove that it suffered (or is likely to suffer) any guantifiable

dilution of its federally registered marks. Accordingly, it is

not entitled to damages under the state statutes. Finally, even

if plaintiff had proved that defendants knowingly made false or

fraudulent statements in violation of RSA 349:10 or 350-A:10, for

the reasons set forth previously, it is not entitled to an

injunction under RSA 349:10 or 350-A:12.

__________________________ CONCLUSION

For the foregoing reasons, the court holds that defendants'

limited use of the trade name "Pep Boys Auto Parts" did

constitute trademark infringement and false designation within

the purview of the Lanham Act and unfair practice according to

RSA § 358-A:2. Pep Boys, however, is not entitled to recover

damages for actual harm or obtain injunctive relief. Pep Boys is

32 entitled $1,000 in statutory damages as mandated by RSA 358-A:10.

This is not an "exceptional" case and plaintiff is, therefore,

not awarded attorneys' fees under the Lanham Act. As the

prevailing party, however, plaintiff is awarded reasonable

attorneys' fees pursuant to RSA § 358-A:10. Plaintiff is also

awarded its costs.

The foregoing shall constitute the findings of fact and

conclusions of law reguired by Rule 52 of the Federal Rules of

Civil Procedure. Any reguests for findings or rulings which are

not expressly or implicitly granted in the body of this opinion

are hereby denied. See Applewood Landscape & Nursery Co. v.

Hollingsworth,

(1st Cir. 1989); Morgan v.

Kerrigan,

, 588 n.14 (1st Cir. 1974), cert, denied,

(1975) .

Judgment shall be entered in favor of the plaintiff on its

claims under the Lanham Act (

(1) and 1125(a)) and

its claims under RSA 358-A:2. Judgment shall be entered in

favor of defendants on plaintiff's remaining state law claims

over which the court has exercised supplemental jurisdiction.

Costs and reasonable attorneys' fees are awarded to plaintiff.

33 SO ORDERED.

Steven J. McAuliffe United States District Judqe

November 30, 1995

cc: Brian T. Tucker, Esq. Marsha G. Gentner, Esq. David P. Slawsky, Esq.

34