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First Franklin Financial v. Franklin First Financial

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Citation Edit

First Franklin Financial Corp. v. Franklin First Financial, Ltd., 356 F.Supp.2d 1048 (N.D. Cal. 2005) (full-text).

Factual Background Edit

Plaintiff, a national wholesale mortgage lender, operated under the mark FIRST FRANKLIN since 1983. Plaintiff also used the slogan "FIRST FOR A REASON" and operated a website at "ff.com." Defendant operated a retail mortgage business using the mark FRANKLIN FIRST since 1993. Defendant also used the slogan FRANKLIN FIRST, FIRST. FOR SO MANY REASONS. In May 2004, while investigating available domain names for its own use, plaintiff discovered defendant's ownership of "franklinfirstfinancial.com" and "franklinfirstfin.com."

Trial Court Proceedings Edit

Plaintiff sued for cybersquatting, false designation of origin, and trademark infringement, and moved for a preliminary injunction to prevent defendant from using any trade names, trademarks, and domain names confusingly similar to its FIRST FRANKLIN marks and names. Regarding the infringement claims, the court first addressed the similarity-of-the-marks factor and determined that the marks, when taken as a whole, were sufficiently dissimilar. The court noted that plaintiff used a logo resembling a house with a teal and black color scheme while defendant used an image of Benjamin Franklin with a purple, yellow, and white color scheme.

Regarding the domain names, the court cited the Ninth Circuit's decision in Brookfield for the proposition that "a similarity in domain names is 'irrelevant as a matter of law' to the question of whether there is a likelihood of confusion between the parties' marks." The court further noted that a Google search for plaintiff's mark "First Franklin" yielded plaintiff's website as both the first result listed and as a sponsored link while defendant's website did not even appear in the first 100 hits. And a search for defendant's mark "Franklin First" yielded plaintiff's site as both a sponsored link and as the fourth hit.

Moreover, according to the court, "[c]ertainly, it is true that anyone manually typing the URL www.franklinfirstfiancial.com will find defendant's website, but such persons would only do so, in all likelihood, in an attempt to specifically locate defendant's website and would in no way be confused." Therefore, the dissimilarity of the marks favored defendant. The sophistication-of-purchasers factor also favored defendant because of the large amounts of money involved with mortgages. Regarding the similarity of market channels, the court pointed out that although defendant's website clearly indicated that it conducted business in only nine states, both parties nevertheless solicited business over the Internet so this factor favored plaintiff. However, "given that almost every business has a website nowadays, a likelihood of confusion would be found in nearly every case unless this factor was accorded less weight than others." The relatedness-of-the-goods factor favored defendant because the parties targeted different markets — real estate professionals for plaintiff and consumers for defendant. As to the strength of plaintiff's marks, the court initially noted that because plaintiff let one of its registrations lapse and transferred ownership of the other to its parent, it was not entitled to any presumption of strength for either mark.

Plaintiff's FIRST FRANKLIN marks were weakened by numerous third-party uses of marks containing the terms "FIRST" and "FRANKLIN" for banking or financial services and by the fact that plaintiff did not even own the domain names "firstfranklin.com," "firstfranklinfiancial.com," or "firstforareason.com." The intent factor was neutral due to the absence of any evidence of bad faith on defendant's part.

Ultimately, the court found that plaintiff failed to demonstrate a likelihood of success on the merits on its infringement and ACPA claims because of a lack of likelihood of confusion. In addition, the balance of hardships favored defendant, which would incur significant costs and the loss of its goodwill and recognition it earned over the last ten years. Therefore, the court denied plaintiff's motion for a preliminary injunction.

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