Freedom Card, Inc. v. JPMorgan Chase & Co.

Urban Television Network, Inc. and Freedom Card, Inc. (collectively, UTN) (defendants) were the owner and exclusive licensee, respectively, of the federally registered trademark “Freedom Card,” for credit cards and credit card services. In December 2000, UTN, in conjunction with CompuCredit Corporation, began offering credit card services under the “Freedom Card” mark to the sub-prime credit market. Most of UTN’s customers had credit lines of $300. CompuCredit, however, stopped marketing and issuing new “Freedom Card” cards after December 2001. Just over a year later, on January 27, 2003, JPMorgan Chase & Company (Chase) (plaintiff) officially launched a credit card that it called Chase Freedom by announcing that card in a Wall Street Journal (WSJ) advertisement. The Chase Freedom card was a reissue of the Chase Shell MasterCard for 1.5 million of Chase’s existing customers. Less than 10,000 people became Chase Freedom card customers after the WSJ ad. Upon seeing the WSJ ad, UTN’s CEO contacted Chase and complained that Chase was infringing UTN’s “Freedom Card” mark. In response, Chase stopped its advertising and promotional activities for its Chase Freedom card and stopped acquiring new customers for that card. Next, representatives of UTN and Chase met in person to try to resolve the problem, but those discussions broke down after UTN threatened to cause demonstrations against Chase. On February 4, 2003, Chase filed a declaratory-judgment action against UTN in the United States District Court for the District of Delaware, seeking a declaration that its use of the mark Chase Freedom did not infringe any of UTN’s trademark rights. UTN counterclaimed against Chase for infringement of its registered marks under 15 U.S.C. § 1114 and for federal unfair competition under 15 U.S.C. § 1125(a). Chase moved for a summary judgment of noninfringement. The district court concluded that there was no likelihood of confusion between the parties’ marks and granted Chase’s motion. UTN appealed, arguing that, among other things, the strength of the Chase housemark drove UTN from the marketplace.