SunAmerica Corp. v. Sun Life Assurance Co. of Canada

ORDER OF THE COURT

This trademark action came before the Court for a non-jury trial during November and December, 1993. The trial record contains well over a thousand pages of live and deposition testimony, the controversial results of a joint survey, and many volumes of exhibits documenting the evolution of this conflict since 1916. Having carefully considered the evidence presented, the arguments of counsel, and the relevant law governing the parties’ claims, the Court makes the following findings of fact and conclusions of law.

TABLE OF CONTENTS

FINDINGS OF FACT

I. Background 1563

A. The Parties 1563

B. Claims and Counterclaims 1564

C. Decision on Appeal 1564

II. History of the Parties and Their Names I — * cn a

A.The Early Days of Cooperation cn o*

*1563 B. Expansion and Conflict ) — 1 Cn 05 05

C. An Incomplete Accommodation 1 — 1 Cn C5> <1

D. Hostilities Resume I — 1 ctt 05 OO

III. The Joint Survey 1570

IV. Likelihood of Confusion 1573

CONCLUSIONS OF LAW

V. Defendants’ Counterclaim 1577

VI. Plaintiffs’ Acquiescence Defense 1577

VIL Inevitable Confusion 1579

VIII. “Sun Financial” Group and Services 1580

IX. Miscellaneous Matters 1582

A. Defendants’ Other “Sun” Marks 1582

B. Plaintiffs’ State Law Claims 1582

C. The “SunAmerica” Counterclaim 1582

D. Attorney’s Fees 1582

X. Conclusion 1582

FINDINGS OF FACT

I. BACKGROUND

Plaintiffs filed this trademark infringement action charging Defendants with violations of the Lanham Act and various state laws concerning trademark protection. Both Plaintiffs and Defendants currently use corporate names, trade names, and service marks featuring the term “Sun Life.” Plaintiffs claim that Defendants recently began to use the names “Sun Life (U.S.)” and “Sun Life” prominently in advertising without any proximate reference to “Canada.” Such use, said Plaintiffs, is confusing to consumers. At trial, Defendants did not deny the likelihood of confusion, but contended that the parties’ simultaneous use of the salient phrase “Sun Life,” even if modified by geographic terms such as “of America” or “of Canada,” is inevitably confusing.

On motions for summary judgment, this Court ruled that Defendants’ use of “Sun Life (U.S.)” presented a substantial likelihood of confusion with Plaintiffs’ mark “Sun Life of America.” See Order [# 137], entered June 10, 1991. The Court enjoined Defendants from further use of the “Sun Life” name without the geographic modifier “of Canada.” See Order [# 143], entered August 22, 1991. On September 9, 1992, the Eleventh Circuit vacated this Court’s injunction and remanded for further proceedings. See SunAmerica Corp. v. Sun Life Assurance Co. of Canada, 24 U.S.P.Q.2d 1505, 974 F.2d 1348 (11th Cir.1992) (per curiam). The case came to trial on November 15, 1993.

A. The Parties

Plaintiffs are an American holding company, SunAmerica, Inc. [“SunAmerica”] and its wholly-owned subsidiary, Sun Life Insurance Company of America [“Sun Life of America” or “SLA”]. Defendants are a Canadian mutual life insurance company, Sun Life Assurance Company of Canada [“Sun Life of Canada” or “SLC”] and its wholly-owned U.S. subsidiary, Sun Life Assurance Company of Canada (U.S.). Both parties presently are in the business of selling annuity products to American consumers. Both Plaintiffs and Defendants have used the service mark “Sun Life” alone or in combination with geographic modifiers and other descriptive terms for over seventy-five years.

*1564 B. Claims and Counterclaims

Sun Life of America challenges both Sun Life of Canada’s use of “Sun Life (U.S.)” as a name for its U.S. subsidiary and SLC’s federal registration of “Sun Financial Group.” Plaintiff SLA further alleges unfair competition and trademark infringement under federal law, common law trademark infringement and unfair competition, and deceptive trade practices and false advertising under state law. SLA also seeks the cancellation of federal registration for various other marks used by Sun Life of Canada. 1

Sun Life of Canada filed a counterclaim asserting that Plaintiffs are infringing Defendants’ rights in the unmodified term “Sun Life.” In addition, SLC wants the Court to cancel registration of Plaintiffs’ “SunAmeri-ca” marks.

C. Decision on Appeal

As noted, the Eleventh Circuit Court of Appeals vacated this Court’s permanent injunction against Defendant SLC’s use of “Sun Life (U.S.)” and remanded the case for trial. The Court of Appeals determined that this Court had failed to explicitly resolve the issues raised by SLC’s counterclaim. Defendants argued that SLA did not have enforceable trademark rights in the “Sun Life of America” name, a prerequisite to a claim under section 43(a) of the Lanham Act. Thus, the Court must begin with an analysis of SLC’s prior use of “Sun Life” and the legal effect of that use. In a concurring opinion, Judge Birch suggested an analytical framework for resolving the complex factual and legal issues presented on remand.

The Court will first determine whether Defendant SLC can demonstrate both enforceable rights in its “Sun Life of Canada” mark and that Plaintiffs’ use of “Sun Life of America” generates a likelihood of confusion. The Court will next consider SLA’s affirmative defense of acquiescence. In this regard, “[acquiescence would estop Sun Life of Canada from extinguishing SunAmerica’s use of ‘Sun Life of America,’ unless there is an inevitability of confusion between the two marks.” Id. at 1510. If confusion is inevitable, the public interest may require that Defendant’s claim to the “Sun Life” name be revived, regardless of acquiescence. As for SLA’s claim that Defendants’ “Sun Life (U.S.)” is confusingly similar to “Sun Life of America,” the Court will first decide whether SLA has a protectable trademark interest in the “Sun Life of America” name before reaching the issue of confusion.

The evidence presented at trial and the applicable law suggest that two basic issues dispose of the principal claims in this action:

(1) Whether Sun Life of Canada acquiesced in Sun Life of America’s use of its “Sun Life” name; and

(2) Whether there is an inevitability of confusion between the two marks.

II. HISTORY OF THE PARTIES AND THEIR NAMES

A. The Early Days of Cooperation

Defendant Sun Life Assurance Company of Canada was founded in Montreal, Canada in 1865 and adopted its present name in 1882. SLC pioneered several highly successful innovations in the life insurance field, grew steadily, and by the 1890’s was one of the leading Canadian life insurance companies. The company opened its first branch office in the United States in 1895. Employees known as “career agents” began selling life insurance in the United States under the “Sun Life of Canada” name in 1895 and *1565 annuities at least as early as 1902. By 1915, a respected reporting source described Sun Life of Canada as follows:

The company has built up a large income and operates in a widely extended territo-ry_ The company is very strong finan-cially_ Its actuarial methods are conservative and sound. The investments are sound and remunerative_ This company specializes on annuities and transacts a very large business under that plan.

Best’s Insurance Reports, 2 Defendants’ Exhibit [“DX”] 914 at 1916-1917 tab. SLC has used the name “Sun Life” as an abbreviation for its full name in promotional advertisements since at least May 18, 1914. See DX 648. The parties do not dispute that Defendant was the first user of the “Sun Life” service mark for insurance products in the United States.

Plaintiff Sun Life Insurance Company of America was founded in Baltimore in 1890 and was incorporated in 1897 as “Immediate Benefit Life Insurance Company.” SLA began operation as a “debit company,” selling small denominations of industrial life, health and disability insurance policies to low income workers through home service agents. These employees, also called “debit agents,” personally visited policyholders and collected the premium payments on a weekly or monthly basis. The company officially adopted the name “Sun Life Insurance Company of America” in 1916.

Although SLC immediately protested SLA’s name change, the American company’s charter already had been amended. In a letter dated April 26, 1916, SLC conceded: “Under the circumstances, there is nothing to be done in the matter, but to endeavor as far as possible, to avoid any confusion through this similarity of names.” PX 77.

Both companies grew dramatically during the succeeding decades. Sun Life of Canada, many times larger than Sun Life of America, rapidly expanded its business throughout the United States. 3 In contrast, SLA concentrated on developing business in the Middle Atlantic states. Historically, SLC sold its products to a broader base of upper income, investment-oriented customers, while SLA focused on selling smaller denominations of industrial insurance to low income workers. As the two companies moved through the first half of the twentieth century, however, their products, customers, and distribution methods began to converge.

By the 1920’s, SLA had expanded its lines of business to include relatively small amounts of ordinary life insurance and annuities sold by independent general agents. During the 1930’s and 1940’s, the importance of industrial insurance diminished as consumers’ interest in ordinary life insurance grew. In 1952, SLA created a general agency division and by 1963 derived the majority of its premium income from the sale of ordinary life insurance. Ten years later, industrial premiums accounted for only about 20% of SLA’s total premiums, but annuity premiums had grown to about one-third.

During the first half of the century, Sun Life of Canada further enhanced its reputation by expanding profitable operations over a world-wide territory. During the 1950’s and 1960’s, annuity premiums remained a steady component of its corporate income. By 1973, total annuity premiums were $42 million compared to life premiums of $342 million.

Both companies continued their U.S. expansion. By 1973, SLA was licensed in 41 states and SLC in 45 states. For the most part, relations between the companies were cordial. For example, a number of states required consent by the first registered in *1566 surance company in the state as a prerequisite to allowing the second company to conduct business there. In every instance in which the two companies sought to expand into the same states, the first registered company — typically SLC — gave its consent to the second company seeking registration. See, e.g., PX 126 (Delaware, 1953); PX 127 (Florida, 1959). Where SLA was the first insurance company in a state, it indicated its willingness to reciprocate. See, e.g., PX 131 (New Mexico, 1968); PX 135 (Maryland, 1974).

B. Expansion and Conflict

The decade of the 1970’s marked the beginning of a new era in the business and relations of both parties. In 1970, SLC formed a wholly-owned subsidiary, “Sun Life Assurance Company of Canada (U.S.),” for the specific purpose of issuing variable annuity products. In the same year, this newly created business established its own broker-dealer subsidiary [“SUNESCO”] to sell registered investment products. 4 SUNESCO opened 30 to 35 offices throughout the United States, staffed by a total of 300 registered representatives who sold SLC annuities and third party mutual funds to the public. During this period, SLC also increased its media advertising in an attempt to bolster public recognition of the company. SLC began using “Sun Life (U.S.)” as an abbreviation for the full name of its U.S. subsidiary in 1973. See DX 826, 863.

Meanwhile, the owners of Sun Life of America sold the company to home-building conglomerate Kaufman & Broad, Inc. in 1971. Thereafter, SLA also embarked on a plan to develop innovative financial products and new channels of distribution. In 1972, after the New York Stock Exchange modified its rules to allow member firms to sell insurance products, SLA began a campaign to sell single premium deferred annuities to the public through independent broker-dealers.

In 1973, SLA entered into general agency sales agreements with several large brokerage firms. This new distribution strategy met with increasing success. Broker-dealers sold approximately $3.5 million of SLA’s “Sun Annuity” product in 1973. From 1973 to 1982, SLA had average annual annuity sales of $16 million through independent broker-dealers. In 1983 and 1984, annuity sales reached $51 and $67 million respectively. Total sales increased dramatically to $255 million in 1985 and averaged more than $300 million per year through the remainder of the decade. Broker-dealers consistently accounted for a material portion of the company’s total annuity sales.

During the time that SLA’s broker-dealer distribution effort was beginning to take form in 1973, identification problems already had surfaced concerning the similarity of company names. On August 21, 1973, SLC asked SLA to incorporate “of America” in SLA’s advertising:

With increasing frequency we are receiving reports from our field offices that advertising placed by Sun Life of America is contributing to the confusion over the similar names of our companies.... I think we have to expect that there will always be some degree of confusion over identification since the public is certain to abbreviate, even when we don’t. The words “of Canada” are a prominent part of our corporate logo, however, and we would appreciate it if your advertising and public relations departments could be made aware of the importance óf giving the words “of America” equal prominence in your printed materials.

PX 797. SLA indicated its willingness to comply with Defendant’s request: “Please be assured that all future advertisements and public announcements by our Company will be prepared in such a way as to eliminate any possible confusion between our Company and your Company.” 5 PX 798, dated August 23, 1973.

*1567 Plaintiff expanded more aggressively in the following years. In 1978, Kaufman & Broad acquired an insurance holding company that owned Coastal States Life Insurance Company and Universal Guaranty Insurance Company. The name “Sun Life Group, Inc.” was adopted to reflect the association of these companies with Sun Life of America.

Defendants were fully aware of the likelihood of public confusion caused by this similarity of names. In a letter dated February 19, 1979, SLC’s general counsel protested that SLA’s use of the name “Sun Life Group” with no geographic modifier “could cause confusion or misunderstanding by the general public.” PX 78. In a follow-up letter in June, Sun Life of Canada threatened legal action. SLA responded, disputing that the new name infringed on SLC’s existing name and denying the danger of public confusion: “Since the phrase ‘Sun Life’ has been continuously used to describe our life insurance business since 1916, we believe that at this time our right to continue to use this phrase has been perfected by the substantial passage of time.” PX 81, dated July 19, 1979. Defendant strongly disagreed with this contention:

Contrary to your opinion that such use has been perfected by the passage of time, it is our opinion that the use of the name “Sun Life Group” just came into being with your acquisition of Coastal States etc. As such, it is our position that the use of the name “Sun Life Group, Inc.” is confusing to the public because of its similarity to Sun Life Assurance Company of Canada.

PX 82, dated July 27, 1979. SLC again threatened suit to remedy the “strong likelihood of confusion or of misunderstanding by the public as to the affiliation, connection or association of Sun Life Group with Sun Life Assurance Company of Canada.” Id.

C. An Incomplete Accommodation

The two companies subsequently resolved their differences and signed a Settlement Agreement on May 30, 1980 [the “1980 Agreement”]. See PX 83. The 1980 Agreement provided that SLA would not use the name “Sun Life Group” without inclusion of the traditional geographic modifier “of America.” In return, SLC agreed not to oppose SLA’s adoption of “Sun Life Group of America” as its corporate name.

It is important to note that the 1980 Agreement was limited to the issues involving Sun Life of America’s use of “Sun Life Group” and did not cover a wider range of issues pertaining to other similar names and marks used by the parties in promotional activities. Consequently, the 1980 Agreement did not prevent further controversy surrounding the use of “Sun Life.”

Late in 1981, SLC became aware of an annuities advertisement distributed by one of SLA’s general agents, apparently without authorization by Sun Life of America. The brochure prominently featured the term “Sun Life” standing alone. Counsel for SLC wrote SLA on November 4,1981, to complain about SLA’s use of “Sun Life” without a geographic modifier. “The likelihood of confusion is overwhelming,” said SLC, “[w]e strenuously object to this infringing use of our registered mark.” PX 84, dated November 4, 1981. When no answer was received, SLC once again threatened litigation over SLA’s “Sun Life” advertisement. PX 85, dated January 20,1982. After further correspondence, SLA indicated that it would be willing to use “Sun Life” in conjunction with its full corporate name if SLC would do the same. PX 88, dated March 19, 1982. SLA proposed a meeting to resolve the conflict. Legal representatives of the two companies met in Washington D.C. in April, 1982, and reached a general understanding that reference to the full corporate name, including geographic modifiers, should be made within the body of any written piece distributed by either company.

Meanwhile, Defendant SLC acquired Massachusetts Financial Services Company [“MFS”] in 1981. MFS was a registered broker-dealer and a long established whole *1568 saler of investment products. 6 MFS had its own mutual fund sales force, as well as extensive relations with numerous broker-dealer firms throughout the country. MFS immediately began marketing SLC’s annuity products through its broker-dealer channels.

MFS produced advertising brochures featuring the name “Sun Life (U.S.)” as a short form of “Sun Life of Canada (U.S.).” Following the Washington meeting in 1982, but before a draft of the proposed agreement was circulated, SLA objected that MFS’s use of “Sun Life (U.S.)” was likely to be confused with “Sun Life of America.” PX 95, dated June, 1982. Counsel for Sun Life of Canada responded that SLC’s use of “Sun Life (U.S.)” in the MFS brochure was within the general understanding reached in Washington. PX 96, dated July 1, 1982. SLA disagreed, insisting that merely revealing the corporate affiliation as a part of the internal text was not sufficient to avoid confusion when the brochure’s cover prominently featured “Sun Life (U.S.).” PX 97. This dispute over SLC’s potentially confusing use of “Sun Life (U.S.)” remained unresolved.

In December, 1982, SLC produced a draft settlement agreement based on the general understanding reached in the Washington meeting. See PX 100. The draft stated that both parties agreed not to use the phrase “Sun Life” standing alone on any piece of sales advertising without identifying in prominent fashion the party’s full corporate name. SLC forwarded the draft agreement to SLA, but Plaintiff failed to respond to the proposal and the 1982 draft agreement was never signed.

D. Hostilities Resume

In 1984, Plaintiff SLA began another program to promote sales of annuities through consumer advertising and direct mail. This marketing operation was informally titled “Sun Financial Services” but also used several variations, including “Financial Services Division” and “Financial Services Division— Sun” in its activities. PX 23-35; 37-68; 71-72. Prior to April, 1987, Plaintiff used “Sun Financial Services” in a total of about seven advertisements and in all cases the term was used as a part of a return address. No evidence was introduced showing that consumers associate the “Sun Financial Services” name with Sun Life of America or that Plaintiff established market penetration under that name in any geographic area. 7 Between February, 1986, and March, 1987, SLA ceased all advertising use of “Sun Financial Services” pursuant to an agreement with a third party prior user of the name “Sun Financial Corp.” DX 207, 208.

In April, 1986, SLC chose a new corporate title, “Sun Financial Group,” for its U.S. operations. Sun Life of Canada registered the name “Sun Financial Group” with the United States Trademark and Patent Office without opposition in April, 1987. Prior to adopting *1569 “Sun Financial Group,” Defendants conducted a trademark search and sought the advice of outside counsel to assure that the mark was available for use and registration. Plaintiffs use of “Sun Financial Services” did not appear in the results of the search. Also, in 1982 and 1985, Defendants searched all 50 states for the mark “Sun Financial Services.” Both searches revealed that unaffiliated third parties had registered the name in several states, including Georgia. Defendants concluded that “Sun Financial Services” was not available. See DX 662.

Sun Life of America’s growth accelerated in 1986 through the acquisition of Anchor National Life Insurance Company and Anchor Financial Services, a registered broker-dealer. In 1989, SLA acquired another broker-dealer, Royal Alliance. These companies complemented SLA’s product distribution strategy, enabling SLA to increase the sale of its annuities through broker-dealers. SLA also continued to sign new selling agreements with independent brokerage firms.

At the same time, SLC substantially increased its use of the “Sun Life (U.S.)” name in media advertising and promotional materials. See Transcript at 382-88, Derriekson testimony. Shortly thereafter, the dispute concerning SLC’s use of “Sun Life (U.S.)” flared again. On March 18, 1988, Eh Broad, Chairman of Kaufman & Broad, wrote to SLC to complain about its use of “Sun Life (U.S.)” without the geographic modifier “of Canada.” PX 105. Broad cited a specific example of actual confusion concerning an analyst’s report on a “Sun Life U.S.” annuity product. He also questioned SLC’s recent registration and use of “Sun Financial Group.” Broad insisted that “[e]ontinued expansion of financial services by each of the companies under marketing names which do not distinguish between the two companies will lead inevitably to serious public confusion.” Id. SLC replied with a suggestion for holding discussions to resolve the conflict. Company representatives met in September, 1988, but were unable to agree on a settlement. Plaintiffs subsequently filed this action on June 19, 1989.

During this period, Sun Life of America also sought a new name for its expanded financial services businesses. After extensive discussion, SLA settled on “SunAmerica Corporation,” a name owned by Chemical Bank. In September, 1988, SLA purchased the rights to the “SunAmerica” name and in 1989 introduced “SunAmerica” as its umbrella mark. On August 30, 1993, SunAmerica Corporation merged into SunAmerica, Inc., a publicly-traded company. Plaintiff Sun Life Insurance Company of America is now a wholly-owned subsidiary of SunAmerica, Inc. Until very recently, SLA’s commercial advertising emphasized its new identity as a financial services company by consistently using the corporate signature “Sun Life, a SunAm-erica Company.” 8 See, e.g., DX 301.

Sun Life of America changed more than its name. In 1989, the company sold its life insurance business, retaining small amounts on its books but completely discontinuing industrial and ordinary life sales. SLA now issues only single premium deferred annuities. 9 However, testimony at trial indicated that Plaintiffs may soon offer a variable annuity product under the “Sun Life of America” name. See Transcript at 485, Greer testimony; Saltzman Deposition at 73-75. According to a senior sales manager at SLC’s Massachusetts Financial Services, a new SLA variable annuity product would significantly increase the existing level of confusion: “If we have a product that is a direct competitor of ours with the name ‘Sun Life’ on it, there is going to be mass confusion in the marketplace.” Transcript at 968, Grip testimony.

Moreover, SLA’s broker-dealer subsidiaries sell the annuity products of both SLA and SLC. Since 1986, these SLA subsidiaries have sold at least $175 million of SLC’s annu *1570 ity products under the marks “Sun Life,” “Sun Life (U.S.)” and “Sun Life Group.” 10 The three brokerage subsidiaries continue to sell between $20 and $25 million per year of SLC’s annuities. Plaintiffs have earned millions of dollars in commissions by selling Defendants’ competing annuity products. In addition, SLA’s subsidiaries distribute sales literature for both SLA and SLC, including those brochures and prospectuses containing the many variations of “Sun Life” names used by both parties. In particular, the allegedly offending name “Sun Life (U.S.)” was prominently featured in promotional material provided by SLC and distributed to annuity customers by SLA’s subsidiary sales organizations. 11

In 1990-91, the insurance industry was rocked by the so-called “junk bond scandal,” a period when investors became concerned about the financial viability of certain insurance companies whose policyholders’ money was invested in high-yield, high-risk securities. Under a new, broader definition of “junk bonds” adopted by state regulatory agencies, many life insurers began reporting increased holdings of non-investment grade securities. On April 30, 1991, the New York Times ran a front page story featuring warnings by some consumer groups that insurance companies investing in low grade bonds faced heavy losses. DX 636. In reporting the balances held by many large insurers, the newspaper shortened Sun Life of America’s name to “Sun Life,” causing concerned calls from the media and from customers directed to Sun Life of Canada.

Financial stability is critical to an annuity issuer. Such confusion as resulted from the junk bond episode can undermine public confidence in the financial strength of a company and impair its ability to market credit-sensitive products such as annuities. SLC has a superior credit rating in the insurance industry, substantially higher than SLA’s. Throughout its history, SLC has been given Best’s Insurance Reports’ highest rating, currently an “A+ + ”. SLA has an “A” rating, two categories lower, but still termed “excellent” by Best’s. SLC’s American subsidiary, Sun Life of Canada (U.S.), has the same A+ + rating as Sun Life of Canada. See DX 914, 1993 tab; Transcript at 645-46, Lautzenheiser testimony.

III. THE JOINT SURVEY

At the Court’s direction, the parties conducted a survey to measure the level of confusion among registered brokers caused by the similarity in company names. The study was jointly designed and executed by Plaintiffs’ expert, Norman Passman, and Defendants’ expert, Jerry Wind. See PX 1002, DX 1000. Both experts testified at trial. See Transcript at 515-85, Passman testimony; at 587-627, Wind Testimony. Not surprisingly, the experts do not agree on the proper interpretation of the survey results, as further described below.

In this “mystery shopper” survey, trained interviewers telephoned pre-selected broker-dealers, pretending to be potential annuities buyers. The responding brokers were individual registered representatives segregated into three groups: (1) brokers licensed to sell SLA annuities; (2) brokers licensed to sell SLC annuities; and (3) brokers licensed to sell both SLA and SLC annuities. The survey purports to assess the degree to which brokers trained to sell SLA and SLC annuities are confused by the similarity in names into believing that there is some affiliation between the two companies.

Although the survey focused on registered representatives, the results indicate the degree of confusion existing among consumers. Registered representatives are the conduit through which most annuities reach consum *1571 ers. By regulation, all of SLC’s annuities must be sold to the public by registered brokers, and most of SLA’s annuities also are sold through brokerage firms. Because registered representatives are professional brokers trained in the sale of sophisticated financial products, they are normally more difficult to confuse by similar marks. Thus, evidence of confusion on the part of knowledgeable dealers tends to prove confusion on the part of consumers. See 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 23.29[1]; 3 McCarthy § 32.47[3] at 32-200 (3d ed. 1992).

Responding brokers were categorized as “definitely confused” if they answered a series of interview questions in any way that indicated they thought SLA and SLC were connected. In addition, SLA’s expert used the term “core level confusion” to distinguish those situations where a registered representative was asked about his own client and wrongly believed that there was a connection with the adverse party. For example, core confusion exists when an SLA broker is asked about “Sun Life of America” and responds in a way that shows the broker believes that Sun Life of America is connected with Sun Life of Canada. Aso, core confusion describes an SLC broker who is asked about buying one of the Canadian products and associates it with the American plaintiff.

Both experts agreed that the following results constituted “definite confusion” among brokers:

A.LIST A: Brokers Representing Sun Life of America.

There is a core level of confusion among brokers who represent Sun Life of America averaging 25%. For example, when asked about the name “Sun Life Insurance Company of America,” 19% of the SLA brokers thought the American company was connected with the Canadian insurance company. When asked about “Sun Life of America,” 31% of the brokers selling SLA annuities were confused about a possible connection with the larger Canadian defendant.

Significantly greater confusion resulted when interviewers questioning SLA brokers asked about the Canadian companies. Twenty-two percent of the brokers thought there was some affiliation between “Sun Life Assurance Company of Canada” and the American plaintiffs. The name “Sun Life of Canada” confused 35% of the SLA brokers. The most confusing name was “Sun Life (U.S.),” where 59% of the SLA brokers indicated they believed “Sun Life (U.S.)” was connected to Sun Life of America.

B. LIST B: Brokers Representing Sun Life of Canada

The so-called “core level” of confusion among Sun Life of Canada brokers is somewhat lower, averaging about 10%.

When interviewers asked SLC brokers about the Canadian company names, 6% of the sample group thought “Sun Life Assurance Company of Canada” was affiliated with SLA. Thirteen percent thought there was an American affiliation when asked about the name “Sun Life of Canada.” A total of 9% of the SLC brokers were confused by the name “Sun Life (U.S.).”

When asked about the American company names, however, the percentage of SLC brokers classified as “definitely confused” is dramatically higher. Sixty-nine percent of the brokers thought “Sun Life Insurance Company of America” was connected with Sun Life of Canada. Fifty-seven percent of the SLC brokers confused the name “Sun Life of America” with Defendant.

C. LIST C: Brokers Representing Both Companies

This measure of “definite confusion” applies to brokers who represent both Sun Life of America and Sun Life of Canada. This is the group that has been trained in selling the products of each company and might therefore have the best basis for distinguishing the two names. Aso, because these brokers are authorized to sell annuities for both companies, there is no dispute about interpreting data from some respondents labeled “possibly” and “probably” confused, a matter discussed below.

The following percentage of LIST C brokers wrongly perceived a connection between *1572 the American and Canadian companies when questioned about the names:

“Sun Life Insurance Company of America”. Sfc O) CO

“Sun Life of America”. O CO

“Sun Life Assurance Company of Canada”. ^ Cv!

“Sun Life of Canada” . SR CO

“Sun Life (U.S.)”. B* LO

SUMMARY: “DEFINITELY CONFUSED”

Stimuli LIST A: SL Amer. Brokers LIST B: SL Can. Brokers LIST C: Brokers for Both Parties

Sun Life Ins. Co. of America CO a* CD h CO

Sun Life of America CO ^ cn -q co M

Sun Life Assur. Co. of Canada CO O to W

Sun Life of Canada i — 1 CO co OI

Sun Life (U.S.) CO <D cn CO

D. “Probably” and “Possibly” Confused

The experts agree that the responses above show the percentage of brokers who are “definitely confused.” They do not agree, however, on defining an additional group of “probably” and “possibly” confused brokers.

As the survey responses were analyzed for signs of “definite” confusion, a second category of respondents emerged — those who were labeled “possibly confused” by Plaintiffs and “probably confused” by Defendants. 12 SLA’s expert later reclassified as “not confused” many respondents he had initially labeled as “possibly confused.” See Transcript at 534-35, 537-39, 566-69, Passman testimony; at 590-92, 595-602, Wind testimony. The re-suit is that SLA’s version of the survey data shows significantly fewer “confused” brokers in total. For example, of the LIST A brokers, those who represent Sun Life of America, Plaintiffs find only an additional 2% that were “possibly confused” by the name “Sun Life of Canada.” On the other hand, Defendants contend that an additional 51% of the LIST A brokers were “probably confused” by the name “Sun Life of Canada.”

The Court will not attempt to resolve the experts’ disagreement on how many respondents were “possibly” or “probably” confused. The experts agree that many brokers were “definitely confused,” indicating an absolute level of confusion that is very high. In addition, the Court is convinced that the *1573 number of brokers in the definitely confused category should be further increased by an undetermined number to reflect the likelihood that among the disputed responses there is reliable evidence of additional confusion.

E. The “Sun Life” Abbreviation

According to the experts, the joint survey does not determine the amount of confusion generated solely by the use of “Sun Life” in both companies’ names. See Transcript at 545, Passman; at 606-07, Wind testimony.

The survey results show that brokers responding to the short-form name “Sun Life” are indeed confused. Eighteen percent of SLA’s brokers believe the name “Sun Life” is Canadian, 37% think it is American, and 46% gave “ambiguous” answers. Not surprisingly, SLC brokers generally believe the “Sun Life” name is Canadian, with 57% indicating a Canadian affiliation and only 5% saying it is American. In addition, thirty-three percent of the SLC brokers gave ambiguous responses. Of the brokers representing both companies, 32% believe “Sun Life” is Canadian, 30% believe it’s American, and 38% of the answers mentioned both options or gave no indication of the origin. Thus, according to the registered representatives who sell the products, the name “Sun Life” might be American or Canadian, neither or both.

F. The Reasons For Confusion

The absolute level of confusion among brokers is astounding. Credible testimony at trial established that licensed brokers, as a group, are reasonably well-trained in the characteristics of annuity products. See Transcript at 592-94, Wind testimony. Since the credit risk associated with the issuer of an annuity is one of the fundamental concerns a broker or investor should address, how can a presumably knowledgeable sales agent confuse the origin of an annuity product?

These survey results are at least partially attributable to the rapid growth and escalating complexity of financial markets, coupled with the relatively recent changes in the traditional channels of distribution used by the insurance industry. In an effort to achieve the profitability provided through massive product placement, insurance companies have expanded the scope of their promotional activities from the now quaint concept of an agent selling policies in the home to a complex and sophisticated brokerage network.

Viewed in the context of the marketplace, the resulting name confusion makes sense. Plaintiffs and Defendants compete for high volume annuity sales in the same arena, selling to the same customers through the same channels of distribution. While SLA sells only fixed annuities at present, SLC sells both fixed and variable annuities, as well as a full range of traditional, mortality based life insurance products. Both parties’ products are sold by many of the same brokerage firms, even by Plaintiffs’ own subsidiaries. These independent sales agents distribute promotional materials using a variety of “Sun Life” names for both Sun Life of America and Sun Life of Canada. Both companies target upper and middle income customers of similar profiles. Both companies periodically make extensive media use of their “Sun Life” names. It is hardly surprising, then, that both companies’ brokerage representatives are confused about a possible connection between the American and Canadian companies. On the other hand, such confusion would have been unlikely among the customers who bought traditional insurance products through the companies’ former channels of distribution.

IV. LIKELIHOOD OF CONFUSION

SLA claims that SLC’s use of “Sun Life (U.S.)” and “Sun Life” without a geographic modifier creates a likelihood of confusion with “Sun Life of America.” SLC contends that SLA’s “Sun Life of America” name generates a likelihood of confusion with “Sun Life of Canada.” In addition, Plaintiffs argue that Defendants’ use of “Sun Financial Group” is confusingly similar to SunAmeri-ca’s “Sun Financial Services.” 13

*1574 Liability under § 43(a) of the Lanham Act requires proof of the likelihood of confusion. 15 U.S.C. § 1125(a). Likelihood of confusion is a question of fact. Jellibeans, Inc. v. Skating Clubs of Georgia, Inc., 716 F.2d 833, 839, 840 n. 16 (11th Cir.1983). This circuit has identified seven factors to consider in deciding whether a party’s use of a contested mark is likely to cause confusion. See Dieter v. B & H Indus., 880 F.2d 322, 326 (11th Cir.1989). In making its factual determination, the district court must evaluate the weight accorded to each subsidiary fact, rather than simply computing whether the majority of factors show a likelihood of confusion. Jellibeans, 716 F.2d at 840 n. 17. The seven factors are: (1) type of mark; (2) similarity of mark; (3) similarity of products; (4) similarity of distribution channels and customers; (5) similarity of advertising; (6) defendant’s intent; and (7) proof of actual confusion. Conagra, Inc. v. Singleton, 743 F.2d 1508, 1514 (11th Cir.1984).

A. Type of Mark

The first factor measures the distinctiveness of the mark. Marks are often classified into four categories of distinctiveness, in decreasing degrees of strength. “Arbitrary” and “suggestive” marks are regarded as being inherently distinctive, while weaker “descriptive” and “generic” marks are non-distinctive. Inherently distinctive marks do not require proof of secondary meaning, while merely “descriptive” marks must have acquired distinctiveness through secondary meaning in order to be protected by the trademark laws. Two Pesos, Inc. v. Taco Cabana, Inc., — U.S.-,-, 112 S.Ct. 2753, 2758, 120 L.Ed.2d 615 (1992). “Generic” words can never be trademarks. Unfortunately, “[t]he demarcation between each category is more blurred than it is definite.” Investacorp, Inc. v. Arabian Inv. Banking Corp., 931 F.2d 1519, 1522 (11th Cir.1991); see generally 1 McCarthy § 11.01.

Descriptive marks simply identify a characteristic or quality of a product. Investacorp, 931 F.2d at 1522. When used to describe a product, they do not inherently identify a particular source, and hence cannot be protected unless they acquire a secondary meaning. American Television and Communications Corp. v. American Communications and Television, Inc., 810 F.2d 1546, 1548-49 (11th Cir.1987). The difference between descriptive and generic terms is merely a difference of degree. Id. Also, marks designating the geographic location of a business are considered descriptive and are not inherently distinctive. Investacorp, 931 F.2d at 1522-23 (contrasting descriptive and suggestive marks). See generally 1 McCarthy §§ 11.05-.09.

The service marks at issue here are composed of the words “Sun Life” along with various geographic modifiers. The “Life” component obviously describes life insurance products sold by a life insurance company. Although SLA at one point attempts to characterize “Sun” as an arbitrary term weakened by third-party usage, Plaintiffs’ Supplement [# 184] at ¶ 5(a), the Court finds that the composite marks, viewed as a whole, are descriptive and cannot be protected unless secondary meaning is proven.

A merely descriptive mark may acquire distinctiveness, otherwise known as “secondary meaning.” 15 U.S.C. § 1052(e), (f). Secondary meaning arises when consumers connect the mark and the provider of a product. Investacorp, 931 F.2d at 1525.

“In order to establish secondary meaning the plainti