Opinion
Case No. 98 C 1553
August 24, 2000
MEMORANDUM OPINION
This matter comes before the Court on cross-motions for summary judgment. For the reasons set forth below, the Court denies both motions.
BACKGROUND
Plaintiffs, Advertising to Women, Inc. ("ATW") and Loliere, Inc. ("Loliere") (collectively, the "Plaintiffs"), filed this action against Defendants, Gianni Versace S.p.A., Versace Profumi, USA (collectively, "Versace"), Saks Fifth Avenue ("Saks"), and Giver Profumi, S.p.A, alleging trademark infringement, unfair competition and false designation of origin under the Trademark Act of 1946, 15 U.S.C. § 105 1, et seq., as amended (the "Lanham Act"), and common law. Plaintiffs claim that Versace's use of the "Blonde" mark for its fragrance line infringes on ATW's federally registered trademark, "eau de Blonde," for its own line of fragrances.
Lois Geraci-Ernst ("Lois Ernst") is the principal shareholder and founder of ATW and Loliere. ATW is an advertising and marketing agency organized and existing under the laws of the state of New York that is devoted to understanding the needs and motivations of women. Through ATW, Lois Ernst enjoyed a long history of success in advertising and marketing fragrances, health products, and shoes. In early 1990, ATW began researching and developing its own line of fragrances, one of which was "eau de Blonde."
In or about June 1993, ATW performed a trademark search on the "eau de Blonde" mark. While the search indicated that there existed registrations or applications for marks containing "eau de" or "blonde," the mark "eau de blonde" was available.
On May 23, 1994, ATW filed an intent-to-use application for the "eau de blonde" mark for perfume, cologne, toilet water, bath oil, bath and shower gel, dusting powder, toilet soap, after-bath splash, bath lotions and creams. In June 1995, the Patent and Trademark Office issued the Notice of Allowance for the "eau de blonde" mark. ATW thereafter began developing its fragrance and the packaging for the final product. ATW maintains that it intended to market and sell its fragrance line in high-end department stores such as Saks, Nordstrom, and Neiman Marcus. On May 15, 1997, ATW gave an exclusive license for its registration of the "eau de Blonde" mark to Loliere.
In August 1995, Versace publicly announced the launch of its fragrance, "Versace's Blonde." That month, ATW spotted an advertisement for Versace's Blonde in the September 1995 issue of Vanity Fair. On August 23, 1995, ATW sent a cease and desist letter to Versace in New York, asserting that Versace's sale of its "Blonde" fragrance would violate ATW's prior rights in the "eau de Blonde" mark. ATW sent a similar letter to Saks.
Although Versace intended to launch its fragrance in September 1995, because it wanted to further refine its fragrance, it delayed the launch. In December 1995, Versace began offering Versace's Blonde for sale in Saks' flagship store in New York City. That same month, Versace filed the "Versace's Blonde" mark with the Italian trademark office. Versace launched its Versace's Blonde in Saks stores across the United States in March 1996. That same month, Versace filed an application for registration of "Versace's Blonde" with the U.S. Patent and Trademark Office.
Plaintiffs claim that because of Versace's launch of the Versace's Blonde fragrance, certain department stores, including Saks, Nordstrom, and Neiman Marcus refused to carry and sell ATW's eau de Blonde. Thus, ATW claims that it was forced to sell its eau de Blonde to higher-end health and beauty aid stores and pharmacies. Plaintiffs were generally unsuccessful in selling the eau de Blonde fragrance, but they were able to place the product in the Clarendon Pharmacy in Clarendon Hills, Illinois. On February 18, 1997, ATW received trademark registration for its "eau de Blonde" mark based on its sale of the eau de Blonde fragrance to the Clarendon Pharmacy.
Plaintiffs subsequently brought this action against Defendants alleging trademark infringement, unfair competition, and false designation of origin under the Lanham Act and under common law. Presently, the parties cross-move for summary judgment. Plaintiffs argue that they are entitled to summary judgment because the "Blonde" mark is a valid registered mark, upon which the undisputed facts allegedly demonstrate Defendants infringed, and that Defendants' allegedly infringing use is likely to cause confusion. Defendants move for summary judgment arguing that Plaintiffs' "eau de Blonde" mark is invalid because it was fraudulently obtained and without a bona fide intent to use, that Plaintiffs failed to make any lawful use in commerce, and that Plaintiffs have not incurred any damages.
LEGAL STANDARD
Summary judgment is appropriate when the record, viewed in a light most favorable to the nonmoving party, reveals that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the initial burden of showing that no genuine issue of material fact exists.See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2458, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmoving party to show through specific evidence that a triable issue of fact remains on issues on which the nonxnovant bears the burden of proof at trial. See id. The nonmovant may not rest upon mere allegations in the pleadings or upon conclusory statements in affidavits. The nonmovant must go beyond the pleadings and support its contentions with proper documentary evidence.See id.
The plain language of Rule 56(c) mandates the entry of summary judgment against a party who fails to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. "In such a situation there can be `no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." See id. at 323.
For cross-motions for summary judgment, each movant must individually fulfill the stringent requirements necessary to obtain summary judgment under Rule 56, such standards still being applicable. See United Transportation Union v. Illinois Central R.R., 998 F. Supp. 874, 880 (N.D. Ill. 1998). By filing cross-motions for summary judgment, the parties do not waive trial by the merits, but each party merely believes that the court should grant it judgment without trial, unless the judge disagrees. See Miller v. LeSea Broadcasting, Inc., 87 F.3d 224, 230 (7th Cir. 1996). Indeed, upon receipt of cross-motions for summary judgment, the court is not required to grant summary judgment as a matter of law for either side. See Brownlee v. Chicago, 983 F. Supp. 776, 779 (N.D. Ill. 1997); Boozell v. United States, 979 F. Supp. 670, 674 (N.D. Ill. 1997). Rather, the court will evaluate each motion on its merits, resolving factual uncertainties and drawing all reasonable inferences against the movant. See Brownlee, 983 F. Supp. at 779; Boozell, 979 F. Supp. at 670; United Transportation Union, 998 F. Supp. at 880. It is with these principles in mind that we evaluate the motion before us.
DISCUSSION
In a claim for trademark infringement, a plaintiff must demonstrate: "(1) the validity of its trademark; and (2) the infringement of that mark." Platinum Home Mortgage Corp. v. Platinum Financial Group. Inc., 149 F.3d 722, 726 (7th Cir. 1998). The validity of a mark addresses whether trademark law affords a "word, term, name, symbol or device" protection and focuses on whether the mark specifically identifies and distinguishes one company's goods or services from those of its competitors. 15 U.S.C. § 1125(a)(1). The infringement of a mark pertains to "whether the actions of a subsequent user of a substantially similar or identical mark cause[d] [a] likelihood of confusion among consumers as to the source of those specific goods or services." Id.
I. Validity of the Mark
Before 1988, an applicant had to have used a mark in commerce before making an application to register it as a trademark. See Vision Entertainment Inc. v. Empire of Carolina, Inc., 101 F.3d 259, 260 (2d Cir. 1996). In 1988, Congress passed the intent-to-use provisions of the Lanham Act, which allow an applicant to seek registration of a mark not already in commercial use by alleging a bona fide intent to use it. See id., citing 15 U.S.C. § 1051(b). If the mark appears registrable, the Patent and Trademark Office (the "PTO") publishes it for opposition. 15 U.S.C. § 1062 (a). If there is no successful opposition, the PTO issues a notice of allowance. 15 U.S.C. § 1063(b)(2). Registration is granted only if the applicant files a statement of commercial use within six months of the date on which the notice of allowance was issued. See 15 U.S.C. § 1051(d). However, the applicant is entitled to an extension of six months to file the statement of use and may receive extensions for an additional twenty-four months. 15 U.S.C. § 1051(d)(2). The PTO then examines the statement of use, and only if it is still satisfied that the mark, as used, is registrable, issues a certificate of registration. See 15 U.S.C. § 1051(d)(1); Eastman Kodak Co. v. Bell Howell Document Management Products Co., 994 F.2d 1569, 1570 (Fed. Cir. 1993). "Federal registration of a trademark is prima facie evidence of the mark's validity, the registrant's ownership of the mark, and its exclusive right to use the mark in commerce." Lucent Information Management, Inc. v. Lucent Technologies, Inc., 186 F.3d 311, 315 (3d Cir. 1999), citing 15 U.S.C. § 1115(a). The LanhamAct provides that "the filing of an application to register [a mark] shall . . . confer a right of priority, nationwide in effect, . . . against any other person except for a person who, prior to such filing, has used the mark." 15 U.S.C. § 1057(c).
Defendants attack the validity of Plaintiffs' registered "eau de Blonde" mark. In challenging the presumption of ownership of a registrant, the challenger must overcome the presumption by a preponderance of the evidence. See Sengoku Works Ltd. v. RMC Int'l, Ltd., 96 F.3d 1217, 1219 (9th Cir. 1996) (citations omitted); see also Erva Pharmaceuticals, Inc. v. American Cyanamid Co., 755 F. Supp. 36, 40 (D. P.R. 1991) (party challenging registration has burden of proving facts which compel denial or cancellation of the federal registration), citing Kellogg Co. v. New Generation Foods, Inc., 6 U.S.P.Q.2d 2045 (1988). Defendants do not argue that they used the "Blonde" mark prior to ATW's filing of its application for registration, but rather, Defendants argue that ATW's "eau de Blonde" mark is invalid because it was filed without a "bona fide" intent to use the mark in commerce and it obtained registration based on a false attestation that the "eau de Blonde mark" was in fact lawfully used in commerce.
The Court bases whether an applicant has a bona fide intent to use a mark in commerce on a fair, objective determination of all the circumstances. See Lane Ltd. v. Jackson Int'l Trading Co., 33 U.S.P.Q.2d 1351, 1355 (T.T.A.B. 1994). An applicant's statement of subjective intent alone is insufficient to establish the applicant's bona fide intent to use the mark in commerce. See id. Although the statute does not provide what an applicant must produce to corroborate or defend its claimed bona fide intention to use the mark in commerce, the legislative history of the 1988 revisions provides several examples of objective circumstances which, if proven, may cast doubt on the bona fide nature of the intent or even disprove it entirely." Id., quoting S. Rep. No. 100-515, 100th Cong. 2d Sess. at 23 (1988).
The Trademark Trial and Appeal Board (the "TTAB") gave the following examples that may cast doubt on a applicant's bona fide intent:
. . . the applicant may have filed numerous intent-to-use applications to register the same mark for many more new products than are contemplated, numerous intent-to-use applications for a variety of desirable trademarks intended to be used on [a] single new product, numerous intent-to-use applications to register marks consisting of or incorporating descriptive terms relating to a contemplated new product, numerous intent-to-use applications to replace applications which have lapsed because no timely declaration of use has been filed, an excessive number of intent-to-use applications to register marks which ultimately were not actually used, an excessive number of intent-to use applications in relation to the number of products the applicant is likely to introduce under the applied-for marks during the pendency of the applications, or applications unreasonably lacking in specificity in describing the proposed goods. Lane Ltd., 33 U.S.P.Q.2d at 1355-56.
In this case, there does exist a material fact issue as to whether ATW's intent to use its mark in commerce as of the application filing date was bona fide. Similarly, there exists a material dispute of fact as to whether ATW's use in commerce was bona fide as opposed to action made merely to reserve a mark.
The 1988 revision to the Lanham Act defines "use in commerce" as "the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a mark." Allard Enterprises, Inc. v. Advanced Programming Resources, Inc., 146 F.3d 350, 357 (6th Cir. 1998), citing 15 U.S.C. § 1127. It further provides:
. . . a mark shall be deemed to be in use in commerce —
(1) on goods when —
(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto . . . and
(B) the goods are sold or transported in commerce. . . . 15 U.S.C. § 1127
The TTAB explains "that the purpose of the amendment was to eliminate `token use' as a basis for registration, and that the new, stricter standard contemplates instead commercial use of the type common to the particular industry in question. Paramount Pictures Corp. v. White, 31 U.S.P.Q.2d 1768, 1774 (T.T.A.B. 1994), aff'd 108 F.3d 1392 (Fed. Cir. 1997) (Table). However, use sufficient to support registration does not require the same use sufficient to generate nationwide rights in the absence of registration. See Zazu, 979 E.2d at 505; compare Allard Enterprises, 146 F.3d at 358 (citations omitted) ("In the absence of federal registration, prior ownership of a mark is only established as of the first actual use of a mark in a genuine commercial transaction"),with Paramount Pictures, 31 U.S.P.Q. 2d at 1774. To support registration, an applicant need only use the mark in the ordinary course of trade. See Paramount Pictures, 31 U.S.P.Q.2d at 1774. Because the actual use of the mark was extremely limited, its bona fide nature is best resolved at trial and upon a full exposition of the evidence.
Defendants further argue that Plaintiffs' registration is invalid because their use in commerce violated the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 321, et seq. (the "FFDCA"), and thus was not lawful. Specifically, Defendants maintain that Plaintiffs' noncompliance with the labeling requirements were a per se violation of the FFDCA. The TTAB has provided that use in commerce should be held to be unlawful "only when the issue of compliance has previously been determined (with a finding of noncompliance) by an entity, such as a court or government agency, having competent jurisdiction under the statute in question, or when there has been a per se violation of a statute regulating the sale of a party's goods. . . ." Satinine Societa in Nome Collettivo di S.A. v. P.A.B. Produits et Appareils de Beaute, 209 U.S.P.Q. 958, 964 (T.T.A.B. 1981); see also Erva Pharmaceuticals, Inc., 755 F. Supp. at 40. Defendants contend that Plaintiffs "misbranded" the "eau de Blonde" fragrance because neither the packaging nor the bottle provided (a) the street address of Loliere; (b) the net quantity of contents on the bottle; (c) a sufficient sized font for the information on the box; and (d) an accurate list of the ingredients. These violations, Defendants claim, are "per se."
Although these violations may qualify as per se violations of the FFDCA, see Erva Pharmaceuticals, 755 F. Supp. at 41, they are de minimis and do not require invalidation of the trademark. See General Mills Inc. v. Health Valley Foods, 24 U.S.P.Q. 2d 1270, 1274-75 (T.T.A.B. 1992). The TTAB advocates "a case by case determination of the importance or materiality of the labeling requirement which a party may have violated" rather than a "blanket policy of finding every possible technical violation to result in cancellation of a registration, no matter how minor or harmless the violation may be." Id. at 1275. Further, the TTAB has said that a blanket policy of cancellation is a "rigid approach" that" serves the interests of neither justice nor common sense and such an approach is not mandated by the case law on this matter." See id. This Court agrees.
The instant case is unlike Erva Pharmaceuticals, where a district court in Puerto Rico found a party's labeling violation not de minimis. See Erva Pharmaceuticals, 755 F. Supp. at 41. In that case, a drug manufacturer failed to print the established drug name in the proper size font and did not comply with the placement requirements for drug labeling. The district court found that this was not de minimis because "Congress specifically amended the statute so that the appearance of the label, which may contain the necessary information, be visually designed in a certain way in order to protect consumers (doctors and patients) who may pay more because they do not realize the product they are buying is a well-known drug which they could purchase for a cheaper price." Id. at 41. In the instant case, although Plaintiffs may not have complied with the requirements for labeling fragrances, their transgressions are not of such a material nature and do not raise serious consumer protection concerns such that their mark should be invalidated. As such, they are de minimis and should not result in the "Draconian result of cancellation of its registration." General Mills, 24 U.S.P.Q.2d at 1273.
II. Likelihood of Confusion
ATW alleges that it is entitled to Summary Judgment on the liability of Versace for trademark infringement because of likelihood of confusion between its "eau de Blonde" and "Versace's Blonde". This Court disagrees, finding that issues of material fact also exist as to the likelihood of confusion. This applies equally to Defendants insofar as they move for summary judgment on the basis that there is no likelihood of confusion. Therefore, we deny both ATW's and Versace's Motions for Summary Judgment.
Likelihood of confusion is the test for a finding of liability for trademark infringement under the Lanham Act. See 15 U.S.C. § 1114(1);James Burrough Ltd. v. Sign of Beffeater, Inc. 540 F.2d 266, 274 (7th Cir. 1976). This Circuit has identified seven factors to be used in analyzing likelihood of confusion:
The degree of similarity between the marks in appearance and suggestion; the similarity of the products for which the name is used; the areas and manner of concurrent use; the degree of care likely to be exercised by consumers; the strength of the complainant's mark; actual confusion; and intent on the part of the alleged infringer to palm off his products as those of another.McGraw-Edison v. Walt Disney Prods., 787 F.2d 1163, 1167-1168 (7th Cir. 1986). The ultimate conclusion of the likelihood of confusion is a finding of fact; as a result, "a motion for summary judgment in trademark infringement cases must be approached with great caution." AHP Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611, 616 (7th Cir. 1990). Courts examine the facts presented in light of the seven factors to determine whether genuine issues of triable fact exist as to the likelihood of confusion. None of the seven confusion factors alone is dispositive; the weight and totality of the most important factors in each case will ultimately be determinative of the likelihood of confusion. See Id.
In the case at bar, between the allegations, authority, and facts proffered by both parties, ATW cannot point to any prong in the seven-pronged analysis for likelihood of confusion that is certain to win out in its favor. Even the identity of the products, the factor of the seven which seems to weigh most heavily in favor of ATW, is not free of factual dispute. Given the fact-intensive nature of an inquiry into the likelihood of confusion, this Court finds that this issue is not ripe for summary judgment. See, e.g., Johs. De Kuyper Zoon B.V. v. Phillips Products Co., Inc., No. 92 C. 4996, 1993 WL 134903, at *8-9 (N.D.Ill. Apr. 22, 1993) (finding summary judgment inappropriate where, among other reasons, genuine issues of fact remained disputed in the likelihood of confusion analysis). We find that genuine issues of material fact exist, and as such deny the motions for summary judgment.
CONCLUSION
For the reasons set forth above, this Court denies the Plaintiffs' and Defendants' respective Motions for Summary Judgment.