Opinion
01 Civ. 1881 (HB)
May 8, 2001
OPINION ORDER
Plaintiff Origins Natural Resources, Inc. ("Origins") brings this action by Order to Show Cause for a preliminary injunction barring defendants Ben Kotler and LDI, LLC ("Kotler") from using the trademark NATURAL ORIGINS. Plaintiff sues for trademark infringement, false designation of origin, and trademark dilution under the Lanham Act, 15 U.S.C. § 1114 (1), 1125(a), and 1125(c), and for related claims of trademark infringement, unfair competition and dilution arising under the laws of the state of New Mexico. The Court held a hearing on the preliminary injunction on March 14, 2001. For the following reasons, I find that plaintiffs application must be denied.
BACKGROUND
Founded in 1990, Origins is a successful purveyor of upscale cosmetics and skin care products sold under the trademark ORIGINS. Origins sells its wares in both national department stores and in freestanding Origins retail stores, and, since inception, retail sales of ORIGINS products have exceeded six hundred million dollars. Origins acquired its mark in 1993 from Judith Margolis, owner of a clothing store in Sante Fe. Until that time, Margolis had used the mark in her business — she named her store "Origins" and labeled her original line of clothing "Origins II," "Origins Sante Fe" or "Origins by Judy Margolis." When Origins acquired the mark, it entered into a licensing agreement that permitted Margolis to continue her use of the mark but only on a limited basis. Specifically, the agreement allowed Margolis to continue to use the name Origins for her store but not for her clothes. Margolis selected a new name for her line, "FIRE designed by Origins Sante Fe," and sold the line in her store and to a small number, about 4 or 5, other stores nationally. Although plaintiff made much of the extent of the sales of Margolis' clothing, plaintiff submitted only one advertisement to demonstrate Margolis' promotion of her new line, which included the text "FIRE Transformational Clothing Designed by Origins Boutique," but no other evidence of advertising or extensive sales. Allegedly, Margolis's market is now Sante Fe and a limited mail order clientele. Margolis states that she plans national sales of her "Fire" line in the future.
Plaintiff submits evidence that Margolis' former lines, Origins II, Origins Sante Fe and Origins by Judy Margolis were sold nationally with some success. No more.
As for Origins' products, the vast majority are skin care products or cosmetics, but Origins claims that it has sold other items including T-shirts, bathrobes, slippers and caps. Currently, the only items of clothing sold by Origins are caps, and it is clear that sales of the caps constitute only a minuscule portion of Origins' profits.
On September 24, 1999, defendant Ben Kotler filed an application with the U.S. Patent and Trademark Office for a trademark on NATURAL ORIGINS, and, in January 2000, defendant began selling a line of upscale women's clothing under that mark. Since then, he has promoted his line and has acquired a number of national department stores as clients including Lord Taylor, Macy's and Dillard's. Defendant sold approximately $2.6 million worth of NATURAL ORIGINS clothes in 2000 and has already exceeded that amount in 2001. Defendant promotes his clothes as made with "the finest natural fibers."
Kotler began his use of the mark only after his trademark counsel analyzed the mark for potential conflicts and concluded that although it was weak, it was registrable.
Plaintiff learned of defendant's application in April, 2000 and, on April 13, 2000, plaintiff filed a request for an extension of time to oppose it. On June 1, 2000, plaintiffs counsel sent a letter to defendant formally objecting to defendant's use of the mark. On June 26, 2000 Origins filed a Notice of Opposition with the Trademark Trial and Appeal Board opposing defendant's application
On October 10, 2000, plaintiff filed an action in the United States District Court for the District of New Mexico and moved for a preliminary injunction. Defendant moved to dismiss for lack of personal jurisdiction. The New Mexico District Court stayed plaintiffs motion for a preliminary injunction, set a briefing schedule on defendant's motion to dismiss, and ordered the parties to conduct discovery. On March 2, 2001, the New Mexico court granted defendant's motion to dismiss, and immediately thereafter plaintiff re-filed its complaint in this Court.
DISCUSSION
I. Preliminary Injunction Standard
In order to grant a preliminary injunction, a court must find 1) that the plaintiff is at risk of imminent irreparable harm, and 2) that the plaintiff has demonstrated a likelihood of success on the merits or sufficiently serious questions going to the merits to make them a fair ground for litigation plus a balance of hardships tipping decidedly toward the party requesting the preliminary relief." Federal Express Corp. v. Federal Espresso, Inc., 201 F.3d 168, 173 (2d Cir. 2000).
A. Risk of Irreparable Harm
In a trademark case, a plaintiff satisfies the irreparable harm prong if it demonstrates a likelihood of confusion. See Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 142 (2d Cir. 1997) ("the requirement of irreparable harm carries no independent weight, as . . . a showing of a likelihood of confusion . . . establishes irreparable harm."). However, this does not relieve the plaintiff from showing that the harm is imminent and a "[s]ignificant delay in applying for injunctive relief in a trademark case tends to neutralize any presumption that infringement [or dilution] alone will cause irreparable harm pending trial, and such delay alone may justify denial of a preliminary injunction for trademark infringement." Citibank N.A. v. Citytrust, 756 F.2d 273, 276 (2d Cir. 1985). Defendant contends that plaintiffs delay in filing this action was "substantial" and warrants a finding that plaintiff has not proved imminent harm. I agree. Plaintiffs delay in filing its complaint, particularly combined with the fact that it was content to wait for the New Mexico court's ruling on defendant's motion, hardly supports a claim that its harm is imminent and irreparable. Therefore, I find that plaintiff has failed to satisfy this prong.
Although plaintiff may not have been able to speed up the court's timetable, plaintiff was free to re-file its action in the Southern District of New York, thereby ensuring personal jurisdiction over the defendant and prompt attention to its complaints.
B. Likelihood of Success
1. Trademark Infringement
Plaintiff contends that defendant's use of the mark NATURAL ORIGINS impermissibly infringes upon its use of the established mark ORIGINS. The central inquiry to determine trademark infringement is whether a consumer is likely to be confused by the similarity of the marks. The risk, of course, is that a consumer will believe that the new product originated with or is sponsored by the owner of the established mark. As an aide for determining the likelihood of confusion, courts apply the now familiar Polaroid test that considers: (1) the strength of the mark; (2) the degree of similarity between the two marks; (3) the proximity of the products; (4) the likelihood that the plaintiff will bridge the gap between the two products; (5) actual confusion between the two marks; (6) the defendant's good faith in adopting its mark; (7) the quality of defendant's product; and (8) the sophistication of the buyers or users of the parties' goods or services. See Polaroid Corp. v. Polaroid Electronics Corp., 287 F.2d 492, 495 (2d Cir.), cert denied 368 U.S. 820 (1961).
These eight factors need not be accorded equal weight. Rather, courts have adopted a flexible approach in which the court evaluates each factor in the context of the particular case. See Lois Sportswear USA, Inc. v. Levi Strauss Co., 799 F.2d 867, 872 (2d Cir. 1986). Furthermore, in applying this test, a court "should focus on the ultimate question of whether consumers are likely to be confused." Paddington Corp. v. Attiki Importers Distributors, Inc., 996 F.2d 577, 584 (2d Cir. 1993). Here, four factors — the sophistication of the buyers, the similarity of the marks, the proximity of the products, and bridging the gap — are determinative, clearly indicating that consumers are not likely to be confused.
I do find that ORIGINS is a relatively strong mark. It is more than merely "descriptive, " rather it is "suggestive" in that it "requires imagination, thought and perception to reach a conclusion as to the nature of the goods." Stix Products, Inc. v. United Merchants Manufacturers, Inc., 295 F. Supp. 479, 488 (S.D.N.Y. 1968); see also Bigstar Entertainment v. Next Big Star, Inc., 105 F. Supp.2d 185, 195-96 (S.D.N.Y. 2000). However, the fact that ORIGINS is a suggestive mark does not mean that the defendant's mark is infringing. As to the quality of the products, it is clear that all of the products are of high quality. Plaintiff argues, however, that defendant's arrangement to sell "off-price" or irregular merchandise at T.J. Maxx and Marshalls raises the possibility that consumers, if confused, may associate these "lesser quality" items with Origins' products. Although there is little evidence on this point, plaintiff may be correct in its assumption, thus this prong favors the plaintiff. Plaintiff has not produced any evidence of actual confusion, but as NATURAL ORIGINS has been in use for only a year, for the purposes of this motion, I will consider this a neutral factor. Also, there is no evidence of bad faith by the defendant, so this factor cuts his favor.
The four remaining factors strongly favor the defendant. Simply put, the goods involved are upscale, expensive products that will likely be purchased by sophisticated consumers able to distinguish between ORIGINS, a brand of cosmetics, and NATURAL ORIGINS, a line of clothing. In appearance, these marks are easily distinguishable. First, the defendant's mark places the word "natural" before the word "origins," this brings a consumer's attention to the difference between the two marks. Consumers seeing NATURAL ORIGINS are unlikely to associate it with the mark ORIGINS since "origins" is a common word in the English language and makes sense when combined with "natural" resulting in a different meaning from "origins" by itself. Second, the presentation of the marks is dramatically different. ORIGINS is printed on the product in a distinctive typeface that is simple, rounded, and usually in all capital letters. NATURAL ORIGINS, however, is printed to resemble handwritten script with only initial capital letters. The tags that the defendant attaches to his clothing, which are in the shape of a leaf with a green border, further distinguish the marks. Defendant also places a small leaf motif following the words "Natural Origins" and a small "U.S.A." directly below. The overall impression of the marks is therefore quite different as the NATURAL ORIGINS marks appears much less stylized and, in fact, more natural.
The dictionary definition of "origin" is 1: ancestry parentage, 2a: rise, beginning, or derivation from a source; 2b: the point at which something begins or rises or from which it derives; 3: the more fixed, central, or larger attachment of a muscle; 4: the intersection of coordinate axes. The definition of "natural" is: 1: based on an inherent sense of right and wrong; 2a: being in accordance with or determined by nature; 2b: having or constituting a classification based on features existing in nature . . ." Merriam-Webster's Collegiate Dictionary, 10th Edition (1999).
Origins also has a trademark on ORIGINS NATURAL RESOURCES. It places this name on only one product, a liquid handcleanser. However, I find that this mark is also distinguishable from NATURAL ORIGINS, to same degree if not moreso than ORIGINS.
These differences are magnified further when the high level of consumer sophistication is taken into consideration. See Chum Ltd. v. Lisowski, 2001 WL 243541, *12 (S.D.N.Y. March 12, 2001) citing Centaur Communications Ltd v. A/S/M Communications, Inc., 830 F.2d 1217, 1228 (2d Cir. 1987). Plaintiff does not dispute that consumers in upscale department stores and their own freestanding stores can be presumed to be sophisticated but argues that defendant's sales of "off-price" merchandise to the lower end stores like Marshalls and T.J. Maxx create the opportunity for confusion. Given the limited evidence regarding sales at these stores and the fact that the large majority of consumers of these products must be presumed to be sophisticated, I find plaintiffs argument unconvincing.
A final, and significant, stumbling block for Origins is the fact that its products and the defendant's products are not in competition with each other, and, therefore, are not in close proximity. Plaintiff contends that ORIGINS and NATURAL ORIGINS do compete because Origins sells caps and has sold a few other items of clothing in the past and because Margolis manufactures clothing. These arguments are unpersuasive. First, the undetermined number of caps that ORIGINS sells at its freestanding stores are not in competition with defendant's full line of upscale womens' clothing. The same can be said for Origin's past sales of miscellaneous other clothing items that it no longer sells and has no plans to reinstitute. As for Margolis, while she does sell a line of clothes under the "FIRE designed by Origins Sante Fe" label, these sales are largely limited to Sante Fe and there is little to no evidence at this point that her market overlaps with the market of NATURAL ORIGINS. Finally, Origins attempts to ameliorate any deficiency in the proximity of the products prong by showing that it is likely to "bridge the gap" between the marks. But Origins has put forth no evidence to show that it plans to enter the women's clothing market. Furthermore, on the facts before me, I find plaintiff's argument that consumers would assume that Origins has entered the clothing market when they encounter the mark NATURAL ORIGINS unconvincing.
Plaintiff cites Scarves by Vera v. Todo Imports, 544 F.2d 1167 (2d Cir. 1976) in support of its claim that cosmetics and clothing are so closely related to be in close proximity. However that case does not control given the facts here. In Scarves by Vera, plaintiff, a clothing designer, produced substantial evidence that other high-end clothing designers had entered the cosmetics market, and therefore that consumers were likely to believe that VERA cosmetics were related to VERA clothing. Here, plaintiff has not shown any evidence that cosmetics retailers tend to enter the clothing market or that consumers are likely to perceive them as doing so. See Revlon v. Jerell, Inc., 713 F. Supp. 93, 98 (S.D.N.Y. 1989).
2. Trademark Dilution
Plaintiff also contends that it is likely to prevail on its federal and state claims of trademark dilution. To succeed on a claim for dilution, Origins must establish five elements: (1) the senior mark must be famous; (2) it must be distinctive; (3) the junior use must be a commercial use in commerce; (4) it must begin after the senior mark has become famous; and (5) it must cause dilution of the distinctive quality of the senior mark. See Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir. 1999).
It appears that the ORIGINS mark is a famous mark, but plaintiff has failed to provide sufficient evidence to show a likelihood of success on the fifth element, which is the "key operative element of the statute." Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 216 (2d Cir. 1999). As noted, the dissimilarity between the marks makes it highly unlikely that NATURAL ORIGINS will dilute the ORIGINS mark. See id. at 217 (applying the Polaroid factors in determining whether plaintiff had shown trademark dilution). Thus, plaintiff are not likely to prevail on this claim either.
C. Balance of Hardships
Finally, plaintiff cannot prevail under a balancing of the hardships analysis. Defendant has presented considerable evidence that a preliminary injunction would have a significant negative impact on its business. Therefore, I am unable to conclude that any hardship to the plaintiff would outweigh the harm to the defendant if I did grant the injunction.
CONCLUSION
For the above reasons, plaintiffs motion is denied. As the parties have completed discovery, the matter is down for a bench trial to commence on June 11, 2001. If this date is not agreeable to the parties, they must contact the Court no later than May 11, 2001 to arrange a mutually convenient time.
SO ORDERED