Summary
finding that use of "STEIN-WAY CO." to sell clip-on beverage handles tarnished high-end musical instrument company's use of its name of "STEINWAY SONS"
Summary of this case from Starbucks v. Wolfe's BoroughOpinion
80-04404 TJH (Mx)
January 28, 1981
KURT RICHTER, ESQ., MORGAN, FINNEGAN, PINE, FOLEY LEE, New York, New York, RODNEY E. NELSON, ESQ., NELSON, RITCHIE GILL, Los Angeles, California, Attorneys for Plaintiff.
DONALD M. CISLO, CISLO O'REILLY, Santa Monica, California, Attorneys for Defendents.
PRELIMINARY INJUNCTION INJUNCTION
FINDINGS OF FACT AND CONCLUSIONS OF LAW ON PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION Introduction
This is an action for trademark infringement and unfair competition brought by Steinway Sons (Steinway), a New York corporation, against Robert DeMars Friends (DeMars Friends), a California corporation, and against its founder, president and principal shareholder Robert A. DeMars (DeMars).
The matter is now before this Court on plaintiff's motion for a preliminary injunction seeking to restrain defendants from, inter alia, further using the names and marks STEIN-WAY and STEIN-WAY COMPANY, and from using any other name or mark confusingly similar to plaintiff's names and marks STEINWAY and STEINWAY SONS.
Based upon the evidence submitted by the parties and the papers filed in support of and in opposition to the motion, and after hearing argument of counsel, the Court determined that a preliminary injunction should be entered. Following the hearinq and the Court's ruling, the parties reached agreement that the preliminary injunction should be made permanent.
FINDINGS OF FACT The Parties
1. Plaintiff Steinway Sons (Steinway) is a distinguished manufacturer of world famous pianos, which are sold throughout the United States and the rest of the world.
2. Defendant Robert DeMars Friends (DeMars Friends) is a California corporation and is doing business under the name Stein-Way Company. Defendant Robert A. DeMars (DeMars) is founder, president and a principal shareholder of DeMars friends.
Plaintiff's Use of STEINWAY
3. STEINWAY is the name of the family which founded and managed plaintiff for 125 years. Since its inception in 1853, plaintiff Steinway has been in the business of manufacturing fine pianos in New York, New York. From that time forward, plaintiff has used the names and marks STEINWAY and STEINWAY SONS as trademarks for its instruments and as a trade name. From the year 1880, plaintiff has manufactured pianos also in Germany.
4. Plaintiff has expended considerable resources in developing, improving and perfecting the state of the piano-making art. STEINWAY pianos embody many innovations for which patents have been granted to plaintiff.
5. Since before the turn of the century, STEINWAY pianos have been used and played exclusively by the world's foremost piano musicians. Plaintiff has long been a sponsor of musical culture and the musical arts. Through its concerts and artists department, plaintiff provides concert pianos to performing pianists throughout the country. A STEINWAY piano has been present in the White House for over seventy-five years and to this day is played at musical events there.
6. Steinway has advertised extensively nationwide for many decades, as is shown, for example, by Exhibits 2-6. Its advertisements have appeared in such publications as Fortune, Saturday Eveninq Post, New Yorker, National Geographic, Atlantic, Harpers, House Garden, Gourmet and Smithsonian. In the period 1970-1979 alone, plaintiff has spent in excess of 2.5 million dollars in advertising and promotion expenses.
7. Plaintiff's products have also been advertised extensively in local newspapers within the State of California by its several authorized dealers. (See Exhibit 6) In addition, the name and mark STEINWAY has been listed for decades in local telephone directories within the state, a current example of which appears in Exhibit 7. In public performances, in California and elsewhere, when plaintiff's pianos are used, it has long been the custom to inform the listening audience of this fact by a statement in the performance program.
8. A STEINWAY piano is an instrument of distinctive quality and plaintiff has earned and long enjoyed immense good-will. The name "STEINWAY" differentiates plaintiff's products from all others, not only to professional pianists, concert artists and music recording companies, but also to amateur musicians, students, prospective buyers and the public throughout the State of California and the rest of the country.
9. Plaintiff has acquired a well-deserved reputation as being the source of pianos of the highest quality, and the names and marks STEINWAY and STEINWAY SONS, since long prior to defendants' activities herein, have been universally recognized and acclaimed by the trade and public throughout the United States and the rest of the world as being the hallmarks of a particular source and symbolic of products of prestige and value. That plaintiff and its products have often been the subject of articles appearing in newspapers and other publications (e.g., Exhibit 8) bears this out.
10. This Court, though not bound by the decisions of other courts affecting plaintiff's trademarks, takes note of the findings in Grotrian, Helfferich, Schultz, Etc. v. Steinway Sons, 365 F. Supp. 707, 713 (S.D.N.Y. 1973), modified and aff'd, 523 F.2d 1331 (2d Cir. 1975), and tends to agree that:
"There can be little doubt that upon hearing the name `Steinway', anyone the least familiar with music would instantly think not so much of the identity of the producer as of the piano itself. Indeed, the name `Steinway' is so associated in the minds of prospective buyers and the public with defendant [Steinway] that plaintiff's own dealers were of the opinion that . . . `the name Steinway has a magic influence on buyers' has an `attraction' or `excitement' and that `people seem to be swayed by this name.' . . .
Likewise, it is plain to us that there is a strong link between the names Steinway and Steinway Sons and defendant producer and its piano. [Steinway's] mark is thus strong and its name famous. As such, it is entitled to broader protection than a suggestive, weak or commonplace mark."
11. Plaintiff's use of STEINWAY has not been limited solely to pianos. Long before defendants' STEIN-WAY product came into existence, plaintiff itself has used one or more of its trademarks on numerous promotional gift and other articles. Such articles (Exhibits 9-12) have included gold lapel pins, metal ash trays, gold-plated pens, commemorative bronze paper-weights, metal, wood and plastic tools provided to local piano technicians for servicing STEINWAY pianos, and piano replacement and repair parts. Plaintiff also publishes a quarterly news letter, STEINWAY NEWS, which is distributed to its piano dealers and music libraries throughout the country.
12. Because the marks STEINWAY and STEINWAY SONS have an undeniable appeal, other businesses have sought plaintiff's permission to associate the Steinway name with their products in order to enhance their public image of quality. Plaintiff's celebrated pianos and marks for many years have been selectively associated in advertisements (Exhibit 14), in this country and elsewhere, with the products and services of other companies' lines of business, such as homes, high fidelity electronic equipment, cameras, expensive cigarettes, high quality stationary, insurance and airline services.
13. As a result of such advertisements, the public can be expected to recognize that plaintiff from time to time endorses the association of its trademarks with products and services not specifically related to music or to the music industry.
14. Plaintiff has obtained federal registrations (Exhibit 15) on the Principal Register for STEINWAY SONS, Reg. No. 45,846 (pianos), STEINWAY, Reg. No. 141, 687 (pianos), STEINWAY — THE INSTRUMENT OF THE IMMORTALS, Reg. No. 285, 732 (pianos), and STEINWAY NEWS, Req. No. 527, 479 (printed publications). Each of the foregoing registrations is presently subsisting and, pursuant to the provisions of 15 U.S.C. § 1057 (b), is prima facie evidence of the validity of the registration, of plaintiff's ownership of the mark, and of its exclusive right to use the mark in commerce. Pursuant to the provisions of 15 U.S.C. § 1065, these registrations are now incontestable.
Defendants' Use of STEIN-WAY
15. There is no dispute that sometime in 1977, without the knowledge or permission of Steinway, defendant DeMars sought to promote the sale of clip-on beverage can handles under the names STEIN-WAY and STEIN-WAY COMPANY (or the abbreviation STEIN-WAY CO.) and, since about 1978, has sold and caused to be sold and distributed in commerce such can handles. Mr. DeMars testified on deposition that these activities were carried out under the fictitious business name STEIN-WAY COMPANY. The corporate defendant DeMars Friends was established about January, 1979 and assumed and continues to operate the STEIN-WAY COMPANY business previously conducted by defendant DeMars.
16. Defendants have employed a Gothic, or "old English", typeface in the STEIN-WAY trademark used by them, substantially in the forms reproduced below Exhibit 17):
17. Since before the turn of the century all of plaintiff's pianos have borne the mark STEINWAY prominently case into the metal plate of the piano along an arc, substantially as depicted below:
Defendants have employed in packaging and on printed matter Exhibit 18) the designation STEIN-WAY, also curved along an arc as shown below:
18. In about 1980, defendants adopted another style of embodying a different typeface, shown below, on their in their packages and in printed matter disseminated Exhibit 19):
19. The above trademark (¶ 18) is nearly identical to plaintiff's mark STEINWAY and STEINWAY SONS, especially in the styles, reproduced below, in which they have appeared for several decades on plaintiff's instruments:
20. From a careful observation of the trademarks and names used by defendants, and considering all the circumstances under which defendants' goods are sold, the Court is of the view that STEIN-WAY and STEIN-WAY COMPANY are indistinguishable from STEINWAY and STEINWAY SONS to the casual observer and likely purchaser of defendants' clip-on can handles.
21. When spoken, STEIN-WAY is identical to STEINWAY and the Court finds that defendants' insertion of a hyphen between the syllables "Stein" and "Way" is insufficient to distinguish defendants' name and mark from plaintiff's. Not even the average sophisticated person can be counted on to distinguish one mark from the other in the marketplace.
22. No one named Steinway is associated in any way with defendants' business.
23. Prior to adopting and using the names STEIN-WAY STEIN-WAY COMPANY, defendants had constructive and actual knowledge of plaintiff's trademarks STEIN-WAY and STEINWAY SONS and of plaintiff's registrations for the marks STEINWAY, STEINWAY SONS and STEINWAY, THE INSTRUMENT OF THE IMMORTALS. Defendant DeMars in his deposition acknowledged "having [the name] Steinway ring a bell" when considering a number of possible trademarks, all incorporating the prefix "stein."
24. Defendants' prominently feature the STEIN-WAY trademark on their promotional literature and display items (Exhibits 17-19). Defendants admit that, in marketing their product, they have continuously emphasized the mark STEIN-WAY.
25. Defendant DeMars related that, in the short span of one year, almost one million STEIN-WAY handles (costing about one dollar) were apparently sold, notwithstanding the lack of any paid-for advertising and the use of only limited promotional activities (i.e., attending trade shows, handing out printed flyers and free samples).
26. Affidavits submitted by plaintiff, Exhibits 20-22, indicate that defendants' use of the designation STEIN-WAY in connection with its products has already resulted in actual confusion in the trade, in that persons encountering said mark I have inquired about the relationship between plaintiff Steinway Sons and defendants' Stein-Way Company. An affidavit submitted by defendant DeMars does not dispute that such confusion has taken place and, indeed, appears to concede that persons seeing STEIN-WAY on defendants' products make reference to plaintiff. DeMars' only explanation for this phenomenon is that no such person "would contend that my product had any connection with Steinway."
27. The foregoing facts, taken collectively, confirm the Court's view (reached independently of the affidavits) that plaintiff is likely to succeed in establishing at trial that defendants' adoption and use of STEIN-WAY is likely to cause confusion in the marketplace. Moreover, the Court finds that such use dilutes the distinctiveness of plaintiff's trademarks.
Steinway Did Not Unreasonably Delay Its Action
28. On September 29, 1978, defendant DeMars caused to be filed in the United States Patent Trademark Office an application Serial No. 187, 440 for registration on the Principal Register of the mark STEIN-WAY for goods identified as "clip on handle for beverage can. . . ." Plaintiff immediately filed a notice in the United States Patent Trademark Office objecting to and opposing such application on the grounds, inter alia, that use of the mark STEIN-WAY in the United States by defendants on its products is likely to cause confusion, mistake or deception. In response to said notice, the United States Patent Trademark Office set up an opposition proceeding No. 62, 938, which is now pending.
29. Plaintiff also wrote to defendants on November 29, 1979 (Exhibit 23) objecting to the use of the trademark STEIN-WAY and trade name STEIN-WAY COMPANY as an infringement of plaintiff's trademark and trade name rights. Defendants received such letter, but neither defendant took any responsive action.
30. Steinway acted with due haste in bringing this action and its motion for preliminary injunction. Plaintiff first pursued its trademark rights both privately with defendants and in the United States Patent and Trademark Office opposition proceeding. That proceeding has gone on actively from its inception date to the present. Defendants brought a motion to dismiss the opposition on February 6, 1980. This motion was subsequently denied by the Trademark Trial and Appeal Board on September 29, 1980 after the submission of briefs. Between February 1980 and June 1980, the parties sought amicably to resolve the controversy, without success, Thereupon, plaintiff took the deposition of defendant DeMars (Exhibit 16) on June 11, 1980; this action was lodged on October 2, 1980 and was timely.
A Liklihood of Confusion Arises From Defendants' Use of STEIN-WAY
31. The Court concludes that plaintiff will probably succeed at trial in proving that defendants' activities are likely to cause confusion, mistake and deception and will irreparably injure and damage plaintiff, in that the trade and public will erroneously believe that defendants' articles and plaintiff's pianos and/or business have a common origin, or that defendants' products bearing the confusingly similar legends STEIN-WAY and/or STEIN-WAY COMPANY are designed, manufactured and/or sold by plaintiff, or are being placed on the market with the consent, authority and/or approval of plaintiff or under plaintiff's sponsorship, or that plaintiff has licensed or approved defendants' use of the designation STEIN-WAY, or that plaintiff's and defendants' businesses are in some way connected or associated.
Defendants' Use of STEIN-WAY Is Likely To Dilute The Distinctiveness of STEINWAY And To Injure Steinway's Business Reputation
32. Defendants' use of the designations STEIN-WAY and STEIN-WAY COMPANY on products and as a trade name in connection with its business activities is also likely to dilute, has diluted and, unless enjoined, will continue to dilute the distinctiveness and uniqueness of plaintiff's famous trademarks STEINWAY and STEINWAY SONS, which trademarks have long been associated substantially exclusively with plaintiff and plaintiff's products, and will thereby tend to diminish the immense value and goodwill attending such trademarks.
33. Defendants' use of the designation STEIN-WAY in connection with its business and on its products, unless enjoined, will associate or tend to associate plaintiff's high quality pianos and plaintiff's business and cultural activities with defendants' inexpensive, mass-produced products and with the retail liquor stores, supermarkets and similar merchandising concerns which sell defendants' products. Such association will inevitably tarnish plaintiff's reputation and image with the public of manufacturing and/or sponsoring only products and activities of taste, quality and distinction.
CONCLUSIONS OF LAW Jurisdiction and Venue
1. An action for trademark infringement and unfair competition arising under the Federal Trademark Act of 1946, as amended (the Lanham Act, 15 U.S.C. § 1051 et seq.), vests jurisdiction in the federal district court pursuant to 15 U.S.C. § 1121 (actions arising under the Federal Trademark Act), 28 U.S.C. § 1332 diversity) and 28 U.S.C. § 1338 (a) (acts of Congress relating to trademarks). Pursuant to 28 U.S.C. § 1332 (diversity) and 28 U.S.C. § 1338(b) (pendant jurisdiction over unfair competition claims), this court also has jurisdiction over plaintiff's counts arising under the common law of the State of California and the California Business and Professions Code (Cal. Bus. Prof. Code § 14330).
2. This Court has jurisdiction of the parties. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b) and (c), since both the individual defendant and the corporate defendant reside in the Central District of California and since the claims arose there.
The Appropriateness of a Preliminary Injunction
3. The preliminary injunction is a particularly appropriate remedy in trademark and unfair competition cases, and is essential where it appears that plaintiff's trademark riqhts are being infringed. See 4 Callmann, The Law of Unfair Competition and Monopolies § 88.3 at 187 (3d ed. 1970).
4. Congress, in the Lanham Act ( 15 U.S.C. § 1116), has vested the federal courts with the . . . "power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent Office."
5. The California State Legislature likewise has expressly provided for injunctive relief to remedy any "likelihood of injury to business reputation or of dilution of the distinctive quality of a mark valid at common law," whether or not registered in California and "notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods. . . ." Cal. Bus. Prof. Code § 14330.
6. The essential requirements for issuance of a preliminary injunction are: (1) irreparable injury to the plaintiff; and (2) either (a) a likelihood of success on the merits, or (b) serious questions going to the merits of the litigation coupled with a balance of hardships tipping decidedly in favor of the party seeking relief. Citibank, N.A. v. City Bank of San Francisco, 206 U.S.P.Q. 997, 1006 (N.D.Cal. 1980); Selchow Righter Co. v. McGraw-Hill Book Co., 439 F. Supp. 243, 245 (S.D.N.Y. 1977), aff'd, 580 F.2d 25 (2d Cir. 1978). See also Burton v. Matanuska Valley Lines, Inc., 244 F.2d 647, 651 (9th Cir. 1957); Chopra v. Kapur, 185 U.S.P.Q. 195, 200 N.D. Cal. 1974). Here, since the likelihood of deceit of the public is also manifest, the necessity of a preliminary injunction is even stronger. Citibank, supra.
Irreparable Harm Attends A Likelihood of Trademark Confusion Or Trademark Dilution
7. The primary function of a trademark or service mark is to identify the product or service sold by the owner of the mark. Incident to that identification is the enhanced goodwill and selling power that a distinctive mark gradually attains with it prolonged usage and favorable acceptance by the public. When an interloper applies a confusingly similar mark to a product over which the trademark owner has no control (trademark infringement), or uses any name or symbol which diminishes the distinctiveness of the trademark (trademark dilution), damage necessarily occurs. such damage is irreparable, since it is practically irreversible and impossible to assess.
8. That trademark infringement causes irreparable injury and necessitates immediate injunctive relief is universally recognized in the courts of this circuit. McLeod v. Hosmer-Dorrance, Inc., 192 U.S.P.Q. 683, 686 (N.D. Cal. 1976) (high probability of confusion supports a finding of irreparable injury in the sense that it may not be fully compensable in damages); Edgar Rice Burroughs, Inc. v. Manns Theatres, 195 U.S.P.Q. 1159, 162 C.D. Cal. 1976) (preliminary injunction an appropriate remedy to restrain acts of unfair competition resulting from threat of creating a likelihood of confusion). Accord, Diagnostics Designs, Inc., v. Waverly Beauty Products, Inc., 185 U.S.P.Q. 513, 514 (C.D. Cal. 1975); Miller Brewing Co. v. Carling O'Keefe Breweries, 452 F. Supp. 429, 437-38 (W.D.N.Y. 1978) ("infringement of one's trade mark usually in and of itself gives rise to the distinct possibility of irreparable injury"); Omega Importing Corp. v. Petri-Kine Camera Co., 451 F.2d 1190, 1195 (2d Cir. 1971) ("where there is high probability of confusion, irreparable injury I in the sense that it may not be fully compensable in damages almost inevitably follows").
9. A preliminary injunction will also issue to combat the threat of irreparable injury arising from the likelihood of dilution of a distinctive trademark. The irreparable harm is the damage which will be done to plaintiff's mark itself. Thus, as stated in Citibank, N.A. v. City Bank of San Francisco, 206 U.S.P.Q. 997, 1007 (N.D. Cal. 1980), "unless a preliminary injunction is granted, plaintiff will suffer a serious dilution of its trademark by the use of that mark in conjunction with a competitor's name and products, thereby losing the benefit of the mark's function as a distinctive identifier of plaintiff and its products. As a result, the value of the mark to plaintiff will be greatly impaired, and re-establishment of that value will be difficult if not impossible. This in itself is a sufficient indication of irreparable harm to satisfy the requirement." Accord, Hallmark Cards, Inc. v. Hallmark of Hollywood, Inc., 352 F. Supp. 1195, 1198 (C.D. Cal. 1972); Edgar Rice Burrouqhs, Inc. v. Manns Theaters, 195 U.S.P.Q. 159, 162 (C.D. Cal. 1976) (preliminary injunction granted to protect strong trademark against unfair competition, infringent and dilution).
10. The same rule applies in other federal circuits. Gucci Shops, Inc. v. R. H. Macy Co., 446 F. Supp. 838, 840 (S.D.N.Y. 1977); Louis Rich, Inc. v. Horace W. Longacre, Inc., 423 F. Supp. 1327, 335 (E.D. Pa. 1976); or Da Industries, Ltd. v. Leisure Learning Products, 479 F. Supp. 710 (S.D.N.Y. 1979) (likelihood of serious dilution provides a basis for finding irreparable injury); Markel v. Scovill Mfg. Co., 471 F. Supp. 1244, 125 W.D.N.Y. 1979) (probable success demonstrated where there is a strong likelihood that trademark owner could satisfy less stringent requirement of showing dilution).
11. Plaintiff need not prove that its business will be less prosperous if an injunction is not granted. "Loss of business is not the test of irreparable injury in motions for preliminary injunctions against the use of a trademark. The fact that plaintiff has had the symbol of its reputation placed in the hands of another is irreparable injury." Citibank, N.A. v. City Bank of San Francisco, supra, 206 U.S.P.Q. 977, 1007.
Plaintiff Is Entitled To An Injunction Under Cal. Bus. Prof. Code § 14330 To Preclude Dilution of STEINWAY As A Trademark
12. Section 14330 of the California Business and Profession Code, enacted in 1967, provides:
"Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark registered under this chapter, or a mark valid at common law, or a trade name valid at common law, shall be a ground for injunctive relief notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services."
13. Even in the absence of proof of confusion as to the source of the goods or services, relief is available here injury to business reputation of the owner or dilution of the distinctive quality of the mark is likely. Good faith is no defense to this claim and actual confusion need not be proved. The statute is concerned with the likelihood of injury or dilution, not the actuality of it. Golden Door v. Odisho, 437 F. Supp. 956, 965 (N.D. Cal. 1977).
14. Section 14330 (the California anti-dilution statute) furnishes the basis for two causes of action: (1) if there exists a likelihood of injury to business reputation or (2) if there is a likelihood of dilution of the distinctive quality of the mark or trade name. It relieves an aggrieved party of the burden of proving competition between the parties or proving confusion as to the source of goods or services. Dawn v. Sterling Drug, Inc., 319 F. Supp. 358, 363 (C.D. Cal. 1970); HMH Publishing Co. v. Brincat, 342 F. Supp. 1275, 1281 (N.D. Cal. 1972), aff'd in part and rev'd in part, 504 F.2d 713 (9th Cir. 1974) (use of "PLAYBOY" in connection with certain dune buggy businesses and in towing service dilutes the distinctive quality of the marks of the PLAYBOY magazine publisher); BankAmerica Corp. v. Bamieh, 188 U.S.P.Q. 380, 382 (N.D. Cal. 1975) (use of "B/A Associates" for a management consulting service violates Section 14330 by diluting the names and marks "BA" and "B of A" identified with plaintiff's banking services). By its plain, unambiguous language it lays a heavy hand upon one who adopts the trade name or mark of another. Cf., Polaroid Corp. v. Polaraid, Inc., 319 F.2d 830, 835 (7th Cir. 1963) (Illinois anti-dilution statute).
15. Plaintiff need not establish that defendants have sought to trade upon the public recognition of the STEINWAY name, as such an intent is not a prerequisite for relief under the anti-dilution statute. Golden Door v. Odisho, supra, 437 F. Supp. 956, 965; Polaroid Corp. v. Polaraid, Inc., supra, 319 F.2d 830, 836.
16. Section 14330 extends the protection afforded trademarks and trade names beyond that provided by actions for infringement and unfair competition. The evil which the Legislature sought to remedy was not public confusion caused by similar products or services sold by competitors, but a cancer-like growth of dissimilar products or services which feeds upon the business reputation of an established distinctive trademark or name. Thus, it would be of no significance under our statute that Stein-Way Company is not a competitor of, nor likely to be confused with Steinway Sons. The harm that Section 14330 is designed to prevent is the gradual whittling away of a firm's distinctive trademark or name. It is not difficult to imagine the possible effect which the proliferation of various non-competitive businesses utilizing the name STEIN-WAY would have upon the public's association of the name STEINWAY with fine pianos. The ultimate effect has been appropriately termed dilution. See, Allied Maintenance Corp. v. Allied Mechanical Trades, Inc., 198 U.S.P.Q. 418, 422 (N.Y. 1977); Mortellito v. Nina of California, 335 F. Supp. 1288, 1295-96 (S.D.N.Y. 1972). See also, Dallas Cowboys, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 n. 8 (2d Cir. 1979).
17. It is immaterial that no representations were made to customers, prospective customers of plaintiff or to the general public that defendant is in any way connected with plaintiff or that any customer of defendant believed he was dealinq with plaintiff; that the parties' products are not sold through the same outlets or to the same type of customer; that the parties advertise in different media; or that there is no showing of an intent on the part of defendant to capitalize on the good will of plaintiff. These are traditional arguments made against a charge of unfair competition and, even there, it is without force where a party adopts the distinctive, invented or coined trademark or trade name of another. Polaroid Corp. v. Polaraid, Inc., supra, 342 F. Supp. 839, 836.
18. The visual and audible identity of STEINWAY and STEIN-WAY is undeniable and needs little amplification. The sole difference in the marks resides in defendants' insertion of a hyphen between the syllables STEIN and WAY. This difference immaterial. Miss Universe, Inc. v. Plesher, 605 F.2d 1130, 1134-5 (9th Cir. 1979).
19. "Small changes in words, such as adding or deleting a hyphen, are insufficient to distinguish marks." Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 382 (7th Cir. 1976), cert. denied, 429 U.S. 830 (1976). "The absence of a hyphen. is of no significance, it is a distinction without a difference." Stix Products, Inc. v. United Merchants Mfrs., Inc., 295 F. Supp. 479, 486 (S.D.N.Y. 1968); Safeway Stores v. Dunnell, 172 F.2d 649, 655 (9th Cir. 1949) ("Safe-Way" on toilet seat covers an imitation of "Safeway" for supermarket stores); Kroger Co. v. Superx, Inc., 193 U.S.P.Q. 245, 247 (E.D. Pa. 1976).
20. The trademarks STEINWAY and STEINWAY SONS are distinctive, strong and famous and they are now substantially exclusively identified with plaintiff and plaintiff's goods. That businessmen stand ready to pay for the non-exclusive right to place the mark STEINWAY on their unrelated products is a measure of its true worth. Plaintiff's trademarks are accordingly entitled to broad protection. Grotrian, Helfferich, Schultz, Etc. v. Steinway Sons, supra, 365 F. Supp. 707, 713; Edgar Rice Burroughs, Inc. v. Manns Theatres, supra, 195 U.S.P.Q. 159, 162.
21. The Court finds pertinent to this case the statements in Schechter, The Rational Basis of Trademark Protection, 60 TMR 334 (1970), originally published over fifty years ago. Schechter observed (60 TMR at 341-342):
"Trademark pirates are growing more subtle and refined. They proceed circumspectly, by suggestion and approximation, rather than by direct and exact duplication of their victims' wares and marks. The history of important trademark litigation within recent years shows that the use of similar marks on non-competing goods is perhaps the normal rather than the exceptional case of infringement. . . . The real injury in all such cases can only be gauged in the light of what has been said concerning the function of a trademark. It is the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon non-competing goods. The more distinctive or unique the mark, the deeper is its impress upon the public consciousness, and the greater its need for protection against vitiation or dissociation from the particular product in connection with which it has been used."
22. Unless defendants' activities are halted, the distinctive quality of STEINWAY inevitably will be injured beyond repair. The low price of defendants' products contributes to the alarming speed of the dilution process and makes a preliminary injunction imperative.
23. Another pressing danger warranting injunctive relief is that the public will begin to identify STEINWAY with a product incompatible with the quality and prestige attached by the public to plaintiff's mark. Tiffany Co. v. Boston Club, Inc., 231 F. Supp. 836, 844 (D. Mass. 1964).
The Trademark Infringement Count
24. The Court is of the view that plaintiff will probably succeed at trial in establishing that defendants have infringed plaintiff's rights in STEINWAY and STEINWAY SONS in violation of 15 U.S.C. § 1114 (1), which provides in pertinent part:
"Any person who shall, without the consent of the registrant —
(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive;
. . . .
shall be liable in a civil action by the registrant. . . .
25. The likelihood of confusion addressed by the Lanham Act is not limited, as it once was, to only confusion "as to the source or origin of such goods or services." The Court of Appeals for the Ninth Circuit, in HMH Publishing Co. v. Brincat, 504 F.2d 713, 717 n. 7 (9th Cir. 1974), said "this court defined the appropriate inquiry in much broader terms, i.e., whether the average consumer would be likely to believe that the infringer's 10 products "had some connection' with those of the registrant."
26. The purpose of the Act is "to outlaw the use of trademarks which are likely to cause confusion, mistake or deception of any kind, not merely of purchasers nor simply as to source or origin." Syntex Laboratories, Inc. v. Norwich Pharmacal Co. 437 F.2d 566, 568 (2d Cir. 1971).
27. Thus, defendants' use of STEIN-WAY infringes plaintiff's marks if persons are likely to believe that Steinway sponsors defendants' product, HMH Publishing Co. v. Brincat, supra, 504 F.2d 713, 716, or are led "to conclude that Defendant's [products] are in some way related to Plaintiffs, or that Defendant is in some way authorized or sanctioned by Plaintiffs to advertise, offer and render [products] . . . under that name and mark." Bank-America Corp. v. Bamieh, supra, 188 U.S.P.Q. 380, 382. "The public's belief that [Steinway] sponsored or otherwise approved the use of [STEIN-WAY] satisfies the confusion requirement." Dallas Cowboys, Inc. v. Pussycat Cinema, 27 Ltd., 604 F.2d 200, 205 (2d Cir. 1979).
28. Infringement does not turn upon "commonality" of purchasers or purchaser confusion as to who manufactures the respective goods. Confusion in the legal sense occurs if the average consumer encountering defendants' can handles would be likely to believe that defendants' products have some connection with plaintiff. See HMH Publishing Co. v. Brincat, supra, 504 F.2d 713, 717 n. 7.
29. In determining the existence of the likelihood of confusion, a number of factors must be considered: the strength of Steinway's marks; the visual and verbal similarity between STEINWAY and STEIN-WAY: the class of goods in question; the marketing channels; the degree of care likely to be exercised by consumers of defendants' product; the intent of defendants; and evidence of actual confusion. HMH Publishing Co. v. Brincat, supra, 504 F.2d 713, 717; Golden Door, Inc. v. Odisho, supra, 437 F. Supp. 956, 963. No single factor is determinative. Grotrian, Helfferich, Schultz, Etc. v. Steinway Sons, supra, 365 F. Supp. 707, 712.
30. Similarity of sound, appearance or meaning may be enough to warrant a finding that confusion is likely." or Da Industries, Ltd. v. Leisure Learning Products, 479 F. Supp. 710, 717 n. 9 (S.D.N.Y. 1979). "The examination of the similarity of the trademarks . . . does not end with a visual comparison of the marks. Trademarks, like small children, are not only seen but heard. Similarity of sound also enters into the calculation of likelihood of confusion." Grotrian, Helfferich, Schultz, Etc. v. Steinway Sons, 523 F.2d 1331, 1340 (2d Cir. 1975).
31. Under the Trademark Act of 1946, differences in the physical characteristics of the goods in question are not per se significant and must be regarded as only one, rather subordinate element in determining the likelihood of confusion." Tiffany Co. v. National Gypsum Co., 459 F.2d 527, 530 (C.C.P.A. 1972) (upholding Tiffany Co.'s opposition to registration of "TIFFANY" for wood fiber acoustic ceiling tiles "taking into account the fame of its mark.")
32. Steinway applies its marks to small promotional give-away articles made of metal, such as pens, paperweights, ashtrays and piano technicians' tools. Since defendants' product also is a small article made of metal, it is but a natural conclusion that defendants' handles are simply another promotional item distributed by plaintiff.
33. Additionally, plaintiff's marks have been associated in advertising with numerous other goods and services, e.g., cameras tobacco products, airline services and high fidelity electronic equipment. As was observed in HMH Publishing Co. v. Brincat, supra, 504 F.2d 713, 719, "[t]hese promotional "tie-ins do tend to create an association between [plaintiff] and the products which it actively aids in marketing." Here the public is certainly aware that, in selected circumstances, Steinway associates its trademarks and pianos with other manufacturers and products, and thus would be likely to conclude that plaintiff has endorsed, if not licensed, the use of its marks on defendants' can handles. This is one type of confusion recognized as trademark infringement.
34. It has come to be recognized that disparity in the nature or location of non-competing businesses does not ensure against the risk of public confusion. That risk is particularly strong where, as here, a newcomer imitates the celebrated mark of another.
35. "In a situation where there is no direct competition between the parties, confusion of source may be defined as a misleading of the public by the imitation of "an attractive, reputable trade-mark or tradename . . . not for the purpose of diverting trade from the person having the trade-mark or trade name to the imitator, but rather for the purpose of securing for the imitator's goods some of the good-will, advertising and sales stimulation of the trade-mark or trade name.' Stork Restaurant, Inc. v. Sahati, 166 F.2d 348, 356 (9th Cir. 1948). see also, American Petrofina, Inc. v. Petrofina of California, Inc., 596 F.2d 896, 899 (9th Cir. 1979); Tiffany Co. v. Tiffany Productions, Inc., 147 Misc.2d 679 (N.Y.Sup.Ct. 1932), aff'd, 237 A.D. 801 (1932), aff'd, 262 N.Y. 482 (1933) (defendant's operation of motion picture theater under name TIFFANY enjoined); Tiffany Co. v. Boston Club, Inc., supra, 231 F. Supp. 836, 845 (use of "Tiffany" on restaurant prohibited); Polaroid Corp. v. Polaraid, Inc., supra, 319 F.2d 830, 835; Wall v. Rolls-Royce of America, 4 F.2d 333 (3d Cir. 1925) ("Rolls-Royce" on electronic radio tubes enjoined at the behest of famous Rolls-Royce automobile and airplane maker).
36. Recent decisions in the United States Patent and Trademark Office, refusing trademark registrations on grounds of potential confusion with similar trademarks for unrelated goods, support Steinway's claim for relief. "It would not be unusual for consumers, simultaneously confronted with the same arbitrary mark for intrinsically unrelated goods, to assume a relationship between the sources of the goods." Philip Morris Inc. v. K2 Corp., 555 F.2d 815, 816 (C.C.P.A. 1977). "[I]t would not be unreasonable for purchasers encountering "LLOYD'S OF LONDON" after-shave cologne and perfume to assume falsely that [Lloyd's] has licensed, sponsored, recommended, insured or 1 otherwise guaranteed the quality of those products." Corp. of Lloyd's v. Louis D'Or of France, Inc., 202 U.S.P.Q. 313, 316 (T.T. App. Bd. 1979)
37. Because defendants' "novelty" item is inexpensive, prospective purchasers will not expend any appreciable time to inform themselves about the "true source" of the product. Thus any confusion caused by the similarity between STEINWAY and STEIN-WAY will not be dispelled by careful consumer examination nation. Or Da Industries, Ltd. v. Leisure Learning Products, Inc., 479 F. Supp. 710, 718 (S.D.N.Y. 1979); 3 Callman, Unfair Competition Trademarks and Monopolies § 81.2(a), at 583-4
38. Since defendants' product will be viewed and purchased by all classes of consumers, it must be taken into account that there will be among them the "ignorant, the inexperienced and the gullible," amongst whom confusion is more prevalent. American Petrofina, Inc. v. Petrofina of California, 189 U.S.P.Q. 67, 81 (C.D. Cal. 1975), aff'd, 596 F.2d 896 (9th Cir. 1979); Stork Restaurant v. Sahati, 166 F.2d 348, 359 (9th Cir. 1948).
39. Evidence of confusion is usually difficult to obtain. Plaintiff has tendered evidence of actual confusion among retailers, wholesalers and the purchasing trade who revealed their confusion as to the source and sponsorship of the goods by asking about a connection between Stein-Way Company and Steinway Sons. See Kroger Co. v. Superx, Inc., supra, 193 U.S.P.Q. 245, 247 ("customers evidenced such confusion by inquiring as to whether defendant's store was affiliated with [plaintiff's] national chain").
40. Where there is evidence of actual confusion, it is regarded as "extremely significant" to the issue of likelihood of confusion, U.S. Jaycees v. San Francisco Chamber of Commerce, 354 F. Supp. 61, 77 (N.D. Cal. 1972), aff'd, 513 F.2d 1226 (9th Cir. 1975), and "great weight is attached to it." American Petrofina, Inc. v. Petrofina of California, supra, 189 U.S.P.Q. 67, 81. "Since reliable evidence of actual confusion is difficult to obtain in trademark infringement cases, any such evidence is substantial evidence that confusion is likely." Jockey International, Inc. v. Burkard, supra, 185 U.S.P.Q. 201, 207.
41. Very little proof of actual confusion would be necessary to prove likelihood of confusion. Citibank, N.A. v. City Bank of San Francisco, supra, 206 U.S.P.Q. 997, 1009; Roto-Rooter Corp. v. O'Neal, 513 F.2d 44, 46 (5th Cir. 1975).
42. Heretofore the public has identified STEINWAY with plaintiff alone. Thus, the public is entitled to protection against any confusion and deception which is likely to result from defendants' use of STEIN-WAY. The interest of the public to be free from trademark confusion has long been recognized as a basis for an injunction. American Philatelic Society v. Claiborne, 3 Cal.2d 689, 695, 46 P.2d 135 (1935).
43. In actions for infringement of rights in trade names and trademarks courts have a duty to protect both the private rights of the original owner and the right of the public to be free from confusion, deception and mistake. American Petrofina, Inc. v. Petrofina of California, Inc., supra, 189 U.S.P.Q. 67 at 83; Jockey International, Inc. v. Burkard, supra, 185 U.S.P.Q. 201 at 207.
44. The balance of equities also weighs in favor of plaintiff Steinway Sons.
45. Defendants' entry into the marketplace is recent. Marketing of the STEIN-WAY product did not commence in earnest "until mid-1978. The public has had limited exposure to defendants product. Moreover, defendants proceeded with their activities in awareness of plaintiff's trademarks. These facts militate against any unfairness in enjoining defendants' use of STEIN-WAY.
46. Defendants will suffer little, if any, harm from the grant of an injunction against use of a name which it has employed or only a short period of time. To the contrary, defendants will undoubtedly benefit from an immediate injunction. "[A] preliminary injunctive decree in a case of this sort is sometimes an act of kindness to the party enjoined. It cuts him off from a business life which, from all the portents, would involve a series of trademark frustrations. By the time he would have attained some modicum of success, it might be taken away by court decree, making him start all over again. It is more consonant with equity to enjoin him at the threshold of his enterprise." George Washington Mint, Inc. v. Washington Mint, Inc., 349 F. Supp. 255, 263 (S.D.N.Y. 1972)
47. While a preliminary injunction may necessitate certain expenses for retooling and printing associated with a new trademark, such expenses can be adequately compensated by an award of money damages if the defenses are ultimately upheld. Louis Rich, Inc. v. Horace W. Longacre, Inc., 423 F. Supp. 1327, 1340 (E.D. Pa, 1976). Moreover, defendants have not shown that any of their contractual commitments or future business depends on their continued right to use the name STEIN-WAY. Miss Universes Inc. v. Patricelli, 271 F. Supp. 104, 110 (D. Conn. 1967), aff'd., (2d Cir. 1967).
48. That defendants' business operations are small relative to plaintiff's is without significance. Stork Restaurant, Inc. v. Sahati, supra, 166 F.2d at 357; Jockey International, Inc. v. Burkard, 185 U.S.P.Q. 201, 207 (S.D. Cal. 1975) (disparity in the size of the respective businesses does not bar the granting of injunctive [relief).
49. Steinway's delay, if any, in bringing the present action and seeking injunctive relief is not of a character to bar the issuance of a preliminary injunction.
50. The mere passage of time cannot constitute laches as to defeat a motion for preliminary injunction, and defendants do not allege plaintiff lulled them or caused them to act in reliance on the delay. Ideal Industries, Inc. v. Gardner Bender, Inc., 612 F.2d 1018, 1025 (7th Cir. 1980). In this Circuit, simple delay will not defeat an injunction to protect trademark rights. Whitman v. Walt Disney Productions, Inc., 263 F.2d 229, 231 (9th Cir. 1958). Friend v. H. A. Friend Co., 416 F.2d 526, 533 (9th Cir. 1969) (plaintiff's six year delay no bar where reliance was absent.)
51. Plaintiff cannot be charged with delay attributable to efforts, such as those here, to resolve the dispute without the court's intervention. Louis Rich, Inc. v. Horace W. Longacre, Inc., 423 F. Supp. 1327, 1335 E.D. Pa. 1976); Coca Cola Company v. Gemini Rising, Inc., 346 F. Supp. 1183, 1192 (E.D.N.Y. 1972).
52. Defendants' infringing use of the name STEIN-WAY will, if permitted to continue, injure plaintiff's business reputation and dilute the distinctivequlity of plaintiff's trade name and trademark. Such injury and dilution are in violation of Section 14330 of the California Business and Professions Code.
53. Plaintiff has shown that it is likely to prevail on merits at trial.
54. Plaintiff is entitled to injunctive relief, pendente lite, from defendants' trademark and trademark infringement, unfair competition and dilution.