37 F.3d 74 (2nd Cir. 1994), 1979, Polymer Technology Corp. v. Mimran

Docket Nº:1979, Docket 94-7207.
Citation:37 F.3d 74
Party Name:32 U.S.P.Q.2d 1506 POLYMER TECHNOLOGY CORPORATION (a New York Corporation), Plaintiff-Appellant, v. Emile MIMRAN, also known as Alan Franco; U.D.S. Export & Import, also known as User Designed Software; Optic Express, Incorporated; American Contact Lens Association; International Contact Lens Lab I; Marty Powers Sales, Incorporated; Worldwide Scent
Case Date:October 06, 1994
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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37 F.3d 74 (2nd Cir. 1994)

32 U.S.P.Q.2d 1506

POLYMER TECHNOLOGY CORPORATION (a New York Corporation),

Plaintiff-Appellant,

v.

Emile MIMRAN, also known as Alan Franco; U.D.S. Export &

Import, also known as User Designed Software; Optic

Express, Incorporated; American Contact Lens Association;

International Contact Lens Lab I; Marty Powers Sales,

Incorporated; Worldwide Scents, Incorporated; Julio

Moreno; Carlo Sanchez d/b/a Alpha Omega; and Various John

Does, Jane Does and XYZ Companies, Defendants-Appellees.

No. 1979, Docket 94-7207.

United States Court of Appeals, Second Circuit

October 6, 1994

Argued May 23, 1994.

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[Copyrighted Material Omitted]

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Morton M. Maneker, New York City (Proskauer Rose Goetz & Mendelsohn, New York City, of counsel), for plaintiff-appellant.

Fran M. Jacobs, New York City (Jonathan A. Kenter, Richards & O'Neill, New York City, of counsel), for defendants-appellees.

Before: VAN GRAAFEILAND, CARDAMONE, and ALTIMARI, Circuit Judges.

ALTIMARI, Circuit Judge:

This action for a preliminary injunction returns to us after a prior remand to the district court. See Polymer Technology Corp. v. Mimran, 975 F.2d 58 (2d Cir.1992) ("Polymer I "). In 1991, plaintiff-appellant Polymer Technology Corporation ("Polymer") commenced an action against defendant-appellee Emile Mimran and other defendants alleging various claims of trademark infringement and counterfeiting. The claims were based on the defendants' retail sales of a promotional product manufactured by Polymer that Polymer claimed was intended for professional distribution only. All defendants other than Mimran stipulated to a preliminary injunction. The district court denied the injunction against Mimran, finding insufficient evidence of counterfeiting or trademark infringement. On appeal, we remanded for further findings regarding certain of Polymer's claims. For the reasons discussed below, we now affirm the district court's denial of the preliminary injunction, 841 F.Supp. 523.

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BACKGROUND

Polymer, a manufacturer of ophthalmic products including contact lens solutions, sells its lens care solutions under the federally-registered "BOSTON" trademark. Polymer uses two methods of distributing these solutions. One line of solutions is distributed in the retail market ("retail solutions"). The retail solutions are generally packaged individually and their outer packaging contains a list of active ingredients and preservatives, a notice that the contents are sterile, warnings concerning contamination, contraindications, and shelf life, and tamper-evident seals on the top and bottom flaps. The solutions also contain an insert with directions and important safety information.

The other line of solutions is directed through authorized distributors to professional eye-care practitioners ("professional solutions"). Although the professional solutions contain an insert similar to the one used with the retail solutions, they do not always contain the same information on their outer packaging as the retail solutions, nor do they always contain the tamper-evident seal. Some of the solutions contain labels indicating that the solutions are "For Professional Dispensing Only."

The professional solutions are packaged in two types of kits, "Care System Kits" and "Starter Kits." The "Care System Kits" contain a full retail-size bottle of conditioning solution, and smaller containers of lens cleaner and reconditioning drops. Polymer sells these Care System Kits to the distributors for $1.75, and they in turn sell them to eye-care professionals for between $2.00 and $2.50. The price for the retail equivalent of the "Care System Kits" ranges from $10.00 to $14.50. The "Starter Kits" contain sample-sized containers of the solutions and are given to the distributors free of charge.

Although Polymer's authorized distributors are not explicitly contractually bound to restrict their distribution of the professional solutions to eye-care practitioners, the distribution of the professional solutions to these practitioners is a key part of Polymer's marketing strategy. Presumably the eye-care practitioners give the solutions to their patients as they fit them for contact lenses, and the patients then continue to use the BOSTON solutions in the future. Polymer's marketing research indicates that 75-80% of patients will continue to buy the same brand of solution recommended to them by their doctors.

Defendant-appellant Emile Mimran owns a number of businesses that distribute ophthalmic lens care products. Mimran admittedly obtains Polymer's professional solutions from Polymer's authorized distributors and then resells them to wholesalers and retail drug stores. Polymer sought a preliminary injunction against Mimran from obtaining possession of, purchasing, or selling Polymer's professional solutions. The district court for the Southern District of New York (Knapp, J.) denied the injunction against Mimran, finding, among other things, that Polymer's failure to have restricted by contract "the population of entities to which defendants could sell its product" defeated Polymer's claim that the sales in question were unauthorized. On appeal, a divided panel of this Court vacated the district court's decision and remanded for reconsideration of certain evidence relevant to Polymer's claims of trademark infringement. See Polymer I, 975 F.2d at 61. Polymer then made a renewed motion for a preliminary injunction based upon the trademark theories previously advanced as well as several new theories. On remand, the district court reconsidered the evidence, considered Polymer's new theories, and again denied the motion.

Polymer now appeals.

DISCUSSION

On appeal, Polymer maintains that Mimran's retail sale of products Polymer intended only for professional distribution constitutes trademark infringement and common law misappropriation. We will discuss each of Polymer's theories of liability in turn.

I. Standard...

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