Yarmuth-Dion, Inc. v. D'ion Furs, Inc., YARMUTH-DIO

• Decision Date: 22 December 1987
• Docket Number: YARMUTH-DIO,INC,No. 180,D,180
• Citation: 835 F.2d 990
• Parties: , Peter Dion, Inc., and Peter Dion, Plaintiffs-Appellants, v. D'ION FURS, INC., Defendant-Appellee. ocket 87-7423.
• Court: U.S. Court of Appeals — Second Circuit

Page 990

835 F.2d 990

5 U.S.P.Q.2d 1262

YARMUTH-DION, INC., Peter Dion, Inc., and Peter Dion Plaintiffs-Appellants, v. D'ION FURS, INC., Defendant-Appellee.

No. 180, Docket 87-7423.

United States Court of Appeals Second Circuit.

Argued Sept. 16, 1987.

Decided Dec. 22, 1987.

James Hamilton, Washington, D.C. (Mary Helen Sears, Samuel H. Black, David G. Sumner, Ginsburg, Feldman and Bress, Washington, D.C., Paul Frohman, Alfieri, Frohman, Unger & Primoff, New York City, of counsel), for plaintiffs-appellants.

George Gottlieb, New York City (Jeffrey M. Kaden, Gottlieb, Rackman & Reisman, New York City, of counsel), for defendant-appellee.

Before CARDAMONE, WINTER and MINER, Circuit Judges.

CARDAMONE, Circuit Judge:

Yarmuth-Dion, Inc., Peter Dion, Inc., and Peter Dion (collectively Dion or Peter Dion) appeal from an April 21, 1987 judgment of the United States District Court for the Southern District of New York (Griesa, J.) dismissing their amended complaint against D'ion Furs, Inc. (D'ion Furs). The judgment was based on an oral decision rendered April 9, 1987, in which Judge Griesa held that Peter Dion had failed to prove secondary meaning necessary to sustain a Lanham Act claim for false designation of origin. The trial court also dismissed Peter Dion's New York state law claims for dilution and the use of a misleading trade name.

The substance of this appeal is whether an unregistered mark that consists of Peter Dion's personal name has acquired secondary meaning so as to be entitled to Lanham Act protection. Historically, by indicating a product's source, a mark protects both the public from confusion and the owner in his trade. The complaint before us in effect disputes Iago's utterance, "But he that filches from me my good name Robs me of that which not enriches him, And makes me poor indeed" (W. Shakespeare, Othello, act III, scene iii, line 159 (W. Craig ed. 1928)), because here Peter Dion claims that the alleged infringer of his name is enriched by the infringement. We reverse and remand for further proceedings.

BACKGROUND

All parties to this appeal are actively involved in the fur industry. Based in New York, Peter Dion is a distinguished designer, manufacturer, and wholesaler of fine fur garments. Dion was born in Greece under the name Peter Dionisiou and immigrated to the United States in the early 1950's. He changed his legal name to "Dion" in 1973. Dion began his career at the New York firm of Hiller and Becker, a renowned manufacturer of fur garments, and his talents soon became apparent. In 1974 the firm began to manufacture coats under the Peter Dion label. Eventually Dion became the owner of the business and changed its name to Peter Dion, Inc. Later, he acquired Yarmuth Furs, Inc., a fur jobber, and called it Yarmuth-Dion, Inc.

In 1982 Peter Dion and James Galanos, a leading fashion designer, entered into an agreement under which Dion manufactures fur garments designed by Galanos. Galanos furs are distributed only through the country's best known department stores catering to the carriage trade, such as Bergdorf Goodman in New York and Nieman-Marcus in Dallas. The Galanos label--not the Peter Dion label--appears on these furs together with that of the store. In addition, Peter Dion sells garments of his own design and manufacture to retailers in Chicago such as McElroy Furs, Marshall Field's, and the Chicago branches of Nieman-Marcus and Saks Fifth Avenue. These garments are sold under the retailer's private label, though there is evidence that salesclerks occasionally use the name Peter Dion to clinch a fur sale.

Unlike Peter Dion, appellee D'ion Furs is a retailer selling directly to the public. D'ion Furs was established in 1983 by Denis and Diane Dionissopoulos and at the time of the district court's decision had two retail stores located in Niles and Oaklawn, Illinois, both suburbs of Chicago. D'ion Furs has since established a store in Chicago on Michigan Avenue. It is a high volume discounter advertising extensively in the Chicago area. Its purchase at the 1986 Seattle fur auction of high-quality "Blackglama" mink skins was announced in Fur Age Weekly, and in December 1985 it ran a full-page advertisement in Vogue, a nationally distributed fashion magazine, inviting telephone and mail orders.

In a letter dated February 10, 1986 Peter Dion charged the Dionissopouloses with trademark infringement and unfair competition. A complaint was subsequently filed in the Southern District of New York seeking relief, including an injunction and damages, on four grounds:

(1) Sec. 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1982), (2) common law trademark and trade name infringement, (3) state law trademark or trade name dilution, N.Y.Gen.Bus.Law Sec. 368-d (McKinney 1984), and (4) misleading trade name, id. Sec. 133 (McKinney 1968).

After an eight-day bench trial, the district court dismissed the complaint. Initially, it narrowed the relevant geographic market to the Chicago area. It then ruled that though "Dion" had acquired secondary meaning in the Chicago wholesale fur market, the relevant market for assessing secondary meaning was the Chicago retail market. The trial court found that within that market, only two groups of customers knew of Peter Dion and his association with high quality fur garments: first, select Neiman-Marcus customers who became personally acquainted with Peter Dion through Nieman-Marcus promotions and, second, customers who had Peter Dion's name mentioned to them in an effort to close the sale. The district judge held that within the former group there was no appreciable likelihood of confusion between Peter Dion and D'ion Furs and stated concerning the latter group that they "are not an appreciable part of the fur market in Chicago," and "whatever is done to introduce them to the name of Peter Dion ... does not create secondary meaning within the meaning of the rules of law which must be applied here."

Because "Dion" had not acquired secondary meaning in the retail fur market in Chicago, the district court concluded that Peter Dion's mark and trade name were not protectible under the Lanham Act. Accordingly, it dismissed appellants' claims under that Act and dismissed the New York state law antidilution claim, stating that it could not "possibly apply, because the claim relates to Illinois." It also dismissed the state law claim for using a misleading trade name, presumably for the same reason.

DISCUSSION

I The Lanham Act Claim

Section 43(a) of the Lanham Act provides that

"[a]ny person who shall ... annex, or use in connection with any goods or services, ... a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same, ... shall be liable to a civil action ... by any person who believes that he is ... damaged by the use of any such false description or representation."

15 U.S.C. Sec. 1125(a) (1982). This provision protects unregistered marks or trade names such as Peter Dion's.

We have developed a two-step test for determining whether an unregistered mark has been infringed. First, a plaintiff must demonstrate that his mark merits protection under the Lanham Act. Thompson Medical Co. v. Pfizer Inc., 753 F.2d 208, 212-13 (2d Cir.1985). Then, if the mark is protectible, the plaintiff must establish the likelihood of confusion, that is, "that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question." Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978) (per curiam), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979). A trial court determines "likelihood of confusion" by examining many factors, including:

the strength of [the plaintiff's] mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of defendant's good faith in adopting its own mark, the quality of defendant's product, and the sophistication of the buyers.

Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961).

To resolve the first question--whether Peter Dion's name is eligible for trademark protection--we must first classify the mark. "Peter Dion" or "Dion," being a personal name, is a descriptive mark. See Abraham Zion Corp. v. Lebow, 761 F.2d 93, 104 (2d Cir.1985); 3A R. Callmann, The Law of Unfair Competition, Trademarks and Monopolies Sec. 21.36, at 145 (4th ed. 1983) ("An individual name is rather similar to a descriptive word, in the sense that it might properly be regarded as a convenient description of the fact that the named individual is or was affiliated with the firm."). As a descriptive mark, the name is protectible under the Act only when it has acquired secondary meaning. Thompson, 753 F.2d at 216.

Peter Dion argues that proof of secondary meaning should not be required in this case. He asserts that as against Diane and Denis Dionissopoulos, who do not legally bear the name "D'ion" or "Dion," he has an absolute and exclusive right to use his legal name. While a senior user of a personal name historically might have a certain equitable priority in using his legal name as against a junior user who does not legally bear that name, see, e.g., Societe Vinicole de Champagne v. Mumm, 143 F.2d 240, 241 (2d Cir.1944); Stephano Bros., Inc. v. Stamatopoulos, 238 F. 89, 91-92 (2d Cir.1916), today proof of secondary meaning is required before a senior user's name is entitled to Lanham Act protection. See Madrigal Audio Laboratories, Inc. v. Cello, Ltd., 799 F.2d 814, 822 (2d Cir.1986) (individual's personal name can acquire secondary meaning and thereby merit Lanham Act protection as trade name); Abraham Zion, 761 F.2d at 104 (same); Taylor Wine Co. v. Bully Hill...