Otokoyama Co. Ltd. v. Wine of Japan Import, Inc.

• Citation: 985 F.Supp. 372
• Decision Date: 14 November 1997
• Docket Number: No. 97 Civ. 5031.,97 Civ. 5031.
• Parties: OTOKOYAMA CO. LTD., a Japanese Corporation, Plaintiff, v. WINE OF JAPAN IMPORT, INC., a New York Corporation, and Does 1 through 50, inclusive, Defendants.
• Court: U.S. District Court — Southern District of New York

Page 372

985 F.Supp. 372

OTOKOYAMA CO. LTD., a Japanese Corporation, Plaintiff, v. WINE OF JAPAN IMPORT, INC., a New York Corporation, and Does 1 through 50, inclusive, Defendants.

No. 97 Civ. 5031.

United States District Court, S.D. New York.

November 14, 1997.

As Amended November 20, 1997.

Nancy J. Deckinger, Arlana S. Cohen, Mark J. Speciner, Liddy, Sullivan, Galway, Begler & Cohen, P.C., New York, NY, for plaintiff.

Michael A. Cornman, Meyer Gross, Schweitzer, Cornman, Gross & Bondell, New York, NY, for defendants.

OPINION AND ORDER

BAER, District Judge.

Plaintiff Otokoyama Co. Ltd. ("OCL"), a Japanese corporation, moves for a preliminary injunction preventing defendant Wine of Japan Import, Inc. ("WOJI"), a New York corporation, from infringing on plaintiff's trademark "Otokoyama" through the unauthorized use of that trademark in connection with the sale, advertisement, production and/or distribution of sake in the United States. For the reasons stated below, the plaintiff's motion is granted.

I. Background

Since 1984, OCL has distributed and sold sake (a mildly alcoholic Japanese beverage made from fermented rice) using the trademarks "Otokoyama" and the Japanese character notations denoting the term "Otokoyama", for which it owns the federal trademark registrations.¹ During the past 13 years, OCL has been the sole user of the Otokoyama trademarks in connection with the sale and distribution of sake in the U.S. In late March 1997, OCL became aware that WOJI began advertising, distributing and offering for sale sake under the name "Mutsu Otokoyama." On April 2, 1997, OCL's attorneys and attorney's for OCL's exclusive dealer wrote to WOJI to demand that it cease and desist the importation, distribution, advertisement and sale of the Mutsu Otokoyama sake. WOJI responded that it believed plaintiff's trademarks were invalid, and continued to offer its sake for sale. OCL subsequently brought this action for trademark infringement, unfair competition, and false designation of origin, arising under the Lanham Act, 15 U.S.C. § 1051 et seq., as well as state law claims. OCL now moves for a preliminary injunction, preventing defendant from infringing on its Otokoyama trademark. An evidentiary hearing was held on October 20, 1997.

II. Discussion

In order to prevail on its preliminary injunction motion, plaintiff must establish (1) "either a likelihood of success on the merits or sufficiently serious questions going to the merits ... and a balance of hardships tipping decidedly in the moving party's favor" and (2) that it will suffer irreparable injury. Clinique Laboratories, Inc. v. Dep Corp., 945 F.Supp. 547, 550 (S.D.N.Y.1996). In a trademark action, in order to satisfy the first prong, a likelihood of success on the merits or sufficiently serious questions going to the merits, the movant must first establish that it has a valid mark. See Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503 (2d Cir.1997). Once the validity of the mark is established irreparable harm and the likelihood of success on the merits may be established by showing a likelihood of significant consumer confusion or misunderstanding as to the source or sponsorship of the product in question. Giorgio Beverly Hills v. Revlon Consumer Products Corp., 869 F.Supp. 176, 180 (S.D.N.Y.1994).

A. Valid Mark

The first issue therefore is whether plaintiff has a valid mark. Defendant contends that plaintiff has no valid mark and that its trademark registrations, obtained under improper circumstances, should be canceled. Specifically, defendant alleges that when plaintiff applied for its trademark registration, the U.S. Patent & Trademark Office ("PTO") asked for an English translation of the foreign word "otokoyama." In response, plaintiff informed the Examiner that the mark was fanciful or arbitrary and could not be translated. Defendant argues that plaintiff knew the term could be translated and misrepresented that it could not in order to secure the trademark registration in the U.S. The word "otokoyama" is a contrived term comprised of two Japanese words, "otoko" and "yama." While they can be literally translated to mean "man" and "mountain," respectively, that revelation hardly supports defendant's view that the plaintiff's statement was patently false. There is no evidence that OCL intended to mislead the trademark Examiner when it stated that the mark itself could not be translated.

WOJI also argues that OCL knew at the time it submitted its trademark application that the word "otokoyama" is a descriptive or generic term in Japan for a particular ancient type of dry, manly sake, but failed to disclose this to the trademark Examiner. It contends that this knowledge is evidenced by OCL's advertising brochure, (Plaintiff's Exh. L), which states "Otokoyama, a variety of high-quality sakes, ..." and refers to otokoyama as a "high-quality sake backed by 340 years of tradition." As further evidence of this knowledge, WOJI points to the Japanese Trademark Office's denial of OCL's trademark in Japan, which stated that the term "otokoyama" is "a customary written statement of the goods."

OCL's brochure, however, does not demonstrate that the term "otokoyama" refers to a particular variety of sake; OCL's brochure simply refers to the many types of sake OCL offers for sale under the Otokoyama trademarks. The brochure itself advertises four different types of sake offered for sale by OCL under the Otokoyama trademarks in the United States.² More importantly, even assuming that "otokoyama" is in the public domain and means simply, as defendant contends, a variety of dry, manly sake in Japan, this fact is irrelevant to the U.S. PTO's determination of OCL's trademark rights. See Seiko Sporting Goods U.S.A., Inc. v. Tokeiten, 545 F.Supp. 221, 226 (S.D.N.Y.1982), aff'd, 697 F.2d 296 (2d Cir.1982). Therefore, plaintiff had no duty to disclose this information to the PTO. The decision of the Japanese Trademark Office is irrelevant and inadmissible in this action. Vanity Fair Mills, Inc. v. T. Eaton Co. Ltd., 234 F.2d 633, 639 (2d Cir.1956), cert. denied, 352 U.S. 871, 77 S.Ct. 96, 1 L.Ed.2d 76 (1956); see also, Noone v. Banner Talent Assocs. Inc., 398 F.Supp. 260, 263 (S.D.N.Y.1975). Accordingly, defendant has failed to establish a likelihood of success on the merits as to its claim that OCL's trademark should be canceled.³

B. Likelihood of Confusion

Since the defendant has failed to show that plaintiff does not have a valid mark, the next issue is whether the defendant's actions are likely to cause significant consumer confusion. The "likelihood of confusion" issue is governed by the eight-prong Polaroid test which instructs the court to consider the following factors: (1) the strength of plaintiff's mark, (2) the degree of similarity between the two marks, (3) the proximity of the products, (4) the likelihood that plaintiff will "bridge the gap", (5) actual confusion, (6) defendant's good faith, (7) the quality of defendant's product and (8) the sophistication of potential consumers. Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir.1961), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961).

1. Strength of Plaintiff's Mark

"In determining the strength of [a] mark, [courts] look at its tendency to identify the goods ... sold under the mark as emanating from a particular, although possibly anonymous, source." The Sports Authority, Inc. v. Prime Hospitality Corp., 89 F.3d 955, 960-61 (2d Cir.1996). There are four categories to gauge the strength of a mark: (1) generic, (2) descriptive, (3) suggestive and (4) arbitrary and fanciful. Id. at 961. Generic marks are entitled to no protection while arbitrary and fanciful marks are almost always considered strong marks. Id. If a mark is deemed descriptive or suggestive, the court considers whether it has acquired a secondary meaning. Id. at 960-61.⁴

Defendant argues that the trademark Otokoyama is descriptive or generic because the term "otokoyama" refers to an ancient variety of dry, manly sake which originated in Japan more than 300 years ago and which word is commonly used by at least 20 other brewers in Japan to identify this type of sake. However, as discussed above, the meaning of the term "otokoyama" in Japan is not relevant to this action. The issue here is what "otokoyama" means to United States consumers. While several brewers use the term "otokoyama" in Japan, there are only two companies that currently use the term "otokoyama" in the United States, plaintiff and defendant. The meaning of a term outside of the United States is irrelevant in the determination of whether or not the mark is entitled to protection under United States trademark laws.⁵ See V & V Food Products, Inc. v. Cacique Cheese Co., Inc., 683 F.Supp. 662, 669-70 (N.D.Ill.1988); Seiko Sporting Goods U.S.A., Inc. v. Tokeiten, 545 F.Supp. 221, 226 (S.D.N.Y.1982), aff'd, 697 F.2d 296 (2d Cir.1982); see also, Osawa & Co. v. B & H Photo, 589 F.Supp. 1163, 1171-72 (S.D.N.Y.1984). Here, defendant has failed to offer any consumer studies or other evidence to establish what the term "otokoyama" means to United States consumers. See Heroes Inc. v. The Boomer Esiason Hero's Foundation Inc., 1997 WL, 335807 (D.D.C. June 6, 1997), op. amended, 96 Civ. 260 (D.D.C. June 16, 1997)(citing H. Marvin Ginn Corp. v. Int'l Assoc. of Fire Chiefs, Inc., 782 F.2d 987, 990 (Fed.Cir. 1986)(to show a mark is generic, defendant must show, usually through consumer surveys, that the relevant public understands the term to signify the services provided by the plaintiff).

Defendant nevertheless contends that since OCL's sake is marketed to a Japanese-born or Japanese-speaking population in the United States, the meaning of the term in Japan is nevertheless relevant here. However, WOJI's assertion regarding the composition of the sake market is not supported by the evidence. WOJI presented no studies to show what the composition of sake...