American Footwear Corp. v. General Footwear Co. Ltd.
| Decision Date | 09 November 1979 |
| Docket Number | D,No. 505,505 |
| Citation | 609 F.2d 655,204 USPQ 609 |
| Parties | AMERICAN FOOTWEAR CORPORATION, Plaintiff-Appellee, v. GENERAL FOOTWEAR COMPANY LIMITED, Defendant-Appellant, and Universal City Studios, Inc., Intervening-Defendant-Appellant. ocket 78-7362. |
| Court | U.S. Court of Appeals — Second Circuit |
Evan L. Gordon, New York City (Wofsey, Certilman, Haft & Lebow, Barry J. Bendes, New York City, Rosenfeld, Meyer & Susman, William J. Billick, III, Beverly Hills, Cal., of counsel), for defendant-appellant.
Lawrence Rosenthal, Blum, Moscovitz, Friedman & Kaplan, New York City, for plaintiff-appellee.
Before WATERMAN, GURFEIN and VAN GRAAFEILAND, Circuit Judges.
Defendant-appellant General Footwear Company Limited (General) and intervening defendant-appellant Universal City Studios, Inc. (Universal) appeal from an interlocutory judgment entered in the United States District Court for the Southern District of New York, Carter, J., granting plaintiff-appellee American Footwear Corporation (American) an injunction against infringement of its trademark "Bionic" in connection with the promotion and sale of footwear. The judgment appealed from enjoins General and Universal from asserting exclusive rights to use of the term "Bionic" in connection with the promotion and sale of footwear, but in no way interferes with Universal's trademark rights in its T.V. shows or its licensing operations in respect thereto.
The district court found that inasmuch as Universal had not registered or applied for registration of "Bionic" as a trademark prior to the time American selected the mark and applied for registration no statutory trademark issues were involved. Relying primarily upon American's priority of use, the lower court concluded that American established its right to use "Bionic" in connection with the promotion and sale of its footwear, and therefore, as a result of Universal's "Buyers Beware" advertisement, designed to create the impression that American was guilty of trademark infringement, American had suffered irreparable injury. Based upon the foregoing facts, the court determined that American had established its entitlement to an injunction against Universal for trademark infringement and unfair competition.
Universal and General argue that enjoining them from licensing or using the word "Bionic" in connection with the promotion and sale of footwear because of American's prior use of the word constitutes an inequitable restriction upon a creator's use of a fanciful term and contend that they are entitled to an injunction against American based on American's unfair competition in attempting to capitalize upon the success of Universal's T.V. shows by misappropriating an essential element thereof in the word "Bionic." Defendants-appellants also contend that American failed under recognized principles of trademark law to establish any of the criteria necessary for the issuance of the injunction granted to it by the district court and urge the dissolution of that injunction.
We are in agreement with the defendants-appellants' contention that American failed to establish the necessary elements for issuance of an injunction and hereby order its dissolution. As to the appellants' contention that they are entitled to an injunction restraining American, we find that, because appellants failed to establish a likelihood of confusion such that a substantial number of ordinarily prudent purchasers might be misled into mistakenly purchasing American's footwear, American's usage of the trademark "Bionic," although admittedly adopted to capitalize on public receptiveness to a word Universal was responsible for popularizing, does not establish a case of unfair competition or trademark infringement entitling them to enjoin American's use of the word "Bionic" in connection with the promotion and sale of its hiking boot.
This action, a suit for declaratory relief brought in the New York Supreme Court, was initiated on July 30, 1976, by American against General, which, pursuant to license from Universal, was using "Bionic" in the manufacture and sale of inexpensive children's sneakers. On August 13, 1976, General, however, removed that action to the United States District Court for the Southern District of New York and on September The consolidated action contains the claims by American as plaintiff in its suit against General and Universal for common law trademark infringement, unfair competition, and tortious interference with business relations, and also the claims Universal and General assert against American in their action for common law and statutory trademark infringement, unfair competition, false designation of origin, passing off, and dilution.
20, 1976, commenced a separate action against American in the United States District Court. Universal was granted leave to intervene in both actions. Subsequently the two actions were consolidated for all purposes.
The events leading up to the present controversy are lengthy and involve numerous peripherally related facts which will not be discussed at length. Beginning in January 1974 Universal, a television and motion picture studio, began what became an immensely popular T.V. series entitled "The Six Million Dollar Man." The story line of this series concerned the adventures of a "bionic" man who, after a catastrophic accident, had been restored by a team of doctors through the use of numerous artificial limbs and organs. As a result, the "bionic" man possessed great physical strength and powers. This series was followed by another with a similar theme featuring a "bionic" woman, first aired in January 1976 under the title of "The Bionic Woman." Universal has applied for or registered numerous trademarks having reference to these two television shows in the fields of entertainment and of toys, and has begun a vigorous merchandising campaign exploiting the popularity of these two television programs. As of January 1976, however, its only registered mark was for "The Six Million Dollar Man" in the field of entertainment services.
In the fall of 1975 American, through its sister company Anwelt Corp., designed a multipurpose hiking boot. The trademark "Bionic Boot" was adopted for the hiking boot in January 1976, at a brainstorming session of the American staff. It is undisputed that the idea for the trademark was generated from the highly popular television series "The Six Million Dollar Man," where the hero is sometimes referred to as the "Bionic" man.
American searched the records of the U. S. Patent and Trademark Office to ascertain whether "Bionic" had been registered as a federal trademark on footwear or whether there were any pending applications so to register. American was advised that the mark "Bionic" was available for registration and that while "Bionic" or other related terms had been used as trademarks for various goods, the mark "Bionic" had never been registered or applied for in connection with footwear. American, therefore, went ahead with its plans to use "Bionic" as a trademark and displayed the boot under that mark at the New York Shoe Fair in February 1976. The trademark "Bionic" by American was affixed to the heel pad of the boot and was prominently displayed on the box. 1 American's application for federal registration of the trademark "Bionic" was filed on June 9, 1976. The first customer orders for the boot were dated February 1976, and the first shipment to customers was in July 1976. "Footwear News" also featured American's "Bionic Boot" in its April 26, 1976 supplement.
Beginning in December 1975 Merchandising Corporation of America, Inc. (Merchandising), the commercial arm of Universal, began negotiations with General concerning commercial exploitation of its "The Six Million Dollar Man" series in the footwear field. Although some agreement was reached in March 1976, the district court found that the earliest date at which a license was effectuated was sometime subsequent to October 4, 1976. The court held As a result of the article in "Footwear News" featuring American's "Bionic Boot," Universal's subsidiary, Merchandising, sent a letter dated June 25, 1976, to American charging trademark infringement. Thereafter on July 26, 1976, Merchandising published in "Footwear News" a "Buyers Beware" advertisement which stated that Universal alone had the right to use "Bionic" as a trademark and charged trademark infringement against all who used the mark without its permission.
that "(t)he licensing agreement as proposed and as finally agreed upon always refer(s) to Six Million Dollar Man and Bionic Woman, and at no time is there any reference to a trademark Bionic or to licensing the use of Bionic alone or indeed licensing anything separate and apart from the TV shows mentioned." (Joint Appendix at 15.)
At the outset of its opinion the district court found that Universal had not registered or applied for a registration of "Bionic" as a trademark for any goods prior to the time American selected the mark and applied for its registration and accordingly it held that no statutory trademark issues were involved. The district court recognized that:
It was entirely permissible for American to attempt to capitalize on public receptiveness to a concept, idea or word which Universal has been responsible for creating or popularizing. The only limitation is that the party who takes advantage of the atmosphere the other party has helped create may not achieve a competitive boost by confusing the public into mistakenly purchasing his articles believing it to be that of his competitor. (citation omitted). American has not been guilty of that fault. It has at all times made clear that the Bionic boot it was attempting to promote was an American product. No effort of any kind was made to associate the boot with Universal's TV shows or with any of the characters in those shows. (Joint Appendix at 17-18...
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