American Optical Corp. v. North American Optical

• Decision Date: 10 December 1979
• Docket Number: No. 77-CV-324.,77-CV-324.
• Parties: AMERICAN OPTICAL CORPORATION, Plaintiff, v. NORTH AMERICAN OPTICAL CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of New York

489 F. Supp. 443

AMERICAN OPTICAL CORPORATION, Plaintiff, v. NORTH AMERICAN OPTICAL CORPORATION, Defendant.

No. 77-CV-324.

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

December 10, 1979.

COPYRIGHT MATERIAL OMITTED

Whiteman Osterman & Hanna, Albany, N. Y., for plaintiff; Michael Whiteman, Albany, N. Y., of counsel.

Rogers Hoge & Hills, New York City, for plaintiff; William F. Weigel, Charles J. Raubicheck, New York City, of counsel.

Nolan & Heller, Albany, N. Y., for defendant; Richard H. Weiner, Albany, N. Y., of counsel.

JAMES T. FOLEY, Chief Judge.

MEMORANDUM — DECISION and ORDER

This is a civil action for unfair competition, false representation of goods in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), trademark infringement, and violation of New York's anti-dilution statute, N.Y.Gen.Bus.Law § 368-d. Plaintiff American Optical Corporation (American Optical) is a Delaware corporation engaged in the manufacture and interstate sale of a wide range of optical and ophthalmic products, including eyeglass frames. Defendant North American Optical Corporation (North American Optical) is a New York corporation engaged in the interstate sale of eyeglass frames.

Plaintiff commenced this action by filing its complaint on August 26, 1977. Count One alleges that the defendant's use of the corporate name and trading style NORTH AMERICAN OPTICAL CORPORATION in connection with the sale, advertising, and promotion of its optical products without the consent of plaintiff so resembles plaintiff's corporate name AMERICAN OPTICAL CORPORATION and trade name AMERICAN OPTICAL as to be likely to cause confusion among the eye care professions, the optical trade, and the consuming public, thus constituting unfair competition. Complaint, ¶¶ 5-14.

Count Two of the complaint alleges that the defendant's use of the corporate name and trading style NORTH AMERICAN OPTICAL CORPORATION in connection with the sale, advertising, and promotion of its optical products constitutes a false designation of origin and false representation used in connection with its products, in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Complaint, ¶¶ 15-19.

Count Three of the complaint alleges that the defendant's use of the trademark NaoC in connection with the interstate distribution of its eyeglass frames without plaintiff's consent has infringed plaintiff's rights in its trademarks AO and AOCO, which have been used by the plaintiff for its optical and ophthalmic products including eyeglass frames since 1885, and which are duly registered with the United States Patent and Trademark Office. Complaint, ¶¶ 20-30.

Count Four of the complaint alleges that the defendant's use of the corporate name and trading style NORTH AMERICAN OPTICAL CORPORATION and of the trademark NaoC is likely to dilute the distinctive quality of the plaintiff's trade name AMERICAN OPTICAL and trademarks AO and AOCO, and is likely to injure the plaintiff's business reputation, in violation of the New York anti-dilution statute, N.Y.Gen. Bus.Law § 368-d.

Jurisdiction is predicated on 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331, 1332(a), and 1338(a) and (b). Complaint, ¶ 4. The complaint concludes with a prayer for injunctive relief, an accounting of profits, attorneys' fees, and costs.

Defendant filed its answer on October 20, 1977, denying plaintiff's allegations and raising the affirmative defenses of estoppel, waiver, laches, and failure to state a claim.

Following pretrial discovery, plaintiff filed the instant motion for summary judgment pursuant to Fed.R.Civ.P. 56. The motion seeks judgment on all counts, restricting the claims for infringement and dilution to plaintiff's registered trademark AO. Similarly, the sole remedy now sought is injunctive relief. The record now submitted consists of the pleadings, motion papers, affidavits, exhibits, deposition transcripts, and briefs filed by each side, and the motion for summary judgment is ready for disposition.

For the reasons detailed herein, and after careful consideration of all of the above, it is my judgment that plaintiff's motion for summary judgment should be and hereby is granted.

The following facts emerge from the record as submitted.

Plaintiff American Optical was organized in 1962. It is the successor in interest of American Optical Company, a voluntary association of the Commonwealth of Massachusetts organized in 1869. From that time to the present, plaintiff and its predecessor have been continuously engaged in the manufacture and sale of a wide range of optical and ophthalmic products, from lenses and eyeglass frames to optical and ophthalmic equipment and diagnostic devices. These products have been and are currently sold in all 50 states and throughout the world. Consequently, plaintiff has come to be known and referred to by the eye care professions, the optical trade, and the consuming public as AMERICAN OPTICAL or AO.

Plaintiff has advertised and promoted its optical and ophthalmic products throughout the United States and the world for many years under the name AMERICAN OPTICAL. This publicity has been directed to both the eye care professions and the optical trade through advertising materials and trade journals such as Optometric Management, Optical Management, Optometric Monthly, Frames magazine, 20/20 magazine, The Blue Book of Optometrists, and The Red Book of Ophthalmology.

In addition, American Optical has also advertised and promoted its products in several national and regional trade shows and conventions. These include the annual conventions of the American Optometric Association, the Opticians Association of America, the American Academy of Ophthalmology, the New England Council of Optometry, the Southern Council of Optometry, Opti-Fair East, and Opti-Fair West. Recently, American Optical has begun advertising and promoting its optical products to the public generally via the national media with spots on the "Today" Show, the "Seven O'Clock News," and an advertisement in National Geographic magazine.

Of similar longstanding use and widespread promotion is plaintiff's logo AO. In January of 1885, plaintiff's predecessor American Optical Company adopted and began to use the term AO as a trademark for many of its optical and ophthalmic products. Such use by plaintiff and its predecessors has continued to the present. The mark AO has been duly registered in the United States Patent and Trademark Office, among which are those bearing the numbers 268,217; 268,220; 632,197; and 907,993. Each of these registrations is owned by the plaintiff and is presently in effect.

As a result of its lengthy and extensive sale and promotion of its products, plaintiff has developed and enjoys a professional good will of considerable value. Annual sales for 1978 were in excess of $400,000,000, and in no year since 1970 have plaintiff's sales been less than $230,000,000. All such sales were under the name AMERICAN OPTICAL and/or under the mark AO. Advertising and promotion expenditures exceeded $13,000,000 in 1978 and have exceeded $5,000,000 annually since 1970, all of which publicity featured the name AMERICAN OPTICAL and/or the mark AO.

Defendant North American Optical's genesis is of a much more recent vintage. A New York corporation organized in August of 1976 and located in Oneonta, New York, defendant commenced the interstate sale of eyeglass frames on October 8, 1976. It adopted the corporate name NORTH AMERICAN OPTICAL CORPORATION and uses the trademark NaoC for its optical products. Defendant solicits orders by telephone and sells eyeglass frames by mail in all 50 states, doing approximately 70% of its business in the Southwest. Monthly gross sales are approximately $40,000.

Defendant distributes a catalog to its customers, and disseminates advertising and promotional materials which bear, either separately or in combination, the name NORTH AMERICAN OPTICAL CORPORATION and the mark NaoC. Its packages, labels, statements, invoices, and letterhead also bear this name and/or mark. Defendant advertises and promotes its products monthly in Frames magazine, and participates annually in an optometric meeting in Dallas, Texas. An exhibit submitted to the Court, consisting of 18 pairs of defendant's frames and identified as samples of every type of frame it distributes, shows that usually each is stamped with either the name NORTH AMERICAN OPTICAL or the mark NaoC.

Plaintiff first learned of defendant's existence in May 1977, when defendant's application to register the mark NaoC as a trademark for eyeglass frames in the United States Patent Office was published for opposition. American Optical filed a timely notice of opposition to defendant's application, and commenced this action in August 1977 upon defendant's refusal to cease use of the name NORTH AMERICAN OPTICAL CORPORATION and the mark NaoC. Upon consent of the parties, the Patent and Trademark Office proceeding has been suspended pending the outcome of this action.

DISCUSSION

It is fundamental that on a motion for summary judgment under Fed.R.Civ.P. 56, the movant bears the burden of establishing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. In accord with General Rule 10(e) of this Court, both parties have submitted statements setting forth their respective contentions as to the presence or absence of such issues. This Court shares the established judicial hesitancy to grant such relief in trademark cases unless clearly appropriate. Marcus Breier Sons, Inc. v. Marvlo Fabrics, Inc., 173 F.2d 29 (2d Cir. 1949); Car-Freshner Corp. v. Auto Aid Manufacturing Corp., 461 F.Supp. 1055 (N.D.N.Y.1978). Nonetheless, to withhold such a remedy where warranted would be to eviscerate an important procedure provided by the federal rules. Community of Roquefort v. William Faehndrich, Inc., 303 F.2d 494 (2d Cir. 1962). The principles underlying these two policies...