Banff, Ltd. v. Federated Dept. Stores, Inc., 262

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Citation: 6 USPQ2d 1187,841 F.2d 486
• Docket Number: No. 262,D,262
• Parties: BANFF, LTD., f/k/a Sweater Bee by Banff, Ltd., Plaintiff-Appellant, v. FEDERATED DEPARTMENT STORES, INC., and Bloomingdale's, a division of Federated Department Stores, Inc., Defendant-Appellee. ocket 87-7439.
• Decision Date: 10 March 1988

Page 486

841 F.2d 486

6 U.S.P.Q.2d 1187

BANFF, LTD., f/k/a Sweater Bee by Banff, Ltd., Plaintiff-Appellant, v. FEDERATED DEPARTMENT STORES, INC., and Bloomingdale's, a

division of Federated Department Stores, Inc.,

Defendant-Appellee.

No. 262, Docket 87-7439.

United States Court of Appeals,

Second Circuit.

Argued Oct. 19, 1987.

Decided March 10, 1988.

Dennis Grossman, New York City (Eileen King, New York City, of counsel), for plaintiff-appellant.

Karen Artz Ash, New York City (Daniel Ebenstein, Amster, Rothstein & Ebenstein, New York City, of counsel), for defendant-appellee.

Before OAKES, CARDAMONE and MAHONEY, Circuit Judges.

CARDAMONE, Circuit Judge:

This is an appeal in a Lanham Act case. In the typical trademark infringement suit a senior user claims that a junior user is attempting to ride on the senior's coattails and to persuade consumers that the senior user is the source of the junior user's goods. On this appeal, we consider what the rule is when the junior user--because it is bigger and better known in the marketplace--is wrongly viewed as the source of the goods in question.

BACKGROUND

Recognizing that suits for trademark infringement demand a "comprehensive analysis of all the relevant facts and circumstances," Vitarroz Corp. v. Borden, Inc., 644 F.2d 960, 968 (2d Cir.1981), we begin with a brief summary of the facts. Banff Ltd. (Banff) is a New York corporation engaged in the manufacturing, marketing, and sale of a wide range of quality women's clothing. Since 1971 Banff has marketed a successful line of apparel under the unregistered trademark "Bee Wear" to retail stores that in turn sell "Bee Wear" to retail consumers. Beginning in the 1930's Bloomingdale's--an internationally renowned department store in business since 1872--has used the letter "B" by itself and in combination with other words to promote its goods and business. Its use of the letter "B" during this period has been limited to three predominant styles: first, the long-used capital "B" with a "flowing romantic shape" and three-dimensional shading, which we call the "ribbon-style 'B' "; second, a "standard typestyle 'B' "; and third, a more recently introduced lower case "b" with a "modern design distinguished by its simplicity, ... comprised of an unadorned loop and upstroke" which we refer to as the "stylized lower-case 'b.' " The stylized letters also have been used as prefixes for various ordinary words, e.g., "b-Way."

Bloomingdale's presents two examples of its use of "B" in composite with "Wear": one involving the standard typestyle "B Wear" and one involving the ribbon-style "B Wear." It opened a junior wear department in August 1982 called the "B Wear" Department (standard typestyle "B"). There is no claim that this is a protected

trademark use. "B Wear" was only displayed on the junior wear department signs, that is, not on the goods themselves. Bloomingdale's further notes that only two of its stores presently display the "B Wear" sign. It also produced evidence that for a short period it used a ribbon-style "B Wear" to designate its internal dress regulations for its employees. This too is not a trademark use of "B Wear." Apart from these two uses, there is no evidence that before 1986 Bloomingdale's made any use of "B Wear."

In 1986 Bloomingdale's began manufacturing and selling women's clothing of the same general style and quality as Banff's clothing using the standard typestyle "B Wear." This clothing was sold to consumers through its retail stores. Stores that carry Banff's "Bee Wear" and those that carry Bloomingdale's standard typestyle "B Wear" are generally thought to be competitors. Banff had no previous knowledge of Bloomingdale's introduction of its standard typestyle "B Wear" label, and did not consent to it.

As soon as Banff became aware of Bloomingdale's use of the mark "B Wear," it commenced the instant action on May 7, 1986 in the United States District Court for the Southern District of New York (Sweet, J.) against Federated Department Stores, Inc. and its Bloomingdale's division seeking to enjoin Bloomingdale's use of a false designation of origin in violation of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1982). ¹ Shortly thereafter Banff sought a preliminary injunction prohibiting Bloomingdale's from using the mark "B Wear" in connection with the sale of women's apparel, which Banff alleged infringed its prior use of the unregistered trademark "Bee Wear." In a published opinion dated June 5, 1986 and an order dated June 23, 1986 Judge Sweet granted Banff's preliminary injunction. Banff, Ltd. v. Federated Dep't Stores, Inc., 638 F.Supp. 652 (S.D.N.Y.1986).

In its preliminary injunction opinion, the district court compared the marks "Bee Wear" and standard typestyle "B Wear," which at the time was attached to approximately 87,000 units of sold merchandise and $3 million (retail price) of unsold (ordered or displayed) Bloomingdale's goods. 638 F.Supp. at 654. After finding that "Bee Wear" merited protection and that a likelihood of success on the likelihood of confusion issue existed, the district court in its June 23 order preliminarily enjoined Bloomingdale's from using the standard typestyle "B Wear" trademark or trade name--or any designation confusingly similar to "B Wear" or "Bee Wear"--in connection with the sale, marketing, or advertising of women's clothing. Even at that stage of the proceedings, Bloomingdale's had stated that it intended to change the print style used on the "B Wear" labels, substituting a stylized lower-case "b" for the standard typestyle "B." Id. at 658.

The district court specifically refused to prohibit Bloomingdale's proposed use of stylized lower-case "b Wear." This holding was premised upon its findings that the visual similarity of the two marks would be largely eliminated by using the stylized lower-case "b"; that Bloomingdale's might have a protectible interest in this stylized "b"; and that the use of this recognizable "b" on Bloomingdale's private line in its own stores would reduce the likelihood of confusion by sophisticated customers. Id.

Subsequent to the entering of this narrow preliminary injunction, Bloomingdale's reasserted its intention to use after final judgment its proposed stylized lower-case "b Wear" label, and argued that it should be expressly allowed to use this stylized lower-case "b Wear" and a ribbon-style "B Wear." In an opinion dated March 31, 1987--which incorporated the findings and analysis of its preliminary injunction opinion--the district court permanently enjoined Bloomingdale's from using the standard typestyle "B Wear." Again excluded from the scope of the injunction was Bloomingdale's use of a stylized lower-case "b Wear" and excluded for the first time was Bloomingdale's use of a ribbon-style

"B Wear." The district judge also denied Banff's request for attorneys' fees pursuant to 15 U.S.C. Sec. 1117(a) (1982 & Supp. IV 1986) upon finding that the case is not an "exceptional" one meriting such an award

From a final judgment and order entered April 30, 1987 reflecting these holdings, Banff appeals. We agree with nearly all that the district court wrote in its careful opinion, differing only as to its refusal to include in the scope of the permanent injunction all contested variations of "B Wear." In our view, the reasoning that leads to the injunction, which we uphold, logically compels an injunction of broader scope.

DISCUSSION

I Eligibility for Protection Under the Lanham Act

Section 43(a) of the Lanham Act proscribes the "false designation of origin" by the use of "words or other symbols" in connection with goods or services. 15 U.S.C. Sec. 1125(a) (1982). The Act protects not only registered trademarks, but unregistered marks, such as "Bee Wear," as well. Thompson Medical Co. v. Pfizer Inc., 753 F.2d 208, 212 & n. 5 (2d Cir.1985).

A. Kind of Mark

To determine whether an unregistered mark has been infringed, we apply a two-step test. First, plaintiff must demonstrate that its mark merits protection under Judge Friendly's classic formulation in Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir.1976). Trademarks are divided into four categories with respect to protection. "Arrayed in an ascending order which roughly reflects their eligibility to trademark status and the degree of protection accorded, these classes are (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful." Id. at 9. Before beginning analysis, we must acknowledge that placing a mark in one of these four categories is far from an exact science, and that the differences between the classes, which is not always readily apparent, makes placing a mark in its proper context and attaching to it one of the four labels a tricky business at best. See 20th Century Wear Inc. v. Sanmark Stardust Inc., 747 F.2d 81, 87 & n. 6 (2d Cir.1984).

Generally, generic terms--a common description of goods like "aspirin" for example--are ineligible for trademark protection. Abercrombi & Fitch, at 9-10. Arbitrary marks are eligible for protection without proof of secondary meaning and "with ease of establishing infringement." Id. at 11. Recognizing that the determination of similarity of marks discussed below involves comparison of the marks as composites--not as isolated components--the district court properly determined at the preliminary injunction stage that Banff's use of the mark "Bee Wear" combines both an arbitrary and a generic term, resulting in a suggestive or arbitrary mark entitled to copyright protection. 638 F.Supp. at 655; see 2 T. McCarthy, Trademarks and Unfair Competition Sec. 23:15(G) (2d ed. 1984).

Consequently, we turn to the second step in examining infringement, determining whether Bloomingdale's mark is likely to cause confusion with Banff's mark.

B. Likelihood of Confusion

If its mark is entitled to protection, a plaintiff must then establish likelihood of confusion by proving "that an appreciable...