Caesars World, Inc. v. Caesar's Palace

• Decision Date: 21 May 1980
• Docket Number: Civ. A. No. 77-1191.
• Parties: CAESARS WORLD, INC., a Florida Corporation, and Desert Palace Inc., a Nevada Corporation, Plaintiffs, v. CAESAR'S PALACE, a New Jersey Corporation d/b/a Caesars Palace Coiffures, Defendants.
• Court: U.S. District Court — District of New Jersey

490 F. Supp. 818

CAESARS WORLD, INC., a Florida Corporation, and Desert Palace Inc., a Nevada Corporation, Plaintiffs, v. CAESAR'S PALACE, a New Jersey Corporation d/b/a Caesars Palace Coiffures, Defendants.

Civ. A. No. 77-1191.

United States District Court, D. New Jersey.

April 30, 1980.

As Amended May 21, 1980.

COPYRIGHT MATERIAL OMITTED

James W. Clement, Charles W. Ryan, Clement & Ryan, Chicago, Ill., for plaintiffs.

Furman L. Templeton, Jr., Richard A. Rafanello, East Orange, N. J., for defendants.

OPINION

WHIPPLE, Senior District Judge.

This case was tried before the Court without a jury. After careful consideration of all credible testimony, the exhibits admitted into evidence, oral arguments, and post-trial submissions; the Court hereby makes the following findings of fact and conclusions of law pursuant to Fed.R.Civ. 52.

The plaintiffs, Caesars World, Inc. and its wholly owned subsidiary Desert Palace Inc. exist under the laws of Florida and Nevada respectively. The defendant, Caesar's Palace, Inc. exists under the laws of New Jersey. This is an action brought by the plaintiffs for service mark infringement, unfair competition, and service mark dilution. They seek injunctive relief, attorney's fees and costs. However, all claims for damages or an equitable accounting have been waived.

In about January 1965 Desert Palace Inc. hired Seymour Goeld to plan and carry out promotion and advertising activities for a proposed resort hotel. The name "Caesars Palace" was originated and adopted by the plaintiffs to be used as the name for the resort. Seymour Goeld invented a distinctive lettering style to be used in connection with the promotion and advertising. The distinctive characteristic of this style, called "romanesque" at trial, consists of angled type termination for the unattached ends of the letters "C", "A", and "S". The letters "E", "R", and "P" have a distinctive curvature in their design. (Pl. Ex. 14g-1—14g-4). The romanesque lettering style has been used by the plaintiffs in printing "Caesar's Palace" since before the resort opened.

On August 6, 1966 Desert Palace, Inc. began operation of Caesars Palace Resort Hotel in Las Vegas, Nevada. The name Caesar's Palace and the name as printed in romanesque lettering has been used by plaintiffs in advertising and promotion from at least that time until the present. Their advertising and promotion has been extensive. It has cost several million dollars. Ads have appeared in national magazines. Promotional activities have included television specials and sporting events broadcast nationally. Promotional products such as playing cards, glassware, and keyrings have been widely distributed. Samples of the items were admitted into evidence. The name and service marks contribute to the goodwill of the business through these activities.

Caesars Palace Resort Hotel provides room accommodations, banquet and meeting rooms, a casino, bars, restaurants, and very well-known nightclub entertainment. Also included are swimming pools, gift and clothing shops, health facilities, a barber shop, and a beauty salon. Of particular relevance here is the beauty salon which uses the name Caesar's Palace and the romanesque lettering style to print the name. All of the resort services are mentioned in advertising brochures which are distributed nationally. The resort has had guests from throughout the country including the New York City and New Jersey area.

The defendant Caesar's Palace, Inc. was incorporated on June 5, 1968. The president is Caesar Crimi. The sole stockholders are Mr. Crimi and his wife Frances Crimi. In 1967 Mr. Crimi worked in a beauty salon owned by another individual. Upon the recommendation of a customer, Mr. and Mrs. Crimi visited Las Vegas in October 1967 and stayed at Caesars Palace Resort Hotel. They both saw the plaintiffs' trade name and service marks. Less than nine months after returning to New Jersey they incorporated the defendant "Caesar's Palace" and opened a beauty salon on June 8, 1968. Shortly thereafter, Mr. Crimi erected or caused to be erected a sign, printed in the identical romanesque lettering style used by plaintiffs, which reads "Caesar's Palace". When he moved to his second shop, he took the sign and had it installed over the front door. Caesar's Palace Inc. presently does business at the second shop under the name Caesar's Palace Coiffures.

Caesar's Palace Coiffures is a small beauty shop in South Orange, New Jersey. Caesar Crimi is a licensed beautician who works in the shop himself. Over the years he has done very little advertising. The shop is listed in the local phone directory as Caesar's Palace. Mr. Crimi has not engaged in other business besides hairstyling. His customers are predominantly women from South Orange.

When the plaintiffs attempted to reserve a corporate name with the New Jersey Secretary of State in May 1977, they first learned of the defendant's existence. On June 3, 1977 they mailed a cease and desist letter to the defendant. When defendant refused to comply, this action was instituted on June 17, 1977. It should be noted that the plaintiffs have been involved in several lawsuits where others have been enjoined from using the plaintiffs' name and service marks. Caesars World, Inc. v. Caesar's Palace Inc., 179 U.S.P.Q. 14 (D.Neb.1973); see Appendix A, infra.

Jurisdiction is properly before this Court based upon the complete diversity of citizenship between the parties. 28 U.S.C. § 1332. The parties have stipulated that the goodwill of the plaintiffs is valued in excess of $10,000.00. Additionally it has been stipulated that Caesars World, Inc. is the owner of the trade name and service marks used by Desert Palace, Inc. including the name and mark "Caesars Palace".

The law provides protection to those who have acquired common law and statutory rights¹ in a trade name and service mark. A trade name is the name or title lawfully adopted and used by a particular organization engaged in commerce. It can be used in advertising, promotion and to generate publicity for the business. A service mark can be a word, name, symbol, device or any combination thereof adopted and used in the sale or advertising of services to identify the service of the entity and distinguish them from the services of others. 15 U.S.C. § 1127. The only difference between a trademark and a service mark is that a trademark identifies goods while a service mark identifies services. Common law rights are acquired in a service mark by adopting and using the mark in connection with services rendered. Hanover Star Milling Company v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713 (1916); Caesars World Inc. v. Caesar's Palace Inc., supra.

The extent of the protection afforded initially depends upon the characteristics of the mark itself. A descriptive or common word or symbol usually has to acquire secondary meaning through use. However:

Inherently distinctive marks, such as fanciful or arbitrary words and symbols, gain . . . protected status upon their first use on . . . services in the marketplace.

Scott Paper Company v. Scott's Liquid Gold, Inc., 439 F.Supp. 1022, 1034 (D.Del. 1977), rev'd 589 F.2d 1225 (3d Cir. 1978). Inherently distinctive marks are also called technical marks. Common law rights in such marks exist independently of statutory provisions for registration.² Caesars World Inc. v. Caesar's Palace, Inc., supra at 16, citing Armstrong Paint & Varnish Works v. Nu-Enamel Corp., 305 U.S. 315, 333, 59 S.Ct. 191, 200, 83 L.Ed. 195 (1938). It is unnecessary for a plaintiff to prove that their mark has acquired secondary meaning in the minds of the public if their mark is arbitrary, fanciful, and non-descriptive.

In the matter at bar the plaintiffs have shown their trade name and service mark to be unique. It was invented solely for use in connection with the resort hotel and contains a grammatical error, namely, the omission of a apostrophe indicating the possessive form of "Caesar". In Caesars World, Inc. v. Caesar's Palace, Inc., supra, the identical trade name and service marks as used by these same plaintiffs was held to be arbitrary, unique, and non-descriptive. Id. at 16. The romanesque lettering style invented for the use of the plaintiffs is similarly unique. Thus the service mark consisting of "Caesars Palace" written in the romanesque lettering style is protectable because the marks are unique, arbitrary, and non-descriptive. It is unnecessary for the plaintiffs to prove that the service marks have acquired secondary meaning in the mind of the public.

In Caesars World, Inc. v. Caesar's Palace, Inc., supra, it was held that Caesars World, Inc.:

(a)s the first to appropriate and use the marks in connection with the particular business . . . gained an exclusive right to use them. Canal Company v. Clark, 80 U.S. 311 20 L.Ed. 581 (1871). 179 U.S.P.Q. at 16.

The same entity now asserts rights as against a different defendant. In the earlier, Nebraska case, the defendant operated a cocktail lounge; here the defendant operates a beauty parlor. Other differences between the cases³ require an independent analysis of the matter herein. As was prudently stated by the Ninth Circuit:

Each case of trademark and service mark infringement must be analyzed based on its own facts. The results reached in different cases . . . only appear contradictory when the particular facts of each case are not analyzed.

J. B. Williams Inc. v. Le Conté Cosmetics, 523 F.2d 187, 191 (9th Cir. 1975). Compare Scott Paper Company v. Scott's Liquid Gold, Inc., supra where the district court granted relief, 439 F.Supp. 1022, only to be reversed by the circuit court, 589 F.2d 1225 (3d Cir. 1978).

Rights to a trade name and service mark under common law include the right to prevent the subsequent use by another person of the same or similar name or mark, when the business or service for which the name or mark is subsequently used, is likely to...