Clinique Laboratories, Inc. v. Dep Corp.

• Decision Date: 10 October 1996
• Docket Number: No. 96 Civ. 7045 (SAS).,96 Civ. 7045 (SAS).
• Citation: 945 F.Supp. 547
• Parties: CLINIQUE LABORATORIES, INC., Plaintiff, v. DEP CORPORATION d/b/a Basique Labs, Inc., Defendant.
• Court: U.S. District Court — Southern District of New York

945 F.Supp. 547

CLINIQUE LABORATORIES, INC., Plaintiff, v. DEP CORPORATION d/b/a Basique Labs, Inc., Defendant.

No. 96 Civ. 7045 (SAS).

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

October 10, 1996.

COPYRIGHT MATERIAL OMITTED

Robert J. Bernstein, Richard S. Mandel, Sheri L. Gelfond, Cowan, Liebowitz & Latman, P.C., New York City (Lee Puccini, Lesley A. Moradian, of counsel), New York City, for Plaintiff.

Terrence J. Connolly, John P. Coffey, John T. Brennan, Latham & Watkins, New York City, for Defendant.

OPINION AND ORDER

SCHEINDLIN, District Judge.

I. INTRODUCTION

Plaintiff Clinique Laboratories, Inc. ("Clinique") moves, pursuant to Fed.R.Civ.P. 65, for a preliminary injunction prohibiting defendant Dep Corporation, d/b/a Basique Labs, Inc. ("Dep" or "Basique") from infringing plaintiff's trademarks, trade dress, and/or trade name in the sale, distribution, or advertising of skin care, hair care, cosmetic, toiletry or fragrance products. Clinique brings these infringement claims pursuant to Sections 32(1) and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114(1) & 1125(a), and under New York State unfair competition law. In addition, Clinique seeks to enjoin Dep from diluting the value and distinctiveness of its trademarks and trade dress under Section 43(c) of the Lanham Act, 15 U.S.C. 1125(c), and the New York Anti-Dilution Statute, § 368-d of the New York State General Business Law. Finally, under the Copyright Act, 17 U.S.C. § 101 et seq., Clinique seeks to enjoin Dep's use of an advertisement that allegedly infringes three of Clinique's copyrights. For the reasons set forth below, Clinique's motion is granted in part and denied in part.

II. FACTUAL BACKGROUND

Clinique is a wholly owned subsidiary of Estee Lauder, Inc., and was launched in 1968. Clinique manufactures makeup, skin care, and fragrance products, although only their skin care products are at issue in this litigation. Between 1991 and 1995, Clinique's net domestic sales exceeded $2 billion. Their products are distributed in department stores, specialty stores, and some select drug stores, although some Clinique products are diverted from normal distribution channels to discount drug stores. One of Clinique's earliest products was its three-step cleanse, tone and moisturize system, a series of products it continues to market today. Plaintiff is the exclusive user of the CLINIQUE and CLINIQUE & C trademarks within the Estee Lauder family of companies, and has maintained the same marks and trade dress for over twenty-five years.

Dep sells hairstyling, skin care, and oral care products, including nationally known brands such as Agree shampoo, Topol toothpaste, Porcelana, Nature's Family and Cuticura skin care products. In late August 1996, Dep began a six state test market of a new line of skin care products, called "basique simplified skin care." The Basique line consists of nine products, including soap, cleansers, and toners, and is to be marketed exclusively to mass-merchandisers such as Wal-Mart and K-mart, as well as drug store chains. A national launch of the products is planned for early 1997.

Clinique learned of the Basique line when a national magazine sent Clinique a proposed Basique advertisement. Clinique then purchased the Basique line of products in one of the test market states in September 1996. Believing that the products infringed Clinique's trademarks and trade dress, and that the advertisement infringed Clinique's copyrights in its own advertisements for its three step skin care system, Clinique moved for a temporary restraining order to prevent Dep from further marketing of the product and to force Dep to remove the product from the six test states. At an initial hearing held on September 19, 1996, Clinique agreed to withdraw its TRO request, provided that Dep did not expand its marketing or advertising of Basique beyond the six test states, pending the outcome of this motion for a preliminary injunction. An evidentiary hearing was held on September 25, 26 and 27, 1996.

III. ANALYSIS

1. Legal Standard

A preliminary injunction is an equitable remedy meant to maintain the status quo until there can be a hearing on the merits. See Sierra Club v. U.S. Army Corps of Engineers, 732 F.2d 253, 256 (2d Cir.1984). The party seeking injunctive relief must establish that it will suffer

irreparable injury and either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the moving party's favor.

LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71, 74 (2d Cir.1985); see also Laureyssens v. Idea Group, Inc., 964 F.2d 131, 135-36 (2d Cir.1992). Should Clinique show a likelihood of confusion in violation of the Lanham Act on either its trademark or trade dress infringement claims, the requisite irreparable harm is established. Home Box Office, Inc. v. Showtime/The Movie Channel, Inc., 832 F.2d 1311, 1314 (2d Cir.1987). A likelihood of dilution also establishes irreparable harm under Section 43(c). Deere & Co. v. MTD Prods., Inc., 860 F.Supp. 113, 122 (S.D.N.Y.), aff'd, 41 F.3d 39 (2d Cir.1994) (citation omitted). Similarly, under copyright law, a violation of exclusive copyrights also gives rise to a presumption of irreparable harm. Hasbro Bradley, Inc. v. Sparkle Toys, Inc., 780 F.2d 189, 192 (2d Cir.1985).

2. Trademark Infringement

Under Section 32(1) of the Lanham Act, Clinique seeks to enjoin Dep's use of the trademark "basique simplified skin care," and the single letter designation "b," alleging that the mark and designation infringe two of Clinique's registered trademarks: CLINIQUE and CLINIQUE & C DESIGN ("CLINIQUE & C"). In addition, Clinique asserts that Dep's use of "basique" and "b" constitute false designations of origin in commerce in violation of Section 43(a) of the Lanham Act.

Section 32(1) governs claims for the infringement of a registered trademark. Infringement of a registered mark includes "any reproduction, counterfeit, copy or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution or advertising of any goods [that is] likely to cause confusion, or to cause mistake, or to deceive...." 15 U.S.C. § 1114(1). Section 43(a) prohibits the use of

any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin ... likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association ... with another person, or as to the origin sponsorship, or approval of his or her goods, services, or commercial activities by another person....

15 U.S.C. § 1125(a)(1). Section 43(a) guards against infringement of unregistered marks and other indicia of origin, including trade dress and trade names. See, e.g., Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (unregistered marks and trade dress); Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162, 168 (2d Cir.1991) (trade dress); Lang v. Retirement Living Pub. Co., Inc., 949 F.2d 576 (2d Cir.1991) (trade name). To prevail on its trademark infringement claims under either Section 32(1) or 43(a), Clinique must satisfy the same test: (1) that it has a valid mark subject to protection; and (2) that defendant's mark and/or dress results in a likelihood of confusion. See Gruner + Jahr USA Pub. v. Meredith Corp., 991 F.2d 1072, 1074 (2d Cir.1993); Yarmuth-Dion, Inc. v. D'ion Furs, Inc., 835 F.2d 990, 992-93 (2d Cir.1987); Corning Glass Works v. Jeannette Glass Co., 308 F.Supp. 1321, 1325 (S.D.N.Y.), aff'd, 432 F.2d 784 (2d Cir.1970).

A. The Validity of Clinique's Marks

The parties do not dispute the validity of the CLINIQUE or CLINIQUE & C marks, for which Clinique owns federal trademark registrations incontestable under 15 U.S.C. § 1065. These registrations conclusively establish Clinique's ownership of the marks used on their skin care products. The first prong of Clinique's trademark infringement claim being satisfied, Clinique now must show that Dep's marks result in a likelihood of confusion. See Gruner, 991 F.2d at 1074.

B. Likelihood of Confusion

A now-familiar, nonexclusive list of eight factors, articulated by Judge Friendly in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961), structures the inquiry into likelihood of confusion. These factors are: (1) the strength of the plaintiff's mark; (2) the degree of similarity between the two marks; (3) the competitive proximity of the products or services; (4) the existence of actual confusion; (5) the likelihood that the plaintiff will "bridge the gap" between the two markets; (6) the defendant's good faith in adopting the mark; (7) the quality of the defendant's product; and (8) the sophistication of purchasers. Id. at 495. This test applies to both competing and non-competing goods or services. Banff, Ltd. v. Federated Dept. Stores, Inc., 841 F.2d 486 (2d Cir.1988). A court's evaluation of the Polaroid factors should not be mechanical, nor is any single factor determinative. Plus Products v. Plus Discount Foods, Inc., 722 F.2d 999, 1004 (2d Cir.1983). Rather, a court "should focus on the ultimate question of whether consumers are likely to be confused." Paddington Corp. v. Attiki Importers & Distrib. Inc., 996 F.2d 577, 584 (2d Cir.1993) (citing Lang, 949 F.2d at 580). In answering that "ultimate question," a court may find infringement has occurred based on confusion that creates initial customer interest, even if no final sale is completed as a result. See Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 260 (2d Cir. 1987) (likelihood that defendant would gain "crucial credibility" during initial phase of purchase justifies finding of infringement). Post-sale consumer confusion is also actionable. See Lois Sportswear U.S.A., Inc. v....