Crazy Eddie, Inc. v. Lois Pitts Gershon, Inc.

• Decision Date: 21 December 1984
• Docket Number: No. 84 Civ. 8689 (MJL).,84 Civ. 8689 (MJL).
• Citation: 600 F. Supp. 537
• Parties: CRAZY EDDIE, INC., Plaintiff, v. LOIS PITTS GERSHON, INC., Lafayette Stores, Circuit City, Stores, Inc., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

600 F. Supp. 537

CRAZY EDDIE, INC., Plaintiff, v. LOIS PITTS GERSHON, INC., Lafayette Stores, Circuit City, Stores, Inc., et al., Defendants.

No. 84 Civ. 8689 (MJL).

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

December 21, 1984.

Solomon Antar, Brooklyn, N.Y. by Ezra Sutton, P.A., Woodbridge, N.J., for plaintiff.

Stein, Zauderer, Ellenhorn, Friedman & Kaplan, by Mark C. Zauderer, Harry Frischer, New York City, for defendant Lafayette.

Hall, Dickler, Lawler, Kent & Friedman, by Joseph Chase, Douglas Wood, New York City, for defendant Lois Pitts Gershon.

Ronald Guttman, New York City, for defendant CBS.

Cahill, Gordon & Reindel, by Roy L. Regozin, W. Drew Kastner, New York City, for defendant NBC.

LOWE, District Judge.

Plaintiff by order to show cause, seeks a temporary restraining order ("TRO") from this Court restraining the defendants¹ from distributing, televising, displaying or otherwise publicizing certain T.V. commercials on behalf of defendant Lafayette Stores, Circuit City Stores, Inc., hereinafter ("Lafayette") which mention the trade name Crazy Eddie in a derogatory or disparaging manner.

Plaintiff is the owner of a registered trademark for the service mark Crazy Eddie as applied to retail and distributorship services in the field of audio and video electronic equipment.²

Defendant Lafayette owns retail stores in the New York — New Jersey metropolitan area which sell products in direct competition with Crazy Eddie stores.

Plaintiff contends that the commercials use the service mark and trade name CRAZY EDDIE to such an extent that it dominates the use by defendant of its trade name Lafayette and constitutes trademark infringement, false description, false designation of origin, and false and confusing advertising. Plaintiff also alleges that defendant's TV commercials include a number of statements which are false, misleading, disparaging, derogatory, and defamatory, and which constitute trade disparagement and unfair competition.

Plaintiff alleges a claim under 15 U.S.C. § 1114 (Section 32(1)(a) of the Lanham Act) for trademark infringement; 15, U.S.C. § 1125(a) (Section 43(a) of the Lanham Act) for false description and false designation of origin; trade disparagement and unfair competition under the common law of New York and New Jersey and trademark dilution under Section 368-d of the New York General Business Law. N.Y.G.B.L. § 368-d (McKinney 1984).

Plaintiff claims that the commercials³ create a reasonable likelihood that purchasers will be confused as to their sponsorship. More particularly plaintiff alleges that the commercial entitled "The Confessions of Crazy Eddie" (Ex. 4A) shows a person, who looks like Crazy Eddie, is dressed like him and uses his mannerisms, sitting in a confessional booth making derogatory statements concerning Crazy Eddie's business practices.

Plaintiff offered evidence at the TRO hearing that it has received a number of phone calls from television viewers complaining that "The Confessions of Crazy Eddie" commercial is derogatory of the Catholic Church. The complaining customers are confused in that they attributed sponsorship of the commercial to Crazy Eddie.

Plaintiff argued that the balance of the commercials (Exhibits 4B-J) were offending because they falsely advertise that Crazy Eddie's prices are the lowest in town only if the customer "haggles" with the salesman; that Crazy Eddie has a coded price system⁴ and that Lafayette has ten times the buying power of plaintiff.

The non-media defendants argued that the statements concerning the coded price system and Lafayette's buying power are true. Furthermore the characterization of plaintiff's selling practice as "haggling" and the use of the confessional scene are not actionable but legitimate parody.

Discussion

A TRO may be issued only for a short period of time and upon a showing of its necessity to prevent further injury until the parties have had adequate time to prepare for a hearing on the underlying application for a Preliminary Injunction. A court must weigh the probability of irreparable harm, probability of success on the merits and balance the interests of the parties. Only if the plaintiff is able to show serious harm which cannot be undone and for which money damages are an inadequate remedy should the court exercise its equitable power to disturb the status quo pendente lite. Coca Cola Co. v. Tropicana Products, Inc., 690 F.2d 312 (2d Cir. 1982).

Plaintiff pleads his federal claims under both Sections 32(1)(a) (First Claim) and 43(a) (Second Claim). On oral argument plaintiff failed to distinguish between the two sections⁵ and in post hearing argument, placed its primary claim to relief upon the holding in Dallas Cowboys Cheer-leaders, Inc. v. Pussycat Cinema Ltd., 604 F.2d 200 (2d Cir.1979) a case decided under Section 43(a). Defendants, in rebutting plaintiff's Section 43(a) argument, urged this Court to deny plaintiff relief on the ground that plaintiff was complaining of defendant Lafayette's advertisements concerning plaintiff's mark rather than defendant's own mark. They contended that such an allegation is not actionable under 43(a), Fur Information and Fashion Counsel Inc. v. E.F. Timme and Sons Inc., 501 F.2d 1048, cert. denied, 419 U.S. 1022, 95 S.Ct. 498, 42 L.Ed.2d 296 (1974).⁶

In examining plaintiff's complaint, it is apparent that plaintiff pleads that it is the owner of a registered service mark, "Crazy Eddie". An owner of a registered mark has a cause of action under 15 U.S.C. § 1114 (32(1)(a)) for deception by another in the use of the mark. Section 32(1)(a) provides:

(1) Any person who shall, without the consent of the registrant —

(a) use in commerce 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 or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

(b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to.... advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive shall be liable in a civil action....

A service mark is defined in 15 U.S.C. § 1127 as "a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others." The same standards are used to determine whether a trademark or service mark has been infringed, West & Co., Inc. v. Arica Institute, Inc., 557 F.2d 338, 340 n. 1 (2d Cir. 1977), with the distinction noted, that a service mark is used as an identification mark which performs the same function in the selling and advertising of services that a trademark performs in respect of goods. 3 Callman, Unfair Competition, Trademarks and Monopolies, 68.1 at 71.

Plaintiff has proven the following elements of a claim under Section 32(1)(a) by presenting the videotapes:

1. The videotapes were used in commerce;

2. They are a copy or colorable imitation of the Crazy Eddie service mark;

3. They are used in connection with advertising.

Plaintiff, by bringing this action has claimed that the videotapes were made without his consent, therefore the only remaining element is whether they are likely to cause confusion, mistake or to deceive.

In Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 316-317 (2d Cir. 1982) Judge Cardamone, writing for the Court, explained that a Lanham Act plaintiff must submit proof which provides a reasonable basis for the belief that he will be harmed by the false advertising. Citing prior cases in this Circuit, the Court stated that where products are in head-to-head competition "sales of plaintiff's products would probably be harmed if the competing products' advertising tended to mislead consumers" as to their all-around superiority or by misdescription. Id. The Court concluded that if consumers were misled by Tropicana's commercial, plaintiff would lose customers and thereby suffer irreparable injury.

In the instant case, plaintiff offered evidence of consumer's calling to complain about the use of the confessional in...