Cue Pub. Co. v. Colgate-Palmolive Co.

• Decision Date: 02 February 1965
• Docket Number: COLGATE-PALMOLIVE
• Citation: 256 N.Y.S.2d 239,45 Misc.2d 161
• Parties: , 144 U.S.P.Q. 371 CUE PUBLISHING CO., Inc., Plaintiff, v.COMPANY, Defendant.
• Court: New York Supreme Court

Page 239

256 N.Y.S.2d 239

45 Misc.2d 161, 144 U.S.P.Q. 371

CUE PUBLISHING CO., Inc., Plaintiff, v. COLGATE-PALMOLIVE COMPANY, Defendant.

Supreme Court, Special and Trial Term, New York County, Part III.

Feb. 2, 1965.

Nixon, Mudge, Rose, Guthrie & Alexander, New York City (Leonard Garment, New York City, of counsel), for plaintiff.

Cahill, Gordon, Reindel & Ohl, New York City (Thomas C. Mason, New York City, of counsel), for defendant.

THOMAS A. AURELIO, Justice.

This action for injunction is brought under section 368-d of the General Business Law of the State of New York. It is commonly referred to in the 'Anti-Dilution Statute' and provides as follows:

'368-d. Injury to business reputation; dilution

'Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief in cases of infringement of a mark registered or not registered or in cases of unfair competition, notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.'

The plaintiff, Cue Publishing Co., Inc., hereinafter referred to as Cue, is the owner and publisher of Cue Magazine. Colgate- Palmolive Company, the defendant and hereinafter referred to as Colgate, is the multi-million-dollar publicly-held corporation, known throughout the world as a manufacturer of toothpastes, soap and detergent products as well as other related items.

There is no dispute concerning the salient facts and features in this case.

Since about 1934 plaintiff has published Cue Magazine which serves the public as a guide to dining, entertainment, sports events, attractions and general 'goings on' in the City of New York and the surrounding suburban areas. It is published weekly and enjoys a current weekly circulation of about 200,000, which is the result of a gradual process of expansion over the years. Originally, it carried weekly information on New York motion picture programs. It later expanded to include the legitimate theatre and reviews. Since World War II, Cue has further expanded to advertise and recommend good dining places in and about the area comprising its 'sphere of influence'. In about 1950, the further its importance, popularity and publicity, Cue introduced its 'seal of approval' for display by restaurants, night clubs and resorts. The seal is about six inches in diameter and bears the legend 'Approved by CUE'--and the year. The seal is displayed at the entrance to some of the finest restaurants and night clubs in the city. Thus it is intended to, and no doubt does, serve as a promotional aid to Cue as well as for those establishments displaying the Cue 'seal of approval'.

As time went on, editorial features have been added to Cue. These include regular sections on travel, television, FM radio, recordings, sound tapes, World's Fair, etc. In 1963, a 300-page guide to New York City entitled 'Cue's New York' was published and arrangements were made for distribution throughout the country. Suffice it to say that the management of Cue is alert to legitimate promotional ventures which will have as their objective an association of Cue with entertainment, travel, dining and generally, 'the finer things in life.'

An analysis of Cue readers has more or less established that Cue exerts its greatest influence upon the well-educated upper middle classes in what is popularly known as the Metropolitan New York area.

During the past years Cue's weekly circulation increased from about 1500 to its current 200,000. Cue operated at a loss prior to 1961, and now for the first time the magazine is coming into its own and it anticipates a substantial operating profit for 1964--about $200,000.00.

Plaintiff first registered the name 'Cue' in the United States Patent Office in 1935. It was reregistered under the 'Lanham Act' (U.S.Code, tit. 15, § 1051 et seq.) in 1953. The 'Cue' trade mark was also registered under the statutes of New York, Connecticut, Massachusetts and New Jersey. In connection therewith, the Court is satisfied that plaintiff has diligently proceeded to protect its name and mark against intrusion by another publication (Cue Publishing Co. Inc. v. Leo Shull Publications Inc., Civil #46-633, U.S.D.C., Southern District, New York, 1948), and persons allied in the field of entertainment (Cue Publishing Co. Inc. v. Kirshenberg, 22 Misc.2d 188, 198 N.Y.S.2d 993).

The defendant Colgate, as stated at the outset, is an important financially-sound and well-known firm in the business of manufacturing and selling soaps, detergents, toothpaste and other toiletries. Its reputation in the industry is obvious and requires no comment. In 1939, Colgate registered the name 'Cue' with the United States Patent Office for its line of dentifrice products. At or about the same time, it registered 'Cue' as a trade mark with the States of New York, New Jersey, California, Illinois; and since then, defendant has also registered 'Cue' with numerous countries throughout the world. In 1939, Colgate introduced its 'Cue' to the market as a liquid dentifrice. At that time, Cue Magazine wished its namesake 'success and happiness'. The product was regularly advertised in New York City and throughout the country. While it had produced a modest profit for defendant during the ensuing years, in 1946 the marketing of Cue liquid dentifrice was voluntarily discontinued.

Colgate started to test market a 'Cue' shampoo in 1953 in Syracuse, New York, and three other American cities. This product was likewise voluntarily withdrawn before launching any national campaign. In any event, Colgate protected and sustained its right to the 'Cue' mark in accordance with the State and Federal registration regulations.

In 1940, the right of defendant to its use of 'Cue' as a trade mark on its liquid dentifrice was challenged in the Federal Court, Southern District of New York (Landith Laboratories, Inc. v. Colgate-Palmolive-peet Co., D.C., 35 F.Supp. 616). The Court refused to grant a preliminary injunction, nothing 'These (plaintiff's) products are different in character from the defendant's liquid dentifrice.'

Until about 1960 Colgate enjoyed a substantial portion of the national toothpaste market. At that time, Procter & Gamble, defendant's chief competitor, presented to the Council on Dental Therapeutics of the American Dental Association, the results of clinical studies of its toothpaste containing stannous fluoride, which led the A.D.A. to recognize Procter & Gamble's 'Crest' toothpaste as an effective decay-preventive dentifrice. With such endorsement and the great merchandising power of Procter & Gamble, Colgate's position in the dental toothpaste market was threatened. It thus became necessary for Colgate to take all necessary steps to counteract the growing sales and the attention which 'Crest' began to enjoy.

Shortly thereafter, Colgate concentrated on and did develop a stannous fluoride toothpaste. It then began to work on the project of its effective introduction into the national market. After executive and advertising conferences, it was decided to name this new Colgate stannous fluoride toothpaste 'Cue'. Before its adoption, however, the opinion of Colgate's counsel indicated no legal objection to the use of its trade-mark 'Cue' as the name for the new toothpaste.

Defendant then proceeded to develop its package, advertising campaign and general problems of the introduction of 'Cue' to the market. It was test-marketed in Dallas, Texas, in Syracuse, New York, and other cities of the United States. Subsequently, as a result of clinical studies which were submitted to the American Dental Association, its counsel on Dental Therapeutics in July 1964, accorded 'Cue' dental cream the same recognition it had previously granted to Procter & Gamble's 'Crest' toothpaste. Obviously, such pronouncement would enhance the marketing possibiliities of 'Cue' toothpaste. It was given wide publicity and served as a tremendous incentive for a huge introductory advertising campaign.

After the A.D.A.'s recognition of 'Cue' toothpaste, plaintiff in August 1964 wrote to defendant suggesting a conflict of 'Cue' as its magazine trade-mark and 'Cue' as a dental cream. Defendant's answer to plaintiff denied any conflict in the two items, which prompted plaintiff to institute the instant action for an injunction.

Defendant intends to launch an advertising campaign which will entail an expense of approximately $10,000,000 during the first year. It is expected that approximately $1,000,000 of such sum will be expended in the metropolitan New York area. At this juncture, defendant has invested some $2,500,000 in the development and introduction of 'Cue' toothpaste.

Plaintiff's claim for relief is essentially based upon three grounds: (1) dilution, (2) tarnishment and (3) confusion. These will be discussed in inverse order.

As to confusion: It is generally true under the laws of trade-marks and unfair competition that where there is the likelihood of confusion as to source or sponsorship of a product there may be a basis for injunctive relief. However, the existence of a general resemblance between trade-marks is not always sufficient to show infringement and the fact of similarity in and of itself is not sufficient to warrant equitable interference. The test is whether there is likelihood of confusion or deception (87 C.J.S. Trade-Marks, Trade-Names, and Unfair Competition § 68, p. 289; G. B. Kent & Sons, Limited v. P. Lorillard Co., 2 Cir., 114 F.Supp. 621, affd. 2 Cir., 210 F.2d 953; Sunbeam Corp. v. Sunbeam Furniture Corp., D.C., 88 F.Supp. 852, affd. in part and revd. in part on other grounds, 9 Cir., 191 F.2d 141, rehearing den. 9 Cir., 191 F.2d 731; Polaroid Corp. v. Polarad Electronics Corp., D.C., 182 F.Supp. 350, affd. 2 Cir., 287 F.2d 492, cert. den. 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25; Dell Pub. Co. v. Stanley Publications, Inc., 9 N.Y.2d...