Eastern Air Lines v. New York Air Lines, Inc.
| Decision Date | 20 April 1983 |
| Docket Number | No. 82 Civ. 7049(MP).,82 Civ. 7049(MP). |
| Citation | 559 F. Supp. 1270 |
| Parties | EASTERN AIR LINES, INCORPORATED, Plaintiff, v. NEW YORK AIR LINES, INC., and Chiat-Day, Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
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Parker, Auspitz, Neesemann & Delehanty by Carroll E. Neesemann, Kim J. Landsman, New York City, for plaintiff.
Blum, Kaplan, Friedman, Silberman & Beran by Lawrence Rosenthal, Laura Goldbard, New York City, for defendant N.Y. Air Lines.
Skadden, Arps, Slate, Meagher & Flom by Joan M. Secofsky, New York City, for defendant Chiat-Day, Inc.
This is an action to enjoin New York Air Lines, Inc. and Chiat-Day, Inc. from deceptive advertising and from infringing Eastern Air Lines' registered service mark, "Air-Shuttle," which Eastern has used continuously and advertised extensively since 1961 in connection with a distinctive air service between New York and Washington, D.C. and between New York and Boston. Allegedly, defendants have infringed Eastern's registered service mark and have misled or confused the public by using the words "air shuttle" and "shuttle" in extensive advertising in the New York City Metropolitan Area to describe alleged air service in direct competition with Eastern's "Air-Shuttle."
The claims asserted by Eastern Air Lines ("EAL") are based on: (1) Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1), claiming that New York Air's ("NYA") exploitation of the widespread recognition of the term "Air-Shuttle" constitutes trademark infringement and unfair competition; (2) Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), claiming that New York Air's advertising was false and misleading in both its use of the word "shuttle" and in its use of certain price figures; (3) common law claims of unfair competition and service mark infringement; (4) Section 349 of New York's General Business Law, claiming deceptive acts; (5) Section 350 of New York's General Business Law, claiming false and misleading advertising; and (6) Section 368-d of New York's General Business Law, claiming dilution of the distinctive quality of a registered and a common law service mark.
New York Air has counterclaimed and alleges that EAL fraudulently procured the trademark "Air-Shuttle" and that it is void.
EAL's claims fall into three categories: Claims of trademark infringement, claims of misappropriation of commercial good will, and claims of false advertising.
For the reasons set forth hereafter, EAL is entitled to a measure of injunctive relief.
EAL is the owner of two service marks for the name and design "Air-Shuttle" registered in the United States Patent Office on August 9, 1966. In 1961 EAL had instituted a shuttle service between New York City and Washington, D.C. and between New York City and Boston. The distinctive characteristics of that service were: (a) prior to the air controllers' strike in August 1981 (PATCO), seats on air shuttle flights were guaranteed through the provision of back-up extra section aircraft; since the strike EAL has provided back-up extra section aircraft whenever possible (subject to the availability of landing slots); (b) passengers do not make reservations; (c) flights depart every hour on the hour from 7:00 a.m. to 9:00 p.m. on weekdays; (d) tickets may be purchased on-board; and (e) service at LaGuardia Airport is provided from a special Eastern "Air-Shuttle Terminal."
Over the last twenty-two years, EAL's service has evolved from employing Constellations and Electras to Boeing 727's and the A-300 Airbuses. Fifty million passengers have flown on the Air-Shuttle. As part of its efforts to promote the Air-Shuttle, EAL currently sets aside fourteen aircraft that are dedicated for use on the Air-Shuttle's routes.
In order to guarantee seating, EAL has set aside six back-up aircraft and their necessary crews so that it can provide additional service if there is an unexpected surge in passenger demand. Prior to the recent PATCO Air Traffic Controller labor dispute, EAL stood ready to "roll out an extra section (aircraft)" for even one passenger who could not be accommodated on the scheduled flight. Even after PATCO, EAL has made every attempt to provide a guaranteed seat and succeeds in virtually every instance.
In addition to the aircraft that are solely devoted to the Air-Shuttle, EAL employs nine individuals in Miami, who are responsible for supervising the logistics of operating the Air-Shuttle. They monitor historical patterns of Air-Shuttle use so that they are able to have aircraft and crews in the proper locations when they are needed. Often the Air-Shuttle planners will fly empty aircraft from one Air-Shuttle site to another to insure that it is available for anticipated passenger demand.
Provision of back-up service in the manner described above is not inexpensive. EAL feels that the ease, convenience and reliability of its service attract passengers and justify the expense of the Air-Shuttle operation.
Throughout the twenty-two year period of operation, EAL has aggressively promoted the Air-Shuttle service. In their effort to associate convenience and reliability with the EAL Air-Shuttle in the minds of potential passengers, EAL has spent over $5 million in advertising. At times EAL has stressed certain attributes that it feels epitomize the ease, convenience and reliability that EAL is trying to connote. These include the features mentioned above. By 1980 many passengers in EAL's geographic market, especially those who fly frequently for business purposes, were aware of the EAL Air-Shuttle and its claimed attributes and often made use of the service.
Against this background, in December 1980 New York Air initiated operations as an airline and in particular began competing on the routes serviced by the EAL Air-Shuttle. In part due to air route deregulation, NYA was able to offer frequent service between New York/Newark and Washington and Boston. Initially, NYA held itself out as a lower price alternative to its competitors. The reduction in service mandated by the PATCO labor dispute forced NYA to reconsider its strategy. Under the stewardship of a new Chief Executive Officer, Michael Levine, NYA sharpened its focus and attempted to attract the frequent business traveler who was conscious of price and interested in amenities.
In 1982 NYA implemented this strategy in the New York/Newark, Boston and Washington markets by initiating a comparative advertising campaign, which was admittedly designed in part to woo business away from the EAL Air-Shuttle. NYA employed three different advertising agencies during the period. Until March 31, 1982, advertisements were prepared by the Ketchum Agency in New York; upon termination of the Ketchum account, advertisements were prepared by defendant Chiat-Day until November 9, 1982, at which time Mathieu, Gerfen & Bresner ("MGB") took over as advertising agents. In 1982 alone, over $5.8 million of advertising was placed by NYA. Much of this advertising either referred to the EAL Air-Shuttle by way of comparison or described the New York Air service as a shuttle service.
In order to attract EAL's customers and others, NYA stressed its on-board amenities of free food, drinks and allegedly greater leg room, comfort and attentiveness. Particular advertisements, read ordinarily and not analytically, readily implied that amenities associated with the Air-Shuttle were exceeded by the features to be found on NYA's planes. By employing the EAL Air-Shuttle as a basis for comparison, NYA attempted to benefit from the good will that EAL had generated in the minds of the consuming public with respect to the Air-Shuttle over the previous two decades.
The advertising efforts were designed to convince EAL's customers to try NYA's service. As late as September 1, 1982, Chief Executive Officer Levine instructed his advertising agency to "Put it to the shuttle," referring to EAL's Air-Shuttle.
NYA has initiated an aggressive and competitive campaign to win over a substantial share of the air travel market in New York City, Washington, D.C. and Boston geographic areas. NYA has chosen to withstand millions of dollars of losses in its long-term attempt to become a viable competitor. NYA's bold and extensive advertising campaign, which is the subject of the dispute in this case, is the vehicle on which NYA relies to establish a significant place in the air travel market.
Analysis of many of Eastern's claims depends upon the characterization to be given to the term "shuttle." Trademarks are classified along the spectrum of increasing strength from generic, to descriptive, to suggestive to arbitrary or fanciful. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir.1976).
A generic trademark uses a general term which implies reference to every member of a genus and the exclusion of individuating characters; it is "one that refers or has come to be understood as referring to the genus of which the particular product is a species." Abercrombie & Fitch Co., cit. supra. Whether the principal significance of a term is individual in character, supplies the test whether it is not generic and not whether the public perceives the term as an indication of the nature or class of the article. Locite Corp. v. National Starch & Chemical, 516 F.Supp. 190, 199 (S.D.N.Y. 1981), quoting Stix Products, Inc. v. United Merchants & Manufacturers, Inc., 295 F.Supp. 479, 490 (S.D.N.Y.1968) (). Trademarks that are generic do not have any trademark protection.
A descriptive trademark is one that "conveys an immediate idea of the ingredients, qualities or characteristics of the goods." Id. at 11. An alternative test asks whether "the word conveys the characteristics, functions, qualities, or ingredients of a product to one who has never seen it and does not know what it is." Stix, supra, at 487. A...
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