ETF Enterprises, Inc. v. Nina Ricci

• Decision Date: 30 September 1981
• Docket Number: No. 79 Civ. 4489 (LWP).,79 Civ. 4489 (LWP).
• Parties: E. T. F. ENTERPRISES, INC., Plaintiff, v. NINA RICCI, S. A. R. L., Defendant.
• Court: U.S. District Court — Southern District of New York

523 F. Supp. 1147

213 USPQ 517

E. T. F. ENTERPRISES, INC., Plaintiff, v. NINA RICCI, S. A. R. L., Defendant.

No. 79 Civ. 4489 (LWP).

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

September 30, 1981.

Allen Jay Bodner, Dianne Mazzanti, Allen Jay Bodner, P. C., New York City, for plaintiff.

Sidney A. Schwartz, Ronald N. Schwartzman, Pollner, Mezan & Stolzberg, P. C., New York City, for defendant.

OPINION AND ORDER

PIERCE, District Judge.

On March 17, 1975, the plaintiff, E.T.F. Enterprises, Inc. ("ETF"), applied to the United States Patent and Trademark Office for the right to register the trademark "Vittorio Ricci" for shoes, belts, neckties, sweaters, and women's blouses. Defendant, Nina Ricci, S.A.R.L. ("Nina Ricci"), timely filed a notice of opposition to plaintiff's application with the Patent and Trademark Office and an inter partes action was commenced before the Trademark Trial and Appeal Board (the "Board"). After discovery, a hearing was held before the Board on November 9, 1978, and on June 28, 1979, the Board rendered its thirteen page decision sustaining the opposition and refusing applicant's registration.

Plaintiff filed the present action, pursuant to 15 U.S.C. § 1071(b), within 60 days following the final decision of the Board; no appeal has been taken to the United States Court of Customs and Patent Appeals. By its complaint, ETF seeks (1) a decree stating that plaintiff is entitled to register the trademark "Vittorio Ricci", and (2) a decree authorizing the Commissioner of Patents to allow registration of plaintiff's trademark for shoes, belts, neckties, sweaters, and women's blouses.

By its answer, defendant Nina Ricci denies the material allegations of ETF's complaint and asserts that the complaint fails to state a claim for relief and that plaintiff's proposed trademark is bound to cause confusion and unfair competition with defendant's "Nina Ricci" trademark. The defendant also asserts four counterclaims against plaintiff, including a claim for trademark infringement pursuant to 15 U.S.C. § 1114(1), a claim for common law unfair competition, a claim for false designation of origin pursuant to 15 U.S.C. § 1125, and a claim for unfair competition pursuant to N.Y.Gen.Bus. Law § 368-d. With respect to its counterclaims, defendant seeks an order enjoining plaintiff from using the trademark "Vittorio Ricci" or any other trademark encompassing the word "Ricci".

In its reply, plaintiff denies the allegations of defendant's counterclaims and asserts two affirmative defenses, first, that defendant's counterclaims are barred by laches and acquiescence, and second, that defendant has abandoned the use of its registered trademarks in the area of manufacture and sale of men's and women's apparel.¹

On July 10, 13, 14, 15, and 16, 1981, a bench trial of this action was held. The following constitutes the Court's findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a).

Findings of Fact

A. ETF

At all times relevant to this action, ETF was and is a corporation duly organized and existing under the laws of the State of New York. Its principal place of business, from which it conducts its retail sales, is located at 1019 Third Avenue, New York, New York. ETF conducts its wholesale business at 1010 Third Avenue, New York, New York.

The principal of ETF is Todd Vittorio Ricci. Todd Ricci, whose name until 1977 was Todd Neil Finkel (see infra at 1150-1151), worked in the men's high fashion shoe business with Al di La Shoes in New York City for approximately two years until 1973. In late 1974, Todd Ricci decided to design and sell high fashion men's shoes. Thereafter, he and his father, Edward Finkel, formed ETF.²

In late 1974, Edward Finkel and Todd Ricci (then known as Todd Finkel) chose "Vittorio Ricci" as the name under which ETF would market its shoes. Todd Ricci testified that "Vittorio Ricci" was chosen as a fictitious Italian name with a melodious sound that would convey a high class image commensurate with the products ETF intended to market. At that time, Todd Ricci testified that he was aware of the "Nina Ricci" name, but perceived no conflict since he associated "Nina Ricci" with perfume and he believed there were many instances of persons conducting business in the fashion industry under the same surname but different given name.

In March 1975, ETF began selling men's shoes and accessories at its retail store at 1019 Third Avenue. In 1976, ETF began selling shoes on a wholesale basis to small, high fashion boutiques. Later, ETF began selling on a retail and wholesale basis women's shoes designed by Todd Ricci. ETF also sells leather handbags, luggage, and belts designed by Todd Ricci. Presently, all the shoes and boots marketed by ETF are designed by Todd Ricci and manufactured under his guidance in Italy.

Inside each shoe and boot sold by ETF is a label which says "Vittorio Ricci — Handmade in Italy". The sole of the shoes and boots also bears a "Vittorio Ricci" stamp. The shoes are sold in boxes which bear the "Vittorio Ricci" logo. The sign at the retail store at 1019 Third Avenue reads "Vittorio Ricci".

From a fashion point of view, both the men's and women's footwear sold by ETF are considered "fashion forward". As to price, ETF shoes and boots are expensive, ranging from $150 to $400 per pair.

The fashion forward point of view and high price point of view of ETF shoes and boots are reflected in ETF's retail and wholesale customers. According to the testimony of Fred Keller, the women's shoes and accessories merchandise manager of Saks Fifth Avenue department stores (numbering 32 throughout the United States), Vittorio Ricci shoes generally appeal to young career women who are interested in high fashion and are prepared to purchase expensive shoes. Roger Farah, a vice president and merchandise manager of men's fashions at Saks Fifth Avenue department stores, testified that Vittorio Ricci shoes appealed to a customer with high income and sophisticated taste who is looking for something a little different. Doris Johanson Mediros, a vice president and merchandise manager for shoes and fashion accessories at all eleven Bloomingdale's department stores stated that Vittorio Ricci shoes are considered high fashion, high priced, and are located in the designer shoe department. Further, she and Dawn Mello Abraham, an executive vice president and director of fashion merchandising for the Bergdorf Goodman department store in New York City, stated that they regarded the Vittorio Ricci customer as sophisticated with a high income. At the wholesale level, ETF sells Vittorio Ricci shoes and boots to approximately 150 stores in the United States. The wholesale customers include many stores and boutiques which market primarily to high income customers, such as Saks Fifth Avenue, Bloomingdale's, I. Magnin, Neiman-Marcus, Bonwitt Teller, Bergdorf Goodman, and I. Miller.

In 1980, ETF sold $737,000 worth of merchandise at its retail store. Based on figures for the first six months of 1981, ETF projects retail sales of $1.5 million in 1981. In 1980, ETF had sales of $2.4 million on the wholesale level and it projects wholesale sales in 1981 to reach $3.5 to $4 million.

In 1980, ETF spent approximately $25,000 on promoting Vittorio Ricci products. ETF provides magazines and designers with free Vittorio Ricci merchandise. In turn, Vittorio Ricci shoes, boots, and bags receive editorial coverage. During the past several years, Vittorio Ricci footwear has received an extensive amount of editorial coverage in trade publications such as Women's Wear Daily, W., and Footwear News, publications directed towards the fashion oriented public such as Vogue, Harper's Bazaar, Cosmopolitan, and Gentlemen's Quarterly, as well as in general interest publications such as The New York Times, The New York Times Magazine, Daily News Record, People Magazine, New York Magazine, Los Angeles Times, and Daily News. In all cases, the foregoing editorial coverage refers to Vittorio Ricci merchandise as "Vittorio Ricci". Occasionally, after initial references to "Vittorio Ricci", the term "Ricci" alone is used to describe the merchandise. See e. g., PX 14 (Footwear News, 10/1/79, p. 8).

In the future, ETF has immediate plans to continue its footwear, bag, and belt operation and to expand its leather product area by marketing leather coats, leather jackets, and leather ready-to-wear. These products will be marketed under the Vittorio Ricci label.

Before turning to a discussion of Nina Ricci and its business, Todd Ricci's name change warrants brief discussion. As previously discussed, Todd Ricci was named at birth, and known until 1977 as, Todd Neil Finkel. On August 25, 1977, Todd Neil Finkel filed a petition in New York City Civil Court to change his name to Todd Vittorio Ricci. At that time, the opposition proceeding commenced by Nina Ricci against ETF before the Trademark Trial and Appeal Board was pending. By Order dated October 4, 1977, Todd Neil Finkel's name was changed to Todd Vittorio Ricci, effective November 14, 1977. Todd Ricci testified that he changed his name for business and personal reasons.

B. Nina Ricci

At all times relevant to this action, Nina Ricci was and is a corporation duly organized and existing under the laws of the Republic of France. It is a French couturier house which has been manufacturing and selling high fashion apparel since 1932 and perfume since 1946. Its products are presently marketed on a world-wide basis. Nina Ricci's name was derived from the name of one of the founders of the business, Mme. Nina Ricci. Her son, Robert Ricci, is currently the president of Nina Ricci. Wladimir de Kousmine, the executive vice president of Nina Ricci testified that Nina Ricci has "two faces": perfume and apparel. Tr. 57. To date, the vast majority of Nina Ricci's business conducted in the United States has been in the perfume market.

In the United States, Nina Ricci holds several...