Fotomat Corp. v. Photo Drive-Thru, Inc.

• Decision Date: 20 January 1977
• Docket Number: Civ. A. No. 75-0203.
• Citation: 425 F. Supp. 693
• Parties: FOTOMAT CORPORATION, Plaintiff, v. PHOTO DRIVE-THRU, INC. and Thomas D. Baldi, Defendants.
• Court: U.S. District Court — District of New Jersey

425 F. Supp. 693

FOTOMAT CORPORATION, Plaintiff, v. PHOTO DRIVE-THRU, INC. and Thomas D. Baldi, Defendants.

Civ. A. No. 75-0203.

United States District Court, D. New Jersey.

January 18, 1977.

As Amended January 20, 1977.

COPYRIGHT MATERIAL OMITTED

Bleakly, Stockwell & Zink by John A. Fratto, Camden, N. J., Sullivan, Jones & Archer by Steven P. Oggel, Fredman, Silverberg & Lewis, Inc. by Welton B. Whann, San Diego, Cal., Michael A. Kaplan, Fotomat Corp., La Jolla, Cal., for plaintiff.

Duffield & Lehrer by Charles F. Duffield, and Norman E. Lehrer, Haddonfield, N. J., Daniel Zonies, Pennsauken, N. J., for defendants.

OPINION

GERRY, District Judge.

I. INTRODUCTION

Plaintiff Fotomat Corporation (hereinafter "Fotomat") instituted this suit against defendants Photo Drive-Thru, Inc. and Thomas D. Baldi (an officer of Photo Drive-Thru), alleging infringement of Fotomat's registered service marks in violation of the Lanham Trade-Mark Act, 15 U.S.C. §§ 1051 et seq., and the New Jersey Trademark Act, N.J.S.A. 56:3-13.1 et seq., as well as violations of Fotomat's rights under the common law of trademarks and unfair competition.

Plaintiff Fotomat's motion for a preliminary injunction is presently before the Court. Plaintiff alleges that defendants have infringed upon a particular building design that plaintiff has registered as its service mark in connection with its sale of retail drive-in photographic supply store services, and it seeks injunctive relief.¹ For purposes of its preliminary injunction motion, plaintiff seeks relief only for infringement of its registered service mark and building design under federal trademark and unfair competition grounds, and thus other causes of action that plaintiff urged in its complaint are not presently under consideration.²

Plaintiff Fotomat and defendant Photo Drive-Thru are competitors in the business of film processing. Each party dispenses its goods and services from small, free-standing booths ("kiosks") located in parking lots, designed to accommodate drive-in customers in automobiles. Fotomat alleges that the building design of the Fotomat kiosk is protected by a registered service mark which has been infringed by Photo Drive-Thru's construction and operation of kiosks having confusingly similar design.

Second, Fotomat alleges that Photo Drive-Thru has infringed this service mark through use of a confusingly similar logo in its advertising brochures, business stationery and miscellaneous envelopes, receipts and the like.

Third, Fotomat alleges that Photo Drive-Thru has engaged in unfair competition by deceptively palming off its goods and services as those of Fotomat.

The Court has heard four days of testimony on plaintiff's application for a preliminary injunction. After reviewing the testimony, affidavits, exhibits and excellent briefs of both parties, the Court makes the following findings of fact and conclusions of law.

II. FINDINGS OF FACT

A. Background Information

1. Plaintiff Fotomat and defendant Photo Drive-Thru are competitors in New Jersey, New York and Pennsylvania, and both are engaged in the business of selling photographic products and film processing services.

2. Fotomat opened its first retail sales outlet in 1967 in San Diego, California. By June 1, 1973, 25 Fotomat outlets were operating

in New Jersey, 105 in New York and 57 in Pennsylvania. (Ex. D).

3. Defendant Photo Drive-Thru opened its first retail sales outlet in June, 1973, in Collingswood, New Jersey. (Ex. F at 68). Photo Drive-Thru operates approximately 57 retail outlets in the three state area of New Jersey, New York and Pennsylvania, (Tr. 3-123), while Fotomat's operations grew to 266 outlets in these states by June 1, 1975, and 2,267 outlets in the United States and Canada by January 1, 1976 (Ex. D).

4. Fotomat and Photo Drive-Thru both offer products and services to amateur photographers (Ex. D & Ex. F at 108-109).

5. Both parties conduct their businesses in similar modes from small free-standing booths (hereinafter called kiosks), generally situated in shopping center parking lots in such a way that a customer may conduct transactions directly from an automobile.

B. The Registered Service Mark and Symbolic Logos

6. Fotomat is the owner of United States Service Mark Registration No. 911,388, registered April 13, 1971, on the principal register of the U.S. Patent and Trademark Office. (Ex. B). Fotomat's service mark registration is shown at Appendix A to this Opinion. There is no dispute that plaintiffs are prior owners of this service mark.

1. Similarity of Logos

7. The Fotomat service mark, as shown below at Appendix A, consists of a depiction of a rectangular booth, shown from a diagonal view (i.e., not a cross-sectional view). This depiction shows curbing running along the front edge of the booth, enclosing plantings of smaller shrubs shown on each side of the booth. The booth is topped by an overhanging roof having three tiers, trapezoidal in overall design if viewed from the front. The roof design is triangular if viewed from the sides of the booth rising to the peak of the roof. This service mark shows no words or other lettering.

8. Fotomat's evidence shows that sufficiently similar reproductions of this service mark have been displayed on Fotomat's film boxes, merchandising bags, coupons, refund vouchers, business envelopes, customer service requests, point of sale ads and circulars, repair orders, reports of accident or loss, refund logs and letterheads. (Exs. 1-10 of Ex. S; Exs. 9-11 of Ex. D). Fotomat's service mark is sometimes accompanied by the words Fotomat or Fotomat Corporation. Fotomat's registered service mark has been relatively faithfully represented (although in no instance copied exactly) on the merchandising bags, coupons, vouchers, etc., listed above. The service mark logo was in general use prior to 1973.

9. Fotomat has also presented evidence of extensive advertising which showed photographs of various kiosks on sites with an automobile in front of the booth in each photo (Exs. 1-8 of Ex. D; Exs. 1-2 of Ex. E), or drawings of a booth with automobile (Exs. 3-4 of Ex. E). Such advertising has appeared in national and local publications circulated in the relevant geographical areas. The advertising has contributed to the fame of the logo as registered to the limited extent that the logo has occasionally been relatively faithfully reproduced as a symbol in the drawings, while the photographic ads portraying a kiosk in actual use depict the service of retailing itself rather than a symbol of that service. There is, however, sufficient symbolic content in the advertisement drawings of the logo-type mark (as opposed to functional content of the advertisement photographs of services actually being rendered from a kiosk) to justify recognition of the registered logo as a famous mark symbolizing the origin of Fotomat's services (as opposed to the literal depiction of the manner of procuring such services in the normal conduct of Fotomat's retailing).

10. Defendant Photo Drive-Thru has adopted an advertising logo subsequent to 1973 which is shown as Appendix B to this Opinion. The Photo Drive-Thru logo is a silhouette view of a small free-standing booth with an overhanging slanted roof with an automobile beside the booth. The words Photo Drive-Thru sometime appear in connection with this logo.

11. The Court finds that the Photo Drive-Thru logo when viewed as a whole is similar in overall appearance to the registered Fotomat service mark.

12. When used in connection with film processing services, Fotomat's logo is an arbitrary and fanciful symbol, which has also become a famous mark, capable of indicating the source of Fotomat's products and services. Competitors may choose from a universe of other symbols to distinguish their own products. There is no reason why defendants could not have adopted a logo other than their illustration of a kiosk as a symbol to identify and distinguish their business and services.³ The value of the registered logo as a symbol indicating the origin of Fotomat's products and services is entitled to protection from infringement by Photo Drive-Thru's similar logo if the requisite likelihood of confusion is demonstrated. (This finding does not apply to the building designs of the parties' kiosks for reasons discussed below).

2. Likelihood of Confusion of Logos

13. The Court finds that confusion caused by the similarity of Photo Drive-Thru's logo to Fotomat's registered service mark has been demonstrated by the evidence with a sufficient degree of likelihood. There is ample evidence that members of the public have mistakenly attempted to use defendant Photo Drive-Thru's coupons, processing receipts, promotional literature and price lists at Fotomat outlets, and that defendants' logo appeared on these items. (Exs. G-9, G-17, O, T; Tr. 2-88 to 2-92, 2-137 to 2-140 and 3-27 to 3-30; Exs. AI, AC-1).

14. For example, a booklet of Photo Drive-Thru coupons is in evidence (Ex. T), which was distributed by defendant Baldi personally. Fotomat's customers subsequently attempted to use such Photo Drive-Thru coupons to obtain discounts and merchandise at Fotomat on numerous occasions, unaware of any differences between Fotomat and Photo Drive-Thru. (Tr. 3-26 to 3-30).

15. When the registered Fotomat logo (Appendix A) is viewed as a whole when used in connection with retail photographic supplies and services, the Court finds that the average customer is likely to be confused by the similar Photo Drive-Thru logo (Appendix B).

C. The Kiosk Structures and Building Designs

1. Similarity of Kiosks

16. Plaintiff Fotomat has constructed retail outlets which are similar to each other in general design and appearance, consisting generally of a rectangular booth placed on a concrete island with a shrubbery planter at either side of the booth. The booth is covered by a sloped, overhanging roof. The roof is three-tiered, and its four...