Frito-Lay, Inc. v. Bachman Co., 83 Civ. 4484 (MGC).

• Decision Date: 13 January 1989
• Docket Number: No. 83 Civ. 4484 (MGC).,83 Civ. 4484 (MGC).
• Citation: 704 F. Supp. 432
• Parties: FRITO-LAY, INC., Plaintiff, v. The BACHMAN COMPANY, Defendant.
• Court: U.S. District Court — Southern District of New York

704 F. Supp. 432

FRITO-LAY, INC., Plaintiff, v. The BACHMAN COMPANY, Defendant.

No. 83 Civ. 4484 (MGC).

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

January 13, 1989.

Pattishall, McCauliffe, Newbury, Hilliard & Geraldson, Chicago, Ill. by David C. Hilliard, Mark V.B. Partridge, Cahill Gordon & Reindel, New York City, by Thomas F. Curnin, David S. Smith, for plaintiff.

Eikenberry Futterman & Herbert, New York City by Peter G. Eikenberry, Paul R. Levenson, for defendant.

OPINION AND ORDER

CEDARBAUM, District Judge.

This suit involves the alleged infringement of Frito-Lay's registered "Ruffles" trademark and its unregistered Ruffles trade dress. Frito-Lay claims that the Bachman Company, by marketing "ruffled" potato chips, has infringed the Ruffles trademark under the Lanham Act and New York law (Count III of the amended complaint), and has violated New York's anti-dilution statute (Count II). Frito-Lay also claims that Bachman's "Golden Ridges" trade dress infringes the Ruffles trade dress under the Lanham Act and New York law (Count I).

Frito-Lay has moved for partial summary judgment as to liability on all counts, and seeks both injunctive relief and an award of damages to be determined at a later hearing. Bachman has cross-moved for summary judgment on the complaint and for a declaration that Ruffles is a generic mark and an order that the trademark be cancelled. For the reasons discussed below, each motion is denied.

BACKGROUND

Frito-Lay, Inc. is a Delaware corporation with its principal place of business in Dallas, Texas. Frito-Lay is a national marketer of snack food products, including potato chips. "Ruffles" is Frito-Lay's federally registered trademark for a brand of ridged potato chips that it has sold since 1958, when Frito-Lay acquired the Ruffles trademark from its predecessor, the Frito Company. The Frito Company had acquired the Ruffles trademark from Bernhardt Stahmer, who first adopted and used the Ruffles trademark in or about 1948. Ruffles potato chips have been sold by Frito-Lay and its predecessors in essentially the same blue and white trade dress since 1964.

The Bachman Company is a Pennsylvania corporation with its principal place of business in Reading, Pennsylvania. Bachman markets various snack food products, including potato chips, in competition with Frito-Lay in the northeast region of the United States. In 1980, Joseph Welch, Bachman's current president, acquired Bachman's assets from the Culbro Corporation.

One line of potato chips that Bachman sells is a ridged variety under the name "Golden Ridges." "Golden Ridges" has been sold in a blue and white trade dress since 1977. In 1981, after reviewing the packaging of all Bachman products, Welch decided to adopt new packaging for the Bachman family of snack products. However, Welch decided not to alter the Golden Ridges trade dress.

In the spring of 1982, Bachman decided to add a line of ridged potato chips, cut from a knife different from the one used for the Golden Ridges brand. Bachman began marketing these potato chips as "Bachman's Ruffled All Natural Potato Chips" in March of 1983. Both Golden Ridges and Bachman's Ruffled All Natural Potato Chips are sold through the same channels of trade as Ruffles. All of these potato chips are inexpensive items likely to be bought on impulse.

Frito-Lay commenced this action in June of 1983. Bachman has asserted a number of affirmative defenses, including laches, and a number of counterclaims, including one seeking cancellation of the Ruffles mark, and others alleging violations of the antitrust laws.

In the early stages of this lawsuit, Bachman filed a motion for summary judgment, arguing that its use of the word "ruffled" did not infringe the Ruffles mark, that Bachman's use was a fair use, and that the New York anti-dilution statute does not apply to direct competitors. The Court denied that motion in all respects.

In May of 1984, Frito-Lay amended its complaint to add a claim that the Golden Ridges trade dress infringes the Ruffles trade dress.

The antitrust counterclaims have been the subject of other decisions by this Court, see Frito-Lay, Inc. v. The Bachman Co., 659 F.Supp. 1129 (S.D.N.Y.1986), while a separate, non-jury mini-trial, limited to the issues of laches and acquiescence, was held in May of 1987. That decision concluded that Frito-Lay's trade dress claim was not barred by those defenses.

After the completion of discovery, Frito-Lay filed the motion for summary judgment now before the Court, and Bachman responded with its cross-motion.

DISCUSSION

COUNT III — TRADEMARK INFRINGEMENT

A. Establishing Liability — Likelihood of Confusion

Frito-Lay alleges that the use of the word "ruffled," in "Bachman's Ruffled All Natural Potato Chips," infringes Frito-Lay's federal and state rights in the registered Ruffles trademark. To obtain relief, Frito-Lay must prove that because of Bachman's use of "ruffled," "an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question." Banff Ltd. v. Federated Department Stores, Inc., 841 F.2d 486, 489 (2d Cir.1988) (quoting Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979)); see also Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 871 (2d Cir. 1986); Perfect Fit Industries, Inc. v. Acme Quilting Co., 618 F.2d 950 (2d Cir.1980), cert. denied, 459 U.S. 832, 103 S.Ct. 73, 74 L.Ed.2d 71 (1982).

The Second Circuit has adopted a multifactorial balancing test for evaluating trademark infringement claims. Generally referred to as "Polaroid factors," after the classic opinion by Judge Friendly in which they were enumerated, these factors include the strength of the senior user's mark, the degree of similarity between the marks, the proximity of the products, buyer sophistication, actual confusion, and the junior user's intent in adopting its mark. See Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961); see also Hasbro, Inc. v. Lanard Toys, Ltd, 858 F.2d 70 (2d Cir.1988). None of these factors is dispositive, and each must be evaluated according to the way in which it bears on the ultimate question of confusion. Banff, 841 F.2d at 490.

Frito-Lay argues that application of the Polaroid factors entitles it to summary judgment on its infringement claim. Bachman responds that rather than establishing likelihood of confusion, an analysis of the facts shows that the infringement claim must be dismissed. I conclude that although Ruffles is a strong trademark, there is a genuine factual issue concerning the similarity between Ruffles and "ruffled" that precludes summary judgment in either party's favor.

1. Strength of the Ruffles Trademark

The first Polaroid factor, the strength of the trademark, refers to the mark's "tendency to identify the goods sold under the mark as emanating from a particular source." McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126, 1131 (2d Cir.1979); see also Lois Sportswear, U.S.A. Inc. v. Levi Strauss & Co., 799 F.2d 867, 873 (2d Cir 1986). Strength is often measured preliminary according to the mark's categorization as generic, descriptive, suggestive, or arbitrary, classes which generally reflect the increasing level of protection to which the mark is entitled. The dispositive consideration, however, is the mark's distinctiveness, or "origin-indicating" quality. Banff, 841 F.2d at 491.

Ruffles is a very strong mark, and is entitled to broad protection, for several reasons. First, Ruffles has become incontestable under § 15 of the Lanham Act, 15 U.S.C. § 1065, which not only constitutes "conclusive evidence" of Frito-Lay's "exclusive right to use the registered mark," Lanham Act, § 33, 15 U.S.C. § 1115, but also means that the Ruffles mark may not be challenged as "merely descriptive," and that secondary meaning is presumed. Park 'N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985).

In addition, the uncontested facts show the distinctiveness of the Ruffles mark. Frito-Lay has been using Ruffles as the brand name of its ridged potato chips for almost thirty years. It is undisputed that Frito-Lay has advertised Ruffles extensively, under the well-known slogan, "Ruffles have Ridges." Ruffles potato chips have experienced strong sales. Only one other potato chip manufacturer prior to Bachman had adopted a mark containing the root term "ruff," but that manufacturer ceased using it upon Frito-Lay's demand. Finally, Frito-Lay marketing surveys evidence strong consumer recognition of the Ruffles mark as a brand name for ridged potato chips. Under these circumstances, Ruffles is a strong, distinctive mark, increasing the likelihood that Bachman's use of "ruffled" will confuse consumers.

2. Similarity

Similarity between a senior and junior users' marks is a fundamental Polaroid factor, so much so that "courts have consistently reserved the right to decide whether a visual comparison ... reveals such a lack of substantial similarity as would preclude any likelihood of confusion." S.C. Johnson v. Carter-Wallace, 614 F.Supp. 1278, 1318 (S.D.N.Y.1985); see also Warner Bros. v. American Broadcasting Co., 720 F.2d 231, 246 (2d Cir.1983) (affirming district court's finding of no likelihood of confusion based on visual comparison alone).

Aurally, "ruffled" and Ruffles are virtually identical. They are also visually similar when typewritten. Thus, when appearing in radio or print advertising, for example, the terms could be confusingly similar to targeted consumers.

On the other hand, when these words are considered in the context of their respective packaging, and in terms of their overall impression, see McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126, 1133 (2d Cir. 1979); see also C.L.A.S.S....