Genovese Drug Stores, Inc. v. TGC Stores, Inc.

• Decision Date: 05 September 1996
• Docket Number: No. 96-3053.,96-3053.
• Citation: 939 F. Supp. 340
• Parties: GENOVESE DRUG STORES, INC. v. TGC STORES, INC.
• Court: U.S. District Court — District of New Jersey

939 F. Supp. 340

GENOVESE DRUG STORES, INC. v. TGC STORES, INC.

No. 96-3053.

United States District Court, D. New Jersey.

September 5, 1996.

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Allyn Z. Lite, Robert J. Brener, Goldstein, Till & Lite, Newark, NJ, for Plaintiff.

Joel D. Siegal, Robert S. Raymar, Hellring, Lindeman, Goldstein & Siegal, Newark, NJ, for Defendant.

POLITAN, District Judge.

This matter comes before the Court on the application of plaintiff Genovese Drug Stores Inc. for a preliminary injunction against defendant TGC Stores, Inc., seeking to enjoin defendant from using the name take good care for its new health care stores. The Court conducted an evidentiary hearing on August 12-13, 1996, and reserved decision. For the reasons stated herein, plaintiff's application for preliminary relief is DENIED.

BACKGROUND

Plaintiff operates a chain of retail drug stores in New York, New Jersey and Connecticut. Plaintiff has been in business for over seventy years. Defendant is a new company, specializing in home health care products. Within the last few months, defendant opened its first two stores in New Jersey.¹

Nine years ago, plaintiff registered the trademark "We'll Take Good Care of You" as its slogan. Recently, defendant named its stores take good care. Plaintiff alleges that the name chosen by defendant infringes on its trademark. Accordingly, plaintiff filed the instant Complaint and an Order to Show Cause why defendant should not be preliminarily enjoined from using said name pending the outcome of this case.

DISCUSSION

The standards for issuance of a preliminary injunction in Lanham Act cases, as in all others, are well-settled. In ruling on a motion for preliminary injunction, the court must consider: (1) the likelihood that the plaintiff will prevail on the merits; (2) the extent to which the plaintiff is being irreparably harmed; and, where relevant, (3) the extent to which the defendant or other interested persons will suffer irreparable harm if the injunction is issued; and (4) the extent to which the public interest favors the granting of the requested relief. See Merchant & Evans, Inc. v. Roosevelt Bldg. Prods. Co., Inc., 963 F.2d 628, 632-33 (3d Cir.1992); Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 197-98 (3d Cir.1990). See also Morton v. Beyer, 822 F.2d 364, 367 (3d Cir.1987). "The grant of injunctive relief is an extraordinary remedy ... which should be granted only in limited circumstances." Frank's GMC Truck Ctr., Inc. v. General Motors Corp., 847 F.2d 100, 102 (3d Cir.1988) (citing United States v. City of Philadelphia, 644 F.2d 187, 191 n.1 (3d Cir. 1980)). See also Falter v. Veterans Admin., 632 F.Supp. 196, 201 (D.N.J.1986) ("There is no power the exercise of which is more delicate, which requires greater caution, deliberation, and sound discretion, or more dangerous in a doubtful case, than the issuing of an injunction.").

An injunction should issue only if the plaintiff produces evidence sufficient to convince the court that all four factors favor preliminary relief. Opticians Ass'n of Amer. v. Independent Opticians of Amer., 920 F.2d 187, 192 (3d Cir.1990). Because the Court finds that plaintiff has not successfully carried its burden of showing a reasonable probability of eventual success on the merits and because the irreparable harm to defendant outweighs any harm to plaintiff, the Court will deny the instant application for preliminary relief.

A. LIKELIHOOD OF SUCCESS ON THE MERITS

Plaintiff's Complaint asserts six causes of action: (1) trademark infringement, under 15 U.S.C. § 1114; (2) dilution, pursuant to 15 U.S.C. § 1125; (3) false designation of origin, false description and representation, and false advertising, under 15 U.S.C. § 1125(a); (4) unfair competition under state law, N.J.S.A. 56:4-1 et seq.; (5) common law trademark infringement, unfair competition, misappropriation and passing off; and (6) common law dilution.

1. Trademark Infringement

Plaintiff alleges a cause of action for trademark infringement pursuant to Section 32 of the Lanham Act, 15 U.S.C. § 1114. To succeed on such a claim, the plaintiff must establish: (1) its mark is valid and legally protectable; (2) the mark is owned by the plaintiff; and (3) the defendant's use of the mark is likely to create confusion.² Opticians Ass'n, 920 F.2d at 192 (citing Pedi-Care, Inc. v. Pedi-Care Nursing, Inc., 656 F.Supp. 449, 453 (D.N.J.1987)). The Court finds, and defendant does not challenge, that plaintiff has presented evidence to establish the first two elements. Accordingly, the issue before the Court is the requirement of confusion between the two marks.

The Third Circuit, in Scott Paper Co. v. Scott's Liquid Gold, Inc., annunciated the factors which the Court must analyze to determine whether two marks are confusingly similar. 589 F.2d 1225, 1229 (3d Cir.1978). The ultimate inquiry is whether the marks create a likelihood of confusion. Plaintiff argues that a more relaxed standard, merely requiring a showing that the marks create a possibility of confusion, is applicable. See Versa Prods. Co., Inc. v. Bifold Co. (Mfg.), Ltd., 50 F.3d 189, 200 (3d Cir.) (citing Merchant & Evans, 963 F.2d at 637-38), cert. denied, ___ U.S. ___, 116 S.Ct. 54, 133 L.Ed.2d 19 (1995); Country Floors, Inc. v. Partnership Composed of Gepner & Ford, 930 F.2d 1056, 1065 (3d Cir.1991); Telechron, Inc. v. Telicon Corp., 198 F.2d 903, 908-09 (3d Cir.1952).

"Where an alleged infringer was new to an area and the plaintiff was well-established, this court has at times replaced the `likelihood of confusion' requirement with a lower `possibility of confusion' standard." Versa, 50 F.3d at 200. The primary reasons for lowering the standard in this situation are "the general lack of legitimate reasons for copying a competitor's mark ... and the high degree of reliance by consumers on trademarks as indicators of the source of products." Id. at 201. The possibility of confusion test, however, only applies when the junior user and the senior user are in the same field. Barre-National, Inc. v. Barr Lab., Inc., 773 F.Supp. 735, 740 (D.N.J.1991). This requires the Court to determine and compare the relevant markets of the two parties. Id. (citing Country Floors, 930 F.2d at 1065).

In the case sub judice, plaintiff has operated retail drug stores for over seventy years. The pharmacy department is touted as the "heart" of plaintiff's business. (See Ex. D10). Like most retail drug stores, plaintiffs objective is to provide customers with necessities, i.e., prescriptions, and then once in the store, entice them into making impulse purchases.

In contrast, defendant does not operate a pharmacy, and does not intend to do so in the future. (Tr. at 84:10-14). Defendant specializes in home health care equipment; its profits are generated from the sale of "bigticket" items, i.e., wheelchairs, seat lifts, canes, motorized carts, seated stair lifts. (Tr. at 116:8-10; 193:17-22). Furthermore, all of defendant's low-priced items are geared towards health conscious or handicapped consumers, i.e., herbal teas, medical shampoos, dermatological skin care products, large-print books and playing cards. (Tr. at 113:3-115:13; 132:7-24).

Unlike plaintiff's typical drug store, which is designed in aisles similar to a small grocery store (see Ex. P25), defendant's store features wide-open spaces which display the numerous varieties of durable medical equipment ("DMEs") and provide sufficient area for customers to demonstrate the items. (See Ex. D16, D17, D35, D6). Moreover, defendant provides seminar rooms for counseling and fitting of equipment, such as prosthetics for mastectomy patients. (Tr. 101:6-20; 102:10-22; See Ex. D19). Plaintiff admits that defendant's store is physically different than its own. (Tr. 82:17-21).

Plaintiff, on the other hand, does not advertise DMEs and only indicates their availability by a sign within the pharmacy department in its New York stores. (Tr. 21:5-17; 21:25-22:5; 2:20-23:2). In fact, none of plaintiff's advertising budget is spent on promoting the sale of DMEs. (Tr. 23:3-5). Accordingly, the Court finds that the parties are not competing in the same field for the purposes of applying the possibility of confusion test. Hence, the Court must analyze the likelihood of confusion.

The relevant factors to be considered in a determination of whether a likelihood of confusion exists, commonly referred to as the Scott factors, are: (1) the degree of similarity between the owner's mark and the alleged infringing mark; (2) the strength of the owner's mark; (3) the price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase; (4) the length of time that the defendant has used the mark without evidence of actual confusion arising; (5) the intent of the defendant in adopting the mark; (6) the evidence of actual confusion; (7) where the parties' goods are not competitive, whether the goods are marketed through the same channels of trade and advertised through the same media; (8) the extent to which the targets of the parties' sales efforts are the same; (9) the relationship of the goods in the minds of the public because of the similarity of function; and (10) other facts suggesting that the consuming public might expect the prior owner to manufacture a product in the defendant's market. Scott, 589 F.2d at 1229. Not all of these factors need to be considered if some are dispositive. American Cyanamid Co. v. S.C. Johnson & Son, Inc., 729 F.Supp. 1018, 1021 (D.N.J. 1989).

a. Similarity of the Marks

Plaintiff asserts that the marks are similar because defendant's mark is subsumed within plaintiff's mark. Plaintiff argues that "Take Good Care" is the dominant portion of its mark; and, therefore, defendant's mark creates a commercial impression in the minds of customers. In contrast, defendant asserts that because "We'll Take Good Care of You"...