Golden Door, Inc. v. Odisho

• Citation: 437 F. Supp. 956
• Decision Date: 20 September 1977
• Docket Number: No. C-76-0655-WWS.,C-76-0655-WWS.
• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
• Parties: GOLDEN DOOR, INC., Plaintiff, v. Anver ODISHO, Defendant.

437 F. Supp. 956

GOLDEN DOOR, INC., Plaintiff, v. Anver ODISHO, Defendant.

No. C-76-0655-WWS.

United States District Court, N. D. California.

September 20, 1977.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Warren M. Becker, Gregg, Hendricson, Caplan & Becker, Palo Alto, Cal., for plaintiff.

George P. Eshoo, Redwood City, Cal., for defendant.

MEMORANDUM OPINION GRANTING INJUNCTIVE RELIEF AND FINDINGS OF FACT AND CONCLUSIONS OF LAW

SCHWARZER, District Judge.

Plaintiff Golden Door, Inc., is a California corporation organized in 1958 for the purpose of operating an exclusive health and beauty spa at Escondido, California. Defendant Odisho owns and operates two beauty salons in San Mateo County, California. One salon is located in San Carlos and has been operating since 1965 under the name Golden Door Coiffeur, or some variation thereof; the other is located in the City of San Mateo and has been operating under the name Golden Door for Hair since approximately October, 1975.

Plaintiff seeks injunctive relief against defendant's use of the name "Golden Door" under federal and state law. Although the complaint sought an accounting of profits, no monetary damages were sought at trial. The case was tried to the Court on July 11, 1977, much of the evidence having been received by affidavit, subject to cross-examination of the affiant.

This Court has jurisdiction under 28 U.S.C. §§ 1331 and 1338, and 15 U.S.C. §§ 1121 and 1116. Venue is properly laid in this District under 28 U.S.C. § 1391(b).

I FACTS

Golden Door, Inc., was incorporated in California on October 20, 1958; its subsidiary, Golden Door Cosmetics, Inc., was incorporated on September 30, 1959, and produces a line of cosmetics, including hair care products. Since that time both corporations have been actively engaged in business under these names. In January, 1959, plaintiff's application for federal registration of its name was denied because plaintiff was not engaged in interstate commerce. Subsequently, however, plaintiff has registered three federal trademarks and three federal service marks. The first mark was registered on January 25, 1966, for face and body shampoo and later that year another was registered for skin and hair products. Plaintiff's service mark for beauty parlor services was registered on September 19, 1972. In May, 1968, plaintiff also registered a trademark for skin and hair products and a service mark for the operation of a health resort under California law. To date, marks have been registered in Arizona, Florida, Georgia, Massachusetts, Minnesota, Oregon, and Utah.

The founder of Golden Door, Inc., Deborah Szekely Mazzanti, has been in the beauty business since 1940 when she and her former husband opened a health and beauty spa in Tecate, Mexico, named Rancho La Puerta (translated: The Door). Mrs. Mazzanti designed the Golden Door in Escondido, California, as a unique and elegant residential health and beauty spa. The name, partially derived from the Mexican resort, was intended to symbolize the outstanding quality and elegance of the beauty care furnished.

The business is somewhat unique in the health and beauty industry, as no guests are accepted for a period of less than a week. It includes "the sale of fitness and health services, and beauty counseling, including hair styling, restaurant and motel services, as well as retail sales of cosmetics, clothing, jewelry, kitchen and tableware and the like." (Pl. Ex. 34, p. 1.) The week's program consists of strenuous physical conditioning, diet, and beauty and hair counseling. The facilities are luxurious, and although the patrons work hard to become physically fit, they are pampered in every way consistent with the goals of the program. In order to maintain close control over the quality of services rendered under the name of the Golden Door, plaintiff has declined proposals to franchise the Golden Door, or to open other locations.

At the spa, individualized beauty and hair services are provided for guests in addition to health and exercise programs. The spa employs seven licensed cosmetologists or operators, representing approximately eight percent of the staff. Hairstyling services are a part of the overall beauty counseling offered, and each guest spends about one hour per day on this phase of the program. Most guests have their hair cut while at the spa and "in almost every case, the individual guest seeks a new appearance while at the Golden Door."

The record indicates that plaintiff, primarily through its president, Mrs. Mazzanti, has devoted a great deal of time and money to advertising Golden Door services and products. Since 1958, plaintiff has employed a public relations director. The advertising and promotion budget has grown from nearly $16,000 in 1959, to nearly $38,000 in 1976. In 1965, the year defendant began using the name "Golden Door Coiffeur", plaintiff spent approximately $34,650 for advertising. Promotional mailings have been sent regularly to customers throughout the United States.

Over the years the Golden Door has received extensive coverage in the news media. The opening of the Golden Door in 1959 was accompanied by wide publicity, particularly in California newspapers. Before defendant began to use the name, stories and articles about the Golden Door appeared in Bay Area newspapers and in national magazines, including Time, Life, Good Housekeeping, Sports Illustrated, Town & Country, House Beautiful, TV Guide, Business Week, and Newsweek. Extensive media coverage has continued to the present, including coverage by Vogue, House Beautiful, Harper's Bazaar, Newsweek, Family Circle, and newspapers throughout the country. Personal appearances by Mrs. Mazzanti at women's clubs, country clubs, and on television have enhanced the nationwide reputation of the Golden Door as a health spa. Additionally, the Golden Door has been mentioned in books by various authors, and reference to the Golden Door also appeared in the 1974 Broadway play "Finishing Touches" written by Jean Kerr.¹

At its inception in January, 1959, the Golden Door in Escondido accommodated twelve guests for one and two-week periods. An expanded three million dollar facility was later constructed to accommodate twenty-eight guests. Further expansion, which will increase the capacity to thirty-three patrons, is in progress.

Since 1965, plaintiff's spa has accommodated about 15,000 guests at a rate of about 1,400 per year. Plaintiff's gross sales of services and cosmetics for the year 1976 approximated $1,400,000, of which $40,000 was attributed to the sale of cosmetics.

The guests at plaintiff's spa are primarily women in their thirties or forties, but the spa is open to men for eight weeks of the year, and to couples for four weeks. As a result of an extensive early promotional campaign in the San Francisco Bay Area, many of plaintiff's original customers came from that area; plaintiff estimates that 175 of the current customers reside in the Bay Area, including about thirty in the San Carlos-San Mateo area.

Defendant opened his first hair salon, "Golden Door Coiffeur", in San Carlos on or about November 4, 1965. The original facility had two glass doors; defendant decided to paint them gold and adopt the name "Golden Door Coiffeur". Before selecting the name, he consulted the yellow pages of local telephone directories under the heading "beauty salons" to confirm that the name was not then being used in the area. In November, 1975, when defendant opened a second establishment approximately eight miles away in San Mateo, he began using the name "Golden Door for Hair" at the suggestion of his operators. The defendant filed fictitious business name statements for these salons on July 27, 1971, and December 30, 1976, respectively, after having been directed to do so by county officials.

Defendant's salons offer a variety of hair services, and have at times offered manicures and pedicures as well, services plaintiff also furnishes. The only hair products that defendant sells bear trade or other names in general use; none bears the name "Golden Door".

Defendant's business has grown rapidly, currently employing thirty to forty people at the two establishments. He estimates his customers to number about five to six hundred per week at the San Carlos location alone, and considers his prices "high" compared to the average beauty salon. Defendant's customers are primarily in the forty-five to fifty year age bracket, and reside in the local area.

Defendant has engaged in a variety of local promotional activities since 1965, having offered free haircuts as well as having advertised in the yellow pages of the local telephone directory, in local newspapers, and in miscellaneous local publications in connection with special events. He has occasionally advertised on local radio stations. Some of defendant's advertisements use the name of one salon but give both addresses. Defendant estimates that his advertising expense is currently about $1,000 per year.

Defendant has not been consistent in the manner in which he has used the Golden Door name in his promotional materials. In several instances, the words "Golden Door" have been the most prominently featured words in the descriptive material. For example, on matchbooks designed for defendant, "Golden Door" appears in much larger letters than "Coiffeur." Defendant's appointment card features a color picture of the front of the salon bearing the name "Golden Door." This establishment has large signs over the front and rear doors, and a small sign on the front window, all of which say only "Golden Door". On defendant's federal tax returns for the years 1974, 1975, and 1976, the business is identified only as "Golden Door". Defendant's employees answer the telephone by saying "Golden Door".

There is no evidence in the record of any actual confusion between plaintiff's and defendant's businesses, or actual competition between them or of...