Grey v. Campbell Soup Co.

Decision Date12 September 1986
Docket NumberNo. CV 83-7291-RJK (gx).,CV 83-7291-RJK (gx).
Citation650 F. Supp. 1166
PartiesCynthia GREY, an individual doing business as Dogiva, Ltd., Plaintiff, v. CAMPBELL SOUP COMPANY, a New Jersey corporation, Defendant.
CourtU.S. District Court — Central District of California

COPYRIGHT MATERIAL OMITTED

Cooper, Epstein & Hurewitz, Michael A. Painter, Steve W. Ackerman, Beverly Hills, Cal., for plaintiff.

Nilsson, Robbins, Dalgarn, Berliner, Carson & Wurst, Byard G. Nilsson, Harold E. Wurst, Leonard D. Messinger, Los Angeles, Cal., Banner, Birch, McKie & Beckett, Alan S. Cooper, Kathy J. McKnight, Washington, D.C., for defendant.

MEMORANDUM OF DECISION AND ORDER

KELLEHER, Senior District Judge.

I. INTRODUCTION

This is an action for declaratory relief arising out of the marketing and sale of DOGIVA dog biscuits by plaintiff Cynthia Grey (hereinafter "Grey") and former counterclaim defendant Saks. Defendant Campbell Soup Company (hereinafter "Campbell"), owner of the trademark GODIVA, counterclaimed for unfair competition, trademark and trade dress infringement and trademark dilution based on Grey's use of the confusingly similar marks DOGIVA and CATIVA, the business name "Dogiva, Ltd." and the intentional imitation of Campbell's distinctive gold foil ballotin trade dress. Grey's principal defense was that in February or March of 1982, Alfred J. Pechenik (hereinafter "Pechenik"), while president of Campbell's subsidiary Godiva, gave Grey permission to use the term DOGIVA and the infringing packaging for her product.

A two-day bench trial was held on May 13 and 14, 1986. The primary factual issue was whether Pechenik gave Grey permission to use DOGIVA and the silver foil trade dress. The remaining issues related to the strength of the mark GODIVA, whether the gold foil ballotin trade dress had acquired secondary meaning, Grey's intent in adopting DOGIVA, and whether Grey's use of DOGIVA, CATIVA and/or the silver foil trade dress is likely to cause confusion and to dilute the distinctive quality of the trademark GODIVA.

This is not a typical trademark case; it involves an intentional infringement and the assertion of a permission defense designed to justify that infringement. Because the factual question of permission was the dominant issue at trial, it is discussed first.

II. ACQUIESCENCE OR PERMISSION DEFENSE
A. Burden of Proof

Acquiescence or permission is an affirmative defense. 1 Gilson, Trademark Protection and Practice, § 8.12(12)(e), p. 8-127 (1985). Accordingly, Grey has the burden of proving that defense by a preponderance of satisfactory evidence. Capewell Horse Nail Co. v. Green, 182 F. 404, 405 (N.D.N.Y.1910), aff'd, 188 F. 20 (2d Cir.1911).

B. The Permission Defense is Unsupported
1. Introduction

Reduced to its essentials, Grey's story is that she thought of a pet product idea and the names DOGIVA and CATIVA; she talked to friends about her idea. On the advice of her husband, she called Godiva to see if there was any problem with her use of DOGIVA and the silver foil packaging. Grey allegedly spoke with Pechenik in February or March of 1982 while Pechenik was president of Godiva; he gave her permission and she confirmed that permission in a letter, which cannot be found.

The Court concludes that this story is untenable. While some of the underlying factual details may be true, they did not happen when and how Grey said they did. The evidence shows that what actually occurred is that sometime in early 1983, Grey developed the DOGIVA product idea. She sent handmade prototypes of DOGIVA boxes to several leading department stores, among the first of which were Neiman-Marcus, Saks, and Bloomingdale's. The prototype sent to Bloomingdale's was received by Jeanne Sacklow, who showed it to Pechenik on April 28, 1983, ten months after he left Godiva. The evidence shows this was the first time Pechenik ever heard of DOGIVA and Grey. By that time Pechenik had organized Gourmet Resources, Inc., a competitor in the chocolate field. Pechenik telephoned Grey sometime between April 28 and May 11, 1983 and encouraged her in this project.

In the spring and summer of 1983, Grey began the production, marketing and sale of her product. After she received Campbell's cease-and-desist letter, Grey filed this action.

2. Chain of Events

Grey began marketing the DOGIVA product by calling department store buyers in April or May of 1983. One of her first calls was to Bloomingdale's. Although prior to trial, Grey could not recall to whom she spoke at Bloomingdale's, it is clear from Jeanne Sacklow's deposition and Grey's testimony at trial that Sacklow was that individual.

One of Sacklow's duties at Bloomingdale's was to screen vendors and their products. In that capacity, Sacklow knew Pechenik, knew that he had been president of Godiva, and in 1983 knew that Pechenik was at Gourmet Resources. At a meeting on April 28, 1983, Sacklow showed Pechenik the DOGIVA prototype. It is clear from Sacklow's testimony that April 28, 1983 was the first time Pechenik had ever heard of DOGIVA or Grey. Indeed, Pechenik asked Sacklow "who invented this?" and "did Godiva give her permission to do this?"

Sacklow gave Grey's name to Pechenik and, in a subsequent telephone conversation with Grey, Sacklow also advised Grey that Pechenik was interested in the DOGIVA product. In that conversation, Grey gave no indication to Sacklow that she (Grey) had ever talked to Pechenik before, just as Grey had said nothing about permission in response to Sacklow's earlier questions regarding legal clearance to market the DOGIVA product.

Within a few days after April 28, 1983, Pechenik telephoned Grey. Pechenik identified himself as Jeanne Sacklow's friend and he told Grey that he had seen the DOGIVA product. Pechenik told Grey her product was a "great gimmick" and that it would take Godiva two years to "get their act together" to sue her. Based on his experience at Godiva, Pechenik advised Grey on possible suppliers, prospective customers, and also on a strategy to develop media interest in her product.

Grey's notes on her first conversation with Pechenik were received in evidence. The reference in the upper left hand corner of Grey's notes identifies the caller as "Gene Sackel's sic: Jeanne Sacklow friend." Clearly Pechenik would have no need to identify himself in this manner if Grey already knew who he was by virtue of the "permission conversation" in February or March of 1982.

After introducing himself, Pechenik and Grey discussed her product. As the second paragraph of Grey's notes illustrates, Pechenik told Grey that Simpkins Industries made the GODIVA box; he gave her Morty Simpkins' name and telephone number in Pennsylvania and told her how much Godiva paid for its boxes. Diane Anderson confirmed this when she testified that Pechenik told Grey "where to go for the boxing."

Grey's notes clearly represent Pechenik's advice to Grey on how to negotiate with Saks: "Don't sign an exclusive! The New York market is worth about $800,000 minimum." On April 22, 1983, Grey had sent a DOGIVA prototype to Saks. After receiving the sample, Eileen Lippel, a buyer at Saks, called Grey and discussed the possibility of an exclusive on Grey's product for the Saks' catalog.

Grey's notes also reflect Pechenik's advice as to where Grey could obtain trays for her product. He gave her the name and telephone number of Jerry Shapiro of Bleyer Industries in New York, who in fact supplied Grey with the trays and padding inserts which she used. As former president of Godiva, Pechenik knew that Mr. Shapiro supplied the trays for the GODIVA ballotins.

Grey's notes also represent Pechenik's marketing advice. Grey admits that the suggestion to "print up 5,000 fact sheets and deliver them to every TV station, radio station, newspaper and magazine that you can think of" "could contain some thoughts" from Pechenik, although she claims that this paragraph reflects a "combination" of advice from Pechenik and a public relations firm.

3. Conflicts and Contradictions

Grey's story is internally inconsistent and is contradicted in significant part by the testimony of others and documentary evidence.

a. Timing and Derivation of DOGIVA

On December 9, 1983, Grey testified that she thought of the name DOGIVA "last Valentine's Day which would be February, 1982...." In her Declaration executed on December 12, 1983, Grey also stated that she derived DOGIVA around Valentine's Day 1982. Indeed, Grey "knows" she called Pechenik in February or March of 1982 "because ... it was right around Valentine's Day or after."

Yet at trial, Grey testified that she actually thought of the name DOGIVA on Valentine's Day 1981. When asked to explain the discrepancy, Grey stated that it would have been "impossible" for her to think of the name on Valentine's Day 1982 and then call Pechenik one week later with a product in mind. In addition to it being a very strange coincidence that Grey would think of the name DOGIVA on Valentine's Day 1981 and then happen to call Pechenik on or around Valentine's Day 1982, this explanation simply does not agree with Grey's prior testimony and other portions of her trial testimony.

At her deposition on April 20, 1984, Grey testified as to the timing and sequence of events in the development of her product. Grey's story then was that in February 1982 she thought of the name DOGIVA and began talking to suppliers and friends about the product. During this same period of time, she said she made DOGIVA prototypes and had the artwork and embossing plates made. All of this activity supposedly occurred in a three-to-four-month period beginning in February or March of 1982 at the same time she allegedly contacted Pechenik. At trial, Grey changed the date of conception of DOGIVA from 1982 to 1981 because it would have been "impossible" for her to have a complete product in mind in February 1982. This directly contradicts all of her prior testimony regarding the contemporaneous activities which...

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