Gtfm, Inc. v. Solid Clothing, Inc.

Citation215 F.Supp.2d 273
Decision Date11 July 2002
Docket NumberNo. 01 Civ. 2629(DLC).,01 Civ. 2629(DLC).
PartiesGTFM, INC. and GTFM, LLC, Plaintiffs, v. SOLID CLOTHING INC., d/b/a ZAM, Defendant.
CourtU.S. District Court — Southern District of New York

Louis S. Ederer, John Maltby, Joseph P. Tucker, Gursky & Ederer, LLP, New York City, for Plaintiffs.

Mark L. Sutton, John Park, Benjamin Jesudasson, Los Angeles, CA, for Defendant.

OPINION AND ORDER

COTE, District Judge.

At this non-jury trial, the plaintiffs assert that their two digit number — "05" — functions as a trademark when placed on clothing, principally athletic jerseys, sold to young men. Plaintiffs GTFM, Inc. and GTFM, LLC (collectively, "GTFM") are the owner and master licensee, respectively, of the federally registered trademarks "FUBU," "FUBU 05" and "05" for International Class 25 (Clothing). GTFM designs, manufactures and sells clothing primarily to young males, marketing its products by identification with urban American "hip-hop" culture and celebrities from the sports and music worlds. In less than a decade, its sales have exploded to hundreds of millions of dollars a year. Its designs and success have spawned imitation and this trial is on claims brought against one of its imitators.

GTFM brought this action against defendant Solid Clothing Inc. ("Solid") for Solid's infringement of GTFM's "05" mark. Between 1999 and 2001, Solid used "05" and then "PLAYERS 05" on sports apparel it designed to imitate GTFM's wildly popular garments. GTFM has sued Solid for willful trademark and trade dress infringement, counterfeiting and dilution, and false designation of origin under the Trademark Act of 1946 ("Lanham Act" or the "Act"), 15 U.S.C. 1051 et seq., common law trademark infringement and unfair competition, and the violation of New York General Business Law Sections 360-l and 349. Solid, which has applied to register its own trademark — "PLAYERS 05" — for the clothing it sells that is based on plaintiffs' designs and trademarks, seeks through a counterclaim to cancel GTFM's registration of the "05" trademark pursuant to Section 37 of the Act, 15 U.S.C. § 1119.

GTFM filed this action on March 28, 2001, and filed an amended complaint on April 2, 2002. A bench trial was held on July 1 and 2, 2002. As noted, the trial principally concerned GTFM's claims that Solid had infringed its "05" trademark, as well as the trade dress of its football and baseball jerseys. Solid relied primarily on its assertions that GTFM's registration of the "05" mark had been obtained through fraud, that the "05" mark is functional, that the "05" mark and trade dress are not distinctive, that there was in any event no confusion because many of Solid's "05" garments also had the word "Players" on the garment along with other distinguishing features, and that it had not engaged in any willful misconduct.

In accordance with the Individual Practices of this Court in civil bench trials, and without objection, the parties submitted the direct testimony of their witnesses by affidavit as well as their documentary evidence in advance of trial. Plaintiffs submitted the affidavits of Daymond John ("John"), GTFM's chief designer and the co-founder and Chief Executive Officer of Fubu The Collection, LLC, which is a shareholder of GTFM, Inc. and a member of GTFM, LLC; Bruce Weisfeld ("Weisfeld"), President of GTFM, Inc. and GTFM, LLC; Norman Weisfeld, Secretary and Treasurer of GTFM, Inc. and GTFM, LLC; Joseph Nadav ("Nadav"), President of City Blue, Inc., a chain of clothing stores; Kris Buckner ("Buckner"), a private investigator; Noe Bermudez ("Bermudez"), a private investigator; Lauren Dienes ("Dienes"), a former associate at Gursky & Ederer, LLP, plaintiffs' counsel; David Jones ("Jones"), a paralegal at Gursky & Ederer; and Ken Weprin ("Weprin"), a sportscaster. Plaintiffs also relied on excerpts from the deposition testimony of Sang P. Park ("Park"), President of Solid; Wha Jung Kim ("Kim"), Secretary of Solid; Diane Choi ("Choi"), an administrative assistant at Solid; and Chong Roh ("Roh"), a paralegal at Park & Sutton, LLP, defendant's trial counsel.

Defendant submitted the affidavits of Park, Kim, Roh, and Marian Golub ("Golub"), a secretary at Silver & Silver, LLP, defendant's local counsel. Defendant also relied on excerpts from the deposition testimony of John, Nadav, and Weisfeld. Weisfeld, Norman Weisfeld, Nadav, Dienes, Jones, Park, Kim, and Roh were cross-examined at trial.

In light of the evidence received at trial, the following constitute this Court's findings of fact and conclusions of law.

Background

In 1995, John placed an advertisement in The New York Times seeking financing for a men's apparel business that he had begun with friends three years earlier in Queens, New York using the trademark "FUBU," which is an acronym for the motto "For Us By Us." John and his friends were young, inner-city African-Americans interested in designing and selling clothing that they themselves would enjoy wearing. They were also interested in making a statement about who should profit from the sale of fashion to African-American youth. "It comes down to ownership," John stated in a magazine interview in 1999; "with us, you actually see African-Americans operating the company. We have a face our customers identify with."

Weisfeld, who was and remains President of Alliance Worldwide, Inc. ("Alliance"), a company engaged in the manufacture and sale of apparel, was among the approximately twenty-five investors who responded to John's 1995 advertisement. Negotiations followed, and in November 1996, Alliance, John and his partners formed GTFM, Inc. All rights of John and his partners in the "FUBU" trademark were transferred to GTFM, Inc. At approximately the same time, Alliance entered into an agreement with Samsung America, Inc. ("Samsung") for the production of apparel designed by John. Alliance acted as a manufacturer and sales representative for the apparel and GTFM, Inc. was responsible for brand promotion and licensing.

GTFM, LLC was formed in 1998, to act as the master licensee for the "FUBU" brand. GTFM, Inc. granted GTFM, LLC a master license for all "FUBU" trademarks that included the right to enter into sublicenses. GTFM, LLC was also incorporated into the production agreement between Alliance and Samsung.

The "FUBU" brand has grown at an extraordinarily rapid pace over the past decade. In late 1993, John took out a mortgage on his mother's home to cover $60,000 in orders. When John sought financing in 1995, he was struggling to cover $300,000 in orders. GTFM's sales for the year 2001, in contrast, exceeded $350 million worldwide at wholesale. It projects its sales for the year 2002 to exceed $375 million worldwide at wholesale.

GTFM's Use of the "05" Trademark

In 1993, John began to design mens sports jerseys prominently bearing the number "05" (pronounced "oh-five") as well as the "FUBU" trademark. John chose the number "5" to represent the founders of the "FUBU" brand. He placed a "0" before the "5" in an effort to distinguish the number from other numbers used to identify athletes, which typically do not begin with the number "0" except in the combination "00." Indeed, the parties have only been able to identify one professional athlete who ever wore any other number beginning with "0" and not ending in "0," and that was approximately ten years ago when Benito Santiago ("Santiago") of the San Diego Padres wore "09" for a brief time. Santiago currently wears the number "33." Between 1993 and 1997, musicians and celebrities began to wear John's "05" jerseys when they performed and made appearances. During that time, John designed sports jerseys bearing the "05" mark in large bold numerals to circumvent MTV's practice of blurring out trademarks in music videos. The "05" mark has since become so successful that customers will ask for "05" merchandise by name.

Baseball and Football Jerseys

In 1997, John began to design a full line of baseball and football jerseys bearing the "05" mark. These jerseys continue to be GTFM's best-selling garments. GTFM claims trade dress rights in its baseball jerseys and in its football jerseys.

The baseball jerseys typically carry a main applique across the front of the jersey consisting of the "FUBU" trademark and the "05" trademark located below or below and to the right of the "FUBU" mark. The main applique typically consists of fabric overlays of contrasting colors. Some baseball jerseys also carry the word "League" within a flourish below the main "FUBU" mark. Some carry the phrase "FUBU Varsity." Others carry the "05" trademark on the back. The baseball jerseys also commonly carry various smaller patches and embroideries on the sleeves, some with patches on both the right and left sleeves, some with patches only on the left sleeve. These patches typically contain the "FUBU" trademark or the "FUBU" logo, which consists of two rectangular blocks, one standing upright, the other lying on its side, to form an L-like shape. The placement of patches on the sleeves allows consumers to identify the garment as originating with GTFM even when it is hung sideways on a retail sales rack. All of the baseball jerseys also carry a rectangular patch on the lower left front on which is embroidered various phrases such as "Fubu Collection Official Sports Supplier," "Since 1992," "Authentic Circa 1992 Classic Collection," and/or the size of the garment. The fabric for the baseball jerseys is typically 100% polyester and appears in bright solid colors, sometimes with contrasting sleeve colors, or involves horizontal or vertical gradient color fades, sometimes resembling animal stripes. The shirts also commonly make use of neck tape with a black background and red or white lettering featuring the repeated use of the "FUBU" trademark combined with the word "sports." The tag at the back of the neck typically contains the "FU...

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