Hershey Foods Corp. v. Mars, Inc.
| Decision Date | 31 March 1998 |
| Docket Number | No. Civ.A. 1:CV-97-1719.,Civ.A. 1:CV-97-1719. |
| Citation | 998 F.Supp. 500 |
| Parties | HERSHEY FOODS CORPORATION, and Homestead, Inc., Plaintiffs, v. MARS, INCORPORATED, Defendant. |
| Court | U.S. District Court — Middle District of Pennsylvania |
Alan R. Boynton, Jr., David E. Lehman, McNees, Wallace & Nurick, Harrisburg, PA, Robert D. Rosenbaum, Roberta L. Horton, James T. Walsh, Elissa J. Preheim, Arnold and Porter, Washington, DC, for Hershey Foods Corp., Homestead, Inc.
James W. Evans, Christopher Charles Conner, Mette Evans & Woodside, Harrisburg, PA, Pasquale A. Razzano, Leslie K. Mitchell, Dorothy C. Alevizatos, Fitzpatrick, Cella, Harper & Scinto, New York City, for Mars, Inc.
The plaintiffs are Hershey Foods Corporation and Homestead, Inc. Hershey makes candy and sells it nationwide. Homestead is a related corporate entity that owns many of Hershey's trademarks and trade dress. (We will refer to Hershey and Homestead collectively as Hershey or the plaintiff.) This lawsuit was filed against Mars, Inc., another major candy maker, alleging violations of federal and state law governing competition. The suit stems from Mars' adoption of a trade dress for its peanut butter M & M's that Hershey asserts unlawfully resembles certain elements of its trade dress for its Reese's Peanut Butter Cups.
We are considering Hershey's motion for a preliminary injunction, seeking an order prohibiting Mars from using its current trade dress (or the "trade dress at issue" because Mars freely adopts variations on this dress) on the basis that it dilutes by blurring the Reese's trade dress. Hershey invokes both federal and Pennsylvania law. A hearing was held on the motion on December 23, 1997, January 6, 1998, and January 14, 1998.
The Court has subject matter jurisdiction over plaintiff's federal claim pursuant to 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331 and 1338(a), and supplemental jurisdiction over the state-law claim pursuant to 28 U.S.C. § 1367.
A dilution claim protects a trademark holder's right in the mark's ability to act as a unique identifier of the mark's holder. 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 24.70, at 24-118 (4th ed.1997). This cause of action differs from 15 U.S.C. § 1125(a), section 43(a) of the Lanham Act, the federal trademark infringement law, by eliminating the need to show confusion; that is, the need to show that the defendant's mark causes consumers to confuse the defendant's goods with the plaintiff's. See, e.g., Versa Products Co. v. Bifold Company (Manufacturing) Ltd., 50 F.3d 189, 199-200 (3d Cir.1995) (). Instead, a dilution claim asserts that, while the defendant's mark does not confuse consumers as to the source of the goods, it leads consumers to believe that the plaintiff's mark now identifies two different sources of goods, thus diluting the mark's ability to identify the plaintiff's goods alone. An example of a diluting trademark would be the hypothetical "Dupont shoes." McCarthy, supra, § 24.68 at 24-116.
In other words:
For dilution to occur, the relevant public must make some connection between the mark and both parties. But that connection is not the kind of mental link between the parties that triggers the classic likelihood of confusion test. Rather, the assumption is that the relevant public sees the junior user's mark, and intuitively knows, because of the context of the junior user's use, that there is no connection between the owners of the respective marks. However, even with those who perceive distinct sources and affiliation, the ability of the senior user's mark to serve as a unique identifier of the plaintiff's goods or services is weakened because the relevant public now also associates that designation with a new and different source.
McCarthy, supra, § 24.70, at 24-117 to 118.
Hershey's dilution-by-blurring claim is based on 15 U.S.C. § 1125(c) (1997), a 1996 addition to the Lanham Act, and 54 Pa.C.S.A. § 1124. The two laws are substantively similar. The federal law provides, in pertinent part, as follows:
Remedies for dilution of famous marks
(1) The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark....
15 U.S.C. § 1125(c).
A "mark" is defined as "any trademark, service mark, collective mark, or certification mark." 15 U.S.C. § 1127. A "trademark" includes:
any word, name, symbol, or device or any combination thereof—
....
to identify and distinguish his or her goods ... from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.
Dilution is defined as:
the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of—
(1) competition between the owner of the famous mark and other parties, or
(2) likelihood of confusion, mistake, or deception.
15 U.S.C. § 1127.
The Pennsylvania law provides as follows:
Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark registered under this chapter, or a mark valid at common law, or a trade name valid at common law, shall be a ground for injunctive relief notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.
54 Pa.C.S.A. § 1124. It does not define dilution.
The federal statute requires that the mark be "famous" and provides that the court "may consider factors such as, but not limited to" the following in "determining whether a mark is distinctive and famous":
(A) the degree of inherent or acquired distinctiveness of the mark;
(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(C) the duration and extent of advertising and publicity of the mark (D) the geographical extent of the trading area in which the mark is used;
(E) the channels of trade for the goods or services with which the mark is used;
(F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought;
(G) the nature and extent of use of the same or similar marks by third parties; and
(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.
15 U.S.C. § 1125(c)(1).
We read this language as giving the court flexibility in analyzing the enumerated factors so that their relative weight in any given case can be balanced. See Star Markets, Ltd. v. Texaco, Inc., 950 F.Supp. 1030 (D.Haw.1996) ().
In deciding whether the defendant's mark dilutes the plaintiff's by blurring, federal courts interpreting section 1125(c) have started from the framework first set forth in Judge Sweet's concurring opinion in Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026 (2d Cir.1989), which Judge Sweet used for interpreting the New York antidilution statute. See Clinique Labs., Inc. v. Dep Corp., 945 F.Supp. 547 (S.D.N.Y.1996); Ringling Brothers-Barnum & Bailey Combined Shows, Inc. v. B.E. Windows Corp., 937 F.Supp. 204 (S.D.N.Y.1996); Star Markets, Ltd., supra; Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Division of Travel Development, 955 F.Supp. 605, 615-16 (E.D.Va.1997); WAWA Dairy Farms v. Haaf, 1996 WL 460083 (E.D.Pa.1996).
Judge Sweet used a six-factor test:
1) similarity of the marks
2) similarity of the products covered by the marks
3) sophistication of consumers
4) predatory intent
5) renown of the senior mark
6) renown of the junior mark
He believed there was a positive correlation between blurring and the similarity of the marks, the similarity of the products covered by the marks, the existence of predatory intent, and renown of the senior and junior marks, but that there was a negative correlation if the consumers were sophisticated.
Some commentators have disagreed on whether all of the factors are relevant to a dilution analysis. See McCarthy, supra, § 24:94.1 at 24-163 to 164 (); Eric A. Prager, "The Federal Trademark Dilution Act of 1995: Substantial Likelihood of Confusion," 7 Fordham Intell. Property, Media and Entertainment L.J. 121 at n. 51 (1996) (). Additionally, in Clinique Labs., supra, the court refused to use predatory intent because Congress had not made it part of the statute. See 945 F.Supp. at 562 n. 22.
When these legal principles are put together, to prove dilution by blurring, the plaintiff must make the following showing: (1) that its mark is famous (as opposed to merely being a valid trademark); (2) that the defendant began using a mark in commerce after the plaintiff's mark became famous; and (3) that the "defendant's use causes dilution by lessening the capacity of the plaintiff's mark to identify and distinguish goods or services." McCarthy, supra, § 24:89, at 24-138. See also Utah Division of Travel Development supra, 955 F.Supp. at 614. In turn, dilution depends on at least how some of the factors set forth in Mead Data Central apply here.1
with its principal place of business in Hershey, Pennsylvania.
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