Hormel Foods Corp. v. Jim Henson Productions, Inc.

• Decision Date: 04 January 1996
• Docket Number: D,No. 1010,1010
• Parties: HORMEL FOODS CORPORATION, Plaintiff-Appellant, v. JIM HENSON PRODUCTIONS, INC., Defendant-Appellee. ocket 95-7977.
• Court: U.S. Court of Appeals — Second Circuit

Page 497

73 F.3d 497

37 U.S.P.Q.2d 1516

HORMEL FOODS CORPORATION, Plaintiff-Appellant, v. JIM HENSON PRODUCTIONS, INC., Defendant-Appellee.

No. 1010, Docket 95-7977.

United States Court of Appeals Second Circuit.

Argued Oct. 31, 1995.

Decided Jan. 4, 1996.

Kevin C. Jones, Austin, Minnesota (Wiley, Rein & Fielding, Washington, DC, Derfner & Mahler, LLP, New York City, of counsel), for plaintiff-appellant.

Carol F. Simkin, New York City (Glenn Mitchell, Rose Auslander, Sara K. Stadler, Weiss Dawid Fross Zelnick & Lehrman, P.C., New York City, of counsel), for defendant-appellee.

William C. MacLeod, Karen M. Lockwood, Collier, Shannon, Rill & Scott, Washington, DC, submitted a brief for Grocery Manufacturers of America, amicus curiae.

Before: VAN GRAAFEILAND, JACOBS and PARKER, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

Hormel Foods Corporation appeals from a judgment of the United States District Court for the Southern District of New York (Wood, J.) denying Hormel's request for a permanent injunction against Jim Henson Productions, Inc. after a full bench trial on the merits. Hormel originally contended that Henson's use of the character "Spa'am" in its upcoming movie and related merchandise would infringe and/or dilute Hormel's trademark in the luncheon meat SPAM, but now limits its argument to the merchandising use. With respect to that use, Hormel argues that the district court erred in finding no infringement and that it misinterpreted New York's anti-dilution statute, N.Y.Gen.Bus.Law Sec. 368-d (McKinney 1984). For the reasons that follow, we affirm.

BACKGROUND

Since 1937, Hormel has used the trademark name "SPAM" to market its luncheon meat. It is beyond dispute that SPAM is a distinctive, widely recognized mark. Under that name, Hormel has sold over five billion cans of meat in the United States alone and spent millions of dollars to advertise its product.

In February 1996, Henson plans to release the film Muppet Treasure Island which features Henson's widely popular cast of puppets, known collectively as the "Muppets." The film will use some of Henson's most familiar characters, including Kermit the Frog, Miss Piggy, and Fozzie Bear. A number of additional characters have been created However, the executives at Hormel are not amused. They worry that sales of SPAM will drop off if it is linked with "evil in porcine form." Complaint at p 16. Spa'am, however, is not the boarish Beelzebub that Hormel seems to fear. The district court credited and relied upon the testimony of Anne Devereaux Jordan, an expert in children's literature, to find that Spa'am is a positive figure in the context of the movie as a whole--even if he is not "classically handsome." Hormel Foods Corp. v. Jim Henson Productions, Inc., No. 95 Civ. 5473, slip op. at 4, 1995 WL 567369 (S.D.N.Y. Sept. 22, 1995) (hereinafter "Slip Op."). Indeed, Spa'am is a comic character who "seems childish rather than evil." Id. at 6, 1995 WL 567369. Although he is humorously threatening in his first appearance, he comes to befriend the Muppets and helps them escape from the film's villain, Long John Silver. By film's end, "Spa'am is shown sailing away with the other Muppets as good humor and camaraderie reign." Id. at 4, 1995 WL 567369.

for this production, among whom is Spa'am, the subject of this litigation. The similarity between the name "Spa'am" and Hormel's mark is not accidental. In Henson's film, Spa'am is the high priest of a tribe of wild boars that worships Miss Piggy as its Queen Sha Ka La Ka La. Although the name "Spa'am" is mentioned only once in the entire movie, Henson hopes to poke a little fun at Hormel's famous luncheon meat by associating its processed, gelatinous block with a humorously wild beast.

Hormel also expresses concern that even comic association with an unclean "grotesque" boar will call into question the purity and high quality of its meat product. But the district court found no evidence that Spa'am was unhygienic. At worst, he might be described as "untidy." Id. at 5, 1995 WL 567369. Moreover, by now Hormel should be inured to any such ridicule. Although SPAM is in fact made from pork shoulder and ham meat, and the name itself supposedly is a portmanteau word for spiced ham, countless jokes have played off the public's unfounded suspicion that SPAM is a product of less than savory ingredients. For example, in one episode of the television cartoon Duckman, Duckman is shown discovering "the secret ingredient to SPAM" as he looks on at "Murray's Incontinent Camel Farm." In a recent newspaper column it was noted that "[I]n one little can, Spam contains the five major food groups: Snouts. Ears. Feet. Tails. Brains." Mike Thomas, Ready? Set? No!, The Orlando Sentinel, June 25, 1995, at 30. In view of the more or less humorous takeoffs such as these, one might think Hormel would welcome the association with a genuine source of pork. Nevertheless, on July 25, 1995, Hormel filed this suit alleging both trademark infringement and dilution.

The district court found that the presence of the character named "Spa'am" in the film constituted neither infringement nor dilution, and Hormel does not contest this conclusion here. Rather, this appeal concerns Henson's proposed use of the Spa'am likeness with and without the name "Spa'am" on movie-related merchandise. Henson plans to support the release of its film with a merchandising program, including licensed products depicting scenes and/or characters from the movie, and already has contracted to place Muppet Treasure Island vignettes on food, candy, and cereal boxes. In addition, Henson has plans to market clothing, books, and a CD-ROM computer game featuring the Muppet Treasure Island motif. Henson has shelved its plans to place the name "Spa'am" on its Muppet Treasure Island merchandise pending the outcome of this litigation. However, according to Henson's proposals, submitted below, if it were permitted to go ahead with its plans, the merchandise would carry only the Spa'am likeness or the Spa'am likeness beside the name "Spa'am." The name "Spa'am" would not appear alone. Moreover, any merchandise in which Spa'am appeared would clearly display the words "Muppet Treasure Island."

Henson's plans nevertheless concern Hormel, which has begun merchandising items featuring SPAM. These secondary products include clothing, watches, golf balls, and toy cars--some of the same items Henson's licensees would like to issue. In addition, Hormel markets its luncheon meat with a Moreover, the Muppets are familiar to television and motion picture audiences, and they are "well-known for parodies of brand names, trademarks, television programs, fictional characters, and celebrities." Id. at 3, 1995 WL 567369. The district court found that "[c]hildren who enjoy the Muppets are familiar with the Muppet brand of humor and are unlikely to think that the Muppets are sponsored by the products and celebrities who are the subject of their jokes." Id., 1995 WL 567369. This undoubtedly led to the court's further finding that "[c]onsumers of merchandise bearing the likeness and/or name of Spa'am will buy it because they like Spa'am, the Muppets, and/or Muppet Treasure Island--not because they mistakenly think it is SPAM-related merchandise." Id. at 8, 1995 WL 567369.

character it calls "SPAM-man," essentially a giant can of SPAM with arms and legs. Hormel is worried that sales of merchandise featuring Spa'am will directly cut into the sales of secondary SPAM items. The district court found, however, that "[p]urchasers of the secondary [SPAM] products are generally consumers of the luncheon meat and associate the secondary products with the luncheon meat." Slip Op. at 3, 1995 WL 567369.

Hormel points out that some newspaper accounts already have confused the names "SPAM" and "Spa'am." Hormel directed the district court's attention to several news articles which evidenced some confusion concerning the spelling, pronunciation, and use of the two words. However, each of them antedated the initial public showing of Muppet Treasure Island.

DISCUSSION

A. Trademark Infringement

A plaintiff's trademark is protected by federal law against infringement by use of colorable imitations of the mark which are "likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. Sec. 1114(1). The central inquiry is whether there is a "likelihood of confusion," a "likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question," Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979), or that there may be confusion as to plaintiff's sponsorship or endorsement of the junior mark. See Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 204-05 (2d Cir.1979).

In this circuit, claims for infringement usually are analyzed under the eight-factor Polaroid test. See Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961). In the instant case, the district court found that each of the eight factors favored Henson as to both use of the Spa'am likeness alone and use of the Spa'am likeness in conjunction with the name "Spa'am" on its merchandise. Finding no other circumstances tending to create confusion, it concluded that there was no likelihood of confusion and rejected Hormel's claim. Although we review de novo the district court's comprehensive application of the Polaroid factors, the district court's determinations as to each of the factors are factual in nature. See, e.g., DC Comics Inc. v. Reel Fantasy, Inc., 696 F.2d 24, 26 (2d Cir.1982); American Int'l Group, Inc. v. London American Int'l Corp., 664 F.2d 348, 351 (2d Cir.1981). These findings will be disturbed only if clearly erroneous. Moreover, because we are...