ITS Industria Tessuti Speciali v. Aerfab Corp.

• Decision Date: 16 May 1967
• Docket Number: No. 66 Civ. 3813.,66 Civ. 3813.
• Citation: 280 F. Supp. 581
• Parties: I. T. S. INDUSTRIA TESSUTI SPECIALI, Plaintiff, v. The AERFAB CORP., Allan Goldfarb Corp., Raven Mills Corp. and Lamont International Corp., Defendants.
• Court: U.S. District Court — Southern District of New York

280 F. Supp. 581

I. T. S. INDUSTRIA TESSUTI SPECIALI, Plaintiff, v. The AERFAB CORP., Allan Goldfarb Corp., Raven Mills Corp. and Lamont International Corp., Defendants.

No. 66 Civ. 3813.

United States District Court S. D. New York.

May 16, 1967.

Isaac Henkoff, Ruben Schwartz, New York City, for plaintiff.

Mannis Neumann, Stanley Wolder, Newmann, Aronson & Neumann, New York City, for defendants.

MOTLEY, District Judge.

Motion for Preliminary Injunction Findings of Fact and Conclusions of Law

Plaintiff seeks a preliminary injunction enjoining defendants from infringing plaintiff's trademark and enjoining acts of unfair competition on the part of defendants. This court has jurisdiction of the complaint seeking similar permanent relief and damages under 28 U.S.C. § 1338(a) and (b), and 15 U.S.C. § 1121, and 28 U.S.C. § 1332.

Plaintiff, I. T. S. Industria Tessuti Speciali, is an Italian corporation with no office for the transaction of business in the State of New York or anywhere else in the United States. Plaintiff's business is the manufacture of a laminated plastic and cloth fabric. It has used the name or legend AERPEL to identify this fabric since December, 1961. Plaintiff and its American sales agents have continuously used, since November 10, 1963, and still use, the name and legend AERPEL in the United States in connection with the advertising, sale, distribution and marketing of this fabric product. This trademark has been prominently displayed, applied to and printed upon plaintiff's product and wrappers. C. Haedke & Co., Inc., plaintiff's sole importer and distributor in the United States spent $40,000 in 1964 promoting AERPEL, $12,500 in 1965, and $9,000 in 1966.

On or about June 15, 1964, plaintiff made application to the United States Patent Office to register the trademark AERPEL for heavy-duty laminate of cloth and plastic in the nature of imitation leather for general use in the industrial arts in Class "1". Industrial arts includes the manufacture, distribution and sale of fabrics.

On or about March 22, 1966, the Patent Office granted plaintiff's application and issued a certificate of trademark registration of the name AERPEL. Plaintiff's registration is valid and subsisting, uncancelled and unrevoked.

Defendant, The Aerfab Corp., is a domestic corporation organized under the laws of the State of New York. It has manufactured and distributed for sale a fabricated, laminated plastic and cloth fabric under the tradename AERFAB since September 4, 1964, or just prior thereto. This defendant, formerly known as Hollywood Mills Meta-Lite Corp., caused its name to be changed to The Aerfab Corp. on or about September 1, 1965. Defendant has a trademark application for the registration of the name AERFAB pending in the Patent Office. The application was published in the Official Gazette of the Patent Office on January 10, 1967. Plaintiff claims that the name AERFAB is confusingly similar and infringes its trademark.

Defendants, Allan Goldfarb Corp., Raven Mills Corp., and Lamont International Corp., are alleged to be or to have been in the business of manufacturing, selling and distributing a laminated plastic and cloth fabric in the nature of imitation leather in New York and throughout the United States in general, and to be or to have been in competition with plaintiff with respect to such manufacture, distribution and sale. The Allan Goldfarb Corp. claims that it has never been and is not now in the business of manufacturing, producing and selling materials of any kind similar to the synthetics manufactured and sold by The Aerfab Corp. Raven Mills Corp. and Lamont International Corp. state that they are both corporate shells which have not been active in any business of any kind whatsoever for more than three years and are not engaged at the present time in any business whatsoever.

Plaintiff alleges that the name AERPEL was chosen as a trademark because the phrase "AER" has the meaning of "air" in many European countries and the phrase "PEL" is derived from the Italian word for "leather". The use of the trademark, plaintiff urges, in European languages gives one the impression of a soft, pliable, leather-like material. Plaintiff further alleges that "AER" has no meaning in the English language, especially when dealing with textiles.

The Aerfab Corp., alleges that presently there are in the United States Patent Office, thirty-one different trademarks starting with the prefix "AER" and thirty-six starting with the prefix "AIR", all of which are in the same line of business as the plaintiff and defendant or in similar allied businesses.

The Aerfab Corp. alleges that its name AERFAB is a coined English word containing "AER" and the word "fabricate". "AER" was chosen as a prefix because the fabric they make was permeable to air. The name AERFAB was adopted when this defendant's business was changed from textiles and plastics to synthetics. After this product change was made, this defendant believed it only natural to change its corporate name to The Aerfab Corp.

Plaintiff's product is being manufactured in Italy and sells at a higher price in the United States than does the product of The Aerfab Corp. Plaintiff alleges that in comparison to its product, defendants manufacture and sell an inferior and cheaper laminated plastic and cloth fabric. The Aerfab Corp. claims that its product is superior and that the price differential is due to plaintiff's additional costs of transportation and duties. Upon examination of small swatches of both fabrics, this court takes no position as to which fabric is superior because both appear to be of comparable quality.

Plaintiff claims that it and its licensed agents asked defendants to cease and desist their use of the name AERFAB but defendants have refused the demand and continue their unfair competition practice of "palming off" defendants' goods as those of plaintiff. Aerfab Corp. denies that demands were ever made and states that it first learned of the unfair competition claim upon institution of this action.

The crux of the factual issue here is whether there is evidence of unfair competition sufficient to sustain the granting of a preliminary injunction. Plaintiff's advertisements contain the name AERPEL followed by an asterisk. The asterisk after the name AERPEL in plaintiff's advertisements directs the reader's attention to the bottom of the copy where it is stated, "TM Reg App". This was used, of course, only while the application for trademark registration was pending. The Aerfab Corp. advertisements contained the name AERFAB followed by an asterisk. In this defendant's advertisements, however, the asterisk drew the reader's attention to nothing further in the copy. Defendant alleges that the usage of the asterisk leading to nothing is hardly a similarity between the parties' advertisements because the use of an asterisk is common usage in advertising and is done by dozens of firms throughout the country.

Examination of the language and phraseology of the advertising copy gives an impression of some similarity. It is to be noted, however, that the complained of language and similarity is really only language descriptive of the qualities of the competing products.

AERPEL'S advertisements contain language such as:

"the luxury look and feel of leather, yet has none of its disadvantages"; "dry cleaned safely at neighborhood cleaners"; "permanently water-repellant"; "will not crack, peel, or stiffen"; "naturally crease-resistant"; "marvelously spot-resistant"; and "highly scuff-resistant".

Defendant AERFAB'S advertisements emphasize:

"breathable leather look"; "all the appeal of supple leather — without its costs or problems"; "won't peel or crack"; "washable and dry-cleanable"; and "dirt resistant, crease resistant and permanently water repellant".

Another factor to be considered in the comparison of the advertising is that some of plaintiff's advertisements highlight the fact that the fabric is imported from Italy, whereas AERFAB advertisements call their product the "great new American fabric."

Plaintiff also alleges that defendants are guilty of unfair competition in that defendant, The Aerfab Corp., used copies of photographs of models wearing garments made of AERPEL in its advertisements. The photographs were taken in Germany by the supplier of chemicals which are employed in the making of the laminated AERPEL fabric. Plaintiff claims to have permitted the chemical supplier to take the photographs for the purposes of advertising the chemicals and plastics, showing their uses in fabrics.

The Aerfab Corp. admits that at least one of the contested photographs appeared in an editorial about their product appearing in American Fabrics Magazine in 1966. This defendant also admits that the contested photographs were taken in Germany by Bayer Chemisch, a chemical manufacturer. The photos were given this defendant as part of a larger group by Verona Dyestuffs, the American representative of the German firm. Verona gave The Aerfab Corp. permission to use the photos.

Plaintiff and its agents have sold in excess of 600,000 yards of AERPEL in the United States since 1963. Ivy International, Ltd. and C. Haedke & Co., Inc. have carried on a promotional campaign in the United States to gain acceptance of the product. It is alleged that with the emergence of AERFAB on the market, plaintiff's sales have declined greatly. None of the details of this decline is alleged or proved.

This suit was commenced on November 10, 1966. The motion for preliminary injunction was filed on November 28, 1966. Argument on the motion was heard on February 14, 1967.

A party seeking a preliminary injunction has the burden of proving his right to injunctive relief pendente lite. As a part of that burden, plaintiff must establish that he is threatened with immediate irreparable injury if the injunction is not granted. Hudson Pulp & Paper Corp. v. Swanee Paper Corp., ...