Jordache Enterprises, Inc. v. Hogg Wyld, Ltd.

• Decision Date: 01 August 1985
• Docket Number: Civ. No. 84-1616 HB.
• Citation: 625 F. Supp. 48
• Parties: JORDACHE ENTERPRISES, INC., Plaintiff, v. HOGG WYLD, LTD., Susan Duran, Marsha Stafford, and Oink, Inc., Defendants.
• Court: U.S. District Court — District of New Mexico

625 F. Supp. 48

JORDACHE ENTERPRISES, INC., Plaintiff, v. HOGG WYLD, LTD., Susan Duran, Marsha Stafford, and Oink, Inc., Defendants.

Civ. No. 84-1616 HB.

United States District Court, D. New Mexico.

August 1, 1985.

Earl R. Norris, Oldaker & Oldaker, Albuquerque, N.M., and Steven M. Gerber, New York City, for plaintiff.

Jay Hertz, Sutin, Thayer & Browne and Stephen E. Woodbury, Albuquerque, N.M., for Hogg Wyld, Ltd., Susan Duran, Marsha Stafford and Oink, Inc.

MEMORANDUM OPINION

BRATTON, Chief Judge.

This cause comes on for decision on the merits. The suit involves claims of trademark infringement under 15 U.S.C. §§ 1051, 1114 and 1125 (the Lanham Act), common law trademark infringement, and violation of the New Mexico Trademark Act, N.M.Stat.Ann. §§ 57-3-1 et seq. (1978), specifically § 57-3-10, the New Mexico "anti-dilution" statute. Defendants have counterclaimed requesting a declaratory judgment that their use of the "Lardashe pig pocket" mark in connection with the sale of jeans does not infringe upon any rights of the plaintiff. A non-jury trial was held June 20, 21, and 22, 1985. In addition, a hearing was held November 2, 1984 on plaintiff's application for a preliminary injunction. The Court has considered evidence introduced at that hearing as well as at trial in reaching its decision on the merits. Having considered the evidence, the arguments and authorities advanced by the parties, and the record, the Court finds in favor of the defendants and against the plaintiff on plaintiff's claims, and on defendants' counterclaim. This Memorandum Opinion shall constitute the Court's findings of fact and conclusions of law pursuant to Rule 52, Federal Rules of Civil Procedure.

The plaintiff, Jordache Enterprises, Inc. (Jordache), is a New York corporation which manufactures, markets, and licenses the manufacture and marketing of various items of apparel. Its principal line of apparel is designer blue jeans; that is, jeans intended to be stylish, fashionable, social and sport wear, rather than primarily work-wear. Jordache also markets or licenses the marketing of a number of other Jordache clothing items, accessories, and personal care items. Jordache is the owner of several trademarks used on, and in connection with the sale of, its jeans and other products. It has duly registered at least three of its marks with the U.S. Patent and Trademark Office. In 1979, it obtained a registration of the mark JORDACHE, in block letters, for use in connection with jeans and items of apparel. In 1983, it obtained registration of a mark consisting of JORDACHE printed in block letters superimposed over a drawing of a horse's head. At the same time, it obtained registration of a mark consisting simply of the horse's head drawing alone. In addition, an exhibit was introduced which indicates that plaintiff also employs a mark on some of its products consisting of the name Jordache in script lettering. There is no evidence that this mark has been registered.

Testimony at trial established that the plaintiff company was formed in 1978 with the intent of marketing stylish, fashionable jeans. It was formed by Joe Nakash and his two brothers, Israeli immigrants, who had arrived in the United States a few years earlier virtually penniless. The JORDACHE mark was used on and in connection with plaintiff's products from the beginning of the enterprise. The horse's head mark was also used from the beginning or was adopted within a short time thereafter. One or more of its trademarks appears on all of the products manufactured or licensed by Jordache.

Through a massive initial advertising campaign Jordache created a very large customer awareness and demand for its products. It has continued to expend very large sums on advertising. Evidence was submitted which indicates that Jordache spent some $30,000,000 to advertise its products in 1984. Its advertising is done on television, radio, newspapers, magazines, trade publications, in-store promotions, contests, give-aways, etc. Jordache products are sold in a wide range of retail outlets throughout the United States and internationally. Evidence indicates that Jordache has become the country's fourth largest jeans manufacturer, selling over 20,000,000 pairs of jeans annually, with gross sales in the amount of some $500,000,000 in 1984.

The evidence establishes beyond any doubt that JORDACHE is a very strong trademark, and that it has acquired secondary meaning; that is, the mark is widely associated with the plaintiff company in the mind of consumers. See, Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934 (10th Cir.1983). While there was little specific evidence as to the strength of the horse head mark, the Court finds from all the circumstances that it is also a strong mark.

One of Jordache's licensees is Shaker Sport, which manufacturers and markets Jordache large size jeans, clothing items, and accessories. These products are designed for large size women, and are marketed and advertised to appeal to that segment of the market. Evidence established that Shaker Sport has spent large sums of money annually advertising its line of Jordache large size jeans. Jordache large size jeans are sold in a wide range of retail outlets throughout the United States. The Jordache trademarks are used by Shaker Sport in advertising and marketing its line of Jordache large size jeans, and one or more of the marks appears on every Jordache item marketed by Shaker Sport. Apparently Jordache Enterprises itself does not produce a product designed especially for large size women. Evidence indicated that a primary emphasis of Shaker Sport's advertising has been, "Now, you (large size women) can also achieve the Jordache `look'."

The evidence indicates that Shaker Sport's line of Jordache large size clothing has been a success. It has sold in the range of 33,000 to 60,000 pairs of Jordache large size jeans to date. Jordache has retained the right to approve and closely monitor all aspects of the manufacture, advertising, and marketing of Jordache products sold by its licensees, including Shaker Sport. For purposes of this law suit, the question whether defendants have infringed upon Jordache's trademarks relates to the use of those marks by both Jordache and by its licensee, Shaker Sport. The same strong Jordache trademarks appear on, and are used in connection with, products sold by Shaker Sport under license from Jordache. It is the exclusive right to control the use of Jordache marks on items of apparel, primarily on large size designer jeans, that plaintiff seeks to protect from infringement in this suit.

Defendant Oink, Inc., formerly Hogg Wyld, Ltd., is a New Mexico corporation founded in 1984 by the defendants Marsha Stafford and Susan Duran. (The defendants may be referred to collectively as Lardashe.) Its primary business is marketing designer jeans for large size women under the trade name Lardashe, employing the "LARDASHE pig pocket" as a trademark. This mark consists of the name LARDASHE in script lettering stitched into the right rear pocket of the jeans; an inverted-heart-shaped embroidered design also on the pocket; and an embroidered applique of a pig's head and pig's feet, sewn onto the garment to appear as if the pig is peering over the top of the pocket.

Duran and Stafford began to market their Lardashe jeans in August or September of 1984. At that time they were operating as an informal partnership. They have been friends for a number of years, and at some point conceived the idea of designing and selling designer jeans for large size women. Both women testified that they themselves wear larger size clothing. They perceived that larger size women like themselves were unable to wear designer jeans, which apparently were available originally only in "standard" sizes for women. They felt that there existed a market for women's large size designer jeans which, to their knowledge, no manufacturer was exploiting at that time. They set about to produce a garment to fill that void. They testified that their design includes a number of features not found in "standard" size designer jeans, which they included specifically to make the garment comfortable to and attractive on larger size women.

Duran and Stafford found a manufacturer for their product, had him make a prototype of the garment, and ultimately had him manufacture an initial order of some 500 pairs of jeans in various sizes, incorporating their design features. They had arranged for a separate company to produce the pig applique, which Stafford herself sewed onto each pair of jeans. The women have financed this enterprise using personal savings, loans from acquaintances, and after the initial order was received, from the sale of jeans. They have operated the business out of their homes.

While their record-keeping has been somewhat loose, it appears that approximately 1600 pairs of Lardashe jeans have been produced, and approximately 1300 pairs have been sold. To date, sales have been limited to several specialty shops and boutiques in New Mexico, Colorado, and Arizona in relatively small quantities. In addition, Duran and Stafford have sold a number of pairs of Lardashe jeans to individuals, either acquaintances or women who learned of the product and asked to buy a pair. They state that they have never formally advertised. Several newspaper ads have been placed by shops carrying Lardashe jeans.

Despite the great difference in size of the two companies, and the so far limited retail availability of Lardashe jeans, the two products are presently in actual competition. At least one of the shops that carries Lardashe jeans also carries, or has carried, Jordache jeans. In addition, Lardashe hopes to expand its market, ultimately to sell its jeans in a wide range of retail outlets nationwide, should customer awareness and demand justify such expansion. Shortly after Lardashe began to sell its jeans, in the fall of 1984,...