Malaco Leaf, Ab v. Promotion in Motion, Inc.

• Decision Date: 01 October 2003
• Docket Number: No. 01 Civ.7600 (WHP).,01 Civ.7600 (WHP).
• Parties: MALACO LEAF, AB, Plaintiff, v. PROMOTION IN MOTION, INC. dba The Promotion in Motion Companies, Inc., and Michael Rosenberg, personally and individually, Defendants. Promotion In Motion, Inc., Counterclaim-Plaintiff, v. Malaco Leaf, AB, Counterclaim-Defendant.
• Court: U.S. District Court — Southern District of New York

287 F.Supp.2d 355

MALACO LEAF, AB, Plaintiff, v. PROMOTION IN MOTION, INC. dba The Promotion in Motion Companies, Inc., and Michael Rosenberg, personally and individually, Defendants.

Promotion In Motion, Inc., Counterclaim-Plaintiff, v. Malaco Leaf, AB, Counterclaim-Defendant.

No. 01 Civ.7600 (WHP).

United States District Court, S.D. New York.

October 1, 2003.

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Philippe Bennett, Robert E. Hanlon, Lara A. Holzman, Coudert Brothers LLP, New York, NY, for plaintiff.

Richard S. Mandel, Jonathan Z. King, Cowan, Liebowitz & Latman, P.C., New York, NY, for defendants.

MEMORANDUM AND ORDER

PAULEY, District Judge.

This action involves a smorgasbord of trademark infringement, dilution and false advertising claims relating to Malaco Leaf, AB's ("Malaco") fish-shaped gummy candy, known as "Swedish Fish." Specifically, Malaco asserts claims for infringement and dilution of its product configuration trade dress pursuant to 15 U.S.C. § 1125(a) and (c), trade dress infringement of its packaging pursuant to 15 U.S.C. § 1125(a), trademark infringement pursuant to 15 U.S.C. §§ 1114, 1125(a), false advertising pursuant to 15 U.S.C. § 1125(a), injury to business reputation and product configuration trade dress dilution pursuant to N.Y. Gen. Bus. L. § 360-l (formerly Section 368-d), and common law unfair competition and dilution. In particular, Malaco alleges that defendants Promotion In Motion, Inc. ("PIM") and Michael Rosenberg ("Rosenberg") (collectively, the "defendants") infringed and diluted the configuration and packaging for Swedish Fish, infringed Malaco's trademarks SWEDISH FISH and THE ORIGINAL SWEDISH FISH (the "Marks"), and engaged in false advertising by promoting their fish-shaped gummy candy (the "Famous Sqwish Candy Fish") as "Famous." PIM counterclaims for cancellation of Malaco's federally registered trademark, SWEDISH FISH.¹ Defendants move for summary judgment on all of Malaco's claims. For the reasons set forth below, defendants' motion for summary judgment is granted.

I. BACKGROUND

The facts are not in dispute. Since 1956, Malaco has manufactured soft, fish-shaped gummy candy² under the name "Swedish Fish." Malaco is a Swedish company that distributes Swedish Fish through its exclusive licensee Jaret International (CS), Inc. ("Jaret"), owned by Cadbury Trebor Allan, Inc. ("Trebor Allan"), and its predecessors-in-interest.³ Jaret is also responsible for developing advertising and marketing strategy for Swedish Fish. Jaret distributes Malaco's Swedish Fish throughout the United States via numerous distribution channels including drug stores, mass merchandisers, grocery stores, convenience stores, vending distributors, club stores, and bulk wholesalers and retailers. Malaco's Swedish Fish is sold in a variety of packages for retail sale, and in bulk for repackaging or sale. Malaco is also the owner of the federally registered trademark SWEDISH FISH, U.S. Reg. No. 1,273,762, as well as the unregistered mark THE ORIGINAL SWEDISH FISH, both of which are used in the marketing for Swedish Fish.

Founded in 1980, PIM is a primary marketer of a wide variety confectionary products, including a competitive gummy fish-shaped candy named "Famous Sqwish Candy Fish," various gummy bears, worms, dinosaurs, dolphins and sharks and other candy products. As a primary marketer, PIM promotes products manufactured by its suppliers under in-house brands or through third party licenses. Rosenberg is PIM's President and Chief Operating Officer. Rosenberg became interested in marketing a branded candy fish after seeing small, soft red gummy fish at Ferrara Pan, a manufacturer that sells gummy fish to several different companies. Ferrera Pan, one of PIM's major suppliers, agreed to supply PIM with the product. In anticipation of creating a brand around that product, PIM filed an intent-to-use trademark application for the mark THE ORIGINAL SQWISH CANDY FISH on September 22, 2000. On December 28, 2000, Malaco's counsel sent a cease and desist letter to PIM's trademark attorney objecting to PIM's use of THE ORIGINAL SQWISH CANDY FISH mark. On January 22, 2001, PIM notified Malaco it was withdrawing its intent-to-use application in favor of a different trademark, FAMOUS SQWISH CANDY FISH, similar to a mark, NUCLEAR SQUORMS, it was already using for promotion of its gummy worms. In 2001, PIM filed a trademark application for the FAMOUS SQWISH CANDY FISH mark, U.S.App. No. 76/197,860, and introduced its candy into niche markets, such as the fundraising and movie theater candy sectors. On August 15, 2001, Malaco filed the instant infringement, dilution and false advertising action against defendants.

II. SUMMARY JUDGMENT STANDARD

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party. See, e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Grady v. Affiliated Cent., Inc., 130 F.3d 553, 559 (2d Cir.1997). The movant may meet this burden by demonstrating a lack of evidence to support the nonmovant's case on a material issue on which the nonmovant has the burden of proof. Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

To defeat a summary judgment motion, the non-moving party must do "more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Indeed, the nonmoving party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); accord Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348. In evaluating the record to determine whether there is a genuine issue as to any material fact, the "evidence of the nonmovant is to be believed and all justifiable inferences are to be drawn in his favor." Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505.

III. PRODUCT CONFIGURATION TRADE DRESS INFRINGEMENT & DILUTION

Malaco asserts three claims based on the fish-shaped product design of the Swedish Fish: (1) infringement under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (2) dilution under the Federal Trademark Dilution Act ("FTDA"), 15 U.S.C. § 1125(c); and (3) dilution under Section 360-l (formerly Section 368-d) of the New York State General Business Law. Defendants argue that Malaco cannot sustain its claims of trade dress infringement and dilution of the fish shape and design of its Swedish Fish. Specifically, defendants argue that Malaco's product configuration in its Swedish Fish is unprotectable because it is (1) generic, and (2) functional. (Defendants' Memorandum of Law, dated August 16, 2002 ("Def.'s Br.") at 3-12.) Defendants further assert that even if the product configuration of Malaco's Swedish Fish were protectable, it cannot meet the requirements of federal and state dilution law because its product configuration is weak and diluted due to extensive third party use of similar fish-shaped candy designs. (Def.'s Br. at 12-13.)

A. Product Configuration Trade Dress Infringement

"[T]rade dress encompasses the design and appearance of the product together with all the elements making up the overall image that serves to identify the product presented to the consumer." Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993, 999 (2d Cir.1997). The Lanham Act protects both registered and unregistered trade dress. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 773, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). A plaintiff asserting an action for trade dress infringement must demonstrate: (a) that its trade dress is entitled to protection under the Lanham Act because it is inherently distinctive or has acquired distinctiveness; (b) a likelihood of confusion between the parties trademarks and between their trade dresses; and (c) that its trade dress is non-functional. Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 377 (2d Cir.1997); Fun-Damental Too, 111 F.3d at 999; see also 15 U.S.C. § 1125(a)(3) (2003)⁴. As opposed to other types of trade dress, such as packaging trade dress, a trade dress based on the design of a product can never be inherently distinctive. Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 212-215, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000); Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 115 (2d Cir. 2001). Instead, it must have acquired distinctiveness, otherwise known as secondary meaning, to be protected. Samara Bros., 529 U.S. at 212-215, 120 S.Ct. 1339; Yurman, 262 F.3d at 115. Courts "exercise `particular caution when extending protection to product designs.'" Yurman, 262 F.3d at 114 (quoting Landscape Forms, 113 F.3d at 380). Indeed, "product design almost invariably serves purposes other than source identification." Samara Bros., 529 U.S. at 213, 120 S.Ct. 1339.

Defendants argue that Malaco's Swedish Fish product design is not entitled to protection because it is a generic, common design that is used extensively by third parties in the confectionery industry. (Def.'s Br. at 4.) This Court agrees that the generic design of Malaco's Swedish Fish, along with extensive third party use of the design and Malaco's failure to police infringing third-party uses, renders the Swedish Fish design generic and unprotectable.

1. Generic Shape & Third Party Use...