New York Stock Exchange v. New York Hotel LLC

• Decision Date: 01 April 2002
• Docket Number: Docket No. 99-9276.
• Citation: New York Stock Exchange v. New York Hotel LLC, 293 F.3d 550 (2nd Cir. 2002)
• Parties: NEW YORK STOCK EXCHANGE, INC., Plaintiff-Appellant, v. NEW YORK, NEW YORK HOTEL, LLC and New York, New York Hotel & Casino, LLC, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

Page 550

293 F.3d 550

NEW YORK STOCK EXCHANGE, INC., Plaintiff-Appellant, v. NEW YORK, NEW YORK HOTEL, LLC and New York, New York Hotel & Casino, LLC, Defendants-Appellees.

Docket No. 99-9276.

United States Court of Appeals, Second Circuit.

Argued: July 10, 2000.

Decided: April 1, 2002.

William R. Golden, Jr., Kelley Drye & Warren LLP, New York, NY; Michelle M. Graham, of counsel; Joseph D. Garon, Doreen L. Costa, Baker & Botts LLP, New York, NY, of counsel, for Plaintiff-Appellant.

Kenneth A. Plevan, Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY; Bruce J. Goldner, Scott D. Brown, of counsel; Mark G. Tratos, Quirk & Tratos, Las Vegas, NV, of counsel, for Defendants-Appellees.

Before WALKER, Chief Judge, WINTER, and JACOBS, Circuit Judges.

WINTER, Circuit Judge.

The New York Stock Exchange, Inc. ("NYSE") appeals from Judge Cedarbaum's grant of summary judgment, dismissing its claims for trademark infringement and dilution under the Lanham Act, see 15 U.S.C. § 1125, and trademark blurring and tarnishment under New York law, see N.Y. Gen. Bus. Law § 360-l. NYSE brought this action against New York, New York Hotel & Casino, LLC (the "Casino") and its corporate predecessor, New York, New York Hotel, LLC, to prevent the Casino's use of physical features and promotional materials based on modified versions of NYSE's marks. Examples of the modified marks include: (i) a replica of NYSE's architectural facade that bore the words "New York New York Stock Exchange" located near the Casino's gambling floor; (ii) the Casino's "New York $lot Exchange" or "New York-New York $lot Exchange" club for frequent gamblers; (iii) sweatshirts, caps, and other souvenirs given out by the Casino to the members of its players club displaying the "New York $lot Exchange" or "New York-New York $lot Exchange" slogan; and (iv) the Casino's reference to its players club by the "NY$E" or "NY-NY$E" abbreviation.

We affirm in part and reverse in part. We hold that summary judgment was properly granted on all of NYSE's Lanham Act infringement claims. We also affirm the dismissal of NYSE's Lanham Act dilution claims as to all but one of its marks on the ground that the NYSE marks, save for the exception, are not inherently distinctive. The exception is a registered logo consisting of the NYSE building's facade bearing the words "New York Stock Exchange." We believe that a trier might find this mark to be inherently distinctive and thus eligible for the Lanham Act's anti-dilution protection. Finally, we affirm the dismissal of NYSE's state law blurring claim but reverse the dismissal of the tarnishment claim.

BACKGROUND

Because NYSE is appealing from an adverse grant of summary judgment, we view the evidence and draw all reasonable inferences in its favor. See Delaware & Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 177 (2d Cir.1990).

All would concede that NYSE is famous in the business world and beyond. Founded more than two hundred years ago, NYSE operates and manages one of the foremost national and international facilities for the trading of securities. It publicizes financial data about its listed companies and provides other services, such as educational programs about the securities markets. Routine references to NYSE are found in newspapers, television broadcasts, and other media outlets. Every working day, numerous news stories and updates are reported from NYSE's trading floor. NYSE annually receives visits by hundreds of thousands of tourists, many of whom purchase memorabilia bearing NYSE's marks. NYSE itself spends millions of dollars in advertisements every year to protect and enhance its reputation for listing only firms that adhere to rigorous disclosure and governance standards and for transparency and integrity in the use of its facilities to trade securities in those companies. NYSE also engages in promotional activities for its products and services.

Accordingly, NYSE has registered numerous marks with the United States Patent & Trademark Office. These marks include the names "New York Stock Exchange" and "N.Y. Stock Exchange," as well as the abbreviation "NYSE." NYSE has also registered a trademark for a logo spelling out "NYSE" in a stylized form, with thin horizontal lines running across the width of the logo except for the letter "S." Another NYSE-registered logo embodies a picture of the architectural facade of NYSE's building, an historical landmark. This facade consists of a triangular pediment, displaying eleven bas-relief figures, that is supported by six Corinthian columns and topped by an attic. It also contains the words "New York Stock Exchange" on the frieze. It is conceded that NYSE's marks are valid and properly registered.

The Casino operates a hotel and gambling facility located in a part of Las Vegas that is popularly known as the "Las Vegas Strip." Like many other casinos in the surrounding area — such as Caesar's Palace and Treasure Island — the Casino's building and operations are based on a theme, namely the "mood and spirit" of New York City. Consistent with this theme, the Casino features famous "neighborhoods" and notable icons of New York City throughout its interior and exterior decor. For example, various parts of the Casino's grounds are divided and named after famous New York City locales, such as the "Coney Island Emporium" game arcade, the "Greenwich Village" food court, and the "Soho Village" and "Park Avenue" retail shops. Additionally, the Casino has furnished its interior space with subway signs, parking meters, steaming manholes, and other familiar sights of New York City streets.

The Casino's exterior displays an illusion of New York City's skyline by cobbling together the appearances of ten famous Manhattan skyscrapers, including the Empire State Building and the Chrysler Building. The entranceway area of the Casino also contains a 150-foot tall replica of the Statue of Liberty and a 300-foot long replica of the Brooklyn Bridge.

The Casino also has bona fide New York City restaurants such as "Gallagher's Steakhouse," as well as other stores and eateries with fictional, but authentic-sounding, New York City names, including "Greenberg's Deli," "Broadway Burger," and "The Bar at Times Square." Even the change carts used on the Casino's gambling floor — decorated with the looks of "classic" New York City Checker taxi cabs — adhere to the theme.

At the time the Casino opened for business in January, 1997, it also featured references to NYSE, which are the heart of the present dispute. First, the Casino built a replica of NYSE's architectural facade in the Casino's "Financial District," an area on the main gambling floor where the cashiers' cages are located. The replica facade bore the words "New York New York Stock Exchange" in gold letters and was visible to gamblers playing on the Casino's slot machines. The Casino also distributed a press kit at the time of its opening and for several months thereafter that included a photo of the replica facade. As a consequence, pictures of the replica appeared in newspapers and magazines across the country.

Second, the Casino sponsored a players club entitled the "New York $lot Exchange" for frequent gamblers. References to the players club appeared in the Casino's print brochures, its Internet web site, its slot machines, and on a large neon sign. The Casino also used the "New York $lot Exchange" slogan on some souvenir items that it gave out — but never sold — to the members of its players club. Third, the Casino displayed the abbreviation "NY$E" on its slot machines and in some promotional materials. The Casino has also alternatively used the abbreviation "NY NY$E" to refer to its players club.

After NYSE filed the present action, the Casino voluntarily modified some of its versions of NYSE's marks. For example, the Casino renamed its players club to "New York-New York $lot Exchange." It also replaced some signs advertising the players club, but did not remove the original "New York $lot Exchange" slogan from its slot machines. Additionally, the Casino altered its replica facade to read "New York New York $lot Exchange," thereby exchanging the word "Stock" for "$lot." The replica facade was otherwise unchanged, however. Lastly, the Casino promised to discontinue using the abbreviation "NY$E," though it also expressed its intention to continue using the abbreviation "NY-NY$E."

Upon a motion by the Casino, the district court granted summary judgment against NYSE, dismissing all of its claims. See New York Stock Exch., Inc. v. New York, New York Hotel, LLC, 69 F.Supp.2d 479, 494 (S.D.N.Y.1999) ("NYSE"). Applying the eight factors of Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir.1961), the court held that the Casino did not infringe upon NYSE's marks under the Lanham Act. See NYSE, 69 F.Supp.2d at 484-88. The district court then ruled that the Casino did not dilute NYSE's marks for Lanham Act purposes. See id. at 488-90. In particular, the district court held that "famous" marks that acquire secondary meaning — such as NYSE's — are not "distinctive" as that term is used in the statute and are thus not entitled to anti-dilution protection. See id. Finally, the district court concluded that there was no factual basis supporting liability for either blurring or tarnishment under New York law. See id. at 490-93.

DISCUSSION

We review the district court's decision to grant summary judgment de novo. See Nora Beverages, Inc. v. Perrier Group of America, Inc., 269 F.3d 114, 118 (2d Cir.2001). Summary judgment is appropriate only where there are no genuine issues of material fact and the moving party has established its right to a judgment as a matter of law. See Fed.R.Civ.P. 56(c); see also EMI Catalogue P'ship v. Hill, Holliday, Connors, Cosmopulos Inc., 228 F.3d 56, 61 (2d Cir.2000). A dispute is not "genuine" unless "the evidence is such that a reasonable jury could return a verdict for the nonmoving...