PHYSICIANS FORM. COSMETICS v. WEST CABOT COSMETICS, 86-CV-1248.

• Decision Date: 20 April 1987
• Docket Number: No. 86-CV-1248.,86-CV-1248.
• Citation: 660 F. Supp. 1222
• Parties: PHYSICIANS FORMULA COSMETICS, INC., Plaintiff, v. WEST CABOT COSMETICS, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

660 F. Supp. 1222

PHYSICIANS FORMULA COSMETICS, INC., Plaintiff, v. WEST CABOT COSMETICS, INC., Defendant.

No. 86-CV-1248.

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

April 20, 1987.

Debevoise & Plimpton, New York City (Roger E. Podesta, Bruce P. Keller, Marian W. Payson, and Anne E. Cohen, of counsel), for plaintiff.

Warshaw Burstein Cohen Schlesinger & Kuh (James E. Daniels, of counsel), and Stiefel, Gross, Kurland & Pavane, P.C. (Marc S. Gross, of counsel), New York City, for defendant.

DECISION AND ORDER

BRAMWELL, District Judge.

This is a trademark infringment case in which both plaintiff Physicians Formula Cosmetics, Inc. and defendant West Cabot Cosmetics, Inc. claim that recent conduct by the other is likely to create substantial confusion among consumers of soaps and related cosmetics and skin care products. Plaintiff's complaint asserts federal statutory claims of trademark infringement and false representation under sections 32(1) and 43(a) of the Lanhan Trade-Mark Act, 15 U.S.C. §§ 1114(1) and 1125(a), common law claims of trademark infringement, trade name infringement, and unfair competition, and a statutory state law claim of false advertising under sections 349 and 350 of New York's General Business Law. Defendant's counterclaims allege false representation in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and unfair competition. Presently before the Court are plaintiff's motion for summary judgment on its trademark infringement claims and defendant's motion for a preliminary injunction "to preserve the status quo" pending the ultimate outcome of this case. For the reasons that follow, plaintiff's motion is granted, and defendant's motion is denied.

I. FACTUAL BACKGROUND

Because the factual background of this case is essentially undisputed, the Court will merely summarize what appear to be the uncontested facts that the parties have presented in voluminous detail.

Plaintiff is a California corporation that has been, since December, 1985, a wholly-owned subsidiary of Tambrands, Inc., a Delaware corporation with its principal place of business in Lake Success, New York. Since 1937, plaintiff has marketed cosmetics and skin care products in interstate commerce under the trademark PHYSICIANS FORMULA.¹ The PHYSICIANS FORMULA mark was registered on the Supplemental Register in 1964, and on the Principal Register in 1982, for numerous skin care products and cosmetics. As of December, 1985, PHYSICIANS FORMULA products were sold in over 2,300 retail outlets in 28 states and by mail order to 1,316 customers in 38 states. During the 15-year period from 1970 to 1985, plaintiff spent more than $6 million, or approximately 15 percent of its annual gross sales per year, in aggressively promoting its PHYSICIANS FORMULA products. Since 1970, PHYSICIANS FORMULA sales have steadily increased from approximately $400,000 to over $6 million.

Defendant is a New York corporation located in Central Islip, New York. Since 1888, defendant and its predecessors have marketed hard-bar soaps under the trademark PHYSICIANS & SURGEONS. In 1947, one of defendant's predecessors obtained federal registration of the PHYSICIANS & SURGEONS mark for use in connection with soaps. That registration has never been amended or modified to include any products other than soaps, and until 1981, the mark was used only on hard-bar soap products. Sales of PHYSICIANS & SURGEONS soaps have gradually increased over the years, but have never reached $200,000.

Until recently, both the PHYSICIANS FORMULA and PHYSICIANS & SURGEONS trademarks have peacefully coexisted in the market. Moreover, although the marks share a common word and theme, there is no evidence that consumers were ever confused as to the source of either product, and neither party challenged the other's trademark. Recently, however, the owner of each mark has commenced a new marketing campaign that is alleged by the other to create a likelihood of substantial confusion among the consuming public. In 1981, defendant's predecessor began marketing, in addition to hard-bar soaps, a limited number of skin care products under the PHYSICIANS & SURGEONS trademark.² Defendant introduced several other similar skin care products in 1985.³ Total sales of PHYSICIANS & SURGEONS non-soap products increased from approximately $18,000 in 1981 to approximately $70,000 in 1986, although defendant apparently has decided, at least temporarily, to cease marketing these products, and sales currently average less than $3,000 per month. Perceiving defendant's new line of non-soap products as an expansion by defendant from hard-bar soaps to skin care products, plaintiff commenced the present trademark case in April, 1986 to prevent defendant from continuing to market its new line of products. Subsequently, when defendant became aware that plaintiff was about to launch a new marketing strategy centered around a modification of the PHYSICIANS FORMULA trade dress to accentuate the word "Physicians," defendant filed false representation and unfair competition counterclaims seeking to prevent plaintiff from doing so. The Court will address plaintiff's motion for summary judgment first, and defendant's motion for a preliminary injunction thereafter.

II. DISCUSSION

A. Plaintiff's Motion for Summary Judgment

Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is proper if the affidavits and other submissions show "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, ___ U.S. ___, ___, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., ___ U.S. ___, ___, 106 S.Ct. 2505, 2510-12, 91 L.Ed.2d 202 (1986). In the present case, as previously noted, the material facts are essentially undisputed. Plaintiff asserts that it is entitled to judgment as a matter of law because (1) plaintiff's PHYSICIANS FORMULA trademark is a valid, distinctive mark for cosmetics and skin care products; (2) plaintiff has a prior right to use its PHYSICIANS FORMULA trademark and therefore to exclude others from using confusingly similar marks on cosmetics and skin care products; and (3) there exists a likelihood of substantial customer confusion if West Cabot is permitted to apply the PHYSICIANS & SURGEONS trademark to cosmetics or skin care products.

With respect to plaintiff's first contention, defendant essentially concedes that the PHYSICIANS FORMULA trademark is valid and distinctive, and consequently is entitled to protection.⁴ However, defendant "strenuously denies" plaintiff's second contention, that is, plaintiff's claim to a prior and exclusive right to use the PHYSICIANS FORMULA mark on cosmetics and skin care products. Although conceding that it is too late to prevent plaintiff's use of the PHYSICIANS FORMULA mark on cosmetics and skin care products, defendant argues that its own prior use of the PHYSICIANS & SURGEONS mark on hard-bar soap products entitles it to extend application of the mark to other related skin care products. After considering the long history of caselaw regarding this issue, the Court agrees with plaintiff's claim of priority.

Although the Court has uncovered no authority directly controlling the issue, analogous cases in the Second Circuit date back as early as George v. Smith, 52 F. 830 (C.C.S.D.N.Y.1892). In that case, the court held that the plaintiffs' use of the trademark "Epicure" for canned salmon entitled them to an injunction against the defendants' use of the same trademark for the same product, even though defendants had used the "Epicure" mark for canned tomatoes and peaches long before plaintiffs had used it on canned salmon. Id. at 830-32. And although the court suggested in dictum that defendants might have prevailed if the disputed product were, instead of canned salmon, "other fruit and vegetables, analogous to tomatoes and peaches," see id. at 831-32, that possibility was apparently put to rest by the subsequent decision of the Second Circuit in France Milling Co. v. Washburn-Crosby Co., 7 F.2d 304 (2d Cir.), cert. denied, 268 U.S. 706, 45 S.Ct. 640, 69 L.Ed. 1168 (1925).

In France Milling Co., plaintiff sought to protect its trademark "Gold Medal" as applied to prepared pancake and buckwheat flour. Defendant had used the same "Gold Medal" trademark on "straight" wheat flour since long before plaintiff's first use of the mark, but did not attempt to extend its use of the mark to prepared pancake flour until 20 years after plaintiff began marketing prepared pancake and buckwheat flour under the mark. Notwithstanding the obvious similarity between defendant's traditional wheat flour product and the prepared flour products it subsequently sought to market under the same trademark, the Second Circuit affirmed the issuance of an injunction in favor of the plaintiff, holding that plaintiff possessed a prior and exclusive right to use the mark on prepared flours. See id. at 305.

Since the Second Circuit's decision in France Milling Co., courts in other circuits have ruled similarly in analogous cases. See, e.g., Artcraft Novelties Corp. v. Baxter Lane Co., 685 F.2d 988, 990-91 (5th Cir.1982) (plaintiff had prior right to exclusive use of "Texas" trademark on novelty giant fly swatter and housefly notwithstanding defendant's 20 years of prior use of the mark on as many as 600 other novelty items); Borg-Warner Corp. v. York-Shipley, Inc., 293 F.2d 88, 92-93 (7th Cir.) (party who was first to acquire secondary meaning in use of "York" trademark for oil conversion burners and furnaces had prior and exclusive right to use mark on such products despite other party's prior authorized use and registration of same mark for ice-making, refrigeration, and air-conditioning equipment), cert. denied, 368 U.S. 939, 82 S.Ct. 381, 7 L.Ed.2d 338 (1961); Consumers Petroleum Co. v. Consumers Co., ...