Playboy Enterprises v. PK Sorren Export Co.
| Decision Date | 10 May 1982 |
| Docket Number | No. 81-1264-Civ-CA.,81-1264-Civ-CA. |
| Citation | 546 F. Supp. 987 |
| Parties | PLAYBOY ENTERPRISES, INC., Plaintiff, v. P. K. SORREN EXPORT COMPANY INC. OF FLORIDA, and Sorren, Inc., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
COPYRIGHT MATERIAL OMITTED
Robert Sondak, Paul, Landy, Beiley, Harper & Metsch, P. A., Miami, Fla., for plaintiff.
Dubbin, Schiff, Berkman & Dubbin, Miami, Fla., for defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
THIS MATTER came before this Court for non-jury trial, and the Court having heard the evidence, arguments of counsel, and duly considered the matter, hereby finds:
FINDINGS OF FACT
1. Plaintiff PLAYBOY ENTERPRISES, INC., (hereinafter "PEI"), a Delaware corporation, with its principal place of business at 919 North Michigan Avenue, Chicago, Illinois, is the owner of the trademark rights here in suit.
2. Defendant P. K. Sorren Export Company, Inc. of Florida (hereinafter "SORREN — FLA.") is a Florida corporation with a place of business at 22 N.W. First Street, Miami, Florida. Defendant SORREN, INC. (hereinafter "SORREN — N.Y.") is a New York corporation having a place of business at 250 West 54th Street, New York, New York and at 22 N.W. First Street, Miami, Florida. Defendants SORREN — N.Y. and SORREN — FLA. are under the common ownership and control of Mr. Paul K. Sorren.
3. PEI is the owner of the following United States trademark registrations for the trademarks PLAYBOY and RABBIT HEAD Design, which have been duly registered in the United States Patent and Trademark Office:
Affidavits under Sections 8 and 15 of the Lanham Act (15 U.S.C. §§ 1058 & 1065) have been filed with and accepted by the United States Patent and Trademark Office.
The PLAYBOY and RABBIT HEAD Design marks are well-known in the United States and abroad.
4. PEI is not in the business of manufacturing or selling any product, either at wholesale or retail. Among other things, it licenses others to manufacture goods bearing Playboy trademark, for which Plaintiff receives a royalty of from five (5%) to seven (7%) percent of the licensee's net sales. Licensees of PEI are licensed to sell merchandise directly to retailers such as the Defendants herein. Examples of such licenses are the licenses issued to Gilbert Hoisery Company for the manufacture and sale of hoisery and to Ruby International, Inc. for the manufacture and sale of underwear. A Trifle Bit is licensed to sell active and casual sportswear and tops under the PLAYBOY ENTERPRISES, INC. trademark. All of these companies sell directly to retailers and also may sell to Playboy Sales, Inc. (hereinafter "PSI"), a separate corporation in the Playboy group of corporations. A retailer such as Defendants can acquire the same goods directly from the manufacturer of the goods and also from Playboy Sales, Inc.
5. PSI, a wholly-owned subsidiary of PEI, is in the business of selling PLAYBOY trademark goods to retailers such as Defendants, either directly or through field representatives, selling goods through Playboy gift shops and selling goods by direct mail. Playboy Sales, Inc. does not manufacture any of the goods it sells. It acquires those goods either from vendors under contract to it, or from licensees of PLAYBOY ENTERPRISES, INC. During all times relevant to this suit, knit shirts, bearing the "RABBIT HEAD Design", were distributed solely by PSI and not by any licensees of PEI.
6. PEI has promoted its PLAYBOY and RABBIT HEAD Design trademarks so as to make them strong marks with distinctiveness in the market place for which various manufacturers and retailers have paid and are paying substantial sums to PEI in order to sell PEI licensed and authorized products and goods.
7. PEI's PLAYBOY and RABBIT HEAD Design trademarks have come to be identified by the general public with goods and products emanating from, sponsored by, authorized by or affiliated with PEI.
8. Both Defendants are engaged in the business of selling consumer merchandise, primarily to tourists and for export.
Since the mid-seventies, defendant SORREN — N.Y. has been a major customer of Playboy Sales, Inc. for genuine PEI clothing products, including shirts, bearing the PLAYBOY and RABBIT HEAD Design marks and has sold such clothing products to the public from its store locations in New York and Florida. All such purchases were made from PSI; neither Defendant has ever done business directly with PEI.
9. From at least as early as 1977 and continuing on through 1979, defendant SORREN — N.Y. purchased shirts bearing a rabbit head emblem1 from Grenadier Knitwear, Ltd., Statesville, North Carolina (hereinafter "Grenadier") and sold said shirts from store locations in New York and Florida.
10. In 1980 and 1981, defendant SORREN — N.Y. continued to purchase shirts bearing a rabbit head emblem from Rolex Industries, Inc., Charlotte, North Carolina (hereinafter "Rolex") which company had taken over the SORREN — N.Y. account from Grenadier. These shirts were sold by SORREN — N.Y. and SORREN — FLA. At least some sales of such shirts by defendants were made under a placard which prominently displayed the PLAYBOY mark.
11. The purchase by defendants from Rolex and Grenadier of shirts bearing the rabbit head emblem and the sale by defendants of such shirts was neither authorized nor approved by PEI.
12. Defendants' dealing in counterfeit and genuine wearing apparel bearing or sold under the PLAYBOY and RABBIT HEAD Design marks has confused and deceived and is likely to confuse and deceive the public as to the source, origin or sponsorship of the goods.
13. Defendants' dealing in counterfeit and genuine wearing apparel bearing or sold under the PLAYBOY and RABBIT HEAD Design marks has misled and is likely to mislead the public to believe that the shirts originate from or are associated with PEI.
14. Defendants' dealing in counterfeit and genuine wearing apparel bearing or sold under the PLAYBOY and RABBIT HEAD Design marks has diluted and is likely to dilute the distinctiveness and reputation of the PEI marks here in suit.
15. Defendants' dealing in counterfeit and genuine wearing apparel bearing or sold under the PLAYBOY and RABBIT HEAD Design marks has damaged PEI by unjust profits to defendants, and damage to PEI's reputation and goodwill.
16. Defendants' dealing in counterfeit and genuine wearing apparel bearing or sold under the PLAYBOY and the RABBIT HEAD Design marks has resulted in unjust profit to defendants.
17. Defendants' involvement in the manufacture of shirts bearing a rabbit head emblem first with Grenadier and later with Rolex constituted a deliberate attempt to counterfeit plaintiff's goods.
18. Defendants' aforesaid dealings with counterfeit and genuine shirts bearing or sold under the PLAYBOY and RABBIT HEAD Design marks were carried out with a willful, deliberate intention of trading on the goodwill of PEI's PLAYBOY and RABBIT HEAD Design marks.
19. Defendants have not been cooperative in producing discovery,2 and their records of purchases from Grenadier, tardily produced, are incomplete. Defendants have also failed to produce adequate evidence of their costs related to the infringing goods, other than the purchase price and certain freight charges.
20. The Rolex compiled invoice list which is annexed hereto as Exhibit A shows the sales of shirts bearing a rabbit head emblem by Rolex to SORREN — N.Y. and SORREN — FLA. during 1980 and 1981.
21. The Grenadier purchase orders listed below show the purchase of rabbit head design emblems by Grenadier from Artistic Identifications Systems, Inc. (hereinafter "AIS"), Pompton Lake, New Jersey, for use in making shirts sold to SORREN — N.Y., and SORREN — FLA.
Purchase Order Date Price Quantity
2281 n/a n/a 700 dozen (on third
party evidence)
3745 9/26/77 $.80/dozen 875 dozen
(10,500)
2025 7/27/78 $.85/dozen 13,000
Defendants purchased from Grenadier shirts bearing the above emblems.
22. The emblems purchased by Grenadier from AIS were used by Grenadier to make shirts and such shirts were sold to defendants at a price of $43.50/dozen.
Sometime during 1979-1980, the ownership of Grenadier changed. At about this time, Messrs. Rosenberg and Leventhal left the employ of Grenadier and established Rolex International, Inc. Rosenberg had been a major shareholder in Grenadier and both Rosenberg and Leventhal are major stockholders in Rolex. At about the time of these events, the defendants terminated their business relationship with Grenadier and began dealing with Rolex.
Defendants subsequently bought rabbit head emblem shirts from Rolex at prices varying from $46/dozen to $63/dozen.
23. Defendants sold shirts bearing the rabbit head emblem purchased from Rolex and Grenadier according to the following price schedule:
Cost to Defendants Export Price Wholesale Retail
(per dozen) (doz.) Price (doz.) Price (doz.)
Grenadier $43.50 $58.00 $81.00 $93.00
Rolex 46.00 58.00 81.00 93.00...To continue reading
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