Sykes Laboratory, Inc. v. Kalvin
| Decision Date | 03 June 1985 |
| Docket Number | No. CV 84-3428 RG(JRx).,CV 84-3428 RG(JRx). |
| Parties | SYKES LABORATORY, INC., Plaintiff, v. Russ KALVIN dba Consumer Products Associates Distr., and Sunshine Beauty Supplies, Inc., Defendants. |
| Court | U.S. District Court — Central District of California |
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Charles E. Wills, Los Angeles, Cal., for plaintiff.
William C. Conkle and Mark D. Kremer, Conkle & Olesten, Los Angeles, Cal., for defendants.
Plaintiff Sykes Laboratory, Inc. ("Sykes") manufactures and sells a fingernail conditioner which it calls "Sykes' `Perfect Nail.'" Defendant Sunshine Beauty Supplies, Inc., ("Sunshine") markets low cost versions of name-brand beauty products, including the plaintiff's, under the label, "the GENERIC BRAND." Defendant Russ Kalvin is the president of Sunshine. In packaging their goods defendants use the tradenames and trademarks of their competitors to identify the defendants' products as inexpensive substitutes for the better known, name-brand items they have copied.
In this action plaintiff charges that Sunshine's use of the name, "Sykes", and the mark, "Perfect Nail," violates both federal and state law regarding trademark protection. The complaint contains five claims for relief. Sykes' first and second claims allege unfair competition under California law by reason of defendants' reference to plaintiff's product name in the phrase, "the GENERIC BRAND Version of Sykes' Perfect Nail." These claims allege in essence that defendants have unlawfully misappropriated the goodwill Sykes has built up in its name and mark by benefiting from the labor and expense plaintiff invested in developing and promoting its product. Plaintiff's third claim is for dilution of its trademark under California law. Plaintiff's fourth and fifth claims allege trademark infringement and unfair competition, respectively, on the basis of Sunshine's use of a container identical to plaintiff's, which is registered with the trademark office, in bottling the generic nail hardener.
This court's subject-matter jurisdiction is founded both on diversity of citizenship, 28 U.S.C. § 1332 (1982), with regard to the state-based causes of action and on the presence of a federal question as to the trademark infringement claim, 28 U.S.C. §§ 1331 and 1338(a) (1982).
The matter came before this court on December 3, 1984, for a hearing on defendants' motions for judgment on the pleadings on plaintiff's first and second claims, for summary judgment on plaintiff's third through fifth claims, and for an order cancelling the trademark registration of Sykes' bottle design pursuant to section 37 of the Lanham Act, 15 U.S.C. § 1119 (1982). The court has reviewed the papers and affidavits filed by the parties and carefully considered their arguments. As indicated at length below, the court will grant these motions except as to the third claim for relief.
The basic facts necessary to decide the pending motions are undisputed and can be summarized readily:
Both Sykes' Perfect Nail and defendant's generic version are unpatented potions used for conditioning and hardening fingernails. Plaintiff has been selling its product since at least 1972 in both a one-quarter ounce bottle for retail use and a one ounce bottle for professional use by manicurists. Plaintiff has spent more than $250,000 in promoting Perfect Nail and has enjoyed total sales of more than $5 million. According to numerous letters plaintiff has received and filed with the court as exhibits, praise for Perfect Nail has flowed in from various quarters, including Her Royal Highness, the Duchess of Windsor.
Defendant Russell Kalvin and his wife Marilyn established Sunshine Beauty Supplies in 1974 after having been involved in the sale of beauty supplies with various prominent manufacturers for some twelve years. Originally acting as a retail and wholesale beauty supply store for well known brands, Sunshine began in 1976 or 1977 to market its own versions of those products under the labels, "Apples'" and, more recently, "the GENERIC BRAND." Defendants' copy of Sykes' Perfect Nail entered the market in late 1981 or early 1982. The defendants list the Sykes' product along with several dozen other namebrands on a comparison chart which boasts, "If You Like the Name Brand, You'll Love the GENERIC BRAND."
Both Sykes' Perfect Nail and the Generic Brand are sold in small, banjo-shaped vials, identical except that defendants' has a white cap while plaintiff's has a black one. Defendants' bottle bears a label with the block-letter words, "the GENERIC BRAND tm Version of Sykes' `Perfect Nail' (R)" and "NAIL HARDENER # 82001" printed beneath. Plaintiff's bears a simple, script label, "Perfect Nail."
The vials, however, are sold in dissimilar packages. The box containing plaintiff's nail hardener is gold with thick black lettering; Sunshine's box is white with blue lettering and the phrase that Sykes object to—"the GENERIC BRAND Version of Sykes `Perfect Nail'" — appears not on the main part of the box but rather on a flap attached at the top and designed for hanging on a display rack.
Although a fraction of plaintiff's product has been sold in past years in a so-called window-box displaying the purportedly distinctive bottle, defendant's product is contained in a sealed package. The vial is thus not visible to a consumer comparing the parties' products. Further, Sunshine has never used the bottle shape in advertising or marketing its nail hardener.
The top of the package containing the defendants' version bears the same label as the vial. On the front of the box defendants have conspicuously placed a disclaimer:
In very small print on another side of the box and underneath the directions for using the nail hardener, defendants' package identifies its producer as "Consumer Products Associates Distr."
1. Defendants' motion for judgment on the pleadings as to plaintiff's first and second claims for relief.
Plaintiff alleges in its first and second claims that defendants have engaged in unfair competition under both the common law and under section 17,200 of the California Business and Professions Code, Cal. Bus. & Prof.Code § 17,200 (West Supp. 1985), by misappropriating the goodwill of the mark and name Sykes' Perfect Nail. Plaintiff contends that consumers of nail conditioners have been buying defendants' product only because they recognize plaintiff's distinctive name and not by reason of any goodwill defendants may have independently developed, and that defendants have thus unfairly benefitted from plaintiff's labors. Plaintiff nowhere alleges, however, that purchasers have been or are likely to be confused by defendants' use of plaintiff's name and mark on the box for its generic version.
Defendants move for judgment on the pleadings under federal rule of civil procedure 12(c), Fed.R.Civ.P. 12(c). They contend that in this circuit a claim for unfair competition may not be founded upon misappropriation of goodwill in the trademark of an unpatented product unless confusion or deception results. Plaintiff, in response, seeks to bring its unfair competition claim under that line of cases, most notably International News Services v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918), in which courts have prohibited wholesale misappropriation of the products of one's competitor's time, effort and money. Defendants should not reap, plaintiff argues, where they have not sown.
Because the plaintiff's opposition to this motion relies in part on matters outside the pleadings in this case, the court has treated this motion as one for summary judgment. Fed.R.Civ.P. 12(c)1 Having carefully reviewed the affidavits, declarations, and other papers presented by both sides, the court concludes that defendants are entitled to judgment as a matter of law. Dalke v. Upjohn Co., 555 F.2d 245, 248 (9th Cir.1977). This result is required by certain well established principles of this circuit delimiting the laws of unfair competition.2
The gist of any unfair competition action based on the adoption of a rival's trademark must always be the likelihood of confusion or deception. As the United States Court of Appeals for the Ninth Circuit has stated:
Trade-mark and trade name infringement, or unfair competition, preclude one from using another's distinctive mark or name if it will cause a likelihood of confusion or deception as to the origin of the goods.... Whether we call the violation infringement, unfair competition, or false designation of origin, the test is identical —is there a "likelihood of confusion"?
New West Corp. v. NYM Co. of Cal., 595 F.2d 1194, 1201 (9th Cir.1979) (citations omitted); accord Walt Disney Productions v. Air Pirates, 581 F.2d 751, 760 (9th Cir.1978), cert. denied sub nom. O'Neill v. Walt Disney Productions, 439 U.S. 1132, 99 S.Ct. 1054, 59 L.Ed.2d 94 (1979); see Plotkin v. Tanner's Vacuums, 53 Cal. App.3d 454, 459, 125 Cal.Rptr. 697, 700 (1975) ().
The requirement that a plaintiff prove a likelihood of confusion in order to recover on an unfair competition claim follows from "the traditionally accepted premise that the only logically relevant function of a trademark is to impart information as to the source of sponsorship of the product." Smith v. Chanel, 402 F.2d 562, 566 (9th Cir.1968). Thus protection does not normally extend to ...
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