VMG Enterprises, Inc. v. F. Quesada & Franco, Inc.
| Decision Date | 30 March 1992 |
| Docket Number | Civ. No. 91-2558 (RLA). |
| Citation | 788 F. Supp. 648 |
| Court | U.S. District Court — District of Puerto Rico |
| Parties | VMG ENTERPRISES, INC., Plaintiff, v. F. QUESADA & FRANCO, INC., Defendant-Counterclaimant. |
COPYRIGHT MATERIAL OMITTED
Edgardo Cartagena-Santiago, Brown Newsom & Cordova, Hato Rey, P.R., Kenneth R. Nowakowski, Whyte & Hirschboeck S.C., Milwaukee, Wis., for plaintiff.
José M. Muñoz-Silva, Mayaguez, P.R., Edwin Toro Goyco, Hato Rey, P.R., for defendant-counterclaimant.
Plaintiff, VMG Enterprises, Inc. ("VMG") filed this case under the provisions of the Lanham Act, 15 U.S.C. §§ 1051-1127, seeking monetary and equitable relief1 for defendant's trademark infringement of plaintiff's federally registered trademark, BABY'S CHOICE.
VMG claims it is the owner of a concurrent use registration for the trademark BABY'S CHOICE, registered in the principal Register of the United States Patent and Trademark Office under Registration Number 1,564,375, granted on November 7, 1989.
Plaintiff also avers that its concurrent use registration grants it exclusive rights to use the trademark BABY'S CHOICE in the entire United States except for specifically described geographic areas and that Puerto Rico is not one of the excepted areas. VMG also alleges that on dates subsequent to its trademark registration and use of the mark in Puerto Rico, and without its authorization, defendant, F. Quesada & Franco, Inc. ("Quesada"), commenced the sale in Puerto Rico of disposable baby diapers not manufactured by VMG, and sold under the trademark BABY'S CHOICE, all in violation of 15 U.S.C. §§ 1114(1) and 1125(a).
On January 10, 1992 (docket No. 5) defendant filed an answer to the complaint essentially denying plaintiff's trademark rights, and counterclaimed for cancellation of plaintiff's concurrent trademark registration and damages under the antitrust laws. Defendant bases both its defenses and the counterclaim on three theories: (1) the existence of agreements to which plaintiff was a party and which defendant alleges are in violation of the antitrust laws of the United States; (2) acts by plaintiff which have allegedly "destroyed" the distinctiveness of the BABY'S CHOICE trademark upon which the complaint is based; and (3) a denial of the existence of the likelihood of confusion between the product sold by defendant and plaintiff.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338 and under 15 U.S.C. § 1121(a).
On January 14, 1992 plaintiff filed a motion for preliminary injunction. On January 15, 1992 this Court issued an Omnibus Order (docket No. 10) which, inter alia, set a hearing on the preliminary injunction petition for February 13, 1992 and ordered defendant to file a brief specifically addressing its defenses of loss of distinctiveness of the trademark and misuse of the trademark as violative of the antitrust laws.
Based on the evidence submitted by the parties, the pleadings, the depositions on record, the stipulated facts and after due deliberation, this Court makes the following FINDINGS OF FACT AND CONCLUSIONS OF LAW.
1. Plaintiff is a Washington corporation with its principal place of business in Vancouver, Washington.
2. Plaintiff manufactures and sells disposable baby diapers in portions of the United States, including Puerto Rico, under the trademark BABY'S CHOICE.
3. Defendant is a Puerto Rico corporation with its principal place of business in Ponce, Puerto Rico.
4. Plaintiff is the owner of a November 7, 1989 Concurrent Use Registration for the mark BABY'S CHOICE for disposable baby diapers on the Principal Register of the United States Patent and Trademark Office under Registration No. 1,564,375.
5. Universal Converter, Inc. ("UCI") manufactures the BABY'S CHOICE diapers sold by defendant in Puerto Rico. UCI is the owner of Concurrent Use Registration No. 1,564,376 which covers the areas excepted in VMG's registration.
6. Plaintiff's Concurrent Use Registration covers the entire United States except for specifically described geographic areas. Puerto Rico is not one of the excepted geographic areas.
7. VMG adopted and began using the BABY'S CHOICE mark on disposable diapers in interstate commerce on January 8, 1985 and applied for federal registration of the mark on March 8, 1985. UCI's first use of the mark in state commerce was December 1, 1984, with its first use in interstate commerce on January 15, 1985.
8. Upon VMG's application for federal registration, UCI filed opposition proceedings pursuant to Section 13 of the Lanham Act, 15 U.S.C. § 1063, and also filed an application to register its mark on May 17, 1985.
9. The parties settled their differences by means of a 1986 concurrent use agreement and agreed to file concurrent registration proceedings before the U.S. Patent and Trademark Office ("The Trademark Office").
10. VMG and UCI were issued concurrent use registrations by the Trademark Office on November 7, 1989. Their respective certificates of registration contain trademark territorial limitations identical to the areas set forth in the parties' 1986 Agreement.
11. In 1990-91, VMG and UCI engaged in litigation over the scope of the 1986 agreement and the resulting concurrent use registrations, upon VMG's sale of goods bearing the marks GIRL's CHOICE and BOY's CHOICE into the territory covered by UCI's registration. UCI's infringement suit against VMG was resolved by the 1991 Settlement Agreement, which clarified the scope of the 1986 Agreement.
12. VMG has sold its disposable baby diapers under the BABY'S CHOICE mark in Puerto Rico since at least May 1990, through Argüelles, Inc., and AA Distributors, Inc. (collectively "Argüelles") a Puerto Rico distributor.
13. Argüelles is presently the only distributor authorized by VMG to use the BABY'S CHOICE mark in Puerto Rico.
14. Quesada has been selling diapers in Puerto Rico with the trademark BABY'S CHOICE, manufactured or supplied by UCI since November, 1991.
15. VMG has not authorized Quesada to sell disposable baby diapers bearing the BABY'S CHOICE trademark.
16. On November 29, 1991 Quesada received a letter from plaintiff's counsel which advised Quesada that Argüelles was VMG's only authorized distributor in Puerto Rico and that Quesada's sale of BABY'S CHOICE diapers was illegal and contrary to VMG's trademark rights. The letter also advised Quesada it had ten days to discontinue sales and retrieve previously sold merchandise or VMG would be forced to resort to the Courts.
17. On December 9, 1991, Quesada received a letter from plaintiff's counsel reiterating its demand that Quesada desist from selling in Puerto Rico the BABY'S CHOICE product manufactured by UCI and that VMG was prepared to take legal action for trademark infringement, seeking exemplary damages and attorney's fees.
18. On December 10, 1991, defendant received a letter of same date from UCI, defendant's supplier of the BABY'S CHOICE diapers. The letter stated that UCI would not be able to ship additional BABY'S CHOICE diapers into Puerto Rico given VMG's notice that VMG's concurrent use trademark registration included Puerto Rico as its exclusive territory.
19. Quesada did not communicate with either plaintiff or its counsel in response to the letters received.
20. Quesada made sales of UCI's BABY'S CHOICE product after receipt of plaintiff's counsel's letters and after the complaint herein was filed and served on defendant.
21. Defendant had actual notice of plaintiff's rights in the BABY'S CHOICE mark no later than November 29, 1991.
22. The trademark BABY'S CHOICE is prominently displayed on the VMG packaging and on the UCI packaging.
23. Upon examination of the packages in evidence and the trademarks thereto affixed, the Court finds that the marks are virtually identical.
24. The word components of the marks are the same, to wit: BABY'S CHOICE.
25. The packages sold by defendant and those sold by plaintiff each have affixed the names of the respective manufacturers. This information, however, is not as prominently displayed as the mark BABY'S CHOICE in each of the packages, which is printed in letter type at least five or six times larger than that used for the name of the manufacturer.
26. The colors used for each of the packages (light blue and white for boys, pink and white for girls) are almost identical in tone.
27. The disposable baby diapers sold by defendant under the BABY'S CHOICE mark and those manufactured by VMG are similar in size, overall appearance and color (pink for girls and blue for boys).
28. The letter type of the BABY'S CHOICE mark is different on each package.
The federal statute pertinent to plaintiff's action is the Lanham Act, 15 U.S.C. §§ 1051-1127. Plaintiff contends that defendant is in clear violation of two provisions of that legislation. One is § 32(1), 15 U.S.C. § 1114(1), which provides where pertinent as follows:
Plaintiff also claims defendant is in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) which is similar to Section 32(1) except that it affords protection from infringement regardless of whether the person claiming protection is the owner of a registered trademark.
Section 43, 15 U.S.C. § 1125 provides:
To continue reading
Request your trial
-
Critter Control, Inc. v. Young
...of general antitrust principles or conclusory and formulaic statements. adidas Am., Inc., supra; VMG Enterprises, Inc. v. F. Quesada & Franco, Inc., 788 F. Supp. 648, 657 (D.P.R. 1992). The Defendant has not set out a viable antitrust defense, let alone supported such a defense with evidenc......
-
VERYFINE PRODUCTS, INC., v. Colon Bros., Inc.
...customers are likely to think that the plaintiff had authorized the defendant's use of the mark." VMG Enterprises, Inc. v. F. Quesada & Franco, Inc., 788 F.Supp. 648, 660 (D.P.R.1992), citing International Kennel Club of Chicago, Inc. v. Mighty Star, Inc., 846 F.2d 1079 (7th Cir.1988). See ......
-
Black & Decker Corp. v. Positec U.S. Inc.
...plaintiff has licensed, approved or otherwise authorized the defendant's use of its trade dress. See VMG Enterprises, Inc. v. F. Quesada & Franco, Inc., 788 F. Supp. 648, 660 (D.P.R. 1992). Here, a reasonable trier of fact viewing the photographs in the Fischer Declaration and Berger report......
-
The Greater Westerly-Pawcatuck Area Chamber of Commerce v. South Kingstown Chamber of Commerce, Inc., C. A. WB-11-0741
...any possibility of confusion as to the source of services provided. But see VMG Enterprises, Inc. v. F. Quesada & Franco, Inc., 788 F.Supp. 648 (D.P.R. 1992) (court held the consumer confusion-a relationship existed between the parties-was likely to occur because of the similarity between t......
-
§ 4.03 Defenses to the Crime of Trademark Counterfeiting
...vehicle required and used" to violate antitrust laws). See also: First Circuit: VMG Enterprises, Inc. v. F. Quesada & Franco, Inc., 788 F. Supp. 648, 657 (D.P.R. 1992) ("An attack based on the Sherman Act and in response to a trademark infringement complaint requires that defendant prove th......
-
Antitrust Issues Involving Intellectual Property
...of its trademark rights does not constitute an antitrust violation or a trademark misuse”); VMG Enters. v. F. Quesada & Franco, 788 F. Supp. 648, 658 (D.P.R. 1992) (recognizing that the exclusivity that inheres in a trademark could not preclude competition in any meaningful way). But see Ke......
-
Table of Cases
...Inc. v. Schmidt & Sons, 403 F. Supp. 643 (E.D. Pa. 1975), aff ’ d, 565 F.2d 154 (3d Cir. 1977), 353 VMG Enters. v. F. Quesada & Franco, 788 F. Supp. 648 (D.P.R. 1992), 1270 Vogel v. American Soc’y of Appraisers, 744 F.2d 598 (7th Cir. 1984), 59, 88, 118, 492 Vogue Ring Creations, Inc. v. Ha......