Westchester Media Co. v. Prl Usa Holdings, Inc.

• Decision Date: 04 August 1999
• Docket Number: No. Civ.A. H-97-3278.,Civ.A. H-97-3278.
• Citation: 103 F.Supp.2d 935
• Parties: WESTCHESTER MEDIA COMPANY L.P., et al., Plaintiffs, v. PRL USA HOLDINGS, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

103 F.Supp.2d 935

WESTCHESTER MEDIA COMPANY L.P., et al., Plaintiffs, v. PRL USA HOLDINGS, INC., et al., Defendants.

No. Civ.A. H-97-3278.

United States District Court, S.D. Texas, Houston Division.

August 4, 1999.

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Paul J. Dobrowski, Gibbs & Bruns, Thomas C. Godbold, Fulbright & Jaworski, Houston, TX, for Westchester Media Co. and Navasota Holding Co.

Anthony F. Lo Cicero, Amster, Rothstein & Eberstein, New York City, Thomas H. Adolph, Baker Botts, Michael P Lennon, Jr., Houston, TX,Leslie G. Fagen, Carey R. Ramos, Jeremy Creelan, Mariann Meier Wang, Paul, Weiss, Rifkin, Wharton, and Garrison, New York City, for PRL USA Holdings Inc.

MEMORANDUM ORDER, FINDINGS OF FACT, AND CONCLUSIONS OF LAW ON DEFENDANTS' MOTION FOR PERMANENT INJUNCTIVE RELIEF

MILLOY, United States Magistrate Judge.

On February 18, 1998, the parties consented to proceed before a United States magistrate judge, under 28 U.S.C. § 636(c), "for the limited purpose of ruling on the motion for [a] preliminary injunction" that was filed, jointly, by Defendants PRL USA Holdings, Inc. and the Polo Ralph Lauren Corporation, d/b/a Delaware Polo Ralph Lauren Corporation (collectively "PRL" or "Defendants"). (Docket Entry # 19). An order granting limited injunctive relief was entered on July 2, 1998. Subsequently, the parties consented to proceed before this court for all purposes, including entry of final judgment. (Docket Entry # 104). The court entertained testimony on these claims and defenses in November 1998, and heard final arguments in January 1999. Since that date, the parties have supplemented the record with additional evidence in the form of deposition transcripts, copies of all publications issued to date, and memoranda on recent case decisions. Prior to ruling, the court has reviewed all of the briefs, letter memoranda, and exhibits submitted by the parties, including all of the transcripts/videos of depositions given by witnesses for each party.

At the heart of this matter is the contention that the 1997 "re-launch" of a magazine, under the name "POLO", by Plaintiffs Westchester Media Company, L.P. and Navasota Holding Company, L.L.C., ("Westchester" or "Plaintiffs"), will cause a likelihood of consumer confusion as to affiliation, sponsorship, or association with Defendants. In weighing these claims and defenses, the court is called upon to decide matters implicated under the first amendment to the constitution, the effect of an incontestable trademark registration, the contours of a new federal dilution statute, as well as the validity of expert opinions, including the procedures and results from competing market surveys. In making these findings, the court has scrutinized carefully each factor involved in the determination of a likelihood of confusion, the equitable and legal defenses raised, and all aspects of the relief ordered. Following that scrutiny, and based on credibility findings and the governing law, the court is persuaded, by a preponderance of the evidence, that PRL has met its burden to show a likelihood of confusion on its trademark infringement claim and that injunctive relief should be ordered. The explicit findings required under Rule 52 of the Federal Rules of Civil Procedure, follow this memorandum and are incorporated for all purposes.

BACKGROUND

On October 1, 1997, Westchester filed this declaratory judgment action against PRL, seeking a determination of its right to use "POLO" as the title for a magazine. In response to Plaintiffs' declaratory judgment action, PRL filed counterclaims alleging trademark infringement and dilution under the Lanham Act, codified as amended at 15 U.S.C. §§ 1114(1), 1125(a), and state law claims of unfair competition and injury to business reputation. The court has jurisdiction over the subject matter of these claims pursuant to 15 U.S.C. § 1121, 28 U.S.C. § 1338, and 28 U.S.C. § 636(c) and venue is proper in the Southern District of Texas under 28 U.S.C. § 1391. This case requires close decisions on questions of fact and law as the parties dispute the right of each to use the word "polo" in pursuing business goals. PRL, Counter-Plaintiff here, claims that Westchester Media, Counter-Defendant, has infringed its rights by use of that name and that it has diluted its distinctive mark in the process. Westchester responds that PRL's efforts to control the use of the word, by litigation, is an overreaching attempt to extend its current rights under the law. In July 1998, this court was presented with similar issues on PRL's request for a preliminary injunction, and limited injunctive relief was ordered. Since July 1998, Westchester has been required to distance itself from PRL, and its products, by publishing a disclaimer on the disputed magazine cover and in all of its advertising media. At the trial on the merits, and in the post trial briefs and arguments, the parties have elaborated on and expanded, the factual underpinnings for the competing claims and defenses.

As the springboard for its claims, PRL insists that, from its inception, Polo Ralph Lauren has initiated, and vigorously pursued, an advertising theme which it has deemed "aspirational". PRL contends that through this "aspirational" style of advertising, it has consistently evoked "lifestyle images" that resonate with elegance, luxury, and distinctively American imagery. PRL complains that Westchester, through its current publication, has imitated and usurped that "aspirational advertising" to further its own goals at the expense of PRL's distinctive trademark. PRL points to Westchester's actions in hiring new editorial staff and displacing the number of articles on equestrian sports with "an abundant mix of elegant fashion, romantic travel, witty observations, [and] world-class reporting" as proof of an intent to infringe on its rights. PRL insists that this wholesale change to the original magazine is a "Big Bang" creation and no mere Darwinian step in the evolution of the periodical. Westchester responds that, on the contrary, it is simply an attempt to broaden its appeal beyond the membership of the United States Polo Association ("USPA"), and that its expansion is not tied in any way to PRL's image. The evolution vs. revolution argument is clear; what is less clear is the impact of the disputed evidence on the determination of a likelihood of confusion. It is undeniable that polo players, team owners, and followers are likely to be affluent and just as likely to be interested in other leisure activities. Certainly, it is safe to assume that polo enthusiasts are also interested in fashion, travel, and "world-class reporting". Westchester is adamant that, as the official magazine for the only American polo association, it has every right to evoke the elegance and opulence that it reports is attendant to that sport. In contrasting its readership ("the real deal"), to the typical Ralph Lauren consumer, Westchester argues that PRL is attempting to use the trademark laws to trample its first amendment right to disseminate the editorial content of its choice. In addressing these arguments, the parties bring into sharp focus Justice Frankfurter's comments in Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 62 S.Ct. 1022, 86 L.Ed. 1381 (1942). In speaking to the purpose and import of trademarks in the market setting, Justice Frankfurter stated the following:

The protection of trade-marks is the law's recognition of the psychological function of symbols. If it is true that we live by symbols, it is no less true that we purchase goods by them. A trade-mark is a merchandising short-cut which induces a purchaser to select what he wants, or what he has been led to believe he wants. The owner of a mark exploits this human propensity by making every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the means employed, the aim is the same- to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-mark owner has something of value. If another poaches upon the commercial magnetism of the symbol he has created, the owner can attain legal redress.

Id. at 205, 62 S.Ct. at 1024.

From the undisputed evidence, it is clear that since 1967, PRL, under its founder, Ralph Lauren, has built an image known to both national and international consumers, and it is one which encompasses diverse merchandise including fashions, accessories, home furnishings, fragrances, and other products. PRL contends that these diverse offerings are known immediately by the "Polo" name which has become famous and distinctive. (See Memorandum Order, Findings of Fact and Conclusions of Law on Defendants' Motion for a Preliminary Injunction ("July 1998 Memorandum Order"), p. 4). Over the years, PRL has registered a number of trademarks with the United States Patent and Trademark Office ("PTO"). These registrations have been referred to as the "Polo Trademarks", and each is detailed in the record. (Defendants' Exhibit # 43, # 44, July 1998 Memorandum Order, p. 4). These trademark registrations are in full force and effect and a great number of them have become incontestable under the Lanham Act, codified as amended at 15 U.S.C. § 1065. PRL protects these marks through legal action when necessary. (July 1998 Memorandum Order, p. 4).

Westchester is in the business of publishing magazines and, until the summer of 1997, published only specialty magazines such as "Cowboys & Indians". Westchester's general partner is Navasota, whose sole shareholder is John B. Goodman ("Goodman"). Mr. Goodman is an avid polo player and has been a member of the USPA since 1989. John Goodman currently serves on two USPA committees, as well as on the board of directors of the Museum of Polo and Hall of Fame. Mr. Goodman is also on the...