Western Pub. Co., Inc. v. Rose Art Industries, Inc.

• Decision Date: 31 July 1990
• Docket Number: No. 1423,D,1423
• Citation: 910 F.2d 57
• Parties: WESTERN PUBLISHING COMPANY, INC., Plaintiff-Appellant, v. ROSE ART INDUSTRIES, INC., Lawrence Rosen and Jeffrey Rosen, Defendants-Appellees. ocket 90-7291.
• Court: U.S. Court of Appeals — Second Circuit

Page 57

910 F.2d 57

15 U.S.P.Q.2d 1545

WESTERN PUBLISHING COMPANY, INC., Plaintiff-Appellant, v. ROSE ART INDUSTRIES, INC., Lawrence Rosen and Jeffrey Rosen,

Defendants-Appellees.

No. 1423, Docket 90-7291.

United States Court of Appeals, Second Circuit.

Argued April 30, 1990.

Decided July 31, 1990.

Neil M. Zipkin, New York City (Ira E. Silfin, Amster, Rothstein and Ebenstein, New York City, of counsel), for appellant.

Robert L. Epstein, New York City (Harold James, James & Franklin, New York City, of counsel), for appellees.

Before FEINBERG, MESKILL and WINTER, Circuit Judges.

MESKILL, Circuit Judge:

This is an expedited appeal, pursuant to 28 U.S.C. Sec. 1292(a)(1), from an order of the United States District Court for the Southern District of New York, Owen, J., denying plaintiff-appellant Western Publishing Company's motion for a preliminary injunction under the Lanham Trademark Act (Lanham Act), 15 U.S.C. Sec. 1051 et seq., and lifting a previously issued ex parte order temporarily restraining defendant-appellee Rose Art's shipment of the "Magnetic GoldenSlate" from inventory. 733 F.Supp. 698.

We affirm.

BACKGROUND

Plaintiff-appellant Western Publishing Company (Western) is a well established children's book and educational toy manufacturer widely known for, inter alia, its "Little Golden Book" products. Western owns more than one hundred federal trademark registrations for marks on what it calls the "Golden family," sales of which exceeded $850 million during the last five Defendant-appellee Rose Art Industries (Rose Art), a comparatively small, sixty-five year old firm also prominently engaged in the toy manufacturing business, recently developed and began selling a magnetic drawing toy under the name "Magnetic GoldenSlate." The GoldenSlate, which retails in the $10 to $15 price range, is a rectangular red plastic drawing slate with a gold colored screen capable of receiving and temporarily storing impressions written or drawn with a magnet-tipped stylus. Both the "Rose Art Brand" logo and the phrase "Magnetic GoldenSlate ^TM" are prominently displayed on the package and on the slate. Rose Art conducted a trademark availability search prior to introducing the GoldenSlate but had not, at the time of suit, registered the mark.

fiscal years. Advertising expenditures approximated $75 million for the same period.

On February 23, 1990, approximately one year after Rose Art first introduced the GoldenSlate at the annual toy industry show and after approximately 168,000 units had been sold, Western filed the instant suit alleging that the use of the GoldenSlate mark infringed Western's trademark rights under the Lanham Act. Western concedes, as it must, that it has no right to appropriate the term "Golden" for its exclusive use in the children's toy or game market. It nevertheless claims that Rose Art's use of the term in connection with the GoldenSlate could result in consumers mistakenly assuming that Western was the manufacturer of that product.

After obtaining an ex parte temporary restraining order (TRO) staying Rose Art's shipment of the GoldenSlate from inventory, Western promptly moved for a preliminary injunction against any further sales. The district court held an evidentiary hearing and found no likelihood of consumer confusion as to the source of the GoldenSlate. The court denied Western's motion for a preliminary injunction and lifted the previously issued TRO, which by that time had delayed Rose Art's shipment of inventory worth approximately $250,000. We subsequently denied Western's motion for an injunction pending this appeal, but granted appellant's request to expedite the appeal.

DISCUSSION

A. Preliminary Injunctions Under the Lanham Act

In order to obtain a preliminary injunction in this Circuit, the movant must demonstrate "(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief." Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979) (per curiam); see Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 206-07 (2d Cir.1979) (applying Jackson Dairy standard to Lanham Act trademark infringement case). However, assuming that a particular mark warrants protection under the Lanham Act, the requisite likelihood of success on the merits and irreparable harm can both be established by showing a " 'likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or ... simply confused, as to the source of the goods in question.' " Charles of the Ritz Group Ltd. v. Quality King Distribs., Inc., 832 F.2d 1317, 1321 (2d Cir.1987) (quoting Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978) (per curiam), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979)); accord Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 73 (2d Cir.1988). Our initial inquiry, therefore, is whether the term "Golden," as used by Western, is eligible for trademark protection.

B. Eligibility for Protection

Section 43(a) of the Lanham Act, which protects unregistered as well as registered marks, provides, in pertinent part:

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--

(1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person ...

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. Sec. 1125(a). ¹ The eligibility for and scope of protection under section 43(a), however, is dependent on the nature of the mark allegedly infringed--i.e., arrayed in an ascending order that reflects both their eligibility for trademark status and the degree of protection accorded, the categories are (1) generic (ineligible for protection), (2) descriptive (eligible for protection with proof of secondary meaning), (3) suggestive (eligible for protection without proof of secondary meaning), and (4) arbitrary or fanciful (eligible for protection without proof of secondary meaning and "with ease of establishing infringement"). See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir.1976) (Friendly, J.); see also PaperCutter, Inc. v. Fay's Drug Co., 900 F.2d 558, 561-62 (2d Cir.1990) (discussing Abercrombie & Fitch trademark categorization scheme); Thompson Medical Co. v. Pfizer Inc., 753 F.2d 208, 212-13 (2d Cir.1985) (same). But, as we have repeatedly cautioned, categorizing a mark is a "slippery business" and necessarily turns on "the particular context of the mark's use, the context of its time of use, and the context of its group of users." 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 747 F.2d 81, 87 (2d Cir.1984), cert. denied, 470 U.S. 1052, 105 S.Ct. 1755, 84 L.Ed.2d 818 (1985); accord Banff, Ltd. v. Federated Dep't Stores, Inc., 841 F.2d 486, 489 (2d Cir.1988).

In the instant case, concerned with both the commonality of the term "Golden" and the numerosity of third party registrations in connection with it, the district court deemed Western's use of the term to be "descriptive"--i.e., conveying " 'an immediate idea of the ingredients, qualities or characteristics of the goods.' " Abercrombie & Fitch, 537 F.2d at 11 (quoting Stix Prods., Inc. v. United Merchants & Mfrs., Inc., 295 F.Supp. 479, 488 (S.D.N.Y.1968)). Thus categorized, protection is dependent on proof of secondary meaning, or, in other words, proof that the public has come to associate the term with a particular source. On appeal, Western argues that its use of the term is "arbitrary"--i.e., so distinctive of a product's source that proof of secondary meaning is unnecessary--and, consequently, deserving of the highest degree of protection. See id. Although we have serious doubts as to whether Western's long-standing use of the term "Golden" in connection with both books and educational toys may properly be categorized as merely "descriptive" for purposes of Abercrombie & Fitch analysis, we need not resolve that question at this juncture. Even assuming that Western's use of the term warrants the highest degree of trademark protection, we conclude that, based on the present record, Western has failed to demonstrate the requisite likelihood of appreciable consumer confusion. It is to this critical requirement that we now turn.

C. Consumer Confusion

The "likelihood of confusion" as to product source is evaluated by balancing the following factors articulated by Judge Friendly in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961):

[T]he strength of [plaintiff's] mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of defendant's good faith in adopting its own mark, the quality of defendant's product, and the sophistication of the buyers.

Id. at 495. In reviewing the district court's application of the Polaroid factors, we note that " 'each specific finding is subject to a clearly erroneous standard, but the ultimate determination of the likelihood of confusion is a legal issue subject to de novo appellate review.' " Hasbro, Inc., 858 F.2d at 75-76 (quoting Banff, Ltd., 841 F.2d at 490). Because Western contests each of the district court's findings under the Polaroid analysis, we...