WWW Pharmaceutical Co., Inc. v. Gillette Co.
| Decision Date | 14 July 1992 |
| Docket Number | No. 89 Civ. 1942 (CBM).,89 Civ. 1942 (CBM). |
| Citation | 808 F. Supp. 1013 |
| Parties | W.W.W. PHARMACEUTICAL CO., INC., Plaintiff, v. The GILLETTE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of New York |
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John M. Keene, Graham, Campaign & McCarthy, P.C., New York City, for plaintiff.
Marie V. Driscoll, Robin, Blecker, Daley & Driscoll, New York City, for defendant.
Opinion on Plaintiff's Motion to Amend Judgment July 14, 1992.
OPINION ON MOTION FOR JUDGMENT AS A MATTER OF LAW AND FINDINGS OF FACT AND CONCLUSIONS OF LAW
Plaintiff commenced this action on March 21, 1989, claiming that defendant's unauthorized use of the terms SPORT and STICK in the packaging and marketing of its Right Guard deodorant and anti-perspirant products has injured plaintiff's federally registered trademark SPORTSTICK for lip balm. Plaintiff alleges four causes of action: Count 1, for infringement of a registered trademark under § 32 of the Lanham Act, 15 U.S.C. § 1114(1)(a); Count 2, for false designation of origin under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); Count 3, for trademark infringement and unfair competition under New York state law; and Count 4, for violation of New York's anti-dilution statute, § 368-d of the General Business Law of the State of New York. The court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1332, 1338 and 15 U.S.C. § 1121. Plaintiff demanded trial by jury on all issues and requested injunctive relief, monetary damages, and attorney's fees.
At the close of discovery, defendant moved for summary judgment on the grounds that defendant's use of the mark was a "fair use" as a matter of law. Judge Kenneth Conboy denied the motion by opinion dated December 5, 1989. The case was transferred to this court in October of 1991. The court held several pre-trial conferences for the purpose of narrowing the issues at trial and ruling on several motions in limine. The court's rulings on these motions are set forth in a Pre-trial Schedule and Order dated December 16, 1991. In this order, the court ruled that the trial would be bifurcated, with liability to be tried first, followed by trial on the issue of damages should plaintiff prevail on the issue of liability.
The liability stage of the trial commenced January 2, 1992. Plaintiff completed its case on January 7, 1992, at which time defendant moved to dismiss plaintiff's damages claim for failure to prove real and precise actual confusion, to dismiss plaintiff's complaint in its entirety for failure to establish liability as a matter of law, and for Judgment as a Matter of Law pursuant to Rule 50(a) of the Federal Rules of Civil Procedure. The court heard oral argument and granted the motion with respect to plaintiff's damages claim and reserved decision on the issue of liability for injunctive relief. The court then dismissed the jury, there being no issues of fact remaining for the jury to determine. The court now makes the following findings of fact and conclusions of law.
Plaintiff, a New York corporation, has been engaged in the business of selling lip balm since 1982. (PX 55) Plaintiff's lip balm is identified by the registered trademark SPORTSTICK. (Tr. 291) SPORTSTICK lip balm is sold through plaintiff's SPORTSTICK division, and is the only product plaintiff sells. (PTO 20) Plaintiff's founder, Steven Pliss, is also the president, sole shareholder, and sole employee of the company. (Tr. 3-4)
The SPORTSTICK lip balm business was originally established by Rumby International, Inc. (hereinafter "Rumby") in 1978. Rumby applied to register the trademark SPORTSTICK for use on and in connection with "lip pomade," and on May 11, 1982, was issued Certificate of Registration No. 1,194,944. In 1981, plaintiff purchased from Rumby all rights, title and interest in the trademark SPORTSTICK and the formula for lip balm sold under that trademark for $10,000. (Tr. 13; PX 1) At the time plaintiff purchased SPORTSTICK, it was being marketed exclusively in hotel gift shops. (Tr. 13) Mr. Pliss had no experience in marketing lip balm at the time plaintiff purchased SPORTSTICK. (Tr. 115)
Affidavits of use and incontestability were filed in support of plaintiff's registration of SPORTSTICK, and were accepted by the United States Patent and Trademark Office in January of 1989. (Tr. 291) Defendant has not challenged the validity and incontestability of plaintiff's registration of SPORTSTICK. There are no other federal trademark registrations for SPORTSTICK, or for SPORT STICK.
Plaintiff has continued to market and promote SPORTSTICK lip balm since 1982. (PTO 5) Plaintiff has used essentially the same trade dress in marketing SPORTSTICK, that is, a 2 5/8 inch long, 5/8 inch in circumference, royal blue-colored cylindrical tube and cap, with the mark SPORTSTICK prominently displayed on the tube in white lettering. (PX 4(e)) Plaintiff has used several different forms of external packaging in an effort to make SPORTSTICK more attractive to retailers, including two different types of hangstrips, point-of-sale displays known as "shoe boxes," and smaller display boxes. Plaintiff made modifications updating each of these packaging forms several times between 1982 and 1986. (Tr. 15) Plaintiff implemented the following product changes in the mid-1980s: plaintiff added three additional "flavors" of SPORTSTICK, sealed the tops of individual SPORTSTICKS, and added a UPC label to each product container. (Tr. 16; PX 4(e)1)
Plaintiff's SPORTSTICK is sold either from store aisle shelves, at check-out counters or in point-of-sale displays in retail outlets. (PTO 23-24) SPORTSTICK has been sold in pharmacies, supermarkets, mass marketing chains, convenience stores, and college bookstores. (PTO 23) At the greatest point in plaintiff's national sales, plaintiff had a total of seventy-five different sales accounts and sold SPORTSTICK in approximately 8,000 stores, including major national chains such as Safeway, Lucky Stores, Smith Stores, Arco, and Eckerd Drugstores. (Tr. 36-37) Plaintiff has sold SPORTSTICK in approximately forty states. (Tr. 37) Most of plaintiff's efforts to sell SPORTSTICK consisted of personal sales promotion trips and visits to stores by Mr. Pliss. (Tr. 31-32, 36) Mr. Pliss also participated in trade shows and used promotions combining sales of SPORTSTICK with give-away items such as caps, hats, rulers and cameras. (Tr. 17-19, 21-23; PX 7(a)-(p)) The standard retail price for SPORTSTICK is two dollars each, although it is sometimes sold for less. (PTO 19; Tr. 78)
Plaintiff engaged in modest advertising of SPORTSTICK from 1982 through the first quarter of 1988. In 1984, plaintiff had two thirty-second spot local television commercials produced. The commercials were broadcast in various local television markets from 1984 through the first quarter of 1988. (Tr. 20, 140; PX 8(1), 8(2)) Plaintiff has also advertised SPORTSTICK on local radio spots aired on approximately six local stations in mid-Atlantic cities and on state radio networks in six states. (Tr. 24-26) Plaintiff has also placed print advertisements for SPORTSTICK in college newspapers, trade papers, several local newspapers, two metropolitan editions of TV Guide, and several magazines targeting new mothers. (Tr. 26-31; PX 5(a)-(l)) Plaintiff's advertising slogan describes SPORTSTICK as a product "for sportspeople and lovers". (PX 4(a)-(e), 8(1)-(3)) Plaintiff's advertising expenses for fiscal years 1982 through 1990 totaled approximately $252,000. (PTO 23)
The annual gross sales of SPORTSTICK for fiscal years 1982 through 1990 were as follows:
1982: $ 56,714.52
1983: 42,779.00
1984: 171,390.00
1985: 233,267.00
1986: 59,893.00
1987: 46,030.00
1988: 30,345.00
1989: 11,229.00
1990: 14,756.00
(PTO 22) After plaintiff purchased SPORTSTICK in 1982, gross sales of SPORTSTICK increased, peaking at $233,267 in fiscal year 1985. In the period of 1986-1987, plaintiff decided to change suppliers and began employing a supplier in Silver City, New Mexico, in an effort to reduce production costs. (Tr. 37-38) The new supplier was unable to produce sufficient quantities of SPORTSTICK, however, and as a result, plaintiff lost most of its accounts and sustained a dramatic decrease in sales. (Tr. 37-38, 40) Major accounts lost during this period include Thrift Drug Stores, Revco Drug Stores, Eckerd, Safeway and Rite-Aid. (Tr. 37, 40, 122-24) Plaintiff's loss of sales during this period is admittedly unrelated to any conduct on the part of defendant. (Tr. 121, 340-41)
In late 1987, plaintiff again changed suppliers in an effort to re-establish its ability to supply SPORTSTICK to its customers. (Tr. 42, 121) Plaintiff began to experience an increase in sales during the first quarter of 1988. (Tr. 121) However, plaintiff's sales again declined at an increasing rate after the first quarter of 1988, and gross sales of SPORTSTICK for fiscal year 1989 totaled $11,229. As of January 3, 1992, gross sales of SPORTSTICK for fiscal year 1991, ending April 30, 1992, totaled approximately $78,000. (Tr. 92) From 1987 to the present, Mr. Pliss has made personal loans to plaintiff in the amount of approximately $224,000. (Tr. 93) Plaintiff's gross sales in the state of New York for the years 1984 through 1988 totaled $490, with sales to only four customers. (PTO 22)
Defendant is a Delaware corporation engaged in the business of selling a variety of personal care products, including razors and blades, shaving cream, deodorants and anti-perspirants, and other toiletries. (PTO 5) Defendant has sold personal deodorants under the RIGHT GUARD brand since 1959, and the parties have stipulated...
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