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TABLE OF CONTENTS I. FIRST AND FOREMOST: PROVING TRADEMARK OWNERSHIP A. First Use B. Intent-to-use II. BEING FIRST IS NOT EVERYTHING: PROVING TRADEMARK RIGHTS A. Trademark Categories B. Trade Dress 1. Definition 2. Concept v. Concrete Expression 3. Requirements a) Non-Functionality b) Distinctiveness 1) Inherently Distinctive 2) Secondary Meaning C. Product Configurations D. Other Types of Trademarks 1. Color 2. Slogans 3. Titles 4. Characters 5. Celebrities E. Incontestable Rights III. PROVING LIKELY CONFUSION A. Factors To Consider 1. Strength of Plaintiff’s Mark 2. Similarities in Marks 3. Proximity of Products 4. Defendant’s Intent 5. Sophistication of Purchasers 6. Evidence of Actual Confusion 7. Bridging the Gap 8. The Quality of Defendant’s Product B. General Rules IV. PROVING PARODY A. Definition B. Parody and Likely Confusion C. Parody and the First Amendment V. PROVING DILUTION UNDER FEDERAL AND STATE LAW A. Dilution Under the FTDA B. Dilution Under State Statutes C. Dilution and Parody D. Recent Case Law VI. PROVING FALSE ADVERTISING A. Elements of Proof B. Literal Falsity v. Implied Falsity C. Methods of Proof 1. Literal Falsity 2. Implied Falsity 3. The Test for Claims Based on Tests D. Proof of Intent to Deceive E. Puff the Magic Dragon: The Puffing Defense F. Recent Case Law VII. PROVING AFFIRMATIVE DEFENSES A. Genericness B. Abandonment C. Fair Use D. Laches 1. Affect of Laches on Preliminary Injunction 2. Affect of Laches on Permanent Relief E. Acquiescence F. Estoppel G. Fraud H. Unclean Hands I. Trademark Misuse J. Violation of the Antitrust Laws VIII. EARLY PRE-TRIAL MOTIONS A. Temporary Restraining Order B. Preliminary Injunction 1. The Standard 2. Speed Counts 3. Sample Decisions C. Motion to Dismiss D. Motion to Strike E. Motion to Transfer IX. OTHER PRE-TRIAL MOTIONS A. Motion to Bifurcate B. Motion to Amend the Pleadings C. Summary Judgment 1. The Supreme Court Trilogy Encourages Summary Judgment Motions 2. Summary Judgment Rulings re Likely Confusion 3. Summary Judgment Reversed: Facts Too Close to Call D. Motion in Limine X. SURVEY EVIDENCE A. Inference re Failure to Conduct Survey B. How Much is Enough C. Proper Universe XI. MONETARY RELIEF A. Defendant’s Profits B. Plaintiff’s Damages 1. The Need For Actual Harm 2. Harm To Reputation 3. Enhancement of Damages; Punitive Need Not Apply C. Punitive Damages (under State law only) D. Attorneys’ Fees E. Costs XII. TRADEMARK CONTEMPT A. Standard of Confusion as to Prior Infringer B. Infringer Beware Plaintiff in a trademark infringement action must prove ownership of a valid (protectable) trademark and that defendant’s use is likely to cause confusion. Here are the basics: I. FIRST AND FOREMOST: PROVING TRADEMARK OWNERSHIP A. First Use “[T]he first seller to use a mark in the sale of goods or services is the ‘owner’ and the ‘senior user.”‘ 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, � 16.2 [1][a] (3rd Ed. 1992). Plaintiff’s prior use must be: public; continuous; in the ordinary course of trade. Prior use can be defeated by: a finding that plaintiff’s mark is descriptive and did not acquire “secondary meaning” (identification with plaintiff) before defendant adopted its mark. Scott Paper Co. v. Scott’s Liquid Gold, Inc., 589 F.2d 1225, 1231- 32 (3d Cir. 1978). B. Intent-to-use The Lanham Act was amended in 1988 to provide for the filing of applications based on intent to use. 15 U.S.C. �1051(b) The intent-to-use application will not be registered until a statement of use is accepted by the United States Patent and Trademark Office. 15 U.S.C. � 1051(d)(1). Once registration issues, the filing date of the intent-to-use application will be considered the date of first use. If another party adopts the same mark after the intent-to-use filing date, the intent-to-use registration will be accorded priority. Thus, if you really have plans for commercial use, an intent-to-use application is desirable to (1) get your claim on record and (2) establish your priority date. Keep in mind, however, that another party’s use or filing before your intent-to-use filing date will still give that party prior rights. 15 U.S.C. � 1057(c). Some other points to keep in mind with intent-to-use applications are: Intent to use can be based on plans to license. Lane Ltd. v. Jackson Int’l Trading Co., 33 U.S.P.Q.2d 1351, 1356 (T.T.A.B. 1994); see also T.M.E.P. 902.01(a). An intent-to-use application will usually not be accepted for descriptive marks. T.M.E.P. 1212.09. An intent-to-use application cannot be assigned prior to the filing of a verified statement of use except to a successor to the business (or portion of the business related to the mark) of applicant if that business is ongoing and existing. 15 U.S.C. � 1060; The Clorox Co. v. Chemical Bank, 40 U.S.P.Q.2d 1098 (TTAB 1996). The TTAB accords an intent-to-use application nationwide priority as of the application filing date. 15 U.S.C. �1057(c); Zirco Corp. v. American Telephone & Telegraph Co., 21 U.S.P.Q.2d 1542 (TTAB 1991). An intent to use application filing date may be relied on to defend an opposition proceeding before the TTAB. Larami Corp. v. Talk To Me, Inc., 36 U.S.P.Q.2d 1840, 1844-5 (TTAB 1995) [applicant entitled to rely on intent-to-use filing date when opposer's first use was after applicant's filing date and before applicant's first use date]. In federal court an intent-to-use filing date confers a right of priority contingent on the registration of the mark on the principal register. See Windows User, Inc. v. Reed Business Publishing Ltd., 795 F.Supp. 103, 107-108 (S.D.N.Y. 1992). Mere filing of an intent-to-use application does not give the intent to use applicant access to the federal courts. Fila Sport S.P.A. v. Diadora America Inc., 141 F.R.D. 74, 75 (N.D. Ill. 1991). But if the intent to use applicant has use of the mark on other goods, he may satisfy the use in commerce requirement necessary to federal jurisdiction. You may later claim a date of first use that predates the filing date of an intent-to-use application. Don’t let any doubts about first use hold you up. File the intent-to-use application and then determine whether you have use sufficient to claim as first use in commerce. TMEP � 904. Be aware that courts still have trouble sorting out ITU priority v. actual use. For example, the court in the Virgin Cola case held that an intent-to-use applicant lacked priority over a later user. The later user had previously used the mark for other goods and services and made actual use of the mark VIRGIN for cola before the ITU applicant’s first actual use of the mark for cola. Redisar Ltd. v. Virgin Enterprises Ltd., 33 U.S.P.Q.2d 2020 (S.D.N.Y. 1995). In the WarnerVision case, the Second Circuit accepted the ITU filing date as a basis for defending against an action brought by a later user. WarnerVision Entertainment v. Empire of Carolina, 38 U.S.P.Q.2d 1179, 1186 (S.D.N.Y. 1996), rev’d, 40 U.S.P.Q.2d 1855 (2d Cir. 1996). II. BEING FIRST IS NOT EVERYTHING: PROVING TRADEMARK RIGHTS A. Trademark Categories Proof required to establish trademark validity depends on the type of trademark. Trademarks are generally categorized as follows: Arbitrary or fanciful Terms that have no relation to the product — Proof of public identification with single source (secondary meaning) is not required. Jellibeans, Inc. v. Skating Clubs of Georgia, Inc., 716 F.2d 833, 835 (11th Cir. 1983) [JELLI BEAN arbitrary for roller skating rink]. Arbitrary mark is strong even without proof that it is known. Kookai S.A. v. Shabo, 950 F.Supp. 605 (S.D.N.Y. 1997). Suggestive Terms that subtly connote something about the product — secondary meaning is not required. Physicians Formula Cosmetics, Inc. v. West Cabot Cosmetics, Inc., 857 F.2d 80 (2d Cir. 1988) [PHYSICIANS FORMULA suggestive for skin cream]. Another example: “100% Time Release Moisturizer” is suggestive rather than descriptive when read alone or as part of a phrase. (Can have multiple interpretations). Estee Lauder Inc. v. The Gap Inc., 108 F.3d 1503 (2d Cir. 1997). Descriptive Terms that immediately describe something about the product or service — secondary meaning is required. Security Center, Ltd. v. First Nat’l Sec. Centers, 750 F.2d 1295, 1299 (5th Cir. 1985) [SECURITY CENTER descriptive for secure storage facility]. Generic Terms that designate a general type or class of goods, e.g., “Camera,” or a subcategory of a more general class, e.g., “light” beer, “diet” cola. Restatement (Third) of Unfair Competition � 15, p. 149 (1993). Generic terms cannot be protected as trademarks, even if secondary meaning is proven. To prove a mark generic, defendant must show that the public does not understand the term as a trademark, i.e., as identifying the goods as coming from a single source. Murphy Door Bed Co., Inc. v. Interior Sleep Systems, Inc., 874 F.2d 95 (2nd Cir. 1989). ["Murphy bed" generic for bed which folds into wall enclosure]. Berner International Corp. v. Mars Sales Co., 987 F.2d 975 (3rd Cir. 1993) [remanded to determine what "air door" means to relevant consumers]. BellSouth Corp. v. DataNational Corp., 60 F.3d 1565, 1569-1570 (Fed. Cir. 1995) [widespread use of "Walking Fingers" logos for yellow page directories by different companies establishes genericness under purchaser understanding test]. Anheuser-Busch Inc. v. John Labatt Ltd., 89 F.3d 1339 (8th Cir. 1996) [Ice not generic for beer.] B. Trade Dress 1. Definition: The trade dress of a product “involves the total image of a product and may include features such as size, shape, color or color combinations, texture [or] graphics.” John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir. 1983); [overall appearance of check book stubs protected]; Stormy Clime, Ltd. v. Progroup, Inc., 809 F.2d 971, 974 (2d Cir. 1987) [combination of high-sheen waterproof fabric, shingle/vents, and hood for jackets not protected]. 2. Concept v. Concrete Expression: Trade dress does not protect the concept of generalized appearance but does protect concrete expression. Trade dress composed exclusively of nonprotectable elements might be generic. Jeffrey Milstein Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27 (2d Cir. 1995) [greeting cards using cover of die-cut photographs of animals/humans/inanimate objects with blank white pages following not protectable.] Where no commonly used alternative effectively communicates the same functional information, the term that denotes the product is generic. Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137 (2d Cir. 1997) ["Honey Brown" is generic as applied to distinct category of beer]. 3. Requirements Trade Dress will be protected if it is a) not functional and b) inherently distinctive or has acquired secondary meaning. a) Non-Functionality Trade dress is functional and not protectable if it is essential to the utility of the product or affects the cost of manufacture. Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 850 n. 10 (1982). Trade dress protection was denied where copied configuration is significant part of patented invention — even if configuration is non-functional in trademark sense, i.e. not necessary to effective competition. Vornado Air Circulation Systems Inc. v. Duracraft Corp., 58 F.3d 1498, 1510 (10th Cir. 1995). Aesthetic Functionality Design of silverware pattern found to be aesthetically functional and not protected where use of design necessary for effective competition. Wallace International Silversmiths, Inc. v. Godinger Silver Art Co., Inc., 916 F.2d 76 (2d Cir. 1990). No aesthetic functionality where many products present same general fashion impression but do not use plaintiff’s design. L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993). Aran sweater design comprising unique combination of public domain elements not aesthetically functional as a matter of law; summary judgment denied. Banff Ltd. v. Limited, Inc., 869 F.Supp. 1103 (S.D.N.Y. 1994). b) Distinctiveness 1) Inherently Distinctive Trade dress is inherently distinctive where: a) Trade dress consists of arbitrary features that do not describe the product or assist in effective packaging. b) Trade dress creates a commercial impression distinct from accompanying words. c) Trade dress is unique or unusual (as opposed to common), and not a mere refinement of a commonly known form of ornamentation. d) Trade dress consists of unique combination of descriptive features. Paddington Corp. v. Attiki Importers & Distributors, Inc., 996 F.2d 577, 583 (2nd Cir. 1993) [Clear ouzo bottle with large side label and neck label in red, white and black and NO. 12 in large block letters protected]. Taco Cabana Int., Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1120 (5th Cir. 1991), aff’d., 505 U.S. 763, 112 S.Ct. 2753, reh’g denied, 120 L. Ed. 2d 947, 113 Sup. Ct. 20 (1992) [restaurant layout, festive decoration and color scheme protected]. 2nd Circuit applies Abercrombie test to determine inherent distinctiveness. Fun-Damental Too Ltd. v. Gemmy Industries Corp., 111 F.3d 993 (2d Cir. 1997). Trade dress of trade show is protected since it has a unique combination of features such as name, date and location. Toy Manufacturers of America, Inc. v. Helmsley-Spear Inc., 960 F.Supp. 673 (S.D.N.Y. 1997). Trade Dress in Common Use is Not Inherently Distinctive EFS Mktg., Inc. v. Russ Berrie & Co., Inc., 836 F.Supp. 128, 136 (S.D.N.Y. 1993) [Appearance and body features of troll dolls in common use not protected]. 2) Secondary Meaning Trade dress that is not inherently distinctive requires proof of secondary meaning. (a) Definition Secondary meaning is found where purchasers identify mark with single source. Thompson Medical Co., Inc. v. Pfizer Inc., 753 F.2d 208, 217 (2nd Cir. 1985). (b) Factors Secondary Meaning may be proven by: Length of use Sales/advertising Unsolicited public comments Licenses and requests for licenses Copying by defendant Consumer correspondence/testimony Surveys Harlequin Enters. Ltd. v. Gulf & Western Corp., 644 F.2d 946, 950 (2d Cir. 1981). Isaly Co. v. Kraft, Inc., 619 F.Supp. 983, 990-991 (D.C. Fla. 1985), aff’d in part and rev’d in part sub nom., Ambrit, Inc. v. Kraft, Inc., 805 F.2d 974 (11th Cir. 1986). Note advertising should be directed to the claimed trademark: The design configuration of wrap ring was refused registration because the owner’s advertising did not call attention to the design as its trademark. In re Sandberg & Sikorski Diamond Corp., 42 U.S.P.Q.2d 1544 (T.T.A.B. 1996). C. Product Configurations The courts are split as to whether stricter standards should be applied to evaluate protectibility for product configurations (shape) as compared with overall packaging appearance. The 3rd Circuit has adopted strict standards for finding inherent distinctiveness as to product configurations. The trade dress must be: . Unusual and memorable; . Conceptually separable from the product; . Likely to serve primarily as designator of product’s origin. Duraco Products Inc. v. Joy Plastic Enterprises, Ltd., 40 F.3d 1431 (3rd Cir. 1994). The 8th Circuit in Stuart Hall says: same standard should apply to product configuration and trade dress. Issue is how claimed trademark relates to product. If the design is dictated by the nature of the product, secondary meaning must be proven. If the design is only tenuously connected with the nature of the product, it is inherently distinctive and secondary meaning need not be proven. Stuart Hall Company Inc. v. Ampad Corp., 51 F.3d 780 (8th Cir. 1995). The Second Circuit says: The standards for inherent distinctiveness for package trade dress are not appropriate for product configuration. Test for product configuration is whether the configuration is likely to serve primarily as a designator of origin of the product. Product designs are not ordinarily considered inherently distinctive and thus normally require proof of secondary meaning. Knitwaves Inc. v. Lollytogs Ltd. (Inc.) d/b/a French Toast,36 U.S.P.Q.2d 1737 (2d Cir. 1995). But see New York District Court decision disagreeing with Second Circuit. Krueger Int’l., Inc. v. Nightingale Inc.,915 F.Supp. 595, 602 (S.D.N.Y. 1996). Courts have noted that in “trade dress product configuration” cases, special care must be taken, because product features actually comprise the product. “Where product configurations are concerned, we must be especially wary of undermining competition. Competitors have broad rights to copy successful product designs when those designs are not protected by (utility or design) patents. It is not unfair competition for someone to trade off the goodwill of a product …it is only unfair to deceive consumers as to the origin of one’s goods and thereby trade off the good will of a prior producer.” Versa Products Co., Inc. v. Bifold Co. (Manufacturing) Ltd.,50 F.3d 189, 207 (3d Cir. 1995). Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 656 (7th Cir. 1995). [Court denies trade dress protection for "a rounded, low profile head configuration with a vertical slot which is aligned with the body of the cable tie... (etc.)," because of lack of secondary meaning]. D. Other Types of Trademarks 1. Color A single color is entitled to registration and protection. Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 131 L. Ed. 2d 248, 115 S. Ct. 1300 (1995). Color will not be protected where it is functional. Pink is functional for stomach medicine – it creates pleasing effect for Pepto-Bismol stomach medicine. Norwich Pharmacal Co. v. Sterling Drug., Inc., 271 F.2d 569, 572 (2d Cir. 1959). Pink is not functional for insulation. In re Owens-Corning Fiberglas Corp., 774 F.2d 1116 (Fed. Cir. 1985). 2nd Cir. says, color may never be inherently distinctive. Color red for swiss army knife does not acquire secondary meaning because of third party use. Foreclosing color red would restrict effective competition to extent public views red handles as a familiar feature. Forschner Group Inc. v. Arrow Trading Co., 124 F.3d 137 (2d Cir. 1997). 2. Slogans Slogans are protectable if used to identify and distinguish source. YOUR FINANCIAL SECURITY IS OUR BUSINESS In re Sottile, 156 U.S.P.Q. 655 (T.T.A.B. 1968). QUALITY THROUGH CRAFTSMANSHIP In re Hallicrafters Co., 153 U.S.P.Q. 376 (T.T.A.B. 1967). DEDICATED TO ACHIEVING THE HIGHEST LEVEL OF PROFESSIONALISM In re National Training Center of Lie Detection, Inc., 226 U.S.P.Q. 798 (T.T.A.B. 1985). Slogans are not protectable where: The slogan does not create a commercial impression separate and apart from the other material on the labels. NATUR-ALL-IZE YOUR HAIR COLORING used only in the full slogan NATUR-ALL- IZE YOUR HAIR COLORING WITH ANOTHER NEW SERVICE. In re Morganroth, 208 U.S.P.Q. 284, 285 (T.T.A.B. 1980). The slogan is viewed not as a trademark but merely as an explanatory, instructional, or informational statement. GO AHEAD-TRY AND FINGERNAIL THIS! In re Illinois Bronze Powder & Paint Co., 188 U.S.P.Q. 459, 463 (T.T.A.B. 1975). The slogan is a familiar expression with an ordinary nontrademark meaning. THINK ABOUT IT. In re European-Am. Bank & Trust Co., 201 U.S.P.Q. 788, 790 (T.T.A.B. 1979). 3. Titles Titles are protectable if suggestive or arbitrary with respect to the contents of the work, or they are descriptive but have acquired secondary meaning. 4. Characters Certain aspects of characters appearing in books, television, or movies are protectable, e.g., names, physical appearances, and costumes. Character traits and ability, however, are not protectable. Walt Disney Co. v. Powell, 698 F.Supp. 10, 12 (D.C. Cir. 1988), modified 897 F.2d 565 (D.C. Cir. 1990). 5. Celebrities The celebrity’s “persona,” e.g., looks, dress, or sound may be protected against unauthorized use. Prudhomme v. Procter & Gamble Co., 800 F.Supp. 390 (E.D. La. 1992) [use of look alike Chef Prudhomme in coffee commercial found actionable]. Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992) [Doritos corn chip commercial imitating Tom Waits singing voice enjoined]. White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992) [use of robot with Vanna White wig, gown, jewelry and elements of Wheel of Fortune game show raises issue of fact as to likely confusion; summary judgment for defendant reversed]. E. Incontestable Rights a. Incontestability is achieved 5 years after issuance of registration upon filing a Declaration that the mark has been in continuous use on the goods recited in registration for 5 years. 15 U.S.C. 1065. b. Validity of incontestable mark may not be attacked on grounds of descriptiveness. 15 U.S.C. � 1127; Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 198 (1985). c. Can incontestable registration be attacked on grounds of functionality? One Court of Appeals says n Shakespeare Co. v. Silstar Corp. of America, Inc.,9 F.3d 1091 (4th Cir. 1993). d. Incontestability does not preclude argument that mark is descriptive/weak for likely confusion purposes. Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922 (4th Cir. 1995). III. PROVING LIKELY CONFUSION Plaintiff must prove that defendant’s use is likely to cause confusion by an appreciable number of ordinarily prudent purchasers. A. Factors To Consider In determining the likelihood of confusion, courts consider the following factors sometimes called the Polaroid Factors. Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820 (1961). 1. Strength of Plaintiff’s Mark A strong mark is entitled to a greater scope of protection than a weak mark. Conagra, Inc. v. George A. Hormel, & Co., 990 F.2d 368 (8th Cir. 1993) [HEALTHY CHOICE for microwave food products relatively weak mark and entitled to less protection from infringement]. Determination of trademark strength is affected by: a. Type of mark In descending order of strength are arbitrary/fanciful marks, suggestive marks, descriptive marks. (See Section IIA supra.) b. Advertising and promotion: more is better Kraft General Foods, Inc. v. Allied Old English, Inc., 831 F.Supp. 123, 129-130 (S.D.N.Y. 1993). c. Third party use of similar marks Various views on third party use: Extensive third party use of SUN is evidence of no likelihood of confusion. Sun Banks of Florida, Inc. v. Sun Fed. Sav. & Loan Ass’n., 651 F.2d 311, 316 (5th Cir. 1981). 3rd party registrations and uses of mark (FAIRWAY) for related pro ducts and services would make the mark less strong if they were in the same market, but their use in different markets and for products and services that are not closely related does not undermine plaintiff’s claim of strength. Fisons Horticulture Inc. v. Vigoro Indus. Inc., 30 F.3d 466, 479 (3rd Cir. 1994). Third party use does not diminish trade dress rights unless use is so extensive that the trade dress no longer functions to identify source. AmBrit v. Kraft, Inc., 805 F.2d 974, 980 (11th Cir. 1986), repub. at, 812 F.2d 1531, 1537 (11th Cir. 1986), cert. denied, 481 U.S. 1041 (1987). Third party infringement is irrelevant. E. & J. Gallo Winery v. Consorzio del Gallo Nero, 782 F.Supp. 457 (N.D. Cal. 1991). STX Inc. v. Bauer USA Inc., 43 U.S.P.Q.2d 1492 (N.D. Cal. 1997), citing Century 21 Real Estate Corp. v. Sondlin, 846 F.2d 1175, 1181 (9th Cir. 1988). Third party registrations are not evidence of use, and are not proof that consumers are familiar with the mark. Helene Curtis Industries Inc. v. Suave Shoe Corp., 13 U.S.P.Q. 2d 1618, 1622 (T.T.A.B. 1989) Telephone book listings are given greater weight as evidence of third party use for services (as opposed to goods) because mark is presumed in use for advertised services. Lloyd’s Food Products Inc. v. Eli’s Inc., 987 F.2d 766, 768 (Fed. Cir. 1993). Strength of mark in PTO proceeding is not diminished by third party registrations. Olde Tyme Foods Inc. v. Roundy’s Inc., 961 F.2d 200, 203-204 (Fed. Cir. 1992). 2. Similarities in Marks Similarities judged by: a. Sound, appearance and meaning Nikon Inc. v. Ikon Corp., 987 F.2d 91 (2nd Cir. 1993). Marks judged by sound, appearance and translation should not be judged side by side. Daddy’s Junky Music Stores, Inc. v. Big Daddy’s Family Music Center, 109 F.3d 275 (6th Cir. 1997). Close similarity in sound is a factor to consider when determining likelihood of confusion. TBC Corp. v. Holsa Inc., 126 F.Supp. 1470 (Fed. Cir. 1997) [Fed. Cir. found Grand Slam for tires likely to cause confusion with Grand Am for tires]. b. Marketplace use Comparison should be in context of marketplace use, e.g., style of presentation, appearance of packaging. W.W.W. Pharmaceutical Co., Inc. v. Gillette Co., 984 F.2d 567, 573 (2nd Cir. 1993) [SPORTSTICK for lip balm not confusing with SPORT STICK for deodorant: summary judgment granted]. Similar trade dress enhances similar commercial impression. Kenner Parker Toys Inc. v. Rose Art Industries Inc, 963 F.2d 350 (Fed. Cir. 1992), cert. denied, 113 S.Ct. 181 (1992) [FUNDOUGH confusing with PLAY-DOH]. Trade dress can be considered in PTO proceedings as to whether marks create a similar commercial impression [dissent disagrees]. Burns Philp Food Inc. v. Modern Products Inc., 28 U.S.P.Q.2d 1687 (Fed. Cir. 1993). c. The House Mark Defense Defendant’s use of house mark may avoid infringement. Merriam-Webster, Inc. v. Random House Inc., 35 F.3d 65, 71 (2d Cir. 1994) [conspicuous use of house marks/company logos significantly distinguishes parties' trade dress; jury finding of trade dress infringement reversed]. L.A. Gear Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993) [use of defendant's name on sneakers rebuts presumption of likely confusion from copying]. Aktiebolaget Electrolux v. Armatron International, Inc., 999 F.2d 1 (1st Cir. 1993) [House marks prevent confusion between Weed Eater and Leaf Eater even though plaintiff's mark is strong. Injunction granted against use of plaintiff's mark alone, but plaintiff's use permitted when coupled with house mark.] Defendant’s use of house mark may not avoid infringement. Tanel Corp. v. Reebok International Ltd., 774 F.Supp. 49 (D. Mass. 1990) [company name does not avoid confusion]. A.T. Cross Co. v. Jonathan Bradley Pens, Inc., 470 F.2d 689, 692 (2d Cir. 1972). [Addition of term "by Bradley" to Lacrosse is "an aggravation, and not a justification"; LA CROSSE by Bradley found confusing with CROSS mechanical pens and pencils]. 3. Proximity of Products Closely related goods are more likely to be attributed to the same source. Restatement (Third) of Unfair Competition � 21 p. 233 (1993). Union Carbide Corp. v. Ever-ready, Inc., 531 F.2d 366 (7th Cir. 1976), cert denied, 429 U.S. 830 (1976). Courts will consider similarities of: media advertising retail outlets location in retail outlets intermingling of goods on same shelf Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 941 (10th Cir. 1983). 4. Defendant’s Intent a. Bad intent is not required to prove infringement. Official Airline Guides Inc. v. Goss, 6 F.3d 1385, 1394 (9th Cir. 1993). But when you have it, flaunt it! b. Evidence re intent Plaintiff’s knowledge of defendant’s mark does not per se prove bad faith. Mushroom Makers, Inc. v. R.G. Barry Corp., 441 F.Supp. 1220, 1230 (S.D.N.Y. 1977), aff’d, 580 F.2d 44 (2d Cir. 1978). Defendant’s copying of elements other than plaintiff’s mark supports bad faith. Consider similarities in packaging, type style and colors. Bad faith may be found where defendant has no credible explanation for the adoption of his mark. Kiki Undies Corp. v. Promenade Hoisery Mills, Inc., 411 F.2d 1097, 1101 (2d Cir. 1969). c. Presumptions flowing from defendant’s intent to capitalize on plaintiff’s mark: Presumption that plaintiff’s mark has acquired secondary meaning (i.e., public identification with single source). Thompson Medical Co., Inc. v. Pfizer Inc., 753 F.2d 208, 217 (2nd Cir. 1985). Presumption that defendant’s use is likely to cause confusion. Osem Food Industries Ltd. v. Sherwood Foods, Inc., 917 F.2d 161 (4th Cir. 1990). Perfect Fit Indus., Inc. v. Acme Quilting Co, Inc., 618 F.2d 950, 954 (2d Cir. 1980). Presumption may vary depending on Circuit. Schwinn Bicycle Co. v. Ross Bicycles Inc., 870 F.2d 1176, 1183-1185 (7th Cir. 1989) [defendant's intent to capitalize is factor, but not decisive]. d. Intent to Compete v. Intent to Deceive Defendant inferred that consumers like brooms with contrasting color bands after noticing that plaintiff’s brooms were selling briskly, and decided to climb on the bandwagon. The Seventh Circuit called that “competition, not bad faith, provided there is no intention to confuse,” Libman Co. v. Vining Industries Inc., 69 F.3d 1360, 1363 (7th Cir. 1995). 5. Sophistication of Purchasers The more sophisticated and knowledgeable the purchaser, the less the danger of confusion. Purchaser sophistication may have little impact when marks are very similar. Daddy’s Junky Music Stores Inc. v. Big Daddy’s Family Music Center, 109 F.3d 275 (6th Cir. 1997). Sophistication is determined by: a. Price of products Buyers exercise greater care in their purchases of expensive goods. Official Airline Guides Inc. v. Goss, 6 F.3d 1385, 1393 (9th Cir. 1993). b. Types of products Is product subject to impulse purchase or will it be closely examined prior to purchase? Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 941 (10th Cir. 1983). c. Experience of purchaser Will product be purchased by professional who can be expected to know the difference? Astra Pharmaceutical Prods., Inc. v. Beckman Instruments, Inc., 718 F.2d 1201, 1206 (1st Cir. 1983). or by ordinary gullible public? Florence Mfg. Co. v. J.C. Dowd & Co., 178 F.73, 75 (2d Cir. 1910). 6. Evidence of Actual Confusion Actual confusion is not required – likelihood of confusion is the test. Hills Bros. Coffee, Inc. v. Hills Supermarkets, Inc., 428 F.2d 379, 380 (2d Cir. 1970). Absence of actual confusion may be persuasive of no likelihood of confusion. Amstar Corp. v. Domino’s Pizza, Inc., 615 F.2d 252, 263 (5th Cir. 1980), cert. denied, 449 U.S. 899 (1980). But absence of actual confusion may not be persuasive where: a. The products represent a small investment to consumer and are unlikely to malfunction: actual confusion not likely to manifest itself to the manufacturer. Fisons Horticulture Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 476 (3rd Cir. 1994). b. Defendant has recently entered the market. Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 875 (2d Cir. 1986). Presence of actual confusion may be persuasive of likelihood of confusion. World Carpets, Inc. v. Dick Littrell’s New World Carpets, 438 F.2d 482, 489 (5th Cir. 1971). But actual confusion may not be persuasive where: a. confusion is de minimis. Official Airline Guides Inc. v. Goss, 6 F.3d 1385, 1393 (9th Cir. 1993) [7 misdirected forms out of 80,000 de minimis]. b. inference of confusion is based on declarations of plaintiff’s relatives. Lloyd’s Food Products Inc. v. Eli’s Inc., 987 F.2d 766 (Fed. Cir. 1993). 7. Bridging the Gap Bridging the gap has been defined as “the senior user’s interest in preserving avenues of expansion and entering into related fields.” C.L.A.S.S. Promotions, Inc. v. D.S. Magazines, Inc., 753 F.2d 14, 18 (2d Cir. 1985). Second Circuit statement: “[T]he intent of the prior user to expand or its activities in preparation to do so, unless known by prospective purchasers, does not affect the likelihood of confusion.” Lang v. Retirement Living Pub. Co., Inc., 949 F.2d 576, 582 (2d Cir. 1991) [emphasis in original]. 8. The Quality of Defendant’s Product Good quality is not a defense. Wesley-Jessen Div. of Schering Corp. v. Bausch & Lomb, Inc., 698 F.2d 862, 867 (7th Cir. 1983). But bad quality will make it easier for plaintiff to prove irreparable harm. On the other hand, some courts say difference in quality helps to prevent confusion. Plus Products v. Plus Discount Foods, Inc., 722 F.2d 999, 1008 (2nd Cir. 1983). Parenting Unlimited Inc. v. Columbia Pictures Television, Inc., 743 F.Supp. 221, 230, (S.D.N.Y. 1990). B. General Rules Comparison of marks should not be side by side. Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366 (7th Cir. 1976). Comparison should not be based on dissection–the marks should be viewed as a whole. Franklin Mint Corp. v. Master Mfg. Co., 667 F.2d 1005, 1007 (C.C.P.A. 1981). Heartsprings Inc. v. Heartspring Inc., 949 F.Supp. 1539 (D.KS 1996) [Heartsprings found not confusing with Heartsprings due to different logo use]. Similarity “is determined on the basis of the total effect of the designation, rather than on a comparison of individual features.” Arrow Fastener CO., Inc. v. Stanley Works, 59 F.3d 384, 394-395 (2nd Cir. 1995). IV. PROVING PARODY A. Definition: 1. Dictionary Definition: a literary or musical work in which the style of an author or work is closely imitated for comic effect or in ridicule. Merriam-Webster’s Collegiate Dictionary (10th ed. 1993). 2. Definition In Trademark Context Humorous imitation of plaintiff’s trademark. B. Parody and Likely Confusion Likely confusion in parody cases typically occurs where purchasers believe that defendant’s product is endorsed, approved or somehow associated with plaintiff. The more obvious the parody, the harder it becomes to prove that the public believes the product is sponsored/approved by plaintiff: the public is less likely to think that a trademark owner is poking fun at his own trademark. Jordache Enters., Inc. v. Hogg Wyld, Ltd., 625 F.Supp. 48 (D.N.M. 1985), aff’d, 828 F.2d 1482 (10th Cir. 1987) [LARDASHE large-size designer jeans play on JORDACHE designer jeans not likely to cause confusion]. Imitation of distinctive cover features of the Old Farmer’s Almanac by New York magazine created no likelihood of confusion because it was clearly a joke. Yankee Publishing Inc. v. News America Publishing Inc., 809 F.Supp. 267, 282 (S.D.N.Y. 1992). The less obvious the parody, the easier it is to demonstrate likely confusion. Schieffelin & Co. v. Jack Co. of Boca, Inc., 725 F. Supp. 1314, 1321 (S.D.N.Y. 1989) [simulation of DOM PERIGNON bottle and label by CHAMPOP popcorn not sufficiently strong (obvious) parody to destroy potential for consumer confusion]. As to distasteful parodies, defendant will argue that purchasers are not likely to believe that the trademark owner has approved defendant’s use. Nevertheless, courts have shown an aversion to parodies that besmirch the trademark owner’s reputation. Mutual of Omaha Ins. Co. v. Novak, 775 F.2d 247 (8th Cir. 1985) [MUTANT OF OMAHA likely to cause confusion with MUTUAL OF OMAHA for T-shirts protesting nuclear arms.] A survey can help establish likely confusion. Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769, 772 (8th Cir. 1994) [mock ad headlined: "ONE TASTE AND YOU'LL DRINK IT OILY - MICHELOB OILY"; showing polluted water/oil slick and dead fish pouring out of Michelob Dry bottle; survey relied on in finding likely confusion]. A survey may not help. Jordache Enters., Inc. v. Hogg Wyld, Ltd., 625 F.Supp. 48 (D.N.M. 1985), aff’d, 828 F.2d 1482 (10th Cir. 1987). C. Parody and the First Amendment Consumer protection from confusion must be balanced against First Amendment rights of free speech. “Somewhat more risk of confusion is to be tolerated when a trademark holder seeks to enjoin artistic/editorial parody (as opposed to commercial parody use).” Plaintiff must show that defendant’s use caused significant likelihood of confusion. Cliffs Notes, Inc. v. Bantam Doubleday Dell Pub. Group, Inc., 886 F.2d 490, 495 (2nd Cir. 1989) [SPY NOTES held to be permissible artistic/ editorial parody of CLIFFS NOTES]. V. PROVING DILUTION UNDER FEDERAL AND STATE LAW A. Dilution Under The Federal Trademark Dilution Act (FTDA) 1. The Purpose of the FTDA The FTDA is intended to provide national uniformity by making a dilution claim available regardless of the state where suit is brought and by providing nationwide injunctive relief. H.R. Rep. No. 374, 104th Cong., 1st Sess. pt. 2 (“purpose and summary”) (1995). 2. Dilution Defined by the FTDA The FTDA provides for the protection from “dilution of the distinctive quality of [a] famous mark” notwithstanding the absence of likelihood of confusion or competition between the parties. 15 U.S.C.A. � 1125(c); 1127. The term “dilution” is defined as: “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of – (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception. 15 U.S.C.A. � 1127. 3. The “Famous Mark” Requirement In order to qualify for protection under the FTDA, plaintiff’s mark must be “famous”. The FTDA lists the following factors to consider in “determining whether a mark is distinctive and is famous”: “(A) the degree of inherent or acquired distinctiveness of the mark; “(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used; “(C) the duration and extent of advertising and publicity of the mark; “(D) the geographical extent of the trading area in which the mark is used; “(E) the channels of trade for the goods or services with which the mark is used; “(F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks owner and the person against whom the injunction is sought; “(G) the nature and extent of use of the same or similar marks by third parties; and “(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.” The “famous mark” requirement appears to be a higher standard than the state anti-dilution statute requirement that the mark be distinctive. Although some courts limit state dilution protection to extremely strong marks, a mark may be strong in the sense of unique and arbitrary without being famous. Some famous marks under the Federal Dilution Act: “Budweiser” for beer. Anheuser-Busch Inc. v. Andy’s Sportswear Inc, 40 U.S.P.Q.2d 1542 (N.D. Ca. 1996). “Nailtiques” fingernail care products. Nailtiques Cosmetic Corp. v. Salon Sciences Corp., 41 U.S.P.Q.2d 1995 (S.D. Fla. 1997). “Candyland” children’s game. Hasbro Inc. v. Internet Entertainment Group Ltd., 40 U.S.Q.P.2d 1479 (N.D. Wash. 1996). 4. Remedies Under the FTDA Under the FTDA, the scope of injunctive relief is nationwide. In addition, in cases of “willful” dilution, the remedies of profits, damages, attorneys’ fees and even enhanced damages under Lanham Act �35 are available to a prevailing party. 15 U.S.C. 1125(c). B. Dilution Under State Statutes Under the state anti-dilution statutes, a cause of action for dilution arises where: 1. The mark or name is “truly of distinctive quality”; Sally Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 625 (2d Cir. 1983). and 2. There is likelihood of dilution. 1. The Requirement of Distinctiveness It is still unsettled as to just how distinctive a mark must be to qualify for protection against dilution under state law. Some commentators have suggested that only “famous” or “celebrated” marks should be protected by anti- dilution statutes. Note, Dilution: Trademark Infringement or Will-o’-Wisp? 77 HARV. L. REV. 520, 530 (1964). Examples of famous diluting marks were given in the legislative history of the New York statute: Dupont shoes, Buick aspirin tablets, Schlitz varnish, Kodak pianos, and Bulova gowns. 1954 N.Y. LEGIS. ANN. 49. The Restatement of Unfair Competition uses the term “highly distinctive trademark” in describing a mark eligible for dilution protection under state anti-dilution statutes. Restatement (Third) of Unfair Competition �25 cmt. c at 267 (1995). Fame, however, was not specifically mentioned by the Allied majority as the touchstone for distinctiveness. The court phrased the test this way: The mark must be “truly of distinctive quality or have a secondary meaning in the mind of the public.” Allied Maintenance Corp. v. Allied Mechanical Trades, Inc., 42 N.Y.2d 538, 545-46, 369 N.E.2d 1162, 399 N.Y.S.2d 628 (1977) (over 300 uses of ALLIED for companies in the New York telephone directory precluded a finding of distinctiveness). A mark not particularly distinctive, but protected from dilution because it acquired secondary meaning is “AT A GLANCE” for appointment books. Cullman Ventures Inc., v. Columbian Art Works, Inc., 13 U.S.P.Q.2d 1257, 1284 n.28 (S.D.N.Y. 1989). 2. The Requirement of Likely Dilution There are two forms of dilution: 1. The blurring of a mark’s product identification Blurring is defined as diminution in uniqueness and individuality of the mark. Exxon Corp. v. Oxxford Clothes Inc., 109 F.3d 1070 (5th Cir. 1997). 2. The tarnishment of the affirmative associations a mark has come to convey Sally Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 624-25 (2d Cir. 1983). Blurring: Some courts have adopted a multi-factor test to assess the likelihood of blurring. The factors include: 1) similarity of the marks, 2) similarity of the products covered, 3) sophistication of the consumers, 4) predatory intent, 5) renown of the senior mark, 6) renown of the junior mark. Deere & Co. v. MTD Prods., 41 F.3d 39, 43 n.8 (2d Cir. 1994) (emphasis omitted). Tarnishment: “A trademark may be tarnished when it is ‘linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context,’ with the result that ‘the public will associate the lack of quality or lack of prestige in the defendant’s goods with the plaintiff’s unrelated goods.”‘ Deere & Co. v. MTD Prods, Inc., 41 F.3d 39, 43 (2d Cir. 1994). Hormel Foods Corp. v. Jim Henson Productions Inc., 73 F.3d 497, 37 USPQ2d 1516, 1523 (2d Cir. 1996). vToys “R” Us tarnished by use of ADULTS R US as name for the sale of adult sexual products. Toys “R” Us Inc. v. Akkaoui, 40 U.S.P.Q.2d 1836 (N.D. Cal. 1996). C. Dilution and Parody Application of Anti-Dilution Statute to enjoin artistic/editorial parody violates First Amendment right of free speech. L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26, 33 (1st Cir. 1987) [The L.L. BEAM sex catalog parody of the L.L. BEAN catalog cannot be enjoined under dilution theory]. D. Recent Case Law 1. Retroactivity The 1996 statute does not apply to defendant’s marks used before January 16, 1996, because the federal anti-dilution statute cannot be applied retroactively. Circuit City Stores Inc. v. Officemax, Inc., 949 F.Supp. 409, 42 U.S.P.Q.2d 1194 (E.D. Va. 1996). 2. Application to PTO Proceedings The Anti-Dilution Statute is not a ground of opposition or cancellation. Babson Brothers v. Surge Power Co., 39 U.S.P.Q.2d 1953 (TTAB 1996). 3. Dilution and Cyberspace CANDYLAND children’s game tarnished by “candyland.com” for web site showing sexually explicit pictures. Hasbro Inc. v. Internet Entertainment Group Ltd., 40 U.S.P.Q.2d 1479 (W.D. Wash. 1996). PANAVISION movie and TV cameras diluted by cyber-squatter. Panavision Inter’l. v. Toeppen, 40 U.S.P.Q.2d 1908 (C.D. Cal. 1996). INTERMATIC electrical products diluted by cyber-squatter. Intermatic Inc. v. Toeppen, 40 U.S.P.Q.2d 1412 (N.D. Ill 1996), approved 41 U.S.P.Q.2d 1223 (N.D. Ill. 1996). TOYS ‘R US toy stores tarnished by ADULTS R US as domain name for sale of adult sexual products. Toys “R” Us Inc. v. Akkaoui, 40 U.S.P.Q.2d 1836 (N.D. Cal. 1996). 4. “The Greatest ______ on Earth” Controversies THE GREATEST SHOW ON EARTH not diluted by THE GREATEST BAR ON EARTH. Ringling Bros.-Barnum & Bailey Combined Shows v. B.E. Windows Inc., 937 F.Supp. 204 (S.D.N.Y. 1996). THE GREATEST SHOW ON EARTH not diluted by THE GREATEST SNOW ON EARTH. Ringling Bros. Barnum & Bailey Combined Shows, Inc. v. Utah Division of Travel Development, 955 F.Supp. 605 (E.D. Va. 1997) [note discussion of survey evidence]. Watch for the appeal. VI. PROVING FALSE ADVERTISING A. Elements Of Proof v To succeed on the merits of its false advertising claim, plaintiff must prove by a preponderance of evidence that: 1. The accused uses are either literally or implicitly false; 2. The accused uses actually deceive or have a tendency to deceive a statistically significant portion of reasonably intelligent purchasers; 3. The accused uses are material, i.e., purchasers are likely to rely on the accused uses in making a purchase; and 4. Plaintiff has been or is likely to be injured by the accused uses. U.S. Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898 F.2d 914, 921-922 (3rd Cir. 1990). William H. Morris Co. v. Group W, Inc., 66 F.3d 255, 257 (9th Cir. 1995). Restatement (Third) of Unfair Competition �3 cmt. b, p. 38 (1995). B. Literal Falsity v. Implied Falsity Plaintiff must prove either that the ad is literally false or that it conveys a false impression. American Home Prods. Corp. v. Johnson & Johnson, 577 F.2d 160 (2d Cir. 1978). Evidence of consumer reaction is required to show that ad creates false impression. Johnson & Johnson * Merck Consumer Pharmaceuticals Company v. Smithkline Beecham Corporation, 960 F.2d 294, 298 (2nd Cir. 1992). C. Methods of Proof 1. Literal Falsity Determination of literal falsity requires analysis of statement in context. Avis Rent A Car Sys., Inc. v. Hertz Corp., 782 F.2d 381, 385-86 (2d Cir. 1986). Where ad is ambiguous/and one possible interpretation is true, the ad is not literally false. Coors Brewing Co. v. Anheuser Busch Companies, Inc., 802 F.Supp. 965, 969 (S.D.N.Y. 1992). 2. Implied Falsity Consumer survey is required to prove what message was conveyed to substantial portion of intended audience. Proof that 7.5% of survey respondents were deceived is not enough. Survey evidence is rejected where questionnaire focused on allegedly false statement. Court approves general questions re what was message conveyed as opposed to leading question, i.e., what was defendant’s product strongest at doing. (Alleged deception was that product claimed to be strongest at providing relief when it was only strongest at neutralizing acid in lab setting). Johnson & Johnson-Merck v. Rhone-Poulenc Rorer, 19 F.3d 125, 134 (3rd Cir. 1994). 3. The Test for Claims Based on Tests Where defendant’s accused ad refers to tests to support his claims, defendant should be prepared to furnish those tests. What’s more, defendant’s claims will be found literally false if: 1) the tests do not support the proposition for which they were cited; or 2) the tests are not sufficiently reliable to permit the conclusion that defendant’s product is superior. Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 63 (2d Cir. 1992). Factors pertaining to test reliability include: “…the state of the testing art, the existence and feasibility of superior procedures, the objectivity and skill of the persons conducting the tests, the accuracy of their reports, and the results of other pertinent tests.” Procter & Gamble Co. v. Chesebrough-Pond’s Inc., 747 F.2d 114, 119 (2d Cir. 1984). The reliability of test data has been called into question where: . The test method has not been used or approved by experts or established research organizations. Alpo Petfoods, Inc. v. Ralston Purina Co., 720 F.Supp. 194, 207 (D.D.C.1989), aff’d in part, rev’d in part on other grounds, 913 F.2d 958 (D.C.Cir.1990). . Defendant has intentionally deviated from his own test protocol. Id. at 209. . The overwhelming weight of scientific authority contradicts a party’s claim. Id. at 213. . The studies disregard inconsistent results or more current scientific information. Id. at 206; .R. Squibb & Sons Inc. v. Stuart Pharmaceuticals, No. 9-1178, 1990 WL 159909, *18 (D.N.J. Oct. 16, 1990). D. Proof of Intent To Deceive If plaintiff can establish that defendant intentionally mislead customers, a presumption of deception arises, shifting the burden of proof to defendant. William H. Morris Co. v. Group W Inc., 66 F.3d 255, 258 (9th Cir. 1995). Deceptive comparative advertising may presume causation and injury. Porous Media Corp. v. Pall Corp., 110 F.3d 1329 (8th Cir. 1997). E. Puff The Magic Dragon: The Puffing Defense When the accused false statement is “puffing”, it is not actionable. Cook, Perkiss & Liehe, Inc. v. Northern California Collection Serv. Inc., 911 F.2d 242, 244 (9th Cir. 1990). “Puffery” has been defined as a generalized assertion of superiority which lacks “detailed or specific factual assertions.” McCarthy, Vol. 3, �27.04[4][d] at 27-55. Lanham Act does not prohibit false statements generally — only false representations of fact made about one’s own or another’s goods. Groden v. Random House, Inc., 61 F.3d 1045, 1052 (2d Cir. 1995). F. Recent Case Law Plaintiff failed to prove that the overall message of competitor’s cleaning superiority was literally false or that ad conveyed other false messages to a significant portion of audience. L&F Products v. Procter & Gamble Co., 845 F.Supp. 984, 1000 (S.D.N.Y. 1994), aff’d 45 F.3d 709 (2d Cir. 1995). Ads claiming antifreeze met certain industry specifications were literally false because no tests were performed on the antifreeze to establish that the industry standards were met. BASF Corp. v. Old World Trading Co., 839 F.Supp. 528 (N.D. Ill. 1993); aff’d., 41 F.3d 1081 (7th Cir. 1994). Literal falsity found where claim relating to tests was untrue, even though defendant provided some credible substantiation or basis for its belief that the claims are accurate. Castrol, Inc. v. Pennzoil Co., 987 F.2d 939 (3rd Cir. 1993) reh’g, denied en banc, 1993 U.S. App. LEXIS 4205 (1993). [Dissent disagrees] VII. PROVING AFFIRMATIVE DEFENSES Defendant must plead and prove: A. Genericness Plaintiff’s federal registration creates a presumption that his mark is not generic. However, plaintiff’s unregistered mark carries no presumptions, so that if defendant raises a generic claim the burden will be on the plaintiff to prove lack of genericness. National Conference of Bar Examiners v. Multistate Legal Studies, Inc., 692 F.2d 478, 488 (7th Cir. 1982), cert. denied, 464 U.S. 814 (1983). B. Abandonment An abandoned mark is free for use. Sutton Cosmetics (P.R.), Inc. v. Lander Co., 455 F.2d 285, 288 (2d Cir. 1972). Abandonment as defined by the Lanham Act is discontinued use with intent not to resume use in the ordinary course of trade. 15 U.S.C. �1127. Three years non use is prima facie abandonment. To rebut prima facie claim of abandonment requires proof of intent to resume “commercial” use. Ambrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1550 (11th Cir. 1986), cert. denied, 481 U.S. 1041 (1987). Abandonment, once established, is not cured by a resumption of use. Id. But Plaintiff could still win if he resumed use prior to Defendant’s first use. Phase out agreement without quality control does not result in abandonment. Exxon Corp. v. Oxxford Clothes Inc., 109 F.3d 1070 (5th Cir. 1997). Private branding may cause abandonment. STX Inc. v. Bauer USA Inc., 43 U.S.P.Q.2d 1492 (N.D. Ca. 1997). C. Fair Use Defendant is permitted to make a good faith use of plaintiff’s mark in a non- trademark sense to fairly describe defendant’s goods. 15 U.S.C. �1115(b)(4). Cosmetically Sealed Industries Inc. v. Cheesebrough-Ponds USA Co., 125 F.3d 28 (2d Cir. 1997) [words "seal it with a kiss" fair use for a cosmetic promo]. Defendant’s fair use may defeat plaintiff’s claim even if defendant’s use is likely to cause confusion. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 12 (2d Cir. 1976) [CAMEL SAFARI, HIPPO SAFFARI, and CHUKKA SAFARI fair use]. A few decisions indicate that fair use cannot be a defense where likely confusion has been proven. Lindy Pen Co. v. Bic Pen Corp., 725 F.2d 1240, 1247 (9th Cir. 1984). The Restatement has straddled the fence, stating that the extent of likely confusion is a factor in determining whether a use is fair, while acknowledging that fair use precludes a finding of infringement even if some residual confusion is likely. Restatement (Third) of Unfair Competition, � 28, comment b (1993). Some fair use no-nos Do not claim your term as trademark. Yamaha Corp. of America v. Ryan, 13 U.S.P.Q. 2d 1157 (C.D. Cal. 1989). Gale Group Inc. v. Diane Corp., 20 U.S.P.Q. 2d 1550 (M.D. Fla. 1991). Do not copy plaintiff’s logo. Mobil Oil Corp. v. Mobile Mechanisms, Inc., 192 U.S.P.Q. 744, 749 (D.Conn. 1976). Some Fair Use Examples “We Do It Right Or We Do It Over. We Do It On Time Or We Do It Free” for quick printing center. American Speedy Printing Centers v. Sir Speedy, 25 U.S.P.Q. 2d 1974 (M.D. Fla. 1992). “the dentist’s choice” — advertising for Crest toothpaste Wonder Labs, Inc. v. Procter & Gamble Co., 728 F.Supp. 1058 (S.D.N.Y. 1990). Does Plaintiff’s Mark Have to be Descriptive? Recent 7th Circuit and Second Circuit decisions say no. The focus is on whether defendant’s use of the term is descriptive. Sunmark, Inc. v. Ocean Spray Cranberries, Inc., 64 F.3d 1055, 1058-1059 (7th Cir. 1995. Car-Freshner Corp. v. S.C. Johnson & Son, Inc., 70 F.3d 267 (2nd Cir. 1995). Compare with Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir. 1980). D. Laches Laches applies where plaintiff has unreasonably delayed in asserting his rights against defendant, and defendant has relied on this delay to his prejudice. Cuban Cigar Brands, N.V. v. Upmann Int’l, Inc., 457 F.Supp. 1090, 1096 (S.D.N.Y. 1978), aff’d, 607 F.2d 995 (2d Cir. 1979). 1. Affect of Laches on Preliminary Injunction An extended delay indicates a lack of irreparable harm. Preliminary injunction has been denied where plaintiff chose to wait as little as three months before filing suit while defendant was spending substantial amounts to market its product. Stokely-Van Camp, Inc. v. Coca-Cola Co., 2 U.S.P.Q.2d 1225, 1227 (N.D. Ill. 1987). Three months of settlement discussions prior to defendant’s opening does not bar P.I. relief. The Diner Inc. v. Dream Kitchen Inc., 37 U.S.P.Q.2d 1029 (S.D.N.Y. 1995). 2. Affect of Laches on Permanent Relief Two-year delay sufficient to bar preliminary injunction. Campbell-Lyons v. Cobain, 25 U.S.P.Q.2d 1963 (C.D. Cal. 1992). Where preliminary relief is not at issue, a delay under two years is rarely laches. Perini Corp. v. Perini Constr., 715 F.Supp. 719 (D. Md. 1989), rev’d, 915 F.2d 121 (4th Cir. 1990) [two-year delay]. Plaintiff’s inexcusable delay [two years] does not result in laches where defendant fails to prove prejudice and defendant intends to capitalize on plaintiff’s marketing techniques. McDonald’s Corp. v. Druck and Gerner DDS, P.C., d/b/a McDental, 814 F.Supp. 1127 (N.D.N.Y. 1993). Columbia University’s claims against Columbia Healthcare are barred by laches. They took no action for over 3 years. Trustees of Columbia University in the City of New York v. Columbia/HCA Healthcare Corp., 964 F.Supp. 733 (D.C. SNY 1997). 3. Measuring the Delay Delay is measured from when plaintiff knew it had probable claim. Kason Industries Inc. v. Component Hardware Group Inc., 120 F.3d 1199 (11th Cir. 1997). Progressive encroachment is a fact to consider in deciding when to measure delay – i.e. time when plaintiff knew or should have known she has a claim for infringement. Kason Industries Inc. v. Component Hardware Group Inc., 120 F.3d 1199 (11th Cir. 1997). E. Acquiescence Acquiescence is proven where plaintiff’s conduct amounts to an assurance to defendant that plaintiff would not assert his mark against defendant. Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 293 F.Supp. 892, 917 (S.D.N.Y. 1968); aff’d, 433 F.2d 686 (2d Cir. 1970), cert. denied, 403 U.S. 905 (1971). F. Estoppel Estoppel is the result of plaintiff’s laches. Where laches is found, plaintiff is estopped from asserting infringement. NAACP v. N.A.A.C.P. Legal Defense & Educational Fund, 753 F.2d 131, 137- 138 (D.C. Cir. 1985). G. Fraud Fraud in obtaining or maintaining registration will result in cancellation. Orient Express Trading Co. Ltd. v. Federated Department Stores, Inc., 2 U.S.P.Q. 2d 1106 (S.D.N.Y. 1987). Fraud in Section 8/15 Declaration claiming use on all goods when use only made on some goods results in cancellation of entire registration. General Car and Truck Leasing v. General Rent-A-Car, Inc., 17 U.S.P.Q. 2d 1398 (S.D. Fla. 1990). Fraud in Section 8/15 Declaration claiming use for cigarette tobacco when actually in use for cigarettes and cigars results in cancellation of entire registration. Conwood Corp. v. Loew’s Theatres Inc., 173 U.S.P.Q.829,830 (T.T.A.B. 1972). Filing specimen label not currently in use is fraud and the registration must be canceled. Torres v. Cantine Torresella S.r.l.,808 F.2d 46 (Fed. Cir. 1986). Just because the individual signing a Declaration was unaware that a statement was false does not shield a party from a finding of fraud where responsible individuals had knowledge. Mister Leonard Inc. v. Jacques Leonard Couture Inc., 23 U.S.P.Q.2d 1064 (TTAB 1992). False statements of use are material where they resulted in the status of incontestability — a status which the registration should not have. Id. Be aware that plaintiff may be able to rely on common law rights even if registration is canceled due to fraud. National Trailways Bus Systems v. Trailway Van Lines, Inc., 269 F.Supp. 352 (EDNY 1952). H. Unclean Hands The unclean hands must relate directly to the subject matter of the action. Shaver v. Heller & Merz Co., 108 F. 821, 834 (8th Cir. 1901). Conduct held to constitute unclean hands includes intentional material misrepresentation as to product ingredients. Mulhens & Kropff v. Ferd. Muelhens, Inc., 43 F.2d 937, 939 (2d Cir.), cert. denied, 282 U.S. 881 (1930). I. Trademark Misuse Trademark misuse has been found where a trademark license was terminated as a result of illegal discrimination. United States Jaycees v. Cedar Rapids Jaycees, 614 F.Supp. 515, 518 (N.D. Iowa 1985), aff’d, 794 F.2d 379 (8th Cir. 1986). Trademark misuse cannot be used affirmatively. Juno Online Services v. Juno Lighting Inc., 54 BNA 503, 1997 WL 613021 (DC N ILL 1997). J. Violation of the Antitrust Laws Plaintiff’s use of mark to violate antitrust laws will bar enforcement of registration. 15 U.S.C. �1115(b)(7). Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 298 F.Supp. 1309, 1314 (S.D.N.Y. 1969), modified, 433 F.2d 686 (2d Cir. 1970), cert. denied, 403 U.S. 905 (1971). The trademark must be the “fundamental vehicle” for accomplishing the antitrust violation. Phi Delta Theta Fraternity v. J.A. Buckroeder & Co., 251 F.Supp. 968 (W.D.Mo. 1966). Noerr-Pennington defense: Lawsuit brought with probable cause cannot be a “sham” for purpose of eliminating antitrust immunity under the Noerr-Pennington doctrine. Columbia Pictures Industries Inc. v. Professional Real Estate Investors Inc., 508 U.S. 49, 123 L.Ed.2d 611, 625-626, 113 S.Ct. 1920 (1993). VIII. EARLY PRE-TRIAL MOTIONS Consider whether any pre-trial motions may expedite or streamline your case. A. Temporary Restraining Order (TRO) A TRO is available even without notice to defendants if plaintiff meets the requirements of Fed. R. Civ. P. 65(b): (1) immediate and irreparable injury will result to applicant before the adverse party can be heard in opposition; (2) certification to the court in writing of the efforts made to give notice to the adverse party and why notice should not be required. As a practical matter, TRO applications are routinely made with notice to the other side. The Court may request briefs in a matter of hours and/or hold an immediate hearing. The TRO will be in effect for a limited period of time; Fed. R. Civ. P. 65(b) Usually a hearing on the preliminary injunction motion will be scheduled before expiration of the TRO. The standards for granting a TRO are the same as the standards for granting preliminary injunctive relief (see below). Towers Fin. Corp. v. Dun & Bradstreet, Inc., 803 F.Supp. 820, 822 (S.D.N.Y. 1992). See Section B infra. In both cases, a bond may be required. Fed. R. Civ. P. 65(c). B. Preliminary Injunctions 1. The Standard A typical preliminary injunction standard requires proof of: irreparable harm, and either likelihood of success on the merits, or sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in favor of moving party. Western Publishing Co., Inc. v. Rose Art Industries, Inc., 910 F.2d 57, 59 (2nd Cir. 1990). Some circuits also include a public interest factor. Check the law in your circuit. 2. Injury to Goodwill Confusion causing injury to goodwill (even though not resulting in lost sales) is basis for Preliminary Injunction. Meridian Mutual Insurance Co. v. Meridian Insurance Group, Inc., 44 USPQ2d 1545 (7th Cir. 1997). 3. Speed Counts A year of settlement discussions is not laches, but is strong evidence of no irreparable harm to plaintiff. Seltzer Sister Bottling Co. Inc. v. Source Perrier S.A., 19 U.S.P.Q. 2d 1898 (N.D. Cal. 1991). 14 month delay removes presumption of irreparable harm. Preliminary injunction against car seat carrier trade dress reversed. Tough Traveler Ltd. v. Outbound Products, 60 F.3d 964 (2d Cir. 1995). 4. Sample Decisions Preliminary Injunction granted – likelihood of confusion between BREAKSTONE’S trade dress and FRIENDSHIP trade dress on sour cream. Kraft General Foods Inc. v. Friendship Dairies Inc., 19 U.S.P.Q. 2d 1691 (S.D.N.Y. 1991). Preliminary Injunction vacated – no likelihood of confusion between EXCEDRIN PM trade dress and TYLENOL PM trade dress for analgesic/sleep aid. Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033 (2d Cir. 1992). C. Motion to Dismiss In setting forth a valid claim, a party is required only to plead “a short plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a). However, the pleadings must state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In determining a motion to dismiss, courts are guided by such principles as: . all well pleaded allegations in the Complaint are accepted as true. Bartholomew v. Fischl, 782 F.2d 1148, 1152 (3d Cir. 1986). . Legal conclusions, deductions or opinions couched as factual allegations are not given a presumption of truthfulness. Cole v. Cardoza, 441 F.2d 1337, 1342 (6th Cir. 1971). . the Court may not dismiss a Complaint unless plaintiff can prove no set of facts which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). . the issue is not whether plaintiff will ultimately prevail but whether he is entitled to offer evidence to support the claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). . A motion to dismiss will be granted where plaintiff has not alleged facts that would permit the legal conclusions required to sustain plaintiff’s case. Toho Co., Ltd. v. Sears, Roebuck & Co., 645 F.2d 788, 791 (9th Cir. 1981). . Dismissal is proper if the complaint lacks an allegation regarding a required element necessary to obtain relief. 2A Moore’s Federal Practice (2nd Ed. 1992) Sec. 12.07 [2-5] at 12- 68. D. Motion to Strike Where a pleading contains “any insufficient defense or any redundant, immaterial, impertinent or scandalous matter”, a motion to strike is in order. A party must bring the motion before responding to a pleading or within 20 days of service of a pleading as to which no responsive pleading is permitted; in addition, the Court may order matters stricken on its own initiative at any time. Fed. R. Civ. P. 12(f). E. Motion to Transfer Even though venue (location of the District Court) may be proper, it may be inconvenient. Defendant’s remedy is to move to transfer the action to any other district/division where it might have been brought. 28 U.S.C. � 1404 sets out the guidelines for transfer: “the convenience of the parties and witnesses…the interest of justice”. Factors typically include the location of trial witnesses within the subpoena power of the Court, the location of documents, the time to trial in the transferor and transferee forums; the applicable state law. See, e.g., Chrome Hearts Inc. v. Montana Street Wear Inc., 39 U.S.P.Q.2d 1858 (S.D.N.Y. 1996) [transfer granted]; Blane v. American Inventors Corp., 934 F.Supp. 903 (M.D.Ten. 1996) [transfer denied]. Generally, a motion to transfer should be made reasonably promptly, but need not be made before filing an answer. C. Alan Wright, et al., Federal Practice and Procedure, � 3844 at 334 (1986). IX. OTHER PRE-TRIAL MOTIONS A. Motion to Bifurcate The Court may order the separate trial of any claims in the interests of expedition, economy, convenience and avoidance of prejudice. Fed. R. Civ. P. 42(b). This rule is frequently used to support a motion to bifurcate the issues of liability and damages. The idea is that if liability is not established, there will be no need for a damage trial. Motions to bifurcate may also seek to separate out claims such as a charge that plaintiff sued on a knowingly invalid mark in violation of the antitrust laws which will automatically fail if plaintiff succeeds in establishing the merits of his infringement action. B. Motion to Amend the Pleadings Of course, pleadings can be amended to add claims, e.g., if the facts supporting the new claims are revealed by discovery. FED. R. CIV. P. 15(a). New claims may also be tried by implied consent of the parties. FED. R. CIV. P. 15(b). If you find it necessary to amend your pleadings at some point later than 30 days after filing, leave of court is required. The Federal Rules provide that leave “shall be freely given when justice so requires”. Fed. R. Civ. P. 15(a). The standard to be applied in granting leave to amend was set forth by the Supreme Court in Foman v. Davisas follows: In the absence of any apparent or declared reason – such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. – the leave sought should, as the rules require, be “freely given.” Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules. Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, prejudice to the adverse party will be a key factor in ruling on motions to amend. Commodore Electronics Ltd. v. CBM Kabushiki Kaisha, 26 U.S.P.Q. 2d 1503, 1505 (TTAB 1993). C. Summary Judgment 1. The Supreme Court Trilogy Encourages Summary Judgment Motions: The moving party need not “support its motion with affidavits or other similar materials negating the opponent’s claim.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “[T]he issue of fact must be ‘genuine’… When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). 2. Summary Judgment Rulings re Likely Confusion No likely confusion between SWEATS active sportswear and ULTRASWEATS sweatshirts and sweatpants. Sweats Fashions v. Pannill Knitting Co., 833 F.2d 1560 (Fed. Cir. 1987). No likely confusion where obvious to purchaser that they were not receiving plaintiff’s product sold only by licensed cosmetologist. Martrix Essentials, Inc. v Emporium Drug Mart, Inc., 988 F.2d 587 (5th Cir. 1993). There is likely confusion between OPRYLAND USA amusement park services and MUSICLAND USA T-shirts (in identical style and color). WSM, Inc. v. Tennessee Sales Co., 709 F.2d 1084, 1086-1087 (6th Cir. 1983). Summary Judgment granted based on lack of similarity. Large media expenditures by AT&T show that AT&T publicity and reputation focuses on AT&T housemark. [AT&T UNIVERSAL CARD for telephone and retail credit card not confusing with UNIVERSAL MONEY CARD for ATM cards.] Universal Money Ctrs. v. American Tel. & Tel. Co., 22 F.3d 1527 (10th Cir. 1994), cert denied, 63 U.S.L.W. 3438 (U.S. 1994). 3. Summary Judgment Reversed: Facts Too Close To Call GRAND OLD OPRY, OPRYLAND v. THE CAROLINA OPRY and CALVIN GILMORE PRESENTS THE CAROLINA OPRY for country music entertainment services. Opryland USA Inc. v. Great American Music Show Inc., 970 F.2d 847 (Fed. Cir. 1992). LLOYD’S for restaurant services v. LLOYD’s & Design for cooked meats. Lloyd’s Food Products, Inc. v. Eli’s, Inc., 987 F.2d 766 (Fed. Cir. 1993). PAM nonstick cooking spray v. PAN-LITE nonstick cooking oil and spray. AHP Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611 (7th Cir. 1993). NIKE v. MIKE T-shirts using NIKE type style and “swoosh design.” Nike, Inc. v. “Just Did It” Enterprises,6 F.3d 1225 (7th Cir. 1993). Finding that moving party’s mark “is relatively strong is not a proper inference upon a motion for summary judgment because it is drawn against the non movant…” Olde Tyme Foods Inc. v. Roundy’s, Inc., 961 F.2d 200, 204 (Fed. Cir. 1992). D. Motions in Limine Motions in limine typically seek to exclude evidence that a party refused to produce in discovery, is inconsistent with discovery responses or is more prejudicial than it is probative. Fed. R. Evid. 403 permits the District Court to exclude relevant evidence if its probative value is substantially outweighed by the danger of unfair prejudice, or misleading the jury or by considerations of undue delay or it is needlessly cumulative. X. SURVEY EVIDENCE A. Inference re Failure to Conduct Survey Negative inferences may be drawn from the absence of survey evidence. Braun Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 827 (Fed. Cir. 1992). Where defendant’s sneakers were significantly cheaper and bore defendant’s trademark (TITAN), similarity in stripe check designs not sufficient to find likely confusion in absence of survey. Plaintiff’s decision not to conduct survey (when plaintiff warned in other cases of need for survey) strongly suggests that likely confusion could not be shown. Reebok Int’l Ltd. v. K Mart Corp., 849 F.Supp. 252 (S.D.N.Y. 1994). B. How Much is Enough Range of association with plaintiff considered sufficient to support secondary meaning: 30.5 percent and above. Henri’s Food Prods. Co. v. Kraft, Inc., 717 F.2d 352, 362 n.2 (7th Cir. 1983). Ranges showing confusion by 7.7% to 25% of respondents may be sufficient to support likely confusion. Seven-Up Co. v. Green Mill Beverage Co., 191 F.Supp. 32, 36 (N.D. Ill. 1961) (25%). Grotrian, Helfferich, Schulz, etc. v. Steinway & Sons, 365 F.Supp. 707, 716 (S.D.N.Y. 1973) (7.7%, 8.5%). C. Proper Universe Past purchasers are not proper universe unless it is frequently purchased product. The Forschner Group Inc. v. Arrow Trading Co. Inc., 30 USPQ2d 1258 (S.D.N.Y. 1993) XI. MONETARY RELIEF Large monetary awards are the exception rather than the rule. Remember that the grant of both injunctive and monetary relief is subject to the principles of equity. 15 U.S.C. �1117(a) Courts often find that equities are satisfied by an injunction and monetary relief is not necessary. Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 131-32 (1947); Electronics Corp. of Am. v. Honeywell, Inc., 358 F.Supp. 1230, 1234 (D.Mass.), aff’d, 487 F.2d 513 (1st Cir. 1973), cert. denied, 415 U.S. 960 (1974). Monetary relief under the Lanham Act may consist of: A. Defendant’s Profits Profits are designed to compensate plaintiff for lost sales and to deter deliberate infringement. Defendant’s profits are usually awarded only where defendant is guilty of intentional infringement, i.e., deliberately trading on plaintiff’s mark. Foxtrap, Inc. v. Foxtrap, Inc., 671 F.2d 636, 641 (D.C. Cir. 1982). Primary task is to make Lanham Act violations unprofitable to infringing party. Veryfine Products Inc. v. Colon Brothers Inc., 799 F.Supp. 240, 259 (D. P.R. 1992). Accounting of profits is not required under Lanham Act’s Section 35 if infringement is innocent and without intent to capitalize on competitor’s trade name. Lindy Pen Co. Inc. v. Bic Pen Corp., 982 F.2d 1400 (9th Cir. 1993). George Basch Co. v. Blue Coral Inc., 968 F.2d 1532 (2nd Cir. 1992), cert. denied, 113 S.Ct. 510 (1992). Banff Ltd. v. Colberts Inc., 996 F.2d 33 (2nd Cir. 1993). Compare with Sands, Taylor & Wood v. Quaker Oats Co., 18 U.S.P.Q.2d 1457 (N.D. Ill. 1990), aff’d in part and rev’d in part, 978 F.2d 947 (7th Cir. 1992), aff’d, 34 F.3d 1340 (7th Cir. 1994) [willful infringement is not required to justify an award of profits but award reversed where excessive and bears no relation to defendant's unjust enrichment]. B. Plaintiff’s Damages 1. The Need for Actual Harm Damages are designed to compensate plaintiff for actual injury caused by defendant’s wrongful conduct. Plaintiff does not have to prove that defendant intended to cause damage. But when defendant’s conduct is not flagrant and the damage is slight, damages have been refused. Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 131-32 (1947); Electronics Corp. of Am. v. Honeywell, Inc., 358 F.Supp. 1230, 1234 (D.Mass.), aff’d, 487 F.2d 513 (1st Cir. 1973), cert. denied, 415 U.S. 960 (1974). Where defendant acted fraudulently, actual harm may be presumed. When defendant’s conduct warrants bypassing the rule of actual harm, damages may be assessed on theory of unjust enrichment or deterrence. Aktiebolaget Electrolux v. Armatron Int’l, Inc., 999 F.2d 1, 5-6 (1st Cir. 1993). When a claim involves false advertising, Courts are more willing to allow monetary damages. Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir. 1997). 2. Harm to reputation Plaintiff may be awarded damages to his reputation. Heaton Distrib. Co. v. Union Tank Car Co., 387 F.2d 477, 486 (8th Cir. 1967). 3. Enhancement of Damages: Punitive Need Not Apply Enhancement of damages must be compensatory, not punitive. Alpo Petfoods, Inc. v. Ralston Purina Co., 997 F.2d 949, 952 (D.C. Cir. 1993). C. Punitive Damages (under State law only) Punitive damages are recoverable under the laws of many states where the party is guilty of some egregious conduct. In New York, for example, punitive damages are recoverable for: “tortious acts which involve ingredients of malice, fraud, oppression, insult, wanton or reckless disregard of the plaintiff’s rights, or other circumstances of aggravation, as a punishment of the defendant and admonition to others.” N.Y. Jur. 2d � 176 (1984); see Universal City Studios v. Nintendo Co., 615 F. Supp. 838, 863 (S.D.N.Y. 1985), aff’d, 797 F.2d 70 (2d Cir. 1986). D. Attorneys’ Fees The Lanham Act provides that the court may award reasonable attorneys’ fees to the prevailing party “in exceptional cases.” The statutory history indicates that “exceptional” includes cases of deliberate or willful infringement and that “prevailing party” includes defendants as well as plaintiffs. 15 U.S.C. �1117. S. REP. NO. 1400, 93d Cong., 2d Sess. (Dec. 17, 1974). Note that paralegal fees are included in attorneys’ fees awards. Aris Isotoner Inc. v. Dong Jin Trading Co., 17 U.S.P.Q.2d (BNA) 1017, 1027 (S.D.N.Y. 1989). For fees considered “reasonable,” see Howes v. Medical Components Inc., 17 U.S.P.Q.2d (BNA) 1591 (E.D.Pa. 1991). E. Costs Court costs are recoverable by the prevailing party “as of course…unless the court otherwise directs.” Costs may include filing fees, court reporter fees for transcripts necessary for use in the case, printing and witness fees, and compensation of court-appointed experts. Fed. R. Civ. P.54(d). 28 U.S.C.A. � 1920 (West 1966 & Supp. 1990). XII. TRADEMARK CONTEMPT A. Standard of Confusion as to Prior Infringer Imposing stricter standard of avoiding all possibility of confusion against prior infringer is within discretion of District Court. It is not required as matter of law. Badger Meter Inc. v. Grinnell Corp., 13 F.3d 1145, 1156 (7th Cir. 1994). B. Infringer Beware Use prohibited by consent judgment cannot be challenged on contempt motion on grounds that use is not likely to cause confusion. Harley-Davidson Inc. v. Morris, 30 U.S.P.Q.2d 1165 (3rd Cir. 1994). Determination of contempt re injunction against “confusingly similar mark” is made without resort to application of Polaroid factors (likely confusion factors – e.g. difference in goods, etc. will not be considered). Wella Corp. v. Wella Graphics, Inc., 37 F.3d 46 (2nd Cir. 1994). Copr. (C) West 1999 No Claim to Orig. U.S. Govt. Works

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