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August 24, 1979

SARATOGA VICHY SPRING CO., INC., Plaintiff, against ORIN LEHMAN, Commissioner of Parks and Recreation of the State of New York and WATERS OF SARATOGA SPRINGS, INC., Defendants.

The opinion of the court was delivered by: FOLEY


Plaintiff, the Saratoga Vichy Spring Company, Inc., has commenced this action for declaratory and injunctive relief against the defendants, Orin Lehman, as Commissioner of Parks and Recreation of the State of New York, hereinafter sometimes referred to as the state defendant, and, Waters of Saratoga Springs, Inc., a licensee of the state defendant, hereinafter defendant licensee. This action arises under 15 U.S.C. §§ 1051 et seq. (Lanham Act) and 28 U.S.C. § 2201 (Declaratory Judgment Act). The jurisdictional predicates for plaintiff's several claims are 28 U.S.C. § 1338(a) and (b), and, 15 U.S.C. § 1121. It has recently been brought to the court's attention that plaintiff has changed its name to the Saratoga Springs Co., Inc., subsequent to the commencement of this action.

Plaintiff's complaint sets forth four claims for relief. The first and second claims arise under the Lanham Act 15 U.S.C. §§ 1114 (infringement) and 1125(a) (false designation of origin and description), respectively. Plaintiff's third claim is one for unfair competition. 28 U.S.C. § 1338(b); see Maternally Yours, Inc. v. Your Maternity Shop, Inc., 234 F.2d 538, 540-41 (2d Cir. 1956). Plaintiff's fourth claim is premised upon New York's trademark infringement and "anti-dilution" statutes. N.Y.Gen.Bus. Law §§ 368-b and 368-d. See generally, United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d 218 (1966).

 Briefly, the gravamen of complaint is that the state defendant's New York registered trademark, "Saratoga Geyser", which appeared upon the labels of its bottled mineral water, infringes upon plaintiff's earlier and exclusive use of its U.S. Patent Office registered trademarks, "Saratoga Vichy", the logo formed by combining the letters "S" and "V", and a combination of these two marks, which similarly appeared upon the label of its carbonated mineral water Saratoga Vichy.

 The factual posture of this litigation is far more complex than this brief description; therefore, further explication is necessary.

 At the outset, it is noted that the plaintiff is no stranger to trademark litigation involving its mineral waters. See La Republique Francaise v. Saratoga Vichy Springs Co., 107 F. 459 (2d Cir. 1901), aff'd, 191 U.S. 427, 24 S. Ct. 145, 48 L. Ed. 247 (1903); Saratoga Vichy Spring Co. v. Saratoga Carlsbad Corp., 45 F. Supp. 260 (S.D.N.Y.1942). Other mineral springs unique to Saratoga Springs have generated litigation wherein protection was sought for the goodwill associated with the peculiar curative properties said to be found in their mineral waters. Congress Spring Co. v. High Rock Congress Spring Company, 45 N.Y. 291 (1871).

 Saratoga Springs, lying in the foothills of the Adirondack Mountains in upstate New York, has long been known for its abundant mineral springs. The source of these waters is the underground Orenda River which pushes its way to the surface in numerous locations within the present Saratoga State Spa Park. The Iroquois are said to have described the waters as the "Medicine Springs of the Great Spirit". Sir William Johnson, Superintendent of Indian Affairs in Northern America for the British Crown in a letter to Philip Schuyler in 1767 described a visit as one "to a new amazing spring, which almost effected my cure." Waller, Saratoga: Saga of an Impious Era (1966).

 Saratoga Springs has drawn visitors to its waters for nearly 200 years. In the 19th century, the nation's social and financial elite would gather at the fashionable summer resort to drink the waters which were purported to contain certain medical properties as well as to attend the thoroughbred races at one of the nation's oldest and most beautiful flat tracks. To the students of thoroughbred racing the name Saratoga is established in the sport as "the Graveyard of Favorites". Most of us were not fortunate enough to experience personally the grandeur of Saratoga Springs in August during the postbellum era of the Civil War, but Edna Ferber successfully portrayed that era in her memorable novel, "Saratoga Trunk." The name Saratoga famed in our history books was derived by colonists in the area from the Iroquois word, Sarachtogue, or a similar Indian name.

 In March 1872, the plaintiff's predecessor according to the record developed a well and began bottling the mineral waters. The plaintiff acquired the spring in 1876, and, since that time, has sold the water extensively under the name Saratoga Vichy Water or Natural Saratoga Vichy Water.

 On March 9, 1920, plaintiff registered the mark "Saratoga Vichy" under the 1905 Trademark Act. Pursuant to the provisions of the present statute, 15 U.S.C. § 1062(c), plaintiff caused this mark to be republished on June 8, 1948. Moreover, plaintiff caused the requisite affidavits of "continued use", 15 U.S.C. § 1058, and, "incontestability", 15 U.S.C. § 1065, to be filed for this mark on July 29, 1953.

 On November 14, 1939, plaintiff registered its fanciful logo under the 1905 Act; and, similarly caused this mark to be republished under the provisions of the Lanham Act. Plaintiff also filed the requisite affidavits of continued use and incontestability.

 On January 24, 1967, plaintiff caused a combination of its two existing marks to be registered on the Principal Register of the Lanham Act pursuant to 15 U.S.C. § 1052(f). Concurrently, plaintiff submitted combined affidavits of continued use and incontestability.

 Plaintiff has also registered these marks and others under the New York Trademark statute. N.Y.Gen.Bus. Law §§ 360 et seq.

 These several marks have been affixed as labels upon plaintiff's bottled Vichy water and various flavored sodas continuously since 1876. Plaintiff's primary and most popular product, however, has long been its bottled mineral water, Saratoga Vichy, to which salt, bicarbonate of soda and artificial carbonation were added. Since 1968, it is alleged that sales in excess of seventeen million dollars have been realized.

 Sometime in 1978, plaintiff undertook a bold marketing strategy. It discontinued production of its "celebrated Saratoga Vichy Water" and began the bottling, advertisement and commercial sales of a "natural" mineral water apparently to compete with Perrier water, the highly successful French mineral water. Plaintiff's product, unlike its predecessor, does not have additives of salt, bicarbonate of soda and "artificial" carbonation.

 Finally, to complete this metamorphosis in marketing strategy, plaintiff abandoned its familiar green bottles as well as its recognized labels which embodied their distinctive marks. Seeking to reach an expanding so-called sophisticated class of consumers for whom the consumption of mineral waters is now considered chic, plaintiff's mineral water was quite recently revealed to the public in new "trade dress". This new trade dress, a term of the trademark field of law, consists of a clear wine-bottle-shaped glass container upon which are affixed a neck label and a body label. Plaintiff's new mineral water is boldly and simply named "Saratoga."

 The neck label, completely different from the Saratoga Vichy bottle, bears a fanciful gold-colored "S" logo against a white background with the accompanying words "Bottled Exclusively At The Source". The body label, which is oblong-shaped and affixed vertically upon the bottle contains the words printed in small red letters, "Naturally Sparkling Mineral Water", running around the vertical prominent name "Saratoga", which is set off in blue lettering imposed upon a gold background.

 The body label reveals the Patent Office trademark symbol after the name "Saratoga", although there is nothing in the record before the Court which discloses whether the purported mark "Saratoga" is registered upon the Principal Register under 15 U.S.C. § 1052. It is also noted that upon close inspection of the cap, the name of the bottler is "The Saratoga Springs Co., Inc." As previously noted the plaintiff company's name was changed subsequent to the commencement of this action with the word "Vichy" dropped.

 The affidavit of plaintiff's President discloses that the reason underlying this transition was more than a mere desire to achieve market penetration. Thus, it is stated that the term "Vichy" has "taken on a more general meaning, descriptive of the character of a particular type of water" as opposed to identifying waters solely with a particular region of France. The President's affidavit then underscores this observation with reference to numerous "Vichy" water products presently marketed.

 While plaintiff argues that the term "Vichy" has become descriptive, it is equally plausible that the term Vichy may well have passed into the public domain. See e.g., King-Seeley Thermos Co. v. Aladdin Industries, Inc., 321 F.2d 577 (2d Cir. 1963) ("Thermos"). In either case, descriptive or generic, plaintiff now asserts that "Saratoga" has become the salient feature of its trademark which tends to identify goods sold under the mark as emanating from it. Compare 15 U.S.C. § 1052(e)(2) with § 1052(f). It is upon this basis that plaintiff seeks to restrain the defendant licensee from using the term "Saratoga Geyser", the term Saratoga, either alone or in conjunction with other words, or any term similar thereto, in connection with the promotion or sale of carbonated mineral water or similar goods.

 The role of the State of New York in the development of the mineral waters at Saratoga Springs as shown by the record submitted has been substantial. Beginning in 1909, the State began to purchase the mineral springs and surrounding lands so as to prevent private commercial exploitation and misuse of this natural resource. The total area acquired became known as the Saratoga Reservation. At that time, it was intended that the waters would be used as therapeutic aids.

 Beginning in 1910, the State bottled and sold its natural mineral waters under the now-disputed "Saratoga Geyer" mark. From 1920 until 1932, the rights to bottle and sell the mineral waters were extended to private businesses under lease. In 1932, a decision was reached to convert the 2,000 acre Reservation into a health spa. To that end, the Saratoga Springs Authority was created in 1933.

 A $ 3,200,000 bond issue was undertaken by the Authority, the proceeds of which were used to construct the Gideon Putnam Hotel, the Mineral Water Bottling Plant, the Roosevelt Baths and several other facilities. Since that time, millions of dollars have been expended by the State and private contributors to create the Saratoga Spa and surrounding facilities.

 Through the years, the sale and consumption of the Spa's mineral waters have always constituted an integral aspect of the facility. Beginning in 1954, the State instituted a program designed to promote the distribution of its bottled waters, not only locally, but in interstate commerce as well. In 1954, the Authority adopted its present trademark as it would appear upon labels of the bottled "Saratoga Geyser". Sales and promotion continued through the 1960's, at which time the then licensee retained a New York ad agency to promote "Saratoga Geyser". Since 1936, approximately fifty million bottles of the State's mineral waters have been sold. *fn1"

 For some unknown reason, until now, the plaintiff, Saratoga Vichy Spring Co., has never sought to restrain the State or its licensees from using the mark "Saratoga Geyser", although their marks existed side by side for a period of sixty years.

 The bottling and sales of the State's mineral waters continued through the Spring of 1971, at which time the New York State Assembly deleted funds for the operation of the bottling plant at the Spa. This decision was reached as a result of a report from the State Comptroller's Office which recommended that the State discontinue operation of the plant due to substantial annual operating losses for the years immediately preceding 1971.

 Approximately eight months after the State ceased operations at the bottling plant, it caused the mark, "Saratoga Geyser", to be registered in 1972 with the New York Department of State.

 Although the bottling plant ceased operation in 1971, the State in 1978 and 1979 executed various agreements with the defendant, Waters of Saratoga Springs, Inc., to lease the bottling plant, and, once again, undertake the bottling and distribution of "Saratoga Geyser" and "State Seal." To date, the defendant Waters of Saratoga Springs, Inc., has not begun to operate the State's bottling plant. At the oral argument it was stated that financing is being sought to allow the commencement of the operation.

 The products of the plaintiff and the State are the same "naturally" carbonated mineral water. *fn2" And, of course, their geographic origins are identical the mineral waters unique to Saratoga Springs, New York.

 At this juncture, a comparison of the various marks is warranted. The Court has previously described plaintiff's present mark; therefore, the examination now focuses upon plaintiff's predecessor and transitional marks and the defendant's mark.

 Plaintiff's three registered trademarks, singularly and in combination, have appeared upon a neck band label and an oval body label which were affixed to the bottles of its various marketed beverages especially its "Saratoga Vichy". The body label, consisting of the combined marks, was printed in black and red against a yellow background. The neck band label was printed in black upon yellow background. Its transitional label, used in 1978, employed the identical color scheme, except for the deletion of the word "Vichy" from its registered mark, "Saratoga Vichy", and, the addition of the words, "Natural Sparkling Mineral Water", under the name Saratoga and the logo.

 Plaintiff's predecessor and transitional marks bear no resemblance to its present mark, except for the presence of the name, Saratoga and accompanying legend, "Natural(ly) Sparkling Mineral Water".

 The State's mark, "Saratoga Geyser", appears upon a square body label and was affixed to its bottled mineral water. This label is printed in green, gold and red against a predominantly white background. The bottom border of the label is set off against a gold background (approximately 1/2 inch) upon which the seal of the State of New York is imposed. This circular seal contains the words, "Bottled by the State of New York". Imprinted upon the gold border are the words "Bottled at the Saratoga Spa, Saratoga Springs, New York". The body label bears the legend, "Genuine Mineral ...

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