The opinion of the court was delivered by: HAIGHT
Plaintiff I. Appel Corporation ("I. Appel") brings this action for injunctive relief and damages for alleged violations of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) ("Section 43(a)"), trademark infringement, 15 U.S.C. § 1114 et seq., and related state claims. Subject matter jurisdiction in this Court is predicated upon 28 U.S.C. § 1338(a) and principles of pendent jurisdiction. Plaintiff now moves for a preliminary injunction.
The case concerns defendant's manufacture and sale of brassieres under the trade name "The Active Collection." Plaintiff alleges that defendant's "Sports-Woman Bra," formerly the "Running Free Bra," is a copy of plaintiff's "The Running Bra." Plaintiff also contends that defendant breached a contractual agreement between the parties in which defendant agreed not to produce a brassiere "identical" to plaintiff's "Running Bra." Finally, plaintiff asserts that defendant's use of "The Active Collection" is an infringement of its federally registered trademark "The Active Woman Collection" and of various rights under New York law. By order to show cause signed May 12, 1986, plaintiff moved for a temporary restraining order and a preliminary injunction prohibiting defendant from manufacturing, advertising, or promoting its "Sports-Woman Bra" or advertising or promoting products under the trade name "The Active Collection."
By Memorandum Opinion and Order of May 15, 1986, familiarity with which is assumed, the motion for a temporary restraining order was denied and counsel were directed to address the issue whether plaintiff's complaint should be dismissed. Having considered the present record and cases cited by counsel, I decline to dismiss the action at this time, but deny the preliminary injunction.
I. Alleged Infringement of the Trademark "The Active Woman Collection"
In its complaint plaintiff alleges that use of the slogan "The Active Collection" infringes on its federally registered trademark "The Active Woman Collection" and seeks injunctive relief and damages. In its motion for preliminary injunctive relief, plaintiff seeks the termination of the use of the slogan and of the distribution of all materials utilizing the slogan.
Defendant represents that it has already acceded to these demands and has voluntarily stopped using the term "The Active Collection." Specifically, it asserts that the term is no longer on merchandise "hangtags" (Aff. of Moore P8), and that it has removed the term from its price lists and all brochures which will be published in the future. (Aff. of Moore P4).
Defendant asserts that its voluntary termination of use of "The Active Collection" moots plaintiff's trademark claim. I disagree for two reasons: (1) voluntary cessation does not moot a motion for injunctive relief, and (2) plaintiff's claim for damages remains.
It is well settled that voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of that practice. E.g., City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289, 102 S. Ct. 1070, 1074, 71 L. Ed. 2d 152 (1982). Such abandonment is an important factor bearing on the question whether a court should exercise its power to enjoin the defendant from renewing the practice, but that is a matter relating to the exercise rather than the existence of judicial power. Id. at 289, 102 S. Ct. at 1074. However, since defendant asserts that it has already undertaken to comply with plaintiff's demands, it should have no objection to entering into a stipulated order to that effect. Therefore, I direct defendant to settle an order of permanent injunction on five (5) days' notice.
Plaintiff's trademark claim also remains a live case or controversy because plaintiff has asserted a claim for damages. Defendant conclusorily asserts that this claim is "frivolous"; but if defendant so believes, it may, if so advised, move for summary judgment. Until judgment is entered on that claim, by a Rule 56 motion or through trial on the merits, it remains a live issue.
II. Section 43(a) Claim Regarding The "Sports-Woman Bra"
Plaintiff asserts that defendant's manufacture and distribution of the "Sports-Woman Bra" constitutes false designation of origin, pursuant to 15 U.S.C. § 1125(a), and violates state contract and unfair competition law. For the reasons that follow, I decline to issue the injunction and dismiss the state claims without prejudice.
The essence of plaintiff's Section 43(a) claim is that the design of defendant's "Sports-Woman Bra" brassiere constitutes a false designation of origin, infringing plaintiff's rights in its "Running Bra."
Since its enactment in 1946 as part of the Federal Trademark Act, Section 43(a)'s broad language and potentially expansive scope have been held to embrace a variety of unfair trade practices. See, e.g., American Brands, Inc. v. R.J. Reynolds Tobacco Co., 413 F. Supp. 1352, 1355-56 (S.D.N.Y.1976). Under these broad interpretations of Section 43(a), the design of a product itself may function as its packaging, serving to distinguish it from other products, and hence be protectable trade dress under Section 43(a). Le Sportsac, Inc. v. K Mart Corp., 754 F.2d 71, 75 (2d Cir.1985).
In order to establish a claim under Section 43(a) based on product design, plaintiff must show that the copied design has acquired secondary meaning in the marketplace and be nonfunctional. Vibrant Sales, Inc. v. New Body Boutique, Inc., 652 F.2d 299, 303 (2d Cir.1981). Plaintiff's Section 43(a) claim appears to founder on the functionality prong of this test. "A feature is functional if it is essential to the use or purpose of the article or that affects the cost or quality of the article," Inwood Laboratories v. Ives Laboratories, 456 U.S. 844, 850 n. 10, 102 S. Ct. 2182, 2187 n. 10, 72 L. Ed. 2d 606 (1982), or if it "'constitutes an improvement in the operation of the goods.'" Le Sportsac, supra, 754 F.2d at 76 (quoting Warner Brothers, Inc. v. Gay Toys, Inc., 724 F.2d 327, 331 (2d Cir. 1983)). The feature is "essential" only if the feature is dictated by the functions to be performed; a feature that merely accommodates a useful function is not enough. Le Sportsac, 754 F.2d at 76. "The ...