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December 13, 1990


The opinion of the court was delivered by: Kevin Thomas Duffy, District Judge:


Plaintiff, Francis Denney, Inc. ("Denney") brought this action, under the Lanham Act, 15 U.S.C. § 1114(1) and 1125(a), as well as New York statutory and common law for trademark infringement and unfair competition. Denney moved, by Order to Show Cause, for a preliminary injunction against defendants I.S. Labs and its principal H. Allen Lightman. After a hearing was conducted in this matter, I rendered an opinion on April 6, 1990, 737 F. Supp. 247, in which I preliminarily enjoined Lightman from replicating the trade dress and name identification of a line of moisturizers and skin-care cosmetic products, known as the IRMA SHORELL line, which was developed and produced in contravention to Denney's trademark. I will not repeat all of the facts from that opinion, but, those facts and findings abide here. Denney now moves to dismiss Lightman's counterclaims or, in the alternative, for partial summary judgment on the issue of liability, seeking also entry of a permanent injunction.


The original IRMA SHORELL skin-care line was created by Dr. I. Daniel Shorell in the early 1960's. Dr. Shorell registered the products under the trademark IRMA SHORELL, his daughter's name. Irma Shorell, Inc. and Shorell Products Corp. were formed in the early 1960's solely to market the IRMA SHORELL line. Both corporations were controlled by Lightman, Irma Shorell's husband. Lightman was also primarily responsible for marketing and designing the packaging of products. The record from the hearing for a preliminary injunction indicates that the trademarked packaging is widely associated with the SHORELL name.

Pursuant to an Agreement for Purchase and Sale of Assets, dated June 19, 1985, Lightman and his wife, Irma Shorell, and corporations controlled by them, sold the IRMA SHORELL trademark, IRMA SHORELL business assets, and all of the goodwill attendant to the IRMA SHORELL name to the New York corporation of Alfin Fragrances, Inc. ("Alfin"), its heirs and assigns. Exh. 6 and Sched. A annexed to Devlin Affid. On July 31, 1987, Denney acquired all ownership rights to the IRMA SHORELL trademark and product line from Alfin pursuant to a written agreement.

Between August 1987 and October 1989, Lightman and I.S. Labs were Denney customers, purchasing Denney's SHORELL products for resale. Plaintiff's Memorandum in Support of Preliminary Injunction at 7. Sometime in 1989, Lightman began developing and marketing a line of products under the name I.S. Labs in competition with Denney. Purportedly, Lightman conceived his own line of skin-care products because Denney, inter alia, allegedly failed to respond to various complaints Lightman had regarding late or defective shipments of product and failure to timely cure or credit losses incurred by Lightman at the time. Instead of maintaining a relationship with Denney, Lightman undertook to develop his own line of products in competition with Denney's line.

Soon after Lightman developed his own line of products, Denney began receiving telephone calls from its customers who claimed to have received several confusing mailings, referring to the new company, I.S. Labs. Lightman had sent the materials to Denney customers, gleaned from customer lists which Alfin had previously sold Denney, and had signed them as "President of I.S." The materials solicited sales of a new Lightman line of products strikingly similar in appearance to the SHORELL line.

On April 6, 1990, Lightman was preliminarily enjoined from replicating the trade dress and name identification of a line of moisturizers and skin-care cosmetic products, known as the IRMA SHORELL line which he developed and produced in contravention to Denney's trademark. He was also enjoined from violating Denney's ownership rights in the goodwill attendant to the SHORELL product.


Denney seeks partial summary judgment and a permanent injunction. Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. All doubts are to be resolved against the movant and all favorable inferences are to be drawn in favor of the party against whom judgment is sought. Branko International, Inc. v. Saudi Arabian Airlines, 704 F. Supp. 386, 389 (S.D.N.Y. 1989), aff'd without op., 880 F.2d 1318 (2d Cir. 1989). Moreover, the standard for a permanent injunction is essentially the same as for a preliminary injunction, except that for a permanent injunction a plaintiff must demonstrate actual success on the merits. ER Holdings, Inc. v. Norton Company, 735 F. Supp. 1094 (D.Mass. 1990). The record in this matter is complete on the issue of liability.

With regard to trademark and trade dress infringement, my previous findings make clear that Lightman's products were confusingly similar to the trademarks which Lightman had sold to Denney's predecessor, Alfin. Lightman's contention that Denney never held trademarks or rights in the trademarks since Alfin, the intermediary company, sold rights to Denney makes little sense.*fn1 Simply because Lightman was not a signatory to the Alfin-Denney agreement does not mean that Lightman gets a reversion of the trademarks. Once a trademark is alienated with no reservation of rights in the future, as is the case here, reversion rights do not miraculously come into play. Lightman's contention that he never alienated his rights in the advertising that he developed in the 1960's for the SHORELL line also defies logic. Whatever rights Lightman thought he was secretly reserving to himself must fall to an objective reading of the contract. Exploiting advertising in the same trade dress as was alienated in the Lightman-Alfin contract is improper. Lightman must be enjoined permanently from producing a line of products confusingly similar to Denney's SHORELL line. Furthermore, Lightman's problems with the quality of certain SHORELL product shipments from Denney in 1989 does not give him license to exploit the very same trademarks, trade dress, and advertising alienated by him in 1985. Thus, no question of fact remains at this juncture with respect to Lightman's liability for trademark and trade dress infringements.

To prevail on claims of unfair competition and trademark infringement, plaintiffs must prove by a preponderance of the credible evidence that there is a likelihood that an appreciable number of ordinary prudent purchasers are likely to be confused as to the source of goods in question. Smithkline Beckman Corp. v. Proctor & Gamble Co., 591 F. Supp. 1229, 1235 (N.D.N.Y. 1984), aff'd without op., 755 F.2d 914 (2d Cir. 1985). While actual confusion to the public is not necessary to establish that confusion is likely, instances of actual confusion are extremely persuasive evidence of likelihood of confusion. Gucci v. Gucci Shops, Inc., 688 F. Supp. 916, 926 (S.D.N.Y. 1988). Although not dispositive, evidence of intentional copying "bolsters a finding of consumer confusion." Charles of Ritz Group Ltd. v. Quality King Distributors, Inc., 832 F.2d 1317 at 1322 (2d Cir. 1987) (citing Centaur Communications, Ltd. v. A/S/M Communications, Inc., 830 F.2d 1217, 1227 (2d Cir. 1987)). Relief has been granted in New York in a wide variety of situations to insure that "one may not misappropriate the results of the skill, expenditure and labors of a competitor." Flexitized, Inc. v. National Flexitized Corp., 335 F.2d 774 (2d Cir. 1964), cert. denied, 380 U.S. 913, 85 S.Ct. 899, 13 L.Ed.2d 799 (1965).

It is not disputed that there have been innumerable instances of actual confusion as evidenced by telephone inquiries as well as misdirected and cancelled orders directed at Denney in favor of Lightman's products. In addition to instances of actual confusion, Denney has lost sales to Lightman simply because customers think they are buying IRMA SHORELL when they are buying I.S. Labs products, and believe that SHORELL is the genuine source of Lightman's line of products.*fn2

Moreover, it is clear that Lightman's advertisements derived from the very same advertising and trade dress elements which he sold to Alfin and which Alfin sold to Denney. Lightman does not deny repeated acts of comparative advertising. He disputes only the legal consequences and effect of these acts, therefore, the only matter to be resolved is a question of law, namely, whether defendants' acts constitute unfair competition. I find they do. Lightman undertook to target the same group of consumers as were purchasing the SHORELL line. Once ...

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