The opinion of the court was delivered by: SHIRLEY WOHL KRAM
SHIRLEY WOHL KRAM, U.S.D.J.
In this action involving two nationally known manufacturers and distributors of jeans and jeans apparel, plaintiff Jordache Enterprises, Inc. ("Jordache") moves, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for summary judgment against Levi Strauss & Co. ("Levi"). Specifically, Jordache seeks an order declaring that its use of the trademark "Jordache Basics 101"
(1) is not likely to cause the public to be confused that jeans and jeans apparel sold in association with that mark are manufactured or are otherwise sponsored by Levi, and such use therefore does not infringe any rights Levi may have in the mark "501" under §§ 32(1) and 43(a) of the Federal Trademark Act (the "Lanham Act"), 15 U.S.C. §§ 1114(1), 1125(a), and the common law of unfair competition; (2) does not constitute a false designation of the origin or affiliation, or a false description or representation of characteristics and qualities of such jeans under § 43 (a) of the Lanham Act, 15 U.S.C. § 1125(a), and the common law of unfair competition; (3) does not cause an impairment of or a reduction in the distinctiveness of Levi's "501" trademark, pursuant to section 368-d of the New York General Business Law; and (4) does not otherwise appropriate any advertising value associated with Levi's "501" mark under the common law of unfair competition. Jordache also moves, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss Levi's counterclaims.
Levi opposes Jordache's motions and cross-moves for summary judgment on its counterclaims, alleging that Jordache's use of the mark "Jordache Basics 101" and design: (1) is likely to cause confusion, mistake or deception and constitutes infringement of Levi's "501" mark in violation of § 32(a) of the Lanham Act, 15 U.S.C. § 1114(a); (2) constitutes a false designation of origin in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (3) dilutes the distinctive quality of the "501" trademark and Levi's family of three-digit marks in violation of New York's antidilution statute, N.Y. Gen. Bus. Law § 368-d; and (4) misappropriates Levi's advertising and promotional expenditures, and the goodwill and advertising value inherent in Levi's "501" mark and other three-digit marks, in violation of the law of unfair competition. Alternatively, Levi moves for a preliminary injunction halting Jordache's use of its allegedly infringing "101" mark until trial.
Except where noted, the following facts are undisputed. Jordache is a nationally-known manufacturer and distributor of jeans and jeans apparel, and has sold such products in conjunction with the federally registered "Jordache" trademark since 1978.
In 1986, Jordache began using the "Jordache Basics" trademark in the manufacture, sale, promotion, and advertisement of its jeans and jeans apparel. In 1988, it also commenced use of the trademark "Jordache Basics 101."
During this same time period, Jordache ran a television commercial that Levi claims to be a simulation of the style, format and mood of Levi's "501 Blues" advertising campaign.
Subsequently, beginning in February 1991, Jordache used "Jordache Basics 101 with wings and stars design" in commercial advertisements to promote a line of Jordache jeans. These advertisements appeared in magazines such as Mademoiselle, Seventeen, Cosmopolitan and Redbook, as well as on approximately 320 outdoor promotional displays at bus shelters in New York City, Los Angeles and San Francisco. In addition, an advertisement incorporating the mark "Jordache Basics 101 with wings design" appeared in the September 15, 1991 men's fashion supplement of The New York Times Magazine. Between November 25, 1991 and January 19, 1992, Jordache also sponsored television commercial advertisements featuring the "Jordache Basics" and "101" marks. Subsequently, from February 1992, through May 1992, and again in July 1992, Jordache placed advertisements using the "Jordache Basics 101" mark in The New York Times Magazine, Glamour, Mademoiselle, Seventeen, Cosmopolitan, Rolling Stone, Vogue and Playboy.5
Between October 1990 and February 1991, Jordache manufactured and distributed approximately 600 dozen men's jeans that were promoted as "Jordache Basics 101 with wings and stars designs" and "Jordache 101 with wings and stars designs." Most of these jeans were sold in early 1991 to several small retailers, not including any department stores or large specialty chains. An additional 200 dozen jeans were ordered for distribution and sale in the fall of 1991 and the winter of 1992, and 1,000 dozen "Jordache Basics 101" jeans were ordered for production and shipment through September 15, 1992. These jeans were labelled, affixed and tagged with the following Jordache identifiers: (1) either the "Jordache Basics," "Jordache Basics 101 with stars and wing designs" or "Jordache 101 with stars and wing designs," trademark was printed on suede-like fabric which was permanently stitched onto the jeans at the top of the right rear panel and positioned between two belt loops; (2) the trademark, "Jordache," was stitched in thread to a strip of fabric and placed on one of the rear pockets; (3) metal rivet fasteners and buttons were embossed with the mark, "Jordache;" (4) Jordache's "Horsehead Design" trademark was placed on a permanent inside tag on which was printed the jean's size and care instruction information; (5) the "Horsehead Design" also appeared on the zipper pull; and (6) bright colored, detachable "flasher cards" bearing one of the trademarks, "Jordache Basics," "Jordache Basics 101 with wings and stars designs" or "Jordache 101 with wings and stars designs," was attached to the jeans at the point-of-sale.
The entire line of Jordache jeans featured a front zipper fly.
Jordache describes its "101" products as "high waisted, tight body fitting, zipper-front jeans." See Deposition of Stephen Baum, taken on July 30, 1991, at 331, annexed to Plaintiff's Statement of Material and Undisputed Facts Pursuant to Local Civil Rule 3(g) ("Jordache's Rule 3(g) Statement"), as Exh. "7." According to Jordache, the "Jordache Basics 101" style is intended for the woman or man who desires their jeans to have a "tight sexy fit." See Deposition of David Warren, taken on August 2, 1991, at 82, annexed to Jordache's Rule 3(g) Statement as Exh. "4."
Jordache jeans for men are priced between $ 30.00 and $ 45.00.
Jordache claims that its "Jordache Basics 101" mark forms an integral part of its campaign of advertising and marketing promotion, generating future consumer demand even though the product is not immediately available. According to Jordache, the "Jordache Basics 101" concept directs the consumer to a line of basic, five pocket, western-style jeans, by communicating the idea that "like the first course one can take in school in any subject, 'there is nothing more basic than 101 in the Jordache line' of jeans apparel." See Jordache's Rule 3(g) Statement at P 5.
Levi originated its line of "501" jeans in the 1800's, when the model number 501 was randomly assigned to a style of jeans containing five pockets, a button fly, and metal rivets securing the edges of each pocket. In 1969, Levi officially began use of the number "501," a federally registered mark, as a trademark for the jeans themselves.
The style of jeans utilizing the "501" trademark has remained virtually unchanged for over 135 years and, Levi's "501" jeans have frequently been referred to as the "original" jeans.
Levi's "501" jeans can be purchased either in pre-shrunk, or original non-pre-shrunk, or "shrink-to-fit," forms. Thus, in contrast to Jordache's description of "501" jeans as "loose fitting," Levi claims that its "501" jeans, after washing, provide a fit that conforms to the body. Levi's "501" jeans are available in various fabric treatments, such as stonewashed (rocks), stonewashed (chemical), rinsed, bleached, white-washed, electric-washed, and overdyed. The "501" jean is tagged with several Levi identifiers, including: (1) the "arcuate" design pattern identifier, which is stitched on the two rear pockets; and (2) a permanent red ribbon labelled "Levi," which is sewn on the jean's left-hand vertical seam of the right rear patch pocket; (3) the "Guarantee Ticket," consisting of a leather-like fabric which is sewn on the waistband; (4) a flash card prominently displaying the "501" mark; and (5) a button fly. Generally, "501" jeans are sold at retail prices ranging from $ 16.99 to $ 42.00.
In the period 1982-1991, Levi expended over $ 150,000,000 in advertising that featured the "501" mark. This advertising was conducted via television, posters, print and in-store displays, and is considered the largest advertising program ever conducted for a specific apparel item. Levi "501" jeans have also received extensive publicity in the news media. In the period 1970-1991, Levi sold more than 390 million pairs of "501" jeans, yielding more than $ 5 billion in revenues.
While "501" jeans are targeted for men, in 1981, Levi introduced a special line of "501" jeans for women. Additionally, since 1987, Levis has produced, advertised and sold a line of women's jeans identified by three-digit trademarks in the "900" series. Sales of the "900" series models have exceeded $ 185 million though 1991. The most popular model in this line is the "901" jean, with sales of over 2.7 million pairs, producing revenue of more than $ 41 million. A youthwear version of "501" jeans was also introduced in 1905. Sales of these jeans between 1970-1991 exceeded $ 570 million. In conjunction with the "501" trademark that appears on the flashcard attached to the rear pocket of these jeans, the designation "701" appears on the leather patch which is permanently affixed to the garment.
In addition to its jeans utilizing the "501," "701" and "901" trademarks, Levi offers several different styles of jeans utilizing other three-digit trademarks in the 500 series, including "505," "506," "517," and "550." The "505" and "517" marks are federally registered. Levi claims that its marketing strategy has been to attract vast purchaser interest in "501," creating a promotional halo over its other jeans styles. As with its "501," "701" and "901" jeans, Levi has enjoyed large sales of jeans bearing its other three-digit marks. For example, in the period 1989-1990, sales of the "505," "506," and "517" and "550" jeans exceeded 95 million units and amounted to more than $ 1.5 billion in revenues.
III. Registration of Jordache Trademarks
Between February and April 1988, Jordache applied to register with the United States Patent and Trademark Office ("PTO") the trademarks "Jordache 101," "Jordache Basics 101," and "Basics 101." In the latter part of 1988, Levi filed notices of opposition to each of these marks, claiming that Jordache's use of the number "101" was similar to Levi's family of three-digit trademarks, and therefore likely to confuse or mislead the public into believing that Jordache's jeans either originated from, were associated with, or were sponsored by Levi. Subsequently, in October 1989, Jordache abandoned its application to register those trademarks. Jordache claims, however, that it reserved the right "to use trademarks including the numeral '101' in different formats and/or different design configurations." See letter from Lori B. Cohen, counsel for Jordache, to Milton W. Schlemmer, counsel for Levi of 12/28/89, annexed to Jordache's Rule 3(g) Statement as Exh. "30."
On February 1, 1991, Jordache filed an intent to use application with the PTO to register the mark "Jordache Basics 101 with star and wing design" for use with jeans and jean apparel. Levi opposed Jordache's application and the opposition was suspended without decision pending the outcome of the instant action.
IV. The Parties' Claims and Counterclaims
On June 17, 1991, Jordache filed an amended complaint, seeking declaratory judgment that (1) its use of the mark "Jordache Basics 101" does not violate Levi's rights in the mark "501" under either §§ 32(1) and 43(a) of the Lanham Act, or the common law of unfair competition; (2) Jordache has the right to continue using the mark "Jordache Basics 101" free from interference by Levi; (3) its use of the "Jordache Basics 101" mark does not dilute and violate Levi's rights in the "501" mark under N.Y. Gen. Bus. Law § 368-d. Jordache also seeks an order preliminarily and permanently enjoining Levi from interfering with, or threatening to interfere with Jordache's use of the mark "Jordache Basics 101," and instituting any suit or other proceeding placing in issue Jordache's right to use this mark.
Levi answered the amended complaint on June 24, 1991, and asserted four counterclaims against Jordache. Specifically, Levi alleges that Jordache's use of the "Jordache Basics 101" mark: (1) is likely to cause confusion, mistake or deception and constitutes an infringement of Levi's registered "501" mark in violation of § 32(a) of the Lanham Act (Count One); (2) constitutes a false designation of origin or affiliation and a false description or representation of the characteristics and qualities of its products in violation of § 43(a) of the Lanham Act (Count Two); (3) dilutes the distinctive quality of the "501" trademark and Levi's other three-digit marks in violation of the antidilution statute set forth in N.Y. Gen. Bus. Law § 368-d (Count Three); and (4) misappropriates Levi's advertising and promotional expenditures and the goodwill and advertising value inherent in Levi's marks in violation of the law of unfair competition (Count Four).
I. Summary Judgment Standard
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact, which can be done merely by pointing out that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The nonmoving party then has the burden of coming forward with "specific facts showing that there is a genuine issue for trial," Fed. R. Civ. P. 56(e), by "a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322.
The Court "must resolve all ambiguities and draw all reasonable inferences in favor of the party defending against the motion." Eastway Constr. Corp. v. New York, 762 F.2d 243, 249 (2d Cir. 1985); see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970); Hathaway v. Coughlin, 841 F.2d 48, 50 (2d Cir. 1988); Knight v. United States Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987). But the Court must inquire whether "there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986), and to grant summary judgment where the non-movant's evidence is merely colorable, conclusory, speculative or not significantly probative. Id. at 249-50; see Knight v. United States Fire Ins. Co., 804 F.2d at 12, 15; Argus Inc. v. Eastman Kodak Co., 801 F.2d 38, 45 (2d Cir. 1986), cert. denied, 479 U.S. 1088, 94 L. Ed. 2d 151, 107 S. Ct. 1295 (1987). To determine whether the non-moving party has met his or her burden, the Court must focus on both the materiality and the genuineness of the factual issues raised by the non-movant. As to materiality, "it is the substantive law's identification of which facts are critical and which facts are irrelevant that governs." Anderson v. Liberty Lobby, Inc., 477 U.S. at 248. A dispute over irrelevant or unnecessary facts will not preclude summary judgment, id., but the presence of unresolved factual issues that are material to the outcome of the litigation mandates a denial of the summary judgment motion. See, e.g., Knight v. United States Fire Ins. Co., 804 F.2d at 11-12.
Once the non-moving party has successfully met the burden of establishing the existence of a genuine dispute as to an issue of material fact, summary judgment must be denied unless the moving party comes forward with additional evidence sufficient to establish his or her ultimate burden under Rule 56. See Celotex Corp. v. Catrett, 477 U.S. at 330, n.2 (Brennan, J., dissenting). In sum, if the Court determines that "the record as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (quoting First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1969)); see also Weg v. Macchiarola, 654 F. Supp. 1189, 1191-92 (S.D.N.Y. 1987).
II. Trademark Infringement