The opinion of the court was delivered by: SHIRA A. SCHEINDLIN
SHIRA A. SCHEINDLIN, U.S.D.J.
On December 14, 1994, plaintiffs J. Lyons & Company Ltd. and Tetley Inc. ("Lyons") filed suit against The Republic of Tea, Inc. ("Republic") for (1) trademark infringement under Section 32 of the Lanham Trademark Act, 15 U.S.C. § 1114, (2) unfair competition under Section 43(a) of the Trademark Act, 15 U.S.C. § 1125(a), (3) common law trademark infringement, (4) common law unfair competition, (5) deceptive trade practices under New York General Business Law § 133 and (6) trademark dilution under New York General Business Law § 368-d. Lyons also filed identical claims against two other tea vendors, J. Lyons & Company Ltd. and Tetley Inc. v. Conopco Inc. d/b/a Thomas J. Lipton, Inc. ("Lyons v. Lipton") (94 Civ. 8877),
filed on December 8, 1994, and J. Lyons & Company Ltd. and Tetley Inc. v. Interport National Corp. d/b/a/ Barrows Tea Co. ("Lyons v. Barrows") (95 Civ. 0151), filed on January 10, 1995.
In addition to these three New York actions, three related actions are also pending. Republic has filed a declaratory judgment action against Lyons in the Northern District of California, Lipton has filed a declaratory judgment action against Lyons in New Jersey, and Barrows has filed a declaratory judgement action against Lyons in Massachusetts. All three of the declaratory judgment actions were filed before Lyons filed any of its actions in the Southern District of New York ("New York").
In response to the New York actions brought by Lyons, each defendant filed motions to dismiss, stay or transfer the actions in favor of the first-filed declaratory judgment action.
These motions are now pending before the Court.
These disputes concern the use of round-shaped tea bags by Republic, Lipton and Barrows. Lyons, a British corporation, is the source of the tea products marketed by Tetley, a Delaware corporation with its principal place of business in Connecticut. Complaint in Lyons v. Barrows at PP 6, 8-10. Tetley is a wholly owned U.S. subsidiary of Lyons, which sells and distributes tea products in the United States. Id. at P 9. Lyons adopted the Round Tea Bag Design on May 1, 1989 and first used this mark in the United Kingdom. Id. at P 15. On January 4, 1991, Tetley introduced and began using the Round Tea Bag Design in United States commerce. Id. at P 16. Lyons was issued Trademark Registration No. 1,839,551 on June 14, 1994 for a Round Tea Bag Design. Id. at P 20. Between 1991 and 1993, Lyons sold over $ 25 million dollars worth of the Tetley round tea bags, id. at P 37; and in 1994, Lyons' and Tetley's combined revenue was in excess of one billion dollars. Declaration of William Rosenzweig, President of Republic, dated January 19, 1995 ("Rosenzweig Decl."), at P 3.
A summary of the facts surrounding each of the separate actions filed by Lyons is set forth below.
Lyons wrote to Republic on October 11, 1994, demanding that Republic cease and desist from infringement of Lyons' trademark Round Tea Bag Design. Id. at P 2. This letter's only reference to legal action was that Lyons "will be constrained to pursue appropriate legal steps against" Republic if Republic choose not to comply. Id. at Exh. A.
On November 8, 1994, Republic denied Lyons' claim to a trademark on the round tea bag. Id. P 8. In addition, on November 8, 1994, Republic filed a complaint for declaratory relief in the Northern District of California. Id. at P 7. Republic's declaratory judgment action seeks a judicial determination under 28 U.S.C. §§ 2201 and 2202 as to (1) the protectibility of round tea bags and the its right to use its round tea bags and as to (2) the validity, nature and scope of Lyons' trademark registration. Complaint in Republic v. Lyons at PP 25, 30. Lyons initially responded by stating that it would take the matter under advisement. Crittenden Decl. at Exh. I. Two weeks later, however, Lyons renewed its cease and desist demands. Id. at Exh. J.
Conopco Inc. ("Lipton"), a Delaware corporation with its principal place of business in New Jersey, has manufactured and marketed tea products in the United States since 1893. Declaration of John C. Young, Lipton's counsel, dated January 20, 1995 ("Young Decl."), at PP 6-7. In June of 1993, Lipton began advertising and selling its "Lipton Rounds" family size tea bags. Id. at P 4. In July, 1994, Lyons charged Lipton with trademark infringement and demanded that Lipton remove its "Lipton Rounds" tea product from the market. Id. at P 8. Thereafter, on November 4, 1994, Lyons demanded Lipton cease and desist from infringing Lyons' Round Tea Bag Design trademark, id. at P 9, and indicated that its attorneys were authorized to ...