The opinion of the court was delivered by: KAPLAN
LEWIS A. KAPLAN, District Judge.
IBM and a division initially called IBM Educational Systems ("IES") have sold computer hardware, software and related services to schools with children in kindergarten through twelfth grade ("K-12") since 1985. In 1992, in circumstances described more fully below, IBM renamed IES "EduQuest." It continued to market its K-12 product line under that name.
Mejia is a small home-based entity located in Brooklyn, New York. Theodore Mejia is president, Aimee Mejia is chair and chief executive officer, and six to seven other persons appear to be involved in a non-ownership capacity. (T. Mejia Decl. P1; A. Mejia Decl. P 1; A. Mejia Dep. 36-37, 60) Mejia contends that it began using the word EduQuest in commerce in November 1989 through a predecessor.
(A. Mejia Dep. 133; see also Villella Dep. Ex. B at 8410000802) While the parties characterize differently the full scope of Mejia's activity in conjunction with the mark "EduQuest," it is undisputed that the majority of this activity is advising adult individuals on how to start and run home-based businesses. (A. Mejia Dep. 60-61; Pl. Mem. 21)
IBM's Adoption of EduQuest Mark
James Dezell, the founder and first president of IES, held a number of meetings in 1991 to consider new names. (Dezell Dep. 20-22) In the course of the meetings, the field of names suggested by IBM's corporate naming division was reduced to a short list. (Id 27) During one meeting, a manager proposed combining elements of two names from the short list: the prefix "Edu" from "Edutech" and the last part of a name ending in "Quest" to produce "EduQuest." (Id. 20-21; Mackenzie Decl. P 4; Nelson Decl. P 6) The name appealed to Mr. Dezell, who believed that it captured what the business was about: "the improvement of the educational system in America." (Dezell Dep. 30) However, some of the managers were opposed to changing the name, and an agreement was reached to keep the new name "EduQuest" closely tied with the name "IBM" through a tagline "The IBM Educational Systems Company." (Id. 29-30, 82-83; MacKenzie Dec. P 5; Altman Dep. 25)
IBM ordered a comprehensive trademark search by an IBM intellectual property lawyer, Joseph Villella, who completed the search on January 3, 1992. He found no other occurrence of the name "EduQuest" in federal, state, and common law sources, though he found several instances of marks beginning with "Edu" or ending with "Quest." (Dezell Dep. 84; Villella Decl. P P 4-5; Def. App. Ex. 16 at 33-34) On the advice of Mr. Villella that the name was available, IBM announced the formation of the "EduQuest, The IBM Educational Systems Company" on January 22, 1992, and filed applications to register "EduQuest" as a service and trade mark with the U.S. Patent and Trademark Office on January 13 and 24. (Villella Decl. P 5; Nelson Decl. P 5; Def. App. Exs. 10-11) IBM also began the process of reserving the name "EduQuest" in all 50 states, an effort that was successful in all states except Wisconsin. (Def. App. Ex. 14)
In view of this record, plaintiff appropriately has conceded for purposes of this motion that IBM adopted the mark in good faith. (Pl. Mem. 28; see also Def. App. Ex. 35)
IBM's Discovery of Other Users of the "EduQuest" Name
After announcing the adoption of the "EduQuest" name for its K-12 products, IBM became aware of two other users of the word EduQuest, a Wisconsin retailer of computer hardware and software intended for educational purposes and a California publisher of CD-ROM software. (Villella Decl. P 6) Both approached IBM, which purchased any rights they had to the name "EduQuest." (Id; Def. App. Exs. 18-19)
The Evolving Appearance and Uses of EduQuest By Each Party
The parties characterize differently the use and appearance of their "EduQuest" marks to better position their arguments about the similarity of the marks and proximity of the products, two considerations that affect the disposition of this motion. However, the evidence itself is fairly straightforward.
IBM has used the "EduQuest" name in conjunction with "IBM" since January 22, 1992 with its products for the K-12 schools and school districts, which include instructional software, noninstructional software (i.e., for school administrative operations), and some support and training services for using these products. (Def. App. Ex. 8; Dezell Dep. 9, 12-13, 31-32, 83; White Dep. 59-60) The tagline has changed at various points from "The IBM Educational Systems Company" to "An Educational Systems Company" to an "IBM Company." (Dezell Dep. 31-32, 37; Def. App. Ex. 16 at 10) Currently, EduQuest is being used as a sub-brand, and certain products therefore are labeled "IBM EduQuest Products." (Def. Mem. 4 n.2; Def. App. Ex. 8;
Def. App. Ex. 16 at 10) IBM has sold more than $ 1.6 billion of products under the EduQuest name. (Def. App. Exs. 16-17, Answ. to Interrog. No. 8) and has invested more than $ 3 million in nationally promoting the EduQuest name. (Def. Mem. 5; Def. App. Ex. 15)
Mejia contends, without a scrap of evidentiary support, that IBM has used the name "EduQuest" standing alone and that third parties refer to IBM's products as simply "EduQuest." (Pl. Mem. 20) Indeed, the evidence to which Mejia points shows exactly the opposite. (See Pl. Ex. 20) Mejia relies on a teachers' handbook with a title page labeled "EduQuest (TM): An IBM Company" with the "EduQuest" in larger type, and the tagline, "An IBM Company," on the next line in smaller, but still very conspicuous, type.
Nowhere in the record does IBM's use of the word EduQuest appear without "IBM" appearing noticeably and in close proximity. Mejia points to no evidence that third parties refer to IBM or its products as simply "EduQuest." (Pl. Mem. 20)
Mejia frequently uses EduQuest in conjunction with the tagline "A Tradition for Tomorrow" and a logo described as a Peruvian maze graphic design (see, e.g., Def. App. Exs. 24-25), which is precisely the mark for which Mejia initially sought registration on January 30, 1992.
(Id. Ex. 22) The newsletter is called "EduQuest Connections," and its front page contains the Peruvian design logo. (Def. App. Ex. 27 at 8400000831, S400000S94; Pl. Ex. 13)
The seminars offered by Mejia under its EduQuest name cover such subjects as "Becoming a Homebased Consultant," "Managing a Homebased Business," "Image Enhancement," and "Managing Your Personal Finances." (Def. App. Ex. 25) Two of the seminars addressed computer concerns of the home-based entrepreneur: one was called "Hardware The Easy Way: How to Buy a Computer." Another was "Computer Literacy: Conquering WordPerfect." (Id.)
Mejia has used the phrase EduQuest 3000, typically when the audience members are part of the educational system. (Pl. Exs. 13, 15; A. Mejia Dep. 64, 128, 373) Under the name EduQuest, 3000, for example, Mejia participated in an show called "Minority Careers in Education" produced by Tylin Enterprises, during which Mejia conducted two seminars called "Entering the World of Consulting" and "Preparing for a Change in Careers." (Mejia Dep. 357-58; Pl. Ex. 9) According to an EduQuest newsletter, Mejia also networked with the educational community and showcased its program for professional development for teachers and supervisors at the show. (See Pl. Ex. 13 at 1)
The principals of Mejia all have been teachers in New York City schools (Pl. Mem. 24; A. Mejia Dep. 31-32, 45, 598), which perhaps explains their attendance, on occasion, of conferences on alternative education and their plans to provide proposals on curriculum reform and to obtain grants for curricular programs. These endeavors allegedly have included: (1) participation in a conference in September 1989 about changing the educational system, which inspired the hope to participate in an alternative high school in New York City, perhaps by teaching entrepreneurialship, a plan never implemented (A, Mejia Dep. 587-90, 360-63 619-21; Skeete Dep. 97-98, 99-101, 103-04), and (2) drafting and planning to submit a grant proposal to Con Edison for a program on multiculturalism geared toward teachers and administrators as well as students.
(A. Mejia Dep. 612-615; Pl. Ex. 5; Skeete Dep. 81-82)
Notwithstanding the Mejia principals' avowed interest in and involvement with educational reform, there are no kindergarten through twelfth grade institutions that are actual customers of Mejia. (A. Mejia Dep. 81; accord, Homer Decl. P 6) All of Mejia's course and program offerings have been directed to individuals (A. Mejia Dep. 81), with the possible exception of contracts in spring of 1995 with the Support Center of New York to conduct seminars for teacher coordinators ...