The opinion of the court was delivered by: KOELTL
JOHN G. KOELTL, District Judge:
This case concerns a dispute over the right to use in the New York metropolitan area a trademark consisting of the four Chinese characters pronounced "Hua Shang Nien Chien" ("the mark"). The undisputed owner of the mark, which in English means "Chinese Business Yearbook," is the defendant Asia System Media, Inc. ("ASM"). ASM uses the mark as the title for the numerous Chinese business directories ASM and its licensees publish throughout the United States and Canada. The plaintiff Tap Publications Co. ("Tap") contends that it has the exclusive right to use the mark in the New York metropolitan area pursuant to a 1986 settlement agreement between ASM and Key Publications, Inc. ("Key"), Tap's alleged predecessor corporation, and that ASM violated the terms of this settlement by entering into a licensing agreement with defendant Chinese Yellow Pages (New York), Inc. ("CYPNY").
Tap initiated this action and made claims against both CYPNY and ASM under Section 43 (a) of the Lanham Act, 15 U.S.C. § 1125(a), for false designation of origin as well as under state trademark law and state law against unfair competition. In addition, Tap alleges that ASM breached the 1986 settlement agreement. ASM answered and counterclaimed against Tap, alleging that Tap infringed ASM's trademark rights in violation of 15 U.S.C. §§ 1114(1) (a) and 1125 (a) and state trademark law, violated state laws against unfair competition, breached the 1986 settlement agreement, and tortiously interfered with its contract with CYPNY. Tap seeks injunctive relief, money damages, an accounting for profits, the turnover of profits, the destruction of all infringing publications from Asia System Media, Inc. ("ASM") and Chinese Yellow Pages (New York), Inc. ("CYPNY"), and attorney's fees. ASM seeks the same relief against Tap. CYPNY seeks only attorney's fees from Tap.
After denying the parties' motions for temporary restraining orders, the Court consolidated the cross-motions for preliminary injunctions with a trial on the merits pursuant to Fed. R. Civ. P. 65(a). The Court makes the following findings of fact and conclusions of law.
1. Jurisdiction over the federal causes of action is based on the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), and 1121, and 28 U.S.C. §§ 1331 and 1338(a). Jurisdiction over the pendent state-law claims exists under 28 U.S.C. §§ 1338(b) and 1367(a).
2. Tap is a corporation organized and existing under the laws of the State of New York, and its principal place of business is New York. Tap is the publisher of the copyrighted Chinese language business directory entitled "Chinese Business Guide & Directory," which is published annually.
3. CYPNY is a corporation organized and existing under the laws of the State of New York. Its principal place of business is also New York. CYPNY publishes a Chinese language telephone directory.
4. ASM is a corporation organized and existing under the laws of the State of California, with its principal place of business in Monterey Park, California. ASM is engaged in the business of publishing or licensing to publish telephone directories that use the mark as a title. ASM and its licensees publish directories in several geographical regions in the United States and Canada.
5. ASM began using four Chinese Characters pronounced "Hua Shang Nien Chien" as its trademark and book title in 1983. These characters appear in a straight horizontal line on the front cover of ASM's publications. (ASM Exh. C) (covers of ASM's publications.) ASM has continuously used this mark from that time to the present.
6. ASM registered the four Chinese characters that are pronounced "Hua Shang Nien Chien" as its trademark with the U.S. Patent and Trademark Office in the Supplemental Register on May 8, 1990 and in the Principal Register on November 30, 1993. (ASM Exh. G, H) (Certificates of Registration).
7. In 1985, ASM entered into a contract with Asia System Media (New York), Inc. ("ASMNY") to publish a telephone directory with these four characters in the New York market. Pursuant to the contract, ASMNY would be the sole distributor of Chinese language directories with the mark.
8. In 1986, Key filed an action against both ASMNY and ASM in the United States District Court for the Southern District of New York alleging copyright infringement, trademark violations (trade dress), unfair competition, and related claims. Key Publications, Inc. v. Asia System Media, Inc., Civil Action No. 86-3403 (JMW).
9. This action was settled by agreement of the parties. The parties drafted an agreement in Chinese, which was translated into English by one of the attorneys for Key. Only the English language version was filed with the Clerk of the Court on May 27, 1986 as an Order and Stipulation of Settlement.
10. Pursuant to the terms of the settlement, as set out in both the original Chinese-language agreement and the English-language Order and Stipulation of Settlement entered by Judge Walker on May 27, 1986, Key was to add ASM's trademark, the four Chinese characters pronounced "Hua Shang Nien Chien," to the title on the cover of its telephone directory.
11. Pursuant to the terms of both the Chinese and English versions of the settlement agreement, ASM agreed not to publish Chinese telephone directories in the metropolitan New York area as long as Key published Chinese/English telephone directories in the metropolitan New York area; however, if Key ceased to publish a Chinese directory in the New York area, ASM would be permitted to Publish a Chinese directory in the New York area. (Tap Exh. 1; ASM Exh. E.)
12. No version of the 1986 settlement agreement offered by the parties expressly states whether a successor to Key would have the same rights to the mark that Key had. Tap was not mentioned in the 1986 agreement and did not play any role in the negotiation of the agreement; indeed, Tap did not even exist at the time. In addition, there is no evidence that the parties discussed whether Key should have the power to transfer its rights in the mark to a successor corporation.
13. Key was dissolved on March 20, 1992. (ASM Exh. L.) Key did not inform ASM of its dissolution.
14. Tap was incorporated on November 7, 1991. (ASM Exh K.) (certificate of incorporation for Tap)
15. On February 19, 1992, Key executed an assignment of its copyrights for the 1992 Chinese Business Guide and Directory and "all other rights there in [sic]" to plaintiff Tap. (Tap Exh. 9.) ("Assignment") The purpose of this document was to transfer copyrights from Key to Tap and makes no mention of any rights Key may have had in the mark.
16. No notice of this assignment was given to ASM by either Key or Tap.
17. Neither Key nor Tap told ASM that Tap claimed status as a successor corporation to Key.
18. ASM has never licensed Tap to use the mark, nor has ASM otherwise transferred or consented to the use of the mark by TAP.
19. Since 1992, Tap has published an annual Chinese-language directory containing the Chinese characters pronounced "Hua Shang Nien Chien" on the cover. These characters are arranged in a square box, with two characters on top of the other two characters, and the box containing the characters is located at the top right corner of the cover. (Tap Exh. 7.)
20. Although the Chinese characters pronounced "Hua Shang Nien Chien" appear in a box in the upper right corner of the cover of Tap's directories, it is possible that customers would consider those characters as part of the title of Tap's publication.
21. The meaning of the Chinese characters pronounced as "Hua Shang Nien Chien" are the same whether they are arranged in a square or in a horizontal line.
22. ASM learned that Tap was using ASM's trademark and book title some time during 1992 when it acquired a copy ...