The opinion of the court was delivered by: SCHEINDLIN
Defendant Scientific Concepts, Inc. ("Scientific") moves: 1) to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6); or 2) to dismiss the fourth claim of the complaint pursuant to Fed. R. Civ. P. 12(b)(1), 12(b)(2) and 12(b)(6), and the remainder of the complaint pursuant to Rules 12(b)(7) and 19; or 3) to strike paragraphs 17 and 18 of the complaint. Defendant B-Line A.G., also known as Pointer Switzerland ("Pointer"), moves to dismiss the complaint under Fed. R. Civ. P. 12(b)(2), 12(b)(4), and 12(b)(5)
, or, alternatively, joins Scientific's motion. For the reasons set forth below, Defendants' motions are denied.
Plaintiffs The Forschner Group, Inc. ("Forschner") and its wholly owned subsidiary, Swiss Army Brands, Ltd. ("Swiss Army") are Delaware corporations. See Complaint ("Compl.") PP 3-4. Forschner sells Swiss-manufactured SWISS ARMY brand watches throughout the United States. Id. P 11. Swiss Army owns several U.S. registered trademarks: SWISS ARMY for watches, SWISS ARMY for sunglasses, OFFICER'S for watches, and a cross and shield design for watches. Id. Exs. B-E. All of the trademarks are valid and in full force and effect. Id. PP 11-12.
Plaintiffs claim that because of the "high quality and durability of the watches" and Forschner's diligence in advertising, distributing and selling the SWISS ARMY and OFFICER'S watches under the cross and shield design, the design and the trademarks have come to represent valuable good will symbolizing Forschner's reputation as a supplier of dependable goods. Id. P 14.
Defendant Pointer is a Swiss corporation and Defendant Scientific is an Iowa corporation. Id. PP 6-8. In the past, Defendants have used the slogan "The legendary Swiss Army Knife NOW THE WATCH" and the terms "Officer" and "Officer Chronograph" as trademarks to sell watches. Id. PP 17-18. Plaintiffs warned Defendants that such use of the terms "Swiss Army" and "Officer" constitutes trademark infringement and unfair competition. Id. P 19.
On September 23, 1995, wishing to avoid litigation, the parties entered into a "Settlement Agreement." Under the terms of the Agreement, Defendants agreed not to use SWISS ARMY, OFFICER, or the phrase "Swiss Army knife" in any manner in connection with the sale of watches. Id., Ex. A, Settlement Agreement ("Agreement") PP 1-2. They also agreed not to "represent in any manner that the watches offered for sale or distributed by . . . them are approved or endorsed by the Swiss Armed Forces," id. P 3, and not to "engage in any marketing activities such that the total impression created is that the [watches] are associated with Forschner." Id. P 5 (emphasis added). In return, Forschner agreed to pay Pointer a sum of money and promised to "refrain from filing a suit for infringement and unfair competition against Scientific or Pointer so long as Scientific and Pointer abide by the terms and conditions of this agreement." Id. PP 6-7. Finally, all parties consented that the Agreement would be "governed by the laws of the State of New York" and that they would "submit to the jurisdiction of the courts of New York to resolve any dispute that may arise anywhere under [the] Agreement." Id. P 11.
Recently, Pointer has begun to advertise and sell a watch described as "Swiss Airforce Sunpower Watch." See Compl. P 21; Ex. F. A copy of page 24 of the Lifestyle Fascinations mail order catalog, the Early Winter 1995 edition, is attached to the complaint. The copy of the photograph of the watch shows that the watch bears the word "AIRFORCE" and a white cross in a red circle design on the watch casing, and the words "POINTER Switzerland" on the face of the watch. Next to the watch are the words "Made by Pointer (R)." See Compl. PP 20-22, Ex. F. Additionally, on or about September 24, 1995, Scientific applied to the U.S. Patent and Trademark Office to register the trademarks "SWISS COLONEL" and "SWISS SCOUT" for watches and pens, and "SWISS COMMANDER" for pens.
On November 21, 1995, Forschner filed a complaint against Scientific and Pointer alleging that: 1) Defendants' use of "Swiss Airforce" in connection with watches constitutes trademark infringement and violates 15 U.S.C. § 1114, because this phrase so resembles Plaintiffs' registered trademark SWISS ARMY that it is likely to cause confusion, deception or mistake; 2) Defendants' use of "Swiss Airforce" and/or "AIRFORCE" in connection with watches constitutes trademark infringement and violates 15 U.S.C. § 1125(a), as it is a "false designation of origin or sponsorship [implying] an association of defendants' goods with plaintiffs' and plaintiffs' trademark SWISS ARMY," causing consumers to mistakenly believe that Defendants' watches are distributed by or under Plaintiffs' authority; 3) Defendants' acts constitute unfair competition; 4) Defendants have embarked upon a scheme to unfairly compete with Plaintiffs and to trade upon their good will by imitating Plaintiffs' registered trademark SWISS ARMY and OFFICER'S, by using, in connection with watches, and applying to register, the word "Swiss" combined with titles of army officers -- "Colonel," "Commander," and "Scout" -- causing confusion, deception and mistake; 5) Defendants' use of "Swiss Airforce" dilutes the distinctive quality of Plaintiffs' SWISS ARMY trademark and blurs the affirmative association between SWISS ARMY and Plaintiffs' products, in violation of N.Y. Gen. Bus. Law § 368-d regarding dilution; and 6) Defendants have breached P 5 of the agreement of February 23, 1995, by combining "Swiss Airforce" and/or "AIRFORCE" with a cross within a circle design in imitation of Plaintiffs' SWISS ARMY trademark, creating a "total impression that defendants' watches are associated with plaintiffs." Compl. P 54.
Plaintiffs seek to enjoin Defendants from: 1) using "Swiss Airforce" and/or "AIRFORCE" in connection with watches; 2) using the cross within a circle design, or any other imitation of Plaintiffs' cross and shield trademark; 3) using and registering as trademarks "Swiss Colonel," "Swiss Scout," and "Swiss Commander" in connection with watches and/or pens; 4) representing that their watch is a SWISS ARMY watch; 5) competing unfairly with Plaintiffs; and 6) breaching the Agreement of February 23, 1996. Plaintiffs also ask the Court to order Scientific to withdraw its trademark applications for the marks "Swiss Colonel," "Swiss Scout" and "Swiss Commander."
Finally, Plaintiffs ask the Court for costs and reasonable attorneys' fees under 15 U.S.C. § 1117.
A. Motion to Dismiss under Rule ...