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PAYLESS SHOESOURCE, INC. v. TOWN OF PENFIELD

August 26, 1996

PAYLESS SHOESOURCE, INC., Plaintiff,
v.
TOWN OF PENFIELD, NEW YORK, PENFIELD ZONING BOARD OF APPEALS, and HAROLD MOREHOUSE, Defendants.



The opinion of the court was delivered by: LARIMER

 Payless ShoeSource, Inc. ("plaintiff") brings this action, pursuant to § 1121(b) of the Lanham Act, against the Town of Penfield ("Town"), the Penfield Zoning Board of Appeals ("Board"), and Town Building Inspector Harold Morehouse ("Morehouse") (collectively "defendants"), alleging unlawful interference with its trademark.

 FACTUAL BACKGROUND

 Plaintiff, who operates two retail stores in Penfield, has a trademark registered with the United States Patent and Trademark Office. This mark consists of the distinctively lettered name "Payless ShoeSource" displayed in yellow, except for the two "o"s contained therein which are displayed in orange.

 One of plaintiff's stores is located in Baytowne Plaza. According to existing sign restrictions at this plaza, plaintiff's sign is required to be either yellow, red, or white. Plaintiff, however, disregarded these restrictions and erected a two-colored sign reflecting its trademark.

 In April 1995, Morehouse demanded that plaintiff change its sign to a single Board-approved color or seek a variance. Plaintiff applied for a variance. The Board, however, denied its application. To date, plaintiff has not brought its Baytowne Plaza sign into compliance.

 Plaintiff's other store is located in Panorama Plaza. Sign restrictions imposed on this plaza require that all signs be red. Plaintiff has complied with this requirement, displaying an all red sign, rather than a sign that reflects its yellow and orange trademark. Although plaintiff would like to display its two-colored trademark at Panorama Plaza, it has not applied for a variance in light of the Board's decision regarding the Baytowne Plaza store.

 Defendants move, pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss the complaint for failure to state a claim upon which relief can be granted. Defendants maintain that § 1121(b) of the Lanham Act was not intended to interfere with uniform aesthetic zoning requirements, enacted pursuant to a town's police power, that indirectly affect a trademark.

 Plaintiff cross-moves for summary judgment, arguing that the plain language of § 1121(b) forbids a town, as a political subdivision, from requiring alteration of a registered trademark.

 Because both parties have submitted, and I have considered, matters outside the pleadings, I will treat these motions as motions for summary judgment. Fed. R. Civ. P. 12(b).

 DISCUSSION

 Summary judgment will be granted if the record demonstrates 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); Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 36 (2d Cir. 1994).

 Here, the parties agree that there are no material issues of fact in dispute and that resolution of this matter depends solely on whether § 1121(b) preempts a town's authority to regulate signs for aesthetic purposes when those signs involve federally registered trademarks.

 I. Authority to Regulate Signs for Aesthetic Purposes

 The law in New York is well settled that a town, pursuant to its police power, may impose sign restrictions in order to regulate aesthetics.

 For example, in People v. Goodman, 31 N.Y.2d 262, 338 N.Y.S.2d 97, 290 N.E.2d 139 (1972), the New York State Court of Appeals noted that a "State and its political subdivisions may regulate the erection and maintenance of outdoor advertising under the police power . . . and that villages are empowered by statute to regulate the maintenance of advertising media near streets and in public places . . . and to adopt ordinances for general purposes consistent with the exercise of the police power . . . ." Id. at 265 (citations omitted).

 The Court stated further that "it is now settled that aesthetics is a valid subject of legislative concern and that reasonable legislation designed to promote the governmental interest in preserving the appearance of the community represents a valid and permissible exercise of the police power. . . . Under the police power, billboards and signs may be regulated for aesthetic purposes." Id. (citations omitted); see also Suffolk Outdoor Advertising Co., Inc. v. Hulse, 43 N.Y.2d 483, 489, 402 N.Y.S.2d 368, 373 N.E.2d 263 (1977); Philanz Oldsmobile, Inc. v. Keating, 51 A.D.2d 437, 440, 381 N.Y.S.2d 916 (4th Dep't 1976); People v. Rubin, 162 Misc. 2d 104, 106, 616 N.Y.S.2d 166 (Just. Ct. Nassau County 1994).

 Plaintiff recognizes that the Town of Penfield, pursuant to its police power, generally may regulate signs for aesthetic purposes. However, plaintiff contends that because the Town's regulations preclude it from erecting and maintaining signs with the two colors (yellow and orange) that are part of its federally registered trademark, the Town violates the plain language of § 1121(b) of the Lanham Act. I disagree.

 II. Section 1121(b) of the Lanham Act

 Section 1121(b) of the Lanham Act provides: "No State . . . or any political subdivision . . . may require alteration of a registered mark . . . ." 15 U.S.C. § 1121(b).

 A. The "Century 21" Amendment

 Section 1121(b), which was added to the Lanham Act in 1982, is commonly referred to as the "Century 21" amendment because it was enacted in response to the problems encountered by Century 21, a national franchisor, when several states required ...


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