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AEROGROUP INT'L, INC. v. SHOE SHOW

June 13, 1997

AEROGROUP INTERNATIONAL, INC., Plaintiff,
v.
THE SHOE SHOW, INC., THE SHOE SHOW OF ROCKY MOUNT, INC., Defendants.



The opinion of the court was delivered by: LARIMER

 BACKGROUND

 This is a trade dress, trade mark and patent infringement case. Plaintiff Aerogroup makes women's shoes including women's casual sandals, using the brand name AEROSOLES(R). Defendants The Shoe Show Inc. and The Shoe Show of Rocky Mount, Inc. (Shoe Show) are discount retailers of women's shoes.

 This suit was filed November 20, 1995. Aerogroup's claims arise out of the sale, by Shoe Show, of women's "Air Twist" brand sandals, which are "knock offs" (i.e., imitations) of a particular model of AEROSOLES(R) sandals. Aerogroup alleges that by selling Air Twist sandals, Shoe Show infringes upon Aerogroup's federal trade dress, trademark and patent rights, as well as its rights under New York statutory and common law. Specifically, Aerogroup seeks to enjoin sales of Air Twist brand shoes because the name 'Air Twist' is printed across a white shoe box in lettering similar in style and identical in color to Aerogroup's trademark AEROSOLES(R) brand name, and the box also contains a depiction of a twisted shoe that is similar to Aerogroup's "twisted shoe design" for which a trademark application is pending.

 In January 1996, Aerogroup moved for a preliminary injunction and for expedited discovery. Following limited discovery, the preliminary injunction motion was resolved by Stipulation and Order dated March 20, 1996, pursuant to which Shoe Show agreed to cease utilizing the allegedly offending packaging on future orders of Air Twist shoes and insert disclaimers ("not associated with AEROSOLES(R)") in all existing Air Twist shoe boxes. This stipulation was entered into by consent of the parties; there was no hearing and no factual findings were made by the Court. Moreover, it is apparent that the parties intended the stipulation to be of limited duration, i.e., "until the infringement issue in this case is decided by the District Court..." March 20, 1996 Stipulation and Order at PP 1,3.

 Shoe Show now moves for partial summary judgment dismissing the trademark and trade dress infringement claims asserted against it and vacating the March 20, 1996 Stipulation and Order. The basis for Shoe Show's motion is the collateral estoppel effect of a decision and order rendered in a separate but related action pending in the Southern District of New York, Aerogroup International, Inc. v. Marlboro Footworks, Ltd., 955 F. Supp. 220 (Judge Denise Cote).

 THE MARLBORO DECISION

 While this action was pending before me, on April 17, 1996 Aerogroup sued Marlboro and other defendants (but not Shoe Show) in the United States District Court for the Southern District of New York. Marlboro is a manufacturer and supplier of "knock-off" shoes. *fn1" In the Marlboro action, Aerogroup's claims included trademark infringement under 15 U.S.C. § 1114(1), trade dress infringement under 15 U.S.C. § 1125(a), dilution under 15 U.S.C. § 1125(c), and unfair competition under New York common law.

 As in this case, Aerogroup sought to enjoin the Marlboro defendants from utilizing trade dress and trademarks similar to those of Aerogroup. In addition to the same Air Twist brand packaging at issue in this case, Aerogroup also asserted claims relative to the marketing of other brands of shoes, including ones called 'Airflex' and 'Airsupply.' Thus, with respect to all these brands, Aerogroup asserted that Marlboro infringed (1) the AEROSOLES(R) trademark (which consists of the word Aerosole in stylized capital letters written on an angle with the right edge of the work going up and a twisting line underneath that curves back and forth three times) -- the 'swoosh'; (2) the waffle sole trademark, No. 1,953,875, which consists of a plurality of diamond or rhombic recessed patterns on the shoe sole; (3) the twisted shoe trademark for which a trademark application is pending; and (4) Aerosole's trade dress, which includes any combination of these elements when used to sell women's comfort sandals. See Aerogroup International, Inc. v. Marlboro Footworks, Ltd., 955 F. Supp. 220, 96-cv-2717, Judgement and Order dated November 15, 1996. Aerogroup provided to Judge Cote a list of specific shoes, shoe boxes, and advertisements which it claimed were infringing. Included in that group was "Exhibit 117", the same Air Twist shoe box at issue in the case before this Court.

 In the Marlboro action, Judge Cote conducted a hearing on Aerogroup's application for a permanent injunction and then read her extensive findings from the bench on October 21, 1996. The findings and conclusions were summarized in a Judgment and Order dated November 15, 1996. Judge Cote found that the AEROSOLES(R) trademark is strong and that Aerogroup "has established trade dress rights which include the use of the Aerosoles trademark with a swoosh underneath, located on the shoe box, ... and the twisted shoe, either alone or in combination, in connection with women's comfort fashion footwear bearing a waffle sole." Judgment and Order at p. 4. Based upon these findings Judge Cote determined that Marlboro had infringed Aerogroup's trademark and trade dress rights with respect to certain items bearing brand names Airsupply and Airflex. However, she found no infringement with respect to the Air Twist brand shoe box.

 With respect to Air Twist in particular, Judge Cote stated as follows:

 
I find that the twisted shoe figure used by the Marlboro defendants on the Air Twist box is not sufficiently similar to the Aerogroup twisted shoe trademark to warrant enjoining its use. First, the Air Twist shoe box contains a drawing of two hands twisting a shoe held horizontally. Second, the Aerogroup twisted shoe is a simple line drawing of a twisted shoe on a vertical axis.
 
Thus, in looking at Exhibit 117, I find there is not sufficient similarity to believe that any consumer would confuse the logo, name, and design of the Air Twist box with the trademarked twisted shoe design belonging to Aerogroup. Similarly, I find that the overall trade dress displayed on the Air twist box does not violate Aerogroup's trade dress rights, nor does the use of the Air Twist name alone or in conjunction with the twisted shoe design violate Aerosoles' trademark rights. Therefore I reject each of Aerogroup's claims with respect to Exhibit 117. October 21, 1996 Decision at p. 655.

 Moreover, Judge Cote found no infringement of Aerogroup's waffle sole trademark because she determined that the sole was not subject to protection. Despite its trademark, she found that Marlboro had met its burden to overcome the presumption of distinctiveness. Judge Cote found for various reasons ...


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