The opinion of the court was delivered by: PATTERSON
ROBERT P. PATTERSON, JR., U.S.D.J.
Plaintiff Telebrands Corp. ("Telebrands") moves for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure. Defendants Wilton Industries, Inc. and ROWOCO (collectively "Wilton") move pursuant to 28 U.S.C. § 1404(a) for an order transferring venue from this Court to the Northern District of Illinois.
Telebrands is a Virginia corporation with offices in Virginia and New Jersey. It is in the business of marketing and selling consumer products through direct response television advertising and through national retail stores.
(Khubani Decl. P 2). In the Spring of 1996, Telebrands became the exclusive licensee in the United States of a patent for a new kind of hand-held can opener, which Telebrands sells under the mark "SAFETY CAN." While most hand-held can openers cut through the top of the can, leaving a jagged edge on the lid after opening, SAFETY CAN employs a new technology that cuts sideways through the rim of the can and leaves both the lid and the can without any sharp or jagged edges. (Id. PP 3-4). Additionally, using SAFETY CAN ensures that the lid of the can will not fall into its contents, eliminating a potential source of contamination. (Id.).
On December 2, 1996, after testing its direct response advertising on television, Telebrands began a national television advertising campaign to promote SAFETY CAN as a new, safer hand-held can opener. (Id. P 8). Its television commercial was and is shown on television networks, major cable channels and local television stations across the country. As of August 22, 1997, the date this lawsuit was filed, Telebrands had spent approximately $ 3 million advertising SAFETY CAN. (Id.). In addition to television advertising, it also advertises on the Internet, in catalogs, in newspapers, in magazines, in free standing inserts, and in credit card statement "stuffers." (Id.). As of the filing of this lawsuit, Telebrands had received over 300,000 direct response orders from consumers and over 1,900,000 retail orders. (Id.). Orders are currently placed through December 1997. (Id.). The packaging for SAFETY CAN displays the familiar red "AS SEEN ON T.V." logo. (Vetter Decl., Exs. A-1 to A-5).
Around June 1997, Wilton began selling a competing hand-held can opener, known as the Betty Crocker "Safe Touch TM" ("BCST") can opener, that also opens cans without any sharp edges on the can or the lid. The Betty Crocker trademark is licensed by General Mills, Inc. ("General Mills") and is displayed on the packaging for the BCST can opener. (Khubani Decl., Ex. 1). The packaging also displayed the "AS SEEN ON T.V." logo in the upper right-hand corner. (Id.).
Between June 1997 and September 17, 1997, Wilton shipped a total of 63,622 units of its BCST can opener in packaging containing the "AS SEEN ON T.V." logo. (Vetter Decl. P 4). Most of these units (58,292) were shipped to seven major chain store retailers. (Id.). Approximately 4,326 units were shipped to General Mills to be distributed through its catalog. (Id. P 5). The remaining units were shipped in small quantities to retailers in Canada, to Rowoco for use as product samples, and to Wilton's Housewares. (Id. P 6). This action was commenced and this motion was filed on August 22, 1997. Since September 17, 1997, Wilton has not shipped any product bearing the "AS SEEN ON T.V." logo. (Erwin Reply Aff. P 2).
Wilton states that it determined, in April 1997, to run a multi-regional direct response television advertising campaign to promote the BCST can opener. (Id.). This campaign was initially scheduled to begin in early July 1997. (Vetter Decl. P 7). However, to accommodate changes to the commercial requested by General Mills, the campaign was delayed. (Erwin Decl. P 4.A). The campaign was then rescheduled for around the end of September 1997. (Id.). Until October 15, 1997, no nationwide television advertising of the BCST can opener had occurred, although there had been limited direct response television advertising that appeared on cable preview channels in the Chicago suburbs during June 1997. (Id.).
Telebrands complaint alleged that Wilton had not advertised the BCST can opener on television and that Wilton's use of the "AS SEEN ON T.V." logo in marketing its BCST can opener constituted false advertising in violation of both § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and N.Y. Gen. Bus. Law § 350, as well as unfair competition under New York common law. On the same day this lawsuit was filed, Telebrands filed a notice of motion for a preliminary injunction seeking to enjoin Wilton from using the logo "AS SEEN ON T.V.," from accepting orders for the BCST can opener in response to offers to sell the product with packaging displaying that logo, from shipping the BCST can opener in packaging containing that logo, and from advertising, promoting, offering for sale, distributing or selling the BCST can opener until the benefit received by Wilton of its false advertising has dissipated. In addition, Telebrands requests that the Court order Wilton (1) to cancel all outstanding orders for the BCST can opener and refund monies received, (2) to notify all customers that the BCST can opener was not advertised on television and is not related to SAFETY CAN, (3) to issue a recall of all BCST can openers which have been distributed in packaging bearing the false logo, and (4) to send blank stickers to its customers to affix over the "AS SEEN ON T.V." logo for any BCST can opener not returned pursuant to the recall.
On September 17, 1997, defendants submitted their opposition papers to this motion. At the same time, they filed a motion seeking to transfer venue to the Northern District of Illinois, a district they claim is more convenient for their witnesses. While these motions were pending, defendants launched their national television advertising campaign which was scheduled to run 10,000 direct-response spots in 500 markets nationwide between October 15 and October 28, 1997. (Erwin Reply Aff. P 3). Although it is Telebrands's regular business to monitor direct response television commercials and it subscribes to the Jordan Whitney Report listing direct response television advertising (Mullen Aff. PP 2-3), both Telebrands and the Court learned of the start of Wilton's advertising campaign at the argument for the current motions, held October 28, 1997, at which defendants submitted a so-called "Reply Affidavit," which is, in reality, a surreply affidavit to the motion for preliminary injunction.
Wilton continues to maintain that since September 17, 1997 it has shipped no can openers bearing the "AS SEEN ON T.V." logo. Since that date, it has, however, sold a number of units to Telestar, the marketing concern responsible for its television advertising campaign, which Telestar is attempting to sell using the direct response television advertising campaign described above. These units apparently do not contain the "AS SEEN ON T.V." logo. (Erwin Reply Aff. P 5).
At the argument on October 28, 1997, neither party requested an evidentiary hearing and it does not appear that there is a genuine issue of material fact in dispute. Accordingly, the Court will accept the affidavits of both parties as true for purposes of this motion and decide the motion on the papers.
In order to receive a preliminary injunction, the plaintiff must show (1) either (a) a likelihood of success on the merits or (b) sufficiently serious questions concerning the merits to make them fair grounds for litigation and a balance of hardships tipping decidedly in favor of the plaintiff, and (2) that irreparable harm will result unless an injunction ...