although the word "otokoyama" has no literal translation as one word, it does have a translation as two separate words, "man" and "mountain." The term thus connotes or can be loosely translated to mean "man mountain" or, in other words, "big man."
The question then is into what category plaintiff's mark falls. A mark is suggestive if it requires some "imagination, thought or perception to reach a conclusion as to the nature of the goods." Hasbro, Inc. v. Lanard Toys, Inc., 858 F.2d 70, 73 (2d Cir. 1988). A mark is descriptive if it directly conveys the qualities, ingredients, effects or other features of the product naturally and in ordinary language. Thompson Medical Co., Inc. v. Pfizer, Inc., 753 F.2d 208, 212 (2d Cir. 1985). While the word "otokoyama" or "mountain man" may suggest masculine attributes that describe a hearty, manly sake, the mark requires some "imagination, thought or perception to reach a conclusion as to the nature of the goods," and therefore must be categorized as suggestive. Hasbro, 858 F.2d at 73.
Accordingly, the court looks to secondary meaning to analyze the strength of the mark. Secondary meaning exists when the mark used has come to indicate that the goods in connection with which it is used are the goods manufactured by the alleged owner. Guidelines include (1) advertising expenditures, (2) consumer studies linking name to source, (3) sales success, (4) unsolicited media coverage, (5) attempts to plagiarize the mark and (6) the length and exclusivity of the mark's use. Hasbro, 858 F.2d at 70. OCL has offered some evidence that its mark has developed secondary meaning. First, OCL has expended over $ 67,000 in advertising its product in the U.S. over the last five years. Tr. at 17. While this is not a large amount of money, OCL also offered evidence that it engages in many informal promotional activities with respect to the Otokoyama products, for which it spends large and increasing amounts of money each year. Tr. at 17-23, 45. Second, over the past 13 years, sales of OCL's sake have steadily increased (in 1984 it sold 2,052,000 milliliters of sake; in 1996 it sold 92,336,000 milliliters). Supp. Declaration of Jun Tanaka PP 3, 15. Third, OCL's sake has received unsolicited media coverage; for example, in 1994 the Seattle Times printed an article praising OCL's sake. Declaration of Nan Hoskins, Exh. A. Finally, OCL has been the exclusive user of the Otokoyama trademarks in the U.S. for the past thirteen years. Based on this evidence, the plaintiff has shown that its mark is relatively strong, but not entitled to the fullest protection available under the law. This factor thus weighs in favor of plaintiff.
2. Similarity of the Marks
"In considering this factor, [courts] look to two key questions: 1) whether the similarity between the two marks is likely to cause confusion and 2) what effect the similarity has upon prospective purchasers." The Sports Authority, 89 F.3d at 962. Marks will not be similar "for the purposes of assessing likelihood of confusion simply because they contain an identical or nearly identical word." Mejia and Assocs. Inc. v. I.B.M., 920 F. Supp. 540, 547 (S.D.N.Y. 1996). In order to properly assess similarity, "the overall impression given by a mark in the framework in which it is presented must be examined." Giorgio Beverly Hills, Inc. v. Revlon Consumer Products Corp., 869 F. Supp. 176, 182 (S.D.N.Y. 1994). Therefore, it is proper to consider the "products' sizes, logos, typefaces, and package designs." W.W.W. Pharmaceutical Co. v. Gillette Co., 984 F.2d 567, 572 (2d Cir. 1993).
Here, both plaintiff's and defendant's "Otokoyama" appear in black all capital letters placed at the bottom of the label. Plaintiff's mark, however, is bordered by a red box and is in a different font than defendant's. Internat'l Data Group v. J & R Electronics, 798 F. Supp. 135, 139 (S.D.N.Y. 1993), aff'd, 986 F.2d 499 (2d Cir. 1992) (marks not similar where race track border used around one mark and not around the other). Similarly, the Japanese character is in the middle of each label and is in black lettering. Again, however, on defendant's label the character is on a white background and is encircled in a dark color whereas plaintiff's lettering is set against a drawing of a rope and is not encircled. Furthermore, defendant's label has the word "Mutsu" before " Otokoyama." See Lang v. Retirement Living Publishing Co., 949 F.2d 576, 581-82 (2d Cir. 1991). Taken together, the general impression conveyed to the public by these designations differs somewhat. This factor weighs slightly in favor of defendant.
3. Proximity of Products
"Under this Polaroid factor, [the court] considers whether the two products compete with each other." The Sports Authority, 89 F.3d at 963. In the instant case, the two products clearly compete with each other. Both products are sake that are sold to restaurants, supermarkets and specialty stores. This factor weighs in favor of plaintiff.
4. Bridging the Gap
"This factor looks to either the likelihood that [plaintiff] will enter [defendant's] business or the average customer's perception of the likelihood that the plaintiff would enter the defendant's market." The Sports Authority, 89 F.3d at 963. This factor is inapplicable to the instant case because, as mentioned above, the products are identical and therefore there is no gap to bridge.
5. Actual Confusion
"The Lanham Act seeks to prevent consumer confusion that enables a seller to pass 'off his goods as the goods of another.'" W.W.W. Pharmaceutical Co., 984 F.2d at 574 (citation omitted). While no evidence of actual confusion is required to prove the likelihood of confusion, the absence of proof of actual confusion may support the inference that there is also no likelihood of confusion. Inc. Publishing Co. v. Manhattan Magazine, Inc., 616 F. Supp. 370, 386 (S.D.N.Y. 1985), aff'd, 788 F.2d 3 (2d Cir. 1986).
Here, plaintiff has submitted some evidence of some actual confusion. OCL alleges that upon learning of the existence of Mutsu Otokoyama sake in New Jersey and New York, the general manager of OCL's authorized dealer contacted OCL to ask if defendant's sake was a product made or distributed by OCL. Additionally, OCL's distributor in New York and New Jersey has received inquiries from retailers as to whether the Mutsu Otokoyama sake is associated with or authorized by OCL and whether there was any difference between the two products. Declaration of Tadashi Itabashi PP 13, 17. In addition, a representative of OCL's distributor, Mr. Tanaka, testified that he received three calls from consumers who asked if OCL had changed its sake. Tr. at 26, 42. This factor thus weighs in favor of plaintiff. See Multi-Local Media Corp. v. 800 Yellow Book Inc., 813 F. Supp. 199, 204-05 (E.D.N.Y. 1993) (actual confusion existed where plaintiff received several phone calls asking whether defendant was affiliated with plaintiff).
6. Defendant's Good Faith in Adopting the Mark
"This factor 'looks to whether the defendant adopted its mark with the intention of capitalizing on plaintiff's reputation and goodwill and any confusion between his and the senior user's product.'" Lang v. Retirement Living Pub. Co., 949 F.2d 576, 583 (2d Cir. 1991) (quoting Edison Brothers Stores, Inc. v. Cosmair, Inc., 651 F. Supp. 1547, 1560 (S.D.N.Y. 1987)). A court may find that the defendant acted in good faith where it has "selected a mark which reflects the product's characteristics, has requested a trademark search or has relied on advice of counsel." W.W.W. Pharmaceutical, 984 F.2d 567, 575 (2d Cir. 1993) (citation omitted). Furthermore, bad faith is not necessarily found where defendant was aware of the senior user's mark. Id..
Plaintiff states in conclusory fashion that defendant acted in bad faith and is using plaintiff's trademark to "palm off" its products as those of OCL in order to "usurp" OCL's good will. Defendant, on the other hand, claims that it has not acted in bad faith because it is marketing its sake in the U.S. the same way it has in Japan for 150 years. Furthermore, defendant points out that it has not acted in bad faith because it believes that plaintiff does not have a valid trademark registration. There is little evidence here to suggest bad faith on defendant's part and therefore this factor weighs in defendant's favor.
7. Quality of the Products
"This factor is primarily concerned with whether the senior user's reputation could be jeopardized by virtue of the fact that the junior user's product is of inferior quality." Arrow Fastener Co. v. Stanley Works, 59 F.3d 384, 398 (2d Cir. 1995). Plaintiff has offered evidence that its sake is very high quality and that it is a member of the Japan Prestige Sake Association. However, defendant's sake is also of high quality. In the last ten years Mutsu Otokoyama has won the gold medal prize given by the Japanese government's Institute of Brewery Research three times, the most recent won in 1990. Furthermore, Mutsu Otokoyama has won the gold prize seven times, including four of the last five years. Declaration of Mitsumasa Takeda P 14. Because defendant's product is not of inferior quality, this factor weighs in favor of the defendant.
8. Sophistication of Consumers
In considering the likelihood of confusion, the court should finally assess the level of sophistication of the relevant purchasers. W.W.W. Pharmaceutical, 984 F.2d at 575. The court must consider "the general impression of the ordinary purchaser, buying under the normally prevalent conditions of the market and giving the attention such purchasers usually give in buying that class of goods." Id. (citation omitted)(alteration in original).
Sake is sold at restaurants and in grocery stores. It is a relatively inexpensive item, and even defendant concedes that the sake market is only beginning to become more sophisticated in the United States. Therefore, because there is evidence that consumers of sake are not very sophisticated, this factor weighs in plaintiff's favor.
C. Balancing of Hardships
Both parties will lose money if the injunction is either granted or denied. However, plaintiff stands to lose its reputation that it has taken thirteen years to establish. Defendant, on the other hand, is new to the United States market, and does not have an established reputation. Therefore, the hardships tip in favor of plaintiff.
D. Balancing the Factors
In summary, because plaintiff has a relatively strong mark, because the products are identical, because there is some evidence of actual confusion, because the consumers are not sophisticated, and because the balance of hardships tips decidedly in plaintiff's favor, plaintiff has demonstrated irreparable harm and sufficiently serious questions going to the merits to warrant granting a preliminary injunction.
For the reasons set forth above, plaintiff's motion for a preliminary injunction is GRANTED as follows. Defendant Wine of Japan Import, Inc., its officers, agents, servants, employees and any other persons in active concert or participation with it are hereby enjoined and restrained during the pendency of this litigation or until further order of this Court from:
(1) Using any of OCL's Otokoyama Trademarks or any other mark which is confusingly similar to the Otokoyama Trademarks in connection with the advertisement, distribution, manufacture, sale, or offering for sale of sake products, and from acting in any manner likely to cause others to believe that defendant's products are connected with plaintiff or plaintiff's Otokoyama sake; and
(2) Passing off, inducing, or enabling others to sell or pass off any products and other related products which are not genuine and authorized by OCL as and for genuine and/or authorized OCL products; and
(3) Committing any other acts calculated to cause purchasers to believe that defendant's products are genuine OCL products, or products authorized by OCL unless they are such. The parties are directed to contact my Courtroom Deputy to schedule a Pre-Trial conference in this matter.
New York, New York
November 14, 1997
Harold Baer, Jr.