United States, in the Dominican Republic and in other countries for many years.
Defendant GDM is a New York corporation with offices at 599 Lexington Avenue, New York, New York. GDM has been engaged in, the importation, advertising and distribution of cigars in New York and elsewhere since July, 1997.
Defendant Raymond Parker ("Parker") is the vice-president and a principal owner of GDM and has offices at 27 West 20th Street, New York, New York.
Defendant Glen Miller ("Miller") is president and principal shareholder of the corporate defendant.
General Cigar filed this action on October 21, 1997, bringing claims against GDM for trademark infringement in violation of § 32 of the United States Trademark Act, (the "Trademark Act") 15 U.S.C. § 1114, unlawful importation and sales of unlawfully imported goods in violation of the United States Tariff Act of 1930, 19 U.S.C. § 1526, and in violation of §§ 42 and 43(b) of the Trademark Act, 15 U.S.C. §§ 1124, 1125(b), false representations, false advertising and unfair competition in violation of § 43(a) of the Trademark Act, 15 U.S.C. § 1125(a), deceptive trade practices in violation of N.Y. Gen. Bus. Law § 349, false advertising in violation of N.Y. Gen. Bus. Law § 350, injury to reputation in violation of N.Y. Gen. Bus. Law § 360(1), common law trademark infringement and unfair competition and tortious interference with prospective business advantage.
On October 29, 1997, General Cigar brought the instant preliminary injunction action by order to show cause. General Cigar seeks to enjoin GDM from, inter alia : (a) using the mark COHIBA or any other mark confusingly similar to General Cigar's COHIBA mark to identify services constituting or relating to cigars; (b) making any false or misleading statement about General Cigar's COHIBA cigars, which misrepresents the nature, characteristics or qualities of General Cigar's goods or trademark; (c) importing COHIBA cigars without the consent or authorization of General Cigar; and (d) selling, distributing, marketing, or advertising COHIBA cigars which have been imported into this country without the consent or authorization of General Cigar.
General Cigar also seeks an injunction requiring GDM to deliver all cigars or other merchandise which refer to the COHIBA mark in connection with cigars or related goods, to inform their customers that they cannot sell COHIBA cigars in the United States, and that all their COHIBA cigar sales have been unauthorized, and to recall all cigars which GDM has distributed or sold which bear the infringing COHIBA mark.
A factual hearing was held on Friday, November 14 and Monday, November 17, with final arguments heard on Monday, December 1, 1997.
Findings of Fact
Use of COHIBA Mark by General Cigar
In late 1977, Culbro, the former parent company of General Cigar, decided to adopt COHIBA as a new trademark for one of its premium brand cigars. Notes from internal Culbro meetings dated December 15 and January 2, 1977 state that the word "cohiba" was derived from the Spanish verb "cohibir", which means to prohibit or restrain. Another set of notes dated December 12, 1977 made by Charles H. Sparks, the trademark custodian for Culbro, state that COHIBA was the name of a personal brand of cigar smoked by Castro. These notes indicate that the CEO of Culbro rejected the idea of a trademark search for COHIBA, and was satisfied with beginning use of the mark on cigars. The notes conclude by stating that "a grain label [will be] made up for the first three marks and [Culbro will] at least have a first use made of the marks in commerce."
Culbro registered the COHIBA mark in 1978. In its application for registration, Culbro stated that the mark was first used on cigars in interstate commerce on February 13, 1978, and "is now in such use in commerce." The mark at that time consisted merely of the word COHIBA, without any specific design or presentation of the letters. In February and June of 1978, Culbro sold cigars labeled with the COHIBA mark to Rubovits Cigars, Inc., Chicago, Illinois. In March and April of 1978, Culbro sold COHIBA cigars to Cigars Santa Clara Ltd., New York, New York. These retailers sold the COHIBA cigars to the public. During this period, COHIBA Cigars were marketed in boxes of 50 cigars each, no example of which has survived.
On July 25, 1978, the Patent and Trademark Office ("PTO") sent an inquiry to Culbro regarding whether the term Cohiba had any meaning or significance in the relevant trade or industry, or in the English language. The PTO also inquired regarding compliance with labels using the trademark. On January 3, 1979, Culbro sent a response to the PTO stating "To the best of applicant's knowledge, the word 'cohiba' has no English translation or any meaning or significance in the relevant trade or industry." The response also stated that "applicant is and has been in compliance with the Federal Regulations regarding labeling of products bearing the mark COHIBA", and enclosed a label specimen.
On March 30, 1979, the PTO again contacted Culbro, raising the issue that Cohiba is a geographical tobacco growing region of Cuba, and therefore the name should be denied registration as merely descriptive or as deceptively misdescriptive, pursuant to § 2 of the Trademark Act. Culbro responded by contending that registration should not be denied because the cigars did not originate in Cuba, and cigar consumers in the United States were sufficiently ignorant of the Cohiba region in Cuba that use of the term was arbitrary or fictitious.
On February 17, 1981, the PTO issued registration of the COHIBA mark, No. 1,147,309. This registration was assigned by Culbro to its subsidiary, General Cigar on January 13, 1987.
An internal memorandum dated March 2, 1981, informed Edgar M. Cullman, Jr. ("Cullman"), the CEO of Culbro, that the trademark registration had matured. The memorandum also stated:
This trademark is being used in conjunction with periodic shipments, but to gain full protection of this trademark against use by others, shipments of cigars in interstate commerce should be made with the permanent-type of packaging as early as practical.
General Cigar was unable to produce documents demonstrating any sales of COHIBA cigars in 1980 or 1981. Another internal memorandum dated February 18, 1982 stated:
We have a registration for that mark issued February 17, 1981, but as yet no commercial use of product . . . Normally the Patent & Trademark Office would reject the new application on the basis of our registration. . . . This is a little tricky because of our non-use of the registration on a commercial scale.