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M. FABRIKANT & SONS v. FABRIKANT FINE DIAMONDS

August 19, 1998

M. FABRIKANT & SONS, LTD., Plaintiff, against FABRIKANT FINE DIAMONDS, INC., Defendant.

ROBERT W. SWEET, U.S.D.J.


The opinion of the court was delivered by: SWEET

Sweet, D.J.

M. Fabrikant & Sons, Ltd. ("Fabrikant & Sons"), has moved for a preliminary injunction, pursuant to Rule 56 of the Federal Rules of Civil Procedure, to prohibit the defendant, Fabrikant Fine Diamonds, Inc. ("Fabrikant Fine Diamonds"), from using the word "Fabrikant" in advertising unless a first name immediately precedes the last name "Fabrikant" -- on the same line, and in the same size, color, type style, and conspicuousness. For the reasons set forth below, Fabrikant & Sons' motion is granted, and the preliminary injunction is issued.

 The Parties

 Fabrikant & Sons is a New York State corporation with its principal place of business in New York, New York.

 Fabrikant Fine Diamonds is a New York State Corporation with its principal place of business in New York, New York.

 Prior Proceedings

 Fabrikant & Sons filed the complaint in this matter on May 18, 1998, alleging several claims including violations of Lanham Act sections 32(a), 43(a), and 43(c), 15 U.S.C. §§ 1114, 1125(a), 1125(c), as well as various state claims including unfair competition.

 Fabrikant & Sons filed the instant motion on June 3, 1998. Oral argument was heard on June 25, 1998, at which time the motion was deemed fully submitted.

 Facts

 Fabrikant & Sons is the owner of United States Trademark Registration No. 1,447,377 for the trademark "Fabrikant," which was issued by the United States Patent and Trademark Office (the "Trademark Office") on July 14, 1987. On March 24, 1993, Fabrikant & Sons filed a declaration with the Trademark Office attesting to its continued use of the trademark, and the mark has been accorded incontestible status.

 Fabrikant & Sons, started in 1895 by Max Fabrikant, is a privately owned company engaged in the jewelry business and has promoted and marketed jewelry for personal wear under the FABRIKANT mark nationwide. Fabrikant & Sons states that it is the largest manufacturer of jewelry and the largest seller of jewelry to retail jewelry stores in the United States with annual sales of almost one billion dollars. Fabrikant & Sons sells jewelry to all of the major jewelry retail stores in the United States, including Sears, J.C. Penny, and Fortunoff. Most of this jewelry bears a trademark identifying the jewelry as manufactured by Fabrikant & Sons. Fabrikant & Sons also sells jewelry to private individuals, although it does not advertise this business so as to not compete with its retail customers. Revenue from private sales is currently between $ 2 million and $ 3 million per year. Finally, Fabrikant & Sons sells precious stones, settings and completed jewelry to other members of the trade, such as other manufacturers.

 Fabrikant Fine Diamonds is in the estate jewelry business, buying estate and heirloom jewelry from the general public. Fabrikant Fine Diamonds sells the jewelry to a group of about 15 jewelers, most of whom are sole proprietorships that operate out of the various jewelry exchanges on 47th Street. For the year ending 1997, Fabrikant Fine Diamonds had revenue of about $ 9 million.

 Fabrikant Fine Diamonds submitted the affidavit of Peter Fabrikant, the vice president and treasurer of Fabrikant Fine Diamonds, Inc. Peter Fabrikant states that he has been in the jewelry industry for over thirty years, and originally worked for his father, Benjamin Fabrikant, in Fabrikant Brothers. Benjamin Fabrikant started Fabrikant Brothers in 1935 or 1936 with his brother Herman, and with the encouragement of his cousin, Max Fabrikant. In the early 1940's William Fabrikant joined his brothers in the Fabrikant Brothers business.

 Fabrikant Brothers was in the business of buying estate and heirloom jewelry. Fabrikant Brothers had a large advertisement on the Manhattan Bridge in the 1940's proclaiming "Fabrikant Brothers - The House of Diamonds," and advertised at Yankee Stadium during the 1940's, as well as in magazines and on the radio.

 Fabrikant Brothers filed for bankruptcy protection in 1965, and Peter, along with his brothers, Sherwin and Robert, bought all of the assets of the company, including its name. The new owners continued to operate as Fabrikant Brothers until Robert left the business in 1972, at which point the company name was changed to P&S Fabrikant (Fabrikant Brothers). When Sherwin died in 1977, Peter continued to operate the business under his own name.

 In 1992, Andrew Fabrikant, William Fabrikant's son, joined Peter and formed Fabrikant Fine Diamonds.

 Fabrikant & Sons complains about an advertising campaign recently begun by Fabrikant Fine Diamonds. In the advertisements, Fabrikant Fine Diamonds emphasizes the Fabrikant name, and diminishes the impact of the first names of the companies' principals by various techniques, including placing the names on a different line and in smaller typeface.

 As a result of the Fabrikant Fine Diamonds advertising, Fabrikant & Sons has received several phone calls from customers inquiring about the advertising. Fabrikant & Sons submitted the affidavit of Susan Boshwit ("Boshwit"), the vice president of communications and sales executive of Fabrikant & Sons. According to Boshwit's affidavit, Fabrikant & Sons received a call from Zales inquiring whether the advertisement was theirs. Fabrikant & Sons also received a call from a private customer inquiring why Fabrikant & Sons was advertising in newspapers. Boshwit also alleges that "numerous employees of banks" have commented to her regarding the advertisements, and that she has had to explain to them that the advertisements were published by Fabrikant Fine Diamonds, not Fabrikant & Sons.

 Fabrikant & Sons also submitted the affidavit of a private customer, Stanley P. Berkman ("Berkman"). Berkman testified that he saw what he believed to be Fabrikant & Sons' advertisements in the New York Times, and called Boshwit to complain that he did not think Fabrikant & Sons should be running the advertisements. Boshwit ...


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