The opinion of the court was delivered by: Sprizzo, District Judge.
MEMORANDUM OPINION AND ORDER
In this action for a declaratory judgment, plaintiff Paco
Sport, Ltd., ("Paco Sport")*fn1, seeks a declaration that its
use of the trademarks PACO and PACO SPORT on clothing does not
infringe upon the rights of defendant Paco Rabanne Parfums ("Paco
Rabanne"), in its federally registered trademarks PACO and PACO
RABANNE. See Complaint at ¶¶ 1, 2, 4. Paco Rabanne asserts
counterclaims of trademark infringement and false designation of
origin under sections 32 and 43(a) of the Lanham Act,
15 U.S.C. § 1114 and 1125(a), trademark dilution under section 360-1
(formerly 368-d) of New York General Business Law, and unfair
competition under common law. See Answer & Counterclaim at ¶¶
9-11. Paco Rabanne seeks to enjoin Paco Sport permanently from
using the word "Paco," alone or in combination with other words,
in connection with advertising or sale of denim jeans or any
other apparel or related products. Paco Rabanne also seeks an
accounting of Paco
Sport's profits derived from the alleged trademark infringement
and an award of reasonable attorneys' fees and costs. See
Answer & Counterclaim at ¶¶ 11-13; Defendant's Post-Trial
Memorandum of Law ("Def.Mem.") at 25.*fn2 A bench trial was
held, and both parties filed post-trial memoranda of law. Upon
considering all the evidence presented, as well as the arguments
made by the parties' counsel at trial and in their papers filed
with the Court, the Court, for the reasons set forth below,
concludes that Paco Sport did not infringe upon Paco Rabanne's
trademark rights. Accordingly, the Court grants Paco Sport's
request for a declaratory judgment and denies Paco Rabanne's
requests for a permanent injunction, an accounting, and costs.
Paco Sport markets inexpensive casual clothing in the United
States, Puerto Rico and the Caribbean. See Transcript of
Preliminary Injunction Hearing ("Tr.H.") 10/3/96 at 394, 440. The
company's primary target market consists of young, urban Hispanic
and Black males. See Transcript of Trial ("Tr. T.") 6/18/98 at
156-62; Tr. H. 10/3/96 at 394, 402. Since 1989, Paco Sport has
been marketing jeans, shirts, and other clothing under the name
PACO alone and in combinations such as PACO SPORT, PACO JEANS,
and others. See Tr. H. 10/3/96 at 396, 402. The clothing
generally features large labels, overstated sizes, bright colors,
and embroidery. See Defendant's Exhibits ("Dx") EEEE, FFFF,
GGGG; Tr. T. 6/23/98 at 343; Plaintiff's Exhibits ("Px") 70-79.
Paco Sport's advertising emphasizes the youthful and ethnic
orientation of its clothing, featuring young men and boys in
baggy, colorful sportswear. See Px 123; Dx UUU, WWWWWW, ZZZZZZ.
The average retail price of Paco Sport's jeans is approximately
$25-$30 per piece. See Tr. H. 7/15/96 at 317. Paco Sport sells
its apparel to retailers with stores in predominately minority
neighborhoods, such as VIM, Cooky's Department Stores, and
Wertheimer's Department Stores. See Tr. H. 7/9/96 at 176; Tr.
H. 7/15/96 at 317, 325.
Between 1989 and 1996, Paco Sport sold over 10 million pieces
of clothing, and its annual sales grew from $3.5 million in 1989
to approximately $27 million in 1995. The company's advertising
expenses reached approximately $500,000 in 1995. See Tr. H.
10/3/96 at 425, 437-39. PACO brand products account for
approximately 90% of Paco Sport's total sales and 100% of its
advertising expenses. See Tr. T. 6/18/98 at 122. By March 1998,
the sales of PACO brand goods were approximately $163.8 million,
resulting in approximately $8.4 million of profits. See Tr. T.
6/18/98 at 119-20; Px 136.
Twice, Paco Sport unsuccessfully attempted to register its
trademark PACO with the United States Patent and Trademark
Office. The registration was refused because of the possible
confusion between Paco Sport's mark and a previously registered
trademark "PaCo," owned by a producer of women's hosiery not
related to this lawsuit. See Tr. H. 10/3/96 at 396-97, 402-03;
Px 94; Dx CCCC, ZZZ. In 1991, Paco Sport registered the trademark
Le-PACO, but the company's attempt to use this trademark on
clothing failed. According to Paco Sport's President Mr. Badr
Jebara, the trademark was not simple enough and the company's
customers did not "want to be bothered" with a French name. Tr.
H. 10/3/96 at 468-69; see also Dx AAAA; Tr. H. 10/3/96 at
Paco Sport has never used the name "Paco Rabanne" on its
products, nor has it ever sold or had any intention of selling
perfumes, cosmetics or toiletries. See Tr. H. 10/3/96 at 436.
In the United States, Paco Rabanne sells fragrances and
cosmetics almost exclusively. See Tr. T. 6/23/98 at 275-76.
During the last ten years, Paco Rabanne's fragrance and cosmetics
sales in this country exceeded $200 million, and the company
spent over $100 million on print, television, and other
advertising. See Tr. T. 6/23/98 at 342. In marked contrast,
Paco Rabanne's clothing sales in this country are minimal. Paco
Rabanne has presented no evidence of any clothing sales in the
United States prior to 1994. Since 1994, the company has sold
only approximately 200 pieces of clothing. See Tr. T. 6/23/98
at 250-53. By 1996, clothing sales had reached only $120,000
annually. See Tr. H. 7/15/96 at 189. Paco Rabanne has presented
no evidence of sales of clothing or related products by its
licensees in this country. See Tr. H. 7/15/96 at 190-91; Tr. T.
6/23/98 at 250.
Over the years, Paco Rabanne has developed and maintained an
upscale and fashionable image. Its target market consists of
fashion-conscious consumers who pay high prices for Paco Rabanne
products. See Tr. T. 6/23/98 at 207-08, 342-43. Paco Rabanne's
fragrances are perceived as symbols of prestige and high social
and economic status. See Tr. T. 6/23/98 at 207, 211-12; Tr. T.
10/1/98 at 372, 389. In the United States, the company
distributes its products through exclusive specialty and
department stores, such as Saks Fifth Avenue, Bloomingdale's and
Lord & Taylor. See Dx QQ; Tr. H. 7/9/96 at 60. Paco Rabanne's
exclusive distributor in the United States, Compar, Inc., makes
substantial efforts to limit the importation of "gray market" and
counterfeit fragrances under Paco Rabanne's name and their sale
in drug and discount stores. See Tr. T. 6/23/98 at 347-50; Tr.
H. 7/9/96 at 26-28; Dx OO.
Prior to 1996, Paco Rabanne used variations on the trademark
PACO RABANNE only on its products, and it did not market products
under the name PACO alone. See Tr. H. 7/9/96 at 38; Tr. H.
7/15/96 at 191-92; Tr. T. 6/23/98 at 232-33. In 1996, Paco
Rabanne launched a new unisex fragrance PACO. Eventually, the
PACO line was to include sunglasses, bags, and a collection of
upscale "ready-to-wear" clothing. See Tr. T. 6/23/98 at 232,
341. In the United States, only the fragrance was introduced.
See Tr. T. 6/23/98 at 232-34, 341.
Since 1970, Paco Rabanne has owned several federally registered
trademarks that are variations on the mark PACO RABANNE. See Dx
A, C-G.*fn3 Since 1976, the company has also owned the
registered trademark PACO for use on perfumes, colognes, toilet
water, and other cosmetics and toiletries. See Dx B, H. The
mark, however, was not used, and in 1995 the company's management
was concerned that the registration may have been forfeited.
See Px 60.
In 1993, Robert McCormick, vice-president of Compar, and Craig
advertising director, noticed bright-colored casual shirts
bearing the mark PACO in a store in Manhattan. They bought two
shirts, and sent them to Paco Rabanne's headquarters in France.
See Tr. H. 7/9/96 at 23; Tr. H. 10/3/96 at 504; Tr. T. 6/23/98
at 240. The shirts did not cause serious concern either to Paco
Rabanne or to Compar, and the companies took no action at the
time, nor did they investigate the issue further. See Tr. H.
7/9/96 at 24-25, 50-51; Tr. T. 6/23/98 at 240-43. On the
contrary, the shirts became a joke at Compar, where the designs
of the shirts were seen as "outrageous" and "humorous." See Tr.
H. 7/9/96 at 50-51. Mr. Morton noticed at that time that the
shirts clearly targeted a market different from Paco Rabanne's.
See Tr. H. 7/9/96 at 25, 50-51.
Paco Sport's use of the name PACO attracted Paco Rabanne's
attention in the fall of 1995, when Paco Sport's advertisements
appeared on billboards, buses, and in the subway in New York
City. See Px 19, 55; Tr. H. 10/3/96 at 505; Tr. T. 6/23/98 at
243. On December 1, 1995, Paco Rabanne's attorneys sent a letter
to Robert Jebara, President of Paco Sport, demanding that Paco
Sport discontinue marketing any products bearing the mark PACO.
See Answer and Counterclaim Exhibit A. On December 6, 1995,
Paco Sport commenced the present action for a declaratory
judgment in the United States District Court for the Central
District of California. See Complaint at ¶¶ 1-4. Paco Rabanne
asserted counterclaims of trademark infringement, false
designation of origin, trademark dilution, and unfair
competition, and requested injunctive and other relief. See
Answer and Counterclaim at ¶¶ 9-13. The case was subsequently
transferred to this Court
Paco Rabanne filed a motion for a preliminary injunction, which
Paco Sport opposed. After a hearing, the Court denied Paco
Rabanne's motion, finding that Paco Rabanne had failed to prove a
high likelihood of success on the merits; that at best, Paco
Rabanne had shown substantial questions going to the merits; and
that the balance of hardships tipped in Paco Sport's favor. Tr.
H. 1/30/97 at 8, 12. The United States Court of Appeals for the
Second Circuit affirmed this denial. See Paco Sport, Ltd. v.
Paco Rabanne, 112 F.3d 504 (2d Cir. 1997) (table opinion). A
bench trial was then held.
Even if the claimant's trademark is entitled to protection, a
trademark infringement claim cannot succeed without proof that
"numerous ordinary prudent purchasers are likely to be misled or
confused as to the source of the product in question." Id.
(quoting Gruner Jahr USA Publ'g v. Meredith Corp.,
991 F.2d 1072, 1077 (2d Cir. 1993)). It is well settled in this Circuit
that in evaluating the likelihood of confusion, courts consider
the eight factors established by Judge Friendly in Polaroid
Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir.
1961), ("the Polaroid factors"). These factors include: (1) the
strength of the senior user's trademark; (2) the degree of
similarity between the contested trademarks; (3) the competitive
proximity of the products; (4) the likelihood that the senior
user will "bridge the gap" by entering the junior user's market;
(5) actual confusion; (6) the junior user's good faith in
adopting its mark; (7) the quality of the junior user's product;
and (8) the sophistication of relevant consumers. See id.; see
also Time, 173 F.3d at 117.
In the present case, the Court finds based upon an evaluation
of these factors that although Paco Rabanne's trademarks PACO and
PACO RABANNE are valid and entitled to protection, Paco Rabanne
has failed to prove likelihood of confusion.
A. PROTECTABILITY OF PACO RABANNE'S TRADEMARKS
Assessment of a trademark's protectability begins with
appraising the trademark's inherent capacity to identify the
source of a product and classifying the trademark in one of four
categories of inherent distinctiveness. See Time, 173 F.3d at
117, 118. These categories, outlined in Abercrombie & Fitch Co.
v. Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir. 1976), are
generic, descriptive, suggestive, and arbitrary/fanciful.*fn6
Generic terms are never entitled to protection. Suggestive,
arbitrary and fanciful terms, on the other hand, are inherently
distinctive and generally entitled to protection. Descriptive
terms are not inherently distinctive, but are nonetheless
entitled to protection if they acquire secondary meaning in the
marketplace. See PaperCutter, Inc. v. Fay's Drug Co.,
900 F.2d 558, 561-62 (2d Cir. 1990); Abercrombie & Fitch, 537 F.2d at
9-11. Personal names, either surname — or first names, are
generally classified as descriptive terms, because "a name might
be regarded as a convenient description of the fact that the
individual was affiliated with the firm." Pirone v. MacMillan,
Inc., 894 F.2d 579, 583 (2d Cir. 1990) (citing Abraham Zion
Corp. v. Lebow, 761 F.2d 93, 104 (2d Cir. 1985)).
In the present case, Paco Rabanne seeks to protect its
trademarks PACO and PACO RABANNE. See Answer & Complaint at ¶¶
1, 2, 4. "Paco" is a common Hispanic nickname, used as a short
form of "Francisco," and "Paco Rabanne" is the fictitious name of
the designer who founded
the company. Accordingly, the trademarks are descriptive and, had
they not been registered, would have been entitled to protection
only with proof of secondary meaning. The registration of the
trademarks, however, curtails the protectability analysis. See
Conopco, Inc. v. Cosmair, Inc., 49 F. Supp.2d 242, 247 (S.D.N Y
The registration of a trademark by the United States Patent and
Trademark Office may create the presumption that the mark is
entitled to protection and thus relieve the owner of the burden
of proving protectability. Under 15 U.S.C. § 1115, registration
of a trademark is prima facie evidence of the trademark's
validity, of the registrant's ownership of the mark, and of the
registrant's exclusive right to use the mark in commerce "on or
in connection with the goods or services specified in the
registration." 15 U.S.C.A. § 1115(a); see also Lois Sportswear,
U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 871 (2d Cir.
1986) ("[R]egistered trademarks are presumed to be
distinctive."); McGregor-Doniger Inc. v. Drizzle Inc.,
599 F.2d 1126, 1132 (2d Cir. 1979). Furthermore, if the registered
trademark becomes "incontestable" after five years of continuous
use, the presumptions of validity, ownership, and exclusive right
to use the trademark become irrebuttable. 15 U.S.C.A. § 1115(b)
(West 1998).*fn7 Accordingly, such registered trademarks are
conclusively presumed to be valid and entitled to protection.
See Park `N Fly, Inc. v. Dollar Park and Fly, Inc.,
469 U.S. 189, 205, 105 S.Ct. 658, 83 L.Ed.2d 582 (holding that an
incontestable mark may not be challenged as merely descriptive).
Here, Paco Rabanne has owned registrations of the trademarks
PACO RABANNE and PACO since 1970 and 1976 respectively. See Dx
A-H. Paco Rabanne claims that the trademarks are incontestable,
and Paco Sport does not dispute this claim. See Def.Mem. at
6-7; Plaintiff's Post-Trial Memorandum of Law ("Pl. Mem.") at 3.
Accordingly, the Court assumes for the purposes of the decision
that the trademarks are entitled to protection.*fn8
B. LIKELIHOOD OF CONFUSION: THE POLAROID FACTORS
Having established that Paco Rabanne's trademarks PACO and PACO
RABANNE are entitled to protection, the Court must now determine
the scope of protection appropriate for the trademarks. See
Time, 173 F.3d at 118 ("[I]ncontestability . . . does not alter
the breadth of infringement protection that a mark is
accorded."). To prevail on its infringement claim, Paco Rabanne
must demonstrate that Paco Sport's use of the trademark PACO is
likely to confuse consumers about the source of the products.
See id. at 117. An analysis of the Polaroid factors leads the
Court to conclude that confusion is not probable.
1. Strength of Paco Rabanne's Trademarks
The courts have defined the strength of a trademark as its
inherent and acquired capacity to identify the source of a
product. See Time, 173 F.3d at 117. "The strength of a mark is
directly related to likelihood of confusion, for the stronger the
mark, the more likely that the consumer will associate it with
the familiar purveyor." H. Lubovsky, Inc. v. Esprit De Corp.,
627 F. Supp. 483, 486-87 (S.D.N.Y. 1986). In analyzing this
Polaroid factor, the courts consider both the inherent
distinctiveness of the trademark and its strength
acquired through use in the marketplace. See Time, 173 F.3d at
117-18 (citing Streetwise Maps, Inc. v. Vandam, Inc.,
159 F.3d 739, 743-44 (2d Cir. 1998)). The analysis involves many of the
same factors that initially determine the trademark's
protectability, such as the classification of the trademark on
the Abercrombie continuum as generic, descriptive, suggestive,
or arbitrary/fanciful and the existence of secondary meaning.
The registration of a trademark is also relevant to the
assessment of its strength because, as discussed above, an
incontestible registered trademark enjoys a conclusive
presumption of distinctiveness. See Park `N Fly, 469 U.S. at
205, 105 S.Ct. 658 (holding that an incontestable mark may not be
challenged as merely descriptive); Lois Sportswear, 799 F.2d at
871 ("[R]egistered trademarks are presumed to be distinctive.").
The presumption, however, applies only when the trademark is used
on the products specified in the registration. See 15 U.S.C. § 1115
(a), (b) (registration is evidence of a trademark's validity,
registration, ownership and exclusive right to use it "on or in
connection with the goods or services specified"); Mushroom
Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 48 (2d Cir. 1978)
("[E]ven if a mark is registered, the presumption of an exclusive
right to use it extends only so far as the goods or services
noted in the registration certificate."); Avon Shoe Co. v. David
Crystal, Inc., 279 F.2d 607, 613 n. 7 (2d Cir. 1960)
("[I]ncontestability . . . would carry a conclusive presumption
of the plaintiffs' exclusive right to use its marks only on shoes
[the goods specified in the registration certificate].").
Furthermore, the presumption of distinctiveness applies only to
the trademark as a whole, and does not extend to its components.
See Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1043
(2d Cir. 1980) (holding that the owner of a registered trademark
"Saratoga Vichy" could not assert rights in an unregistered
trademark "Saratoga" absent proof of secondary meaning); see
also In re National Data Corp., 753 F.2d 1056, 1059 (Fed.Cir.
1985) ("[R]egistration affords prima facie rights in the mark
as a whole, not in any component.") (emphasis added);
Beneficial Corp. v. Beneficial Capital Corp., 529 F. Supp. 445,
447 n. 1 (S.D.N.Y. 1982) (reasoning that the registration of the
mark "Beneficial Finance System" did not create the presumption
that the name "Beneficial," standing alone would have been
sufficiently distinctive to be entitled to protection).
In the present case, Paco Rabanne's only registration of the
mark PACO is for use on fragrances and various cosmetics
products. See Dx B, H. This registration, therefore, cannot
create the presumption that the trademark PACO is distinctive
when used on clothing. Paco Rabanne's other registered marks,
including the registration in the clothing category, include the
words PACO RABANNE. See Dx A, C-G. Accordingly, these
registrations cannot create the presumption that the name PACO
alone is distinctive.
As discussed above, the personal names PACO and PACO RABANNE
are descriptive terms, and, therefore, inherently weak
trademarks. See Pirone, 894 F.2d at 583. Even inherently weak
trademarks, however, may acquire capacity to identify the source
of the product to the public, i.e., secondary meaning. See H.
Lubovsky, 627 F. Supp. at 487. Secondary meaning attaches to a
descriptive term when "in the minds of the public, the primary
significance of a . . . term is to identify the source of the
product." Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc.,
973 F.2d 1033, 1041 (2d Cir. 1992) (quoting Inwood Labs. v. Ives
Labs., 456 U.S. 844, 855 n. 11, 102 S.Ct. 2182, 72 L.Ed.2d 606
(1982)). Personal names acquire secondary meaning when "`the name
and the business have become synonymous in the mind of the
public, submerging the primary meaning of the term in favor of
its meaning as a word identifying that business.'" Pirone, 894
F.2d at 583 (quoting
Abraham Zion, 761 F.2d at 104). "Proof of secondary meaning
entails vigorous evidentiary requirements." PaperCutter, 900
F.2d at 564 (quoting Ralston Purina Co. v. Thomas J. Lipton,
Inc., 341 F. Supp. 129, 134 (S.D.N.Y. 1972)). In assessing
secondary meaning, the courts consider a variety of factors,
including, but not limited to, "(1) advertising expenditures, (2)
consumer studies linking the mark to a source, (3) unsolicited
media coverage of the product, (4) sales success, (5) attempts to
plagiarize the mark, and (6) length and exclusivity of the mark's
use." Centaur Communications, Ltd. v. A/S/M Communications,
Inc., 830 F.2d 1217, 1222 (2d Cir. 1987).
In the present case, the evidence shows that the name PACO
RABANNE has acquired limited secondary meaning in the fragrance
market. The company has been using this trademark in the United
States since the 1970s. See Tr. H. 7/9/96 at 91. All Paco
Rabanne products, including its signature fragrance PACO RABANNE
POUR HOMME, bear the designer's name on the packaging. See
e.g., Dx K, L, M, DDDD. The evidence of secondary meaning also
includes the level of the company's sales ($200 million over the
last ten years, see Tr. T. 6/23/98 at 342) and its advertising
expenditures ($100 million over the last ten years, see Tr. T.
6/23/98 at 342). Witnesses have testified to the existence of
counterfeit and "gray market" trade in fragrances under Paco
Rabanne's name, and to the company's efforts to prevent this
trade. See Tr. H. 7/9/96 at 26-27, Tr. T. 6/23/98 at 347-50; Dx
OO. In addition, a fragrance industry expert, Mr. Ruttenberg, has
testified that he considers Paco Rabanne a serious competitor in
the industry and that in his opinion the company's brand is
"formidable." See Dx JJJJJJJ at 3; Tr. T. 6/23/98 at 207. A
brand image study ranked PACO RABANNE as # 1658 in the United
States among luxury products brands in terms of recognizability.
See Px 87b at PR0011890. Furthermore, market research studies
that consumers in the United States perceive the name PACO
RABANNE primarily as a name of a fragrance, and not of a real
life person. See Px 129 at 3; Tr. T. 10/1/98 at 385-86; Px 132c
Paco Rabanne argues that the name PACO alone has also acquired
secondary meaning. See Def.Mem. at 5-6; Defendant's Post-Trial
Reply Memorandum of Law ("Def.R.Mem.") at 1-2. The evidence,
however, does not support this contention. Paco Rabanne has
presented no evidence of having marketed products under the name
PACO alone prior to the launch of its new PACO fragrance in 1996.
See Tr. H. 7/9/96 at 38; Tr. H. 7/15/96 at 191-92. On the
contrary, the full name PACO RABANNE appears in letters of equal
size and prominence on bottles and packaging of Paco Rabanne's
products, including the fragrance best known to the average
American consumer, PACO RABANNE POUR HOMME. See Dx K, L, M,
DDDD. Paco Rabanne's instructions to licensees also insist on the
use of full name in strictly specified typeface. See Dx V. Even
the new fragrance's bottle has the name PACO RABANNE printed in
smaller letters under the name PACO. See Tr. T. 6/23/98 at 214;
Paco Rabanne argues that the name PACO is the dominant part of
the trademark PACO RABANNE, relying primarily on testimony that
among Paco Rabanne's employees, distributors, and fragrance
industry insiders, PACO was often used as the shorthand name for
the designer, the company, and the company's signature fragrance
PACO RABANNE POUR HOMME. See Def. Mem. at 5, 7-8; Tr. H. 7/9/96
at 4; Tr. T. 6/23/98 at 207-08, 230-32. This evidence, however,
does support the inference that ordinary American consumers also
have come to associate the common Hispanic nickname "Paco"
primarily with the defendant or its fragrance.*fn9 See infra
at 27-28. Similarly, the Court cannot infer secondary meaning
from occasional media references to the designer Paco Rabanne as
Paco, because the submitted stories also invariably mention the
full name Paco Rabanne. See Dx W, X, Z, AA, WW. Paco Rabanne has
used the name PACO without the name RABANNE in some of its
advertising and on promotional "gifts-with-purchase." See Tr. H.
7/9/96 at 8-14; Dx QQ, RR, SS, UU. The promotional gifts,
however, have been distributed together with products bearing the
full name PACO RABANNE, and included the characteristic monogram
also appearing on the packaging of cosmetics and fragrances,
including PACO RABANNE POUR HOMME. See Dx UU. The monogram
consists of the lower case letter "r" appearing on the silhouette
of a short-stemmed lower case letter "p." See Dx UU, K, L, M.
Most of the advertisements also feature this monogram or the
characteristic bottle of PACO RABANNE POUR HOMME. See Dx QQ, SS.
The Court finds, therefore, that this evidence is insufficient to
prove secondary meaning in the PACO mark alone.
The conclusion that the name PACO alone lacks secondary meaning
is further supported by a series of market studies conducted by
Paco Rabanne and its exclusive distributor in the United States,
Compar Inc. See Tr. H. 7/9/96 at 35-36; Px 62. In the first
study, conducted in 1991-92, Paco Rabanne commissioned a leading
market research firm, Landor Associates, to conduct a worldwide
study to identify the strengths and the weaknesses of the Paco
Rabanne brand ("the Landor study," Px 87). See Tr. T. 6/23/98
at 266-67. In assessing Paco Rabanne's image worldwide, the
Landor study concluded that Paco Rabanne had a "[s]ingle known
product, whose image . . . [was] losing ground"; that the
company's clientele was "older"; and that "haute couture and
readywear of the designer [were] weakly known to the public at
large." Px 87b at PR00011892. In assessing the United States
market, the Landor Associates stressed that the brand's strength,
if any, was limited to one product, Paco Rabanne's signature
fragrance PACO RABANNE POUR HOMME, and that in the minds of the
consumers, the brand existed only in perfumes. See Px 87c
(emphasis added). In particular, the Landor Associates' report
stated that in this country there was "very little awareness of
the mark," "reduction of product line to one product [PACO
RABANNE]," "incapacity of the mark to immediately penetrate
markets other than perfume," and that the brand's image was "the
most devalued" here of all countries studied. Px 87c at
PR0011947. The findings of Landor study are consistent with the
conclusions a qualitative market study commissioned indirectly by
Landor in connection with its study. The KRC report, see Px
129, based on several focus group discussions conducted in
1991-92, states that "Paco Rabanne as a designer is not known
nor recognized in the United States. He is the name of a
fragrance, rather than of a real life figure. As such, any
associations between the fragrance and fashion lines must be
created from scratch." See Px 129 at 3; Tr. T. 10/1/98 at 372,
The limitations of Paco Rabanne's trademark strength are
evident from yet another study entitled "The Compar Marketing
Overview," an internal report prepared by Compar in 1995-96 in
developing a marketing plan for the new PACO fragrance line and,
in part, assessing the market potential of a proposed PACO line
of casual clothing with its usual upscale image. See Tr. H
7/9/96 at 41-43, Px 81. This study consisted of four focus group
discussions with fragrance purchasers about Paco Rabanne's image,
packaging, and advertising. See Tr. H. 7/9/96 at 36. The study
concluded, in part, that "[t]he name
Paco might not have been associated with Paco Rabanne had the
name Paco Rabanne not been written on the ads." Px 62 at
COM0003933. The researchers also observed significant disparity
between the image of Paco Rabanne's fragrance and the image that
the name PACO alone conveyed to the participants. Whereas the
participants generally perceived Paco Rabanne's fragrances as
heavy and appropriate for older men, they perceived the name Paco
as "simple," "youthful," and "catchy." Px 62 at COM0003932,
COM0003933.*fn10 This disparity between the image communicated
by the name PACO alone and the image of Paco Rabanne indicates
that consumers do not associate the name with the company.
Similarly, the Landor study, in assessing the strength of Paco
Rabanne's brand in the United States, observed market penetration
by the name PACO RABANNE only.*fn11 See Px 87c at PR0011929.
Based on these reports, the Court finds that although Paco
Rabanne's trademark PACO RABANNE has acquired some secondary
meaning in the fragrance market, this limited strength does not
extend to the name PACO when used alone.*fn12 Accordingly, the
Court concludes that this Polaroid factor does not favor Paco
Rabanne and that although the trademark PACO RABANNE has acquired
limited secondary meaning in the fragrance market, ...