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PACO SPORT, LTD. v. PACO RABANNE PARFUMS

February 17, 2000

PACO SPORT, LTD., PLAINTIFF,
V.
PACO RABANNE PARFUMS, DEFENDANT.



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.

BACKGROUND

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 398-99.

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.

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.

DISCUSSION

I. LANHAM ACT CLAIMS

Paco Rabanne asserts counterclaims of trademark infringement under 15 U.S.C. § 1114*fn4 and false designation of origin under 15 U.S.C. § 1125(a).*fn5 To prevail on a trademark infringement claim under either of these provisions, the trademark's possessor must prove two elements: (1) that its trademark is valid and entitled to protection and (2) that the contested use of the trademark is likely to cause confusion among consumers. See Time, Inc. v. Petersen Publ'g Co. L.L.C., 173 F.3d 113, 117 (2d Cir. 1999). A trademark is entitled to protection if it is inherently distinctive or if it is descriptive and has acquired secondary meaning in the marketplace. See id. Secondary meaning attaches to a term when in the minds of the consumers the term becomes synonymous with the business and primarily identifies the business. See id.

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 1999).

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. See id.

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 at PR20006890.

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; Dx P.

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, 384-86.

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, ...


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