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GREENPOINT FINANCIAL CORP. v. SPERRY & HUTCHINSON

September 19, 2000

GREENPOINT FINANCIAL CORP., PLAINTIFF,
V.
THE SPERRY & HUTCHINSON COMPANY, INC., AND S & H GREENPOINTS. COM, INC., DEFENDANTS.



The opinion of the court was delivered by: Batts, District Judge.

MEMORANDUM & ORDER

Plaintiff GreenPoint Financial Corporation ("GFC") alleges that Defendants Sperry & Hutchinson ("S & H") and S & H Greenpoints.com's use of the name "GREENPOINTS" and GREENPOINTS.COM infringe on GFC's trademark and create likely confusion in violation of Section 32 of the Lanham Act and New York State statutory and common law. In addition, Plaintiff alleges that use of the marks constitutes unfair competition and false designation of origin in violation of Section 43(a) of the Lanham Act and various state statutes. Finally, Plaintiffs allege that S & H's use of the marks dilutes the distinctive quality of GFC's allegedly famous mark in violation of Section 43(c) of the Lanham Act and New York General Business laws.

I. FACTUAL FINDINGS

The Court incorporates the briefings by the parties and the record of the hearing of September 13-14, 2000 and assumes familiarity with the facts set forth therein. Plaintiff, primarily known as a savings bank in Brooklyn since 1868, has expanded into other areas of New York State and Connecticut, not only as a savings bank, but also specializing in mortgages. (Decl. Humphrey ¶¶ 2-3, 6. Supp. Decl. Humphrey ¶ 3). Since 1997, Plaintiff has expanded into mortgage lending and financing of manufactured housing and now has 24 mortgage offices and 45 housing finance offices across the country. (Decl. Humphrey ¶¶ 10, 15). In addition, Plaintiff offers banking services over the Internet. (Humphrey Decl. ¶¶ 20-21).

Plaintiff now seeks to prevent alleged infringement of what they claim to be their trademark, the word(s) "GREENPOINT", standing alone, by the Defendants. Defendants, historically equally well-known for their "S & H Green Stamp" program, which reached a national audience in the 60's and 70's, have used the term "Greenpoints" in conjunction with their marketing, on a national level, to potential clients of their gift redemption program. Despite historic references, it is clear to the Court that Plaintiff first claimed use of the registered term "GREENPOINT" in 1995 and Defendants first used "GREENPOINTS" in 1996. Notwithstanding Plaintiff's claimed first use of a stylized "GreenPoint" mark in 1995, Plaintiff presented evidence of advertising utilizing the phrase "The Green Point" as early as 1985. (Pl.'s Ex. 6).

The facts presented by the Plaintiff in their papers and at the hearing, do not support national use or recognition of GreenPoint with them. At best, the facts presented by Plaintiff raise the question of distinctive mark or secondary meaning under the New York State anti-dilution act. See New York Gen. Bus. Law § 368-d.

II. DISCUSSION

A. Preliminary Injunction Standard

"In cases involving claims of trademark infringement and dilution, as in other types of cases, a party seeking a preliminary injunction must demonstrate (1) the likelihood of irreparable injury in the absence of such an injunction, and (2) either (a) likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them fair ground for litigation plus a balance of hardships tipping decidedly toward the party requesting the preliminary relief." Federal Express Corp. v. Federal Espresso, Inc., 201 F.3d 168 (2d Cir. 2000). "The movant need not show that success is certain, only that the probability of prevailing is `better than fifty percent.'" BigStar Entertainment v. Next Big Star Inc, 105 F. Supp.2d 185 (S.D.N.Y. 2000) (quoting Wali v. Coughlin, 754 F.2d 1015, 1025 (2d Cir. 1985)).

"In the context of trademark . . . injunctions, the requirement of irreparable harm carries no independent weight, as [the Second Circuit has] held that a showing of likelihood of confusion . . . establishes irreparable harm." Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 142 (2d Cir. 1997) (citations omitted). "Proof of such confusion also serves as additional evidence with respect to the separate finding that must be made of plaintiff's likelihood of success on the merits." Church of Scientology Int'l v. Elmira Mission of Church of Scientology, 794 F.2d 38, 41 (2d Cir. 1986). Finally, a likelihood of dilution establishes irreparable harm, because "[d]ilution is itself an injury which [cannot] be recompensed by money damages." Deere & Co. v. MTD Prods., Inc. 860 F. Supp. 113, 122 (S.D.N.Y.), aff'd, 41 F.3d 39 (2d Cir. 1994).

However, "[s]ignificant delay in applying for injunctive relief in a trademark case tends to neutralize any presumption that infringement [or dilution] alone will cause irreparable harm pending trial, and such delay alone may justify denial of a preliminary injunction for trademark infringement." Citibank, N.A. v. Citytrust, 756 F.2d 273, 276 (2d Cir. 1985) (internal citations omitted)

Accordingly, because GFC delayed approximately 4 months in requesting injunctive relief, no presumption of irreparable harm exists.

B. Service Mark Infringement

To prevail on a claim for infringement under the Lanham Act, a plaintiff must show that (1) it has a distinctive mark subject to protection; and (2) the defendant's mark results in a likelihood of confusion. Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503, 1508 (2d Cir. 1997).

1. Protectability of the Mark

Plaintiff's "GREENPOINT" mark is "descriptive of the geographic origin of a product," here Greenpoint, Brooklyn, and "will not receive trademark protection absent proof of secondary meaning." Forschner Group, Inc. v. Arrow Trading Co., Inc., 30 F.3d 348, 348 (2d Cir. 1994); (Humphrey Decl).

The "term has acquired a secondary meaning in its particular market [if] the consuming public primarily associates the term with a particular source." Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1040 (2d Cir. 1992).

Six factors have been identified to help establish secondary meaning. They are (a) advertising expenditures*fn1; (b) consumer studies linking the mark to a source; (c) unsolicited media coverage of the product; (d) sales success; (e) attempts to plagiarize the mark; and (f) the length and exclusivity of the mark's use. See Centaur Communications, Ltd. v. A/S/M/ Communications, 830 F.2d 1217, 1222. While each factor does not have to be proved and no single factor is determinative (id.), Plaintiff must satisfy a "heavy" burden because "[p]roof of secondary meaning entails vigorous evidentiary requirements." 20th Century Wear Inc., v. Sanmark Stardust Inc., 747 F.2d 81, 90 (2d Cir. 1984), cert. denied, 470 U.S. 1052, 105 S.Ct. 1755, 84 L.Ed.2d 818 (1985) (quoting Ralston Purina Co. v. Thomas J. Lipton, Inc., 341 F. Supp. 129, 134 (S.D.N.Y. 1972)).

The critical question is whether the term "GREENPOINT" had gained secondary meaning by the time S & H Greenpoints entered the market in 1996. See PaperCutter, Inc. v. Fay's Drug Co., 900 F.2d 558, 564 (2d Cir. 1990). To establish secondary meaning within a disputed market, courts have also considered whether the senior user had established secondary meaning throughout the relevant disputed marketplace. See, e.g., Centaur Communications, 830 F.2d at 1226 (strength of a mark should be examined in its commercial context); Frank Brunckhorst Co. v. G. Heileman Brewing Co., Inc., 875 F. Supp. 966, 977 (E.D.N.Y. 1994) (national advertising campaign established national secondary meaning).

Plaintiff has not put forth evidence demonstrating that GreenPoint has achieved secondary meaning either in New York or nationally. While its survey, assuming its validity, may demonstrate some name recognition in the New York metropolitan area for the term "Greenpoint Bank", this is insufficient to establish secondary meaning, for either federal or state infringement purposes, for the term "GREENPOINT". In addition, the flaws in the survey, from lack of objectivity in creation and determination of parameters because of the involvement of Plaintiff's law firm, lack of a control group, and the addition of questions a third of the way into the sampling, cast serious doubts on the value of the survey and any conclusion the Plaintiff seeks to draw therefrom.

In addition, although Plaintiff has offered some evidence of advertising throughout the New York metropolitan area, it has not demonstrated exclusivity within the region. A quick glance through the Brooklyn phone directory establishes that more than fifty other establishments conduct business under the "Greenpoint" name. Such significant third party usage also undermines Plaintiff's claim of secondary meaning. See, e.g., Allied Maintenance Corp. v. Allied Mechanical, Inc., 42 N.Y.2d 538, 399 N.Y.S.2d 628, 369 N.E.2d 1162, 198 U.S.P.Q. 418, 422 (1977) (noting numerous other phone directory listings in denying exclusivity); Exquisite Form Industries, Inc. v. Exquisite Fabrics of London, 378 F. Supp. 403, 410 (S.D.N.Y. 1974) (same). Accordingly, for the reasons stated above, the Court remains unconvinced that the public associates the term "GREENPOINT" with Plaintiff's banking service.

2. Likelihood of Confusion

In order to succeed in a trademark infringement suit, Plaintiff must also prove that "there is a likelihood of confusion, or, in other words, that numerous ordinary prudent purchasers are likely to be misled or confused as to the source of the product in question because of the entrance in the marketplace of defendant's mark." Gruner, 991 F.2d at 1077. There must be an "appreciable number" of confused purchasers to sustain this burden. Mushroom Makers, Inc. v. R.G. Barry Corporation, 580 F.2d 44, 47 (2d Cir. 1978).

Courts analyzing likelihood of confusion must consider the eight-factor Polaroid test articulated in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961). The factors are a) strength of mark; b) degree of similarity between the marks; c) the proximity of the products; d) the likelihood that the senior user of mark will bridge the gap; e) evidence of actual confusion; f) the junior user's bad faith vel non in adopting the mark; g) the quality of the junior user's product; and h) the sophistication of the relevant consumer group.

In the context of the Internet, the Ninth Circuit has considered three factors: (1) the virtual identity of the marks; (2) the relatedness of plaintiff's and defendant's goods; and (3) the simultaneous use of the web as a marketing channel, as "most important." Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1054-58 (9th Cir. 1999).

a) Strength Of Mark

A mark's strength is assessed by (1) the degree to which it is inherently distinctive; and (2) the degree to which it is distinctive in the marketplace. W.W.W. Pharmaceutical Co. v. Gillette Co., 808 F. Supp. 1013, 1022 (S.D.N.Y. 1992), aff'd, 984 F.2d 567 (2d Cir. 1993). The strength of a mark should be examined in its commercial context. Centaur Communications, 830 F.2d at 1226, and the geographic ...


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