The opinion of the court was delivered by: Miriam Goldman Cedarbaum, United States District Judge.
Plaintiff Pilates, Inc. sues defendants Current Concepts, Inc. and
Kenneth Endelman for infringing two of plaintiff's registered trademarks
in the word PILATES. One mark is registered for certain types of
equipment used in the "Pilates method" of exercise. The other mark is
registered for use in connection with exercise instruction services.
Plaintiff seeks only declaratory and injunctive relief. A bench trial was
held from June 5 to June 26, 2000.
Because defendants did not contest infringement, the central issue at
trial was the validity of plaintiff's marks. Defendants asserted, in
essence, six defenses to plaintiff's claim of infringement: (1) the marks
are generic; (2) the marks were abandoned; (3) the marks were improperly
assigned in gross; (4) the marks were registered fraudulently; (5)
defendants are prior users of the marks; and (6) plaintiff's claims are
barred by the doctrine of "unclean hands."
After considering all the evidence, observing the demeanor of the
witnesses, and considering the plausibility and credibility of the
testimony, I conclude that defendants have proven by clear and convincing
evidence that: (1) both of the marks at issue are generic; (2) if there
ever was a PILATES equipment trademark, it had been abandoned long before
plaintiff applied for its registration, and its registration was obtained
by plaintiff through fraud; and (3) the exercise instruction service mark
was invalidly assigned in gross. The following shall constitute my
findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a).
Plaintiff Pilates, Inc. is a Montana corporation with offices at 890
Broadway and 2121 Broadway in New York City. Plaintiff's business includes
providing instruction in the Pilates method of exercise, training Pilates
instructors, and selling Pilates equipment and merchandise. Pilates, Inc.
is the registered holder of the trademarks at issue in this suit. Sean
Gallagher is the President and sole shareholder of Pilates, Inc.
Defendant Current Concepts, Inc. is a California corporation with its
main office in Sacramento, California.*fn1 Defendant Kenneth Endelman is
President of Current Concepts and owns 50% of its shares.
Two trademarks are at issue in this case.*fn2 PILATES, U.S.
1,405,304, was registered by Aris Isotoner Gloves, Inc. on August 12,
1986 for "exercise instruction services" (the "PILATES service mark").
PILATES, Registration No. 1,907,447, was registered by plaintiff on
July 25, 1995 for "exercise equipment, namely reformers, exercise
chairs, trapeze tables, resistance exercise units and spring
actuated exercise units" (the "PILATES equipment mark").*fn3
It is undisputed that the PILATES service mark is incontestable. See
15 U.S.C. § 1065. The PILATES equipment mark is contestable. Both marks
are in full force and effect on the Principal Register.
III. Events During the Lifetime of Joseph Pilates
Joseph Humbertus Pilates was born in Germany in 1880. Starting in or
around 1914, when Mr. Pilates was interned in England with other German
nationals during World War I, he developed a method of conditioning
incorporating specific exercises designed to strengthen the entire body,
with emphasis on the lower back and abdominal region, while at the same
time enhancing flexibility. Mr. Pilates developed numerous pieces of
equipment for use in connection with his method of conditioning.
Most of these pieces of equipment utilize springs to provide some form
of resistance against which the person performing the exercises can work.
The most prominent among these pieces of equipment are the "reformer,"
the "Cadillac" (also known as a "trap table"), the "Wunda Chair," and
various "barrels," one of which is referred to as a "spine corrector."
In the mid-1920s, Mr. Pilates and his wife, Clara, emigrated to the
United States. They moved into an apartment at 939 Eighth Avenue in New
York City and opened an adjoining studio at which they provided training
in the method of exercise Mr. Pilates had developed. During Mr. Pilates'
lifetime, his method of conditioning, which he sometimes called
"contrology," gained a positive reputation in the New York City dance
In 1941, Romana Kryzanowska, then a dancer in George Balanchine's dance
company, was referred to Mr. and Mrs. Pilates for rehabilitation of an
ankle injury. At that time, the studio had a glass door which read, in
black ink, "Contrology — Art of Control — Pilates Studio
— Joseph Pilates," with each of these four terms on descending
levels. Kryzanowska trained and studied with Mr. and Mrs. Pilates until
1944, when she married and moved to Peru. Kryzanowska lived in Peru until
Between 1927 and 1951, Mr. Pilates obtained patents for several of the
pieces of exercise equipment he invented. He placed metal plaques on his
equipment to identify the name of the apparatus and the patent number.
For example, one plaque identified the PILATES UNIVERSAL REFORMER as made
by PILATES STUDIOS OF CONTROLOGY.
After 1959, the studio became less active because the condition of the
building deteriorated and the neighborhood became more dangerous.
Throughout his lifetime, Mr. Pilates promoted his method of exercise and
attempted to increase its use by the public. For example, as Kryzanowska
related, "[Mr. Pilates] wanted all colleges mainly to have this exercise
program because he thoroughly believed in it and thought it would be
good for the human race and even children in schools." Mr. and Mrs.
Pilates never did anything to prevent others from using their name to
describe what they taught.
In 1965, Mr. Pilates opened a studio in the beauty salon at Henri
Bendel, a department store in New York City, at which his method of
conditioning was taught. Naja Corey, who had been trained by Mr.
Pilates, was the instructor at the Bendel facility until 1972. Corey was
succeeded by Kathleen Grant, who had also been trained by Mr. Pilates.
The Bendel store directory included a sign for "Pilates Studios." Grant
worked at the Bendel facility until it closed in 1988.
While Mr. Pilates was alive, he taught a number of students who went on
to become Pilates instructors themselves. Among these students were Bruce
King, Carola Trier, Bob Steed, Naja Corey, Kathy Grant, Ron Fletcher, and
Eve Gentry. Mr. Pilates died in 1967. He did not leave a will.
IV. 1967 to 1984:939 Studio Corporation and Pilates Studio, Inc.
After Mr. Pilates' death, Clara Pilates continued to teach at and run
the studio until 1970. Mrs. Pilates was represented by John Steel, an
attorney, beginning in or around 1970 and continuing until her death.
Steel was also a Pilates student and close friend of Mr. and Mrs.
Pilates. On March 3, 1970, Steel formed a New York corporation called 939
Studio Corporation ("939 Studio") whose purpose was to own and operate
the studio at which Mr. and Mrs. Pilates had taught and provide support
for Mrs. Pilates. In September 1971, Steel formed a limited partnership
between 939 Studio and approximately 20 investors who wished to keep the
939 Studio was the general partner and the investors were limited
partners. The limited partnership purchased the assets of her studio from
Mrs. Pilates. At some point during this period, Kryzanowska agreed to take
over the responsibilities of running the studio. In or around 1972, the
studio moved from 939 Eighth Avenue to 29 West 56th Street in New York
City. After the move, the studio gained more clients.
On June 4, 1973, 939 Studio changed its name to Pilates Studio, Inc.
(the "first Pilates Studio, Inc.")*fn4 That same year, Kryzanowska
became a 50% shareholder of the first Pilates Studio, Inc. The remaining
shares were owned by the limited partners of 939 Studio. Clara Pilates
died in 1976.
The State University of New York at Purchase ("SUNY Purchase")
maintained a facility from 1975 through 1990 at which students received
instruction in the Pilates method. SUNY Purchase never paid anyone for
its use of the name "Pilates Studio at SUNY Purchase."
During the 1970s, Kryzanowska facilitated the sale of Pilates equipment
by a manufacturer named Donald Gratz to some of her students. Kryzanowska
forwarded orders and payments from the buyers to Gratz, and Gratz would
then ship or directly deliver the equipment to the buyers. Kryzanowska
sometimes added an extra amount to the price as compensation for her
participation in the transactions. Buyers sometimes ordered directly from
Gratz rather than through Kryzanowska. The first Pilates Studio, Inc.
never manufactured equipment itself, nor did it license anyone to
manufacture equipment. Before her death, Clara Pilates gave Mr. Pilates'
original equipment blueprints to Ron Fletcher for Fletcher's use in
having equipment built in California.
The first Pilates Studio, Inc. initiated a few lawsuits and sent some
cease and desist letters in the early 1980s. During the 1970s, defendant
Endelman became involved in manufacturing Pilates equipment. Prior to
1975, Endelman conducted a furniture business located in Los Angeles,
California. Current Concepts first existed as a furniture design
business and was established in or around 1974.
Endelman first learned of the Pilates method and of the equipment Mr.
Pilates had invented in late 1975 or early 1976 when a client asked him
to manufacture a reformer. In 1976 or 1977, Current Concepts started to
manufacture equipment for use with the Pilates method. Current Concepts
moved to Sacramento, California in 1980 and has operated there
continuously since that time.
V. 1984 to 1986: Aris Isotoner
In 1984, the first Pilates Studio Inc.'s assets were sold to Aris
Isotoner Gloves, Inc. ("Aris Isotoner"). Aris Isotoner's then-president
and CEO, Lari Stanton, was a student of Kryzanowska's who wanted the
studio to survive despite its financial difficulties.
Aris Isotoner bought all of the studio's assets in an agreement dated
August 14, 1984. A separate assignment of the studio's trademarks was
executed on September 24, 1984. The assignment from the first Pilates
Studio, Inc. to Aris Isotoner provided for the transfer of the service
marks PILATES and PILATES STUDIO and the trademark MAGIC CIRCLE, along
with the trade names PILATES, PILATES STUDIO and PILATES STUDIOS. The
assignment did not mention a trademark for equipment.
Kryzanowska continued to teach at the studio as an employee of Aris
Isotoner. She continued to give letters of recommendation to students
whom she trained to teach Pilates.
During these years, Aris Isotoner listed its exercise business in the
Manhattan telephone directory as "Isotoner Fitness Center." This name was
also used in advertisements for the studio.
Aris Isotoner never manufactured Pilates equipment or provided a
license to anyone to manufacture such equipment. Kryzanowska continued
to facilitate the sale of equipment while working for Aris Isotoner.
Aris Isotoner sent some cease and desist letters and settled a
trademark infringement lawsuit relating to the PILATES marks during this
period. Aris Isotoner never licensed any of the PILATES marks. Because
the studio was losing money and Lari Stanton was unable adequately to
manage both the studio and Aris Isotoner's other business
simultaneously, Stanton decided to sell the assets of the studio.
VI. 1986 to 1992: Healite
A. 1986 to 1989: Healite Operates The Pilates Studio
On December 30, 1986, Aris Isotoner transferred all assets related to
its Pilates business to Healite, Inc. for $15,000. Healite Inc. was
wholly-owned and operated by Wee-Tai Hom, a student of Kryzanowska. A
separate assignment of the trademarks was executed on the same day. The
assignment named the same marks as those described in the assignment to
Aris Isotoner. No equipment trademark was mentioned.
Healite moved the Pilates Studio to a new location at 160 East 56th
Street in New York City. On January 6, 1987, Healite incorporated a new
Pilates Studio, Inc. The second Pilates Studio, Inc. was a wholly-owned
subsidiary of Healite. Kryzanowska continued to teach at the Pilates
B. 1989 to 1992: Closing Of The Studio
Healite was unable to make the Pilates Studio into a financial success.
The studio was losing money and could not pay its rent. On April 1, 1989,
Healite's financial difficulties resulted in the closing of the East 56th
Street studio, Healite's only studio. On that day, upon their arrival at
the studio the studio's instructors and clients found the studio closed
and the door locked. Wee-Tai Hom immediately sent the studio's clients a
letter referring them to Body Art, Sichel Chiropractic, and The Gym.*fn5
The letter was printed on Body Art stationery, although Hom signed as
President of Pilates Studio, Inc. Hom created a schedule for the
instructors who used to work at the East 56th Street location, assigning
them to specific times at either Body Art or The Gym. Hom received one or
two dollars as a referral fee for each client served at the three
locations. Hom distributed some cards advertising the three locations.
Hom also distributed in person and by mail a number of fliers
advertising a piece of equipment called the "Pilates Exerciser" and
promoting the Pilates method. The fliers refer to Healite and the
Pilates Studio. It is not clear when these materials were distributed.
Hom sold some equipment and books in July of 1989. Hom also placed some
advertisements in Dance magazine during 1990 and 1991. The advertisements
included a toll-free telephone number which rang in Hom's home. Hom was
billed personally for these advertisements.
Used equipment from the East 56th Street Studio was distributed among
three locations in New York City: Sichel Chiropractic, Body Art Exercise
Ltd. ("Body Art"), and The Gym.
Healite did not open another facility at which the Pilates method was
taught. On May 10, 1991, the owner of The Gym, Dragutin Mehandzic
("Drago"), paid Hom $3000 for all of the equipment Hom had moved there
when the East 56th Street studio closed in 1989. Between 1989 and 1991,
Drago had paid Hom one to two dollars for each customer Hom referred to
The Gym. The Gym never had any licensing agreement or other payment
arrangement with Healite or the second Pilates Studio, Inc. Hom engaged
in a number of sporadic Pilates-related activities on his own behalf. He
gave a lecture at the International Ballet Festival in Jackson,
Mississippi in 1990 and he taught a Pilates course at New York
University in 1990.
Hom certified a student in February, 1990, signing as "president" of an
unspecified business. He approached a few people regarding selling the
Pilates marks, including defendants. As a substitute for returning $300,
he volunteered a one-year license to Amy and Rachel Taylor to use the
Pilates name in connection with their studio in Colorado.
Neither Healite nor the second Pilates Studio, Inc. filed any federal
income tax returns from 1988 through 1993. After April 1, 1989,
Kryzanowska taught Pilates at The Gym, where she continues to teach
today. She also taught at Body Art for a few months.
VII. 1992 to Present: Plaintiff Purchases And Polices The PILATES Marks
Sean Gallagher acquired the trademark registrations for the PILATES
service mark and PILATES STUDIO for $17,000 under an asset purchase
agreement effective August 3, 1992.*fn6 The agreement did not mention a
trademark for equipment. Moreover, Healite represented in the agreement
that "[e]xcept for the [marks listed], Healite presently owns no other
mark containing the word `Pilates' or referencing `Pilates' in any
Gallagher also acquired the studio's archives, which included
photographs, business records, books, films, and other documents dating
back as early as the 1940s. Gallagher destroyed eighty percent of the
papers he received. Gallagher also acquired client lists, which he threw
away within a year.
Gallagher incorporated Pilates, Inc. in 1992. In June 1994, Gallagher
assigned the Pilates marks to Pilates, Inc. On September 25, 1992,
Gallagher applied for a trademark registration for PILATES for use on
exercise equipment. The application was denied in March 1994. Gallagher
eventually obtained registration for a PILATES equipment mark.
In 1993, plaintiff began to develop a formal teacher certification
program headed by Kryzanowska. Kryzanowska was, and is, an independent
contractor. Plaintiff grants certified instructors a license to use its
PILATES marks in specified fashions. Plaintiff currently has license
agreements with approximately 450 instructors.
Shortly after purchasing the PILATES marks, plaintiff had an arrangement
with defendants under which defendants manufactured Pilates equipment and
sold it to plaintiff for resale. The arrangement was of short duration.
Starting in 1996 or 1997, plaintiff entered into a licensing agreement
with Stamina Products. Under this agreement, Stamina sells Pilates
equipment through mass market outlets, including the QVC network, to
consumers who have not been trained in the Pilates method. Stamina's
best-selling Pilates product has been the "Pilates Performer." The
majority of plaintiff's revenue comes from its licensing agreement with
Plaintiff has vigorously enforced the PILATES marks since it acquired
them. Plaintiff has sent hundreds of cease and desist letters to
purported infringers and has sued for trademark infringement in several
other cases. One of those actions resulted in a settlement between
plaintiff and the Joseph H. Pilates Foundation for Physical Fitness, a
non-profit corporation operated by Endelman. Plaintiff currently
operates studios in New York, Chicago, Atlanta, Philadelphia, Seattle,
VIII. History Of This Action
Plaintiff filed a complaint against Current Concepts and Endelman in
1996 alleging three claims of trademark infringement and unfair
competition and seeking declaratory and injunctive relief. Plaintiff
filed an amended complaint later that year adding a claim for false
designation of origin.
Defendants asserted numerous affirmative defenses and four counterclaims
in their answer and named as counterclaim defendants Sean Gallagher, The
Pilates Studio, The Pilates Guild, and Performing Arts Physical Therapy.
Defendants also filed a class action complaint against those same entities
seeking cancellation of plaintiff's marks and unspecified damages.
The parties are in agreement that defendants bear the burden of proving
each of the defenses asserted in this action. The parties also agree that
defendants' fraud defense must be proven by clear and convincing
evidence. See Orient Express Trading Co. v. Federated Dep't Stores, Inc.,
842 F.2d 650, 653 (2d Cir. 1988); Ushodaya Enter., Ltd. v. V.R.S. Int'l,
Inc., 63 F. Supp.2d 329, 335 (S.D.N.Y. 1999). However, the parties are
in disagreement concerning the proper standard of proof for defendants'
genericness and abandonment defenses. Plaintiff argues that these
defenses must be proven by clear and convincing evidence, while
defendants argue that a preponderance of the evidence standard is
In a handful of cases, the Court of Appeals has explained that a higher
standard of proof is applicable to a defense of abandonment. See Saratoga
Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1044 (2d Cir. 1980)
("[A]bandonment, being a forfeiture of a property interest, should be
strictly proved, and the statutory aid to such proof should be narrowly
construed.") (citation omitted); Warner Bros. Inc. v. Gay Toys, Inc.,
724 F.2d 327, 334 (2d Cir. 1983) (requiring a "high burden of proof" to show
abandonment of a trademark). A number of district courts have interpreted
these cases as holding that a clear and convincing standard is applicable
to the defense of abandonment. See McKay v. Mad Murphy's, Inc.,
899 F. Supp. 872, 878 n. 5 (D.Conn. 1995) (explaining that, with respect
to an abandonment defense, the preponderance of the evidence standard "is
the minority view of the Circuits and is not followed in the Second
Circuit"); Eh Yacht, LLC v. Egg Harbor, LLC, 84 F. Supp.2d 556, 564-65
(D.N.J. 2000) (explaining that a majority of courts have held that
abandonment must be proven by clear and convincing evidence).
See also General Cigar Co. v. G.D.M. Inc., 988 F. Supp. 647, 658
(S.D.N.Y. 1997) (RWS) (abandonment must be "strictly proved"); Frankel v.
Central Moving & Storage Co., No. 95 Civ. 6330, 1997 WL 672003, at *3
(S.D.N.Y. Oct. 29, 1997) (BN) (abandonment is "a forfeiture which must be
strictly proven"); Warner-Lambert Co. v. Schick U.S.A., Inc.,
935 F. Supp. 130, 143 (D.Conn. 1996) (party asserting
abandonment has a "high burden of proof"). In light of this authority,
defendants' defense of abandonment must be proven by clear and convincing
In contrast, no decision within the Second Circuit requires "strict
proof" or a "higher standard" for proving genericness. Decisions from
other circuits expressly hold that a preponderance of the evidence
standard is applicable to a genericness defense. See Glover v. Ampak,
Inc., 74 F.3d 57, 59 (4th Cir. 1996) (presumption of validity can be
overcome with showing by a preponderance of the evidence that a mark has
become generic); Anti-Monopoly, Inc.
v. General Mills Fun Group, Inc., 684 F.2d 1316, 1319
(9th Cir. 1982) (same). Since I find that defendants have proven
their genericness defense by clear and convincing evidence, it
is unnecessary to decide whether a preponderance of the evidence
would be sufficient.
Defendants do not dispute that if the PILATES marks are valid, they were
For example, defendants placed a number of advertisements in print
media that infringed the PILATES marks. In advertisements, defendants
provided the telephone number "1-800-PILATES" for readers seeking more
information. A 1992 Shape magazine advertisement reads, "The Pilates
body. Get yours at a body conditioning studio near you," and lists a
number of "Pilates-based fitness studios" to be contacted for more
Defendants have continued through April 2000 to place in numerous other
publications advertisements prominently featuring the term PILATES.
Defendants have also infringed plaintiff's marks in brochures and other
publications by Current Concepts. One brochure which predates this
lawsuit includes the "1-800-PILATES" telephone number. Balanced Body's
1998 and 1999 brochures feature the words "Finely crafted Pilates
equipment" in large print on the cover, with the word "Pilates" in
reverse type surrounded by a block of dark color.
Plaintiff provided other evidence of infringement which will not be
discussed in detail, such as infringement through the use of Internet
domain names including PILATES, and infringement through the production,
marketing, and distribution of video tapes that are described as PILATES
videos. Defendants have infringed the PILATES equipment and service
A trademark or service mark that becomes generic is no longer entitled
to protection. Park `n Fly, Inc. v. Dollar Park and Fly, Inc.,
469 U.S. 189, 194, 105 S.Ct. 658, 661, 83 L.Ed. 2d 582 (1985);
Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir.
1976). Generic marks are subject to cancellation at any time. Park `n Fly,
469 U.S. at 194, 105 S. Ct. at 661. A generic mark lacks protection even
if it is incontestable. Id. at 195, 105 S.Ct. at 662.
A generic mark "is one that refers to the genus of which the particular
product is a species." Park `n Fly, 469 U.S. at 194, 105 S.Ct. at 661.
However, a mark is not generic when "the primary significance of the term
in the minds of the consuming public is not the product but the producer."
Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 118, 59 S.Ct. 109, 83
L.Ed. 73 (1938); see also 15 U.S.C. § 1064(3).*fn11
This is so because "[t]he purpose of a mark is to identify the
source of [goods or services] to prospective consumers." Lane
Capital Management, Inc. v. Lane Capital Management, Inc.,
192 F.3d 337, 343-44 (2d Cir. 1999).
Types of evidence to be considered in determining whether a mark is
generic include: (1) dictionary definitions; (2) generic use of the term
by competitors and other persons in the trade; (3) plaintiff's own
generic use; (4) generic use in the media; and (5) consumer surveys. See
Brandwynne v. Combe Int'l Ltd., 74 F. Supp.2d 364, 381 (S.D.N.Y. 1999).
In addition to these factors, it is necessary to determine whether there
are commonly used alternative means to describe the product or service.
Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 144 (2d Cir.
1997); A.J. Canfield Co. v. Honickman, 808 F.2d 291, 305-06 (3d Cir. 1986).
B. Evidence of Genericness
1. Dictionary Definitions
Dictionary definitions, while not conclusive, reflect the general
public's perception of a mark's meaning and are thus helpful in
determining whether a term is generic. Murphy Door Bed Co. v. Interior
Sleep Sys., Inc., 874 F.2d 95, 101 (2d Cir. 1989). The Random House
Webster's College Dictionary defines "Pilates" as follows:
Pilates (pi l ä ' tez). Trademark. a system of
physical conditioning involving low-impact exercises
and stretches, performed on special ...