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October 19, 2000


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).


I. The Parties

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.

II. The Trademarks

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 community.

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 1959.

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 studio open.

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.

Also starting during the 1970s, Kryzanowska trained people to teach the Pilates method, although there was no formal certification program. Sometimes Kryzanowska provided a letter of recommendation to students who intended to teach Pilates on their own.

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 Studio.

Kryzanowska and Hom implemented a more formalized training program for Pilates teachers. They issued certificates to instructors who had completed the Pilates teacher training program. Hom sold some Magic Circles to individuals in California. He also placed at least one magazine advertisement on behalf of his business.

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.
During this period, Sean Gallagher, who would later form plaintiff Pilates, Inc., was engaged in a separate Pilates-oriented business. In 1990, Gallagher and Steve Giordano formed Synergy Exercises Systems ("Synergy"). Gallagher and Giordano also established "The Pilates Guild" in or around 1990. Synergy provided Pilates exercise instruction services, set up studios to teach the Pilates method, and sold Pilates equipment. Synergy did not have a license to use the words "Pilates," "Pilates method," or "Pilates-based."

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 manner."

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 Stamina.
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, and Brazil.

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.

Plaintiff did not oppose class certification. I certified the class. However, I decertified the class with the consent of counsel for both sides for reasons stated on the record at the final pretrial conference. (Transcript of Proceedings, May 31, 2000, at 2-10.) I also dismissed all of defendants' counterclaims for lack of supplemental jurisdiction.*fn7 I allowed defendants to maintain on their own behalf the class action claims seeking cancellation of plaintiff's marks pursuant to 15 U.S.C. § 1119.*fn8 An eleven day bench trial was held in June, 2000.


I. Burden of Proof

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 applicable.
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 evidence.

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.

II. Infringement

Defendants do not dispute that if the PILATES marks are valid, they were infringed.*fn9

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 information.*fn10
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 marks.

III. Genericness

A. Applicable Law

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 รค ' tez). Trademark. a system of physical conditioning involving low-impact exercises and stretches, performed on special ...

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