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FRIESLAND BRANDS v. VIETNAM NATIONAL MILK COMPANY

October 16, 2002

FRIESLAND BRANDS, B.V., PLAINTIFF,
V.
VIETNAM NATIONAL MILK COMPANY A/K/A VINAMILK AND TSAI'S INTERNATIONAL TRADING CO., DEFENDANTS.



The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge

  OPINION AND ORDER

Defendants Vietnam National Milk Company and Tsai's International Trading Co. (collectively, "Vinamilk") move for summary judgment dismissing all but one of the claims of plaintiff Friesland Brands, B.V. Friesland cross-moves for a finding that the defendants have acted in "bad faith" under trademark law. The parties have consented to this case being adjudicated by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons set forth below, the defendants' motion is granted in part and denied in part. The plaintiffs motion is denied.

I. FACTUAL BACKGROUND

Except as otherwise noted, the following facts are not in dispute.

Friesland is a Netherlands corporation and the owner of United States Trademark number 1,320,968, the design mark LONGEVITY (the "Longevity mark"). See Trademark Registration Certificate (reproduced as Ex. B to Declaration of Charles Knull In Support of Plaintiff's Motion and Opposing Defendants' Motion, dated March 15, 2002 ("Knull Dec.")). This mark is used on Friesland's labels for condensed milk (the "Longevity Brand Label"). See Declaration of Jeffrey A. Schwab in Support of Defendants'/Counterclaim Plaintiffs' Motion for Summary Judgment, dated February 15, 2002 ("Schwab Dec."), Ex. A. Vietnam Milk Company, a Vietnamese corporation, is the manufacturer of a condensed milk product sold in 14 ounce cans, which Tsai's International Trading Company, a United States corporation, distributes in this country. These cans bear several different labels. See Schwab Dec., Ex. B, C.

The Longevity mark consists of the words "Longevity Brand" in block letters above a drawing of an old man with white hair and beard wearing a robe. Chinese ideograms appear vertically to the left of the old man. Below the man in block letters are written the Vietnamese words "SUA ONG THO." The trademark registration asserts that the Chinese characters translate to "longevity sweetened condensed milk." See Knull Dec., Ex. B. Friesland contends that the Vietnamese word "Sua" means milk and "Ong Tho" means "longevity." Knull Dec., Ex. H at 18. Friesland also claims that the old man is an "extremely popular" Chinese god of Longevity who is immediately recognizable to anyone raised in China or in a Chinese community overseas, or for that matter any East Asian country." Report by Elizabeth Brotherton, dated December 13, 2001 ("Brotherton Report") (reproduced as Ex. Y to Knull Dec.), at 1.

On the Longevity Brand Label, the Longevity mark has a white background and blue borders. See Longevity Brand Label (reproduced as Ex. A to Schwab Dec.). The words "Longevity Brand" are printed in large blue capital letters. Below these words, the words "Full Cream" are printed in smaller blue capital letters. Immediately under these words is the phrase "Sweetened Condensed Milk," also in blue capital letters (larger than the words "Full Cream," but smaller than the words "Longevity Brand"). The Chinese characters are in red and the Vietnamese words "SUA ONG THO" below the old man are in red block letters.

The Longevity Brand Label is used on a 14-ounce condensed milk can. The top of the can is stamped with concentric circles in relief around a stamp of the old man. Embossed on the top of the can is the word "Longevity" and five Chinese characters. See Knull Dec., Ex. O.

There are two basic Vinamilk labels that are at issue in this case.*fn1 One bears the words "Sua Ong Tien" and features a drawing of an old man with children and a deer in the background (the "Old Man with Children" label). Schwab Dec., Ex. B. The other bears the words "Sua Phuc Loc Tho" and features a drawing of three men (the "Three Gods" labels). Id. Ex C. Plaintiff contends these men represent three Chinese gods, including the God of Longevity. Brotherton Report at 2. Both of these labels have a white background; the word "Vinamilk" in large blue capital letters across the top; the words "condensed dairy product" in blue capital letters below that; and Chinese characters along one side of the drawing. The Chinese characters are in red and the Vietnamese words below the old man are in red block letters. The top of the Old Man with Children can is stamped with concentric circles in relief.

II. DISCUSSION

A. Summary Judgment Standard

A district court may grant summary judgment only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); New York Stock Exchange, Inc. v. New York Hotel, LLC, 293 F.3d 550, 554 (2d Cir. 2002). A genuine issue is one that "may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999). A material issue is a "dispute[] over facts that might affect the outcome of the suit under the governing law." Anderson, 477 U.S. at 248. Thus, "`[a] reasonably disputed, legally essential issue is both genuine and material'" and precludes a finding of summary judgment. McPherson, 174 F.3d at 280 (quoting Graham v. Henderson, 89 F.3d 75, 79 (2d Cir. 1996)).

When determining whether a genuine issue of material fact exists, courts must resolve all ambiguities and draw all factual inferences in favor of the non-moving party. McPherson, 174 F.3d at 280. Nonetheless, "mere speculation and conjecture is insufficient to preclude the granting of the motion." Harlen Assocs. v. Incorporated Village of Mineola, 273 F.3d 494, 499 (2d Cir. 2001). While trademark infringement and unfair competition cases are often fact intensive, summary judgment may nevertheless be appropriate in such cases. See, e.g., Lois Sportswear, U.S.A. Inc. v. Levi Strauss & Co., 799 F.2d 867, 876 (2d Cir. 1986); Patsy's Brand, Inc. v. I.O.B. Realty, Inc., 2001 WL 170672, at *14 (S.D.N.Y. Feb. 21, 2001); Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 15 F. Supp.2d 389, 400 (S.D.N.Y. 1998).

B. Trademark Infringement Claim

Friesland claims that Vinamilk has infringed its Longevity mark in violation of 15 U.S.C. § 1114(1). Section 1114(1) prohibits, among other things, the unauthorized use in commerce of any "reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion." New York Stock Exchange, Inc., 293 F.3d at 554. "Confusion exists where there is a likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question" Id.; accord Federal Express Corp. v. Federal Espresso, Inc., 201 F.3d 168, 174 (2d Cir. 2000); Gruner Jahr USA Publishing v. Meredith Corp., 991 F.2d 1072, 1075 (2d Cir. 1993); Lang v. Retirement Living Publishing Co., Inc., 949 F.2d 576, 579-80 (2d Cir. 1991).

The Court examines each factor in turn.

1. Strength of the Mark

The strength of the mark "refers to a mark's "tendency to identify the goods sold under the mark as emanating from a particular . . . source.'" Arrow Fastener Co., Inc. v. Stanley Works, 59 F.3d 384, 391 (2d Cir. 1995) (quoting McGregor-Doniger, Inc. v. Drizzle, Inc., 599 F.2d 1126, 1131 (2d Cir. 1979)). The strength of a trademark consists of its inherent and acquired capacity to identify the source of a product. See Time, Inc. v. Petersen Publishing Co. LLC, 173 F.3d 113, 117 (2d Cir. 1999). Thus, courts assess a mark's strength by considering two factors: "(1) the degree to which it is inherently distinctive; and (2) the degree to which it is distinctive in the marketplace." W.W.W. Pharm. Co., Inc. v. Gillette Co., 984 F.2d 567, 572 (2d Cir. 1993).

To gauge the inherent distinctiveness of a mark, courts use four categories of distinctiveness ranging from the least distinctive to the most: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. Id. "A generic mark is generally a common description of goods [—] one that refers, or has come to be understood as referring, to the genus of which the particular product is a species." Genesee Brewing Co., Inc. v. Stroh Brewing Co., 124 F.3d 137, 143 (2d Cir. 1997) (internal quotation marks and citations omitted). A descriptive mark describes a product's features, qualities, ingredients or the use to which a product is put in ordinary language. Id. A suggestive mark, on the other hand, "employs terms which do not describe but merely suggest the features of the product, requiring the purchaser to use imagination, thought and perception to reach a conclusion as to the nature of goods." Id. (citation and internal quotation marks omitted). Finally, the term fanciful applies to words invented solely for their use as a trademark. Id. (citation omitted). "When the same legal consequences [that attach to a fanciful mark] attach to a common word, i.e., when it is applied in an unfamiliar way, the use is called "arbitrary.'" Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 11 n. 12 (2d Cir. 1976).

Friesland contends that the Longevity mark is "at least . . . suggestive []with fanciful elements." Memorandum of Law In Support of Plaintiff's Cross-Motion for Finding Defendants Action in Bad Faith and In Opposition to Defendants' Motion for Summary Judgment, dated March 15, 2002 ("Pl. Mem."), at 11. The defendants argue that the mark is "at best suggestive, if not descriptive." Memorandum of Defendants/Counterclaim Plaintiff's In Support of Their Motion for Summary Judgment, dated February 15, 2002 ("Defs. Mem."), at 15. Construing the evidence most favorably to Friesland on this motion for summary judgment, the Court concludes that a reasonable jury could find that the Longevity mark is at least suggestive with some fanciful elements. The mark features the word "longevity" along with a picture of an old man whom Friesland contends is the God of Longevity. See Brotherton Report at 1. The mark certainly does not describe the features, ingredients or uses of the condensed milk product. Rather, at most it might be thought to "suggest[] features of the product" — that is, that by drinking the product one can achieve a long life. Generally, a suggestive term is entitled to protection and recognition as a strong mark. Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 77 (2d Cir. 1988). In addition, because the Longevity mark features an original drawing of an old man, this adds to its distinctiveness. Moreover, Friesland also filed an affidavit under 15 U.S.C. § 1065 that rendered its registration of the mark incontestable as of 1990, Knull Dec., Ex. D, which entitles Friesland "to a presumption that its registered trademark is inherently distinctive." Sporty's Farm L.L.C. v. Sportsman's Market, Inc., 202 F.3d 489, 497 (2d Cir.) (quoting Equine Technologies, Inc. v. Equitechnology, Inc., 68 F.3d 542, 545 (1st Cir. 1995)), cert. denied, 530 U.S. 1262 (2000).

The fact that the mark is "inherently distinctive" does not answer the question of strength of the mark because a finding of inherent distinctiveness "does not guarantee . . . that the mark is a strong one." Streetwise Maps, 159 F.3d at 744 (quoting Gillette, 984 F.2d at 572); Lang, 949 F.2d at 581 (suggestiveness is not necessarily dispositive on the issue of a mark's strength). Rather, "the strength of the mark turns on its origin-indicating quality, in the eyes of the purchasing public." Lang, 949 F.2d at 581 (internal quotation marks and citation omitted).

"The factors relevant to the inquiry of secondary meaning include advertising expenditures, consumer studies, sales, competitors' attempts to plagiarize the mark, and length and exclusivity of the mark's use." Arrow Fastener, 59 F.3d at 393. Friesland has put forth virtually no admissible evidence in support of these factors. While they state that they have used the mark in the United States for over twenty years, Pl. Mem. at 13, they cite no record evidence for this proposition.

Nonetheless, based on the mark's incontestability and its inherent distinctiveness (and in the absence of additional evidence to suggest that the mark has a strong secondary meaning), a jury could at a minimum reasonably conclude that the Longevity ...


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