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SWATCH GROUP

April 9, 2003

THE SWATCH GROUP (U.S.) INC., PLAINTIFF
v.
MOVADO CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Robert L. Carter, United States District Judge

OPINION

Plaintiff, The Swatch Group (U.S.) Inc. ("Swatch"), brings this action against defendant, Movado Corporation ("Movado"), asserting trademark infringement, false designation of origin, and false advertising under the Lanham Act, 15 U.S.C. § 1114(a) and 1125(a), as well as injury to business reputation under New York General Business Law § 360-1 and common law trademark infringement. Now before the court are defendant's motion for summary judgment and plaintiff's cross motion for partial summary judgment.

BACKGROUND

Hamilton Watch Company ("Hamilton"), a division of Swatch, introduced a watch with the trademark VENTURA in 1957. (Pl.'s Rule 56.1(a) Stmt. Mat. Facts ¶ 6.) This was the world's first electric watch, however, since that time, the watches sold under the VENTURA mark have transitioned from electric to quartz movement. (Id. at ¶ 9.) Hamilton is an American watch brand, and marketing efforts have focused on the message that Hamilton's watches are "uniquely American." (Faivet Dep. at 80.)

The face of the VENTURA watch features the Hamilton logo, and is triangular or boomerang-shaped. (Wang Decl. Ex. 1.) Almost all of the watches in the VENTURA line have a leather band and contain an image of an electric bolt running horizontally through the center of the watch face. (Id.; Def.'s Ex. 14; Faivet Dep. at 33.) The VENTURA mark does not appear on any part of Hamilton's VENTURA watch itself, nor does it appear on its packaging, except on a sticker on one side of the box, above the watch's bar code. (Faivet Dep. at 43-45.)

In Spring of 1998, Movado, through its ESQ division, introduced a watch line called VENTURE.*fn1 (Def.'s Mem. Supp. Summ. J. at 3.) Most of the watches in this line have a stainless steel band and a rectangular face, although ESQ also recently introduced a round face style. (Diamond Decl. ¶ 5.) The face of VENTURE watch depicts the ESQ SWISS logo, conveying that the watch has Swiss movement. (Id. at ¶ 7.) The VENTURE mark does not appear anywhere on the watch or on its packaging. (Id.)

DISCUSSION

A. Summary Judgment Standard

Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the 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." Rule 56, F.R.Civ.P. In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)). Nevertheless, the moving party will be entitled to judgment as a matter of law where the nonmoving party fails to make a significant showing on an essential element of its case with respect to which it has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The party opposing summary judgment "may not rest upon mere allegations," rather it must "set forth specific facts showing that there is a genuine issue for trial." Rule 56(e), F.R.Civ.P.*fn2

B. Trademark Infringement and False Designation of Origin

When deciding whether a trademark owner will be protected against the unauthorized use of its mark, or one very similar, the crucial issue is "`whether there is any 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.'" McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126, 1130 (2d Cir. 1979) (quoting Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir. 1978) (per curiam), cert. denied, 439 U.S. 1116 (1979)). Thus, in order to prevail on a claim of false designation of origin under 15 U.S.C. § 1125(a) or trademark infringement under 15 U.S.C. § 1114, a plaintiff must demonstrate a likelihood of confusion as to the source of the parties' respective products.*fn3 See Nabisco Inc. v. Warner-Lambert Co., 220 F.3d 43, 44-45 (2d Cir. 2000).

The yardsticks to be applied in determining whether there is a likelihood of confusion are set forth in the classic case of Polaroid Corp. v. Polorad Electronics Corp., 287 F.2d 492, 495 (2d Cir.), cert denied, 368 U.S. 820 (1961). These factors include 1) the strength of the mark; 2) the degree of similarity between the two marks; 3) the proximity of the products; 4) the likelihood plaintiff will bridge the gap between the two products; 5) actual confusion between the two marks; 6) defendant's good faith in adopting its mark; 7) the quality of defendant's product; and 8) the sophistication of the buyers of the parties' goods. Polaroid Corp., 287 F.2d at 495. This list of factors is not exclusive, nor is any one factor determinative. See W.W.W. Pharmaceutical Co., Inc. v. Gillette Co., 984 F.2d 567, 572 (2d Cir. 1993) (citations omitted). "The proper approach is to weigh each factor in the context of the others to determine if, on balance, a likelihood of confusion exists." Id. (citation omitted).

Looking to these factors, it is apparent that in the case of competing products, the likelihood of bridging the gap is not a relevant inquiry.*fn4 Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1044 (2d Cir. 1992). Also, there is no evidence that the products at issue here differ in quality; therefore, a comparison of the quality of the products would not be helpful in ...


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