United States District Court, E.D. New York
February 3, 2004.
NEW SENSOR CORPORATION, Plaintiff -against- CE DISTRIBUTION LLC, Defendant
The opinion of the court was delivered by: I. LEO GLASSER, Senior District Judge
MEMORANDUM & ORDER
This motion arises out of an action for trademark infringement and
unfair competition brought by Plaintiff New Sensor Corporation ("New
Sensor" or "Plaintiff") against Defendant CE Distribution LLC ("CE" or
"Defendant") regarding CE's use of the word SVETLANA on its website,
http://www.cedist.com. Before the Court is the motion of CE to dismiss
with prejudice or, in the alternative, for summary judgment. For the
reasons that follow, CE's motion for summary judgment is granted.
Plaintiff and Defendant are competing U.S. distributors of electron or
vacuum tubes ("tubes" or "vacuum tubes") used in electronic equipment
such as guitar amplifiers. (Def. Mem. at 5; Matthew Decl. ¶ 12.)
J.S.C. Svetlana ("JSC") is a Russian corporation located in St.
Petersburg that manufactures electron devices, including vacuum tubes.
(Compl. at 6; Ferrari
Decl. Ex. G-A ¶ 7; hereinafter "Rafiee and Gray Decl.")*fn1
In 1992, JSC entered into a joint venture agreement with Svetlana
Electron Distributors ("SED"), an Alabama corporation "formed to bring
Russian power grid tube technology to the West." (Rafiee and Gray Decl.
¶ 9, Exs. A, B; Kozinets Decl. Ex. F.) Pursuant to this joint venture
agreement, JSC manufactured vacuum tubes while SED had the exclusive
right to distribute them in every country but those of the former Soviet
Union. (Rafiee and Gray Decl. ¶ 10.) In order to develop a market for
these tubes in the U.S., SED invested significant sums in research,
development, and marketing. (Rafiee and Gray Decl. ¶ 13.) The joint
venture adopted the name "SED-SPb" (Rafiee and Gray Decl. ¶ 9),
which, according to Defendant, stands for "Svetlana Electron Devices
St. Petersburg" (Def. Supp. Rule 56.1 Statement).
The tubes manufactured by the joint venture were marked with a stylized
"S" and the words SVETLANA ELECTRON DEVICES. (Compl. ¶ 7; Rafiee and
Gray Decl. Ex. F.) In 1997, SED registered these marks with the United
States Patent and Trademark Office. (Compl. ¶ 7; Rafiee and Gray
Decl. Ex. F.)
According to promotional materials distributed by SED, JSC was founded
in 1889 and became the largest power tube manufacturer in Russia.
(Kozinets Decl. Ex. F.) In 1913, when it began manufacturing light bulbs,
the factory adopted the name SVETLANA from the Russian word "Svet,"
meaning "light." (Kozinets Decl. Exs. D, F.) As SED's website explained,
"light bulb manufacturing naturally evolved into vacuum tube
manufacturing in 1929." (Kozinets Decl.
In 2000, when the joint venture between JSC and SED dissolved, JSC
entered into a agreement with PM of America, Inc. ("PMA") to distribute
its tubes in the United States. (Compl. ¶ 9; Def. Mem. at 6.) In July
2001, SED sold certain assets to New Sensor, including its trademark
rights and goodwill in the SVETLANA mark and the stylized "S." (Compl.
¶ 8; Matthews Decl. ¶ 3.) The tubes that New Sensor currently
distributes under the SVETLANA mark are manufactured at Xpo-pul, a
factory in Saratov, Russia. (Matthew Decl. ¶ 5.) New Sensor does not
sell tubes manufactured by JSC. (Matthews Decl. ¶ 5.) The tubes sold
by New Sensor and those manufactured by JSC have equivalent technical
specifications. (Ferrari Decl. Ex. I, Letter from Pavane to Cravener,
August 13, 2003 at 2.)
In 2001, JSC and PMA filed an infringement action against SED and New
Sensor in the United States District Court of Alabama claiming that New
Sensor did not have rights in the SVETLANA mark. In 2003, the parties
signed a settlement agreement ("Settlement Agreement") with the following
terms inter alia: (1) New Sensor has the exclusive right to use
the SVETLANA mark in the United States and Canada; (2) JSC has the
exclusive right to use the Winged-C logo; (3) New Sensor releases CE and
other customers of JSC and PMA from any claims arising out of the use of
the SVETLANA mark in connection with the sale of inventory manufactured
by JSC and purchased by CE and other customers before March 4, 2003.
(Matthews Decl. Ex. B.) Following this Settlement Agreement, PMA sent a
letter to its customers, approved by New Sensor, which informed them that
tubes formerly branded SVETLANA would now be sold under the Winged-C
PM of America, Inc. is announcing that the tubes it has been supplying
United States and Canada under the name "Svetlana"
will now be marketed under a new brand name, "SED
St. Petersburg, Russia" and will display the
following logo: [Winged-C].
In the early 1990s, J.S.C. Svetlana of St.
Petersburg, Russia, and R&G, Inc. of
Huntsville, Alabama, formed a joint venture
for the purpose of manufacturing and
distributing vacuum tubes, resulting in the
formation of two new companies. SED/SPb of St.
Petersburg, Russia, was formed to manufacture
the tubes, and it took over the factory and
certain other assets of J.S.C. Svetlana
related to vacuum tube production. SED
International, Inc., later renamed Svetlana
Electron Devices, Inc., of Hunstville, Alabama,
was formed to handle worldwide marketing, sales,
engineering support, and customer support for
In the year 2001, Svetlana Electron Devices, Inc.
transferred its assets, including the name and
trademark rights to the Svetlana name, to New
Sensor Corporation. J.S.C. Svetlana maintained
control of SED/SPb. Also that year, J.S.C.
Svetlana appointed a new exclusive worldwide
distributor, PM Components, Ltd., of the United
Kingdom, which in turn appointed PM of America,
Inc. as its exclusive distributor in the United
States and Canada. Litigation subsequently ensued
between New Sensor, J.S.C. Svetlana, PM
Components, and PM of America as to the rights to
the Svetlana name. That litigation has recently
been settled and resolves the issues between the
parties in the United States and Canada.
PM of America will continue to sell vacuum tubes
manufactured by SED/SPb of St. Petersburg, which
produced the tubes PM of America previously
marketed as "Svetlana" and which is still
controlled by J.S.C. Svetlana. These tubes will be
marked in the United States and Canada with the
logo shown above [Winged-C logo].
(Matthews Decl. Ex. C.)
CE maintains a website, http://www.cedist.com, which sets forth a menu
of products sold by CE. including vacuum tubes. (See Ferrari
Decl. Ex. H; Def. Mem. at 7.) By selecting "tubes" from the list of
products, the user is brought to a page that lists several brands of
tubes, including SVETLANA and Winged-C. Choosing SVETLANA brings the user
to a list of tubes manufactured by JSC that were purchased by CE before
January 15, 2003. (Cravener Reply
Decl. ¶ 3; Magee Decl. ¶ 2.) Clicking on "Winged-C tubes"
brings the user to a list of Winged-C brand tubes for purchase, as well
as the following text, interspersed with the Winged-C logo:
How can you be sure you are getting the tubes made
in JSC Svetlana's St. Petersburg's [sic] factory?
Look for the "Winged-C" logo.
As the tube world gets more and more complicated,
it is important to make sure that you know what
you are buying and how to identify the tubes you
want to buy. Here's the story:
JSC Svetlana is a Russian company that owns and
operates the Svetlana factory in St. Petersburg,
Russia, which has been making vacuum tubes for
almost a century. These tubes have been known in
the United States as Svetlana brand tubes and have
had the "S" logo and/or the [Winged-C] logo (a
Cyrillic S) on them.
Because of a change in ownership of the former
American distributor, JSC Svetlana recently lost
its ability to sell vacuum tubes bearing the
"Svetlana" name, while maintaining the ability to
sell the tubes bearing the [Winged-C] logo in the
United States and Canada.
The Xpo-pul factory, otherwise known as Reflector,
in Saratov, Russia is an entirely different
Russian company that makes vacuum tubes for an
American corporation that controls the Sovtek and
Electro-Harmonix brand names. This same American
corporation now also owns and controls the
Svetlana brand name in the United States and
Canada and recently introduced (last Fall) a new
line of Svetlana branded vacuum tubes produced in
the Xpo-pul factory. The Xpo-pul factory
"Svetlana" tubes are not the same
Svetlana tubes that you have been accustomed to
over the years!
Rest assured that the Svetlana factory in St.
Petersburg, Russia is still producing vacuum tubes
and has no plans to stop. These tubes are
available to you through CE Distribution under the
"Winged C" name.
All current production St. Petersburg
factory tubes and only those
tubes do bear the [Winged-C] mark,
while in the past some did not.
In today's world if you want the tubes that you've
come to know in the past as "Svetlana", the only
way to be sure you're getting that tube is to look
for the [Winged-C] mark.
(Ferrari Decl. Ex. H) (emphasis in original). According to the
website, because CE is a
wholesale company, only dealers and distributors may purchase tubes
from the website. See http://www.cedist.com. To ensure this
restriction, a customer must enter a customer code and password in order
to make a purchase.
In August 2003, New Sensor filed this lawsuit against CE for trademark
infringement and unfair competition under the Lanham Act,
15 U.S.C. § 1051 et seq., and N.Y. Gen. Bus. Law §§ 360-k, 360-1, based
on CE's use of SVETLANA on its website. CE now moves to dismiss with
prejudice, or in the alternative, for summary judgment. Because both
parties have submitted affidavits and other evidence outside the
pleadings, pursuant to Fed.R.Civ.P. 12(b) the Court will treat the
motion as one for summary judgment. Kopec v. Coughlin, 922 F.2d 152,
154-55 (2d Cir. 1991) (where materials outside the pleadings were
presented, Rule 12(b) requires the court to treat the motion to dismiss
as one for summary judgment). Although Rule 12(b) requires that parties
be given an opportunity to provide supporting material when the court
converts a motion to dismiss to one for summary judgment, the Plaintiff
here had sufficient notice and opportunity because the original motion
sought summary judgment as an alternate form of relief. Groden v.
Random House, Inc., 61 F.3d 1045, 1053 (2d Cir. 1995).
I. Summary Judgement Standard
Summary Judgment under Fed.R.Civ.P. 56(c) is proper "if 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," Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). "Only
disputes over facts that might affect the outcome of the suit under
the governing law" will preclude summary judgment. Anderson v.
Liberty Lobby. Inc., 477 U.S. 242, 248 (1986).
When evaluating a motion for summary judgment, "the court must view the
evidence in the light most favorable to the party against whom summary
judgment is sought and must draw all reasonable inferences in his favor."
L.B. Foster Co. v. Am. Piles, Inc., 138 F.3d 81, 87 (2d
Cir. 1998) (citing Matsushita Elec. Indus. Co., Ltd, v. Zenith Radio
Corp., 475 U.S. 574 (1986)). The party opposing summary judgment
"may not rely on conclusory allegations or unsubstantiated speculation."
Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998). Instead,
the opposing party "must designate specific facts showing that there is a
genuine issue for trial." Celotex, 477 U.S. at 324. A genuine
factual issue exists if there is sufficient evidence favoring the
opposing party for a jury to return a verdict in its favor.
Anderson, 477 U.S. at 249.
II. CE's use of SVETLANA on tubes purchased from PMA prior to
March 4, 2003
New Sensor claims that there is a material issue of disputed fact as to
whether CE is authorized under the Settlement Agreement to use the term
"Svetlana Factory C Marking" to describe the tubes purchased from PMA
prior to March 4, 2003 and whether this usage leads to a likelihood of
confusion. CE counters that its use of the mark in this style is
expressly permitted by the Settlement Agreement, which contains the
following provision under the heading "Release of Customers":
[W]ith respect to the use of "SVETLANA" in
connection with vacuum tubes purchased from PMA,
the Release includes such use before and after
March 4, 2003 in connection with any such products
which were invoiced by PMA at any time prior to
March 4, 2003. . . . New Sensor agrees that all
PMA inventory invoiced on or before March 3, 2003
can never be the subject of an
action by New Sensor. This release and covenant
not to sue . . . expressly includes C.E.
Distribution, a customer of PMA with which New
Sensor has a pending action which is currently on
(Matthews Decl. Ex. B, Settlement Agreement § l(b)).
According to CE, all tubes identified as "Svetlana Factory C" on its
website were purchased from PMA prior to January 15, 2003. (Cravener
Reply Decl. ¶ 4.) This is supported by the President of PMA, who
confirms that it did not sell any vacuum tubes bearing the SVETLANA mark
after January 15, 2003, pursuant to the Settlement Agreement. (Magee
Decl. ¶ 2.) According to PMA, "[a]ll tubes sold by PMA to CE
Distribution since January 15, 2003 have been marked only with the
`Winged C' logo." (Magee Decl. ¶ 2.) New Sensor has provided no
evidence to the contrary. CE's use of the SVETLANA mark to identify the
tubes purchased from PMA prior to March 4, 2003 is clearly sanctioned by
the terms of the Settlement Agreement. Summary judgment must therefore be
granted for the Defendant on any claims arising out of CE's use of the
SVETLANA mark to identify the tubes purchased from PMA prior to March 4,
III. Trademark Infringement under the Lanham Act
Plaintiff claims that there is a material issue of disputed fact
regarding whether Defendant's use of SVETLANA creates a likelihood of
confusion as to source. Section 32 of the Lanham Act, 15 U.S.C. § 1114,
forbids "any person . . . without the consent of the registrant" to
"use in commerce 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, or to cause
mistake, or to
deceive." Venetianaire Corp. of Am. v. A&P Imp. Co.,
429 F.2d 1079, 1081 (2d Cir. 1970).
"There being no dispute about the lack of [Plaintiff's] consent to the
use of its marks or their validity," the only issue with regard to
infringement here is whether Defendant's use of the mark is likely to
cause confusion. New York Stock Exch., Inc. [NYSE] v. New York, New
York Hotel LLC, 293 F.3d 550, 554 (2d Cir. 2002) (affirming district
court's grant of summary judgment for defendant on infringement claim
where there was no likelihood of confusion). "[I]f no such likelihood of
confusion is found, a defendant will generally not be held to have
infringed plaintiff's mark." Gruner Jahr USA Publ'g v. Meredith
Corp., 991 F.2d 1072, 1074 (2d Cir. 1993). Factors considered in
determining whether there is a likelihood of confusion "include: 1) the
strength of the plaintiff's mark; 2) the similarity of plaintiff's and
defendant's marks; 3) the competitive proximity of the products; 4) the
likelihood that plaintiff will `bridge the gap' and offer a product like
defendant's; 5) actual confusion between products; 6) good faith on the
defendant's part; 7) the quality of defendant's product; and 8) the
sophistication of the buyers." Id. at 1077 (citing
Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d
Cir. 1961), cert. denied, 368 U.S. 820 (1961)). "The
Polaroid factors are not dispositive, and additional factors
may be considered or initial factors abandoned." Id.
To prevail on the likelihood of confusion issue, Plaintiff must show "a
probability, not just a possibility, of confusion." NYSE, 293
F.3d at 554. That 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.
(quoting Mushroom Makers, Inc. v. R. G. Barry Corp.,
580 F.2d 44, 47 (2d Cir. 1978), cert. denied, 439 U.S. 1116 (1979)).
website creates no such likelihood of confusion. The
Polaroid factors are considered in turn below.
1. Strength of the Mark
The strength of a mark is determined by "its tendency to identify the
goods or services sold under the mark as emanating from a particular,
although possibly anonymous, source." The Sports Authority, Inc. v.
Prime Hospitality Corp., 89 F.3d 955, 960-61 (2d Cir. 1996)
(affirming district court's finding that "The Sports Authority" was a
strong mark). For purposes of this inquiry, courts have created four
categories of marks with increasing protection: generic, descriptive,
suggestive, or arbitrary and fanciful. Id. at 961;
Abercrombie & Fitch Co. v. Hunting World. Inc., 537 F.2d 4,
9 (2d Cir. 1976).
"A generic term is a common name . . . that
describes a kind of product." Gruner
Jahr, 991 F.2d at 1075. A descriptive mark is
"one that tells something about a product, its
qualities, ingredients or characteristics."
Id. at 1076. A suggestive mark suggests
the product, though it may take imagination to
grasp the nature of the product. Id. An
arbitrary mark has an actual dictionary meaning,
but that meaning does not describe the product; a
fanciful mark is a made-up name.
Brockmeyer v. Hearst Corp., 248 F. Supp.2d 281, 294
Although SVETLANA may appear arbitrary or fanciful to an
English-speaker, it is necessary to determine the meaning of the mark in
its country of origin. Orto Conservia Cameranese Di Giacchetti
Marino & Co. v. S.N.C., 2000 WL 232108, at *1 (2d Cir. Feb. 8,
2000) (affirming district court finding that the meaning of the mark in
Italian was a generic designation for a type of olive) (unpublished).
This is known as the foreign equivalents doctrine. See
Mondo, Inc. v. Sirco Int'l Corp., 1998 WL 849401, at *6 n.2
(S.D.N.Y. Dec. 7, 1998)
(trademark "mondo" used in connection with luggage is arbitrary in
Italian, its language of origin): see also Otokoyama Co. Ltd, v.
Wine of Japan Imp., Inc., 175 F.3d 266, 270-71 (2d Cir. 1999)
(evidence showing "otokayama" to be generic for a type of dry sake in
Japan was relevant to plaintiff's claim of exclusive right to the mark).
The website maintained by Plaintiff's assignor, SED, stated the
following about the meaning of SVETLANA in Russian:
Svetlana is a woman's name derived from the word
"svet," which means, in the Russian language,
"light." The company was established in 1889 and
changed its name to Svetlana in 1913 when it began
manufacturing incandescent light bulbs. Light-bulb
manufacturing naturally evolved into vacuum tube
manufacturing in 1928.
(Kozinets Decl. Ex. D.)*fn2
This explanation demonstrates that the
mark is not entirely arbitrary or fanciful, but suggestive. With some
imagination, the consumer may connect the suggestion of light with vacuum
tubes, Plaintiff's product. These tubes appear to be made of a clear
material with an interior that glows when power is attached, vaguely
resembling a light bulb. (See Ferrari Decl. Exs. D, E, G, H.)
To determine whether a suggestive mark is a strong one for purposes of
the Polaroid inquiry, "we look to the secondary meaning that the mark has
acquired, because the ultimate issue to be decided is the mark's
origin-indicating quality in the eyes of the purchasing public."
Sports Authority, 89 F.3d at 961 (quoting Lang v.
Retirement Living Publ'g Co. Inc.,
949 F.2d 576, 581 (2d Cir. 1991)). Having been registered for more than five
years, SVETLANA ELECTRON DEVICES is "incontestably distinctive for
protectability purposes," a factor "properly considered by a trial court
on the issue of likelihood of confusion." Gruner Jahr, 991
F.2d at 1078. Additionally, "independent indicia of strength" may be
examined to determine the strength of the mark. Sports
Authority, 89 F.3d at 961.
New Sensor argues that consumers strongly associate SVETLANA with SED
and New Sensor. New Sensor supports this assertion with the declaration
of two former principals of SED, who detail the history of the joint
venture, the research and development performed by SED in the U.S., as
well as the acquisition of trademark rights in SVETLANA ELECTRON DEVICES
and the Stylized "S." (See Rafiee and Gray Decl.) According to
New Sensor, because of these efforts, the goodwill in SVETLANA inured to
SED, New Sensor's assignor. (PL Mem. at 8.)
Plaintiff's conclusion, however, is belied by significant evidence
submitted by CE. Several publications produced by SED, including a
promotional brochure, use SVETLANA to refer to JSC's factory in St.
Introducing Svetlana: . . . Svetlana is
Russia's leading designer and manufacturer of
power grid tubes.
100 year of excellence in engineering and
manufacture: Svetlana has been a leading
power grid tube supplier since it first developed
electron devices in 1928.
The Company was founded in St. Petersburg in
1889. . . .
Svetlana was reorganized as a privatized open
stock company in 1992. . . .
The company is the largest power grid tube
manufacturer in Russia.
Svetlana in the West: In early 1992,
Svetlana Electron Devices, Inc. was formed to
bring Russian power grid tube technology to the
West. This U.S.
based company is working with the newly-privatized
Svetlana in St. Petersburg. . . .
Svetlana Electron Devices, Inc. has its corporate
headquarters in Huntsville, Alabama and has
distribution partners throughout the world. The
company provides sales, marketing and application
engineering support to Svetlana power grid tube
customers throughout the West.
(Kozinets Decl. Ex. F.) Supporting these statements are photographs
of JSC's factory where the word SVETLANA in Cyrillic and the year 1913
are emblazoned on the facade. (Cravener Reply Decl. Exs. A, B.)
Statements such as those above clearly demonstrate that SVETLANA is
primarily associated with JSC's factory in St. Petersburg, not with SED
or New Sensor. Even accepting Plaintiff's arguments that SED was
singularly responsible for the introduction of JSC's products to American
consumers, in its own literature SED repeatedly informed consumers that
the tubes were manufactured at a St. Petersburg factory called SVETLANA.
Therefore, SVETLANA is a strong mark because it creates an association
between the vacuum tubes and JSC's factory in St. Petersburg. SVETLANA
does not, however, create a strong association between the tubes and New
Sensor, the party claiming to deserve the mark's protection, or its
assignor, SED. As such, this factor favors Defendant.
2. Similarity of the Marks
To determine whether two marks are similar, courts assess "the overall
impression created by the logos and the context in which they are found
and consider the totality of factors that could cause confusion among
prospective purchasers." Gruner Jahr, 991 F.2d at 1078. Here,
the overall impression created by CE's website dispels consumer confusion
consumers with information on the vacuum tube market and the
history of the brands. CE further diminishes any possibility of confusion
by prominently displaying its Winged-C trademark on its website, going so
far as to instruct consumers to "Buy Winged-C Tubes." See
The Swatch Group v. Movado Corp., 2003 WL 1872656, at *4
(S.D.N.Y. April 10, 2003) (citing Nabisco, Inc. v. Warner-Lambert
Co., 220 F.3d 43, 46 (2d Cir. 2000) (prominent use of Dentyne mark
on Dentyne Ice chewing gum significantly reduced likelihood of consumer
confusion with Ice Breakers gum)). "When a product's brand name is
prominently featured, the likelihood of confusion based on a subsidiary
mark is unlikely." Id. In addition, Defendant uses only the
word SVETLANA, not the entire mark for which Plaintiff holds a trademark,
SVETLANA ELECTRON DEVICES. (See Rafiee and Gray Decl. Ex. F.) A
consumer viewing the website would be left with little doubt that CE is
distributing Winged-C tubes and not SVETLANA tubes. This
Polaroid factor favors Defendant.
3. Proximity of the Products; 4. Bridging the Gap
Where, as here, parties produce competing products, "one of the
Polaroid factors, proximity of the products in the marketplace,
is necessarily answered in favor of the senior user, and another factor,
the likelihood of bridging the gap, is not a relevant inquiry."
Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033,
1044 (2d Cir. 1992). Because the parties' products compete directly, the
third Polaroid factor favors Plaintiff.
5. Actual Confusion
To show actual confusion, New Sensor must demonstrate that CE's use of
SVETLANA "could inflict commercial injury in the form of either a
diversion of sales, damage to goodwill, or
loss of control over reputation." Sports Authority, 89
F.3d at 963 (internal quotations omitted) (on motion for summary judgment
actual confusion was demonstrated by plaintiff who submitted evidence of
misdirected phone calls between plaintiffs and defendant's
establishments). Plaintiff has provided no evidence of actual consumer
confusion stemming from CE's use of SVETLANA on its website. This factor
6. Defendant's Good Faith
This factor concerns whether CE used SVETLANA on its website "with the
intention of capitalizing on the plaintiff's reputation and goodwill and
any confusion between his and the senior user's product." Cadbury
Beverages, Inc. v. Cott Corp., 73 F.3d 474, 482-83 (2d Cir. 1996)
(quoting Lang, 949 F.2d at 583). CE clearly intended the
opposite. Its website goes to great lengths to dispel consumer
confusion by providing consumers with information on the vacuum tube
market and the source of various brands of vacuum tubes. Throughout the
website, CE displays its own logo and trademark prominently. Furthermore,
CE uses SVETLANA in a descriptive sense to identify the factory in which
its Winged-C tubes are manufactured. Lastly, New Sensor submits that
SED-SPb the name New Sensor would mandate CE use is
simply an acronym for "Svetlana Electron Devices St. Petersburg." It is
clear that CE did not intend to capitalize on New Sensor's reputation and
instead sought to eliminate consumer confusion that might exist because
of the relatively recent changes in the SVETLANA mark. This factor weighs
in favor of Defendant.
7. Quality of Defendant's Product
The quality of a defendant's product can be relevant in two ways: "(1)
an inferior product
may cause injury to the plaintiff trademark owner because people
may think that the senior and junior products came from the same source;
or (2) products of equal quality may tend to create confusion as to
source because of this very similarity." Hormel Foods Corp. v. Jim
Henson Prod., Inc., 73 F.3d 497, 505 (2d Cir. 1996); contra
Bristol-Myers, 973 F.2d at 1044 ("Where . . . the competitive
products are of nearly identical quality, a comparison of the quality of
the products is not particularly helpful in determining the likelihood of
confusion"). New Sensor's tubes are manufactured with the same
specifications as those sold by CE under the Winged-C trademark. (Ferrari
Decl. Ex. I.) Nevertheless, CE's website makes clear that despite their
identical specifications, CE's tubes are not the same as those
now called SVETLANA. Because CE's website so clearly differentiates
between the Winged-C tubes and the SVETLANA tubes, there is no
possibility of confusion based on the tubes' identical specifications.
This factor favors Defendant.
8. Sophistication of the Buyers
Under this heading, a court evaluates "[t]he general impression of the
ordinary purchaser, buying under the normally prevalent conditions of the
market and giving the attention such purchasers usually give in buying
that class of goods." W.W.W. Pharm. Co. v. The Gillette Co.,
984 F.2d 567, 575 (2d Cir. 1993) (quoting McGregor-Doniger Inc. v.
Drizzle Inc., 599 F.2d 1126, 1137 (2d Cir. 1979)). "[T]he more
sophisticated and careful the average consumer of a product is, the less
likely it is that similarities in . . . trade marks will result in
confusion concerning the source or sponsorship of the product."
Bristol-Myers, 973 F.2d at 1046-47.
Here, because the ordinary purchaser of vacuum tubes on CE's website is
and knowledgeable, there is very little possibility of confusion.
Although anyone with access to the internet may view CE's website, only
dealers and distributors may purchase tubes. These professionals "know
the market and are less likely than untrained consumers to be misled or
confused by the similarity of different marks." Virgin Enterprises
Ltd. v. Nawab, 335 F.3d 141, 151 (2d Cir. 2003) (quoting the
district court: "retail customers . . . are not expected to exercise the
same degree of care as professional buyers, who are expected to have
greater powers of discrimination"); see also Ivoclar North
Am., Inc. v. Dentsply Intern., Inc., 41 F. Supp.2d 274, 281
(S.D.N.Y. 1998) (dentists and dental assistants are sophisticated
professionals whose knowledge of the field makes them unlikely to be
confused about a commonly-used mark). The dealers and distributors who
purchase tubes from CE's website surely have considerable knowledge of
the vacuum tube market. They are likely to buy in larger quantities and,
as such, will invest more time and money into researching their
purchases. As a result, there is little likelihood that they will be
confused as to the source of the products on CE's website. This factor
Evaluation of the Polaroid factors "is not a mechanical
process where the party with the greatest number of factors weighing in
its favor wins. Rather, a court should focus on the ultimate question of
whether consumers are likely to be confused." Nabisco, 220 F.3d
at 46 (affirming district court's grant of summary judgment on
infringement claims where parties' use of the marks was dissimilar).
Based on the analysis above, this Court finds that there is no likelihood
that consumers will be confused as to the source of Defendant's product.
Most of the
factors favor Defendant strength of the mark, the degree of
similarity between the two marks, good faith, quality of the Defendant's
product, and sophistication of the buyers. One factor, proximity of the
products, favors Plaintiff. One factor, likelihood of bridging the gap,
is irrelevant. Defendant's motion for summary judgment on the Lanham Act
infringement claim is granted.*fn3
The discussion and application of the Polaroid factors aside,
there has not been a scintilla of evidence proffered by the Plaintiff to
suggest that confusion has been sowed by the Defendant. SVETLANA, to the
extent that it appears on the Defendant's website at all, does so not to
confuse but to allay confusion. Indeed, it is fair to say, that to the
extent it appears at all, it does so to protect consumers, not to confuse
them. It accurately informs that consumers who may previously have had a
preference for vacuum tubes made by the Svetlana factory in St.
Petersburg, may continue to purchase those tubes but which now bear the
Winged-C logo. It truthfully and accurately recounts the historical
events which resulted in the designation change. There is "no such
sanctity in the [name SVETLANA] as to prevent its being used to tell the
truth. It is not taboo." Prestonettes, Inc. v. Coty,
264 U.S. 359, 368 (1924) (Holmes, J.). It is difficult to see any other way in
which the Defendant could have informed the public that the tubes now
bearing the Winged-C logo were made in St. Petersburg in a factory that
was historically known as the Svetlana factory. See
Societe Comptoir de L'Industrie Cotonniere Etablissements Boussac v.
Alexander's Dep't Stores, Inc., 299 F.2d 33, 36 (2d Cir. 1962).
IV. Lanham Act False Advertising Claims
New Sensor contends that there is a material issue of fact as to
whether CE's website makes misleading and inaccurate statements about New
Sensor, the Alabama litigation, and the source and origin of CE's arid
New Sensor's products. The "false advertising" provision of the Lanham
Act, 15 U.S.C. § 1125(a)(1)(B), "is intended to prevent confusion,
mistake, or deception regarding the characteristics or qualities of goods
or services." In re Connecticut Mobilecom, Inc. v. Cellco
P'ship, 2003 WL 23021959, at *9 (S.D.N.Y. Dec. 23, 2003) (quoting
Target Adver. v. Miller, 2002 WL 999280, at *8 (S.D.N.Y May 15,
2002)). This section provides that:
Any person who, on or in connection with goods or
services . . . uses in commerce any word, term,
name, symbol, or device, or any combination
thereof, or any false designation of origin, false
or misleading description of fact, or false or
misleading representation of fact, which
. . .
(B) in commercial advertising or promotion,
misrepresents the nature, characteristics,
qualities, or geographic origin of his or her or
another person's goods, services, or commercial
activities, shall be liable in a civil action by
any person who believes that he or she is or is
likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(B). Although the Lanham Act previously
covered only a Defendant's statements regarding its own
products, the Act was amended in 1988 to cover disparagement of a
competitor's products as well. Wojnarowicz v. Am. Family Ass'n,
745 F. Supp. 130
, 141 (S.D.N.Y. 1990) (pamphlet distributed by defendant
containing portions of plaintiff's artistic works is not advertising or
promotion for purposes of the Lanham Act).
To establish a false advertising claim pursuant to § 1125(a)(1)(B),
Plaintiff must demonstrate: (1) that Defendant made false or misleading
factual representations of the nature, characteristics, or qualities of
Plaintiffs goods, services or commercial activities; (2) that
Defendant used the false or misleading representations "in commerce";
(3) that Defendant made the false or misleading representations in the
context of commercial advertising or commercial promotion; and (4) that
Defendant's actions made plaintiff believe that he was likely to be
damaged by such false or misleading representations. Groden v.
Random House, Inc., 1994 WL 455555, at *5 (S.D.N.Y. Aug. 13, 1994),
aff'd, 61 F.3d 1045 (2d Cir. 1995) (granting summary judgment
for defendant on false advertising claim where statements were opinion,
not fact). The only question in dispute here is whether CE made false or
misleading representations about Plaintiff's goods or commercial
activities. Plaintiff may establish falsity by showing that "an
advertisement is either literally false or that the advertisement, though
literally true, is likely to mislead and confuse consumers."
McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544,
1548-49 (2d Cir. 1991).
New Sensor has not provided any evidence demonstrating a serious
dispute regarding the truth of the statements on CE's website. CE's use
of SVETLANA to describe JSC's factory and the history of the factory is
truthful, as analyzed supra. CE's characterization of the
lawsuit between New Sensor, PMA, and JSC is supported by statements from
New Sensor's president, as well as the Settlement Agreement.
(See Matthews Decl. Ex. B.) Finally, CE's statement that New
Sensor's tubes "are not the same Svetlana tubes that you have been
accustomed to over the years" is literally true. Although their
specifications are the same, they are manufactured in different
factories. (See Ferrari Decl. Ex. I.) In fact, there are few
material differences between the information on CE's website and the
letter sent from PMA to its customers, authorized by New Sensor.
(Matthews Decl. Ex. C.)
New Sensor further argues that even if the website is literally true,
it will leave the consumer with a false impression regarding New Sensor,
the trademark dispute, and the association between the panics. New Sensor
presents no evidence that consumers have been or are likely to be misled
or confused by CE's website. "When an advertisement is not literally
false, but rather is ambiguous or implicitly false, a plaintiff can only
establish a claim of false advertising through a survey." Malaco
Leaf, AB v. Promotion in Motion, Inc., 287 F. Supp.2d 355, 379
(S.D.N.Y. 2003) (granting summary judgment for defendants on false
advertising claim where plaintiff failed to present any evidence on
consumer perceptions) (citing Johnson & Johnson v. Smithkline
Beecham Corp., 960 F.2d 294, 297-98 (2d Cir. 1992) (affirming denial
of injunctive relief where evidence failed to support assertion that
defendant's commercial communicated a false message to consumers);
Hilton Int'l Co., Inc. v. Hilton Hotels Corp., 888 F. Supp. 520,
538 (S.D.N.Y. 1995) (false advertising claim fails where the
advertisement was not literally false and there was no survey to
establish implied falsity)). Because there are no material issues of fact
in dispute regarding the literal or implied falsity of statements on its
website, Defendant's motion on the Lanham Act false advertising claims is
V. State Law Trademark Infringement and Injury to Business
Finally, Defendant seeks summary judgment on Plaintiff's state law
claims for trademark infringement and injury to business reputation under
N.Y. Gen. Bus. L. §§ 360-k, 360-1.*fn4
As with the Lanham Act, a
plaintiff suing for trademark infringement under state law must prove
that defendant's use of the mark "is likely to cause confusion,
mistake or to deceive." Allied Maint. Corp. v. Allied Mech. Trades,
Inc., 42 N.Y.2d 538, 543, 369 N.E.2d 1162, 1165 (1977) (citing
earlier version of the statute). As the Polaroid analysis
supra demonstrates, Plaintiff cannot prove a likelihood of
confusion based on Defendant's use of SVETLANA on its website.
In an action for injury to business reputation and dilution under N.Y.
Gen. Bus. L. § 360-1, New Sensor must demonstrate: (1) that the
trademark is truly distinctive or has acquired secondary meaning, and (2)
a likelihood of dilution either as a result of "blurring" or
"tarnishment." U-Neek, Inc. v. Wal-Mart Stores, Inc.,
147 F. Supp.2d 158, 175 (S.D.N.Y. 2001) (citing Deere & Co. v. MTD
Prods., Inc., 41 F.3d 39, 42 (2d Cir. 1994)). Plaintiff has
proffered no such evidence. Defendant's motion for summary judgment on
Plaintiff's state law claims is granted.
For the reasons stated above, Defendant's motion for summary judgment
is granted in full.