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Pan American World Airways, Inc. v. Flight 001

July 13, 2007

PAN AMERICAN WORLD AIRWAYS, INC., PLAINTIFF,
v.
FLIGHT 001, INC., AND FLIGHT 001 HOLDINGS, INC., DEFENDANTS.



The opinion of the court was delivered by: Haight, Senior District Judge

MEMORANDUM OPINION AND ORDER

In this action, plaintiff Pan American World Airways, Inc. ("Pan Am") alleges trademark infringement and unfair competition by defendants Flight 001, Inc. and Flight 001 Holdings, Inc. (collectively, "Flight 001"). Plaintiff contends that Flight 001 intentionally appropriated the goodwill and mystique associated with Pan Am's famous brand by using the Pan Am Globe logo, PAN AM word mark, PAN AM trade name, the Pan Am light blue and white color combination, and the FLIGHT 001 mark in defendants' stores and on their website. Plaintiff seeks a preliminary injunction preventing further infringement.

I. BACKGROUND

A. The Original Pan Am

The original Pan American World Airways, Inc. ("original Pan Am"), a New York corporation, was an air travel pioneer and trend-setter that "introduced the United States and the world to the golden age of air transportation through [its] innovations in domestic, international, transoceanic and intercontinental flight." Pl.'s Mem. at 3.*fn1 For example, the original Pan Am was the first American airline to operate jets within the continental United States, operate an ongoing international service, employ cabin attendants and serve meals aloft, and complete an around-the-world flight.

In 1931, the original Pan Am began using the PAN AM word mark to identify its air transportation services. By 1956, it was using the Pan Am Globe logo on aircraft, and in the marketing and sale of its air travel-related products and services. Around the late 1950s, the original Pan Am began depicting the PAN AM word mark and Pan Am Globe logo in a light blue and white color combination, which was also used for aircraft, products, advertising, and marketing. The original Pan Am used the Pan Am Globe logo and PAN AM word mark on merchandising products as early as 1963. Between 1963 and 1991, a commercial office building in New York City prominently displayed the PAN AM word mark. The PAM AM trade name, PAN AM word mark, and Pan Am Globe logo have also appeared in well-known films, including Stanley Kubrick's 2001: A Space Odyssey, numerous James Bond movies, and Catch Me If You Can, the 2002 feature film starring Tom Hanks and Leonardo DiCaprio.

>From 1942 to 1981, the original Pan Am offered a globe-hopping flight-Pan Am Flight 1-that originated in San Francisco, stopped in Honolulu, Tokyo, Hong Kong, Bangkok, Delhi, Beirut, Istanbul, Frankfurt, London, and finally landed in New York, 48 hours after its initial take-off.

Plaintiff asserts that the Pam Am marks are "powerful symbols of the height of sophistication, the suave and the cosmopolitan" and that:

As a result of the widespread and longstanding use by the Pan Am Companies of the Pan Am Marks, the Pan Am Companies' reputation as a leader and trend-setter in the world of commercial aviation, their history of providing superlative service, style and comfort, and their vast expenditures in promoting the brands, the PAN AM word mark and Pam Globe logo became and continue to be among the most famous and recognizable in the world.

Pl.'s Mem. at 9.

However, the original Pan Am suffered significant setbacks-involving events such as the 1973 energy crisis, the 1988 destruction of Pan Am Flight 103 over Lockerbie, Scotland, and deregulation of the airline industry-and filed for bankruptcy in 1991. The assets of the original Pan Am were liquidated during the bankruptcy proceeding.

Defendants contend that "[t]he popular conception is that the airline [the original Pan Am] is extinct." Defs.' Suppl. Mem. at 2 (citing the Pan American World Airways Historical Foundation newsletter, which reprinted a September 2, 2006 newspaper article referring to the original Pan Am as "an extinct business").

B. Plaintiff Pan Am

Plaintiff Pan Am is a Delaware corporation with its principal place of business in New Hampshire. Plaintiff acquired the original Pan Am's trademarks in the original Pan Am's bankruptcy proceeding.

During the original Pan Am's bankruptcy proceedings, the trademarks owned by the original Pan Am were transferred to Eclipse Holdings, Inc. ("Eclipse") in a December 20, 1993 purchase agreement, for a purchase price of $1,325,000. The trademarks were then transferred from Eclipse to Cobb Partners, Inc. ("Cobb") in another December 20, 1993 purchase agreement. On December 29, 1993, Cobb and Eclipse then entered a letter agreement in which they agreed that plaintiff Pan Am would step in as the purchaser under the December 20, 1993 purchase agreement between Eclipse and the original Pan Am. In another December 29, 1993 document, Eclipse assigned the trademarks it had acquired from the original Pan Am to plaintiff Pan Am.

After acquiring the trademarks used by original Pan Am, plaintiff undertook preparations to offer flight services. For example, plaintiff raised capital, recruited operating personnel, obtained and implemented computer passenger reservation and management information systems, negotiated airport gate and terminal facilities and aircraft leases, contracted for ground handling and aircraft maintenance services, conducted pilot and flight attendant training, and obtained certification from the Department of Transportation and the Federal Aviation Administration. Plaintiff Pan Am also hired Martin R. Shugrue, Jr. as its President and Chief Executive Officer. Shugrue had been Vice Chairman of the Board of the original Pan Am (or its parent company).

In September of 1996, plaintiff Pan Am commenced flight operations between New York's Kennedy International Airport and Miami and Los Angeles. In the following months, the service was expanded to include flights between San Juan, Puerto Rico and Miami, New York and San Juan, and Chicago and Miami.

However, plaintiff Pan Am filed for bankruptcy in February of 1998. As a result of those proceedings, plaintiff became a wholly owned subsidiary of Pan Am Systems, Inc. ("Pan Am Systems"), which was formerly known as Guilford Transportation Industries, Inc. Plaintiff now provides airline services between several cities in the Northeast, including Portsmouth, NH, Bedford, MA, Trenton, NJ, New Haven, CT, Washington, DC (BWI), and Elmira, NY, as well as Orlando/Sanford, FL, using a fleet of 19-passenger turboprop planes. Plaintiff uses the PAN AM word mark, Pan Am Globe logo, and light blue and white color combination in connection with its present airline services.

In March of 2005, Pan Am Systems began using the PAN AM trade name, PAN AM word mark, Pan Am Globe logo, and light blue and white color combination in connection with its rail freight services.

Plaintiff licenses others to use the PAN AM word mark and Pan Am Globe logo on merchandise, including model airplanes and trains and travel-related products such as flight bags. Pan Am has a licensee that uses the PAN AM word mark and Pan Am Globe logo in connection with a retail store that sells travel-related products. In addition, plaintiff states that it "plan[s] to expand [its] existing operations in the retail services arena, including the operation of Pan Am-branded stores that would sell Pan Am-branded merchandise and other items that relate to travel or otherwise to the legacy of the Pan Am Companies." Culliford Decl. ¶ 36.

C. Flight 001

The collective defendant Flight 001 operates a chain of retail stores and a website that feature travel-related products.*fn2 Flight 001 was co-founded by John Sencion and Brad John, who came up with the idea of creating a travel-related store associated with a stylish design and lifestyle in May of 1998 while flying between New York and Paris. In interviews and promotional materials, Sencion has explained that Flight 001 was inspired by Pan Am's Flight 1 and the original Pan Am's image and style. For example, the Flight 001 website at one point stated: "The duo [Sencion and John] commemoratively named their venture after Pan Am's Flight 001, the world's first and only seamless transcontinental commercial carrier. Taking cues from its namesake, Flight 001 caters to international trend setters who both require and aspire to travel the world and look great while doing it." Nishi Decl. ¶ 9. Sencion has also stated: "Our inspiration is Pan Am, and essentially, we want to pick up where they left off." Nishi Decl. ¶ 8.

Flight 001 began with a small shop in Greenwich Village in New York City, and has successfully expanded over the past nine years. Defendant currently operates retail stores in Manhattan, Brooklyn, San Francisco, Los Angeles, Berkeley, and Chicago; and may soon be operating stores in Miami, San Diego, and Las Vegas. Flight 001 also operates a website, which promotes defendants' retail stores and sells merchandise.

Defendants use the FLIGHT 001 trade name, and a design mark that consists of the term FLIGHT 001 together with the design of a plane, a suitcase, and a globe. Defendants hold United States trademark registrations for the use of this mark in connection with retail store services for travel-related products, and in connection with a wide variety of items including bags and cosmetics. The former registration was obtained in 1999, and the latter in 2003. The mark is featured prominently within defendants' stores, and on items such as luggage, travel accessories, bags, cosmetics, and gift cards. Defendants' retail stores also use a meridian globe logo (the "Flight 001 Globe logo"), which plaintiff contends is highly similar to the Pan Am Globe logo. Defendants' FLIGHT 001 design mark and Flight 001 Globe logo use a light blue and white color combination.

In the past, the Flight 001 website featured the Pan Am Globe logo, PAN AM trade name, photographs of Pan Am airplanes and flight attendants, and historical advertisements that had been used by the original Pan Am. The website included pull-down menus describing the history of the original Pan Am and the history of Pan Am's Flight 1. The website also marketed and sold Pan Am merchandise, including flight bags and alarm clocks. Defendants' retail stores featured Pan Am merchandise and memorabilia, such as vintage flight bags and model airplanes, and a map of the route of Pan Am Flight 001 behind the cashier's desk.*fn3

However, defendants state that, "as a show of good faith," they have voluntarily stopped selling Pan Am merchandise or using the Pan Am name or globe. Sencion Suppl. Decl. at ¶¶ 4-5. Defendants continue to use the FLIGHT 001 trade name, FLIGHT 001 design mark, and the Flight 001 Globe logo.

D. Interactions Between the Parties and Procedural History

In October 2005, Sencion sent an e-mail to Bob Culliford, Pan Am's General Counsel and Secretary to indicate that he was interested in Pan Am licensing generally. Sencion followed up with several voice mail messages, but Mr. Culliford never responded.

Around June 2006, defendants were contacted by Anthony Lucas, an employee of Live Advertising, Inc., which is a company licensed by Pan Am to authorize others to manufacture and distribute certain Pan Am-branded merchandise. Defendants met with him about the possibility of obtaining officially licensed Pan Am merchandise. Sencion contacted plaintiff Pan Am about this matter around June or July 2006. But plaintiff states that it did not discover defendants' extensive use of Pan Am marks until August 16, 2006. On or about August 23, 2006, plaintiff sent a letter to Flight 001 demanding that defendants cease and desist from their use of Pan Am marks.

The parties then explored the possibility of a settlement, but no agreement was reached. Pan Am filed a complaint in the United States District Court for the Eastern District of Virginia on September 18, 2006 and served the complaint on defendants on October 19, 2006, after Pan Am concluded that a settlement could not be reached. Plaintiff moved for a preliminary injunction on November 16, 2006. On December 1, 2006, with the motion for preliminary injunction pending, the case was transferred to this Court.

In May 2007, this Court heard oral arguments on the motion for preliminary injunction, and the parties submitted additional briefs and materials.

E. Plaintiff's Claims and Requests for Relief

1. Plaintiff's Complaint

Plaintiff's complaint asserts six claims: (1) trademark infringement of the federally registered Pan Am Globe logo in violation of Section 32 of the Lanham Act, 15 U.S.C. § 1114; (2) unfair competition and false designation of origin related to unregistered Pan Am marks and the FLIGHT 001 mark in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (3) dilution of the PAN AM word mark, Pan Am Globe logo, and Pan Am color combination in violation of Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c); (4) cyberpiracy through use of the www.flight001.com Internet domain name in violation of Section 43(d) of the Lanham Act, 15 U.S.C. § 1125(d); (5) misrepresentation of goods and services in violation of the Virginia Consumer Protection Act, Va. Code Ann. § 59.1-200; and (6) common law trademark infringement.

The complaint seeks to enjoin defendants from using Pan Am marks or the FLIGHT 001 mark in connection with its business and promotion of goods; making representations regarding sponsorship or association between defendants and Pan Am; or further acts of infringement, dilution, and unfair competition against Pan Am. Plaintiff asks the Court to order defendants to destroy all products, labels, signs, prints, packages, wrappers, receptacles, and advertisements that bear Pan Am marks or the FLIGHT 001 mark. Plaintiff seeks treble damages for all profits derived by defendant and all damages incurred by Pan Am by reason of defendant's infringement of Pan Am marks. Plaintiff seeks to transfer the registration for the www.flight001.com domain name to Pan Am. Lastly, plaintiff seeks attorneys' fees.

2. Plaintiff's Motion for Preliminary Injunction

Plaintiff has moved for a preliminary injunction based on: (1) trademark infringement of the PAN AM trade name, PAN AM word mark, Pan Am Globe logo, Pan Am blue and white color combination, and FLIGHT 001 mark under Section 32 and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a); (2) unfair competition (or false designation of origin) related to those marks under Section 43(a)(1)(A) of the Lanham Act, 15 U.S.C. § 1125(a); and (3) trademark dilution of the PAN AM trade name, PAN AM word mark, and Pan Am Globe logo in violation of Section 43(c) of the Lanham Act, 15 U.S.C. 1125(c).

Plaintiff's motion for preliminary injunction seeks an order preventing defendants from: using FLIGHT 001 in connection with their stores, products, and website; using or selling products with the PAN AM trade name or word mark; using or selling products with the Pan Am Globe logo or any colorable imitation; making any references to Pan Am; or using blue and white coloring in combination with any airline or travel imagery. Plaintiff further seeks to order defendants to deliver up for destruction all labels, signs, prints, packages, wrappers, receptacles, and advertisements bearing the Pan Am marks (or any colorable imitation of them) or the FLIGHT 001 mark. Finally, plaintiff seeks an order directing defendants to cease communications ...


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