The opinion of the court was delivered by: John T. Curtin United States District Judge
More than a century ago, Elbert Hubbard left his position with the Buffalo-based J.D. Larkin Soap Company and entered the publishing business in East Aurora, New York. He established the Roycroft Campus and invited a number of artisans, skilled in a variety of disciplines, to practice their crafts there. The community was modeled loosely upon the medieval-style guild organization of William Morris and the Arts & Crafts Movement in England. As the Roycroft Movement grew, so did the Campus, eventually encompassing numerous buildings that housed the Roycrofters and their shops and studios. The centerpiece of the campus was the Roycroft Inn, built between 1903 and 1905, which accommodated lecturers, guests, and members of the public who traveled to East Aurora to participate in the Roycroft Arts & Crafts Movement.
Following Hubbard's death aboard the Lusitania in 1915, the Roycroft Enterprises were run by his son, Elbert Hubbard II. In 1938, the Campus filed for bankruptcy. Subsequently, a number of individuals and organizations have operated the Inn and other buildings of the Campus.
At issue in this action is the use of the Roycroft Marks, including the Roycroft Orb (a double-barred cross and circle containing the letter "R"), adopted as a trademark by the Roycrofters to identify their handcrafted, high-quality arts and crafts products, and certain patterns used on china and glassware. On February 2, 2001, the Margaret L. Wendt Foundation Holdings, Inc. filed suit against Roycroft Associates, The Roycroft Shops, Inc., Edythe S. "Kitty" Turgeon, and Robert Rust, asserting that the defendants have "wrongfully asserted exclusive dominion, control, and ownership of the Roycroft Marks as they relate to contemporary products--products manufactured or produced after 1938." Item 1, ¶ 70, Item 73, ¶ 70. In an amended complaint filed September 2, 2004, the plaintiff asserts claims for common law trademark infringement, trademark dilution, false designation of origin under the Lanham Act, 15 U.S.C. § 1501, et seq., unfair competition, and related causes of action under the laws of New York State.*fn1 In their Answer to the Amended Complaint, defendants have asserted counterclaims pursuant to federal and state trademark law and state common law claims (Item 79). Defendants allege that they are the rightful owners of the Roycroft Marks, and seek injunctive and monetary relief for plaintiff's wrongful sales of goods bearing the Marks.
In this motion for partial summary judgment filed June 3, 2005, plaintiff seeks a determination that it is the rightful owner of the Roycroft Marks (Item 90). Defendants have also cross-moved for summary judgment dismissing the action in its entirety on the grounds of laches (Item 101). Oral argument on the motions was heard on December 21, 2005. Defendants objected to plaintiff's Statement of Undisputed Facts on the grounds that it did not comport with Local Rule 56.1, contained statements that were immaterial to the motion, unsubstantiated argument and legal conclusions, and lacked proper citation to the record. Following unsuccessful settlement negotiations, the court ordered plaintiff to submit a revised statement of undisputed facts (Item 130). Plaintiff filed its Revised Statement with exhibits on December 31, 2006 (Item 131). Defendants filed a Response on December 28, 2006 (Item 155) and a Reply on January 17, 2007 (Item 157).*fn2 For the reasons that follow, the plaintiff's motion is denied, and the defendants' cross motion is denied.
Use of the Roycroft Orb as a trademark by the original Roycroft craftsmen is undisputed. The Mark was affixed to handcrafted furniture, leather goods, and other products. In 1907, the Orb trademark was registered by Elbert Hubbard for use in "furniture and upholstery." The Roycroft Inn opened to guests in approximately 1903. It was furnished with handcrafted Roycroft furniture, and the Roycroft Orb design was prominently displayed in the decor, on furniture, china, and other dinnerware at the Inn, and in the advertising of the Inn and its services. The Orb trademark came to signify the Roycroft Movement and designated those goods to which it was affixed as authentic, high-quality, handcrafted Roycroft pieces.
Use of the Orb following the bankruptcy of 1938 is less apparent. The Roycroft Movement ceased to exist, while the buildings of the Roycroft Campus were sold, and the businesses therein were acquired and operated by various owners. Following the bankruptcy in 1938, the Roycroft Inn was, for the most part, continuously operated as an inn and restaurant by a succession of owners. The Roycroft Copper Shop, located across the street from the Inn, was sold to an East Aurora businessman named Samuel Guard (Item 105, Att. 4-5, pp. 13-14, 18). Guard himself filed for bankruptcy in 1940, and the Copper Shop passed through a succession of owners, each of whom operated the Copper Shop as a gift shop and sold items bearing the Roycroft Orb (Item 105, Att. 9, pp. 57-59; 10, pp. 98-100).
In 1974, Frank A. Turgeon and Ralph A. Turgeon purchased the real property known as The Roycroft Inn and the related assets. Title to the property vested in Edythe S. "Kitty" Turgeon, Frank's wife, and June Turgeon, Ralph's wife. Frank Turgeon established a separate corporation to operate the Inn and the related restaurant. In 1976, Kitty Turgeon acquired the property and the gift shop business of the Roycroft Copper Shop, including the furniture, fixtures, and merchandise (Item 105, Att. 10). Defendants Turgeon and Rust operated The Roycroft Shops, Inc. from the Copper Shop property, selling a variety of products including original Roycroft antiques, clothing, jewelry, books, glassware, lighting fixtures, china, and rugs. Beginning in 1982, defendants began to produce, market, and sell Roycroft china (Item 101, ¶ 9).
In 1979, Frank and Kitty Turgeon separated. Kitty Turgeon formed a new corporation with defendant Rust to purchase the assets of Frank Turgeon's operating corporation and to assume the operating lease of the Inn. This entity, known as "The Roycroft Inn of East Aurora, Erie County, New York Ltd." ("Roycroft Ltd."), operated the Inn and restaurant from September 1982 until May 1987. Both Kitty Turgeon and Roycroft Ltd. filed for bankruptcy protection on April 3, 1984. The Roycroft Ltd. bankruptcy was converted from Chapter 11 to Chapter 7, and a Chapter 7 trustee was appointed on August 7, 1987.
In 1987, the Landmark Society of Western New York ("Landmark Society"), with the financial assistance of the Wendt Foundation, purchased the Inn and the related assets. Rider No. 1 to the Contract of Sale between the Landmark Society and Kitty and June Turgeon provides that nothing in the contract would prevent the sellers from utilizing the names "Roycroft, Elbert Hubbard, Roycroft Campus, etc., but Sellers shall not have the right to use the name Roycroft Inn in any context . . . ." (Item 107, Att. 5). In a separate document, the sellers agreed to cease use of the business name "Roycroft Inn" in any of its business activity and assigned the right to use the name "Roycroft Inn" to the Landmark Society (Item 107, Att. 6). At that time, the Roycroft Inn closed for renovation and restoration.
Between 1988 and 1990, Roycroft Shops was issued New York State trademark registrations for the Roycroft Marks for use in tableware, furniture, clothing, jewelry, and printed material. Additional New York State trademark registrations were issued in 1998 (Item 108, Att. 5). In 1988, defendants entered into a licensing agreement with Buffalo China to manufacture china based on original Roycroft designs and bearing the Roycroft Orb. This agreement prevents Buffalo China from selling the Roycroft China to any party without the express permission of the defendants. In 1994, defendants entered into a similar licensing agreement with the Stickley Furniture Company to manufacture reproductions of Roycroft furniture. Defendants have marketed and sold furniture and other products in this area and throughout the United States that bear one or more of the Roycroft Marks, with the claim that they are sole owners of the Marks (Item 131, ¶¶ 51, 52, 54-56).
On June 9, 1995, the Wendt Foundation Holdings took title to the Inn and related assets, which preceded the grand re-opening of the Inn the next day. The Roycroft Inn advertises using the Roycroft Orb trademark, and the Orb is featured in the Inn's signage, stationary, menus, dinnerware, and decor. The Roycroft Orb is prominently carved into one of the main interior doors near the front desk. Additionally, the Inn sells a number of items that feature the Orb, including coffee mugs, shirts, wine glasses, and china (Item 131, ¶¶ 41-45).
On April 28, 2005, defendant Turgeon sold the Copper Shop property to the Roycroft Campus Corporation, a not-for-profit organization not ...