The opinion of the court was delivered by: Gerard E. Lynch, District Judge
Plaintiff GMA Accessories, Inc. ("GMA") brings this action for trademark infringement, trademark dilution, and related claims against Croscill, Inc. ("Croscill"), and retailers Linens n' Things, Inc., Bed Bath & Beyond Inc., and Burlington Coat Factory Warehouse Corporation (collectively, "the retailers"), who sell Croscill's products. Prior to the completion of discovery, GMA moved for a preliminary injunction and partial summary judgment on its trademark infringement claim, as well as dismissal of defendants' counterclaims for attorneys' fees. This Court denied GMA's motion and noted that at that stage of the case "issues of fact abound[ed] as to whether plaintiff can establish a violation of its trademarks." GMA Accessories, Inc. v. Croscill, Inc., No. 06 Civ. 6236, 2007 WL 766294, at *1 (S.D.N.Y. March 13, 2007). Discovery is now complete and defendants move for summary judgment on all claims, including their counterclaims for legal fees. The motion will be granted in part, and denied in part.
The central dispute in this case concerns the parties' use of the word "Charlotte." GMA, which manufactures women's fashion items, began using "Charlotte" in commerce in 1996 and has registered the word as a trademark for certain categories of clothing and accessories, including scarves, gloves, socks, handbags, hats, hair clips, and sunglasses. (P. Rule 56.1 Stmt. ¶ 44; D. Rule 56.1 Stmt. ¶ 9.) Croscill, a manufacturer of window, bedding, and bathroom products, first used the word "Charlotte" in August 2003 to designate a style of window products, specifically "valance, panel, and other draperies." (D. Rule 56.1 Stmt. ¶ 2.) Croscill discontinued these items in early 2005 but, later that year, reused "Charlotte" for a line of coordinated bathroom products, including towels, shower curtains, toothbrush holders, a lotion pump, and a jar. (Id. ¶¶ 2-3.) Croscill claims that it selected the "Charlotte" name for both its window and bath products without any knowledge of GMA's use or registration of the "Charlotte" mark, and that its use of "Charlotte" was intended solely as a style name and not as a trademark indicating the source of its products. (Id. ¶¶ 2-4.) Croscill has sold its "Charlotte" bath products to all of the retailers in this action and continues to carry these items in its bath product line. (Id. ¶ 3.)
In addition to Croscill, several third parties, including Gatco, Inc. ("Gatco") and American Pacific Enterprises, LLC ("American Pacific"), have also sold items using the word "Charlotte" to some of the defendant retailers. (See Silberfein Reply Aff. ¶¶ 2, 3.) Specifically, in August 2002, Gatco began using "Charlotte" on its bathroom hardware products, which include towel bars, towel rings, toilet paper holders, mirrors, and glass shelving. (Rabinowitz Aff. Ex. I ("Bergman Dep."), at 18:14-20:5.) Defendant Linens n' Things carried Gatco's "Charlotte" products from February 2003 until March 2007, when Gatco reached an agreement with GMA to phase out its use of "Charlotte." (Id. ¶ 6; Raps Decl. Ex. 66.) American Pacific similarly offered for sale certain bedding products under license from Liz Claiborne using the name "Charlotte," including bedspreads, comforters, drapery panels, duvets, pillows, shams, and valences. (D. Rule 56.1 Stmt. ¶ 7.) From December 2005 to the fourth quarter of 2006, defendants Bed, Bath & Beyond Inc. and Linens n' Things, Inc. carried American Pacific's "Charlotte" products in their stores. (Id. ¶¶ 7-8.) In November 2006, after receiving a cease and desist letter from GMA, American Pacific agreed to abstain from any further use of "Charlotte." (Raps Decl. Exs. 63-64.) Both Gatco and American Pacific claim that they chose "Charlotte" as a style name without any knowledge of GMA's use or registration of the "Charlotte" mark. (D. Rule 56.1 Stmt. ¶¶ 5, 8.)
GMA alleges that Croscill's actions, as well as the retailers' sale of "Charlotte" items produced by Croscill, Gatco, American Pacific, and other third parties (see Silberfein Reply Aff. ¶¶ 2, 3),*fn1 have infringed and diluted its "Charlotte" mark. GMA seeks injunctive relief and damages under the Lanham Act, 15 U.S.C. § 1051 et seq., and New York statutory and common law. (Am. Compl. ¶¶ 49-91.) Defendants, in turn, assert that GMA brought this action "without any reasonable basis to believe in liability against the defendants or injury to plaintiff," and seek to recover their attorneys' fees and expenses for defending this action. (D. Countercl. Mem. 1.)
I. Summary Judgment Standard
Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The Court's responsibility is to determine if there is a genuine issue to be tried, and not to resolve disputed issues of fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The Court must draw all reasonable inferences and resolve all ambiguities in the nonmoving party's favor, and construe the facts in the light most favorable to the nonmoving party. Id. at 254-55. However, summary judgment may be granted "[i]f the evidence is merely colorable, or is not significantly probative." Id. at 249-50 (citations omitted).
The party seeking summary judgment bears the burden of showing that no genuine factual dispute exists. See Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d Cir. 1995). Once the moving party has made a showing that there are no genuine issues of material fact, the burden shifts to the nonmoving party to raise triable issues of fact. Anderson, 477 U.S. at 250. A genuine issue for trial exists if, based on the record as a whole, a reasonable jury could find in favor of the nonmoving party. Id. at 248.
As a preliminary matter, GMA asserts that the arguments raised in the instant motion for summary judgment were already "judiciously determined" to be without merit in the Court's prior opinion. (P. Mem. 1.) That prior decision, however, denied plaintiff's premature motion for summary judgment, and although defendants suggested that the Court enter summary judgment in their favor, defendants never made a properly supported motion. See GMA Accessories, Inc., 2007 WL 766294, at *4 (noting that defendants have "not moved for summary judgment"). The Court's prior decision, moreover, was based on an incomplete record, and nothing in that decision precludes defendants from making a proper motion for summary judgment now based on a full evidentiary record. Accordingly, GMA's suggestion that the issues pertinent to this motion were already decided by the Court "the first time around" (P. Mem. 1) is unavailing. Accordingly, the Court turns to the merits of defendants' motion.
II. Trademark Infringement
GMA's Amended Complaint asserts trademark infringement and related claims under both the Lanham Act and New York common law. Specifically, Count I, as modified by the Court's May 8, 2007, Order (Doc. # 74) (dismissing trade dress infringement and counterfeiting claims), alleges trademark infringement in violation of 15 U.S.C. § 1114(1)(a). (Am. Compl. ¶ 55.) Count III alleges "unfair competition, false designation of origin, and false description or representation" in violation of 15 U.S.C. § 1125(a).*fn2 (Id. ¶ 66.) Count V alleges trademark infringement, unfair competition, and misappropriation in violation of New York common law. (Id. ¶ 78.) "It is well established that the elements necessary to prevail on causes of action for trademark infringement and unfair competition under New York common law mirror the Lanham Act claims." Lorillard Tobacco Co. v. Jamelis Grocery, Inc., 378 F. Supp. 2d 448, 456 (S.D.N.Y. 2005) (internal quotation marks omitted).*fn3
To prevail on a claim of trademark infringement under the Lanham Act, "the plaintiff must prove that its mark is entitled to protection and, even more important, that the defendant's use of its own mark will likely cause confusion with plaintiff's mark." Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F.3d 373, 381 (2d Cir. 2005). Defendants do not dispute that GMA's "Charlotte" mark is a registered mark entitled to protection. Accordingly, the critical inquiry 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." Savin Corp. v. The Savin Group, 391 F.3d 439, 456 (2d Cir. 2004) (internal quotation marks omitted); see New York Stock Exchange, Inc. v. New York, New York Hotel LLC, 293 F.3d 550, 554 (2d Cir. 2002) (noting that "plaintiff must show a probability, not just a possibility, of confusion").
Whether there is a likelihood of confusion is determined by applying the eight-factor test established by Judge Friendly in Polaroid Corp. v. Polaroid Electronics Corp.:
Where the products are different, the prior owner's chance of success is a function of many variables: the strength of his mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of defendant's good faith in adopting its own mark, the quality of defendant's product, and the sophistication of the buyers.
287 F.2d 492, 495 (2d Cir. 1961). The Second Circuit has suggested that the first three Polaroid factors - strength, similarity of marks, and proximity of products - are "perhaps the most significant in determining the likelihood of confusion." Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 258 (2d Cir. 1987). "Application of the Polaroid test is not mechanical," however, "and no one factor is necessarily dispositive, although any one factor may prove to be so." New York Stock Exchange, 293 F.3d at 555 (internal quotation marks omitted). "If a factual inference must be drawn to arrive at a particular finding on a Polaroid factor, and if a reasonable trier of fact could reach a different conclusion, the district court may not properly resolve that issue on summary judgment." Cadbury Beverages, Inc. v. Cott Corp., 73 F.3d 474, 478 (2d Cir. 1996). Summary judgment is appropriate "where the undisputed evidence would lead only to one conclusion as to whether confusion is likely." Id.
The strength of a trademark measures "its power to identify the source of a product." Time, Inc. v. Petersen Pub. Co. LLC, 173 F.3d 113, 117 (2d Cir. 1999); see Lang v. Ret. Living Pub. Co., 949 F.2d 576, 581 (2d Cir. 1991) (noting that "the strength of the mark turns on its origin-indicating quality in the eyes of the purchasing public" (internal quotation marks omitted)). A mark's strength is comprised of two components: "inherent distinctiveness and acquired distinctiveness." Playtex Prods., Inc. v. Georgia-Pacific Corp., 390 F.3d 158, 163 (2d Cir. 2004) (internal quotation marks omitted).
Inherent distinctiveness is measured on an ascending scale reflecting "not only eligibility to trademark status but also the degree of protection accorded." TCPIP Holding Co., Inc. v. Haar Communications, Inc., 244 F.3d ...