201 F. Supp. 3d 428
S.D.N.Y.2016Background
- Classic Liquor launched vodkas under the ROYAL ELITE mark and filed USPTO applications; SPI opposed some filings and sent a cease‑and‑desist alleging infringement of its ELIT marks (marketed as “elit by Stolichnaya”).
- SPI owns several registered marks that incorporate a stylized ELIT element; SPI’s infringement theory focuses on aural/semantic similarity between ELIT and ROYAL ELITE (ELIT ≈ “elite”).
- Classic Liquor sued for a declaratory judgment of non‑infringement; SPI answered and asserted counterclaims under the Lanham Act § 43(a)(1)(B), New York common law unfair competition, and NY GBL §§ 349 and 350, alleging misuse of the ® symbol and misleading use of “Since 1867.”
- Classic Liquor moved for summary judgment on its declaratory claim and to dismiss SPI’s counterclaims; summary judgment briefing addressed (1) whether ELIT is descriptive or inherently distinctive, (2) secondary meaning, (3) likelihood of confusion under Polaroid factors, and (4) whether the ® misuse and “Since 1867” support Lanham Act or state claims.
- The Court found genuine disputes of material fact about secondary meaning and several Polaroid factors and denied summary judgment on the declaratory claim; it granted summary judgment dismissing SPI’s Lanham Act and common‑law unfair competition counterclaims but allowed SPI’s NY GBL §§ 349 and 350 claims (as to “Since 1867”) to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Declaratory judgment of non‑infringement / jurisdiction | Classic Liquor: dispute broad; court should decide non‑infringement despite minor bottle redesign | SPI: redesign moots controversy or makes it speculative | Court has jurisdiction and will decide; summary judgment denied on merits due to factual disputes |
| Distinctiveness / strength of ELIT component | Classic Liquor: ELIT is not distinctive; ROYAL ELITE is different | SPI: ELIT is coined/fanciful and thus inherently strong; ELIT pronounced "elite" creates commercial equivalence | Court: ELIT is a self‑laudatory/descriptive term; not inherently strong; but genuine dispute exists over whether ELIT acquired secondary meaning, precluding summary judgment |
| Likelihood of confusion (Polaroid factors) | Classic Liquor: marks/trade dress differ visually; no likelihood of confusion as a matter of law | SPI: aural and commercial impression (ELIT ≈ ELITE), product proximity, some anecdotal confusion, possible bad faith | Court: several Polaroid factors (similarity aural, proximity, some actual confusion, disputed bad faith) favor SPI; overall factual issues prevent summary judgment for Classic Liquor |
| Lanham Act § 43(a) false advertising re: ® symbol and “Since 1867” | Classic Liquor: ® misuse and historical date do not misrepresent inherent product qualities; not actionable under § 43(a) | SPI: literal falsity of ® and “Since 1867” makes material deception; consumer deception presumed | Court: misuse of ® and claims about registration are not about inherent qualities and cannot support § 43(a); “Since 1867” is ambiguous (not literally false) and SPI offers no extrinsic evidence of consumer deception, so § 43(a) claim fails; summary judgment for Classic Liquor on Lanham Act claim |
| NY common law unfair competition | Classic Liquor: fails because Lanham Act claim fails and no bad faith | SPI: alternative state remedy; bad faith exists | Court: dismissed common law unfair competition (fails with Lanham Act), but NY GBL §§ 349/350 claims based on “Since 1867” survive because those statutes use an objective reasonable‑consumer test and do not require literal falsity or intrinsic‑quality framing |
Key Cases Cited
- Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843 (U.S. 2014) (burden allocation in declaratory suits; plaintiff not required to prove non‑infringement)
- Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (articulating eight Polaroid likelihood‑of‑confusion factors)
- Arrow Fastener Co. v. Stanley Works, 59 F.3d 384 (2d Cir. 1995) (Lanham Act infringement elements and Polaroid application)
- Time, Inc. v. Petersen Publ’g Co., 173 F.3d 113 (2d Cir. 1999) (distinctiveness and protection of marks)
- Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144 (2d Cir. 2007) (literally false advertisements: consumer deception presumed; must be unambiguous to be literally false)
- National Basketball Ass’n v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997) (materiality/inherent quality requirement in false advertising claims)
- Apotex Inc. v. Acorda Therapeutics, Inc., 823 F.3d 51 (2d Cir. 2016) (falsity requires showing misrepresentation of an inherent or material quality)