MARKS ORGANIZATION, INC. v. Joles
784 F. Supp. 2d 322
S.D.N.Y.2011Background
- Plaintiff acquired the Gordon Carpet business in July 2008, including the Gordon Carpet trade name, for $127,636 with goodwill allocated as the largest asset.
- The Gordon Carpet entity had been operating since 1977; the trade name was not registered with NYS or the USPTO.
- Plaintiff renamed the store Leader Carpet and advertised as formerly Gordon Carpet.
- Defendant, former general manager of Gordon Carpet, opened a competing Gordon Carpet store in Northvale, NJ in Sept. 2009 near Plaintiff's Tappan, NY location, using promotional materials prominently featuring the Gordon Carpet name.
- Plaintiff filed suit on Dec. 31, 2009 seeking a preliminary injunction; after jurisdictional disputes and discovery, the matter was reassigned to the undersigned in Nov. 2010, with a hearing held March 7, 2011.
- Court applies the Salinger/eBay framework to determine likelihood of success, irreparable harm, balance of hardships, and public interest for a preliminary injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who has standing to use Gordon Carpet? | Plaintiff acquired the mark with goodwill; ownership passes with going-concern sale. | Plaintiff abandoned the mark by not using it; ownership not exclusive. | Plaintiff owns the Gordon Carpet mark. |
| Was Gordon Carpet abandoned? | Use continued via advertising as formerly Gordon Carpet; not abandonment. | Non-use and lack of intent to resume show abandonment. | No abandonment; use continued and intent to resume shown. |
| Is the Gordon Carpet trade name distinctive and protectable via secondary meaning? | Trade name is descriptive but has acquired secondary meaning through longstanding use and goodwill. | Not argued; focus is on confusion defense. | Gordon Carpet is distinctive with acquired secondary meaning. |
| Is there a likelihood of confusion under Polaroid factors? | Strong likelihood of confusion due to identical marks, proximity, and overlapping markets. | Possible that customers know Leader Carpet; less confusion. | Strong likelihood of confusion; Polaroid factors favor Plaintiff. |
| Whether irreparable harm supports a preliminary injunction and the impact of delay? | Infringement harms goodwill and causes ongoing confusion; delay should not bar relief given seriousness of harm. | Delay undermines irreparable harm presumption; Plaintiff waited 16 months after learning of infringement. | Irreparable harm shown; delay does not defeat relief; balance of hardships and public interest favor injunction. |
Key Cases Cited
- Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir.1961) (Polaroid factors govern likelihood of confusion analysis)
- Omega Importing Corp. v. Petri-Kine Camera Co., 451 F.2d 1190 (2d Cir.1971) (irreparably harm and loss of sales context in trademark cases)
- Sunward Electronics, Inc. v. McDonald, 362 F.3d 17 (2d Cir.2004) (distinctiveness and secondary meaning considerations)
- Lane Capital Mgmt. v. Lane Capital Mgmt., 192 F.3d 337 (2d Cir.1999) (secondary meaning and protectability of descriptive marks)
- Weight Watchers Int'l, Inc. v. Luigino's, Inc., 423 F.3d 137 (2d Cir.2005) (delay and irreparable harm considerations in injunctions)
- Salinger v. Colting, 607 F.3d 68 (2d Cir.2010) (eBay framework applied to preliminary injunctive relief in light of modern standard)
- eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (S. Ct.2006) (setting the four-part test for injunctive relief (non-monetary relief standards))