Lead Opinion
Wе are called upon today to decide whether the trade name "Allied Maintenance” is entitled to protection pursuant to section 368-d of the General Business Law—commonly referred to as the anti-dilution statute.
The plaintiff, Allied Maintenance Corporation, has been in business, in one form or another, since 1888. Throughout the many years since its inception, Allied Maintenance has concentrated the scopе of its services upon the cleaning and maintenance of large office buildings. The defendant, Allied Mechanical Trades, Inc., a corporation organized in 1968 as a successor to Controlled Weather Corporation, is engaged primarily in the installation and repair of heating, ventilating and air-conditioning equipment.
Alleging that the defendant performed maintenance services identical to those it performed, Allied Maintenance brought this action to enjoin Allied Mechanical from operating under the name "Allied” or "Allied Mechanical Trades, Inc.”, or using the word "Allied” in any way in connection with its business. The trial court granted the injunction, finding that the parties were actual and potential competitors in the cleaning and maintenance industry in the metropolitan New York City area and that the auditory and visual similarity between their names created a likelihood of confusion. On this basis, the court concluded that defendant’s use of the name Allied Mechanical would result in irreparable injury to plaintiffs reputation, good will, and proprietary business interests, and would thus constitute unfair competition. The Appellate Division reversed, however, finding an absence of either competition or confusion, actual or potential. The court concluded that "no usеr of the services of either party has been or may probably be confused or deceived by any similarity in the names of the parties.” (
In addition to the protection of trade-marks and trade names afforded by the traditional actions for trade-mark infringement and unfair competition, New York, as well as a number of other States,
Historically, two causes of action have existed to protect the user of a trade-mark or trade name from its improper use by another—viz., trade-mark infringement and unfair competition. Trade-mark infringement developed as the remedy designed to protect technical trade-mаrks—i.e., those marks which were arbitrary, fanciful or coined. (See 3 Callman, Unfair Competition, Trademarks and Monopolies [3d ed], § 66.1.) Trade-marks such as "Kodak”, "Xerox”, "Exxon” and "Coke” would fall within this category. As the law evolved, the protection provided by an action for trade-mark infringement was supplemented by the formulation of a broader remedy—an action for unfair competition. (See Dell Pub. Co. v Stanley Pub.,
Since an action for infringement as well as an action for unfair competition both require a showing that the public is likely to confuse the defendant’s product or service with that of the plaintiff, reliеf may be difficult to secure in situations in which the parties are not in competition, nor produce similar products or perform similar services. It is for this reason that section 368-d specifically provides that an injunction may be obtained notwithstanding the absence of competition or confusion.
Generally, courts which have had the opportunity to interpret an anti-dilution statute have refused to apply its provisions literally. New York courts, State and Federal, have read
Judicial hesitance to enforce the literal terms of the anti-dilution statute has not been limited to New York. In Illinois, for example, some courts have gone so far as to declare the statute inapplicable where the parties are competitors and a likelihood of confusion does exist. These decisions were premised upon the belief that a plaintiff who can frame his complaint under a theory of infringement or unfair competition— albeit unsuccessfully perhaps—should not succeed under a dilution theory. (See Filter Dynamics Int. v Astron Battery, 19 111 App 3d 299, 314-315; Edgewater Beach Apts. Corp. v Edgewater Beach Mgt. Co., 12 111 App 3d 526, 534; AlbertoCulver Co. v Andrea Dumon, Inc., 466 F2d 705, 709.) However, one court in Illinois has interpreted the anti-dilution statute literally, reasoning that unless recovery for dilution is permitted in the absence of competition or confusion the statute adds nothing to existing law. (Polaroid Corp. v Polaraid, Inc., 319 F2d 830, 836-837.) This approach has also been taken in Massachusetts. (See, e.g., Tiffany & Co. v Boston Club,
Notwithstanding the absence of judicial enthusiasm for the anti-dilution statutes, we believe that section 368-d does extend the protection afforded trade-marks and trade names beyond that provided by actions for infringement and unfair competition. The evil which the Legislature sought to remedy was not public confusion caused by similar products or services sold by competitors, but a cancer-like growth of dissimilar products or services which feeds upon the business reputation of an established distinctive trade-mark or name. Thus, it would be of no significance under our statute that Tiffany’s Movie Theatre is not a competitor of, nor likely to be confused with Tiffany’s Jewelry. (See NY Legis Ann, 1954, p 50, citing Tiffany & Co. v Tiffany Prods.,
Although section 368-d does not require a showing of confusion or competition to obtain an injunction, it does require a "likelihood of injury to business reputation or of dilution of the distinctive quality of a mark or tradename.” (Emphasis added.) The statute prohibits any use of a name or mark likely to dilute the distinctive quality of a name in use. To merit protection, the plaintiff must possess a strong mark— one which has a distinctive quality or has acquired a secondary meaning which is capable of dilution. Courts interpreting Massachusetts’ anti-dilution statute—applying its terms literally—have required a showing that the trade-mark or name to be protected is either unique or has acquired a secondary meaning before issuing an injunction. (See, e.g., Skil Corp. v Barnet, 337 Mass 485, 491; Mann v Parkway Motor Sales, 324 Mass 151, 157.)
Turning to the case before us, it is quite apparent that the name "Allied” is a weak trade name. Rather than being distinctive, arbitrary, fanciful or coined, it is, in essence, generic or descriptive. Although the name "Allied” bespeaks of more originality than "maintenance”, it is nevertheless a common word in English usage today. There is nothing in the name "Allied Maintenanсe” itself which indicates that it is an inherently strong trade name susceptible to dilution. (See Dell Pub. Co. v Stanley Pub.,
In sum, although section 368-d should be interpreted literally to effectuate its intended purpose—protection against dilution—only those trade names which are truly of distinctive quality or which have acquired a secondary meaning in the mind of the public should be entitled to protection under the anti-dilution statute. "Alliеd Maintenance” cannot be said to have attained this stature.
Accordingly, the order of the Appellate Division should be affirmed.
Notes
. (Ark Stat Ann, § 70-550; Cal Business & Professional Code, § 14330; Conn Gen Stat Ann, § 35-1 li, subd [c]; Del Code, tit 6, § 3313; Fla Stat Ann, § 495.151; Idaho Code, § 48-512; 111 Rev Stat, ch 140, § 22; Iowa Code Ann, § 548.11, subd 2; Mass Gen Laws Ann, ch HOB, § 12; Mo Ann Stat, § 417.061; Neb Rev Stat, § 87-122; NH Rev Stat Ann, § 350-A:12; NM Stat Ann, § 49-4-11.2; Ore Rev Stat, § 647.107; RI Gen Laws, § 6-2-12.) Although minor differences in wording exist, each of these statutes is a substantive duplicate of New York’s anti-dilution statute.
. At one time fine distinctions existеd between trade-marks, technical and nontechnical, and trade names. Only a technical trade-mark could be registered and protected via an action for infringement. But today, it is recognized that nontechnical marks and trade names are also registrable and can be protected in an action for infringement. (3 Callman, Unfair Competition, Trademarks and Monopolies, [3d ed], § 66.1.) However, since a trade namе or nontechnical trade-mark cannot claim the procedural advantages (see Dell Pub. Co. v Stanley Pub.,
In addition to the erosion of technical distinctions in the theory of infringement, the gravamen of an action for unfair competition has also undergone a liberalization. At one time it was necessary to show in an action for unfair competition that plaintiff's trade-mark or trade name had acquired a secondary meaning. Gradually, courts have begun to recognize that, in essence, an action for unfair competition turns not upon the acquisition of a secondary meaning, but upon whether the acts of the defendant can be characterized as unfair. (See International News Serv. v Associated Press,
Dissenting Opinion
I dissent, voting for a reversal of the Appellate Division order and reinstatement of the judgment of Trial Term granting an injunction in favor of plaintiff.
The majority’s analysis of section 368-d of the General Business Law, it is respectfully submitted, imposes a narrow, overly technical gloss on its terms and, in effect, dilutes the "anti-dilution” statute. For the reason that future litigants may suffer from this interpretation, a broader view is needed and, in my opinion, was intended.
In interpreting this legislation, the court should not overemphasize the importance of a memorandum in support of this statute (see NY Legis Ann, 1954, pp 49-51). That writing describes the author’s view of the purpose of the proposed legislation and enumerates various problems in the area of dilution of a trade name or trade-mark. Dilution of a trade name through sales of dissimilar products is illustrated by somewhat fanciful examples such as "Buick aspirin tablets”, "Schlitz varnish”, "Kodak pianos”, and "Bulova gowns” (p 49). Indeed, that dilution can occur even in the case of dissimilar products, as the memorandum notes (p 50), has long been recognized by our common law which granted the right to enjoin the use of another’s name even in the absence of competition (see, e.g., Tiffany & Co. v Tiffany Prods.,
Dilution does not occur only in the case of a name that is widely known. To be sure, the name Tiffany would be diluted if many noncompeting businesses used that name. However, a less well-known name can also be diluted, perhaps in a more harmful and direct manner. And dilution can occur in instances where there is competition, though in that instance a more appropriate remedy will ordinarily be found under general principles of unfair competition. The difficult case is where a specialized business, with a generic name used in other unrelated businesses, is used by a relatively small segment of the public who rely on its name. The problem occurs when that business is confronted with a newer company, bearing the same or a similar name, engaging in a field that, while perhaps noncompeting, is so closely related to that of the more established business that its customers will identify its name with the newcomer. This is such a case.
It is asserted that the legislative intent was to remedy "not public confusion caused by similar products or services sold by competitors, but a cancer-like growth of dissimilar products or services which feeds upon the business reputation of an established distinctive trade-mark or name” (p 544). It is then concluded that Allied is not sufficiently distinctive but rather is "a weak trade name” (p 545). But the terms of the statute do not require this interpretation and the protection it affords should be availаble to plaintiff based on the facts of this case.
While the trial court determined that plaintiff and defendant are actual and potential competitors, the Appellate Division majority found that the parties are not competitors in their own peculiar specialties nor are they likely to be. Whichever view of the facts one takes, however, it is apparent that the businesses are closely related. There is no basis in the statutory language for concluding that the enactment was not intended to provide a remedy for confusion caused by similar (though perhaps not actually competing) services such as these. The statute provides a remedy "notwithstanding the absence of competition” but does not mandate that in order to benefit from its provisions there must be no competition or dissimilar services, as urged to the cоntrary. Therefore, if plaintiff’s name is of a distinctive quality, it is entitled to a remedy under the anti-dilution statute.
It is wrong to conclude that the name Allied Maintenance is
The majority opinion may be read as limiting the stаtute in question to the protection of only the most well-known names, such as Tiffany, of which there are few, from dilution by noncompeting products or services. The common law of the State has not so narrowed the protection afforded to less unique names and the fact that the statute operates even in the absence of competition does not, as noted, mean that it should have no effect where there is potential, if not actual, competition. A good illustration of this point is Long’s Hat Stores Corp. v Long’s Clothes (
The circumstances here are closely analogous. The name Allied, like the name Long’s, is not so unique that all would know its business, but it is known to a segment of the public that makes use of the service of cleaning and maintenance of buildings. After plaintiff was in business for many years, defendant entered into a related area and, depending upon whether one accepts the view of the Appellate Division majority or the trial court, may provide in some instances the same services. The use of a name associated with a particular business by one in a closely related field is a dilution of a less well-known name and is of no less significance to the particular plaintiff than usе of an extremely well-known trade name by a totally unrelated business. This is the rationale underlying the holding in Long’s (supra), a case that has been regarded as a forerunner of the anti-dilution theory (see NY Legis Ann, 1954, p 50; Tiffany & Co. v Tiffany Prods.,
Plaintiff should be granted the relief it seeks because, as a result of the similarity of names, those using defendant’s services may well be confused as to the source. But thе cause of action would not necessarily fail even if the two could be distinguished. Under the statute recovery is allowed even in "the absence of confusion” and, despite any suggestion to the contrary, this State’s appellate courts have not expressed acceptance of any reading into the statute of a requirement of some showing of confusion (see Cue Pub. Co. v Colgate-Palmolive Co.,
To conclude, prior to enactment оf the statute in question, in cases of this sort it was not determinative that a generic or descriptive name was so commonly used that the plaintiff could not prevent its use by unrelated businesses. For example, an injunction was granted against another business’ use of the name Columbia, a word that, like Allied, is commonly
Judges Gabrielli, Jones and Fuchsberg concur with Judge Jasen; Judge Cooke dissents and votes to reverse in a separate opinion in which Chief Judge Breitel and Judge Wachtler concur.
Order affirmed, with costs.