Summary
In Bumble Bee, defendant sold tuna salad to delicatessens and supermarkets in containers which included the language, "Made with Bumble Bee Tuna" on the lids.
Summary of this case from Audi AG v. Shokan Coachworks, Inc.Opinion
04 Civ. 2105 (SHS).
July 20, 2004
OPINION ORDER
INTRODUCTION
Should the makers of tuna salad be preliminarily enjoined from stating on its label that it is "Made with Bumble Bee Tuna" when the trademark to "Bumble Bee Tuna" is owned by another entity? The answer, in the context of the facts of this action, is "no."
This action arises out of the use of the trademark of one manufacturer's component product on the labels of another manufacturer's composite product to advertise the presence of the former as an ingredient in the latter. Specifically, Bumble Bee Seafoods, LLC brings this action against UFS Industries, Inc., d/b/a Sally Sherman Foods, Inc. ("Sally Sherman") to enjoin Sally Sherman, a maker of tuna salad, from stating on the lids of its five-pound tuna salad containers that its salad is "Made With Bumble Bee Tuna." No one disputes Sally Sherman's tuna salad is in fact made with Bumble Bee tuna. Plaintiff asserts claims for trademark infringement in violation of 15 U.S.C. § 1114(1), false designations, descriptions, and representations in violation of 15 U.S.C. § 1125(a)(1), unfair competition in violation of New York common law, and trademark dilution in violation of N.Y. Gen. Bus. Law 360- 1.
Bumble Bee seeks preliminary and permanent relief enjoining Sally Sherman from using the allegedly offending tuna salad lids as well as actual damages, treble damages pursuant to 15 U.S.C. § 1117(a), and punitive damages pursuant to New York common law. Bumble Bee has moved for a preliminary injunction and a factual hearing was held at which testimony was adduced and exhibits admitted into evidence. Because Sally Sherman is in fact using Bumble Bee tuna, and because setting forth that fact on the containers as currently distributed is neither deceptive nor likely to cause confusion, plaintiff has not shown a likelihood of success on the merits. Accordingly, plaintiff's motion for a preliminary injunction is denied.
DISCUSSION
I. Background
Bumble Bee is a leading provider of tuna in the United States and owns several well-established and widely recognized trademarks under which it has marketed its products since 1910. Bumble Bee has created a Quality Assurance Program by which it authorizes tuna salad processing companies to manufacture and market tuna salad using its products and bearing its marks.
At the end of 2002, Bumble Bee and Sally Sherman discussed the possibility that Sally Sherman would become a participant in the Quality Assurance Program, thereby allowing Sally Sherman to use the Bumble Bee mark on its tuna salad. As part of that application process, Sally Sherman completed and passed a Quality Assurance Survey designed to screen potential participants in the Quality Assurance Program. As the next step in the application process, Bumble Bee then scheduled an onsite inspection at Sally Sherman's facilities, but Sally Sherman withdrew its application one week later.
Sally Sherman purchased a "substantial" amount of Bumble Bee tuna in 2003 "for use in making its tuna salad." (Zizis Aff. In Opp. Mot. ¶ 6). In February 2004, Bumble Bee discovered that Sally Sherman distributed to delicatessens and supermarkets its five pound tubs of tuna salad, the lid of which stated: Sally Sherman Tuna Salad (with the Sally Sherman logo); Made with 100% Hellmann's Real Mayonnaise (with Hellmann's logo); Made with Bumble Bee Tuna (without the Bumble Bee logo). (Compl. Ex. C; Zizis Aff. In Opp. Mot. ¶ 6). Bumble Bee had never authorized Sally Sherman to state "Made with Bumble Bee Tuna" on its lids. A photocopy of the lid is attached to this Opinion and Order as Appendix A. Extensive correspondence between Bumble Bee and Sally Sherman ensued; defendant insisted it was making fair use of Bumble Bee's name, triggering this litigation.
II. Preliminary Injunction Standard
The Lanham Act specifically authorizes injunctive relief to preserve the integrity of trademark rights. 15 U.S.C. § 1116(a). The relevant standard for cases involving claims of trademark infringement and dilution is a familiar one: "A party seeking a preliminary injunction must demonstrate (1) the likelihood of irreparable injury in the absence of such an injunction, and (2) either (a) likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation plus a balance of hardships tipping decidedly toward the party requesting the preliminary relief."Federal Express Corp. v. Federal Espresso. Inc., 201 F.3d 168, 173 (2d Cir. 2000) (citing Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 142 (2d Cir. 1997));Home Box Office. Inc. v. Showtime/The Movie Channel Inc., 832 F.2d 1311, 1314 (2d Cir. 1987)).
III. Bumblebee Is Not Likely to Succeed on the Merits
A. Defendant's Use of Plaintiff's Trademark to Announce the Existence of Plaintiff's Component Product As An Ingredient in Defendant's Composite Product Is Not Deceptive
May the manufacturer of a composite product use the trademark relating to a component product to announce the existence of that component in the finished work? Ultimately, the answer depends upon whether the use is deceptive as to source or endorsement.
1. Permitted Use In The Context of Component And Composite Products
In Prestonettes. Inc. v. Coty, 264 U.S. 359 (1924), the U.S. Supreme Court addressed a similar use of a component product's trademark in connection with the sale of a composite product. In that action, Coty had manufactured toilet powders and perfumes; Prestonettes. Inc. purchased those powders, altered them through various physical processes, and resold the new compound. The district court denied Coty's motion for a preliminary injunction and permitted Prestonettes. Inc. "to put upon the rebottled perfume `Prestonettes, Inc., not connected with Coty, states that the contents are Coty's [giving the name of the article] independently rebottled in New York.'" In upholding that decree, the Supreme Court wrote:
The defendant of course by virtue of its ownership had a right to compound or change what it bought to divide either the original or the modified product, and to sell it so divided. The plaintiff could not prevent or complain of its stating the nature of the component parts and the source from which they were derived if it did not use the trade-mark in doing so.Id. at 367. Moreover, the inferiority of the latter's quality gives the component manufacturer no ground for relief. Id. at 368. ("If the compound was worse than the constituent, it might be a misfortune to the plaintiff, but the plaintiff would have no cause of action, as the defendant was exercising the rights of ownership and only telling the truth.").
Recognizing that trademark rights exist to "protect the owner's good will against the sale of another's product as his," and not to "prohibit the use of the words or words" as is relevant under copyright law, the Court ultimately assessed the merits of the case based upon the potential for deception. Id. ("When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not taboo.") (citing Canal Co. v. Clark, 80 U.S. 311(1871)). The Supreme Court concluded in Prestonettes that the plaintiff did not have "the naked right . . . to prohibit the [composite manufacturer] from making even a collateral reference to the [component manufacturer's] mark."Id. at 369.
Two decades later, the Supreme Court continued to approve the application of a deception standard as the litmus test for permissible use in the context of component ingredients in a composite product. Champion Spark Plug Co. v. Sanders involved a somewhat different, but nonetheless instructive, issue where the defendants reconditioned used spark plugs made by the plaintiff, repackaged them, and sold them bearing the plaintiff's trademark. See 156 F.2d 488 (2d Cir. 1946), aff'd, 331 U.S. 125 (1947).
The U.S. Court of Appeals for the Second Circuit in that action had emphasized that truthful disclosure of the product's origin posed no breach of trademark rights. Id. at 491. ("The defendants have a right to sell them as such provided they make known to the public that they are second-hand and reconditioned and that the defendants — and not the plaintiff — have repaired the original plugs."). As part of that truthful disclosure, the defendants were "also entitled to sell them with the trademark `Champion' . . . because the mark `Champion' shows their origin." Id. Summarizing the legal framework for the permissible use of another's trademark, the Second Circuit wrote:
It is well settled by the authorities that the defendants have the right to sell an article manufactured by the plaintiff and to say that it has been so manufactured by retaining the latter's trade-mark . . . to indicate the origin of the goods . . . if they gave the public clearly to understand that the goods were not simply those of the original manufacturer. . . . They have only to tell the truth, and the whole truth, and to tell it plainly.Id. at 492. As in the Prestonettes action, the relative quality of the new product was irrelevant. Id. ("It is therefore unimportant whether their reconditioned spark plugs were as good as the original ones, . . . but only whether the purchaser was apprized of the real facts."). Moreover, a composite manufacturer is even entitled to benefit from the goodwill of the component maker as long as the "real facts" are truthfully disclosed. Id. (The reconditioner "had a right to gain any advantages derived from the good name of the manufacturer so long as they made it clear that the latter was not responsible for any lack of conformity to original standards. . . .").
One oft cited treatise on unfair competition offers the following insight regarding any potential quality differential between the component and composite products:
If a finished article is made of parts or materials manufactured by a particular producer, who may have a special reputation for quality, the seller of the finished article is allowed to use the latter's mark to identify the source of such parts or materials, and the manufacturer of the parts or materials cannot protest on the ground that the finished article is of inferior workmanship.
Rudolf Callmann, Callmann on Unfair Competition. Trademarks and Monopolies § 22:27 (Louis Altman ed., West Group 4th ed. 1983). This permitted use, however, must be untainted by deception:
But if the trademarked item loses its identity when incorporated into a product, made by one other than the trademark owner, the trademark should not be adopted for the entire new article. . . . But he may, under the doctrine enunciated in Prestonettes v. Coty, state the nature of the component parts and their source, and he may even use the trademark of the ingredient so as to indicate its relation to the new article or combination offered by him. He must, however, use that name discreetly and collaterally, not with an emphasis likely to lead the public into the false belief that the entire new product and the ingredient are from a common source. Such discretion also minimizes the diluting effect of defendant's use.Id. (emphasis added). Alluding to the cases discussed above, a second treatise provides identical guidance for analyzing cases such as this one:
In permitted use decisions, the courts emphasize truthful disclosure. Under appropriate circumstances, for example, a trademark . ., can be truthfully used on repackaged goods sold by one other than the trademark owner if it is made clear that the goods are in fact, repackaged, unguaranteed or otherwise varying from the trademark owner's standards. In some instances, however, deception is inherent and the use must be barred. The salient principle governing the legal propriety of using another's trademark is simply that of truthfulness and the absence of any likelihood of deception.
Beverly W. Pattishall, David C. Hilliard, Joseph N. Welch II,Trademarks and Unfair Competition § 7.06[1] (2d ed. 2003). Not only do the cases and treatises trace a coherent and steady line, but the Lanham Act itself codifies this very approach.
The Lanham Act sets forth the common law defense of fair use, 15 U.S.C. § 1115(b)(4); Trademarks and Unfair Competition 7.06[1]. Section 1115(b)(4) states that a trademark owner's claim that it has the exclusive right to use the mark in commerce is subject to the defense "[t]hat the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark . . . of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party. . . ."
Though not raised by plaintiff, this Court also acknowledges a related line of cases addressing implied endorsement. This claim for trademark violation is slightly different than one grounded in confusion as to the source of the product, though consumer confusion is still the focus of the inquiry. See Oliveira v. Frito-Lay. Inc., No. 96 Civ. 9289, 1997 WL 324042, at *3 (S.D.N.Y. 1998) ("The Lanham Act has been extended to cover `misleading statements that a product or service has been endorsed by a public figure.'") (quoting Allen v. Nat'! Video. Inc., 610 F. Supp. 612, 625 (S.D.N.Y. 1985)), aff'd, 251 F.3d 56 (2d Cir. 2001).
2. There is No Trademark Violation Because There Is No Deception
On the one hand, Bumble Bee concedes that Sally Sherman is entitled to list in small type within the ingredients on its tuna salad lids the words "made with Bumble Bee tuna a registered trademark of Bumble Bee Seafoods, LLC not affiliated." (Tr. at 14, 45-46, 48). On the other hand, Sally Sherman concedes that it cannot simply label its tuna salad with "Bumble Bee" as the brand identifier. (Zizis Aff. In Opp. Mot. ¶ 15; Tr. at 17, 22). The lid at issue presents a use of Bumble Bee's trademark that lies somewhere between those examples. "Made with Bumble Bee Tuna" is not written along with the other ingredients; nor does the label falsely state that it is Bumble Bee Tuna Salad. This Court's analysis focuses upon whether the lids are deceptive — in other words, do they lead the consumer to believe that Bumble Bee is the source of Sally Sherman's tuna salad or endorses this tuna salad?
"Tr." references the transcript from the factual hearing held before this Court on April 21, 2004.
To understand whether these lids are deceptive, this Court's analysis begins with the specific audience that will read the label's contentious phrase: "Sally Sherman Tuna Salad: Made with Bumble Bee Tuna." These labels are affixed solely on five pound tubs of tuna salad and are sold exclusively to delicatessens and supermarkets for further sale out of the deli counter. The counterman will use the Sally Sherman product to sell to the retail customer a certain weight of tuna salad or it can be used to make sandwiches for the retail customer. The lidded tubs themselves do not find their way to the ultimate consumer of the tuna salad; the tubs are sold to commercial entities whose employees remove the tuna salad from the tubs to sell it in smaller quantities to the ultimate consumer.
There is nothing in the record of this action to support the proposition that a buyer for delicatessens and supermarkets lacks the commercial familiarity and sophistication to understand that Sally Sherman makes the tuna salad, and one component of that salad is Bumble Bee Tuna. Moreover, a deli buyer must affirmatively place an order with Sally Sherman — not Bumble Bee — for this tuna salad. The law permits the use of a component owner's trademark for descriptive use provided that use is not deceptive. See Prestonettes, 264 U.S. 366-69; Champion Spark Plug, 156 F.2d at 491-92. No reasonable deli buyer would be deceived after ordering tuna salad from Sally Sherman to think that instead he received Bumble Bee tuna salad.
B. Plaintiff Does Not Have Asserted Quality Control Rights Downstream In The Market Once The Component Good Is Transferred Into A New Composite Product
Bumble Bee contends that it is entitled to supervise and indeed control the quality of third-party tuna salad that advertises that Bumble Bee's tuna is the main ingredient. Plaintiff focuses upon the line of cases where a manufacturer purchases a component product and essentially repackages it for resale in a new container. See, e.g., Warner-Lambert Co. v. Northside Dev., 86 F.3d 3 (2d Cir. 1996); Polymer Tech. Corp. v. Mimran, 37 F.3d 74 (2d Cir. 1994); Original Appalachian Artworks, Inc. v. Granada Elec., Inc., 816 F.2d 68 (2d Cir. 1987); Eastman Kodak Co. v. Photaz Imports Ltd. Inc., 853 F. Supp. 667 (W.D.N.Y. 1993). Those cases address the original manufacturer's concern that its products were being resold intact — albeit in a different container without regard to quality control measures established by the product's maker. The component products were not altered in any way, nor did they become one of several ingredients somehow blended to create a composite product. The worrisome inference in those repackaging cases is that the end consumer may attribute any defect or poor quality in the product to the original manufacturer, though fault may lie with the repackager who ignored the manufacturer's quality control standards.
This action, however, is distinguishable from the repackaging cases because the inference at issue in those cases does not exist in the cases where a component ingredient of a composite product is involved. See Prestonettes, 264 U.S. at 368;Champion Spark Plug Co., 156 F.2d at 492; Callman's § 22:27;Trademarks and Unfair Competition § 7.06[1].
In Forstmann Woolen Co. v. Murray Sices Corp., 144 F. Supp. 283 (S.D.N.Y. 1956), for example, the manufacturer of self-described high quality fabrics brought an action against the maker of suits — alleged to be of inferior quality relative to the fabrics — that advertised on the suit labels that the suits were constructed using plaintiff's fabrics. "The [suit maker] also affixed in each of its garments an additional label which clearly indicated that the garment had been manufactured by [it]." Id. at 290. On the claim of trademark infringement, the district court held that the suit maker was "under the doctrine of Prestonettes, . . . entitled to inform consumers through the plaintiff's name and mark that the basic constituent of its garments was fabric manufactured by Forstmann." Id.
Addressing any purported unfairness arising from the fabric manufacturer's lack of control over the quality of the suits of which its fabrics were tailored, the court reasoned that quality defects in the composite product may be fairly attributed to the composite manufacturer because it has been sufficiently involved in its alteration such that its fault, to the exclusion of the component maker, may be fairly inferred:
[I]t is difficult to see how this circumstance constituted unfair competition. . . . The plaintiff is not, has never claimed to be and was not at any time believed by consumers to be, a garment manufacturer; and its label is not a symbol of a garment's classification. Thus, in the . . . suits which the defendant produced, the absence of those features which customarily are found in `better quality' suits was not and could not be attributed to the plaintiff. The consumer was clearly informed that Sices, not Forstmann, manufactured the suits and therefore was responsible for the deficiency, of any, in design, style, and workmanship. Accordingly, it was not unfair competition for Sices to inform consumers through use of the plaintiff's name and mark that the basic fabric in its suits was [the plaintiff's].Id.
Here, Sally Sherman did not simply repackage Bumble Bee tuna, reselling it in a new container. Rather, Sally Sherman mixed and blended Bumble Bee's tuna, with more than a dozen additional ingredients, including mayonnaise, celery, flour, spices, and preservatives. Any adverse inference to be drawn by a consumer from poor quality tuna salad may fairly be directed toward the composite manufacturer, not the manufacturer of the ingredients. In any event, Bumble Bee may not exert quality control as its tuna swims downstream in the market place and becomes one ingredient in other products, most notably tuna salad. C. Applying the Polaroid Factors Does Not Yield A Likelihood Of Confusion
To prevail on a trademark infringement claim, a plaintiff must demonstrate that the allegedly infringing use creates a likelihood of confusion for consumers. See Nora Beverages, Inc. v. Perrier Group of America, Inc., 269 F.3d 114, 118-19 (2d Cir. 2001). "In this Circuit, likelihood of confusion is determined by the multi-factor test set out in Polaroid Corp. v. Polarad Elec. Corp., 287 F.2d 492, 495 (2d Cir. 1961)." Id. at 119. The non-exclusive list of Polaroid factors includes:
strength of [the prior owner's] mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap [between the two products], 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.Id. (quoting Polaroid, 287 F.2d at 495). It remains unclear whether the Polaroid test has application in a case such as this where the Lanham Act sets forth a specific defense for the use of another's trademark — here, where the use is descriptive and used fairly and in good faith. 15 U.S.C. § 1115(b)(4).
Nonetheless, the Second Circuit has urged the application of the Polaroid factors when assessing a potential likelihood of confusion. See New Kayak Pool Corp. v. R P Pools. Inc., 246 F.3d 183, 185 (2d Cir. 2001) ("Under the law of this Circuit, courts deciding whether a plaintiff has established likelihood of confusion must consider the eight [Polaroid] factors.") (quoting Arrow Fastener Co. v. Stanley Works, 59 F.3d 384, 391 (2d Cir. 1995)). While substantial flexibility is afforded in the application of these factors, district courts are still implored to address each factor. See id. ("Although we have recognized that the application of the Polaroid test need not be rigid, it is nevertheless `incumbent upon the district judge to engage in a deliberate review of each factor, and, if a factor is inapplicable to a case, to explain why.'") (quoting Arrow Fastner Co., 59 F.3d at 400); Nora Beverages. Inc., 269 F.3d at 119. Finally, "[n]o single Polaroid factor is pre-eminent, nor can the presence or absence of one without analysis of the others, determine the outcome of an infringement suit." Id. (quoting Thompson Med. Co. v. Pfizer, Inc., 753 F.2d 208, 214 (2d Cir. 1985)).
Here, the first and second Polaroid factors — the strength of the mark and the similarity of plaintiff's and defendant's marks — have no application because Sally Sherman is admittedly using Bumble Bee's actual trademark and asserts its legal right to do. Comparing the strength or similarity of that mark against itself is obviously not the purpose of the Polaroid test. Turning to the proximity of the goods, tuna fish and tuna salad are very closely related, so that factor favors Bumble Bee. However, there has been no evidence that Sally Sherman will "bridge the gap" by entering the tuna industry nor is there any evidence of actual confusion in this record.
Though Sally Sherman does not use Bumble Bee's logo of a bee, the phrase "Bumble Bee" is also trademarked. (Compl. Ex. A).
Bumble Bee contends that there was actual confusion because Wakefern Corporation, a purchaser of Sally Sherman tuna salad, returned a substantial portion of the tuna salad because it had mistakenly believed that it had purchased Bumble Bee, not Sally Sherman, tuna salad. That contention is disingenuous: the catalyst for the return of that tuna salad was a letter that Bumble Bee sent to Wakefem advising that company that (a) Bumble Bee had instituted legal action against Sally Sherman to prevent distribution of their "illegal" labels and (b) warned ominously of a potential of lost revenue to Wakefern.
Addressing the intentions of Sally Sherman, Bumble Bee argues that defendant acted in "bad faith" because, preceding the creation of the label, it had been accepted into, but rejected an offer to join, Bumble Bee's Quality Assurance Program. Bumble Bee also supports its bad faith claim by contending that Sally Sherman continued to produce the label despite multiple demands by Bumble Bee to cease and desist. This Court is simply not convinced. Sally Sherman advertised a truthful fact in an accurate manner — the source of tuna fish could be the most important factor a delicatessen or supermarket would consider in purchasing tuna salad and Bumble Bee's arguments about Sally Sherman's business decisions give no reason to think that highlighting this ingredient was in bad faith.
The quality of Sally Sherman's tuna salad is another irrelevantPolaroid factor as discussed above. See Prestonettes, 264 U.S. at 368; Champion Spark Plug, 156 F.2d at 492; Forstmann, 144 F. Supp. at 290-91. In addition, there is nothing in the record of this action pertaining to any quality difference in the parties' respective products. Bumble Bee has no trademark right to control the quality of composite products downstream in the market, even if those products are advertised as containing Bumble Bee tuna as one ingredient. Finally, as this Court has already assessed, the purchasers of these five-pound tubs of tuna salad are sufficiently sophisticated to grasp the idea that one company makes the tuna and another takes that tuna, adds things to it, and produces an altered product called tuna salad.
Weighing each of the Polaroid factors and focusing on the paramount issue of potential confusion among consumers, the labels, as placed upon Sally Sherman's five-pound tubs, and as distributed to commercial entities, do not create a likelihood of confusion that Sally Sherman's tuna salad is made by Bumble Bee or that Bumble Bee endorses this tuna salad. See Nora Beverages. Inc., 269 F.3d at 119 (When conducting a Polaroid analysis, "a court should focus on the ultimate question of whether consumers are likely to be confused.") (citing Paddington Corp. v. Attiki Imps Distrib., Inc., 966 F.2d 577, 584 (2d Cir. 1983)).
CONCLUSION
Because there is no likelihood of confusion under these circumstances that Bumble Bee will be viewed as the maker or sponsor of Sally Sherman's tuna salad, and because stating that Sally Sherman tuna salad is made with Bumble Bee tuna is not deceptive, plaintiff has not shown a likelihood of success on the merits. Moreover, plaintiff has failed to demonstrate sufficiently serious questions going to the merits to make them a fair ground for litigation. Accordingly, plaintiff's motion for a preliminary injunction is denied.
SO ORDERED: