Opinion
No. 00 Civ. 9077 (JGK)
May 31, 2002
OPINION AND ORDER
This case involves a dispute over whether the defendant, Heneghan Contracting Corporation, which began doing business in 1999, has the right to use its president's and founder's true family name, Heneghan, in connection with its provision of concrete and masonry subcontracting services for commercial construction projects in the New York area. The plaintiff, Henegan Construction Company, Inc., has been doing business since 1959 and bears the true family name of its original president and founder, Paul J. Henegan, as well as of its current president and chief executive officer, Maureen A. Henegan. For this entire period, the plaintiff has provided general contracting and construction management services for commercial interior work in the New York area. The plaintiff contends that the defendant's use of the name "Heneghan" as part of its corporate trade name and service mark is an act of trademark infringement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and is an act of unfair competition and trademark infringement under New York state common law.
Following a three-day non-jury trial, and after having reviewed all of the submissions of the parties and assessed the credibility of all of the witnesses, pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, the Court makes the following findings of fact and reaches the following conclusions of law.
FINDINGS OF FACT
1. The plaintiff, Henegan Construction Company, Inc., is a private corporation organized and existing under the laws of the State of New York, with its principal place of business in New York County, New York. (Pl.'s Ex. 1.)
2. The plaintiff was founded in 1959 by Paul J. Henegan as a service firm with less than ten employees, which provided design, planning and construction services to commercial clientele in the New York area. (Maureen A. Henegan Test. ("Henegan Test."); Rafferty Test.; Joint Pre-Trial Order, Undisputed Facts ("UF") ¶ 4(a).) Over the years, the plaintiff steadily expanded, and, currently, the plaintiff employs approximately 150 employees and is working on over 200 construction projects in New York City. (UF at ¶¶ 4(a), (c), (d).) Since 1995, the plaintiff's annual sales revenues have averaged over $100 million. (Id. at ¶ 4(c).) The plaintiff specializes in general contracting and construction management services for commercial interiors in the New York area. (Id. at ¶¶ 4(a), (f); Henegan Test.)
3. The plaintiff has used its current name for its entire existence. The plaintiff has never applied to register its name as a trademark. (UF. at ¶¶ 4(a)-(b).)
4. The plaintiff's current and past clients include a number of well-known companies such as American Express, AXA/Equitable, Bear Stearns Co., Chase Manhattan Bank, Davis Polk Wardwell, Disney/ABC, Goldman Sachs, JP MorganChase, Lehman Brothers, Morgan Stanley Dean Witter, Paine Webber, Pfizer, Inc. and Time, Inc. (UF at ¶ 4(e).) The plaintiff has established itself as one of the preeminent general contracting and construction management firms for commercial interiors in the New York area. (Ricker Test.; Barbieri Test.; Winchester Test.; Drayton Test.)
5. The plaintiff provides its construction services by employing a combination of full-time employees and subcontractors, who specialize in particular trades such as masonry, carpentry, plumbing, electrical and engineering. (Henegan Test.; Rafferty Test.) Most of the plaintiff's union employees are members of the Mason Tenders, Laborers and Carpentry Unions and some are members of the Operating Engineers and Teamsters Unions. (UF at ¶ 4(g); Rafferty Test.)
6. The potential consumers for the plaintiff's services are typically commercial building owners and managers, commercial tenants, building owner representatives, real estate firms, architects and/or design professionals who seek commercial interior renovations, installations or alterations. (Henegan Test.)
7. The plaintiff typically obtains its contracts by winning a bid for a particular project on the basis of a proposal that the plaintiff submits to the relevant client, and which competes with proposals submitted by other general contracting or construction management firms. Prospective clients ordinarily invite these proposals from firms selected on the basis of their past work and dealings and their reputation for quality services, integrity and professionalism. A very large proportion of the plaintiff's contracts are with past clients. (Henegan Test.)
8. After being awarded a project, the plaintiff will typically set up a temporary office at the job site and place a sign with its name on the door along with signs bearing the mark "HENEGAN" around the construction site. (UF at ¶ 4(p).) The plaintiff also distributes business cards bearing its trade name at job sites and uses one truck bearing the "Henegan" name at its various job sites. (UF at ¶ 4(p); Henegan Test.)
9. The plaintiff has actively promoted its trade name and service mark in a number of consumer and trade publications that are well-known in the construction industry in the New York area, including The New York Times, Crain's New York Business and the Blue Book of Building Construction, which is an industry directory, for the New York and New Jersey areas. (Pl.'s Exs. 8-11, 29.) The plaintiff also lists its company name in the Bell Atlantic business and yellow pages. (Pl.'s Exs. 12-16.)
10. For the past three years, the plaintiff has spent approximately $30,000 per year on advertising in various publications. From 1995 to 1999, its print advertising expenditures averaged about $17,000 per year. (UF at ¶ 4(i).)
11. The plaintiff distributes a promotional brochure describing its services and clients, see Pl.'s Ex. 5, and maintains a website atwww.henegan.com. This website has received as many as 2,000 visitors per year. The plaintiff is currently in the final stages of an update and expansion of its website and brochure. (UF at ¶ 4(j); Henegan Test.)
12. The plaintiff has actively participated in a several well-known trade industry associations, including the Building Contractor's Association ("BCA") and the Building Owners and Managers Association ("BOMA"). The plaintiff's chairman and president, Maureen A. Henegan, is presently the Secretary of the BCA and served as its Treasurer from 1998 to 2000. (UF at ¶ 4(k).)
13. The plaintiff's officers and employees frequently attend industry-sponsored dinners and promotional events. (UF at ¶ 4(l).) These include events hosted by prominent industry organizations such as the National Association of Corporate Real Estate Executives ("Nacore International") and the Irish American Building Society ("IABS"). See Pl.'s Exs., 19, 20-21, 25-27.) The plaintiff often promotes its name at these events by paying for space for an ad or to be listed as a benefactor in the program brochures. (Henegan Test.) Since 1995, the plaintiff has spent over $130,000 in connection with these functions. (UF at ¶ 4(l).)
14. The plaintiff is an active participant in numerous charitable events and has been recognized for its significant contributions to celebrated causes such as the Juvenile Diabetes Foundation, Wildlife Conservation Society, Covenant House, the American Cancer Society, Boy Scouts of America and the Diabetes Research Institute. (Henegan Test.; Pl.'s Exs. 17-18, 23, 24.) Since 1995, the plaintiff's charitable donations have exceeded $500,000. (UF at ¶ 4(m).) These facts have contributed to the plaintiff's reputation for integrity.
15. There have been numerous news articles regarding the plaintiff and its officers in publications such as Crane's New York Business, Engineering News-Record and The New York Times. (UF at ¶ 4(n); Pl.'s Ex. 29.)
16. The plaintiff and its officers have been the recipients of numerous prestigious awards. (Henegan Test.; Pl.'s Exs. 20-21, 23, 51-53, 57.)
17. The plaintiff has received numerous letters commending its services or performance from many of its clients, including Equitable Life Assurance Society, Chase Manhattan Bank, Bear Stearns Co. and Paine Webber. (UF at ¶ 4(o); Pl.'s Exs. 64-81.)
18. The defendant, Heneghan Contracting Corp., is a private corporation organized and existing under the laws of the state of New York, with its principal place of business in Westchester County, New York. (Def.'s Exs. A B.)
19. The defendant was incorporated in 1998 and began doing business under its current name in 1999. (UF at ¶¶ 4(dd), (ee); Heneghan Test.; Cunningham Test.) The defendant currently has under 10 employees, and its annual revenues are approximately $3 million. (UF at ¶ 4(cc).) The defendant's specialty is concrete and masonry construction services, which it typically provides as a subcontractor to general contractors or construction managers on projects in the New York area. (Heneghan Test.; Cunningham Test.)
20. The defendant bears the true family name of its current president and sole shareholder, James A. Heneghan, who has worked in the construction industry in the New York area since in or about 1984. Prior to founding Heneghan Contracting Corp., Heneghan provided similar concrete and masonry services for approximately six or seven years as a project supervisor and then as the sole owner of the M. O'Connor Company. For approximately six years prior to that, Heneghan worked for C.P. Construction, which was located one block away from the plaintiff's office in Manhattan, and, like the plaintiff, provided general contracting services for commercial interior construction work. (Heneghan Test.)
21. Before incorporating, Heneghan submitted three possible names for the defendant to his attorneys to perform a trademark check. The check indicated that one of the names — "Heneghan Contracting Corp." — was available., (Heneghan Test.)
22. The defendant's direct consumers are typically general contractors or construction management firms that do commercial work in the New York area. The defendant does not advertise, does not obtain any of its business by advertising and has not listed its name in industry directories such as the Blue Book. The plaintiff obtains all of its business instead either from repeat clients, from referrals or from personal connections that James A. Heneghan has developed in the construction industry. The defendant has, however, placed one 8.5" by 11" sign on its door in Westchester County, and has had its corporate logo painted onto four trucks that it uses at job sites in the New York area. (Heneghan Test.; Cunningham Test.)
23. The logos used by each of the parties are similar. Each uses a stylized "H" that consists of two pillars reminiscent of skyscrapers attached by a thin connector. The plaintiff also spells its name out, while the defendant uses the stylized "H" as the first letter of the company name. Mr. Heneghan claimed that a printer suggested the logo to him. (Heneghan Test; see also Pl.'s Exs. 3 90.)
CONCLUSIONS OF LAW
1. This Court has original jurisdiction over the plaintiff's Lanham Act claim pursuant to 15 U.S.C. § 1121 and 28 U.S.C. § 1331 and 1338(a). The Court has supplemental jurisdiction over the plaintiff's related state law claims pursuant to 28 U.S.C. § 1367.
2. The plaintiff's first claim for relief is under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Section 43(a) states, in relevant part, that:
[a]ny person who, on or in connection with any . . . services, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, which . . . is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, . . . shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such an act.Id.
3. To succeed on a federal claim for trademark infringement, the plaintiff must, as an initial matter, show that it has a valid mark that is entitled to protection. Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503, 1508 (2d Cir. 1997); The Sports Auth., Inc. v. Prime Hospitality Corp., 89 F.3d 955, 960 (2d Cir. 1996); The Trs. of Columbia Univ. v. Columbia/HCA Healthcare Corp., 964 F. Supp. 733, 742 (S.D.N.Y. 1997). Where, as here, a mark has not been registered, the plaintiff bears the burden of establishing that its mark is valid and protectable.Reese Publ'g Co, Inc. v. Hampton Int'l Communications Inc., 620 F.2d 7, 11 (2d Cir. 1980); GMT Prods., L.P. v. Cablevision, Inc., 816 F. Supp. 207, 210 (S.D.N.Y. 1983).
4. A personal name or surname such as "Henegan" is a descriptive mark that can only be a valid mark entitled to trademark protection if it has acquired secondary meaning in the relevant market. Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337, 345 (2d Cir. 1999);Yarmuth-Dion, Inc. v. D'ion Furs, Inc., 835 F.2d 990, 993 (2d Cir. 1987). A mark acquires secondary meaning when "the primary significance of the term in the minds of the consuming public is not the product but the producer," such that the mark tends to be associated not just with the goods or services but with a single, though possibly anonymous, source. 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 815 F.2d 8, 10 (2d Cir. 1987) (internal quotation marks omitted) (emphasis in original).
5. Factors that are relevant in determining secondary meaning include (1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage, (4) sales success, (5) attempts to plagiarize the mark, and (6) length and exclusivity of the mark's use. Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 142 n. 4 (2d Cir. 1997).
6. The plaintiff's mark has strong secondary meaning in the commercial construction industry in the New York area. The plaintiff has used its mark in this industry for over 40 years with apparent exclusivity and, in this time, has attained enormous sales success, a number of prestigious awards for its services and a very large amount of unsolicited media coverage and letters of commendation relative to its industry. The evidence at trial suggested that direct advertising does not play as critical a role in the construction industry as in some other industries, but the plaintiff has consistently expended a substantial amount in advertising and participating in industry and non-industry events that have promoted its name. The plaintiff has also consistently contributed to charitable events, which have contributed to the plaintiff's reputation for integrity. A number of witnesses who had entered into the construction industry between 1968 to 1987 testified that they learned of "Henegan" shortly after entering the industry and that Henegan is well-known known as a preeminent firm in its field. (See, e.g., Ricker Test.; Barbieri Test.; Winchester Test.) Hence, the "Henegan" trade name has strong secondary meaning and is entitled to protection.
7. Once a mark is found to be entitled to protection under the Lanham Act, the central question is whether the defendant's entrance into the marketplace and its use of its mark will generate a likelihood of confusion among an appreciable number of ordinarily prudent purchasers.New York Stock Exchange, Inc. v. New York, New York Hotel, LLC, 2002 WL 483528, at *4 (2d Cir. Apr. 1, 2002); The Sports Auth., 89 F.3d at 960;Trs. of Columbia, 964 F. Supp. at 743. Courts assessing this likelihood should consider the well-known Polaroid factors: (1) the strength of the senior user's mark, (2) the degree of similarity between the two marks, (3) the proximity of the products or services, (4) the likelihood that the senior user will bridge the gap between the markets, (5) actual confusion, (6) the defendant's good faith in adopting the mark; (7) the quality of the defendant's services, and (8) the sophistication of the consumers. Id.; Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961). "[T]he Polaroid factors . . . should not be applied mechanically;" they are non-exhaustive and "[n]o single factor is dispositive." Arrow Fastener Co. v. The Stanley Works, 59 F.3d 384, 400 (2d Cir. 1995) (internal quotation marks and citations omitted). Any doubts concerning the likelihood of confusion must be resolved in favor of the senior user. The Trs. of Columbia, 964 F. Supp. at 744 (collecting cases). However, in this particular case, the Polaroid factors must also be assessed in light of the plaintiff's particular theory of how the relevant confusion will lead to the commercial injury in this case. The plaintiff contends, in particular, that confusion between the companies' services or about the association between the companies may undermine the plaintiff's general good will in the construction industry and/or place its reputation beyond its control, thus causing some potential consumers to refrain from inviting or accepting proposals from the plaintiff. See The Morningside Group Ltd. v. Morningside Capital Group L.L.C., 182 F.3d 133, 141 (2d Cir. 1999). The Court of Appeals for the Second Circuit has held that:
In order to succeed a plaintiff does not have to show necessarily that consumers would believe that the defendant's goods or services are from the same source as those of the plaintiff. A defendant may also be liable under the Lanham Act where the defendant's actions are "likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association" of the defendant's goods or services with those of the plaintiff. 15 U.S.C. § 1125(a)(1)(A).The Sports Auth., 89 F.3d at 960.
8. The first Polaroid factor, the strength of the plaintiff's mark, is a measure of "its tendency to identify the goods [or services] sold under the mark as emanating from a particular, although possibly anonymous, source." The Sports Auth., 89 F.3d at 960-61 (internal quotation marks omitted). The same factors that go into establishing secondary meaning generally contribute to the strength of a mark. Time, Inc. v. Peterson Pub'g Co., 173 F.3d 113, 117 (2d Cir. 1999). For the reasons discussed above, the plaintiff's mark has very strong secondary meaning and is thus a very strong mark in the commercial construction industry in New York.
9. With regard to the second Polaroid factor, which is the similarity of the marks, the dominant portions of the parties' written marks differ by only one letter, h, a difference that is hardly noticeable to the casual observer. While the defendant argues that its name is pronounced differently than the plaintiff's (as "HEE-nuh-HAN" rather than "HEH-nih-gihn"), the evidence at trial, including testimony from the defendant's secretary, indicated that the defendant's name is often mispronounced by participants in the construction industry, and that the exact same spoken mark is sometimes used by people in the industry to refer to both companies. Both names are also misspelled with some frequency. Even in the papers before the Court the parties have occasionally misspelled the names. Finally, although the plaintiff and the defendant use their marks in combination with slightly different suffixes — with "Construction Co." and "Contracting Corp.", respectively — these suffixes do very little to differentiate the marks in practice, and do almost nothing to prevent possible confusion as to possible associations between the two corporations. This factor strongly supports the plaintiff's case.
10. The third Polaroid factor is the proximity of services, which depends upon both (i) whether and to what extent the two services compete with each other and (ii) the nature of the services themselves and the structure of the relevant market. See Morningside, 182 F.3d at 140;Citigroup Inc. v. City Holding Co., 171 F. Supp.2d 333, 348 (S.D.N.Y. 2001). The plaintiff and the defendant do not typically compete directly for the same clients because the plaintiff is a general contractor, which provides complete packages of construction services to commercial building owners, commercial tenants, and the like, whereas the defendant is a concrete and masonry subcontractor, which typically provides only these more limited services to general contracting firms. However, the defendant's services are substantially the same kinds of services that the plaintiff regularly provides as part of its more comprehensive construction contracts, although the plaintiff generally uses subcontractors to perform these masonry and concrete services. There is no doubt, in these circumstances, that the proximity of the parties' services would contribute to the likelihood that someone discovering that "Henegan" or "Heneghan" had performed a piece of concrete or masonry work would assume that the plaintiff or one of its subsidiaries or associated firms had performed or overseen the work. This factor supports the plaintiff's case.
11. The fourth Polaroid factor, bridging the gap, "refers to the `senior user's interest in preserving avenues of expansion and entering into related fields.'" Hormel Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497, 504 (2d Cir. 1996) (quoting C.L.A.S.S. Promotions, Inc. v. D.S. Magazines, Inc., 753 F.2d 14, 18 (2d Cir. 1985)). This factor is not directly relevant to the present case because the plaintiff alleges a loss of control of reputation and good will due to the defendant's present activities rather than the potential for unfair competition in any market that the plaintiff seeks to enter. Moreover, the plaintiff already provides the services that the defendant provides, although the plaintiff provides those services using subcontractors. This factor slightly supports the plaintiff's case.
12. The fifth Polaroid factor, actual confusion, is not necessary to establish a likelihood of confusion but can often provide highly probative evidence of this likelihood. Les Ballets Trockadero de Monte Carlo, Inc. v. Trevino, 945 F. Supp. 563, 571 (S.D.N.Y. 1996); Streetwise Maps, Inc. v. Vandam, Inc., 159 F.3d 739, 745 (2d Cir. 1998)). Neither of the parties presented consumer surveys or any related surveys addressing actual confusion in this case. However, two witnesses who are members of the plaintiff's potential consumer group testified credibly that if they heard that "Heneghan" (pronounced HEH-nuh-gihn) had performed certain concrete or masonry services, they would assume that the plaintiff was responsible for performing or directing the work. (Ricker Test.; Barbieri Test.) This testimony is direct evidence that the plaintiff's potential consumers may mistake the defendant's work for the plaintiff's. Moreover, the plaintiff established at trial that since the defendant began doing business in 1999, the plaintiff has received a number of misdirected billings, dispatch confirmation sheets, telephone calls and/or visits and communications from vendors, subcontractors, trade unions and other members of the construction industry more generally. These facts provide direct evidence that the defendant's use of its current name can divest the plaintiff of control over its reputation in the general construction industry, which is sometimes relied upon by potential consumers for information about quality, and indirect evidence that potential consumers may make similar mistakes. Although the evidence of actual confusion in this case was not overwhelming, it was also not contraverted, and this evidence weighs in favor of a finding of likelihood of confusion.
13. The sixth Polaroid factor is the defendant's relative good faith in choosing its name. The plaintiff does not argue that the defendant chose to use "Heneghan" in bad faith to capitalize on the plaintiff's good will or reputation. The name "Heneghan" is, moreover, the true family name of the defendant's president and founder, and the president performed a trademark check that indicated that the defendant's current name was unregistered. (Heneghan Test.) Nevertheless, the defendant's president had been in the construction industry in the New York area for approximately thirteen years when the defendant incorporated under its present name, and he had spent a substantial portion of this time working for a general contracting firm that competed directly with the plaintiff and was located only one block away from the plaintiff's office. The plaintiff is well-known in its industry, and the defendant presented no credible evidence that it chose its name in ignorance of the plaintiff's existence and reputation. The defendant's disclaimers of such knowledge were not credible. The defendant also adopted a logo that is strikingly similar to the plaintiff's and did so without any credible explanation. In these circumstances, the sixth Polaroid factor cannot be viewed as favoring either party.
14. The seventh Polaroid factor measures the quality of the parties' services and "is primarily concerned with whether the senior user's reputation could be jeopardized by virtue of the fact that the junior user's product is of inferior quality." Arrow Fastener, 59 F.3d at 398. Although the defendant is a newcomer, it has already performed services on a number of high-profile projects, such as Shea Stadium, Sotheby's Realty and the Hilton Hotels, (UF at ¶ 4(gg)), and there is no evidence that the defendant's current services are of a quality that would tarnish the plaintiff's reputation or good will in any appreciable manner. The plaintiff has nevertheless provided high-quality services for many years, and the consistent provision of such services is a difficult undertaking. The fact that the plaintiff has maintained consistently high-quality services for so many years makes it more likely that it would be damaged if its reputation were placed beyond its control. On balance, this factor thus weighs slightly in favor of the plaintiff.
15. The eighth and final Polaroid factor to consider is the sophistication of the plaintiff's consumers. This factor requires courts to assess the likelihood of confusion in light of the normally prevalent conditions in which transactions take place in a particular industry and the ordinary levels of background and attention that participants commonly bring to the transactions. The Sports Auth., 89 F.3d at 965. In this case, the plaintiff's potential consumers are highly sophisticated businesses that typically go through extensive bidding procedures before awarding contracts, and there is almost no chance that any confusion between the plaintiff and the defendant would ever go unremedied to the point of sale. However, as discussed above, the plaintiff argues that it will be damaged not through diversions of sales to the defendant but from a number of smaller-scale confusions concerning which party was responsible for certain services, which might contribute to losses of good will and damage to the plaintiff's reputation and, ultimately, losses of sales that are harder to trace. See Morningside, 182 F.3d at 141. (Lanham Act protects against confusions that are likely to lead to commercial injury through loss of good will or reputation). In the contexts in which these kinds of smaller-scale confusions may arise, there was no evidence that the sophistication of the plaintiff's consumers or members of the construction industry would reduce the likelihood of confusion in this case. On balance, this factor does not negate the likelihood of confusion, but cannot be said to support the plaintiff's case.
16. For the reasons discussed above, six of the Polaroid factors that are directly relevant to the plaintiff's claim for trademark infringement in this case either support or strongly support the plaintiff's case. The remaining two factors are either neutral or not directly relevant to the plaintiff's particular type of claim. Given that the plaintiff has a valid and protectible mark, and considering these Polaroid factors as a whole, particularly the strength of the plaintiff's mark, the similarity of the marks and the proximity of the services, the plaintiff has established its claims for trademark infringement under the Lanham Act.
17. The plaintiff also raises a claim for unfair competition and trademark infringement under New York State common law. Although these terms are often used interchangeably, they are technically distinct causes of action. See generally Allied Maintenance Corp. v. Allied Mechanical Trades, Inc., 42 N.Y.2d 538, 542 (N.Y. 1977) ("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."). A plaintiff seeking to establish unfair competition on the basis of a defendant's use of a trade name that is allegedly confusingly similar the plaintiff's trade name need not show that the plaintiff's trade name has secondary meaning under New York common law. Flexitized, Inc. v. Nat'l Flexitized Corp., 335 F.2d 774, 780-82 (2d Cir. 1964). However, "the gravamen of a claim [for unfair competition] . . . is the bad faith misappropriation of a commercial advantage belonging to another by infringement or dilution of a trademark or trade name or by exploitation of proprietary information or trade secrets." Eagle Comtronics, Inc. v. Pico Prods., Inc., 682 N.Y.S.2d 505, 506-07 (App.Div. 1998) (collecting cases). For the reasons discussed above, the plaintiff has not argued or established that the defendant chose its current trade name in bad faith, and, hence, the plaintiff has not proven an essential element of his claim for unfair competition.See, e.g., Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1044 (2d Cir. 1980); Capitaland Heating Cooling, Inc. v. Capitol Refrigeration Co., 521 N.Y.S.2d 202, 203 (App.Div. 1987).
18. On the other hand, a plaintiff seeking to establish a common law cause of action for infringement of a mark that has obtained secondary meaning may obtain an injunction in equity if the plaintiff can show that the defendant's use of the trademark is likely to cause confusion, mistake, or deception; actual confusion need not be shown. Frank's Rest, Inc. v. Lauramar Enters., Inc., 711 N.Y.S.2d 433, 435 (N.Y. A.D. 2000). "Nor is it any excuse or justification that defendant is using his own name or any part of it, or that the parties are not in actual competition or in identically the same line of business." Id. (collecting cases). For the reasons discussed above, the plaintiff's mark has secondary meaning and the plaintiff has therefore established its claim for infringement under New York common law.
19. The plaintiff seeks a permanent injunction prohibiting the defendant from using any name that incorporates the terms "Heneghan" or anything confusingly similar to "Henegan" in its trade name. (JPTO at ¶¶ 3(a)(i) (e).) Upon a finding of trademark infringement, a district court has the "power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable." 15 U.S.C. § 1116. However, a finding of trademark infringement does not compel the issuance of a permanent injunction. See Jim Beam Brands Co. v. Beamish Crawford Ltd., 937 F.2d 729, 737 (2d Cir. 1991). Whether a permanent injunction should issue and what its proper scope should be are issues that ultimately depend upon a careful balancing of the total equities in a case, including, but not limited to, the basic fact of infringement. Id.; cf. also Joseph Scott Co. v. Scott Swimming Pools, Inc., 764 F.2d 62, 67-69 (2d Cir. 1985).
20. Heneghan argues that an injunction prohibiting him from using "Heneghan" in any part of his company's name would be inequitable because Heneghan is his true family name and because individuals have a right to use their true family names in their businesses. See, e.g., Taylor Wine Co. v. Bully Hill Vineyards, Inc., 569 F.2d 731 (2d Cir. 1978). The defendant is correct that such a right existed in some form through the beginning of the twentieth century, but since that time the right has been clearly qualified. In particular, if a plaintiff's family name has acquired secondary meaning in an industry, then, under the modern rule, a newcomer's right to use his family name in commercial activities in the industry can be limited to the extent needed to prevent likely injuries to the plaintiff and misperceptions with the public. See, e.g., Basile, S.p.A. v. Basile, 899 F.2d 35, 37-39 (D.C. Cir. 1990); David B. Findlay, Inc. v. Findlay, Jr., 218 N.E.2d 531, 534 (N.Y. 1966); Gucci v. Gucci Shops, Inc., 688 F. Supp. 916, 927 (S.D.N.Y. 1988). "[A] later competitor who seeks to use the same or similar name must take `reasonable precautions to prevent the mistake.'" Taylor Wine Co., 569 F.2d at 734 (quoting L.E. Waterman Co. v. Modern Pen Co., 235 U.S. 88, 94 (1914));see also Basile, 899 F.2d at 37.
21. Where, as here, an injunction serves to limit a person's use of his family name in a business that he has himself nurtured, the injunction should be carefully limited to prevent only those uses that are likely to create appreciable confusion. Hence, "[t]he ultimate aim is to frame an injunction that will avoid confusion in the marketplace, protect a prior company's property interest in its name, and permit an individual to exploit his own identity and reputation in a legitimate manner." Joseph Scott Co., 764 F.2d at 67.
22. In this case, although Heneghan has spent approximately fifteen years in the construction industry in the New York area, Heneghan has performed almost all of this work for companies that did not bear his family name, and Heneghan has spent only a relatively short period of time doing business under the name Heneghan Construction Corp. Moreover, while the defendant obtains much of his current work through personal connections and on the basis of his personal reputation, he produced no evidence at trial that the name of his corporation has contributed in any way to his ability to exploit this personal good will, or that the defendant would lose the ability to exploit these same resources under a different name. The defendant does not obtain its business by advertising, has not spent any money advertising its current name, and the name "Heneghan Construction Corp." has not yet acquired secondary meaning in the construction industry. In these circumstances, if the defendant were to change its name, Heneghan could still put his personal good will to use for his company, and his company could still profit from this good will, simply by identifying Heneghan's role in the company in ordinary business dealings. Any independent good will that his corporation acquires will, in turn, naturally come to be associated with the corporation under a different name. See Bertolli USA, Inc. v. Filippo Bertolli Fine Foods, Ltd., 662 F. Supp. 203, 207 (S.D.N.Y. 1987).
23. Moreover, as discussed above, the evidence at trial indicated that the names "Henegan" and "Heneghan" are often confused with one another in spoken and written form. These names are the dominant portions of the parties' respective trade names, and the addition of suffixes like "Contracting Corp." or "Concrete and Masonry Corp." would do little to avert the likelihood of appreciable confusion concerning the association between the firms in this particular industry. Cf. generally Am. Express Co. v. Am. Express Limousine Serv., 772 F. Supp. 729, 733 (E.D.N.Y. 1991) (infringer was unable to avoid confusion by adding "descriptive or otherwise subordinate matter"); McCarthy on Trademarks § 23.42 at 23-116 (the dominant part of a composite mark is accorded the greatest weight because "it is that which may make the greatest impression on the ordinary buyer"). The use of Heneghan's full name, "James A. Heneghan," would also do little to prevent this kind of confusion, due in part to the fact that there is also a James Henegan who is active in the plaintiff's business. Finally, Heneghan acknowledged at trial that it would be reasonable from the defendant's business perspective to use a name such as "HHC" in large print in the defendant's corporate logo, along with an explanatory phrase in smaller print that stated "James A. Heneghan, President." (Heneghan Test.)
24. In these circumstances, the appropriate remedy is to enjoin the defendant from using the name "Heneghan," or anything otherwise confusingly similar to "Henegan," in his trade name or service mark, while allowing its president, James A. Heneghan, to use his family name in his business activities, and in those of his corporation, in ways that will identify what his precise relationship to his corporation is while taking affirmative steps not to suggest any false association with the plaintiff. See Basile, 899 F.2d at 37. For example, the plaintiff may identify Heneghan's role in the corporation, either underneath the corporate name or by adding his signature and title in such things as the corporation's business cards, brochures, signs, trucks and advertisements. However, if the defendant chooses to do this in his formal logos, letterheads, advertisements, and the like, then he must use James A. Heneghan's full name, and must ensure, more generally, that the name "Heneghan" plays a subsidiary role to the trade name in identifying his corporation. The defendant must also choose a combination of name, logo and/or explanatory phrase that will help disassociate the defendant from the plaintiff.
25. The plaintiff seeks costs and attorney's fees associated with this litigation. Upon establishing a claim for trademark infringement, a plaintiff is entitled to the costs of the action under 15 U.S.C. § 1117(a). However, an award of attorney's fees is available only in "exceptional cases," id., where bad faith has been shown. See Cache, Inc. v. M.Z. Berger Co., No. 99 Civ. 12320, 2001 WL 38283, at *16 (S.D.N.Y. Jan. 16, 2001). In this case, bad faith has not been established. The defendant also had a legitimate claim to the right to use the Heneghan family name in its business activities in some form, and the ultimate question was how to balance this right against the other legitimate rights asserted by the plaintiff. It would be inappropriate to award attorney's fees to the plaintiff in these circumstances.
CONCLUSION
For the foregoing reasons:
1. The plaintiff's claims for trademark infringement under the Lanham Act is granted.
2. The plaintiff's second cause of action, which arises under New York state common law, is granted insofar as it states a claim for trademark infringement and dismissed insofar as it states a claim for unfair competition.
3. The plaintiff's request for the costs associated with this action is granted, and the plaintiff's request for attorney's fees is denied.
4. The plaintiff is directed to submit a proposed judgment within three (3) days of the date of this Opinion and Order. The defendant may submit a counter-judgment two (2) days thereafter. The parties are encouraged to agree upon a form of proposed judgment.