Opinion
02 Civ. 1465 (VM) (KNF)
August 1, 2002
MEMORANDUM AND ORDER
In the instant action, which contains allegations of, inter alia, unfair competition and trademark infringement, the parties have informed the Court, through written submissions, of disputes regarding discovery demands. The Court has reviewed the parties' submissions; their disputes are addressed below.
Defendant's Requests for Documents
Defendant Prime Jewelry, Inc. ("PJI") submitted eight categories of document requests; the Court's analysis of each category follows:
Category I: Documents Related to the Actual Use of the Plaintiff's Asserted Trademarks
In its complaint, plaintiff PAJ, Inc. ("PAJ") asserted two trademarks: PRIME ART JEWEL and PRIME ART JEWEL and PA. Defendant seeks documents related to the actual use of the trademarks, including: (i) documents sufficient to show actual use of the marks since the commencement of use; (ii) examples of all past, current and proposed advertising documents and other promotional materials bearing the marks; (iii) documents evidencing the type of goods or services, geographical areas, channels of trade and categories of customers associated with the marks; and (iv) marketing plans relating to goods and services offered in connection with the marks. Defendant asserts that the documents should be disclosed because they are reasonably calculated to lead to the discovery of evidence of the strength or weakness of the asserted marks. The strength of a mark is its power to identify the source of a product, see Time, Inc. v. Petersen Publ'g Co. L.L.C., 173 F.3d 113, 117 (2d Cir. 1999), and is one factor in the Second Circuit's analysis of a claim of trademark infringement see id.
Plaintiff opposes defendant's requests. Plaintiff contends that registrations for both marks are "incontestable" under the Lanham Act, that continuous use between registration and incontestability is presumed and that, therefore, documents related to the actual use of the asserted marks for the period prior to incontestability are irrelevant to the subject matter of the instant action. Plaintiff also contends that defendant's inquiries pertain, not to the strength of the marks, but to their "secondary meaning," or descriptiveness. A mark acquires secondary meaning when it has become distinctive of the goods in commerce. See id. According to plaintiff, since an incontestable mark cannot be invalidated for lack of secondary meaning, there is no admissible discovery to be had with respect to the actual use of the marks.
The registration of a trademark creates the presumption that the mark is entitled to protection. Registration of a trademark is prima fade evidence of the trademark's validity and of the registrant's ownership of, and exclusive right to use, the trademark. See Paco Sport, Ltd. v. Paco Rabanne Parfums, 86 F. Supp.2d 305, 311 (S.D.N.Y. 2000). Furthermore, if a registered trademark becomes "incontestable" after five years of continuous use, the presumptions of validity, ownership and exclusive right to the use of the mark become irrebuttable, and the mark is conclusively presumed to be valid and entitled to protection. See id. 15 U.S.C. § 1065.
The Court finds that non-privileged documents related to the actual use of the asserted trademarks, PRIME ART JEWEL and PRIME ART JEWEL and PA, are relevant to the subject matter involved in the pending action. See Fed.R.Civ.P. 26(b)(1).
Plaintiff asserts, inter alia, claims of trademark infringement under 15 U.S.C. § 1114 (1)(a), and of unfair competition, false designation of origin and false description under 15 U.S.C. § 1125 (a). To prevail on a trademark infringement claim under these provisions, a plaintiff must demonstrate that its trademark is valid and entitled to protection and that the contested use of the trademark is likely to cause confusion. See Time, Inc., 173 F.3d at 117. In the Second Circuit, courts consider eight factors in evaluating the likelihood that contested use of a trademark will cause consumer confusion. See id. (citing Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 [2d Cir. 1961]). The first of these Polaroid factors is the strength of the plaintiff's mark, that is, its power to identify the source of a product. See id.
The types of documents defendant seeks under the rubric of "actual use" — documents showing actual use of the marks since the commencement of use, examples of promotional materials bearing the marks, documents evidencing the type of goods associated with the mark, and marketing plans relating to goods offered in connection with the marks — are reasonably calculated to provide evidence of the strength or weakness of plaintiff's asserted marks. Since the strength or weakness of the asserted marks is a factor in determining whether plaintiff may prevail on its claim of infringement, documents containing information relating to this issue are relevant to the subject matter of the pending action.
Although, as plaintiff asserts, the asserted marks are incontestable and, therefore, conclusively presumed to be valid and entitled to protection, incontestable status does not preclude a defendant in an infringement action from questioning the strength of the mark and the scope of its protection. See Cullman Ventures, Inc. v. Columbian Art Works, Inc., 717 F. Supp. 96, 121 (S.D.N.Y. 1989).
Furthermore, "strength" and "secondary meaning" are distinct legal concepts. See 2 J. T. McCarthy, Trademarks Unfair Competition § 11:82. "While `secondary meaning' is an issue of validity for non-inherently distinctive designations, "strength" is an enquiry into a factor leading to the determination of infringement of any kind of mark. The common denominator is the nature of the evidence used to support both legal concepts." Id. Even though secondary meaning is conclusively presumed for a mark with an incontestable registration, that does not automatically establish a conclusive presumption of strength in a likelihood of confusion analysis. See id.
Since the same type of evidence may support a claim concerning the strength of a mark and a claim concerning its secondary meaning, PAJ's contention that the documents defendant seeks pertain only to the secondary meaning of the asserted trademarks and hence are not discoverable is without merit. If the documents defendant seeks are likely to provide information concerning the marks' secondary meaning, then they are likely to provide information concerning the marks' strength, as well. See Time Inc., 173 F.3d at 117 ("In somewhat circular fashion, consideration of [the strength of a mark] includes an evaluation of the same characteristics that initially determined a mark's validity: inherent distinctiveness, descriptiveness, and secondary meaning.") Since the strength of plaintiff's asserted marks relates directly to its claim of trademark infringement, the documents defendant seeks are relevant to the subject matter of the pending action. Accordingly, plaintiff shall disclose to the defendant materials related to the actual use of the asserted marks.
Category II: Documents Related to the Trademark PRIME ART
Plaintiff contends that since it has not asserted the registration for the trademark, PRIME ART, in the instant action, any documents related to this term are irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Defendant states that it is willing to withdraw this request only if plaintiff affirms in writing that PRIME ART will not be added to the action or referred to by plaintiff in connection with its assertion of the two registered marks against the defendant.
The Court finds that since the trademark, PRIME ART, is not asserted by the plaintiff in the instant action, documents related to this term are irrelevant to the subject matter of this action and need not be disclosed by the plaintiff to the defendant.
Category III: Documents Related to the Selection of the Asserted Trademarks
Defendant seeks documents related to the selection of the asserted marks, including documents concerning the conception, creation or design of the marks and any investigation by the plaintiff, such as a trademark search, related to the use or registration of the marks. Plaintiff asserts that the marks are incontestable and therefore cannot be invalidated for reasons other than abandonment, genericization or fraud, which defendant has not asserted in its answer; therefore, according to plaintiff, documents pertaining to its decision to use the asserted marks are not reasonably calculated to lead to the discovery of admissible evidence.
Defendant contends that plaintiff's actions in choosing the asserted marks are discoverable because the existence of abandonment, genericization or fraud could be revealed in plaintiff's responses to the requests, "thus reinforcing their appropriateness."
Genericization, abandonment and fraud are grounds upon which an incontestable trademark may be invalidated. See Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 195, 105 S.Ct. 658, 662 (1985) (noting that, pursuant to 15 U.S.C. § 1115 (b), an uncontested mark may be cancelled at any time if it becomes generic, has been abandoned, is being used to misrepresent the source of goods or services in connection with which it is being used, or was obtained fraudulently). Marks that constitute a common descriptive name are referred to as generic; generic terms are not registrable, and a registered mark may be cancelled at any time on the grounds that it has become generic. See id. at 194, 661. A trademark is deemed abandoned "[w]hen its use has been discontinued with intent not to resume such use." See 15 U.S.C. § 1127; Pilates, Inc. v. Current Concepts, Inc., 120 F. Supp.2d 286, 306 (S.D.N.Y. 2000). A party seeking cancellation of a registered trademark on grounds of fraud must demonstrate the alleged fraud by clear and convincing evidence. See Orient Express Trading Co., Ltd. v. Federated Department Stores, Inc., 842 F.2d 650, 652 (2d Cir. 1988). The allegedly fraudulent statements must show a deliberate attempt to mislead the Patent and Trademark Office and may not be the product of mere error or inadvertence. See id.
In this case, the defendant has not shown, or even suggested, that the asserted marks have become generic, been abandoned, or were obtained fraudulently. The defendant did not present claims of genericization, abandonment or fraud in its answer and has not provided any evidence of a good faith basis to raise these defenses at this time. Defendant may not seek documents related to the selection of the asserted marks merely because information may be revealed therein upon which to base an amended pleading in the future. See, e.g., Surles v. Air France, No. 00 Civ. 5004, 2001 WL 815522, at *4 (S.D.N.Y. July 19, 2001) (noting that discovery requests may not be based on pure speculation or conjecture). Accordingly, documents related to the selection of the asserted marks are irrelevant to the subject matter of this action and need not be disclosed by the plaintiff to the defendant.
Category IV: Licenses Granted by Plaintiff
Defendant seeks all agreements, contracts and licenses granted by plaintiff to anyone to use the asserted marks in connection with any product or service. Plaintiff asserts that licenses under the marks are irrelevant to whether PJI infringes one or more of the marks or has engaged in unfair competition. Defendant contends that licenses can be one of the proofs of the strength of a mark and, thus, inquiries about them are reasonably calculated to lead to the discovery of admissible evidence.
The Court finds that agreements, contracts and licenses granted by plaintiff to others to use the asserted marks in connection with goods or services are reasonably calculated to lead to the discovery of evidence of the strength or weakness of the asserted marks. See, e.g., Twentieth Century Fox Corp. v. Marvel Enterprises, Inc., 155 F. Supp.2d 1, 21 (S.D.N.Y. 2001) (noting that the properly licensed use by licensees of a mark will serve to increase the strength of the licensed mark). As noted earlier, the strength of a mark is one factor in an analysis of a claim of trademark infringement. Therefore, documents belonging to the category of licenses granted by plaintiff are relevant to the subject matter of this action and shall be disclosed by the plaintiff to the defendant.
Category V: Documents Related to the Prosecution History of the Trademarks
Defendant seeks documents related to the prosecution history, if any, of the asserted marks, including any objection, challenge or inquiry based on plaintiff's alleged rights in the marks, documents relating to the registration of or application for the asserted marks, and the result of any administrative or judicial proceedings or arbitrations involving use of the asserted marks. Plaintiff objects that PJI has not asserted any permissible statutory ground for invalidating the marks and that defendant's claims of possible abandonment or fraud are insufficient to support its assertion that the subject documents are discoverable.
The Court finds that documents related to the prosecution history, if any, of the asserted marks are reasonably calculated to lead to the discovery of evidence of the strength or weakness of the asserted marks. Since the strength of a mark is one factor considered by the courts in analyzing claims of trademark infringement, documents belonging to this category are relevant to the subject matter of the action and shall be disclosed by the plaintiff to the defendant.
Category VI: Documents Identifying Plaintiff's Customers
Defendant seeks documents sufficient to identify the five biggest customers of plaintiff in the United States in terms of sales of products or services conducted under the asserted marks. Plaintiff opposes the request on the ground that information related to PAJ's customers is both proprietary and irrelevant to the subject matter of the action. Defendant has submitted a proposed protective order for plaintiff's review. Plaintiff states that it will address the defendant's proposed protective order separately.
Under Fed.R.Civ.P. 26(c), a court, upon a showing of good cause, may "make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." Fed.R.Civ.P. 26(c). In the context of a claim of confidential business information, "this standard demands that the company prove that disclosure will result in a clearly defined and very serious injury to its business." Gelb v. American Tel. Tel. Co., 813 F. Supp. 1022, 1034 (S.D.N.Y. 1993) (internal quotations omitted) (citations omitted).
Public disclosure of documents identifying plaintiff's five biggest customers has a potential for causing a serious injury to plaintiff's business. Therefore, the business privacy interests of the plaintiff provide an adequate basis for the issuance of a protective order. Recognizing this, the defendant has agreed to the granting of a protective order and, indeed, has proposed such an order for plaintiff's review. Therefore, the Court finds that information contained in documents identifying plaintiff's customers shall be withheld from public disclosure and that the parties shall confer and, on or before August 22, 2002, submit a proposed protective order for the Court's review.
Category VII: Documents Identifying Jewelry Companies Using the Term PRIME
Defendant seeks all documents reflecting the identity of each and every company in the jewelry field whose name, either currently or some time in the last ten years, has incorporated or included the term PRIME. Plaintiff objects to the request on the grounds that the marks are incontestable, that the use by other companies of the term PRIME in connection with jewelry is irrelevant to the subject matter of this action, and that the request is overbroad and burdensome.
The Court finds that the request as presented by the defendant is potentially burdensome. See Fed.R.Civ.P. 26(b)(2). However, if narrowed, the request may be lead to the discovery of evidence of the strength of the asserted marks and, therefore, may be relevant to the subject matter of the pending action. See, e.g., The Sports Authority, Inc. v. Prime Hospitality Corp., 89 F.3d 955, 961 (1996) (observing that third-party use of the words "sports authority" may be relevant to the strength of plaintiff's mark). Therefore, on or before August 22, 2002, defendant shall submit an amended request for documents identifying the companies in the jewelry field whose names have included the term PRIME. The request shall be limited to documents identifying those companies located within a reasonably restricted geographical area and whose use of the term PRIME occurred within a reasonably restricted period of time.
Category VIII: Documents Related to Witnesses and Trial
Defendant seeks all documents relied upon by each of plaintiff's expert witnesses and all documents plaintiff intends to rely on at trial or in discovery. Plaintiff objects to the requests on the ground that they are premature.
Rule 26(a)(2) of the Federal Rules of Civil Procedure, titled "Disclosure of Expert Testimony," provides, in pertinent part:
[A] party shall disclose to other parties the identity of any person who may be used at trial to present evidence under Rule 702, 703 or 705 of the Federal Rules of Evidence. . . . In the absence of other directions from the court or stipulation by the parties, the disclosures shall be made at least 90 days before the trial date or the date the case is to be ready for trial or, if the evidence is intended solely to contradict or rebut evidence on the same subject matter identified by another party . . . within 30 days after the disclosure made by the other party.
Fed.R.Civ.P. 26(a)(2)(A) and (C).
Rule 34 of the Federal Rules of Civil Procedure provides in pertinent part:
Any party may serve on any other party a request . . . to produce and permit the party making the request . . . to inspect and copy, any designated documents (including writings . . . and other data compilations from which information can be obtained . . .) or to inspect and copy . . . any tangible things which constitute or contain matters within the scope of Rule 26(b) and which are in the possession . . . of the party upon whom the request is served.
With respect to expert testimony and documents to be relied upon by expert witnesses, discovery shall be governed by Rule 26(a)(2) of the Federal Rules of Civil Procedure. With respect to defendant's request for documents that plaintiff intends to rely on at trial, plaintiff shall disclose any documents in their possession that are within the scope of Rule 26(b) of the Federal Rules of Civil Procedure, as provided in Fed.R.Civ.P. 34(a).
Plaintiff's Document Requests and Interrogatories
Plaintiff submitted twenty-nine document requests and eighteen interrogatories to defendant; the Court's analysis of the requests and interrogatories that are in dispute follows.
Plaintiff seeks all documents and things referring or relating to the factual basis for PJI's assertions that: a) PAJ has not suffered and does not continue to suffer monetary harm and irreparable injury as a result of PJI's activities; b) the asserted trademarks have no secondary meaning and therefore are invalid and unenforceable; c) claims based on the Lanham Act, New York State law and common law unfair competition are without merit in that there is no likelihood of confusion; d) PAJ is barred by the doctrine of acquiescence from pursuing its claims against the defendant; e) PAJ is estopped from pursuing its claims against the defendant because the defendant relied to its detriment upon plaintiff's failure to assert its causes of action at the time defendant commenced doing business; and f) PAJ is barred by the doctrine of laches from pursuing its claims against the defendant.
PJI objects to each of these requests on the ground that the request "calls for a legal conclusion." Plaintiff asserts that the defendant's objection is insufficient because each of the defendant's assertions requires factual support.
Based on the parties' submissions, the Court has determined that defendant shall disclose to plaintiff in response to the above referenced requests, all non-privileged documents relevant to the defenses asserted in paragraphs 1-5 of the section titled "Affirmative Defenses" of defendant PJI's answer to the complaint of PAJ. See Fed.R.Civ.P. 26 (b)(1).
Plaintiff also seeks documents sufficient to identify each display or publication in which PJI has displayed or will display any of its goods and services with the mark PRIME JEWELRY, INC. Defendant opposed the request on the ground that it sought documents protected by the attorney-client privilege or the attorney work-product doctrine. Defendant supplemented its objection subsequently to state that it had produced to plaintiff representative advertisements and will produce any additional documents which may be responsive to this request, except that it objects to the request as it applies to future plans to promote its products, on the ground that the request in this respect is overly broad and burdensome and encompasses confidential and proprietary business plans.
The parties appear to have resolved their dispute regarding documents sufficient to identify displays or publications in which PJI has promoted its goods and services with the mark PRIME JEWELRY, INC. With respect to documents related to defendant's plans to promote its goods and services in the future, defendant shall disclose such documents only to the extent that they are reasonably calculated to lead to the discovery of admissible evidence.
Plaintiff also seeks documents that PJI created or reviewed that refer to any trademark searches or other investigations of third-party marks that PJI conducted in connection with the creation or selection of the mark.
Defendant opposes the request on the ground that it sought documents protected by the attorney-client privilege or the attorney work-product doctrine. Plaintiff contends that, if defendant wishes to assert privilege for documents that clearly are publicly available, it must expressly represent that no non-privileged relevant documents exist.
Based on the parties' submissions, the Court finds that if there are non-privileged documents related to searches or other investigations conducted by the defendant in connection with its selection of the mark PRIME JEWELRY, INC, defendant shall disclose such documents to the plaintiff.
Plaintiff submitted interrogatories requesting that defendant identify the factual basis for PJI's: a) denial that PAJ has no adequate remedy on its First Cause of Action without the intervention of the court; b) denial that PAJ has suffered and continues to suffer monetary harm and irreparable injury as a result of PJI's activities; c) assertion that the asserted trademarks have no secondary meaning and therefore are invalid and unenforceable; d) assertion that claims based on the Lanham Act, New York law and common law unfair competition are without merit in that there is no likelihood of confusion; e) assertion that PAJ is barred by the doctrine of acquiescence from pursuing its claims against the defendant; f) assertion that PAJ is estopped from pursuing its claims against the defendant because the defendant relied to its detriment upon plaintiff's failure to assert its causes of action at the time defendant commenced doing business; and g) assertion that PAJ is barred by the doctrine of laches from pursuing its claims against the defendant.
PJI objects to each of these requests on the ground that it has identified by name individuals who have knowledge or information regarding PJI's awareness of PAJ prior to February 7, 2002. Plaintiff asserts that the defendant's objection is insufficient because merely identifying the individuals in question does not identify the factual basis for the denials and assertions presented in defendant's answer to the complaint.
Plaintiff also submitted an interrogatory seeking identification by name, custodian, location and general description of all documents and other physical evidence relevant to the subject matter of the instant action. Plaintiff contends that PJI's response to this interrogatory is inadequate because PJI failed to identify the referenced documents by general description as required and did not assert an objection to this requirement.
Local Civil Rule 33.3 of the Local Rules of the United States District Courts for the Southern and Eastern Districts of New York provides, in pertinent part:
[A]t the commencement of discovery, interrogatories will be restricted to those seeking names of witnesses with knowledge of information relevant to the subject matter of the action . . . and the existence, custodian, location and general description of relevant documents, including pertinent insurance agreements, and other physical evidence, or information of a similar nature. . . . During discovery, interrogatories other than those seeking information described . . . above may only be served (1) if they are a more practical method of obtaining the information sought than a request for production or a deposition, or (2) if ordered by the court.
Based on the parties' submissions, the Court finds that the defendant need not supplement its response to those interrogatories seeking the factual basis for the denials and affirmative defenses contained in defendant's answer. During discovery, plaintiff may depose the individuals defendant has disclosed or, if this proves not to be a practical method of obtaining the information sought, may serve additional interrogatories. However, defendant shall supplement its response to plaintiff's interrogatory seeking a general description of relevant documents by disclosing this information to plaintiff on or before August 22, 2002.
SO ORDERED.