UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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Y A IP Holdings, Inc.,
Plaintiff,
10 Civ 06811 (GBD)
-against-
MEMORANDUM DECISION AND
ORDERLevits Furniture Warehouse Corp., Levits Furniture:
& Bedding Corp. And John Doe Defendant Nos. I
S,
Defendants.
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GEORGE B. DANIELS, District Judge:
On or about December 11, 2007, Plaintiff Y A IP Holdings purchased the registered
trademarks "Levitz" and "You '11 Love it at Levitz" as part of the liquidation of assets in the
Levitz Furniture Corporation's bankruptcy proceeding. Currently, Plaintiff does not use the
marks in commerce but has expressed its intention to begin using the marks by the end of the
year. Defendant is a furniture store named "Levits Furniture Warehouse Corp." in Yonkers, New
York, which has been doing business since May, 2008. On September 13,2010, Plaintiff sought
and this Court issued an ex parte Order to Show Cause why a Preliminary Injunction should not
issue as to Defendants. Argument on Plaintiffs Motion for a Preliminary Injunction was held on
October 12, 20 I O. Plaintiff has currently not established a likelihood of irreparable injury or
success on the merits. Plaintiff s Motion is denied without prejudice.
In order to obtain a preliminary injunction, plaintiff must establish: "(1) the likelihood of
irreparable injury in the absence of such an injunction, and (2) either (a) a likelihood of success
on the merits or (b) a sufficiently serious questions going to the merits to make them a fair
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ground for litigation plus a balance of hardships tipping decidedly towards the party requesting
preliminary relief." Malletier v. Burlington Coat Factory Warehouse Corp., 426 F.3d 532, 536
(2d Cir. 2005). "In trademark disputes, a 'showing of likelihood of confusion establishes both a
likelihood of success on the merits and irreparable harm." Id.
To establish likelihood ofconfusion, the Court considers the non-exclusive Polaroid
factors: (1) the strength of the mark; (2) the degree of similarity of the mark; (3) the competitive
proximity of the products; (4) actual confusion; (5) the likelihood that plaintiff will bridge the
gap; (6) the defendant's good faith in adopting its mark; (7) the quality of defendant's products;
and (8) the sophistication of the purchasers. Brennan's, Inc. v. Brennan's Restaurant L.L.c., 360
F.3d 125, 130 (2d Cir. 2004). "No single factor is dispositive, nor is a court limited to
consideration of only these factors." Id. (citing to Polaroid Corp v. Polarad EIecs. Corp., 287
F .2d 492, 495 (2d Cir. 1961».
The registered Levitz mark is strong. See Sporty's Farm, L.L.c. v. Sportman's Market,
Inc., 202 F.3d 489,497 (2d Cir. 2001). The mark and the allegedly infringing name are similar
although spelled differently. Also, Plaintiff states it will shortly enter the furniture business
utilizing its acquired trademark. These weigh in favor of granting the preliminary injunction.
However, several of the other factors presently do not weigh in Plaintiffs favor when
Plaintiffs non-use of the marks is considered. The third factor, the competitive proximity of the
products, requires an examination of to "what extent the two products compete with each other."
Id. at 131. Now, there are not two products competing with each other in the marketplace.
Plaintiff does not sell any furniture and Levitz has not sold any for several years. Therefore, this
factor does not weigh towards finding a likelihood of confusion.
Plaintiff has not proven that the quality of defendant's product is inferior to any of
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Plaintiffs products. This Court examines the seventh factor, the quality of defendant's products,
with reference to the discrepancies between the senior and junior users. See Savin Corp. v. The
Saving Group, 391 F.3d 439,455 (2d Cir. 2004) ("If the quality of a junior user's product is low
relative to the senior user's, then this increases the chance of actual confusion.")( emphasis
added). Here, PlaintiffYA IP Holdings has not sold any products for this Court to compare to
Defendant's products. While Levitz Corporation may have previously produced high quality
products, it is not necessarily the case that PlaintiffY A IP Holding, as a purchaser of the Mark,
will continue to produce the same quality product. Thus, this factor also does not weigh in
Plaintiffs favor.
Further, Plaintiff has not provided evidence of actual confusion under the fourth Polaroid
factor. In fact, some of Plaintiffs evidence tends to show that sophisticated customers clearly
recognized that Defendant was not in fact associated with the former bankrupt Levitz Furniture
Corporation. See Rillo Aft'. at Ex. 11 (a customer acknowledges that Defendant's name is a
"ripe-off' of Levitz). Though this is a factor that does not need to be proven to establish
likelihood of confusion, the proffered facts do not weigh heavily in Plaintiffs favor. See Savin
Corporation, 391 F.3d at 455.
Plaintiff also has not demonstrated bad faith on the part of the Defendant. This factor
considers "whether the Defendant adopted its mark with the intention of capitalizing on
Plaintiffs reputation and goodwilL" Arrow Fastener Co. v. Stanley Works, 59 F.3d 384, 397 (2d
Cif. 1995) (citation omitted). Defendant was obviously aware of the trademark's prior use.
However, "prior knowledge of a senior user's trademark does not necessarily give rise to an
inferenee of bad faith." Id. Plaintiff has not presented any evidence of bad faith other than the
fact that Defendant was aware of the mark and continued to use its similar name after its
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registration was rejected by the Patent and Trademark Office, and Plaintiff sent a cease and
desist letter. Thus, this factor does not weigh in Plaintiffs favor.
As to the last factor, Plaintiff contends that furniture purchasers are not sophisticated
purchasers. Generally, however, "when the cost of the ...product is high, the courts assume that
purchasers are likely to be more discriminating than they otherwise might be." Savin Corp., 391
F.3d at 459. The price of furniture, even inexpensive furniture, can run into the hundreds of
dollars. See Rillo Aff. at Ex. 10 (showing advertising for furniture ranging from $100 - $900).
This weighs towards finding that the relevant customers are more sophisticated and less likely to
be confused by the two names. Therefore, this factor does not weigh in Plaintiffs favor.
Conclusion
The current record does not demonstrate likelihood of irreparable injury or success on the
merits to support the issuance of a preliminary injunction. Therefore, Plaintiffs motion for a
preliminary injunction is denied. However, given that this conclusion rests, in part, on Plaintiffs
non-use of the Mark since it was acquired over 34 months ago, Plaintiffs motion is denied
without prejUdice. Plaintiff may renew its motion should they begin using the mark to sell
furniture.
Dated: October 13,2010
New York, New York
SO ORDERED:
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