24 HOUR FITNESS USA, INC.v.24/7 TRIBECA FITNESS, LLC.

United States District Court, S.D. New YorkApr 22, 2005
No. 03 Civ. 4069 (RLE) (S.D.N.Y. Apr. 22, 2005)

No. 03 Civ. 4069 (RLE).

April 22, 2005


OPINION ORDER


RONALD ELLIS, Magistrate Judge

I. INTRODUCTION

Plaintiff 24 Hour Fitness USA, LLC ("24 Hour Fitness") owns and operates a chain of fitness clubs throughout the United States. In 1996, plaintiff began using the name 24 HOUR FITNESS in connection with its health and fitness facilities. On January 20, 1998, plaintiff registered the name with the United States Patent and Trademark Office ("PTO"). On June 4, 2003, plaintiff commenced this action against 24/7 Tribeca Fitness, LLC ("24/7 Fitness"), 24/7 Gym, LLC ("24/7 Gym"), Peter Williams Enterprises, Incorporated ("Williams Enterprises"), and Peter Williams ("Williams"), alleging that defendants' use of the name 24/7 FITNESS CLUB constituted trademark infringement and unfair competition. On August 27, 2003, the parties consented to have all proceedings before the undersigned pursuant to 28 U.S.C. § 636(c). On August 26, 2004, defendants moved for summary judgment. On August 30, 2004, plaintiff cross-moved for summary judgment on plaintiff's cause of action. For the reasons set forth below, plaintiff's and defendants' motions are DENIED.

II. BACKGROUND

Plaintiff began using the name 24 HOUR FITNESS in connection with its fitness facilities in August of 1996. Plaintiff's Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment of Trademark Infringement and Related Unfair Competition Claims ("Pl. Mem.") at 2. On January 20, 1998, plaintiff registered the name with the PTO under registration number 2,130,895. Id. Since then, plaintiff has expanded substantially, and currently owns and operates approximately 310 health and fitness clubs throughout the United States. Id. at 1. Plaintiff offers various types of fitness clubs under a family of 24 HOUR FITNESS marks, including 24 HOUR FITNESS EXPRESS clubs, 24 HOUR FITNESS SPORTS clubs, and 24 HOUR FITNESS MAGIC JOHNSON SPORTS CLUBS. Id. at 2, 5. The PTO has issued plaintiff seventeen registrations incorporating the 24 HOUR and 24 HOUR FITNESS marks for use in connection with its health and fitness products and services. Id. at 2. Additionally, plaintiff has spent over $100 million advertising its mark and various health-related products and services, including in-club signs, billboards, direct mail, broadcast and electronic media, and placement on merchandise and literature. Id. at 1, 3-4. Plaintiff indicates that it plans to expand its business to New York, but, to date, it has opened no 24 Hour Fitness clubs in this state. Id. at 1.

Defendants 24/7 Fitness and 24/7 own and operate two fitness clubs in Manhattan. Defendants' Local Rule 56.1 Statement of Material Facts ("Def. 56.1") at ¶ 9. One club is located in lower Manhattan at Chambers Street, the other is at West 14th Street. Id. at ¶¶ 15, 18. In September 2001, Williams and non-party Wahday Washington became limited partners in defendant 24/7 Fitness, which owns the Chambers Street facility. Id. at ¶ 18. In September 2002, Williams, through the 24/7 Gym, became the sole shareholder of the 14th Street gym. Id. at ¶ 19. The 14th Street gym began operating under the name 24/7 FITNESS CLUB in or around April 2001. Id. at ¶ 22. The Chambers Street facility had begun using the name in or around February 2001. Id. Defendants did not register the name with the PTO for either location. Pl. Mem. at 3.

On or about July 8, 2002, plaintiff sent defendants a cease and desist letter demanding that defendants discontinue the use of the name 24/7 FITNESS CLUB. Def 56.1 at ¶ 23. On or about August 2, 2002, plaintiff sent a second cease and desist letter. Id. at ¶ 24. Defendants continued to use the name 24/7 FITNESS. Defendants contend that they had no knowledge of plaintiff at the time they adopted the name 24/7 FITNESS CLUB for their health and fitness facilities. Id. at ¶ 28.

On June 4, 2003, plaintiff commenced the present action, alleging that defendants' use of the name 24/7 FITNESS CLUB infringed on plaintiff's trademark in violation of the Lanham Act, and constituted unfair competition under New York General Business Law because defendants' name was confusingly similar to plaintiff's mark. Def 56.1 at ¶ 25. Plaintiff also moved for a preliminary injunction to stop defendants' use of the name 24/7 FITNESS CLUB and the internet address 247 fitnessclub.com. Id. at ¶ 26. Defendants took down the website and stated that they did not plan to re-inittate the site. Id. at ¶ 27. On August 14, 2003, District Judge Swain denied plaintiff's motion for a preliminary injunction. Id. at ¶ 29. On August 27, 2003, the parties consented to jurisdiction by this Court for all purposes. On July 19, 2004, plaintiff amended its complaint, and defendants answered on August 18, 2004.

On August 26, 2004, defendants moved for summary judgment to dismiss plaintiff's claim, alleging that plaintiff's 24 HOUR FITNESS mark was not legally protectable because it was a "merely descriptive" phase that non-distinctively described a fitness club that did not close and because plaintiff could not demonstrate a likelihood of consumer confusion between plaintiff's mark and defendants' name. See generally Defendants' Brief in Support of Defendants' Motion for Summary Judgment to Dismiss Plaintiff's Complaint ("Def. Mot."). On August 30, 2004, plaintiff cross-moved for summary judgment against defendants, alleging trademark infringement and unfair competition.

III. DISCUSSION

A. Summary Judgment Standards

In evaluating a motion under Federal Rule of Civil Procedure 56, the Court reviews the "pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, "to determine if there exists a genuine issue of material fact to preclude the moving party from a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A nonmoving party cannot rely on conclusory allegations or speculation, and "may not rest on the pleadings[,] but must further set forth specific facts in the affidavits, depositions, answers to interrogatories, or admissions showing a genuine issue exists for trial." Cifarelli v. Village of Babylon, 93 F.3d 47, 51 (2d Cir. 1996). A genuine issue exists if "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Furthermore, summary judgment is properly denied in a trademark litigation when there are disputes over "facts that might affect the outcome of the suit under the governing law," Lois Sportswear, U.S.A., Inc. v. Levi Strauss Co., 799 F.2d 867, 876 (2d Cir. 1986), such as facts that pertain to "whether [consumer] confusion [with regard to the parties' trademarks] is likely." Cadbury Beverage v. Cott Corp., 73 F.3d 474, 478 (2d Cir. 1996).

B. Material Issues of Fact in Dispute

There are two main issues of material fact in dispute with respect to plaintiff's and defendants' summary judgment motions: 1) is plaintiff's registered trademark 24 HOUR FITNESS legally protectable; and 2) is there a likelihood of consumer confusion between plaintiff's mark and defendants' 24/7 FITNESS CLUB name.

With regard to the first issue, plaintiff correctly argues that federally registered trademarks are prima facie evidence of a mark's validity. Pl. Mem. at 9; 15 U.S.C.A. § 115(a). However, this does not preclude defendants from asserting "any legal or equitable defense or defect . . . which might have been asserted if such mark had not been registered," including a defense, as alleged here, that the mark is weak and merely descriptive. 15 U.S.C.A. § 1115(a); Abercrombie Fitch Co. v. Hunting World Inc., 537 F.2d 4, 9 (2d Cir. 1976). Considering the parties' opposing positions, a dispute of material fact clearly exists with respect to whether plaintiff's mark is legally protectable. Accordingly, summary judgment on this issue is DENIED.

Turning to the second issue, plaintiff asserts that defendants' should be barred from using the 24/7 FITNESS name because there is a high likelihood of confusion between defendants' name and plaintiff's 24 HOUR FITNESS mark. Pl. Mem. at 10-24. Plaintiff has presented factual evidence, including a consumer survey and witness accounts, to demonstrate that actual confusion existed between the names. Pl.Mem. at 14, 18-20. Defendants, for their part, have submitted exhibits to demonstrate lack of confusion. Def. Opp. at 25; Def. Mot. at 6-21: Def. Mot. Exhibits A-M. It is clear that there exists a material fact in dispute with respect to whether there is a likelihood of confusion between plaintiff's mark and defendants' name. Accordingly, summary judgment on this issue is DENIED.

IV. CONCLUSION

There are material facts in dispute regarding whether plaintiff's trademark is legally protectable and whether there is a likelihood of consumer confusion between the parties' names. Accordingly, plaintiff's and defendants' motions for summary judgment are DENIED.
SO ORDERED.