Source: https://casetext.com/case/american-ort
Timestamp: 2019-04-22 14:34:31+00:00

Document:
Kathleen Elizabeth McCarthy, Esq., Joseph Colin Foley, Esq., Morgan Finnegan, LLP, New York, New York, Counsel for Plaintiff.
Jacob Steven Wharton, Esq., Michael E. Ray, Esq., Womble Carlyle Sandridge Rice, PLLC, Winston-Salem, North Carolina, Counsel for Plaintiff.
Daniel Simon Ebenstein, Esq., Chester Rothstein, Esq., Holly Pekowsky, Esq., Michael Joshua Kasdan, Esq., Amster, Rothstein Ebenstein LLC, New York, New York, Counsel for Defendant.
With this action, two formerly affiliated charitable organizations continue, in federal court, a trademark dispute that was initiated in January before the United States Patent and Trademark Office. Plaintiff, American ORT, Inc., brings this case under the Trademark Act of 1946 (the "Lanham Act"), 15 U.S.C. § 1051 et seq., alleging that Defendant, ORT Israel, violated Plaintiff's registered trademark through Defendant's use of the word "ORT" in its American fundraising efforts. On May 8, 2007, Plaintiff filed this Motion, which seeks to preliminarily enjoin Defendant from using the ORT mark to solicit charitable donations in the United States. The Motion was fully briefed on June 13, 2007, and the Court heard oral argument on June 20, 2007. Because there is no material disagreement as to the facts, the Court did not conduct a factual hearing. For the following reasons, Plaintiff's Motion for a Preliminary Injunction is GRANTED.
World ORT, an umbrella organization, was founded in 1921. (Pl.'s Mem. 3.) Plaintiff was founded in the United States in 1922 under the name American ORT Society. (Kessler Aff. ¶ 10; Compl. ¶ 9.) Plaintiff is not the only non-profit organization operating in the United States that uses the word ORT in its name. Both World ORT and Women's American ORT ("WAO"), an organization founded in 1927 as an affiliate of American ORT, conduct fundraising activities in the United States. According to Plaintiff, World ORT's fundraising efforts "are generally limited to Jewish federations" and "are conducted in coordination with and [with] the approval of American ORT." (Nadler Aff. ¶ 1.) Plaintiff also claims that, "[f]rom the beginning, American ORT and Women's American ORT were connected," noting, for example, that one of the founders of WAO was the wife of one Plaintiff's founders. (Id.) WAO's 1969 incorporation papers identify WAO as a "member" of American ORT, and in an agreement executed that same year, Plaintiff gave WAO express permission to use the ORT name on the condition that WAO cease using that name if WAO ever disassociated itself from Plaintiff. (Kessler Aff. II ¶¶ 2, 5.) Defendant disputes this connection between Plaintiff and WAO, arguing that the two organizations are distinct, autonomous entities, each independently using the word "ORT" in its domestic literature and fundraising.
A trademark infringement claim is analyzed under a two-prong test: "First, [courts] look to see whether plaintiff's mark merits protection, and second, whether defendant's use of a similar mark is likely to cause customer confusion." Dooney Bourke, Inc., 454 F.3d at 115; see also Greenpoint Fin. Corp. v. Sperry Hutchingson Co., 116 F. Supp. 2d 405, 409 (S.D.N.Y. 2000) ("To prevail on a claim for infringement under the Lanham Act, a plaintiff must show that (1) it has a distinctive mark subject to protection; and (2) the defendant's mark results in a likelihood of confusion."). "The first of these questions relates closely to the second, because a trademark's distinctiveness — the key consideration in assessing its protectability — is also a factor in determining the likelihood of confusion." Playtex Prods., Inc. v. Georgia-Pac. Corp., 390 F.3d 158, 161 (2d Cir. 2004).
A defendant in a trademark infringement action may also prevail by establishing certain enumerated defenses, including the defense of "fair use." See 15 U.S.C. § 1115(b) (listing defenses under the Lanham Act). Under the fair use defense, where "a mark incorporates a term that is the only reasonably available means of describing a characteristic of another's goods, the other's use of that term in a descriptive sense is usually protected by the fair use doctrine." EMI Catalogue P'ship v. Hill, Holliday, Conners, Cosmopulos Inc., 228 F.3d 56, 65 (2d Cir. 2000). Here, although Defendant notes that it "would be impossible in view of its history" for Defendant to identify its product without using the ORT brand (Def.'s Mem. 7), Defendant does not raise the defense of fair use. Therefore, because that issue has not been presented, the Court does not address what use of the ORT mark, if any, might constitute fair use given Defendant's historical relationship to Plaintiff's mark.
(1) generic terms, which refer to the genus or class of which the product is a species, and are not entitled to protection even with proof of secondary meaning, i.e., proof that the public has come to associate the term with a particular source; (2) descriptive terms, which convey an immediate idea of some characteristic or attribute of the product and are entitled to protection with proof of secondary meaning; (3) suggestive terms, which require some imagination on the part of the consumer to ascertain the nature of the product, and are thus distinctive enough to be entitled to protection even without proof of secondary meaning; and (4) arbitrary or fanciful terms, which are so distinctive and indicative of a product's source, rather than its qualities or attributes, that they, unlike suggestive terms, enjoy trademark protection without the need of debating whether they are "merely descriptive."
"A generic mark is one that refers to the genus of which the particular product is a species. However, a mark is not generic when the primary significance of the term in the minds of the consuming public is not the product but the producer." Pilates, Inc. v. Current Concepts, Inc., 120 F. Supp. 2d 286, 296 (S.D.N.Y. 2000) (citations and quotations omitted). Descriptive terms, in contrast, "are those that describe a thing, or `how it is,' rather than name that thing, or `what it is.'" Horizon Mills Corp. v. QVC, Inc., 161 F. Supp. 2d 208, 212 (S.D.N.Y. 2001). This distinction is more "one of degree" than of kind, id., and courts have recognized the difficulties involved in delineating these definitions. See Papercutter, Inc., 900 F.2d at 562 (noting that the categories of trademark terms are "difficult of definition"). Terms that designate a "particular region, cultural movement, or legend" have been found to be generic, Otokoyama Co. v. Wine of Japan Imp., Inc., 175 F.3d 266, 271 (2d Cir. 1999), and a term found to be generic will not be protected by the Lanham Act even though it is in a language other than English. Id. at 271.
In determining whether a term is generic or descriptive, courts assess the term's "`primary significance' to the buying public." Horizon Mills Corp., 161 F. Supp. 2d at 212; see also Pilates, 120 F. Supp. 2d at 296 (stating that the genericness inquiry turns on the "primary significance of the term in the minds of the consuming public"). In the Second Circuit, courts making this assessment look to several factors, including: "(i) proof of widespread use by competitors that has not been contested by the seller; (ii) generic use by the seller himself; (iii) dictionary definitions; (iv) media usage, such as newspaper or magazine articles; and (v) consumer surveys." Horizon Mills, 161 F. Supp. 2d at 214; accord Pilates, 120 F. Supp. 2d at 297.
Notably, in making this assessment, marks that have been registered with the USPTO are afforded a presumption of validity. See Lemme v. NBC, Inc., 472 F. Supp. 2d 433, 442 (E.D.N.Y. 2007) ("[T]he fact that the USPTO accepted Plaintiff's mark for registration creates a presumption that the mark is valid."). Moreover, if the USPTO accepts a mark for registration without requiring "proof of secondary meaning," courts recognize a "presumption that the mark is more than merely descriptive, and, thus, that the mark is inherently distinctive." Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337, 345 (2d Cir. 1999). This "confers a procedural advantage on the registrant in an infringement action: the opposing party must overcome the presumption that the purchasing public perceives the mark to be inherently distinctive." Id.; see also Lemme, 472 F. Supp. 2d at 443 ("The burden . . . therefore shifts to Defendant to proffer evidence that the mark is not valid, i.e., that it is generic or descriptive with no secondary meaning."). Accordingly, a defendant seeking to invalidate a registered trademark bears the burden of establishing, by a preponderance of the evidence, that the mark is either generic or descriptive. See Papercutter, Inc., 900 F.2d at 563 ("[A] defendant may petition for cancellation of the plaintiff's registration . . . by rebutting the presumption of a plaintiff's right to exclusive use of a registered mark by a preponderance of the evidence.").
In an attempt to avoid this burden, Defendant argues that Plaintiff was able to register its mark only by misleading the USPTO and that, therefore, the Court should not apply the usual presumption of distinctiveness. However, Defendant has not pleaded "fraud on the USPTO," cf, Louis Vuitton Malletier v. Dooney Bourke, Inc., No. 04 Civ. 5316, 2006 WL 2807213, at *4-*5 (S.D.N.Y. Sept. 28, 2006) (listing elements of "fraud on the [US]PTO"), and, indeed, has admitted that "we don't have a basis yet to call it fraud." (Hr'g Tr. 56, June 20, 2007.) Accordingly, the Court will apply the presumption of distinctiveness, although Defendant will be permitted to attempt to rebut the presumption by reference to any facts that were allegedly misrepresented.
Third, Defendant has failed to demonstrate that the term ORT is used generically or descriptively in the media, "such as [in] newspaper or magazine articles." Horizon Mills Corp., 161 F. Supp. 2d at 214. The few articles that are part of the record use the term ORT primarily, if not exclusively, as a proper name to identify either World ORT or the various affiliated "ORT chapters operating in 56 countries" (Kasdan Aff., Ex. 16, 44-45), not to denote a cultural movement. Cf. Pilates, 120 F. Supp. 2d at 300-02 (finding genericness where defendant submitted 775 articles, a book, and several videotapes of news broadcasts, all of which primarily used the term "Pilates" generically). Finally, Defendant has not submitted a consumer survey that might establish that the term ORT is generic. See Horizon Mills Corp., 161 F. Supp. 2d at 214 (noting that courts consider consumer surveys as a factor in determining a mark's genericness); cf. Pilates, 120 F. Supp. 2d at 302-04 (finding genericness where defendant submitted a survey of 273 people in which "everyone surveyed described Pilates as a type of exercise," not as a brand).
Because the Court makes this finding, Defendant's reliance on First Church of Christ, Scientist v. Evans, 520 A.2d 1347 (N.J. 1987), is inapposite. In Evans, the New Jersey Supreme Court held that an individual Christian Science church that had previously been affiliated with the national Christian Science "Mother Church" could still use the Christian Science name despite having broken ties with the national organization. Unlike the instant case, however, the Evans court based its decision on its finding that the term "Christian Science" was generic and therefore was unprotected under the Lanham Act. Id. at 1354 ("[W]e have concluded that `Christian Science Church' is generic. . . ."). Because Defendant has failed to rebut the presumption that the term ORT is distinctive, this case is distinguishable from Evans.
On their face, Plaintiff's and Defendant's marks are clearly similar. Both marks prominently feature the term ORT, and Defendant's mark differs from Plaintiff's mark only by virtue of the geographical descriptor "Israel," which in some instances is written in Hebrew. ( See Nadler Aff., Ex. 1B.) Defendant argues that this geographical descriptor is sufficient to distinguish the two marks. (Def.'s Mem. 15.) But Defendant cites to no authority to support this position, and, indeed, the caselaw supports the opposite view. See U.S. Jaycees v. Phila. Jaycees, 639 F.2d 134, 142 (3d Cir. 1981) ("[It] does not alleviate the confusion when commonly the trademarked name is preceded by a geographical identification."). Accordingly, the Court finds that this factor favors Plaintiff.
To prevail on a trademark infringement case under the Lanham Act, a plaintiff need not present evidence of actual confusion, only a likelihood of confusion. See Savin Corp., 391 F.3d at 459 ("[I]t is black letter law that actual confusion need not be shown to prevail under the Lanham Act. . . ." (quotations omitted and alteration in original)). However, the Second Circuit has held that such evidence strongly supports a finding of likelihood of confusion: "There can be no more positive or substantial proof of the likelihood of confusion than proof of actual confusion." Id; see also Virgin Enters. Ltd. v. Nawab, 335 F.3d 141, 151 (2d Cir. 2003) ("It is self-evident that the existence of actual consumer confusion indicates a likelihood of consumer confusion. We have therefore deemed evidence of actual confusion particularly relevant to the inquiry." (quotations and citations omitted)). Here, Plaintiff has established that, in the short time since Defendant began soliciting donations in the United States, at least one of Plaintiff's donors has already been confused by Defendant's use of the ORT mark. Accordingly, this important factor favors Plaintiff.
In this incident, a representative of the United Jewish Federation of Pittsburgh (the "UJF") was solicited for donations by both Defendant and one of Plaintiff's affiliates. ( See Nadler Aff. ¶ 2.) Mistaking Defendant's funding proposal for that of Plaintiff's affiliate, the UJF contacted the affiliate and requested that it submit only one proposal. ( See id., Ex. 2.) While the UJF did not ultimately donate to Defendant, it cannot reasonably be disputed that the UJF was confused by Defendant's use of the ORT mark. Indeed, had Plaintiff's affiliate not contemporaneously solicited a donation, it is unlikely that the UJF would have realized its mistake.
"Bad faith generally refers to an attempt by a junior user of a mark to exploit the good will and reputation of a senior user by adopting the mark with the intent to sow confusion between the two companies' products." Star Indus., 412 F.3d at 388. While "[b]ad faith may be inferred from the junior user's actual or constructive knowledge of the senior user's mark," id. at 389, such an inference would be inappropriate here. Although Defendant clearly knew of Plaintiff's use of the ORT mark in the United States, Defendant did not "adopt its mark with the intention of capitalizing on [the] plaintiff's reputation and goodwill." Savin Corp., 391 F.3d at 460 (quotations omitted, second alteration in original). On the contrary, Defendant adopted its mark in Israel decades before it anticipated directly soliciting donations in the United States, and Plaintiff has presented no evidence that Defendant has sought to "sow confusion" between its mark with that of Plaintiff. Accordingly, the Court finds Defendant has not acted in bad faith in its use of the ORT mark.
Plaintiff alleges that Defendant's services are inferior because Defendant is insufficiently transparent, an allegation that Defendant disputes. (Pl.'s Mem. 19; Def.'s Mem. 20-21.) Defendant, for its part, submits several statements made by Plaintiff which attest to the high quality of Defendant's services. (Def.'s Mem. 20.) The dispute regarding Defendant's alleged lack of transparency is largely peripheral to these proceedings and, in any event, cannot be resolved on the record before the Court.
Taking all of the Polaroid factors into account, the likelihood-of-confusion inquiry is not a close question. Four of the factors strongly favor Plaintiff, including the "particularly relevant" factor of actual confusion. Virgin Enters., 335 F.3d at 151. Only one factor, good faith, favors Defendant. More importantly, given the close similarity of the marks and the services offered, as well as the fact that Defendant's solicitations target the same potential donors as do Plaintiff's, the Court finds it likely that some donors will be confused by Defendant's use of the ORT mark. See Playtex Prods., Inc., 390 F.3d at 162 ("When balancing the factors, district courts generally should not treat any single factor as dispositive. . . . Instead, the court should focus on the ultimate question of whether consumers are likely to be confused." (internal quotations and citations omitted)). Accordingly, the Court finds that Plaintiff has met its burden of establishing a likelihood of confusion.
Finally, the Court concludes that Plaintiff has shown the irreparable harm necessary for injunctive relief. As noted, in the Second Circuit, a plaintiff "who establishes that an infringer's use of its trademark creates a likelihood of consumer confusion generally is entitled to a presumption of irreparable injury." Weight Watchers Int'l, Inc. v. Luigino `s, Inc., 423 F.3d 137, 144 (2d Cir. 2005). Here, as discussed above, Plaintiff has established a likelihood of confusion. And because Defendant seeks donations from individuals and corporations who, like all potential donors, have only limited resources, the Court finds that, even absent the presumption, such confusion will cause Plaintiff irreparable harm. Moreover, Plaintiff has not unduly delayed in seeking injunctive relief nor done anything else to defeat the presumption of irreparable injury, having sought this relief within weeks of learning the full extent of Defendant's fundraising activities using the ORT mark in the United States. See id. at 144-45; Tough Traveler, Ltd. v. Outbound Prods., 60 F.3d 964, 968 (2d Cir. 1995). Therefore, the Court finds that Plaintiff has established irreparable harm absent a preliminary injunction.
ORDERED that within one week of the filing of this Opinion, the Parties are to submit to the Court memoranda of law addressing the propriety and amount of a bond. These memoranda of law shall not exceed five pages.

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