Opinion ID: 512382
Heading Depth: 2
Heading Rank: 2

Heading: Other Polaroid Factors

Text: 35 The remaining Polaroid factors to be balanced in determining the likelihood of confusion are the degree of similarity between the two marks, proximity of the products, likelihood of bridging the gap, evidence of actual confusion, the junior user's bad faith vel non in adopting the mark, quality of the junior user's product, and the sophistication of the relevant consumer group. Polaroid Corp., 287 F.2d at 495. 36 It is appropriate to consider together, as did the magistrate, the second and third Polaroid factors. See Centaur Communications, 830 F.2d at 1226 (appropriate to evaluate competitive proximity with reference to the first two Polaroid factors). The second Polaroid factor is the degree of similarity between the senior (Hasbro) and junior (Lanard) users' marks. The comparison of marks is an inquiry designed to determine the general impression conveyed to the purchasing public by the respective marks. C.L.A.S.S. Promotions, Inc. v. D.S. Magazines, Inc., 753 F.2d 14, 18 (2d Cir.1985). Ultimately, the crucial question is whether the similarity is likely to create confusion. McGregor-Doniger, 599 F.2d at 1133. The third factor addresses whether, due to the commercial proximity of the competitive products, consumers may be confused as to their source. See Centaur Communications, 830 F.2d at 1226. This confusion can occur if consumers mistakenly will assume that one manufacturer's toys are associated with or made by the other. Lois Sportswear, 799 F.2d at 874. 37 The marks themselves, Hasbro's GUNG-HO and Lanard's GUNG-HO!, are virtually identical. But, Hasbro uses its mark on one individual modern army action figure, whereas Lanard uses its mark on an entire line of international security force action figures. Both display on the top front of their packaging the product line names, G.I. JOE and GUNG-HO!, respectively, in 1 1/2 inch stylized block letters, with other identifying information pertaining to the line or to individual action figures displayed in smaller letters and in less prominent places. The GUNG-HO code name on Hasbro's packaging appears in smaller ( 1/4), yet prominent, type above the figure itself. Thus, while the marks appear strikingly similar, they function differently in promoting the sales of their respective products. 38 With respect to the third factor, there is indisputable competitive proximity. Both products are 3 3/4 inch military action figures, sold side-by-side (many retail stores carry both lines), compete for the identical market, and appear in similar packaging. In addition, Lanard's international security force figures are designed to be compatible in play and warfare with Hasbro's G.I. JOE (good guys) and COBRA team (bad guys) figures. Products which directly compete in the marketplace clearly warrant a finding of the highest degree of competitive proximity. 39 The magistrate concluded that the different uses to which Hasbro and Lanard employ the mark alleviates the likelihood of confusion that would otherwise result from the similarity of the marks and their competitive proximity. We disagree. As a practical matter, a parent sent to a store to purchase a Hasbro GUNG-HO action figure might be confused precisely by the similar marks appearing on products displayed side-by-side. As a legal matter, we cannot accept the conclusion that would inevitably follow from the magistrate's reasoning, which is that Lanard could use G.I. JOE as a code name for one of its individual figures and place G.I. JOE in its line along with Shark, Flashfire, and Boomerang Billy. For these reasons, we hold that the similarity of the marks and their competitive proximity tend to create a strong likelihood of confusion. The magistrate's findings to the contrary on these two factors were clearly erroneous. 40 The fourth Polaroid factor, the likelihood that the senior user of the mark will bridge the gap by entering the market in which the junior user operates, also favors Hasbro. Although the magistrate considered this factor irrelevant because both users operate in the same market, this very fact indicates that a greater likelihood of confusion exists than if they operated in different markets. 41 The fifth Polaroid factor, evidence of actual confusion, is not disputed. Hasbro did not introduce any evidence of actual consumer confusion. Although such evidence is not necessary to show likelihood of confusion, W.E. Bassett Co. v. Revlon, Inc., 435 F.2d 656, 661-62 (2d Cir.1970), its lack may under some circumstances be used against a plaintiff, see McGregor-Doniger, 599 F.2d at 1136. The magistrate properly declined to make any negative inference from Hasbro's lack of such evidence in light of the short time Lanard's product has been on the market. Thus, as the magistrate found, this factor neither helps nor hurts Hasbro's case. 42 The sixth Polaroid factor, the junior user's bad faith vel non in adopting the mark, involves hotly contested facts concerning Lanard's diligence in searching for prior uses of gung ho before employing it as a mark. Hasbro contends that Lanard's search confined to federally registered trademarks, a January 6, 1987 telex from Lanard's counsel to Lanard stating that Hasbro's prior use on one figure is legally enough to stop your use on whole line of figures, and Lanard's refusal to allow Hasbro representatives in its Toy Fair showroom in early 1987 demonstrate Lanard's bad faith in adopting the mark. Lanard denies these allegations and claims it first learned of Hasbro's use of GUNG-HO on January 6, 1987. The magistrate recognized the shortcomings of Lanard's narrow trademark search. She concluded, nevertheless, that Lanard's belief that it was the senior user and Lanard's decision to proceed with sales efforts, despite some indication that Hasbro might be a prior user, do not amount as a legal matter to bad faith. We see no reason to disturb this carefully analyzed finding. 43 The next factor, quality of the junior user's product, is the subject of some confusion. One view is that an inferior quality product produced by the junior user injures the senior user's reputation insofar as consumers might think that the source of the inferior product is the senior user. See, e.g., Lois Sportswear, 799 F.2d at 875. Another view is that a junior user's product of equal quality to a senior user's product injures the senior user by the increased tendency of similar quality products to promote consumer confusion. See, e.g., Banff, 841 F.2d at 492; Centaur Communications, 830 F.2d at 1228; Lois Sportswear, 799 F.2d at 875; Plus Products, 722 F.2d at 1006-07. Without taking sides, we do not disagree with the magistrate's unstated premise that likelihood of confusion may result from the junior user selling an inferior product. But after considering Hasbro's claims that Lanard's less expensive product is an inferior product, the magistrate concluded that Lanard's international security figures are not of lesser quality than Hasbro's military action figures. This finding is not clearly erroneous. 44 The final Polaroid factor, the sophistication of the relevant consumer group, is grounded on the belief that unsophisticated consumers aggravate the likelihood of confusion. See Centaur Communications, 830 F.2d at 1228. This is especially true when the competing products' marks are similar and the inexpensive products are in competitive proximity. The magistrate recognized that the products' price suggests that the consumers are unsophisticated, but that the total lack of evidence on this issue militates against giving this factor much, if any, weight. Despite our inclinations, similar to the magistrate's, that the relevant consumer group is unsophisticated, we agree that the lack of evidence precludes any useful conclusion on this issue. 45 We have reaffirmed the proposition that the eight enumerated Polaroid factors for resolving likelihood of confusion are nonexclusive. See Centaur Communications, 830 F.2d at 1228 n. 2; Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 256 (2d Cir.1987); McGregor-Doniger, 599 F.2d at 1140. The senior user's delay in asserting its trademark claim is an example of a factor which, when appropriate, may also be considered in addition to the enumerated Polaroid factors. Chandon Champagne Corp. v. San Marino Wine Corp., 335 F.2d 531, 536 (2d Cir.1964). The magistrate considered this factor and found it helpful to discuss but unnecessary to decide in light of its holding that no likelihood of confusion exists. Because we reach a contrary conclusion, we address it briefly. 46 Hasbro's delay, if any, in asserting its claim commands increased attention now that we have held that its mark is suggestive. Delay, of course, tends to defeat the presumption that likelihood of confusion would cause irreparable harm pending trial. See Citibank, N.A. v. Citytrust, 756 F.2d 273, 276 (2d Cir.1985). Yet, based on the record facts, we find no undue delay by Hasbro in discovering Lanard's use of GUNG-HO! or in commencing the instant action. Thus, this factor does not weigh in the balance against Hasbro.