Court Opinion

ID: 9466901
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:32:04.385865+00
Date Added: 2024-06-11T17:40:02.119301
License: Public Domain

OAKES, Circuit Judge
(dissenting):
I am required to dissent from the majority opinion and would reverse the district court’s grant of summary judgment for ap-pellees on three of Saratoga Vichy’s five claims — those for false designation of origin *1045under 15 U.S.C. § 1125(a), for unfair competition under New York common law, and for dilution of its mark or name under N.Y.Gen.Bus.Law § 368-d.
In appellees’ summary judgment motions, they relied upon two facts: (1) that “Sara-toga Vichy” rather than “Saratoga” was appellant’s registered trademark and (2) that appellant did not dispute the State’s use of some form of the name “Saratoga” on the State’s mineral water products for more than sixty years, demonstrating either acquiescence in that use or laches on the part of Saratoga Vichy. Since the first of these assertions was not disputed, appellees were entitled to summary judgment on Saratoga Vichy’s federal trademark infringement claim, 15 U.S.C. § 1114, and New York trademark infringement claim, N.Y. Gen.Bus.Law § 368 — b; the mark “Saratoga” was never registered by Saratoga Vichy and the respective statutes apply only to registered trademarks. See Saratoga Vichy Spring Co. v. Saratoga Carlsbad Corp., 45 F.Supp. 260, 262 (S.D.N.Y.1942). But in my view failure to register the mark “Saratoga” is insufficient, in and of itself, to defeat Saratoga Vichy’s three other claims, see Bose Corp. v. Linear Design Labs, Inc., 467 F.2d 304, 309 (2d Cir. 1972); Allied Maintenance Corp. v. Allied Mechanical Trades, Inc., 42 N.Y.2d 538, 541-42, 399 N.Y.S.2d 628, 630-31, 369 N.E.2d 1162, 1163-1165 (1977).
Saratoga Vichy’s primary contention is that it obtained exclusive rights to use the name “Saratoga” on its sparkling water products during the period after 1971 when the New York state legislature deleted funds from the State’s bottling operation. The argument is that the name “Saratoga” has acquired a secondary meaning associated exclusively with appellant’s products since 1971, that the State abandoned through nonuse any rights it had in the name “Saratoga,” and that use of “Sarato-ga” by the State or its licensee would generate confusion.
The district court in my view improperly placed the burden on Saratoga Vichy, in meeting the summary judgment motion, to make an affirmative showing in support of its allegations of secondary meaning and confusion even though appellees’ supporting papers did not contest these allegations. Thus appellees as the moving parties have failed to meet their burden “to show initially the absence of a genuine issue concerning any material fact.” Adickes v. S. H. Kress & Co., 398 U.S. 144, 159, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970).
The district court also held that Saratoga Vichy’s claims were barred by laches and that its allegation of abandonment was met “by a showing of extraordinary circumstances which excuse nonuse.” The court’s discussion, however, ignored Saratoga Vichy’s primary argument that its exclusive rights began only after 1971, and again improperly placed the burden on it to show harm in the absence of any showing of lack of harm.
The “extraordinary circumstances” cited by the district court to refute the allegations of abandonment are unpersuasive. The court found that the nonuse occurred because the state legislature made a “public policy determination” to delete funds — a decision “over which the defendants had no control.” But since the state legislature cannot be considered an entity independent from the State’s Commissioner of Parks and Recreation, the simple fact that the State made a considered business judgment to discontinue production cannot amount to an “extraordinary circumstance” sufficient to excuse any alleged abandonment. The allegation of abandonment was simply not met in the summary judgment papers.
The majority here does not base affirmance on the district court’s determination that Saratoga Vichy failed to demonstrate secondary meaning or likelihood of confusion. Instead the assertion is that the “undisputed facts” support appellees' contentions that Saratoga has been guilty of lach-es and that no abandonment has occurred.
The majority does recognize that Sarato-ga Vichy’s claims to exclusive use of “Sara-toga” arise only after the 1971 closing of the State’s bottling plant. The majority then attempts to show that Saratoga Vichy has been guilty of laches since 1971 by “continuing] to acquiescence as it had from 1910 to 1971, although it knew that the *1046State was seeking a new licensee for a trademark that Saratoga Vichy had effectively accepted as valid.” There is simply no showing, however, that the State was seeking a licensee for most of the period during which the bottling facility lay dormant, much less any showing that Saratoga Vichy “knew” of any such efforts. Indeed, the Commissioner’s brief on appeal (page 10) indicates that the State was not in fact actively soliciting a licensee from the spring of 1972 until May of 1976 because it was involved in protracted litigation with its former distributor. And another two years went by before any deal was made with any licensee. All of this is corroborated by the fact that the State began to use the bottling facility as a university office annex beginning in January of 1973.
The majority apparently bases its view that Saratoga Vichy knew that the State was continually seeking a new licensee during the period on two letters. The first, dated April 27, 1971, states Saratoga Vichy’s own desire to take over the State’s bottling facility. This letter was written before the State closed down its bottling operation and certainly cannot be interpreted to show either that the State was seeking a licensee between 1972 and 1976 or that Saratoga Vichy had any knowledge that such a search was taking place. The second letter, dated October 9, 1978, represents a proposal for Saratoga Vichy to pay appellee Waters of Saratoga Springs in return for conveying all of Waters’ rights as the State’s licensee to Saratoga Vichy for $50,000. I do not see how the majority can dispute the contention that this second letter merely represented an attempt to secure a quitclaim from appellees, an attempt which in these days of high legal expense surely legitimately was aimed at avoiding a lawsuit. The argument is made that Sara-toga Vichy had some obligation to “warn” the State in the time between the two letters in 1971 and 1978 that it was no longer acquiescing in the State’s right to use the “Saratoga” name. But the view that some warning was required, conceded to be “not normally necessary,” is based on an apprehension I think mistaken that Sar-atoga Vichy was aware of some intention on the part of the State to keep its mark alive during this period. And that the State registered the trademark “Saratoga Geyser” in New York on January 21, 1972, is immaterial. Even though that may have demonstrated the State’s intention to continue using the mark as of that date, I do not see hqw it has any bearing on whether the State intended to preserve any rights it had to use “Saratoga” from 1972 to 1976.
In short, I do not believe that on this record Saratoga Vichy can be accused of sleeping on its rights after 1971. As long as the State had no competing product on the market and made no apparent attempt to license its product for a period of four years, Saratoga Vichy was not required to provide any warning to the State. Once the State licensed its product in 1978, after apparently waiting until 1976 to renew its search for a licensee, appellant took immediate action, first attempting to buy out the licensee and then bringing this lawsuit.
The majority’s second conclusion that the “undisputed facts” demonstrate that there was no abandonment by the State suffers from the same infirmity as its laches discussion: I do not see those “facts” in the summary judgment record. Indeed, as already noted, appellees did not even seek to refute the allegation of abandonment in the summary judgment papers or Rule 10(e) statements. As the majority notes, appellant has made out a case of prima facie abandonment under 15 U.S.C. § 1127 by showing nonuse of the name “Saratoga” by the State for more than two consecutive years. The majority finds that this presumption has been rebutted, however, because after the State’s plant was closed “the State . . . sought continuously to sell the business with its good will and trademarks.” But as discussed in connection with the laches argument, I see in the record no showing of such a “continuous” attempt, and indeed the Commissioner impliedly concedes the opposite (Brief at 10). Nor does the failure of the complaint to allege “intent” to abandon on the part of the State lend support to the majority’s conclusion. Under federal law, 15 U.S.C. § 1127, abandonment by definition means that use of the mark “has been discontinued *1047with intent not to resume.” (Emphasis added.) Thus, the allegation of abandonment necessarily implies an allegation that there was intent to cease use of the mark. In any event, such a narrow interpretation of the complaint would be antithetical to the broad rules of federal pleading. See Fed.R.Civ.P. 8(f); Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506, 79 S.Ct. 948, 954, 3 L.Ed.2d 988 (1959); New York State Waterways Association, Inc. v. Diamond, 469 F.2d 419, 421 (2d Cir. 1972)..
Since on the record below abandonment may well have occurred, summary judgment was inappropriate. If there were abandonment, the State may well have completely lost its right to use its mark again if Saratoga Vichy is correct that it “ha[d] acquired exclusive rights in the interim.” 3 R. Callman, The Law of Unfair Competition, Trademarks and Monopolies § 79.4, at 532 (3d ed. 1969). In my view, then, there remain disputed issues of material fact, resolvable only on trial absent a new showing by the appellees.