NFLP's business and cause harm to its reputation and goodwill with licensees and retailers actively promoting the products of NFLP's licensees. If NFLP in unable to abide by its agreement to protect licensees from companies that use the NFL marks without authorization, licensees will lose confidence in the NFLP's licensing program and the value of a license will be impaired thus harming the business of NFLP.
Defendant's use of its trade name and the solicitation and sale of "New Jersey GIANTS" merchandise is also likely to confuse the public into believing that the New York Football Giants has changed the team's name to the New Jersey Giants or does not object to being referred to by that name. Neither is true, of course, and while one may wonder why the New York Giants resist a new name and may wish, perhaps, that it were otherwise, the fact remains that the Giants have the right to retain the long-standing goodwill and reputation they have developed in the name "New York Giants" and efforts in that regard will be undermined were defendant's conduct permitted to continue.
I reach this conclusion without even considering the results of plaintiffs' survey, a survey which demonstrates the existence not merely of likelihood of confusion but of actual confusion on the part of persons exposed to defendant's merchandise bearing the words "New Jersey GIANTS". When that survey is considered, as it properly should be, evidence that was convincing without the survey becomes overwhelming, presumably the reason why defendant has attacked it so vigorously.
Plaintiffs commissioned a consumer survey relating to the merchandising activity of defendant in order to ascertain whether confusion as to the source or sponsorship of defendant's merchandise exists among potential purchasers of such goods. The survey was designed by Dr. Jacob Jacoby and was conducted by Guideline Research Corporation in accordance with the requirements recommended by the Federal Judicial Center and set forth in the Manual For Complex Litigation, 116 (5th ed. 1981) and with generally accepted standards of procedure in the field of such surveys. Dr. Jacoby, Professor of Marketing at New York University, has extensive knowledge and experience in the design and interpretation of consumer surveys, and is an expert in those areas. Guideline Research Corporation ("Guideline"), an independent marketing research company that has experience in conducting surveys for legal proceedings, has established quality control procedures to ensure the validity of survey results. Norman Passman, President of Guideline, has market research experience and has been qualified as an expert in other cases in federal courts to render opinions as to the likelihood of confusion based upon surveys designed and conducted by Guideline.
In order to achieve the research goals set by Dr. Jacoby, the survey was designed to determine whether or not potential purchasers of merchandise sold by defendant were likely to be confused as to the source or sponsorship of such merchandise, i.e., whether or not potential purchasers in a shopping context would be likely to believe that the source or sponsor of the defendant's merchandise was the New York Football Giants or the NFL.
In trademark and unfair competition litigation, the results of properly designed and executed consumer surveys have been consistently accepted by courts as probative evidence on the issue of likelihood of confusion. Union Carbide v. Ever Ready, Inc., 531 F.2d 366, 388 (7th Cir.), cert. denied, 429 U.S. 830, 97 S. Ct. 91, 50 L. Ed. 2d 94 (1976); National Football League Properties, Inc. v. Wichita Falls Sportswear, Inc., 532 F. Supp. 651, 654, 658 (W.D.Wash. 1982); Caesars World, Inc. v. Caesar's Palace, 490 F. Supp. 818, 827 (D.N.J. 1980).
The proponent of a consumer survey has the burden of establishing that it was conducted in accordance with accepted principles of survey research, i.e., that (1) a proper universe was examined; (2) a representative sample was drawn from that universe; (3) the mode of questioning the interviewees was correct; (4) the persons conducting the survey were recognized experts; (5) the data gathered was accurately reported; and (6) the sample design, the questionnaire and the interviewing were in accordance with generally accepted standards of procedure and statistics in the field of such surveys. Federal Judicial Center, Manual For Complex Litigation, 116 (5th ed. 1981).
The persons within the universe for the consumer study in this case were those 14 years or older who either (1) bought in the past twelve months a t-shirt, sweatshirt or other clothing that had a name, slogan, or picture printed on the front or back, or (2) were likely to buy such an item in the next six months. A sub-universe of professional football fans was selected to provide comparable data.
NFLP and its chief income producing licensee Logo 7 predicate their marketing decisions upon the assumption that apparel items are not purchased by children age 13 and under but rather by adults such as parents or other relatives. Dr. Jacoby and Mr. Passman testified that, based upon their knowledge and experience in the fields of market research and consumer behavior, children age 13 and under rarely purchase apparel items for themselves; such items are purchased by adults. Dr. Jacoby also excluded children age 13 and under from the survey universe because, based on his knowledge and experience in psychology, he believed that children of this age may be able to recognize the NFL trademarks but they are not likely to understand the concepts of "authorization" and "sponsorship".
Defendant's market for its products was almost exclusively for adults; less than $100 dollars of the $4,849.30 of stipulated sales were in youth sizes. Therefore, the proper universe was examined in the survey, i.e., potential purchasers of defendant's merchandise. National Football League Properties, Inc. v. Wichita Falls Sportswear, Inc., supra at 657, citing AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 353 (9th Cir. 1979); Survey Rules supra.
The survey was conducted in four shopping malls within the area of concentrated interest assigned by the NFL to the New York Football Giants: two shopping malls are located in the New York metropolitan area consisting of the five boroughs of New York City together with Westchester, Rockland and Putnam Counties; one is located in the New Jersey metropolitan area consisting of Bergen and Passaic Counties, and one is located in the New Jersey metropolitan area consisting of Middlesex, Hunterdon and Somerset Counties. Shopping malls within the Giants' area of dominant influence were chosen to ensure that a cross section of the potential purchasers within such area was tested; age and sex quotas for screening of respondents (and not quotas for respondents themselves) were established proportionate to the population of the area represented.
By conducting the study in four separate shopping malls, each representative of an area of concentrated support for the Giants within the Giants' area of dominant influence, the proponents of the survey tested a representative sample of the relevant universe. Survey Rules, supra. Indeed, ninety-five percent of all consumer market research conducted by personal interviews is tested by mall intercept studies. The results of these studies are used by major American companies in making decisions of considerable consequence.
The interviewing phase of the survey was conducted under Guideline's supervision by three market research service companies whose staffs were given detailed instructions that allowed no discretion in the screening, questioning, recording, and validation procedures. After each respondent was placed in the proper "shopping frame of mind" and was shown three representative articles of defendant's merchandise, he or she was asked a series of neutral, non-leading, non-suggestive, and easily understood questions beginning with general questions, i.e., those seeking the respondent's unaided mental associations, and ending with specific questions, i.e., those seeking respondent's associations with respect to authorization and sponsorship. The mode of questioning was proper and the survey was, thereafter, validated by Centrac, Inc., an independent telephone interviewing service, which successfully recontacted and confirmed the responses of over 50% of the respondents, far exceeding the acceptable level of 15% used in normal industry practice.
Dr. Jacoby reviewed each completed questionnaire and determined that 57.1% of all respondents were actually confused or likely confused as to sponsorship of defendant's merchandise by the Giants or the NFL; 18.7% of all other respondents gave responses that could be interpreted as reflecting possible confusion; and among the sub-universe of fans of professional football, 67% were actually confused or likely confused.
The confusion levels at the New Jersey malls (approximately 46%), while lower than the New York malls, represent significant levels of confusion. In Dr. Jacoby's opinion, given the sizeable percentages of confusion levels that were obtained, the number of individuals in the universe of interest who would be confused (i.e., potential purchasers of defendant's merchandise) is in the millions.
In response to this strong showing, defendant called Dr. Charles S. Keeter who was permitted to testify as an expert in methodology issues in survey research and quantitative research methods for the purpose of attacking plaintiffs' survey. The attack was wholly unsuccessful. It readily became apparent that Dr. Keeter's education and experience were in political science and public opinion polling and that he had no experience in the area of market research in general, much less in consumer confusion in the marketplace or in mall intercept studies. Undoubtedly it was his lack of experience in any area relevant to this case that caused his testimony to be of virtually no use to the court. Thus, after a detailed analysis of plaintiffs' survey, Dr. Keeter incorrectly concluded that the methodology employed was "quota sampling" instead of "quota screening"; in response to a question about his knowledge concerning any error factor considered in non-probability studies, he stated that "he is not familiar with market research studies"; he testified that defendant's sales data should have been considered by Dr. Jacoby in formulating the universe, yet his "expert" report made no mention of this criticism; he attempted to base part of his opinion on the Wichita Falls survey, yet he did not know fundamental aspects of the study (such as the number of cells or the stimuli used there); and he stated that the universe in plaintiffs' survey was too broad but that he was not prepared to testify about the sub-universe for football fans which he admitted are more likely purchasers of defendant's products.
CONCLUSIONS OF LAW
It is undisputed that "Giants" and "New York Giants" are valid service marks worthy of protection. Under the common law and the Lanham Act, owners of service marks and owners of trademarks are protected from other marks that are likely to cause confusion. However, assuming the New York Football Giants' marks are not distinctive marks, the Giants only have protection if their marks possessed secondary meaning at the time defendant commenced its use of them. Scott Paper Company v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1228, 1231 (3d Cir. 1978), rev'g 439 F. Supp. 1022 (D.Del. 1977).
Secondary meaning exists when the trademark is interpreted by the consuming public to be not only an identification of the product, but also a representation of the product's origin. . . . [It] is generally established through extensive advertising which creates in the mind of consumers an association between different products bearing the same mark. This association suggests that the products originate from a single source . . . . Once a trademark which could not otherwise have exclusive appropriation achieves secondary meaning, competitors can be prevented from using a similar mark. The purpose of this rule is to minimize confusion of the public as to the origin of the product and to avoid diversion of customers misled by a similar mark. Id. at 1228 (citations omitted).
A strong showing of secondary meaning in the marks "Giants" and "New York Giants" has been made.
In a case for service mark or trademark infringement and unfair competition, a plaintiff is entitled to a permanent injunction against a defendant by showing that that defendant's activities are likely to confuse consumers as to the source or sponsorship of the goods. Scott Paper Co. v. Scott's Liquid Gold, Inc., supra at 1228; Salton, Inc. v. Cornwall Corp., 477 F. Supp. 975, 989 (D.N.J. 1979). In order to be confused, a consumer need not believe that a plaintiff actually produced a defendant's merchandise and placed it on the market. Rather, a consumer's belief that a plaintiff sponsored or otherwise approved the use of the mark satisfies the confusion requirement. Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 204-05 (2d Cir. 1979); accord, National Football League Properties, Inc. v. Wichita Falls Sportswear, Inc., supra at 659.
In a suit, as here, involving competing goods, the relevant factors to be considered in a determination as to whether a likelihood of confusion exists are:
(1) The degree of similarity between the owner's mark and the alleged infringing mark;