between the marks WIZARDS and WASHINGTON WIZARDS.
Standard for Injunctive Relief
The "grant of injunctive relief is an extraordinary remedy which should be granted only in limited circumstances." FM 103.1, Inc. v. Universal Broadcasting of New York, Inc., 929 F. Supp. 187, 193 (D.N.J. 1996) (quoting Frank's GMC Truck Center, Inc. v. General Motors Corp., 847 F.2d 100, 102 (3d Cir. 1988)); Church & Dwight Co., Inc. v. S.C. Johnson & Son, Inc., 873 F. Supp. 893, 903 (D.N.J. 1994) (same). The standard for granting a permanent injunction is nearly identical to that of a preliminary injunction except that the movant must show actual success on the merits rather than simply the likelihood of success on the merits. Church & Dwight Co., 873 F. Supp. at 903. In determining whether to grant a permanent injunction, a court must consider (1) whether the moving party has demonstrated success on the merits, (2) the probability of irreparable injury to the moving party, (3) the potential for harm to the non-moving party; and (4) the public interest if applicable. See Church & Dwight Co., 873 F. Supp. at 903; Fechter v. HMW Indus., Inc., 879 F.2d 1111, 1116 (3d Cir. 1989).
Plaintiff claims trademark infringement under Section 43(a) of the Lanham Act, The New Jersey Trademark Act (N.J.S.A. 56:4-1) and common law. N.J.S.A. 56:4-1 is the statutory equivalent of Section 43(a)(1) of the Lanham Act and the analysis for trademark infringement under New Jersey common law is the same as under Section 43(a)(1). See, e.g., FM 103.1, Inc. v. Universal Broadcasting of New York, Inc., 929 F. Supp. 187, 198 (D.N.J. 1996). Thus, the Court's discussion with respect to plaintiff's Section 43(a) claim addresses its state law claims as well.
Plaintiff relies on the reverse confusion theory of trademark infringement first recognized by the Third Circuit Court of Appeals in Fisons Horticulture, Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 31 U.S.P.Q.2D (BNA) 1592, 1598 (3d Cir. 1994). In an ordinary trademark infringement case, the alleged trademark infringer takes advantage of the reputation and good will of a senior trademark owner by adopting a similar or identical mark. 31 U.S.P.Q.2D (BNA) at 1597-1598. In contrast, reverse confusion arises when a larger, more powerful entity adopts the trademark of a smaller, less powerful trademark user and thereby causes confusion as to the origin of the senior trademark user's goods or services. See, e.g., Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947 (7th Cir. 1992), cert. denied, 507 U.S. 1042, 123 L. Ed. 2d 497, 113 S. Ct. 1879 (1993) (finding that Quaker Oats Co.'s use of "Thirst Aid" for its product Gatorade infringed on the registered "Thirst-Aid" trademark owned and formerly used by small Vermont beverage company); Banff, Ltd. v. Federated Dep't Stores, Inc., 841 F.2d 486 (2d Cir. 1988) (enjoining Bloomingdales Department stores from using mark "B-Wear" on clothing and in its stores because it infringed on the unregistered trademark "Bee-Wear" belonging to smaller women's clothing marketer). Because the junior user is a larger company with greater financial ability and trademark recognition in the marketplace, it can easily overwhelm the senior user by flooding the market with promotion of its similar trademark. Fisons, 31 U.S.P.Q.2D (BNA) at 1598. The strength of the junior user's promotional campaigns leads consumers to believe that the senior user's products derive from that of the junior user or that the senior user is actually the trademark infringer. Id. As a result, the senior user "loses the value of the trademark -- its product identity, corporate identity, control over its goodwill and reputation, and ability to move into new markets." Id. (quoting Ameritech, Inc. v. American Information Technologies Corp., 811 F.2d 960, 964 (6th Cir. 1987)). The federal courts and legal commentators have observed that failure to recognize reverse confusion would essentially immunize from unfair competition liability companies that have well established trade names and the financial ability to advertise a senior mark taken from smaller, less powerful competitors. See id; Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 561 F.2d 1365, 1372 (10th Cir. 1977).
The Lanham Act protects "an owner's interest in its trademark by keeping the public free from confusion as to the source of goods and ensuring fair competition," and extends to protect trademark owners against reverse confusion trademark infringement. Fisons, 31 U.S.P.Q.2D (BNA) at 1598 (internal quotations omitted). Section 43 (a) of the Lanham Act, 15 U.S.C. § 1125(a) provides that:
Any person who, on or in connection with any goods or services . . . uses in commerce any word, term, name, symbol or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which -- (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services or commercial activities --shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1).
Federal Courts have long recognized that Section 43(a)(1) "protects unregistered service marks in the same manner and to the same extent as registered marks" out of acknowledgement that trademark rights emanate from use and not only registration. FM 103.1, Inc., 929 F. Supp. at 194. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 120 L. Ed. 2d 615, 112 S. Ct. 2753, reh'g denied, 505 U.S. 1244, 120 L. Ed. 2d 947, 113 S. Ct. 20 (1992); accord Time Mechanisms, Inc. v. Qonaar Corp., 422 F. Supp. 905, 911 (D.N.J. 1976). To prevail on a trademark infringement claim under Section 43(a) of the Lanham Act, a plaintiff must establish that: (1) the mark is valid and legally protectable; (2) the plaintiff owns the mark; and (3) the defendant's use of the mark to identify goods or services is likely to create confusion concerning the origin of such goods and services. Fisons, 31 U.S.P.Q.2D (BNA) at 1596. Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 291 (3d Cir.), cert. denied sub nom., Altran Corp. v. Ford Motor Co., 502 U.S. 939, 116 L. Ed. 2d 324, 112 S. Ct. 373 (1991) (citing Opticians Ass'n of America v. Independent Opticians of America, 920 F.2d 187, 192 (3d Cir. 1990).
A plaintiff demonstrates that a mark is valid and legally protectable when a mark is federally registered and "has become 'incontestible' under the Lanham Act." 15 U.S.C. §§ 1058 and 1065. Fisons, 31 U.S.P.Q.2D (BNA) at 1596. However, if the mark has not been federally registered, or if a registered mark has not achieved incontestability, then the mark is valid and legally protectable "if the public recognizes it as identifying the claimant's 'goods or services and distinguishing them from those of others.'" A. J. Canfield Co. v. Honickman, 808 F.2d 291, 296 (3d Cir. 1986) (quoting 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 15.1 at 657 (2d ed. 1984)). Such identification first depends on whether a plaintiff can establish that an unregistered mark is inherently distinctive or has achieved secondary meaning -- consumer recognition that the mark identifies the product as originating from a particular source. See Fisons, 31 U.S.P.Q.2D (BNA) at 1596; Ford Motor Co., 930 F.2d at 291.
Trademark law evaluates marks along a continuum of distinctiveness, from the nondistinctive to the inherently distinctive: Marks are (1) generic, (2) descriptive, (3) suggestive or (4) arbitrary, or fanciful. A generic term functions as the common descriptive name of a class of products and are generally not legally protectable. See, e.g., A. J. Canfield, 808 F.2d at 292 ("chocolate fudge" is generic when used in connection with chocolate fudge flavored soda); Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 29 U.S.P.Q.2D (BNA) 296, 83 L. Ed. 73, 59 S. Ct. 109 (1938) ("shredded wheat" is generic term when used for a breakfast cereal). A descriptive mark immediately conveys a characteristic, ingredient or quality of the article or service it identifies and acquires protected status only if the plaintiff can demonstrate that the goods or services have achieved secondary meaning. See, e.g., Transfer Print Foils, Inc. v. Transfer Print America, Inc., 720 F. Supp. 425, 12 U.S.P.Q.2D (BNA) 1753 (D.N.J. 1989) ("Transfer Print" is descriptive for surface decorating machines, related technical machines, material and related technical services to distributors and manufacturers who require designs or words placed on their products). Suggestive, arbitrary and fanciful marks are afforded the highest level of trademark protection. See AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979). A suggestive mark requires the consumer to use imagination, thought, or perception to determine the character of the goods or service. A. J. Canfield, 808 F.2d at 297. See, e.g., Taj Mahal Enterprises, Ltd. v. Trump, 745 F. Supp. 240 (D.N.J. 1990) ("Taj Mahal" suggestive of an Indian restaurant). An arbitrary mark employs terms that do not describe or suggest any attribute of goods or services sold and a fanciful mark uses unfamiliar language coined expressly for the purpose of trademark protection. See Sunenblick v. Harrell, 895 F. Supp. 616, 624 (S.D.N.Y. 1995), aff'd, 101 F.3d 684 (2d Cir. 1996), cert. denied, U.S. , 136 L. Ed. 2d 303, 117 S. Ct. 386 (1996).
As a threshold matter, this Court must determine whether the mark WIZARDS is inherently distinctive, that is, whether it can be defined as suggestive, arbitrary or fanciful. At the outset, the Court acknowledges that assessing a mark's distinctiveness is not an "exact science" and that the subtle distinctions between these categories can be slippery and elusive. Banff Ltd, 841 F.2d at 489. Nonetheless, a mark elicits a particular and quantifiable consumer reaction. Plaintiff asserts that the mark WIZARDS is an arbitrary or fanciful term and thus subject to the highest level of trademark protection. According to plaintiff, the term WIZARDS has no specific meaning when used in connection with basketball services, apparel, or related merchandise. In opposition, defendants advance several arguments. First, defendants argue that plaintiff's mark, to the extent that it has acquired one, consists only of the term HARLEM WIZARDS in its entirety. Defendants stress that the term "Harlem" is an essential element of plaintiff's a show basketball team. In support of this argument, they note that several show basketball teams have sought to capitalize on the genre established by the Harlem Globetrotters by adopting "Harlem" as part of their appellation. Defendants also argue that plaintiff since its inception, has only sporadically used the term WIZARDS alone as a mark and then only in contexts where the consumer already knows that such materials pertain to the Harlem Wizards. Second, defendants claim that the mark WIZARDS is not inherently distinctive because it describes the nature of plaintiff's services, the "trickery," "wizardry" and "magic" of its basketball performances. As a descriptive mark, plaintiff would have to demonstrate that it has achieved secondary meaning, an unlikely proposition because its consumer recognition level is virtually nonexistent as evidenced by the survey results presented by both parties.
This Court finds that although plaintiff has used the mark HARLEM WIZARDS more consistently than the mark WIZARDS over the years, its use of the mark WIZARDS has nevertheless been sufficient to establish trademark rights. The Court, however, finds that plaintiff's mark is suggestive rather than, as plaintiff asserts, arbitrary or fanciful. The term WIZARDS does not describe accurately plaintiff's services because regardless how talented plaintiff's team members may be, they do not perform magic or even magically. Rather, the mark WIZARDS is accurately defined as suggestive because it asks the consumer to fantasize, to use his or her imagination to connect the idea of magic and the supernatural with show basketball. Because the Court finds that the mark WIZARDS is inherently distinctive, it now turns to the question of whether a likelihood of confusion exists between both parties' use of the mark.
Plaintiff bears the burden of establishing that defendants' concurrent use of the mark WIZARDS will create a likelihood of confusion among basketball fans between the Harlem Wizards and the Washington Wizards. The showing of proof necessary for a plaintiff to prevail depends upon whether the goods or services offered by the trademark owner and alleged infringer are competitive or noncompetitive. Fisons Horticulture, Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 31 U.S.P.Q.2D (BNA) 1592, 1596 (3d Cir. 1994). If the action involves competing goods, "the court need rarely look beyond the mark itself." Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 462 (3d Cir. 1983). In such cases, the court simply analyzes whether the similarity of the marks engenders confusion. Fisons, 31 U.S.P.Q.2D (BNA) at 1596; Country Floors, Inc. v. Partnership Composed of Gepner and Ford, 930 F.2d 1056, 1063 (3d Cir. 1991). In actions where the goods are non-competing, "the similarity of the marks is only one of a number of factors the court must examine to determine the likelihood of confusion." Fisons, 31 U.S.P.Q.2D (BNA) at 1596. If the goods or services are noncompeting,
the court must look beyond the trademark to the nature of the products themselves, and to the context in which they are marketed and sold. The closer the relationship between the products, and the more similar their sale contexts, the greater the likelihood of confusion. Once a trademark owner demonstrates the likelihood of confusion, it is entitled to injunctive relief.
Id. (quoting Lapp, 721 F.2d at 462 (citations omitted)).
Likelihood of confusion exists if the consuming public assumes upon viewing a mark that the products or service represented by the mark is associated with a different product or service represented by a similar mark. See 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 2301 (1992). To measure the likelihood of confusion in a reverse confusion case, a court applies the same test developed to assess the likelihood of confusion in direct confusion cases. The Court of Appeals for the Third Circuit has identified ten factors to be considered in determining whether a likelihood of confusion exists in the marketplace regarding the source of a product or service. Fisons, 31 U.S.P.Q.2D (BNA) at 1597; Dranoff-Perlstein Assoc. v. Sklar, 967 F.2d 852, 862-863 (3d Cir. 1992); Ford Motor Co v. Summit Motor Products, Inc., 930 F.2d 277, 293 (3d Cir.), cert. denied sub nom., Altran Corp. v. Ford Motor Co., 502 U.S. 939, 116 L. Ed. 2d 324, 112 S. Ct. 373 (1991); Lapp, 721 F.2d at 463; Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1229 (3d Cir. 1978). These factors are:
(1) the degree of similarity between the owner's mark and the alleged infringing mark;
(2) the strength of owner's mark;