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800 SPIRITS INC.

July 14, 1998

800 SPIRITS INC., Plaintiff,
v.
LIQUOR BY WIRE, INC., Defendant.



The opinion of the court was delivered by: WALLS

OPINION

 Walls, District Judge

 This matter arises from the alleged unlawful use of the alpha-numeric telephone number "1-800-SPIRITED" by defendant Liquor by Wire, Inc. ("Liquor by Wire"). In its Complaint, plaintiff 800 Spirits, Inc. ("800 Spirits") claims that defendant's use and advertisement of this telephone number infringes upon its statutory and common law rights to its unregistered trade name and service mark "800 SPIRITS." Defendant moves for summary judgment in its favor on all counts. Under Fed. R. Civ. P. 78, the Court decides this motion without oral argument. For the following reasons, the motion is granted.

 Factual Background

 800 Spirits and Liquor by Wire are competitors in the business of gift delivery service of alcoholic beverages. Both market their products through catalogs and brochures mailed to consumers and corporations. Customers may place orders by phone, facsimile, or electronic transmission. Liquor By Wire, through its predecessor Foremost Sales Promotions, Inc., has been in operation for over fifty years and services customers in thirty states and more than thirty other countries. Gail Zelitzky Decl. P 2. Plaintiff advertises in magazines and newspapers throughout the United States and internationally and has provided services under the name 800 Spirits since 1979. See Brooks R. Bruneau Decl., Exh. D. Plaintiff maintains that the company was originally called 800 Spirits as a hyperbole or exaggeration of the number of gifts that it could deliver. Pl.'s Answer to Interrog. No. 11.

 Plaintiff originally registered its "800 SPIRITS" service mark with the United States Patent and Trademark Office (the "PTO") on August 18, 1981 under Registration No. 1,165,835. Id. It disclaimed the exclusive right to use "spirits" apart from the mark. Id. The service mark registration lapsed after some years when plaintiff failed to file a Declaration of Continuing Use. See Harvey Ishofsky Supp. Decl. *fn1" P 5. Notwithstanding the lapse, plaintiff has continued to use the service mark and displays it prominently on its catalogs and other advertising materials. Ishofsky Decl., Exhs. A and B.

 Sometime after plaintiff began using the service mark, it investigated the availability of the alpha-numeric telephone number 1-800-SPIRITS (1-800-774-7487). Pl.'s Admission No. 4. Its attempt to obtain this mnemonic telephone designation was unsuccessful because the toll-free number had been assigned to another company. Pl.'s Admission No. 6. Liquor By Wire contends that this number is presently used by 800 Flowers, another company engaged in the gift delivery business. Zelitzky P 7. Plaintiff instead has employed "1 -800-BE-THERE" (1-800-238-4373) as its business number since 1979.

 In February 1992, Liquor by Wire formed a separate corporation called Spirited Productions, Ltd. ("Spirited Productions") to provide marketing services for its gift delivery business. Zelitzky Decl. P 5. On February 7, 1995, Spirited Productions registered the service mark "SPIRITED PRODUCTIONS LTD." for use in its "marketing and consulting services." *fn2" Adam Derman Certif., Exh. F. Defendant then embarked on a substantial advertising campaign that utilized the term "spirit" or a variation thereof to promote its gift delivery services. For example, Liquor By Wire published a newsletter entitled "Spirit Talk" and created slogans such as "Discover the Spirit of Corporate Gift Giving," "Send a Gift with Spirit," and "Spirited Moments Deserve Gifts and Spirit!" Zelitzky Decl. P 6. It was at this time that defendant also adopted the mnemonic telephone number "1-800-SPIRITED" (1-800-774-7483), *fn3" which is displayed prominently in its mail order catalogs and other marketing materials. Derman Certif., Exh. D and E.

 In October 1995, plaintiff applied again for registration of "800 SPIRITS" as its service mark. Id., Exh. G. The examining attorney of the PTO initially rejected the application on the ground that "the proposed mark merely describes the services" provided:

 
Applicant's mark is 800 SPIRITS for mail order services. The term "800" likely is understood as indicating either the applicant's toll-free telephone area code or as the number of different alcoholic beverages available through the applicant's mail order service. "SPIRITS" is a generic designation as applied to the applicant's service. Viewing the mark in its entirety, it comprises nondistinctive terms combined to form a nondistinctive whole that is incapable of registering. This determination is appropriate regardless of which construction is given to the term "800."

 Id., Exh. H. However, the examining attorney noted that he would "consider withdrawing the refusal if the applicant (1) states for the record that the '800' portion of the mark is not used (and will not be used) to indicate a phone number; (2) the applicant demonstrates that the term '800' does not have any other descriptive significance; and (3) the applicant disclaims the term 'SPIRITS.'" Id., Exh. H. In later letters to the examiner, plaintiff complied with these conditions. Id., Exh. I and J. However, plaintiff soon changed its position by only agreeing not to use the mark solely as a telephone number; it reserved the right to use the mark as a number incidental to its continuing use of 800 SPIRITS as a corporate identifier. Id., Exh. K.

 In December 1996, plaintiff brought this trademark infringement action against defendant to obtain injunctive and monetary relief. Its four-count Complaint alleges that Liquor By Wire's use of the telephone number "1-800-SPIRITED" constitutes a false designation of origin in violation of 15 U.S.C. § 1125(a) (Count One), dilution of plaintiff's famous 800 SPIRITS name and mark in violation of 15 U.S.C. § 1125(c) (Count Two), an appropriation of plaintiff's name, mark, reputation and/or goodwill in violation of The New Jersey Trademark Act, N.J.S.A. § 56:4-1 (Count III), and a violation of the common law of unfair competition (Count IV). Sometime thereafter, defendant began to advertise and use the number "1-888-SPIRITED" in addition to "1-800-SPIRITED." Defendant has filed Counterclaims for unfair competition and a declaratory judgment that plaintiff has no protectible rights in the mark "800 SPIRITS."

 In May 1997, Liquor By Wire filed a notice of opposition to plaintiff's application to register "800 SPIRITS" with the PTO. Bruneau Decl., Exh. E. The PTO has stayed its proceedings pending a ...


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