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AMERICAN CYANAMID CO. v. NUTRACEUTICAL CORP.

May 28, 1999

AMERICAN CYANAMID CO., PLAINTIFF,
v.
NUTRACEUTICAL CORP., DEFENDANT.



The opinion of the court was delivered by: Wolin, District Judge.

OPINION

This case involves claims for trademark infringement, unfair competition, and trademark dilution based on federal law and the laws of the State of New Jersey. The instant matter comes before the Court on defendant's motion for summary judgment, wherein defendant argues, mainly, that its allegedly infringing marks are simply too dissimilar to plaintiff's trademark to be capable of grounding any of plaintiff's claims. Because the case involves a claim for infringement of plaintiff's color-spectrum trademark, the Court examines the degree of similarity required between competing marks that make use of common colors. In addition, the claim for dilution requires the Court to adopt an appropriate standard for cases alleging "blurring" of a senior mark.

STATEMENT OF FACTS

In 1981, plaintiff, American Cyanamid Company,*fn1 registered a color spectrum trademark with the United States Patent and Trademark Office. The registration claimed the mark for use with vitamin and mineral preparations. Accordingly, plaintiff has since used the mark to identify its "Centrum" products.*fn2

The Centrum products, including Centrum (for the general consumer), Centrum Silver (directed at those over fifty years of age), and Centrum Kids (aimed at children over the age of two), are the largest selling multivitamin-multiminerals in the United States. They are sold in numerous trade classes-food, drug, mass merchandise, warehouse clubs, wholesalers, and military commissaries — with almost one hundred percent distribution within these classes. In addition, fiscal year 1998 factory sales for the Centrum products are projected to exceed $275 million; unit sales for the same year are projected at 2.5 billion total tablets for Centrum, 1.4 billion for Centrum Silver, and 132 million for Centrum Kids; and plaintiff enjoys leading market shares for its Centrum and Centrum Silver products.

Plaintiff has spent considerable resources advertising and promoting Centrum products. A particular strategy in this marketing effort has been to reinforce consumers' familiarity with the Centrum color-spectrum trademark. According to Leading National Advertisers, a syndicated reporting service, $263 million in advertising has been spent on the Centrum products over the last twenty years.

Recently, plaintiff has contemplated expanding the Centrum product line to include individual nutritional supplements.*fn3 In 1998, plaintiff launched Centrum Herbals, a line of herbal supplements.*fn4 Plaintiff alleges that expansion of its product line to include Centrum Herbals is within plaintiff's natural zone of expansion.

The appearance of Centrum's trademark is critical to the determination of this motion. The registration certification shows a band of thirteen adjacent colored vertical standing rectangles aligned horizontally. From left to right, the colors of the boxes vary gradually from deep blue to deep red, noticeably imitating the colors of the visual spectrum.

Defendant, Nutraceutical Corporation, sells a wide range of vitamin and dietary supplement products under the trade-names "Solaray" and "Kal". Defendant's products are much more diverse than plaintiff's and include hundreds of different stock keeping units. It is clear, however, that the parties' products at least coexist within an overarching market for vitamins and health food supplements. For instance, Solaray products include the Guaranteed Potency Herb line, which is comparable to plaintiff's Centrum Herbals products. Likewise, Solaray and Kal products include multivitamin-multimineral formulations. There is also evidence that, although defendant's Solaray and Kal products are sold primarily in health food and grocery stores, both plaintiff's and defendant's products are available at some locations.

Solaray and Kal products also bear labels incorporating colors of the visual spectrum. Defendant has offered testimony that the Solaray labels in question, or similarly designed labels, have been sold since as early as 1984. Plaintiff disputes this, but offers no evidence sufficient to give rise to a genuine issue of material fact. Defendant has used the Kal labels at issue on its products since as early as 1994.

The Solaray labels portray five colored stripes on which the word "Solaray" is superimposed in yellow. The stripes are red, orange, yellow, green, and blue. They appear lengthwise on the label and sit one over the other as in the colors of our country's flag.

The Kal labels depict a thin band of colors which range from indigo to blue to green to yellow to orange to red to yellow and then follow the same sequence in reverse. The band attaches to the bold green lettering of the name of the product on the label through the fluid extension of the letter into the color band. In addition, on the same labels, Kal uses a rectangle that includes a gold silhouette of a human form superimposed over a rectangular background colored with bands of colors of the visual spectrum ranging from indigo to green to yellow to orange to red. The color bands are arranged one over another as are the Solaray colored stripes, but are shorter and wider.

No evidence is before the Court that any consumer has, in fact, ever confused the Solaray or Kal brands of food supplement products with Centrum products.

Plaintiff charges that defendant's Solaray and Kal labels infringe Centrum's trademark pursuant to § 32 of the Federal Trademark Act (15 U.S.C. § 1114) and § 43(a) of the Federal Trademark Act (15 U.S.C. § 1125(a)), dilute Centrum's trademark in violation of § 43(c)(1) of the Federal Trademark Act (15 U.S.C. § 1125(c)), and constitute unfair competition under the laws of the State of New Jersey (N.J.S.A. §§ 56:4-1, 2). Defendant contends in this motion for summary judgment that the differences between, and qualities of, the parties' marks are so obvious that, as a matter of law, this Court should dismiss plaintiff's claims.

SUMMARY JUDGMENT STANDARD

Summary judgment shall be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see Hersh v. Allen Prods. Co., Inc., 789 F.2d 230, 232 (3d Cir. 1986). In making this determination, a court must draw all reasonable inferences in favor of the non-movant. See Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 n. 2 (3d Cir. 1983), cert. dismissed, 465 U.S. 1091, 104 S.Ct. 2144, 79 L.Ed.2d 910 (1984). Whether a fact is "material" is determined by the substantive law defining the claims. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); United States v. 225 Cartons, 871 F.2d 409, 419 (3d Cir. 1989).

"[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249, 106 S.Ct. 2505. Summary judgment must be granted if no reasonable trier of fact could find for the non-moving party. See id.

When the non-moving party bears the burden of proof at trial, the moving party's burden can be "discharged by `showing' — that is, pointing out to the District Court — that there is an absence of evidence to support the non-moving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party has carried its burden of establishing the absence of a genuine issue of material fact, the burden shifts to the non-moving party to "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). When the non-moving party's evidence in opposition to a properly-supported motion for summary judgment is merely "colorable" or "not significantly probative," the Court may grant summary judgment. See Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505.

The Third Circuit has implied that trial courts should reserve grants of summary judgment in trademark actions for exceptional cases because "likelihood of confusion", a key element in trademark infringement and unfair competition claims, generally is itself a question of fact usually appropriate for a jury's determination. See Country Floors, Inc. v. Partnership of Gepner and Ford, 930 F.2d 1056, 1062-63 (3d Cir. 1991); see also A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 166 F.3d 197, 201-02 (3d Cir. 1999) (en banc) ("`likelihood of confusion' between two marks is a factual matter, subject to review for clear error"). Concomitantly, however, Country Floors noted that "`courts retain an important authority to monitor the outer limits of substantial similarity within which a jury is permitted to make the factual determination whether there is a likelihood of confusion as to source.'" Country Floors, 930 F.2d at 1063 (quoting Universal City Studios, Inc. v. Nintendo Co., Ltd., 746 F.2d 112, 116 (2d Cir. 1984)). Accordingly, courts in this Circuit have not been hesitant to grant summary judgment where no reasonable juror could find that a likelihood of confusion existed. See e.g. 800 Spirits, Inc. v. Liquor by Wire, Inc. 14 F. Supp.2d 675, 678-81 (D.N.J. 1998); Smith v. Ames Dept. Stores, Inc., 988 F. Supp. 827, 839-41 (D.N.J. 1997); Taj Mahal Enters., Ltd. v. Trump, 745 F. Supp. 240, 244-45, 254 (D.N.J. 1990).

DISCUSSION

A. Trademark Infringement and Unfair Competition

Plaintiff alleges that defendant's use of a color spectrum on its Solaray and Kal products infringes Centrum's trademark pursuant to § 32 of the Federal Trademark Act (15 U.S.C. § 1114) and § 43(a) of the Federal Trademark Act (15 U.S.C. § 1125(a)), as well as constitutes unfair competition pursuant to the law of the State of New Jersey (N.J.S.A. §§ 56:4-1, 2).*fn5

"`The law of trademark protects trademark owners in the exclusive use of their marks when use by another would be likely to cause confusion.'" Fisons Horticulture, Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 472 (3d Cir. 1994) (quoting Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 462 (3d Cir. 1983)). Proof of trademark infringement requires plaintiff to show that "(1) the mark is valid and legally protectable, (2) the mark is owned by the plaintiff, and (3) the defendant's use of the mark to identify goods or services is likely to create confusion concerning the origin of the good or services." Fisons Horticulture, 30 F.3d at 472.

Likelihood of confusion has been described as the "linchpin" of a trademark infringement or unfair competition claim. See Matrix Essentials, Inc. v. Cosmetic Gallery, Inc., 870 F. Supp. 1237, 1251 (D.N.J. 1994) (quoting Matrix Essentials, Inc. v. Emporium Drug Mart, Inc., 988 F.2d 587, 590 (5th Cir. 1993), aff'd, 85 F.3d 612 (3d Cir. 1996)). It is a necessary element for claims of federal trademark infringement under 15 U.S.C. § 1114 and 15 U.S.C. § 1225(a), see Victoria's Secret Stores, 166 F.3d at 205 and Matrix Essentials, 870 F. Supp. at 1253, as well as for unfair competition under New Jersey common law and N.J.S.A. § 56:4-1. See Matrix Essentials, 870 F. Supp. at 1253; Apollo Distributing Co. v. Jerry Kurtz Carpet Co., 696 F. Supp. 140, 142-43 (D.N.J. 1988).

Federal registration of the Centrum trademark is "prima facie evidence of the validity of the registered mark and of the registrant's ownership of the mark." Barre-National, Inc. v. Barr Labs., Inc., 773 F. Supp. 735, 740 (D.N.J. 1991). Defendant does not question that plaintiff owns the Centrum trademark or that Centrum's federally-registered mark is legally protectable. Accordingly, plaintiff satisfies the first two elements of federal trademark infringement.

Defendant argues, however, that summary judgment on plaintiff's trademark infringement and unfair competition claims is appropriate because no reasonable juror could find, as a matter of law, that the Solaray and Kal labels are likely to be confused with Centrum's trademark. Plaintiff disagrees ...


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