The opinion of the court was delivered by: Irenas, District Judge
HONORABLE JOSEPH E. IRENAS
Presently before the Court is defendants', The Lambert Group, Inc., Marian Lambert, Marc Lambert, and Christian Lambert, motion for summary judgment. For the reasons set forth below, defendants' motion is granted in part and denied in part. Also before the Court is defendant Douglas Hunsberger's motion for summary judgment. For the reasons set forth below, in section II of this opinion, this motion is granted in its entirety.
Prior to October of 1988, Marian Lambert and her husband Louis Lambert, owned and operated "M. Lambert Travel Services, Inc.," a New Jersey corporation which organized bus tours for senior citizens. In October of 1988, shortly after her husband's death, Marian Lambert sold M. Lambert Travel Services to Richard Adelizzi, the owner of Suncoast Tours, Inc. Five thousand dollars of the total purchase price was allocated to a restrictive covenant whereby Marian and her son Marc agreed not to start another bus tour business for a period of ten years. As part of the sales contract, Marian Lambert agreed to work for Suncoast for "a limited period of time" in order to aid in the transition of her former customers to Suncoast Tours, Inc. (Defendant's Exhibit A, 3).
In December of 1988, Adelizzi registered the fictitious name "Lambert Travel" with the State of New Jersey and Suncoast Tours, Inc., began doing business as "Suncoast Tours/Lambert Travel Co." (hereafter "Suncoast/Lambert"). Marian Lambert was employed by Suncoast/Lambert from October, 1988, until she resigned in early November, 1998. In November of 1998, Ms. Lambert and her two sons, Marc and Christian Lambert, started a new bus tour company for senior citizens and began conducting business as "The Lambert Group."
In December of 1998, plaintiff brought the instant action before this Court and sought a preliminary injunction to prevent defendants from operating under the name "The Lambert Group." Plaintiff claimed that defendants' use of the Lambert name violated the Lanham Act and New Jersey's unfair competition laws because it was likely to confuse Suncoast/Lambert customers. Plaintiff further alleged that Mrs. Lambert had misappropriated trade secret information from Suncoast/Lambert including: a list of prospective customers, a draft copy of an upcoming brochure, and price information from potential vendors know as "cost buildups."
On December 22, 1998, this Court granted plaintiff's request for a preliminary injunction and ordered defendants to stop using the name "The Lambert Group." The Court also ordered defendants to destroy any documents containing the name "The Lambert Group." In addition, defendants were ordered to return any copies of the Suncoast/Lambert customer lists which they had in their possession. Defendants have since abandoned the "Lambert" trade name and have changed their company name to "Senior Excursions, Inc."
"[S]ummary judgment is proper `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.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c)).
In deciding a motion for summary judgment, the Court must construe the facts and inferences in a light most favorable to the non-moving party. Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). The role of the court is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
I. Defendants', The Lambert Group, Marian Lambert, Marc Lambert, and Christian Lambert, Motion for Summary Judgment
A. Trade Name Infringement
In count I of the complaint, plaintiff charges defendants, The Lambert Group, Marian Lambert, Marc Lambert, and Christian Lambert (hereafter "Lambert defendants" or "defendants") with trade name infringement in violation of the Lanham Act, 15 U.S.C. §1125(a)(1). *fn1 In count III plaintiff charges defendants with common law trade name infringement and in count IV plaintiff charges defendants with trade name infringement under the New Jersey Fair Trade Act, N.J.S.A. 56:4-1 et seq. Because a violation of the Lanham Act is also a violation of the New Jersey common law and the New Jersey Fair Trade Act, the Court will analyze these claims under the framework used to analyze Lanham Act claims. *fn2 See Am. Tel. and Tel. Co. v. Winback and Conserve Program, Inc., 42 F.3d 1421, 1433 (3d Cir. 1994) (holding that because the test for common law unfair competition claims under New Jersey common law is essentially the same as the test under the federal Lanham Act, a separate analysis is not required); see also Apollo Distributing Co. v. Jerry Kurtz Carpet Co., 696 F. Supp. 140, 143 (holding that a violation of section 43(a) of the Lanham Act is also a violation of the New Jersey Fair Trade Act).
To prove trade name infringement, plaintiff must show that: (1) its trade name is distinctive and therefore, protectable; and (2) defendants' actions caused a likelihood of confusion among the relevant consumers. See Birthright v. Birthright, 827 F. Supp. 1114, 1136 (D.N.J. 1997)(quoting Dominion Banskshares Corp. v. Devon Holding Co., Inc., 690 F. Supp. 338, 344 (E.D.Pa. 1988)).
In the instant case, defendants do not dispute that the "Lambert" name is distinctive and protectable or that the name is lawfully owned by Suncoast/Lambert. Rather, defendants argue that any confusion created by their brief use of the Lambert name was remedied before plaintiff suffered actual damages. Shortly after the Court's Order of December 22, 1998, defendants changed their company name to "Senior Excursions, Inc." Defendants sent a letter to an unspecified number of customers pointing out the name change. The letter was signed by Marian Lambert and stated, in relevant part:
AS MOST OF YOU KNOW, MY NEW COMPANY IS NOT IN ANY WAY AFFILIATED WITH SUNCOAST/LAMBERT TOURS. HOWEVER, IN ORDER TO MAKE THIS ABSOLUTELY CLEAR TO EVERYONE, I HAVE CHANGED THE NAME OF MY COMPANY TO SENIOR ADVENTURES, INC.
IF BY CHANCE, YOU TENTATIVELY BOOKED WITH ME THINKING THAT I WAS STILL WITH SUNCOAST/LAMBERT TOURS OR IF YOU TENTATIVELY BOOKED WITH ME BUT INTENDED TO BOOK WITH SUNCOAST/LAMBERT, PLEASE LET ME KNOW AND I WILL GLADLY CANCEL YOUR RESERVATION. (Defendants' Exhibit D)(emphasis in original).
Defendants note that plaintiff sent several similar letters to its customers explaining that Suncoast/Lambert was a separate entity from the Lambert Group and/or Senior Excursions. (See Defendants' Exhibit E). Plaintiff also called a list of prospective customers, known as the "hot prospects" list, in order to determine whether they had received a brochure from "The Lambert Group." (Defendants' Exhibit F, Dep. of R. Adelizzi, 292:11-15).
Defendants argue that these actions eliminated any confusion which might have existed as a result of their use of the Lambert name. According to defendants, "[i]t is inconceivable that after this barrage of information the relevant market of consumers would be confused about which company is which." (Defendants' memorandum, 8). In addition, defendants assert that all of these actions were taken before any bookings were finalized or deposit money was received, and therefore conclude that plaintiff did not suffer any damages.
Plaintiff argues that it is not dispositive that defendants did not receive any deposit checks prior to changing their name. Plaintiff maintains that by the time defendants changed their corporate name, they had already begun to establish recognition in the marketplace by using the Lambert trade name and taking advantage of Suncoast/Lambert's goodwill. As a result, plaintiff claims that: (1) it lost sales to defendants; (2) it was forced to make sales at lower prices to retain customers; (3) it experienced increased bulk buying costs; (4) it was forced to forfeit deposits paid to vendors; (5) it expended additional time, money and effort to maintain client goodwill; and (6) it was forced to bear the costs of the present litigation. (Plaintiff's opposition, 7).
The "linchpin" of a trade name infringement claim, like a trademark infringement claim, is a determination that defendants' actions are or were "likely to cause confusion." Matrix Essentials, Inc. v. Cosmetic Gallery, Inc., 870 F. Supp. 1237, 1251 (D.N.J. 1994) (quoting Matrix Essentials v. Emporium Drug Mart, Inc., 988 F.2d 587, 590) (5th Cir. 1993)). To survive a motion for summary judgment, plaintiff need not prove that defendants' actions actually caused confusion, only that they were likely to do so. Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 292 (3d Cir. 1991) , cert. denied, 502 U.S. 939 (1991).
The burden on the plaintiff is less onerous when the goods or services at issue are in direct competition. "When the trademark owner and the alleged infringer deal in competing goods or services, the court need rarely look beyond the mark itself." Interspace Corp. v. Lapp, Inc., 721 F.2d 460, 462 (3d Cir. 1983). In contrast, where the goods or services are not competing, the similarity of the trademarks or trade names is just one of many factors the court must examine. Id. at 462-63.
It is not disputed that plaintiff and defendants offer competing services. Plaintiff and defendants offer a nearly identical service, bus tours, to the same relevant market, senior citizens living in southern New Jersey. Therefore, the relevant question for this Court is whether the similarity of the trade names "Lambert Travel Co." and "The Lambert Group" was likely to cause confusion among potential Suncoast/Lambert customers.
In order to be found likely to cause confusion, two trade names need not be identical, but only "confusingly similar." Country Floors v. Gepner, 930 F.2d 1056, 1063 (3d Cir. 1991). The task for this Court is to determine whether viewing the "overall impression of the marks, as a consumer normally would in the marketplace. . . it is likely that they would create confusion in the mind of an ordinary purchaser." American Cyanamid Co. v. Nutraceutical Corp., 54 F. Supp.2d 379, 387 (D.N.J. 1999)(citing Taj Mahal Enterprises v. Trump, 745 F. Supp. 240, 247 (D.N.J. 1990)).
Looking solely to the trade names themselves, there is little doubt that defendants' adoption of the name "The Lambert Group" was likely to cause confusion among potential customers. See, e.g., Country Floors, 930 F.2d at 1063 (holding that similarity between competing company logos "Country Floors" and "Country Tile" was in itself sufficient to raise a genuine factual dispute on plaintiffs Lanham Act claim). Here, defendants not only used a "confusingly similar" name, they marketed their services to many of the same customers that Marian Lambert had been in contact with as an employee of Suncoast/Lambert. Defendants produced two thousand brochures bearing the Lambert name, many of which were distributed prior to the December 22nd Court Order. Although "The Lambert Group" was a new company, the brochures thanked the customers for their "loyalty, support and help over the many, many years in the past." (Plaintiff's complaint, 69(a)). In addition, the brochure listed tour packages and price information that was nearly identical to those listed in Suncoast/Lambert's brochure, and stated that the brochure contained "most of our most popular destinations." (Plaintiff's complaint, 69(e)). The Court finds that an average consumer receiving this brochure might well be confused about the origin of the services advertised. *fn3
In deciding upon a motion for summary judgment in a trade name infringement dispute, a court looks to find "a minimum of similarity between the [trade names] before it will impanel a jury to pass upon the issue of whether a likelihood of confusion exists." American Cyanamid, 54 F. Supp.2d at 388. ...