Petition — General Footwear Co. v. American Footwear Corp.

Supreme Court brief1980

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Eupreme Court, U,

FILED |

79-1224 |

IN THE i

Supreme Court of the United.

OCTOBER TERM, 1979

GENERAL FOOTWEAR COMPANY LIMITED,

and

UNIVERSAL CITY STUDIOS, INC.,

Petitioners,

against

AMERICAN FOOTWEAR CORPORATION,

: Respondent.

TA ERLE, SEER AIL GRIN, TAME TERI EE IE RIEL LES ORE TEED ELE NE AEE I

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

ee TL, A ET A RSE REY

Evan L. Gorpon

Attorney for Petitioners

55 Broad Street

New York, New York 10004

Of Counsel:

Worsey, CertiumMan, Hart & LeBow

Barry J. BENDES

TABLE OF CONTENTS

Oe a es ee 1

| Stataiee davedved 80! '92 to etm beh 6 ace

I 3

EEE RE a eS 3

Reasons for Granting the Writ .......... Dah elu

The question of whether Universal is entitled

to enjoin American from capitalizing upon the

popularity and commercial value of Universal’s

creativity in creating the two television series in

issue for American’s own profit by adopting the

principal term by which the series and its char-

acters are known and by selling its product

in a manner calculated to evoke an association

with the two television series presents: an im-

portant question of the scope of the federal

trademark and statutory unfair competition

laws and the common law of unfair competi-

tion which has not been, but should be settled

ogg iy BR Ee os pe

The Importance of the Issue Presented .... 9

The significance of the Unsettled Legal Prin-

ciple to the Merchandising Licensing Indus-

WT PMRW SURGE WUL Gr Nobis kckav.c si ccccuecne 11

ii PaBLE OF CONTRI"

PAGE

The Court of Appeals failure to revognize

the applicability of the Doctrine of Unfair

Competition to American’s purloining of the

__ television word and oe Property

PE 5 Cas spelled es «ed Bpld.chiniaga sks 13

The Second Circuit’s decision conflicts with the

law of the Fifth Circnit on the ‘‘Likelihood of

Confusion’’ testi and improperly denies peti-

tioners a federal cause of action under the Lan-

WINS ios v8 Sook hemes pA RG 5 bes pA S04 AG wee Ole 15

CIE, 6h beds RD RAS As os GiRnes ws. Pa Chae ee 20

APPENDIX:

Opinion of the Court of Appeals .................. Al

Judgment of the Court of Appeals ................. A21

Opinion of the U.S.D.C., S.D.N.Y. (Carter, DJ.) .... A23

Deposition of Gary Evans ..............0.ccceeees A36

Exhibits Presented in Evidence at Trial of Action .. A411

TABLE OF AUTHORITIES ili

PAGE

Boston Professional Hockey Association v. Dallas

Cap é Emblem Mfg., Inc., 510 F.2d 1004 (5th ‘Cir.

1975), cert. denied, 423 U.S. 868 (1975), rehearing

denied, 423 U.S. 991 (1976) ............000, 13, 16, 17

D.C. Comics, Inc.. v.. Powers, 465 F.Supp. 843

(S.D.N.Y. 1978). « .... 23. yh wid ch Lie staid wah 17

DeCosta v. Columbia Broadcasting System, 520 F. 2d

499 (1st Cir. 1975), cert. denied, 423 U.S. 1073

COU. Chead reesav easy asad c hao ek Coles ck. 13

Federal-Mogul-Bower Bearings, Inc. v. Azoff , 313 F.2d

eS SE beck oa ccanes% cumsocs moscis oath 16

Fleischmamn Distilling Corp. v. Maier Brewing Co.,

314 F.2d 149 (9th Cir. 1963) .................. 17

Fleaxitized, Inc. v. National Flexitized Corp., 335 F.2d

SE Cee SNR A hh nh d Keo he kh h wasebene 13

Goldstein v. California, 412 U.S. 546 (1973) ........ 13

HMH Publishing Co., Inc. v. Brincat, 504 F.2d 713

(9th Cir. 1974) eT eT ee ee ee ee 14

Ideal Toy Corp. v. Kenner Products, 443 F.Supp. 291

RS MERE Sot eG tan oats ta meee CaN e es oles 13

International News Service v. Associated page 248

USS. 215 (1918)........ WeeeT Tete te ty eee 13

L’Aiglon Apparel, Inc. v. Lana Lobell, Inc., 214 F.2d

RO Se PONE Sa ewes s eecnwadea wees cas 16

Lone Ranger, Inc. v. Cox, 124 F.2d 650 (4th Cir.

ee St OLN be kal bass a Se ke Ka 14

Mortellito v. Nima of Caltforma, Inc., 335 F.Supp.

SE La es BOP ood Ks aad ln es Sone CEU 16

National Football League v. Governor of the State of

Delaware, 435 F.Supp. 1372 (D.Del. 1977) ...... 13

iv TABLE OF AUTHORITIES

PAGE

National Lampoon, Inc. v. American Broadcasting Co.,

Ine., 376 F.Supp. 733 (S.D.N.Y. 1974), aff'd 497

F.2d 1343 (2d Cir, 1974) ..... 2... ee cece ee ees V4

Triangle Publications, Inc. v. Rohrlich, 167 F.2d 969

ee ee ok, eee Moir 14

Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366

(Fie ies TOSS) Sc SI ak 19

Wyatt Earp Enterprises v. Sackman, Inc., 157 F,

Bote. GR CHEAT. Rs SOUS) oi cc ici ccccccccc 14

Zacchint v. Scripps-Howard Broadcasting Co,, 433

US. 562 (1977) ......... data acter Mah see ak 13, 14

. .Statures, Rutes anp Reeurations Crrep

Statutes:

15 U.S.C. Dy MONS ictdcke es 8G cevaiiw hacen 7

DEM ick ckaGiinacsl so waruekke? 2, 3, 15, 16, 17

Se UTR Re A Sininake evan sdcanabweoud knee 2

SEES nea RA rane ite Tae Seb: 8

MME Coos hooks be akas SaeKe ak 8

DIE 6.00060) Pi dkos echoes ea Co 8

Pees adel avenbi cn uch tad wad 2

OrneR AUTHORITIES

Grimes and Battersby, “The Protection of Merchan-

dising Properties,” 69 Trademark Reporter 431

CEPUR) = ai ee edu deus eA Acdece 9, 10

IN THE

Supreme Court of the United States

OCTOBER TERM, 1979

Bes bccenieail a

GENERAL Footwear Company LimiteD,

and

Unrversat City Srupios, Inc.,

Petitioners,

against

AMERICAN Footwear CorPoraTION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Petitioners pray that a Writ of Certiorari issue to review

so much of a judgment of the United States Court of

Appeals for the Second Circuit as affirms a judgment of the

United States District Court for the Southern District of

New York denying a permanent injunction to petitioners.

Opinion Below

The opinion of the United States District Court for the

Southern District of New York (A, pp. 23-35), is reported

at 199 U.S.P.Q. 531 (S.D.N.Y. 1978). The opinion of the

United States Court of Appeals for the Second Circuit

(A, pp. 1-20), is yet unreported.

Jurisdiction

The judgment of the United States Court of Appeals for

the Second Circuit sought to be reviewed (A, pp. 21-22),

was entered on November 9, 1979. The instant petition is

filed within ninety days‘of the judgment and is thus timely,

pursuant to 28 U.S.C. § 2101(c).

Jurisdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

Question Presented for Review

Whether the public interest in fair business practices

and the promotion of useful arts is frustrated by denying

protection to the creator of a famous television series

which took a previously obscure technical and scientific

term, used the term as the primary and secondary titles

_and nicknames of its television series and characters and

gave the term a fanciful meaning connected with the tele-

vision series and cultivated public acceptance and popu-

larity of the term so as to create great commercial value

in the term as a merchandising property against interfer-

ence by a party which intentionally capitalized on the term

for its product as a result of the popularity of the tele-

vision series and exploited that popularity and commercial

value to the detriment of the creator.

Statute Involved

Title 15 U.S.C. § 1125 provides in pertinent part:

“(a) Any person who shall affix, apply, or annex,

or use in connection with any goods or services, or

any container or containers for goods, a false desig-

nation of origin, or any false description or repre-

sentation, including words or other symbols tending

falsely to describe or represent the same, and shall

cause such goods or services to enter into commerce,

and any person who shall with knowledge of the

falsity of such designation of origin or description

or representation cause or procure the same to be

transported or used in commerce or deliver the same

to any carrier to be transported or used, shall be liable

to a civil action by any person doing business in. the

locality falsely indicated as that of origin or in the

region in which said locality is situated, or by any

person who believes that he is or is likely to be

damaged by the use of any such false description or

representation.”

Statement of the Case

Facts in Issue:

In January 1974, Petitioner Universal ‘City Studios, Inc.

(“Universal”), first introduced a program entitled “The

Six Million Dollar Man’’ as a half-season series for ABC

television. The series continued for the next three full

seasons at 8:00 P.M. on Sunday night on the ABC television

network. In the first motion picture created by Universal,

the hero, Steve Austin, played by Lee Majors, suffers a

catastrophic accident, following which he is rebuilt by an

aerospace team at a cost of $6,000,000. The rebuilding of

Steve Austin involved the replacement of an eye, an arm,

and two legs, with artificial organs with capabilities twenty

times more efficient than those of the normal human being.

These artificial super-human parts are denominated

throughout the ensuing series as Steve Austin’s “Bionic”

parts.

Each of the subsequent episodes of the television series

depicts specific action events by Steve Austin and the in-

credible feats he is able to perform as a result of his

specially reconstructed eye, arm and legs. Steve Austin

was immediately nicknamed the “Bionic Man” and was so

designated at the opening portion of each weekly episode

where his superhuman strength, speed and jumping ability

are visually emphasized through a slow-motion sequence.

The ‘‘Bionic Man’’ is the subtitle of the television series

‘The Six Million Dollar Man’’.

In the five years that “The Six Million Dollar Man” ran

as a weekly television series, it consistently attained high

Nielsen ratings indicating that between seventeen million

and nineteen million household audiences per week viewed

the’ show.

In January 1976, Universal commenced a second weekly

television series entitled “The Bionic Woman”. The series

portrayed the exploits of “The Bionic Woman”, a character

which had been introduced in a March 1975 episode of

‘The Six Million Dollar Man’’, and the character had been

featured in three other episodes of “The Six Million Dollar

Man’’ prior to the introduction of the new series. “The

Bionic Woman”’, as well as ‘‘The Six Million Dollar Man’’

is rebuilt following an accident in a manner similar to

Steve Austin, with two artificial legs, an artificial arm, and

a supersensitive ear. Each episode of ‘‘The Bionic

Woman” as well as of “The Six Million Dollar Man”

began with a series of short scenes in which the main

character performed various feats where his or her super-

human strength, speed and jumping ability are visually

emphasized through slow motion and special effects

created by and unique to Universal and these television

shows.

In February 1976, “The Bionic Woman” achieved

a Nielsen rating in excess of nineteen million household

audiences for each of its weekly episodes. Thus, the Uni-

versal creations of ‘‘The Six Million Dollar Man’’ and

‘‘The Bionic Woman’’ were among the most popular tele-

vision series of their time in that approximately forty

million viewers saw one or another or both of the episodes

of ‘‘The Six Million Dollar Man”’ or ‘‘The Bionic Woman’’

during the airing of the shows on a twice weekly basis.

Universal and its affiliated company, Merchandising Cor-

poration of America, Inc., which licenses Universal’s prop-

erties to various manufacturers, embarked from the outset

of the first television series on an aggressive merchandising

campaign of various items designed for young people re-

lated to “The Six Million Dollar Man” and “The Bionic

Woman” television series. These items include all types of

toys, games, clothing (including socks), costumes, slides

and film strips, candy items, phonograph records, and

numerous other items. As of the date of trial, Universal’s

aggressive merchandising campaign of “Bionic” items had

resulted in the receipt of in excess of $10,000,000 in royalties

from numerous licensees. Moreover, the licensees expended

millions of dollars in advertising their respective products

and there was substantial television advertising of both

the series and the products generated therefrom.

Because the T'V shows aired twice a week and in addition

were advertised several times each week by the network,

and because numerous licensed products were in the retail

stores and millions of dollars of advertising were expended

regarding these products, the consuming public was con-

tinually bombarded with “Bionic” in relationship to the

TV shows and those licensed products, so that any product

bearing the TV word “Bionic” was a presold commodity

to the consuming public,

In approximately March 1976, Genera] Footwear Com-

pany Limited (“General”) obtained a license from Mer-

chandising to manufacture and sell children’s sneakers at

retail for approximately $4.00 per pair based on the

themes and characters of the two television shows. The

children’s sneakers in question contained the legend of

either “The Six Million Dollar Man” or “The Bionic

Woman” on the side of the sole, contained a small chevron

or patch with the name of the appropriate television show

on the side of the shoe, had the word “Bionic” embedded

in the bottom of the sole, and contained the legend on the

tongue of each sneaker “Bionic By Chex”. General’s

sales of “Bionic” sneakers exceeded $1,000,000 and 250,000

pairs in the first fifteen months of the contract period end-

ing October 2, 1977. —

Sometime in 1975, Anwelt Corporation, a manufacturer

and seller of workshoes, including boots, safety shoes,

hiking boots and hand-sewn footwear under private labels,

designed a new adult hiking boot. Anwelt designed the

boot at the request of J.C. Penney to be sold under J.C.

Penney’s private label, and not as a “Bionic” product.

Anwelt invested approximately $50,000 in the purchase of

this new adult luxury hiking boot from the manufacturer.

This expenditure was without any relation to the “Bionic”

name.

Respondent American Footwear Corporation (“Ameri-

can”) a company related to Anwelt, is engaged in the busi-

ness of manufacturing and selling at retail under its own

label the same types of shoes as are sold by Anwelt under

private label. In the third week of January 1976, after

American had determined to sell the Anwelt-J.C. Penney

new adult luxury hiking boot under its own label, a meet-

ing was held to select a name for American’s use of the

boot. The decision to call the boot “The Bionic Boot”

was made by Gary Evans, a Vice President of American.

It is conceded by Mr. Evans (A, pp. 36-39), that the name

was selected because of the popularity of Universal’s two

television programs, and that had it not been for the pro-

grams, the name would not have been selected by Ameri-

can. Once the name was selected, American personnel

prepared an advertising poster to be displayed at the Na-

tional Shoe Show in January 1976 in New York. The

poster, designed to advertise American’s new “Bionic

Boot’’, shows a woman in a slow-motion running position

in & pose conveying a sense of motion (like the “Bionic

Woman” character at the beginning of each television

show) (A, pp. 41-42) even though American’s hiking boot

was not designed for running. The pose was created by

Universal to convey a sense of superhuman speed and was

unique to the television series “Bionic” characters.

American invested approximately $3,000 over a period

of almost two years in advertising its newly-named boot.

From January through July 1976, American sold to re-

tailers a total of 1,667 pairs of Bionic Boots and an addi-

tional 2,255 pairs were sold from August 1, 1976: through

July 31, 1977. It is unknown how many of the boots were

sold to the consuming public. During the same period of

time, however, Anwelt sold approximately 5,000 pairs of

the same boot under the J.C. Penney private label.

Proceedings Below:

American commenced the instant dispute by filing an

action in the New York Supreme Court on July 30, 1976,

against General, seeking, among other things, to enjoin

General from manufacturing and selling its Bionic chil-

dren’s sneakers. American claimed that its previous ap-

plication of the mark “Bionic” for adult hiking boots in

the trademark office deprived General of any right to use

the term “Bionic” in connection with the manufacture

and sale of its children’s sneakers.

On August 13, 1976, General removed that action to the

United States District Court for the Southern District of

New York and on September 20, 1976, commenced a sep-

arate action against American in the same court, alleging

that American, by i.3s use of the term “Bionic”, and the

marketing of its “Bionic Boot’’, had infringed upon Gen-

eral’s rights as exclusive licensee of Universal for foot-

wear designed to capitalize on the popularity of the two

Universal television series. Universal was subsequently

granted leave to intervene in both actions and the two

actions were thereafter consolidated for ail purposes.

Jurisdiction of the District Court was invoked under

the trademark laws and the Trademark Act of July 5,

1946, 15 U.S.C. § 1051, et seqg., under diversity of citizen-

ship pursuant to 28 U.S.C. § 1332, pursuant to 28 U.S.C.

§ 1331, and because of pendent jurisdiction pursuant to

28 U.S.C. $1338.

The consolidated action contained the claims by Ameri-

can as plaintiff in its suit against General and Universal

for common law trademark infringement, unfair competi-

tion, and tortious interference with business relations and

also contained the claims of Universal and General against

American for common law and statutory trademark in-

fringement, unfair competition, false designation of origin,

passing off, and dilution.

Following a non-jury trial, the United States District

Court for the Southern District of New York found that

because American had filed a trademark application for

the use of the term “Bionic” in connection with footwear

before General, that American was entitled to an injunc-

tion against Universal and General for trademark in-

fringement and unfair competition. The District Court

further found that Universal and General were not en-

titled to sizailar relief against American.

On November 9, 1979, the United States Court of Ap-

peals for the Second Circuit, finding that American had

established none of the criteria to sustain an injunction

against Universal and General, reversed so much of the

judgment of the District Court as granted that injunction.

The Court of Appeals, however, affirmed that part of the

judgment that denied an injunction to Universal and Gen-

eral despite the Court’s following findings: that Universal,

through the showing of its immensely popular television

series entitled ‘‘The Six Million Dollar Man’’ and the

‘‘Bionic Woman’”’, had popularized and cultivated public

acceptance of the relatively unknown word ‘‘Bionic’’; that

the term ‘‘Bionie’”’ as popularized by Universal, had a sep-

arate television meaning unrelated to the dictionary defini-

tion of ‘‘bionics”’; that Universal’s efforts in popularizing

the term ‘‘Bionic”’ was sufficient to support a finding of dis-

tinctiveness; and that American, by naming its footwear

the ‘‘Bionic Boot,’’ had intended to capitalize on Uni-

versal’s popularization of the word ‘‘Bionic.’? The Court

further found that Universal’s merchandising program was

expanding into new fields (A, pp. 18-19).

As a result of the Court of Appeals’ decision, all pMrties

were permitted to use the term ‘‘Bionic’’ with reference to

the merchandising of the footwear that the parties

presently merchandise.

REASONS FOR GRANTING THE WRIT

The question of whether Universal is entitled to

enjoin American from capitalizing upon the popu-

larity and commercial value of Universal’s creativity

in creating the two television series in issue for Ameri-

can’s own profit by adopting the principal term by

which the series and its characters are known and

by selling its product in a manner calculated to

evoke an association with the two television series

presents an important question of the scope of the

federal trademark and statutory unfair competition

laws and the common law of unfair competition

which has not been, but should be, settled by this

Importance of the Issue Presented.

One commentator has recently taken note of the

growing phenomenon of the licensing of merchandis-

ing properties on an extensive scale, Grimes and Bat-

tersby, ‘‘The Protection of Merchandising Properties’,

69 Trademark Reporter 431 (1979) (hereinafter cited as

‘‘Grimes’’). Grimes notes that merchandising properties

include ‘‘any word, name, title, symbol, character or per-

sonality image, design or combination thereof which, when

used on or in association with a particular product [or

service], will create consumer demand therefor.’’ Grimes,

swpra, at 431.

Many of the currently popular merchandising properties

emanate from the entertainment industry. Movie titles

(Jaws) and the names of television stars (Farran Fawcett)

and cartoon characters (Mickey Mouse and Snoopy) are

frequently used merchandising properties, as are the names

of sports figures (Reccm Jackson). The wide range of

goods and services sold under these merchandising proper-

ties vary from toys (Farran Fawcetr dolls) to candy

(Reeare bars). Well-known names and trademarks outside

the entertainment area are also widely used merchandising

marks. The name Oxec Cassini appears on a great variety

of goods, including clothing, toiletries, and carpeting, while

the famous Bupwetser trademarks have been placed on

everything from T-shirts to waste cans.

The growth of licensing of merchandising properties on

an extensive scale is evidenced, for example, by the licens-

ing of cartoon characters alone, which in 1978 reportedly

generated $65.3 million, and by the licensing campaign from

the motion picture Star Wars, which is estimated to have

produced $400 million in retail sales as of October 1978.

Grimes, supra, at 436. In the present case, the Court of

Appeals noted that petitioner Universal received royalties

in excess of $10 million from its merchandising program

connected with the name “Bionic” and the television shows

“The Six Million Dollar Man’’ and “The Bionic Woman”

(A, p. 15). Thus, retail sales would have been considerable.

An enormous industry has developed around the li-

censing of merchandising properties, including companies

whose revenues are entirely dependent upon royalties from

merchandising properties. One such company, Merchan-

dising Corporation, is Universal’s exclusive licensing agent.

The licensing of television words and characters is ex-

tremely valuable because a manufacturer is buying for his

product the use of a word and/or personality which has

acquired the attributes of a very strong trademark, i.e.

instant recognition and consumer demand.

The. Significance of the Unsettled

Legal Principle to the Merchandising

Licensing Industry.

In the instant case, it is conceded by American that the

use of the term “Bionic” was prompted by the television

series. Indeed, American’s Vice President, Gary Evans,

conceded that had it not been for Universal’s television

program, the word “Bionic” would probably never have

been selected by American (A, pp. 36-39). The Court of

Appeals specifically found that American adopted the term

“Bionic” to capitalize on the television series (A, p. 4) and

further accepted Universal’s argument that it had popular-

ized the term “Bionic” by agreeing with the District Court

that “Bionic” as used by Universal and as adopted by

American, was “a television word” (A, p. 30). Indeed, the

evidence is overwhelming and uncontested that American’s

adop..on of the term “Bionic” and the definition by Mr.

Evans of that term as “strong, rugged [and] outdoor”

(A, p. 38), specifically reiates to the television series and

the television word “Bionic”.

The Court of Appeals nonetheless ruled that Universal

had failed to establish its right to an injunction based upon

American’s clear misappropriation of the television word

“Bionic”. The Court of Appeals stated that “one can not

sell his product by misappropriating the good will of an-

other through misleading the public into thinking that it is

sponsored by or derived from something else” (A, p. 12).

The Court of Appeals thus ruled that unless a showing can

be made of confusion of customers between American’s

product and a sponsorship of that product by Universal,

that no cause of action existed in favor of Universal (A,

p. 14).

As a result of the Second Circuit’s opinion, the viability

of Merchandising and the vast industry of licensing mer-

chandising properties is severely threatened.

The creators of television programs or movies, sports

figures, or other persons possessing merchantable property

in their names, likenesses or symbols are rarely in the busi-

ness of manufacturing toys, sporting wear or other p.oducts

or services commonly bearing merchandising properties.

The Second Circuit opinion is likely to induce the manu-

facturers of these types of products to ignore the licensing

programs of the creators of these merchandising properties

and to cash in directly and immediately upon the popularity

of the properties. A shoe manufacturer, for example, will

easily be able to establish priority of use of a particular

merchandising property in connection with shoes over the

movie studio that created popularity in the property. The

same is true with other merchandise manufacturers.

Following the debut or establishment of each successful

movie, television show or famous trademark, there will be

a flood of trademark uses and applications for trademark

registrations in the U.S. Patent and Trademark Office for

the same name or symbol for various goods and services

by different predators. The federal trademark law and

federal trademark registrations will thereby be unfairly

used by these predators to carve their own slices from the

merchandising pie created by the movie, television show

or famous trademark. As a further consequence of the

Second Cireuit opinion, such predators will be unjustly

enriched due to the efforts and at the expense of the creator

of the merchandising property.

Thus, contrary to the Second Circuit’s assumption that

the district court’s judgment (and, therefore, its own

ruling) ‘‘in no way interferes with Universal’s trademark

rights in its T.V. shows or its licensing operations in re-

spect thereto’’ (A, p. 35), the lower courts’ rulings present

@ grave danger to Universal’s licensing operations and the

merchandise licensing industry.

The Court of Appeal’s Failure to Recognize

the Applicability of the Doctrine of Unfair

Competition to American’s Purloining of

the Television Word and Merchandising

Property “Bionic”.

This Court long ago established that a cause of action in’

unfair competition exists when a defendant misappropri-

ates a plaintiff’s product into which the plaintiff has put

time, skill and money, and the defendant uses the plain-

tiff’s product in competition with the plaintiff, gaining an

advantage in that competition because the plaintiff, and

not the defendant, has expended the energy to produce it,

International News Service v. Associated Press, 248 U.S.

215 (1918). Recently, this Court has reaffirmed the right

to protection of the product of one’s own talents and

energy from improper economic exploitation of another,

Zacchim v. Scripps-Howard Broadcasting Co., 433 U.S.

562 at 575-576 (1977); Goldstein v. California, 412 U.S.

546, 570-571 (1973), and lower courts in various jurisdic-

tions have followed this Court’s pronouncements, DeCosta

v. Columbia Broadcasting System, Inc., 520 F.2d 499, 570

(1st Cir. 1975), cert. denied, 423 U.S. 1073 (1976); Boston

Professional Hockey Association, Inc. v. Dallas Cap 4

Emblem Mfg., Inc., 510 F.2d 1004 (5th Cir. 1975), cert.

denied, 423 U.S. 868 (1975), rehearing denied, 423 U.S.

991 (1976); Ideal Toy Corp. v. Kenner Products, 443 F.

Supp. 291 (S.D.N.Y. 1977); National Football League v.

Governor of the State of Delaware, 435 F.Supp. 1372

(D.Del. 1977). Moreover, the United States Court of Ap-

peals for the Second Circuit, from which this case em-

anates, has also established the salutary rule that unfair

competition encompasses a broad range of unfair trade

practices generally described as the misappropriation of

the skills, expenditures and labors of another. Flezitized,

Inc. v. National Flexitized Corp., 385 F.2d 774, 781 (2d

Cir. 1964). The misappropriation can, for example, involve

the theft of goodwill inherent in a person’s right of pub-

licity in the exploitation of his personality and talents,

Zacchini v. Suripps-Howard Broadcasting Co., supra, at

577.

The Court of Appeals, by ruling that American’s ad-

mitted purloining of the television word “Bionic” was per-

missible so long as it did not confuse customers as to the

source of sponsorship of the product, placed an unnecessary

limitation on the foregoing established principles in the law

of unfair competition. It is the misappropriation of the

skills, labors and expenditures of another and not the effect

which the misappropriation may have in the marketplace

once it is accomplished that gives rise to Universal’s cause

of action.

The Court below recognized that rights can accrue from

the misappropriation of symbols such as that involved in

the instant case, see, e.g., Triangle Publications, Inc. v.

Rohrlich, 167 F.2d 969 (2d Cir. 1948); Lone Ranger, Inc.

v. Cox, 124 F.2d 650 (4th Cir. 1942); National Lampoon,

Inc. v. American Broadcasting Co., Inc., 376 F.Supp. 733

(S.D.N.Y. 1974), aff'd 497 F.2d 1343 (2d Cir. 1974) ; Wyatt

Earp Enterprises v. Sackman, Inc., 157 F.Supp. 621

(S.D.N.Y. 1958). The Court ruled, however, that the mere

misappropriation of a symbol popularized and given com-

mercial value by another was not actionable and that there

is a requirement of substantial secondary meaning in a

plaintiff’s arbitrary trademark, Triangle Publications, Inc.

v. Rohrlich, supra (secondary meaning in mark “Seven-

teen”), or bad faith predatory conduct justifying relief,

Lone Ranger, Inc. v. Cox, supra; HMH Publishing Co., Inc.

v. Brincat, 504 F.2d 713 (9th Cir. 1974) (bad faith). Ap-

parently, the Court of Appeals confused the standard re-

quired to establish substantial commercial value in a mark

by relying upon the impact of the mark in the marketplace,

rather than solely upon the conduct of the infringer in pur-

loining the mark in the first place. The fact that American

considered the television word ‘Bionic” to have a com-

mercial value sufficient to misappropriate it should be all

the evidence that is required.

Although Universal believes that the mere adoption of

the television word “Bionic’ by American is sufficient to

give Universal the right to enjoin the use of the term, it is

also apparent that American went further in its attempt to

capitalize upon the popularity of the television word

“Bionic’’ by its advertisement of the Bionie Boot.

The advertisement shows a woman in a running pose

similar to the running pose adopted by Universal’s theme

character at the opening of each program of the “Six

Million Dollar Man”, or the “Bionic Woman”. The Court

of Appeals dismissed this element of unfair competition by

stating that an advertisement for footwear lends itself to a

running pose and that the similarity between the poster

and the scene for a television show are not so marked that

when the poster is displayed together with the scene, an

ordinarily prudent public would be likely to be misled into

believing that any sponsorship arrangement existed between

Universal’s television show and American’s product (A,

p. 8).

Thus, the Court of Appeals not only ruled that the mere

purloining of the television word “Bionic” was not action-

able, but also ruled that there must be evidence of actual

customer confusion as to the sponsorship of the infringing

product in order to constitute an action for unfair competi-

tion. Thus, the Court ruled that Universal could not enjoin

American merely upon a showing of an attempt to capitalize

upon the popularity of the television series and the result-

ing damage to Universal’s merchandising licensing pro-

gram.

The Second Circuit’s Decision Conflicts With the

Law of the Fifth Circuit on the “Likelihood of Con-

fusion” Test and Improperly Denies Petitioners

a Federal Cause of Action Under the Lanham Act.

Among the legal theories advanced by Universal in the

courts below was a violation of the Lanham Act, in partic-

ular Section 43(a), 15 U.S.C. §1125(a). To petitioners’

knowledge, this section of the Lanham Act and the “likeli-

hood of confusion” test under this and other sections of the

Act have never been interpreted by this Court. Asa result,

the federal courts have not uniformly applied this test.

Section 43(a) creates a statutory federal tort apart from

common law unfair competition. Federal-Mogul-Bower

Bearings Inc. v. Azoff, 313 F.2d 405 (6th Cir. 1963). The

section may be invoked by “a broad class of suitors injured

or likely to be injured”, L’Aiglon Apparel Inc. v. Lana

Lobell Inc., 214 F.2d 649, 651 (3d Cir. 1954), and is not

limited to suits between business competitors. Mortellito

v. Nina of California, Inc., 335 F.Supp. 1288, 1294 (S.D.N.Y.

1972). Section 43(a) does not require ownership of a

federal trademark registration. Boston Professional

Hockey Association Inc. v. Dallas Cap & Emblem M fg. Inc.,

Supra.

The Second Circuit construed the test “under both the

Lanham Act and the common law” as “the likelihood that

the consuming public will be confused as to the source of

the allegedly infringing product” (A, p. 16). -However,

as noted in Boston Professional Hockey Association, Inc.

v. Dallas Cap ¢ Emblem Mfg. Inc., supra, at 1012, “the

[Lanham] act was amended to eliminate the source of

origin as being the only focal point of confusion.’’ The

Boston court and other courts considering merchandising

rights under section 43(a) and the law of unfair competi-

tion have held that the likelihood of confusion test is

satisfied by:

‘‘the fact that the defendant duplicated the protected

trademarks and sold them to the public knowing that

the public would identify them as being the teams’

trademarks. The certain knowledge of the buyer that

the source and origin of the trademark symbols were

in plaintiffs satisfies the requirement of the act. The

argument that confusion must be as to the source of

the manufacture of the emblem itself is unpersuasive,

where the trademark, originated by the team, is the

triggering mecharism for the sale of the emblem.’’

510 F.2d at 1012.

In other words, likelihood of confusion can be estab-

lished by evidence that the defendant used the merchan-

dising property with knowledge that the public would

associate the mark, if not the goods, with plaintiff.

Most recently, in D C Comics, Inc. v. Powers, 465 F.

Supp. 843 (S.D.N.Y. 1978), the plaintiff, owner of the

Superman story, sought a preliminary injunction under

section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and

under New York’s anti-dilution statute and common law.

Defendant published an underground news publication en-

titled the Daily Planet which was also the title of a mythi-

cal newspaper in the Superman story. Plaintiff had estab-

lished an extensive licensing program around the Superman

name and characters, but had never licensed the term

‘‘Daily Planet”? separate from all of the Superman char-

acters. The court, in granting a preliminary injunction,

stated that the applicable principle of law was:

‘that [where] another’s name was adopted deliber-

ately with a view to obtain some advantage from the

good will, good name, and good trade which another

has built-up, then the inference of [the] likelihood of

confusion is readily drawn, for the very act of the

adopter has indicated that he expects confusion and

resultant profit.’ Fleischmann Distilling Corp. v.

Maier Brewing Co., 314 F.2d 149, 158 (9th Cir. 1963),

cert. denied, 374 U.S. 830 (1963).’? 465 F.Supp. at

848.

In the present case, the lower courts found that defend-

ant was aware of the popularity in “Bionic” generated by

Universal’s television shows and selected “Bionic” as its

trademark because of this popularity and to ‘‘capitalize’’

on it. The survey evidence offered by Universal, which

was rejected on the basis that the survey question was

“too self-serving’’,* showed that 55% of the 802 indi-

viduals surveyed associated a ‘‘bionic product’? with Uni-

versal’s television shows or principal characters. In addi-

tion to using “Bionic”, American also used an advertising

poster showing a woman wearing American’s hiking boots

(which are not designed for running), in a running : pose

copying the running pose used by Universal’s “Bionic

Man”’ and ‘‘Bionic Woman’’ characters at the beginning

of their respective programs. Moreover, both sides alleged

the existence of likelihood of confusion to support their

respective claims, and the Court of Appeals ruled that

Universal, not American, was expanding into new fields

(A, pp. 18-19).

These facts and findings satisfy the likelihood of con-

fusion test of the Fifth Circuit and the aforesaid lower

court decisions and warrant an injunction against Ameri-

can.

The Second Circuit, however, has now taken the view that

the owner of a merchandising property like “Bionic” must

show more than a misappropriation of its property. Uni-

versal was also required to show that American capitalized

on the market created by Universal “by confusing the public

into mistakenly purchasing the product in the belief that

the product is the product of the competitor.” This narrow

focus on consumer confusion as to source of the goods, as

distinguished from endorsement or sponsorship, has not

been required in previous case law. This requirement pre-

sumes that the sole function of the merchandising property

* The Court’s suggestion that the survey question used (‘‘ With

whom or what do you associate a product labelled Bionic?’’)

should have been replaced with a different question (‘‘With whom

or what do you associate a ‘‘bionic boot’’?) further illustrates

the Court’s narrow focus on classic trademark rights and ignores

the non-classic role of merchandising properties.

is to indicate source of origin, and it also suggests that

actual confusion must be shown. However, as shown

earlier, merchandising properties serve functions other

than indicating source, and “the source of origin’ language

was eliminated from the Lanham Act as the focal point of

confusion. Furthermore, actual confusion is not a require-

ment under the Lanham Act. Union Carbide Corp. v. Ever-

Ready Inc., 531 F.2d 366, 383 (7th Cir. 1976).*

The Second Circuit’s view unfairly hampers litigants like

Universal which have not had the time to acquire a

registered trademark** and were not the first to use the

merchandising property in the pertinent market.

A virtually impossible burden of proof is placed on the

owner of a merchandising property when, as here, survey

evidence offered on the issue of likelihood of confusion is

rejected on the ground that the persons surveyed did not

“necessarily have any present purchasing interest concern-

ing American’s hiking boots.” If surveys are to be con-

ducted only of actual consumers, then wrongful conduct

such as American’s could not be stopped before irreparable

harm had occurred. At the time of institution of the law-

suit, American’s ‘‘Bionic’’ boots had only been sold in

minimal quantities, and an insufficient number of actual

consumers were available to survey. It would be improper

and unfair to require Universal to wait until American had

made substantial use of Universal’s mark before relief can

be granted. Rather, the unusually strong ‘‘ generalized link-

* Similarly, secondary meaning, discussed by the Court of Ap-

peals, is an inappropriate requirement once a merchandising prop-

erty is established. The existence of a successful licensing program

as shown here, is highly probative, if not conclusive, that ‘‘Bionic’’

has a meaning and value apart from the dictionary meaning of

the word. Moreover, the Court of Appeals specifically found

‘‘Bionic’’ to be distinctive (A, p. 15).

** Since the inception of this case, Universal has acquired a

number of federal trademark registrations relating to its ‘‘Bionic’’

marks.

age’? found by the lower courts between boots labeled

‘‘Bionic’’ and Universal’s television shows, coupled with

American’s intent to capitalize on Universal’s ‘‘Bionic’’

mark, should have been held sufficient to establish likelihood

of confusion.

The result of the split between the Fifth and Second

Circuits on the likelihood of confusion test is a lack of

uniformity in protecting merchandising properties as

trademarks in the United States. A party which seeks to

capitalize on another’s merchandising property, similar to

the term ‘‘Bionic’’ will be enjoined in Texas; that same

party will be free to enjoy the fruits of another’s efforts

in New York.

CONCLUSION |

For the reasons stated, the petition for a writ of

certiorari should be granted.

Dated: February 5, 1980

Respectfully submitted,

Evan L. Gorpon

Attorney for Petitioner

50 Broad Street

New York, New York 10004

Of Counsel: :

Worsey, Certiuman, Harr & Lesow

Larr, WuHITEsEL & Rockman

RosENFELD, Meyer & Susman

OPINION OF COURT OF APPEALS

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 505—August Term, 1978.

(Argued January 15, 1979

Decided November 9, 1979.)

Docket No. 78-7362

AMERICAN FOOTWEAR CORPORATION,

Plaintiff-Appellee,

—against—

GENERAL FOOTWEAR COMPANY LIMITED,

Defendant-Appellant,

—and—

UNIVERSAL Crty Stupios, INc.,

Intervening-Defendant-A ppellant.

Before:

WATERMAN, GURFEIN and VAN GRAAFEILAND,

Circuit Judges.

Appeal from grant of an injunction, S.D.N.Y.,

Carter, J., enjoining defendant and intervening defen-

dant from infringing plaintiff's trademark “Bionic,”

5365

Si a ch 5 MMR a i a I

Opinion of Court of Appeals

and from on their part asserting exclusive rights to

the use of “Bionic” in the promotion and sale of

footwear.

Injunction order reversed. All parties may use the

term “Bionic” with reference to the merchandising of

the footwear the parties presently merchandise.

District court reversed in part and affirmed in part.

| ~>— 7

EvAN L. Gorpon, New York, N.Y.

(Wofsey, Certilman, Haft & Lebow,

New York, N. Y., Barry J. Bendes, of

counsel; Rosenfeld, Meyer & Susman,

Beverly Hills, Calif., William Billick,’

of counsel) for Appellants.

LAWRENCE ROSENTHAL, New York, N.Y.

(Blum, Moscovitz, Friedman &

Kaplan, New York, N.Y.) for Ap-

pellees. :

WATERMAN, Circuit Judge:

Defendant-appellant General Footwear Company

Limited (General) and intervening defendant-appellant

Universal City Studios, Inc. (Universal) appeal from

an interlocutory judgment entered in the United

States District Court for the Southern District of

New York, Carter, J., granting plaintiff-appellee

American Footwear Corporation (American) an injunc-

tion against infringement of its trademark “Bionic”

in connection with the promotion and sale of

footwear. The judgment appealed from enjoins

General and Universal from asserting exclusive rights

to use of the term “Bionic” in connection with the

5366

Opinton of Court of Appeals

promotion and sale of footwear, but in no way in-

terferes with Universal’s trademark rights in its T.V.

shows or its licensing operations in respect thereto.

The district court found that inasmuch as Univer-

sal had not registered or applied for registration of

“Bionic” as a trademark prior to the time American

selected the mark and applied for registration that

no statutory trademark issues were involved. Relying

primarily upon American’s priority of use, the lower

court concluded that American established its right

to use “Bionic” in connection with the promotion and

sale of its footwear, and therefore, as a result of

Universal’s “Buyers Beware” advertisement, designed

to create the impression that American was guilty of

trademark infringement, American has suffered ir-

reparable injury. Based upon the foregoing facts, the

court determined that American had established iis

entitlement to an injunction against Universal for

trademark infringement and unfair competition.

Universal and General argue that enjoining them

from licensing or using the word “Bionic” in connec-

tion with the promotion and sale of footwear because

of American’s prior use of the word constitutes an

inequitable restriction upon a creator's use of a fan-

ciful term and contend that they are entitled to an

injunction against American based on American’s un-

fair competition in attempting to capitalize upon the

success of Universal’s T.V. shows by _ misap-

propriating an essential element thereof in the word

“Bionic.” Defendants-appellants also contend that

American failed under recognized principles of

trademark law to establish any of the criteria

necessary for the issuance of the injunction granted

to it by the district court and urge the dissolution of

that injunction.

5367

Optnton of Court of Appeals

We are in agreement with the defendants-appel-

lants’ contention that American failed to establish

the necessary elements for issuance of an injunction

and hereby order its dissolution. As to the ap-

pellants’ contention that they are entitled to an in-

junction restraining American, we find that, because

appellants failed to establish a likelihood of confusion

such that a substantial number of ordinarily prudent

purchasers might be misled into mistakenly purchas-

ing American’s footwear, American’s usage of the

trademark “Bionic,” although admittedly adopted to

capitalize on public receptiveness to a word Universal

was responsible for popularizing, does not establish a

case of unfair competition or trademark infringement

entitling them to enjoin American’s use of the word

“Bionic” in connection with the promotion and sale

of its hiking boot.

This action, a suit for declaratory relief brought in

the New York Supreme Court, was initiated on July

30, 1976, by American against General, which, pur-

suant to license from Universal, was using “Bionic”

in the manufacture and sale of inexpensive children’s

sneakers. On August 13, 1976, General, however,

removed that action to the United States District

Court for the Southern District of New York and on

September 20, 1976, commenced a separate action

against American in the United States District Court.

Universal was granted leave to intervene in both ac-

tions. Subsequently the two actions were consolidated

for ali purposes.

The consolidated action contains the claims by

American as plaintiff in its suit against General and

Universal for common law trademark infringement,

unfair competition, and tortious interference with

business relations, and also the claims Universal and

5368

Opinton of Court of Appeals

General assert against American in their action for

common law and statutory trademark infringement,

unfair competition, false designation of origin, pass-

ing off, and dilution.

The events leading up to the present controversy

are lengthy and involve numerous peripherally

related facts which will not be discussed at length.

Beginning in January 1974 Universal, a_ television

and motion picture studio, began what became an

immensely popular T.V. series entitled “The Six

Million Dollar Man.” The story line of this series con-

cerned the adventures of a “bionic” man who, after a

catastrophic accident, had been restored by a team of

doctors through the use of numerous artificial limbs

and organs. As a result, the “bionic” man possessed

great physical strength and powers. This series was

followed by another with a similar theme featuring a

“bionic” woman, first aired in January 1976 under

the title of “The Bionic Woman.” Universal has ap-

plied for or registered numerous trademarks having

reference to these two television shows in the fields

of entertainment and of toys, and has begun a

vigorous merchandising campaign exploiting the

popularity of these two television programs. As of

January 1976, however, its only registered mark was

for “The Six Million Dollar Man” in the field of

entertainment services.

In the fall of 1975 American, through its sister

company Anwelt Corp., designed a multipurpose hik-

ing boot. The trademark “Bionic Boot” was adopted

for the hiking boot in January 1976, at a brain-

storming session of the American staff. It is un-

disputed that the idea for the trademark was

generated from the highly popular television series

5369

Opinion of Court of Appeals

“The Six Million Dollar Man,” where the hero is

sometimes referred to as the “Bionic” man.

American searched the records of the U. S. Patent

and Trademark Office to ascertain whether “Bionic”

had been registered as a federal trademark on

footwear or whether there were any pending applica-

tions so to register. American was advised that the

mark “Bionic” was available for registration and that

while “Bionic” or other related terms had been used

as trademarks for various goods, the mark “Bionic”

had never been registered or applied for in connec-

tion with footwear. American, therefore, went ahead

with its plans to use “Bionic” as a trademark and

displayed the boot under that mark at the New York

Shoe Fair in February 1976. The trademark “Bionic”

by American was affixed to the heel pad of the boot

and was prominently displayed on the box.' Ameri-

can’s application for federal registration of the trade-

mark “Bionic” was filed on June 9, 1976. The first

customer orders for the boot were dated February

1976, and the first shipment to customers was in

July 1976. “Footwear News” also featured American’s

“Bionic Boot” in its April 26, 1976, supplement.

Beginning in December 1975 Merchandising Cor-

poration of America, Inc. (Merchandising), the com-

1 American affixes its trademark to its boots on a heel pad as

foliows:

BIONIC™

AMERICAN

The gummed label affixed to the box in which the “Bionic Boot”

is sold reads as follows:

BIONIC™ BOOT

AMERICAN

5370

Optnton of Court of Appeals

mercial arm of Universal, began negotiations with

General concerning commercial exploitation of its

“The Six Million Dollar Man” series in the footwear

field. Although some agreement was reached in

March 1976, the district court found that the earliest

date at which a license was effectuated was some-

time subsequent to October 4, 1976. The court held

that “[tJhe licensing agreement as proposed and as

finally agreed upon always referjs}] to Six Million

Dollar Man and Bionic Woman, and at no -time is

there any reference to a trademark Bionic or to

licensing the use of Bionic alone or indeed licensing

anything separate and apart from the TV shows

mentioned.” (Joint Appendix at 15.)

As a result of the article in “Footwear News

featuring American’s “Bionic Boot,” Universal’s sub-

sidiary, Merchandising, sent a letter dated June 25,

1976, to American charging trademark infringement.

Thereafter on July 26, 1976, Merchandising pub-

lished in “Footwear News” a “Buyers Beware” adver-

tisement which stated that Universal alone had the

right to use “Bionic” as a trademark and charged

trademark infringement against all who used the

mark without its permission.

At the outset of its opinion the district court

found that Universal had not registered or applied

for a registration of “Bionic” as a trademark for any

goods prior to the time American selected the mark

and applied for its registration and accordingly it

held that no statutory trademark issues were in-

volved. The district court recognized that:

It was entirely permissible for American to at-

tempt to capitalize on public receptiveness to a

concept, idea or word which Universal has been

responsible for creating or popularizing. The only

5371

”

Optnion of Court of Appeals

limitation is that the party who takes advantage

of the atmosphere the other party has helped

create may not achieve a competitive boost by

confusing the public into mistakenly purchasing

his articles believing it to be that of his com-

petitor. (citation omitted). American has not been

guilty of that fault. It has at all times made

clear that the Bionic boot it was attempting to

promote was an American product. No effort of

any kind was made to associate the boot with

Universal’s TV shows or with any of the char-

acters in those shows. (Joint Appendix at

17-18.)

The court concluded, therefore, that the real issue in

that controversy was whether Universal through its

T.V. shows had foreclosed use in the marketplace of

“Bionic” or “Bionics” by others. The court held that

“Bionic” as used by American was an arbitrary mark,

whereas its use by Universal was as a descriptive

term (i.e. bionic man, bionic woman, bionic boy,

2 Appellants dispute this finding by the district court. They con-

tend that American's intent to capitalize upon the popularity of

Universal's television shows was evidenced by a poster, showing

a woman in a running pose similar to the running pose adopted

by Universal's theme characters in the opening segménts of each

episode of “The Six Million Dollar Man” and “The Bionic

Woman,” which was employed by American as part of the adver-

tising display promoting its “Bionic Boot” at the National Shoe

Fair held in New York City in February 1976. On the other

hand, conceding that American's “Bionic Boots” were not design-

ed to be the functional equivalent of track shoes, an advertise-

ment for footwear does lend itself to a running pose. Moreover,

the similarities between the poster and the scenes from the TV

shows are not so marked that, when the poster is displayed

together with numerous and prominent references to American

and to no other entity, an ordinarily prudent purchaser would be

likely to be misled into believing that any sponsorship arrange-

ment existed between Universal's TV shows and American's pro-

duct.

5372

Optnton of Court of Appeals

bionic dog),? and Universal had therefore failed to

establish a right to be accorded use priority over

American, citing Polaroid Corp. v. Polarad Elec-

tronics Corp., 287 F.2d 492 (2 Cir.), cert. denied,

368 U.S. 820, 82 S.Ct. 36 (1961).

Additionally, the court held that “(t]he word bionic

has not been shown to have acquired a secondary

meaning so that the public associates the term with

Universal or its TV series” (Joint Appendix at 18).

In so holding the court rejected survey evidence in-

troduced by Universal that purported to demonstrate

public association between the word bionic and the

T.V. series.‘

3 That is to say, Universal's usage of the adjective “bionic” was

intended to correspond with that term's dictionary meaning.

“concerning the science of designing instruments or systems

modeled after living organisms.”

4 At trial Universal offered two surveys conducted under the

supervision of Dr. Russell Haley, a telephone survey and a shop-

ping center survey.

The telephone study was conducted on a national probability

sample of individuals 16 years of age or older. 802 individuals

were asked a single question: “With whom or what do you

associate a product labelled Bionic?” Of the 802 interviewees

34.7% gave no associational response whatsoever and 55"

associated a product labeled Bionic with Universal's television

shows or their principal characters. Although the latter percen-

tage may be significant, the form of the survey question was too

self-serving, in that the more relevant inquiry should have been

“With whom or what do you associate a ‘Bionic’ boot?” See

American Basketball Association v. AMF Voit, Inc., 358 F.Supp.

981, 986 (S.D.N.Y.), affd 487 F.2d 1393 (2d Cir. 1973), cert.

denied, 416 U.S. 986, 94 S.Ct. 2389 (1974).

The second study, the on-site shopping center survey, involved

307 personal interviews in six shopping centers throughout the

country. Each of the interviewees was shown an American pro-

motional poster for the “Bionic Boot,” and was then asked:

“With whom or what do you associate the term Bionic Boot?”

Out of the 307 persons interviewed 74.3% identified the poster

ae heing connected with Universal's “The Six Million Dollar

Man” or “The Bionic Woman” television series or with their

5373

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A10

Opinion of Court of Appeals

Universal and General concede that if the term,

t.e., word, “bionic” had been used in its descriptive

dictionary sense in relation to a product whose func-

_tional use would correspond to that descriptive sense,

Universal has not foreclosed the use of such a term

by others in the marketplace; but they argue that

the court, in denying their application for an injunc-

tion, misapprehended the nature of their claim. First,

Universal argues that it has foreclosed the use of the

“television word Bionic” to others due to its efforts

and skills in developing and popularizing the word

principal characters. Assuming that this percentage is high

enough to be significant, the critical defect in this survey was

the failure to conduct it under actual marketing conditions.

Whenever American had displayed this poster at various shoe

fairs or industry trade shows, the poster always was shown in

an environment replete with references to American as the seller

of the boot. However, once removed from this environment, the

poster differed from American's other “Bionic Boot” adver-

tisements in that the poster itself did not contain any references

to American. This defect was pointed out by the district court

during Dr. Haley's testimony, the court stating:

. one of the issues in the case is the possibility of confu-

sion on the part of the consumer, so it seems to me that us-

ing the advertisement in the form that the defendant finds

objectionable . . . would get a more accurate response as to

whether or not there is the likelihood of confusion with the

defendani's product than leaving it off.

(Joint Appendix at 698-99); see American Luggage Works, Inc.

v. United States Trunk Co., 158 F.Supp. 50, 53 (D.Mass. 1957)

(Wyzanski, J.), affd sub nom. Hawley Products Co. v. United

States Trunk Co.,'259 F.2d 69 (1st Cir. 1958). Moreover, the

survey participants, although former purchasers of hiking boots,

did not necessarily have any present purchasing interest concern-

ing the particular matter being surveyed. As noted by Judge

Wyzanski in American Luggage Works, Inc., supra, 158 F.Supp.

at 53, “Many men do not take the same trouble to avoid confu-

sion when they are responding to sociological investigators as

when they spend their cash,” quoted approvingly in 259 F.2d at

Accordingly, in light of these methodological defects, the

district court's rejection of this survey evidence was not clearly

erroneous.

5374

All

Optnton of Court of Appeals

through the television series in which the word is us-

ed as part of the title of one of the series and is us-

ed as an adjective describing both major characters.

Universal contends that this issue before the court is

not whether the product is identified as being made

by American, but whether the public could confuse

the source of the product’s sponsorship and purchase

it because of a belief that it had some connection

with Universal’s television series.

Secondly, appellants argue that Universal’s use of

the terms “Bionic Man” and “Bionic Woman” on

products marketed by its licensees was, contrary to

the finding of the district court, arbitrary trademark

use, so that Universal is entitled to protection

against a subsequent user of an identical mark,

citing Triangle Publications v. Rohrlich, 167 F.2d

969, 972 (2d Cir. 1948); LeBlume Import Co. v.

Coty, 293 F. 344, 358-59 (2d Cir. 1923); National

Lampoon, Inc. v. American Broadcasting Cos., Inc..

376 F.Supp. 733, 747-48 (S.D.N.Y.) affd 497 F.2d

1343 (2d Cir. 1974). Also, appellants contend that if

Universal's use of the word “bionic” is merely

descriptive, the word has acquired a secondary mean-

ing and appellants are thereby entitled to equitable

protection.

The essence of Universal’s and General’s claim of

unfair competition and trademark infringement is the

adoption by American of the “television word” bionic.

In support of their alternative theories of recovery,

appellants cite: Triangle Publications v. Rohrlich,

supra; Lone Ranger, Inc. v. Cox, 124 F.2d 650 (4th

Cir. 1942); National Lampoon, Inc. v. American

Broadcasting Cos., Inc., supra; and Wyatt Earp

Enterprises v. Sackman, Inc., 157 F.Supp. 621

5375

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Optnton of Court of Appeals

(S.D.N.Y. 1958), all of which stand for the proposi-

tion that the public, through associating a name or

symbol with a particular sponsorship, can be misled

as to sponsorship of a product by the overt use by

another party of that name or symbol. Hence, ap-

pellants reason that if Universal had in fact estab-

lished a protectable right in the terms “Bionic Man”

or “Bionic Woman” then, under principles of trade-

mark law, American has infringed by the use as the

dominant portion of its mark, the portion, “bionic,”

which most clearly identifies the sponsor of the

goods, and therefore American should have been en-

joined from the use of “bionic.”

Although at one time the law of unfair competi-

tion was limited to claims that one party had at-

tempted to pass off his goods as those of another

party, unfair competition is now held to encompass a

broader range of unfair practices which may be

generally described as a misappropriation of the skill,

expenditures, and labor of another. Flexitized, Inc. v.

National Flexitized Corp., 335 F.2d 774, 781 (2d Cir.

1964), cert. denied, 380 U.S. 913, 85 S.Ct. 899

(1965); Ideal Toy Corp. v. Kenner Products Division

of General Mills Fun Group, Inc., 443 F.Supp. 291,

305 (S.D.N.Y. 1977). “(Ome cannot sell his product

by misappropriating the good will of another through

misleading the public into thinking that it is ‘spon- —

sored’ by or derived from something else.” Ideal Toy

Corp. v. Kenner Products Division of General Mills

Fun Group, Inc., supra at 305. Yet, liability in this

area for misimpression or misappropriation has been

limited. For example, one can capitalize on a market

or fad created by another provided that it is not ac-

complished by confusing the public into mistakenly

purchasing the product in the belief that the product

5376

Al3

Optnton of Court of Appeals

is the product of the competitor. Philip Morris, Inc.

v. R. J. Reynolds Tobacco Co., 188 U.S.P.Q. 289

(S.D.N.Y. 1975). All the cases in this area which ap-

pellants rely upon involved proof of a substantial

secondary meaning in plaintiff's arbitrafy trademark,

Triangle Publications v. Rohrlich, supra (secondary

meaning in mark “Seventeen”), or bad faith

predatory conduct justifying relief, Lone Ranger, Inc.

v. Cox, supra (bad faith); HMH Publishing Co., Inc.

v. Brincat, 504 F.2d 713 (9th Cir. 1974) (bad faith).

See also Lincoln Restaurant Corp. v. Wolfies

Restaurant, Inc., 291 F.2d 302 (2d Cir. 1961)

(deliberate attempt to create name-association). Here

the district court found that there was no proof that

American’s advertising was built thematically around

Universal’s television shows, or that American played

down its own name to inspire confusion, or that

American acted in any other way except by the use

of the word “bionic” to suggest any association with

Universal’s television enterprise. In fact, appellants

concede that Universal’s merchandising program uses

the term “bionic” to describe many products sold

under “The Six Million Dollar Man” mark and the

“Bionic Woman” mark; therefore, in view of this

descriptive usage there would be no apparent reason

for a consumer to assume that because the boots

bore the mark “Bionic” the creators of “The Six

Million Dollar Man” or the “Bionic Woman” were

automatically engaging their creations in the spon-

sorship of hiking boots. Additionally, there was no

evidence of prior dealings between American and

Universal as in Wyatt Earp Enterprises v. Sackman.

Inc., supra, and National Lampoon, Inc. v. American

Broadcasting Cos., Inc., supra, which might tend to

5377

Al4

Optnton of Court of Appeals

support a conclusion that American adopted “Bionic”

for the purpose of suggesting an association with

Universal’s television series. Therefore, while

American certainly intended to capitalize on Univer-

sal's popularization of the word “bionic,” we find that.

it did not so capitalize by confusing consumers.

Challenging the findings of the district court, ap-

pellants also contend that by virtue of Universal’s ef-

forts in promoting its television programs the word

“bionic” has come to be equated with the notion of

enormous strength and superhuman ability as op-

posed to its dictionary definition (“The science of

designing instruments or systems modeled after liv-

ing organisms”) and has, therefore, acquired a

secondary meaning.

We previously have discussed the district court’s

disposition of this argument. Although we do not

subscribe to. the view, arguably implicit in the

district court’s reasoning, that survey evidence

gathered for later use in litigation invariably is

suspect and not relevant to the issue of secondary

meaning, Union Carbide Corp. v. Ever-Ready, Inc.,

531 F.2d 366, 381 (7th Cir. 1976), we are of the

opinion that, in view of the numerous deficiencies in-

herent in the surveys here, the district court’s rejec-

tion of this survey evidence was not clearly er-

roneous. See footnote 4, supra.

The doctrine of secondary meaning requires not

only that the mark have a subordinate meaning, but

also that the primary significance of the mark in the

minds of the consumers is the identification of the

producer, not a designation of the product. See

Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 59

S.Ct. 109 (1938); Spang v. Watson, 205 F.2d 703

59378

A1L5

Opinton of Court of Appeals

(D.C.Cir.), cert. denied, 346 U.S. 938, 74 S.Ct. 378

(1954); Blisscraft of Hollywood v. United Plastic Co..

189 F.Supp. 333 (S.D.N.Y. 1960), aff'd in part, revd

in part on other grounds, 294 F.2d 694 (1961). So.

when a company causes the public to associate a cer-

tain word with that company’s business, that word

has a secondary meaning and receives the full protec-

tion of the law of trademark and unfair competition.

The crucial question in a case involving “secondary

meaning” always is whether the public is moved in

any degree to buy an article because of its source.

See Wyatt Earp Enterprises, Inc. v. Sackman, Inc..

supra. Proof of secondary meaning is often difficult

inasmuch as no precise guidelines are applicable and

no single factor is determinative. Each case must.

therefore, be decided on its facts with consideration

given to such elements as the length and exclusivity

of use, sales levels, and extent of advertising and

promotion. The fact that Universal has succeeded in

popularizing the word “bionic,” and cultivated public

acceptance of a relatively unknown word, while suffi-

cient to support a finding of distinctiveness, Alfred

Dunhill of London, Inc. v. Kasser Distillers Products

Corp., 350 F.Supp. 1341, 1359 (E.D.Pa. 1972), aff d,

480 F.2d 917 (3d Cir. 1973); Time Mechanisms, Inc.

v. Qonaar Corp., 422 F.Supp. 905, 912 (D. N.J.

1976), is insufficient to support a finding of secon-

dary meaning. Furthermore, the fact that Universal

invested in excess of $20,000,000 in the production

of its television shows and received royalties in ex-

cess of $10,000,000 from its merchandising program.

as compared with American’s minimal advertising ex-:

penditures in the promotion of its “Bionic Boot’ (ap- ‘

proximately $3,000), while relative to the issue of

9379

Al6

Opinton of Court of Appeals

secondary meaning, is certainly not dispositive. HMH

Publishing Co. v. Brincat, supra at 719. For just as

the expenditure of large sums of money does not in

and of itself create legally protectable rights, so, too,

the mere presence of extensive advertising does not

assure the existence of a likelihood of confusion.

HMH Publishing Co. v. Brincat, supra. Appellants’

survey relative to consumer reactions to boots labeled

“Bionic” only demonstrated a generalized linkage

with Universal’s television programs and did not

demonstrate the existence of any consumer confusion

as to sponsorship or source of manufacture. Such is

insufficient to establish a secondary meaning in the

word.

Appellants’ trademark theory of recovery is no

more persuasive than its misappropriation theory. It

overlooks the well-established principle that trade-

mark rights, unlike statutory copyrights or patents,

are not rights in gross or at large. “There is no such

thing as property in a trade-mark except as a right

appurtenant to an established business or trade in

connection with which the mark is employed.” United

Drug Co. v. Theodore Rectanus Co., 248 US. 90, 97

(1918). The right, therefore, to exclusive use of a

trademark derives from, and is limited by, its actual

use in the marketplace. La Societe Anonyme des Par-

fums Le Galion v. Jean Patou, Inc., 495 F.2d 1265,

1271 (2d Cir. 1974). The test, under both the

Lanham Act and the common law, is the likelihood

that the consuming public will be confused as to the

source of the allegedly infringing product. See

Mushroom Makers, Inc. v. R. G. Barry Corp., 441

F.Supp. 1220, 1225 (S.D.N.Y. 1977), aff'd, 580 F.2d

44 (2d Cir. 1978); Maternally Yours v. Your Materni-

5380

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Optnton of Court of Appeals

ty Shop, 234 F.2d 538 (2d Cir. 1956). As has often

been observed, the law of trademark infringement is

but a part of the law of unfair competition, Hanover

Star Milling Co. v. Metcalf, 240 U.S. 403, 413, 36

S.Ct. 357 (1916), and the same test is applied in

determining each claim. For confusion to arise the

markets need not be identical, Scarves by Vera, Inc.

v. Todo Imports, Ltd. (Inc.), 544 F.2d 1167 (2d Cir.

1976), but the similarity of the markets or products

is a factor meriting the consideration of the likeli-

hood of confusion. Mushroom Makers, Inc. v. R. G

Barry Corp., supra. The trademarks registered to

Universal were in the areas of T.V. entertainmcut

and toys. This market area bears little if any rela-

tionship to footwear, and diminishes the strength of

Universal's contention that it had established a right

to the term “bionic” as a fanciful mark in the field

of footwear. Yet, as recognized by the district court,

the fact that Universal had not utilized the mark,

registered it, or applied for the mark on footwear is

not decisive of the issue, for a trademark owner has

a right to protection against the use of the mark by

third parties on related non-competing goods. The

district court determined that American, by virtue of

the fact that it was the first user of the arbitrary

mark “Bionic” in connection with the promotion and

sale of footwear, as contrasted with Universal's

purely descriptive use of the term bionic, had

established its entitlement to an injunction against

Universal and General for trademark infringement

and unfair competition and Universal’s “Buyers

Beware” advertisement was the basis of the court's

finding that American had suffered irreparable in-

jury. This finding, coupled with the court'’s conclusion

5381

Als

Opinion of Court of Appeals

that American had acquired common law trademark

rights to “Bionic” in the field of footwear, con-

stituted the factual and legal bases for the award of

injunctive relief. Also, the court held that under the

standards set forth in Polaroid Corp. v. Polarad Elec-

tronics Corp., supra at 495, Universal had failed to

establish a right to be accorded priority over

American in the area of the merchandising of foot-

wear.

The question of whether a senior user is entitled

to protection against a junior user on non-competitive

goods was addressed by this court in Polaroid Corp.

v. Polarad Electronics Corp., supra. The factors sug-

gested in Polaroid include, but are not limited to:

[T]he strength of his mark, the degree of

similarity between the two marks, the proximity

of the products, the likelihood that the prior

owner will bridge the gap, actual confusion, and

the reciprocal of defendant’s good faith in adopt-

ing its own mark, the quality of defendant’s

product, and the sophistication of the buyers.

Polaroid Corp. v. Polarad Electronics Corp., supra at

495.

It has long been established in this circuit that the

mere fact of seniority alone does not entitle the first

user of a trademark to injunctive relief. The deter-

mination is to be made on the basis of the equities

involved, and thereby requires an evaluation of the

legitimate interests of the senior user, the junior

user, and the consuming public. Chandon Champagne

Corp. v. San Marino Wine Corp., 335 F.2d 531, 534

(2d Cir. 1964). Therefore, to the extent that

American sought relief for trademark infringement

9382

Al9

Optnton of Court of Appeals

under the Lanham Act, 15 U.S.C. §114, it was

necessary for it to prove the elements of trademark

infringement. See Scarves by Vera, Inc. v. Todo Im-

ports, Ltd. (Inc.), supra; Kiki Undies Corp. v. Prom-

enade Hosiery Mills, Inc., 411 F.2d 1097, 1099 (2d

Cir. 1969), cert. dismissed, 396 U.S. 1054 (1970):

Polaroid Corp. v. Polarad Electronics Corp., supra.

American has clearly failed to meet this burden.

First, “Bionic” is a relatively new mark and therefore

could not be considered a particularly strong mark in

the marketplace. Second, there is little comparability

between the expensive hiking boots sold by American

and the inexpensive children’s sneakers sold by

Universal’s licensee, General. The dissimilarities in

the products (i.e, hiking boots vs. children’s

sneakers) also have an_ indirect bearing on the

marketplace sophistication of buyers inasmuch as the

purchasers of American’s hiking boot undoubtedly are

not motivated by the same considerations as pur-

chasers of “The Six Million Dollar Man” or “Bionic

Woman” “Bionic Sneakers.” American has not

brought its case within the Polaroid factors.

American, the senior user, is not “bridging the gap.”

It is Universal, the junior user, which is expanding

into new fields (i.e., footwear) and not American. As

to the quality of General’s product, American made

no claim in the court below and none here that it

was concerned with General’s competition in manu-

facturing and selling children’s sneakers. And, finally,

American presented no evidence on the crucial issue,

essential to sustain a finding of trademark infringe-

ment, of whether there was likely to be consumer

confusion by the use of the mark by Universal and

General. In fact, the only evidence presented on the

5383

A20

Optnton of Court of Appeals

issue of consumer confusion was the survey evidence

offered by appellants, a survey which failed to

establish the likelihood of such confusion and the

results of which were rejected by the district court.

We find, after consideration of all pertinent fac-

tors under trademark principles and the law of un-

fair competition, that neither party has demonstrated

entitlement to equitable protection of their respective

marks and hereby order the dissolution of the injunc-

tion entered against appellants herein. In so holding,

we do, however, adopt the suggestion made by ap-

pellants that inasmuch as Universal’s and General's

use of the word “Bionic” was clearly accompanied by

references to the respective television series, and that

all the footwear made by General contained the

name of the television series elsewhere on the

footwear, that American will be permitted to con-

tinue to market its “Bionic Boot” simultaneously with

permitting Universal and General to exploit fully

Universal’s creativity by simultaneously marketing

the “The Six Million Dollar Man” and the “Bionic

Woman” “Bionic Sneakers.”

Inasmuch as the district court did not address the

pendent state claims under section 368d of the New

York General Business Law (N.Y. Gen. Bus. Law

§ 368d) and therefore made no findings of fact or

conclusions of law with respect thereto, we deem it

inappropriate to address those issues on appeal.

Opinion of district court reversed in part; affirmed

in part.

5384

OUTPUT SYSTEMS, INC., 157 Chambers St., N.Y. 10007, (212) 374-1234

A2l

Judgment of Court of Appeals.

UNITHD STATES COURT OF APPEALS

For THE Seconp Circuit

At a stated Term of the United States Court of Appeals

for the Second Circuit, held at the United States Court-

house in the City of New York, on the ninth day of Novem-

ber, one thousand nine hundred and seventy-nine.

Present: Hon. Sterry R. Waterman

Hon. Murray I. Gurrern

Hon. ExtswortaH A. Van GRrAaFEILAND

Circuit Judges

78-7362

AMERICAN FoorwEar CorPorRATION,

Plaintiff-Appellee,

GeneRAL Foorwear Company LimirTep,

Defendant-Appellant,

UntversaL Crry Srupios, Inc.,

Intervening-Defendant-

Appellant.

Untversat Crtry Srupios, Inc. and GeneraL Foorwear

Company LiMiTED,

Plaintiffs-Appellants,

AMERICAN FooTwEar CoRPORATION,

Defendant-Appellee.

A22

Judgment of Court of Appeals.

Appeal from the United States District Court for the

Southern District of New York.

This cause came on to be heard on the transcript of

record from the United States District Court for the

Southern District of New York, and was argued by counsel.

On ConsmeraTiION WHEREOF, it is now hereby ordered,

adjudged, and decreed that the judgment of said District

Court be and it hereby is affirmed in part and reversed in

part in accordance with the opinion of this court.

A. Dante, Fousaro,

Clerk

ARTHUR HELLER

By: Arthur Heller,

Deputy Clerk

A23

Opinion of the District Court.

UNITED STATES DISTRICT COURT

SourHern District or New York

File-in

76 Civ. 3594

sé

v—

AMERICAN Footwear CorPoRATION,

Plaintiff,

—against—

GenerRaAL Foorwear Company Limirep and UnrversaL

City Srupios, Inc.,

Defendants.

76 Civ. 4189

Untversau Crry Strupios, Inc. and Genrerat FoorwEar

Company LimitTep,

Plaintiffs,

—against—

AmeERICAN Footwear Corporation,

Defendant.

OPINION

The Parties

American Footwear Corp. (‘‘American’’) is a Massa-

chusetts corporation, having its principal place of business

in Fitchburg, Massachusetts. American and its sister com-

pany, Anwelt Corporation (‘‘Anwelt’’), are now engaged

A24

Opinion of the District Court.

in the manufacture and sale throughout the United States

of high quality footwear ranging in price from $30 to $80

retail. Anwelt has been in operation since 1926, and Ameri-

can since 1965. American sells its products to retailers

throughout the United States under the mark American.

Anwelt sells Anwelt and American products at retail fac-

tory stores in Fitchburg and in Keene, New Hampshire.

Both companies sell in volume to large chains under the

latters’ private ldbels. The companies promote their prod-

ucts through salesmen and manufacturer representatives,

in catalogs, bulletins, trade journals and general advertis-

ing, and at national and regional trade shows.

General Footwear Company Limited (‘‘General’’) is a

Canadian corporation having its principal place of busi-

ness in Montreal, Quebec, Canada. It has been in the

business of importing, manufacturing and selling footwear

in Canada for many years and more recently in the United

States. It is a licensee of Universal in the footwear field—

thé scope ahd nature of the license to be determined in the

resolution of this cotitroversy.

Universal City Studios, Inc. (‘‘Universal’’) is a Dela-

ware corporation with its principal place of business in

Universal City, California. It is in the business of making

and distributing TV motion pictures and is the producer

of the TV series ‘‘Six Million Dollar Man” and ‘The

Bionic Woman.”’’

Merchandising Corp. of America, Inc. (‘‘Merchandis-

ing’’) is a California corporation with its principal place

of business in Universal City, California. Merchandising

is in charge of licensing rights to the use of ‘‘Six Million

Dollar Man’? and ‘‘The Bionic Woman”’ in the promotion

of various commercial products of third parties. Both

Universal and Merchandising are wholly-owned subsidiaries

of MCA, Ine. (‘‘MCA’’) whose principal place of business

is also in Universal City. MCA is not a party to this

action.

A25

Opinion of the District Court.

The Proceedings

This action was initiated on July 30, 1976, by American

against General as a suit for declaratory relief brought in

the New York State Supreme Court, New York County.

On August 13, 1976, General removed the action to this

court. On September 20, 1976, General commenced a sep-

arate action against American in this court. Universal

was granted leave to intervene in both actions, and the two

actions were subsequently consolidated for all purposes.

The consolidated action involves claims by American as

plaintiff in its suit against General and Universal for

common law trademark infringement, unfair competition

and tortious interference with business relations. Univer-

sal and General assert claims against American in their

action for common law and statutory trademark infringe-

ment, unfair competition, false designation of origin, pass-

ing off and dilution. As defendants the parties have filed

as counterclaims the various canses of action they assert

as plaintiffs.

All causes of action in this litigation arise from a claim

by American to common law trademark rights in the trade-

mark Bionic for its shoes and boots. This claim is con-

tested by Universal which asserts a right, both at common

law and statutory, to the exclusive use of the trademark

Bionic on all commercial goods, including shoes and boots

and tue right to bar all others from use of the mark Bionic

except pursuant to a valid license agreement for such use

with Merchandising. General asserts as Universal’s

licensee the exclusive right to use the trademark Bionic

on footwear. American seeks a permanent injunction

against Universal and General for trademark infringement

and unfair competition. Universal and General seek sim-

ilar relief from American. Both sides seek an accounting

for profits.

A26

Opinion of the District Court.

The case was tried September 26 though September 28,

1977. Proposed findings of fact and conclusions of law

and memoranda of authorities were filed in November, 1977.

The Facts Relevant to Right to Permanent

Injunctive Relief

In the fall of 1975, Anwelt and its supplier, Sango Shoe

Manufacturing Co., designed a multi-purpose boot good

for hiking and mountain climbing which is said to have

some novel features enabling the boot to be both light and

sturdy. Some $50,000 in development costs were expended.

The boot was manufactured exclusively for Anwelt and

American, and American sold the boot to J. C. Penny under

a private label, not in issue here, and to retailers under

the trademark Bionic. That trademark was adopted in

January, 1976, at a brainstorming session of the American

staff called to provide a name for the new boot. It is

undisputed that the idea for the trademark was generated

from the highly popular TV series “Six Million Dollar

Man” where the hero is referred to from time to time as

the bionic man, and in which other characters are referred

to as bionic (boy, woman, dog). A second such TV series

entitled “The Bionic Woman” was aired beginning in

January, 1976.

American caused a search to be made by its counsel of

the records of the United States Patent and Trademark

office to ascertain whether Bionic had either been regis-

tered as a federal trademark on footwear or whether any

application for such registration had been filed. The

search was undertaken, and American was advised that the

name was available; that while Bionic or related terms

had been used as a trademark for various goods, the mark

had never been registered or applied for in connection with

footwear.

A27

Opinion of the District Court.

At the time of the search, Universal had registered “Six

Million Dollar Man” as a trademark covering entertain-

ment services through TV movies—the issue date was

November 18, 1975. An application was on file for “Six

Million Dollar Woman” covering toy dolls and that mark

was subsequently registered, its issue date being March

1, 1977. Similarly, an application was on file for “Bionic

Woman,” covering entertainment services through TV

movies, and for “The Bionic Woman,” covering toy dolls

of the action figure type. Registration of each of these

marks was approved—the issue date for “Bionic Woman”

(entertainment) being February 15, 1977 and for “The

Bionic Woman” (toys) being April 12, 1977. In addition,

Universal had applied on March 25, 1976 for registration

of “Bionic Bustout” covering toys but its application was

filed after the search on American’s behalf had been com-

pleted. That mark (“Bionic Bustout”) was registered on

September 21, 1977. Moreover, since this action was com-

menced, Universal has filed a number of applications seek-

ing registration of the mark Bionic alone in connection

with various articles, e.g., optical viewers, eyeglasses, and

footwear.

Armed with the results of the search showing no prior

registration or application, American went ahead with its

plans to use Bionic as a trademark in connection with the

sale and promotion of its new hiking boot. It displayed

the boot under the trademark Bionic at the New York Shoe

Fair on February 7, 8, 1976. The boot and the mark

Bionic were exhibited at the American booth at the fair,

and American was clearly indicated as the source. The

first customer orders bearing the trademark Bionic are

dated February 8, 1976. American placed its first order

for the boot with Sango, its supplier, on February 18,

1976, and made the first shipment to customers on July 2,

1976. The boot was sold throughout the United States at

A28

Opinion of the District Court.

$32-$40 retail. The trademark Bionic by American has

been affixed to the heel pad of the boot and also is prom-

inently displayed on the box in which the boot is sold.

American’s application for federal registration of the

trademark was filed in June 9, 1976.

Universal and General negotiated a license agreement

in 1976. General was interested in making a breakthrough

into the American market. It was felt that a license under

‘*The Six Million Dollar Man’’ and ‘‘The Bionic Woman’”’

TV shows, pursuant to which the characters in these popu-

lar shows could be exploited and the stars could be used

to aid promotion, would help to establish a following for

General’s products in the United States. The negotiations

for the licensing agreement commenced in December, 1975,

and concerned the terms under which General would be

licensed to use the Universal TV series (‘‘Six Million Dol-

lar Man’’ and ‘‘ Bionic Woman’*) and the characters therein

to help General promote a line of footwear on the Ameri-

can market. The licensing agreement as proposed and as

finally agreed upon always refer to Six Million Dollar

Man and Bionic Woman, and at no time is there any refer-

ence to a trademark Bionic or to licensing the use of

Bionic alone or indeed licensing anything separate and

apart from the TV shows mentioned.

Defendants testified that agrement was reached in March,

1976. However, a September 15, 1976, letter mailed to

General proposes to license General to use the rights ac-

quired only in connection with the sale of ‘‘girls’ casual

footwear, slippers, rain footwear and sneakers—the con-

struction composed of canvas, leather or rubber.’’ There

is a letter dated October 4 from General to Merghandising

seeking changes in the proposed contract of September 15 —

and the agreement, as signed, excludes the use by General

of Universal’s trademark on the boots—at issue here. Ac-

cordingly, sometime subsequent to October 4, 1976, is the

A29

Opinion of the District Court.

earliest date a license to General can be said to have been

effected, and that license does not include the right to use

“Six Million Dollar Man” or “Bionic Woman” or the char-

acters in that TV series on boots.

Footwear News selected the American Bionic boot to

feature in its April 26, 1976 supplement. In the Footwear

News’ display the mark Bionic and American as the source

are prominently displayed. This issue of Footwear News

was seen by someone at General. General advised Mer-

chandising by letter dated May 10 that American was using

the trademark Bionic in connection with the promotion

of its hiking boot. In a telegram to General, dated July

10, Merchandising suggested that General move quickly

into the market. On June 25, Merchandising sent a letter

to American charging trademark infringement. Because

of vacation schedules the letter was actually not seen by

anyone in authority at American until July 19. On J uly 26,

1976, Merchandising had published in Footwear News a

buyers beware article in which it claimed that Universal

alone had a right to use Bionic as a trademark, charging

trademark infringement against all who used the mark,

without its permission.

These two suits followed. In preparing for this trial,

Merchandising or its counsel employed Russell Haley &

Associates, Ine. to conduct a survey purportedly to deter-

mine the extent to which the consumer public associated

the term Bionic as used on a boot with Universal’s TV

shows. The survey and its import will be discussed in

more detail infra.

Discussion

It is clear that Universal had not’ registered or applied

for registration of ‘‘Bionic’’ as a trademark on any goods

prior to the time American selected the mark and applied

A30

Opinion of the District Court.

for its registration. At the time the only registered trade-

mark Universal owned was ‘‘Six Million Dollar Man.’’

Applications for registration were on file for ‘‘Bionic

Woman’”’ and ‘‘The Bionic Woman,’’ in connection with

toy dolls and TV shows. There was no registered trade-

mark or application therefor by Universal of any kind

covering footwear. Accordingly, no statutory trademark

issues are involved.

The ‘‘Six Million Dollar Man’’ was a very popular TV

show, and it helped bring the term bionic into more com-

mon usage. The word bionic appears in the 1955 edition

of the New Standard dictionary of the English Language

(Funk and Wagnal) and is there defined as possessing the

quality of repeating in successive generations the same

morphological characteristics. Bionics is defined in the

New World Dictionary 1970 edition as ‘‘The science of de-

signing instruments or systems modeled after living or-

ganisms.” Yet it is fair to say that until Six Million Dol-

lar Man’s reference to bionic man, bionic boy, bionic dog

and bionic woman, that neither bionics nor bionic were

well known or widely used words.

It is also clear that Universal’s TV series ‘‘Six Million

Dollar Man’’ gave American the inspiration to adopt Bionic

as a trademark, but that fact alone does not make out a

case of trademark infringement. It was entirely permis-

sible for American to attempt to capitalize on public re-

ceptiveness to a concept, idea or word which Universal

has been responsible for creating or popularizing. The

only limitation is that the party who takes advantage of

the atmosphere the other party has helped create may not

achieve a competitive boost by confusing the public into

mistakenly purchasing his articles believing it to be that

of his competitor. Philip Morris Inc. v. R. J. Reynolds

Tobacco Co., 188 U.S.P.Q. 289 (S.D.N.Y. 1975). American

has not been guilty of that fault. It has at all times made

A31

Opinion of the District Cowtt.

clear that the Bionic boot it was attempting to promote

was an American product. No effort of any kind was made

to associate the boot with Universal’s TV shows or with

any of the characters in those shows.

Universal in the TV series used bionic as a descriptive

term—e.g., bionic boy, bionic dog—and in 1976 started a

TV series entitled “Bionic Woman’”—again Bionic being

used in a descriptive sense. The word bionic has not been

shown to have acquired a secondary meaning so that the

public associates the term with Universal or its ‘TV series.

It is quite clear, however, that both shows have become

very popular, and that Merchandising’s licensing program

was successfully capitalizing on that fact. A wide variety

of licensing agreements have been concluded. However,

all of the agreements are associated directly with the TV

shows or the characters depicted therein. Generally, pic-

tures of the TV stars who fill the role of “The Six Million

Dollar Man” and “The Bionic Woman” are prominently

displayed on the packaging of the licensed product. None

of the licenses are for the use of the mark Bionic alone.

In Polaroid Corp. v. Polarad Electronics Corp., 237 F.

2d 492, 495 (2d Cir.), cert denied, 368 U.S. 820 (1961)

and Triumph Hosiery Mills, Inc. v. Triumph International

Corp., 308 F.2d 196, 198 (2d Cir. 1962), the measurements

for approach to trademark infringement cases were set

forth, and in Chandon Champagne Corp. v. San Marino

Wine Corp., 335 F.2d 531, 536 (2d Cir. 1964) ; Kiki Undies

Corp. v. Promenade Hosiery Mills, Inc., 411 F.2d 1097,

1099-1100 ‘(2d Cir. 1969), cert. dismissed, 396 U.S. 1054

(1970) ; and King Research, Inc. v. Shulton, Inc., 454 F.2d

66, 68-69 (2d Cir. 1972), these criteria were expanded to

the current yardstick.

The above cases indicate that the factors to be consid-

ered are the strength of the mark, the degree of similarity,

the proximity of the products, the likelihood that the prior

A32

Opinion of the District Court.

owner will bridge the gap, actual confusion, the reciprocal

of defendant’s good faith in adopting the mark, the quality

of defendant’s product, sophistication of the buyer, and

the severe harm an injunction might cause the defendant

against a small benefit to the defendant.

The fact that Universal had not utilized the mark, reg-

istered it, or applied for the mark on footwear is, of course,

not decisive. A trademark owner has a right to protec-

tion against use by third parties on related non-competing

goods, see e.g.: Yale Electric Corp. v. Robertson, 26 F.2d

972 (2d Cir. 1928) (flashlights v. locks); L. E. Waterman

Co. v. Gordon, 72 F.2d 272 (2d Cir. 1934) (mechanical

pens and pencils v. razor blades); S. C. Johnson & Co.,

Inc. v. Johnson, 116 F.2d 427 (2d Cir. 1940) (waxes and

floor cleaners v. fabric cleaners); Triangle Publications,

Inc. v. Rohrlick, 167 F.2d 969 (2d Cir. 1943) (magazines v.

girdles); Pure Foods, Inc. v. Minute Maid Corp., 214 F.2d

792 (5th Cir. 1954) (juices v. meats); Safeway Stores,

Inc. v. Safeway Properties, Inc., 307 F.2d 495 (2d Cir.

1962) (groceries v. real estate); Communications Satellite

Corp. v. Comcet, Inc., 429 F.2d 1245 (4th Cir.), cert. de-

nied, 400 U.S. 942 (1970) (satellites v. computers) ; Scarves

By Vera, Inc. v. Todo Imports, Ltd. (Inc.), 544 F.2d 1167

(2d ‘Cir. 1976) (scarves v. fragrances), and as was said

in Scarves By Vera, Inc., swora, when the claims for in-

fringement have been rejected, the holding allowing use

on the non-competing goods has been precisely defined.

Id. at 1172.

A trademark, however, must be appurtenant to an es-

tablished business, Capital Temporaries, Inc. of Hartford

v. Olsten Corp., 506 F.2d 658, 663 (2d Cir. 1974), and the

rights of ownership of a mark arises from its prior use

in connection with a particular product or service. Com-

puter Food Stores Inc. v. Corner Store Franchises, Inc.,

176 U.S.P.Q. 535 (TTAB 1973). American was clearly the

A338

Oninion of the District Court.

first to use the mark Bigni¢ in cqnnection with footwear.

The real issue in this case, therefore, is whether Uni-

versal through its TV series has foreclosed use af Bionic

ar Bionics by others in the market plage. We think such

# claim is too brgad. Universal] holds no trademark,

registered or otherwise, in respect of footwear. Moreover,

yntil American reegived publicity for its Bionie boot, Dni-

versal had made no attempt to utilize Bionic as a mark.

It was gontent to use and to license the use of its “Six

Million Dollar Man” and “Bionic Woman” to various and

sundry manufacturers of articles geared to the young so

that TV shows and the characters portrayed therein could

help promote these licensed products. Biqnie as used by

American is clearly an arbitrary mark but as used by

Universal it is merely a descriptive term—bionie boy,

bionie man, ete. Agcordingly, Universal, under the stand-

ards set forth in Polaroid Corp. and cognate cases, supra,

has etablished no right to be aceorded priority over Amer-

ican. The latter as the first user with an arbitrary mark

is, however, entitled to protection.

There is no likelihcod that the publie will confuse Ameri-

can’s Bignic boot as emanating from or having connection

with Univergal or any of the Jatter’s licensees. American

is not utilizing pictures of Universal’s TV characters or

making any reference whatsoever to them in the promo-

tien and sale of its produet. It has made clear that the

boot is an American product, and there can he no confu-

sion as to the souree. American, unlike the defendant in

HMH Publishing Co., Inc. v. Brinecat, 504 F.2d 713 (9th

Cir, 1974), is not attempting to exploit the reputation and

good will engendered by the TV shows. It has clearly

identified its products to show that the source of the boot

is American, and thus its exploitation of the suceess of the

TV shows that have been popularizing Bionic as a word

does not render it subject to injunction for infringement.

A34

Opinion of the District Court.

See Bese Corp. v. Linear Design Labs, Inc., 467 F.2d 304

(2d Cir. 1972).

Universal introduced evidence of a survey which pur-

ported to show that the public related bionic to its TV

shows. The survey was designed, not as an unbiased

scientific measure of the public’s pulse but as a weapon

in litigation to support the client’s cause. In any event,

surveys are only relevant insofar as they throw light on

the issue of the likelihood of confusion. American in its

sales and promotion of its Bionic boot clearly identifies

American as the source, hence a survey showing that in

the abstract, and then only when prodded sufficiently, a

significant part of the public may relate bionic to Uni-

_ versal’s T'V series, does not show that the public will make

such a connection when it seeks to by or sees a display of

a Bionic Boot identified as a product of American.

American has established its right to use Bionic in con-

nection with the sale and promotion of its footwear since

it is the first user. American has established irreparable

injury to itself by virtue of Universal’s buyer beware

advertisement which was designed and gave the public,

including American’s customers and potential customers,

the impression that American was guilty of trademark

infringement in the promotion of its Bionic boot. Ameri-

can has established its right to a permanent injunction

against Universal for trademark infringement and unfair

competition.

General has no standing as a plaintiff since its license

from Universal limits its rights to exploit the TV series

and characters to footwear not related to boots for hiking

or mountain climbing. However, that field of footwear

is certainly closely related to American’s and having ac-

quired common law trademark rights to Bionic in foot-

wear, American is entitled to have General enjoined from

engaging in acts of infringement and unfair competition.

See Yale Electric Corp. v. Robertson and cognate cases,

supra.

A35

Opinion of the District Court.

The injunction to be issued in this case, however, is to

be clearly understood as in no way interfering with Uni-

versal’s trademark rights in its TV shows or its licensing

operations in respect thereto. American seeks an account-

ing. While I am reasonably confident an accounting will

produce little in the way of proved damages, American

is entitled to one if it insists.

Settle order.

Dated: New York, New York

May 31, 1978

Robert L. Carter

Rosert L. Carrer

U.S.D.J.

A326

Deposition of Gary Evans.

Q: And you have no recollection of the other names?

A. I do know that somebody said the word Bionic, and

I said that sounds good. Let’s have it checked out.

Q. And you don’t reeall who suggested it? A. No, I

don’t.

Q. But you do recall it wasn’t you? A. That is right.

I believe I liked it as soon as I heard it.

Q. As soon as you heard Bionic, did those television

programs that we discussed earlier come to mind? A. To

a degree, I suppose they did.

Q: Do you watch Bionic Man? A.I personally don’t

watch it, but I have children. I have caught glimpses of it.

Q. Have you eaught glimpses of the Bionic Woman?

A. I believe I saw just a very short glimpse of that just

recently, as a matter of fact. Naturally, since I had some-

body write down all the ads the Bionic Man did after the

New York shows.

Q. Could you explain that to me? A. I just wanted to

see what they advertise, what media they were after.

Q. They being? A. The people that were buying com-

mercial time on the Bionic Man.

Q. The sponsors for the program? A. Yes, the sponsors.

Q. What field they were in? A. Yes.

Q. I see. You had indicated that you had someone run

through the ads that were placed on the T.V. program

sometime after the trade show. When was that done?

A. Well, I had my wife mark them down when we were

in Montreal.

Q. Just by viewing the show? A. Yes.

Q. And jotting down who else was advertising? A. Yes.

Q. Was that following the February or the August

show? A. The August show.

Q. Presumably sometime the end of August or Septem-

_ber? A. I could get the exact dates, but we were in Mon-

treal, Canada, at that particular time.

A37

Deposition of Gary Evans.

Q. Did you communicate to the group the association

that you had made when you heard Bionic with the téle-

visioh programs? Was there sothe way you communciated

that? A. Not that I recall.

Q. Was there anybody élse that related that informa-

tion to yout A. Not that I recall.

Q. Did anybody ever communicate that thought to you

prior to a letter that Mr. Ansih referred to this morning

that American had received from Universal? Prior to

that time, did anyone within your group or elsewhere with

reference to your choice of Bionic say that is like the

Bioni¢ Man or Bionic Woman? A. Someone within our

organization?

Q. Or otherwise. A. As I recall, there was people at

the show.

Q. The show would have been after the letter I réferred

to. The letter would have been in July. So; I am asking

you beforé the letter just for a period: The letter would

have been say mid July. A. The association with our

boot in relation to the television programs?

Q. Right. You have told us about the association that

you made, and I am saying to you had dhyone else made

that association td you in any context? A: Not that I

can recall specifically examples of where people came up

and related is that something the Six Million Dollar Man

would wear. -

Q. Not something that specific, but ariyway referred to

the television program in the conversation of your boots?

A. I don’t know whether they tied in specifically to the

television program. :

Q. Suppose they didn’t tie it in specifically. Do you

recall in connettion with any tie-in? A. Well, going back

to my adopting the name at the office there that time, I

did know that the Bionic Man was like a Superman, sup-

posed to be very strong; jumped buildings, things like that.

And this is & very strong boot, so theré was some tie-in

there.

A38

Deposition of Gary Evans.

Q. und this is a tie-in that you made? A, Yes.

Q. In associating Bionic for boots and Bionic for the

program. I understand that you told us you don’t recall

having expressed that association to any of your fellow

workers? <A. Well, I assume that when you throw out the

characteristics of the boots that one of the reasons that

that name came back to me is because specifically I said

it was strong, rugged outdoor type boot.

Q. You drew the assmption that the reason the sugges-

tion was made is that they had drawn that relationship, is

that correct? A. I cannot recall if there was specific men-

tion at that meeting to this tying in directly with The Six

Million Dollar Man.

Q. You just don’t remember. A. I am sure to a degree

that this would almost have to come automatically from

what I knew about The Six Million Dollar Man.

Q. I would think so. Did anyone make that reference

after the meeting to you? You must have kicked it around

again. A. I believe that there would be a possibility of

saying, and I can’t remember specific case, where people

came in and said is that the Six Million Dollar Boot, or

something like that.

Q. What would the response be? A. Our response would

have been to that?

Q. Yes. A. I never personally responded to it. I can’t

say what my salesmen responded to that either.

Q. You never had discussions about it? A. No.

Q. They never mentioned to you how they responded,

and you didn’t ask? A. No.

Q. I am sure you have answered it, but I would just

like to get it again. After the meeting and let’s say before

the show— A. Before the February show?

Q. After the meeting and before the August show—

A. The meeting was in January.

Q. I understand—did any of your group make the same

association which you made between the television show

A39

Deposition of Gary Evans.

and your choice of Bionic for boots to you? Did anyone

else express in words what you thought initially? A. I

would say in answer to that, my guess would be if it were

not for The Six Million Dollar Man we probably would

not have come up with a Bionic Boot.

Q. And why was that? <A. Bionic up until that time, as

far as I can recollect, was not a common term.

Q. So, you saw some advantage to you in advertising

and promoting the new line to have selected Bionic because

of The Six Million Dollar Man? A. Not dirvetly because

of The Six Million Dollar Man. I assumed that basically

that was a younger kids program. And this is not a young

kids boot. It is a boot designed for men and sometimes

women. But as far as the association of the strength and

being new, yes, that would have to tie in to the word as we

know it today, Bionic, to the program.

Q. As you said, you would not have chosen it were it

not for the program? A. More than likely, because I

would not have heard of Bionic or if I had I certainly

would have forgot it.

Q. Would it surprise you to know that the largest age

category that watches that program is between eighteen

and forty-nine? A. It would have up until I got some re-

ports back on it. And then that is why I specifically had

somebody check the commercials to see if the commercials

tied into that age bracket.

A4l

EXHIBITS PRESENTED IN EVIDENCE

AT TRIAL OF ACTION

OPENING TITLES | EXHIBIT R2| SIONIC WOMAN RUNNING

A42

Exhibits Presented in Evidence

at Trial of Action

OPENING TITLES ' EXHIBIT R2, BIONIC WOMAN RUNNING

A43

Exhibits Presented in FEvidence

at Trial of Action

A44 A45

Be ‘ ‘ Exhibits Presented in Evidence

Exhibits Presented in Evidence at Trial of Action

at Trial of Actton

SOLE OF BIOCHC MAN SNEAKER | EX XS)

A46

Exhibits Presented in Evidence

at Trial of Action

PHOTOGRAPH PROM POSTER OF WOMAN IN RUNNING POSITION

WEARING AMERICAN FOOTWEAR’S BIONIC BOOT

————

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.