Appendix — Savin Engineers, P. C. v. Savin Corp.

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APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

DECIDED DECEMBER 10, 2004

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term, 2004

(Argued: August 25, 2004 Decided: December 10, 2004)

Docket No. 03-9266

SAVIN CORPORATION,

Plaintiff-Appellant,

v.

THE SAVIN GROUP, Savin Engineers, P.C.,

Savin Consultants, Inc. d/b/a Savin Engineers, P.C.,

and JMOA Engineering, P.C.,

Defendants-Appellees.

Before: MESKILL, MINER, and KATZMANN, Circuit

Judges.

Appeal from summary judgment entered in the United

States District Court for the Southern District of New York

(Scheindlin, J/.), dismissing (i) plaintiff's FTDA and state-

law dilution claims, the court having found that plaintiff

failed to produce any evidence of actual dilution, and (ii)

plaintiff's Lanham Act infringement claim, the court having

found that plaintiff failed to show a likelihood of confusion.

Affirmed in part, vacated in part, and remanded.

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MINER, Circuit Judge.

Plaintiff-appellant, Savin Corporation, appeals from a

summary judgment entered in the United States District Court

for the Southern District of New York (Scheindlin, J.)

dismissing Savin Corporation’s claims alleging:

(1) trademark dilution, in violation of both the Federal

Trademark Dilution Act (““FTDA”), 15 U.S.C. § 1125(c), and

New York General Business Law § 360-1, and (2) trademark

infringement, in violation of the Lanham Act, 15 U.S.C.

§ 1114. On appeal, Savin Corporation argues that the District

Court erred in holding that (i) the FTDA requires a plaintiff

to demonstrate evidence of actual dilution even where the

court finds that the at-issue marks are identical; (ii) the

standard for dilution under New York General Business Law

§ 360-1 is the same as the standard for dilution under the

FTDA; and (iii) there is no genuine issue of material fact

regarding whether the defendants-appellees’ use of certain

at-issue marks creates a likelihood of confusion with the

plaintiff-appellant’s marks.

We agree with the plaintiff-appellant that the District

Court erred in its analysis and disposition of the FTDA and

state-law dilution claims, but we find no error in the District

Court’s analysis of the trademark infringement claim. We

therefore affirm the judgment of the District Court in part,

vacate in part, and remand for further proceedings consistent

with this opinion.

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Appendix A

BACKGROUND

A. The Parties

The following facts, which are essentially undisputed,

are derived primarily from the District Court’s presentation

of background facts, in which we discern no clear error.

Plaintiff-appellant, Savin Corporation (“Plaintiff”), a

Delaware corporation, was founded in 1959 and has its

principal place of business in Stamford, Connecticut. Plaintiff

is engaged in the business of marketing, selling, and

distributing state-of-the-art business equipment for

commercial, business, and home-office use. Plaintiff's

products include color and digital-imaging technology for

photocopying, printing, facsimile, and other systems. Plaintiff

also offers consulting and support services related to

information technology and office management. Plaintiff's

products are sold through seventeen company-owned

branches consisting of over sixty sales and service offices

and over 250 trained dealers throughout the United States.

Plaintiff realizes annual revenues of over $675 million from

sales of its products and services in the United States.

Plaintiff's largest customers are in the government, education,

and military sectors.

Max Lowe, Savin Corporation’s founder, named the

company after his brother-in-law, Robert Savin. Since 1959,

the company has used the trade name “Savin” or “SAVIN”

in various forms in connection with various products and

services. Plaintiff's ownership of the “Savin” mark is

incontestable with respect to: (i) copy paper and developing

liquid; (ii) photocopying machines and parts thereof;

Sass eae ©

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and (iii) maintenance and repair services for photocopiers

and word processors. The company also owns the mark

“SAVIN” for facsimile machines.

During 2002 alone, Plaintiff spent over $20 million in

advertising its products and services, which are regularly

featured in print and television advertisements, trade

magazines, and tradeshow promotions worldwide. Plaintiff's

advertisements have appeared in magazines such as

Newsweek, Time, and Business Week. Plaintiff also maintains

an active website—www.savin.com— through which

Plaintiff markets and promotes its products and services. This

website address is featured prominently in many of Plaintiff's

advertisements.

Defendants-appellees are The Savin Group; Savin

Engineers, P.C.; Savin Consultants, Inc. d/b/a Savin

Engineers, P.C. (“Savin Consultants”); and JMOA

Engineering, P.C. (“JMOA”) (collectively, “Defendants” or

“Savin Engineers”). JMCA and Savin Engineers, P.C. are

New York-based professionai engineering corporations with

offices in Pleasantville, Syracuse, and Hauppauge, New York;

together, the two corporations comprise The Savin Group.

Savin Consultants is a New Jersey-based corporation that

was incorporated in 1987 and that ceased to be actively

engaged in business after Savin Engineers, P.C. was

incorporated in 1988. Defendants provide professional

engineering consulting services, in particular, civil-

engineering consulting services to entities concerned with

environmental waste management. Defendants also offer

professional engineering services in connection with

inspecting buildings and providing building-maintenance

plans.

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Appendix A

Dr. Rengachari Srinivasaragahavan, whose nickname

since college has been “Nivas” (referred to in this opinion as

“Dr. Nivas”), is the founder and sole shareholder of each of

the defendant-appellee corporations. Dr. Nivas chose the

name “Savin” by spelling “Nivas” backwards. Since 1987,

Defendants have continually used the name “Savin” in

commerce. Defendants did not perform a search or

investigation prior to adopting and launching their trade

names, and only became aware of Plaintiff's products and

services about ten years ago.

Defendants have registered the Internet domain names

www.thesavingroup.com and www.savinengineers.com.

These websites, which became accessible after June 2001,

provide information about the engineering services offered

by Dr. Nivas’ companies. Defendants did not perform a search

or investigation prior to adopting and launching these

websites, but were aware of Plaintiff's www.savin.com

domain name prior to registering Defendants’ domain names.

Other than through these websites, Defendants have not

advertised their services in any general interest media.

In July 2002, Plaintiff discovered Defendants’ domain

name registrations and proceeded promptly to send two

successive cease-and-desist letters to Defendants, who

elected to take no action in response to those letters.

In May 2003, one of Plaintiff's executives was attending

a chamber of commerce meeting in Stamford, Connecticut,

when another attendee, a vendor who had once sold products

to Defendants, approached and asked the executive, who was

wearing a name tag that displayed the name “Savin,” if she

was associated with Savin Engineers.

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Presently, there are several hundred other businesses

using the name “Savin” in various industries and capacities,

including, for example, a general contractor in Newington,

Connecticut (Savin Brothers, Inc.), a dry cleaner in

Chesapeake, Virginia (Savin Cleaners), and a dentist in

Glencoe, New York (Savin Dental Associates). Plaintiff has

been aggressive in protecting its marks, with respect to both

traditional media and the Internet.'

B. The Claims

On November 25, 2002, Plaintiff filed a complaint (the

“Complaint’”) in the United States District Court for the

Southern District of New York, alleging, inter alia, violations

of both the Federal Trademark Dilution Act (““FTDA”),

15 U.S.C. § 1125(c), and New York General Business Law

§ 360-1; and trademark infringement, in violation of the

Lanham Act, 15 U.S.C. § 11142 Following discovery, both

sides moved for summary judgment. On October 24, 2003,

in a forty-four-page, unpublished opinion and order, the

1. See, e.g., Savin Corp. v. Rayne, 00 Civ. 11728, 2001 U.S.

Dist. LEXIS 20581, at *11 (D.Mass. Mar. 26, 2001); Savin Corp. v.

Copier Dealers, Inc., Case No. FA 0304000155903, (Nat’l Arb.

Forum, July 9, 2003); Savin Corp. v. Savinsucks.com, Case No.

FA 0201000103982, (Nat’l Arb. Forum, Mar. 5, 2002).

2. In the Complaint, Plaintiff also alleged false designation of

origin under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A); violation

of the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C.

§ 1125(d); violation of the New York Unfair Businesses Act, N.Y.

Gen. Bus. L. § 349; violation of the New York False Advertising

Act, N.Y. Gen. Bus. L. § 350; and unfair competition. Plaintiff has

since abandoned these claims.

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Appendix A

District Court denied Plaintiff's motion, granted Defendants’

motion in its entirety, and dismissed all claims in the

Complaint. See Savin Corp. v. Savin Group, 02 Civ. 9377,

2003 WL 22451731 (S.D.N.Y. Oct. 24, 2003).

With respect to Plaintiff's infringement claim under the

Lanham Act, the court found that while “one of the Polaroid ©

factors weigh{ed] in [P]laintiff's favor,”? the “overwhelming

number of factors” as well as the “Internet initial interest

confusion factor” weighed in Defendants’ favor. Jd. at *13.

Accordingly, the court concluded, Defendants were entitled

to summary judgment on the infringement claim. Jd.

The District Court concluded that Plaintiff's claim of a

violation of the FTDA had to be dismissed as well, because,

the court found, Plaintiff had “failed to raise a material issue

of fact with regard to an essential prong of the dilution test.”

Id. at *15. The court found, in particular, that Plaintiff had

failed to produce any evidence of actual dilution—an

essential element of a claim of a violation of the FTDA—

other than that Defendants had used a junior mark that was

identical to Plaintiff’s senior mark. Thus, the court held,

Plaintiff had failed to produce sufficient evidence for a

rational jury to find that actual dilution had occurred. Id. at

*14. The court did find, however, that Plaintiff had produced

sufficient evidence to create a triable issue of fact on the

other contested elements of an FTDA claim—the

distinctiveness and fame of the senior mark. Jd.

3. See Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492,

495 (2d Cir.1961), and discussion infra Part III.

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Finally, with respect to the state-law dilution claim, the

court found that “[t]he standards for dilution under Section

360-1 [were] essentially the same as that under [the FTDA]”;

that Plaintiff had “failed to produce sufficient evidence to

create a triable issue under the FTDA”; and, thus, that “the

Section 360-1 claim also fail[ed].” Jd. at *16 (internal

quotation marks omitted). Final judgment was entered on

October 31, 2003, dismissing the Complaint, and this timely

appeal followed.

DISCUSSION

I. The FTDA Claim

Plaintiff argues that the District Court “erred in holding

that, even though the marks at issue are identical, [Plaintiff]

was required to demonstrate circumstantial evidence of actual

dilution ... to maintain its claim under the [FTDA].”

Defendants, on the other hand, argue that the District Court

was correct in dismissing the FTDA claim because Plaintiff

had “failed to tender admissible evidence to prima facie prove

any of [the requisite] elements” of a claim under the FTDA.

The FTDA “permits the owner of a qualified, famous

mark to enjoin junior uses throughout commerce, regardless

of the absence of competition or confusion.” TCP/IP Holding

Co. v. Haar Communications Inc., 244 F.3d 88, 95 (2d

Cir.2001); see 15 U.S.C. § 1127. Indeed, “[o]ne circuit has

characterized the Dilution Act as coming ‘very close to

granting rights in gross in a trademark.’” TCPIP Holding

Co., 244 F.3d at 95 (quoting Avery Dennison Corp. v.

Sumpton, 189 F.3d 868, 875 (9th Cir.1999)). Specifically,

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the FTDA provides that “[t]he owner of a famous mark shall

be entitled ... to an injunction against another person’s

commercial use in commerce of a mark or trade name, if

such use begins after the mark has become famous and causes

dilution of the distinctive quality of the mark.” 15 U.S.C.

§ 1125(c)(1). Thus, to establish a violation of the FTDA, a

plaintiff must show that:

(1) its mark is famous; (2) the defendant is making

commercial use of the mark in commerce; (3) the

defendant’s use began after the mark became

famous; and (4) the defendant’s use of the mark

dilutes the quality of the mark by diminishing the

capacity of the mark to identify and distinguish

goods and services.

Pinehurst, Inc. v. Wick, 256 F.Supp.2d 424, 431

(M.D.N.C.2003); see 15 U.S.C. § 1125(c); Ringling Bros. v.

Utah Div. of Travel Dev., 170 F.3d 449, 452 (4th Cir. 1999);

Panavision Int’l L.P. v. Toeppen, 141 F.3d 1316, 1324 (9th

Cir.1998).*

The Supreme Court has made clear that a plaintiff

seeking to take advantage of the broad rights afforded under

the FTDA must show, as an essential element of an FTDA

claim, “actual dilution, rather than a likelihood of dilution.”

Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 433

(2003). The theory of “dilution by blurring,” the form of

4. Here, there is no dispute that Defendants’ use of the at-issue

marks has been in commerce and postdates Plaintiff's use of the

marks.

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dilution particularly relevant to the case at bar, has been

described by Professor McCarthy as follows:

[I}f one small user can blur the sharp focus of the

famous mark to uniquely signify one source, then

another and another small user can and will do

so. Like being stung by a hundred bees, significant

injury is caused by the cumulative effect, not by

just one.... This is consistent with the classic

view that the injury caused by dilution is the

gradual diminution or whittling away of the value

of the famous mark by blurring uses by others. It

is also consistent with the rule in the [likelihood-

of-confusion] cases that even a small infringer will

not be permitted to “nibble away” at the plaintiff's

reputation and goodwill.

4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair

Competition § 24:94 (4th ed. Supp.2004) (footnotes omitted);

accord General Motors Corp. v. Autovation Techs., Inc., 317

F.Supp.2d 756, 764 (E.D.Mich.2004).

A. Fame and Distinctiveness

In this Circuit, to sustain a claim under the FTDA, in

addition to actual dilution, a plaintiff must show that the

senior mark possesses both a “significant degree of inherent

distinctiveness” and, to qualify as famous, “a high degree of

... acquired distinctiveness.” TCPIP Holding Co., 244 F.3d

at 97, 98 (emphasis added). Although a plaintiff must show

a preponderance of evidence on each element of a claimed

violation of the FTDA in order ultimately to prevail on such

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a claim, see Moseley, 537 U.S. at 434, the element of fame is

the key ingredient. This is because, among the various

prerequisites to an FTDA claim, the one that most narrows

the universe of potentially successful claims is the

requirement that the senior mark be truly famous before a

court will afford the owner of the mark the vast protections

of the FTDA.°

Indeed, actionable dilution under the FTDA is defined

as “the lessening of the capacity of a famous mark to identify

and distinguish goods or services, regardless of the presence

or absence of (1) competition between the owner of the

famous mark and other parties, or (2) likelihood of confusion,

mistake, or deception.” 15 U.S.C. § 1127 (emphasis added).

This requirement reflects the purpose of the FTDA, which

“is to protect famous trademarks from subse’ ent uses that

blur the distinctiveness of the mark or tarms. or disparage

it, even in the absence of a likelihood of confusion.”

Genovese Drug Stores, Inc. v. TGC Stores, Inc., 939 F.Supp.

340, 349 (D.N.J.1996) (internal quotation marks omitted).

Accordingly, where it is possible for a district court to

determine in the first instance the issue of the famousness of

a senior mark, the court would be well advised to do so.

Indeed, this will often obviate the costly litigation of

potentially much thornier issues, such as whether actual

blurring or tarnishing of the senior mark has in fact occurred

5. In other words, a plaintiff owning only less-than-famous

marks will receive no protection under the FTDA, even if that plaintiff

can prove that the use of an identical junior mark has in fact lessened

the capacity of the senior mark to identify and distinguish the

plaintiffs goods or services—i.e., that actual dilution has occurred.

See TCPIP Holding Co., 244 F.3d at 97-98.

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)

or, as in the instant case, whether a junior and senior mark

that are each used in varying ways in different contexts and

media are in fact “identical” for purposes of the FTDA.

Here, the District Court held that Plaintiff had “created

a material issue of fact as to the distinctiveness and fame of

its marks.” 2003 WL 22451731, at *14. Although Defendants

chose not to cross-appeal this conclusion, they nonetheless

contend that the lack of inherent distinctiveness and fame in

Plaintiff's marks provides an alternate basis upon which this

Court should affirm the summary judgment granted by the

District Court. Of course, “we may affirm the [D]istrict

[C]ourt’s order of summary judgment on any ground that

finds adequate support in the record.” Eichelberg v. Nat’l

R.R. Passenger Corp., 57 F.3d 1179, 1186 n. 6 (2d Cir.1995).

We need not exercise that power here, however, as we see no

error in the District Court’s conclusion that Plaintiff has

raised genuine issues of fact with regard to the fame and

distinctiveness of its marks.

With respect to fame, or acquired distinctiveness, we

recognize that the at-issue marks ultimately may be found to

possess only a degree of “niche fame.” Nevertheless, we

6. See Christopher D. Smithers Found., Inc. v St. Luke’s-

Roosevelt Hosp. Ctr., 00 Civ. 5502, 2003 U.S. Dist. LEXIS 373,

at *15-16 (S.D.N.Y. Jan. 13, 2003) (“[T]he degree of fame required

for protection under the FTDA must exist in the general marketplace,

not in a niche market. Thus, fame limited to a particular channel of

trade, segment of industry or service, or geographic region is not

sufficient to meet that standard.” (citing TCP/IP Holding, 244 F.3d at

99)); see also Sporty’s Farm L.L.C. v. Sportsman’s Mkt., Inc., 202

F.3d 489, 497 n.10 (2d Cir.2000) (discussing the requirement for

fame in the general marketplace).

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agree with the District Court’s conclusion that Plaintiff has

shown “more than a mere scintilla of evidence” of fame,

which is a sufficient quantum of proof to submit the question

to the finder of fact. 2003 WL 22451731, at *14. In particular,

the court found that:

[Plaintiff] spent over $20 million on advertising

in 2002 and has achieved annual revenues of $675

million. Further, [P]laintiff’s products and

services are regularly featured in print

advertisements, trade magazines[,] and tradeshow

promotions. Plaintiff's advertisements have

appeared in well known magazines such as

Newsweek, Time, and Business Week.

Id. (citations omitted). These are sufficient indicators of fame

to withstand a summary judgment challenge to a claim under

the FTDA. Cf. Nabisco, Inc. v. PF Brands, Inc., 50 F.Supp.2d

188, 202 (S.D.N.Y.1999) (finding top ranking sales dollars

and advertising expenses of more than $120 million in a

three-year period to be significant indicators of the fame of

the mark), aff’d, 191 F.3d 208 (2d Cir.1999).

With regard to inherent distinctiveness, the District Court

was correct to conclude that Plaintiff's marks are entitled to

a presumption of inherent distinctiveness by virtue of their

incontestability. See Sporty’s Farm, 202 F.3d at 497; Equine

Techs., Inc. v. Equitechnology, Inc., 68 F.3d 542, 545 (ist

Cir.1995). Defendants assert that this presumption should

not apply to the marks at issue because they are “merely

descriptive” marks, which can never possess inherent

distinctiveness. See TCPIP Holding Co., 244 F.3d at 96

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(“[D]escriptive marks, which possess no distinctive quality,

or at best a minimal degree, do not qualify for the [Dilution]

Act’s protection.”). Defendants’ argument is unavailing,

however, because Plaintiff's marks are not, as a matter of

law, merely descriptive marks.

While it is true that “Savin” is a surname and that Savin

Corp. was named after Robert Savin, the brother-in-law of

Plaintiff's founder, the word “savin” also has a dictionary

meaning.’ Admittedly, the “Savin” mark is not as obviously

- distinctive as, for example, “Honda” or “Acura.”* But it is

still entirely possible for a reasonable fact-finder to determine

that the “Savin” mark possesses a sufficient degree of

distinctiveness to sustain a finding of dilution, especially

given that Plaintiff's marks are “not patently used as a

surname.” Lane Capital Mgmt., Inc. v. Lane Capital Mgmt.,

Inc., 192 F.3d 337, 347 (2d Cir.1999); see, e.g., IMAF, S.P.A.

v. J.C. Penney Co., 806 F.Supp. 449, 455 (S.D.N.Y.1992)

7. See Merriam- Webster's Third New International Dictionary

Unabridged (2002) (defining “savin” as (1) “a mostly prostrate

Eurasian evergreen juniper (Juniperus sabina) with dark foliage and

small berries having a glaucous bloom and with bitter acrid tops that

are sometimes used in folk medicine (as for amenorrhea or as an

abortifacient)—called also cover-shame, sabina”; (2) “creeping

juniper” or “red cedar”; or (3) “any of several trees, shrubs, or shrubby

herbs somewhat resembling plants of the genusJuniperus“).

8. See Am. Honda Motor Co. v Pro-Line Pwtoform, 325

F.Supp.2d 1081, 1085 (C.D.Cal.2004) (“The famousness and

distinctiveness of the Honda Marks cannot be questioned. Indeed,

“Honda” and “Acura” are words that were added to the English

language by Honda. They are the quintessential distinctive

marks... .”).

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(“[T]he name (or word) Adiansi is not likely to be

immediately identified with a person by an average buyer of

a sweater at J.C. Penney. Thus, the fact that Adiansi is a

surname is not dispositive on the issue of inherent

distinctiveness.”).

B. Evidence of Actual Dilution

In Moseley, the Supreme Court stated that “direct

evidence of dilution such as consumer surveys will not be

necessary if actual dilution can reliably be proved through

circumstantial evidence—the obvious case is one where the

junior and senior marks are identical.” 537 U.S. at 434. The

Court cautioned, however, that “[w]hatever difficulties of

proof may be entailed, they are not an acceptable reason for

dispensing with proof of an essential element of a statutory

violation.” Jd.

Plaintiff interprets Moseley to stand for the proposition

that where both marks are identical, that fact, in itself, is

sufficient circumstantial evidence to satisfy the element of

actual dilution. Not all courts read the above-quoted portion

of the Moseley decision as does Plaintiff, however. Indeed,

the District Court did not. And, at least two other courts have

questioned whether the Supreme Court intended for plaintiffs

to be able to establish a violation of the FTDA merely by

showing the commercial use of an identical junior mark. See

Lee Middleton Original Dolls, Inc. v. Seymour Mann, Inc.,

299 F.Supp.2d 892, 902 (E.D.Wis.2004); see also Nike, Inc.

v. Circle Group Internet, Inc., 318 F.Supp.2d 688, 695

(N.D.I11.2004).

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The holdings in those cases, however, are of little

assistance here. The district court in Lee Middleton Original

Dolls took a decidedly cautious approach, leaving the issue

for the jury to resolve:

In view of the developing status of the law on the

nature of evidence required, the court believes that

the best course is to permit the plaintiff the

opportunity to present its dilution claim to the jury.

The defendant’s motion for summary judgment

on this issue will be denied.

299 F.Supp.2d at 902. And in Circle Group Internet, the court

was able to avoid the question on the facts:

The parties disagree on the correct interpretation

of the Moseley court’s dicta regarding

circumstantial evidence. According to defendant,

the Moseley court meant that proof of actual

dilution by circumstantial evidence is sufficient

if the marks are identical. Plaintiff, on the other

hand, maintains that if the marks are identical,

that in itself constitutes sufficient circumstantial

evidence of dilution. The court need not resolve

this dispute, however, because in addition to the

identity of the marks at issue, there is sufficient

circumstantial evidence of dilution in the record

to preclude summary judgment.

318 F.Supp.2d at 695 (internal citations omitted).

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Moreover, the District Court’s opinion in the case at bar

seems to have been the sole basis for the district courts in

those other cases to question the plain import of the at-issue

language of the Supreme Court in Moseley. See Lee Middleton

Original Dolls, 299 F.Supp.2d at 902 (citing only Savin Corp.

v. Savin Group, 2003 WL 22451731, at *14(S.D.N.Y. Oct.24,

2003), for the proposition that more than a showing of

identical marks is required to make out a prima facie case of

actual dilution); see also Circle Group Internet, 318

F.Supp.2d at 695 (citing only Savin Corp. v. Savin Group for

same). Indeed, in most of the other cases identified as having

dealt with this issue, the courts seem to have assumed that

where the other elements of an FTDA claim have been

satisfied, Moseley only requires a showing of the use of an

identical junior mark to establish per se evidence of actual

dilution.’

9. See, e.g., Am. Honda Motor Co., 325 F.Supp.2d at 1085

(“[W]hen identical marks are used on similar goods, dilution—the

capacity of the famous mark to identify and distinguish the goods of

the trademark holder—obviously occurs.”); GMC v. Autovation

Techs., 317 F.Supp.2d 756, 764 (E.D.Mich.2004) (“GM’s evidence

establishes actual dilution in that Defendant has used marks that are

identical to the world famous GM Trademarks.”); 7-Eleven, Inc. v.

McEvoy, 300 F.Supp.2d 352, 357 (D.Md.2004) (“Though dilution

claims require evidence of actual confusion, that requirement is

satisfied when, as here, the defendant uses the plaintiffs mark.”);

Nike Inc. v. Variety Wholesalers, Inc., 274 F.Supp.2d 1352, 1372

(S.D.Ga.2003) (“[T]he Court concludes that Variety has diluted the

Nike trademarks due to the identical or virtually identical character

of the marks on the Accused Goods to the Nike trademarks.”); see

also Pinehurst, 256 F.Supp.2d at 432 (finding actual dilution where

defendant used domain names identical and nearly identical to

plaintiffs trademarks).

\

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We interpret Moseley to mean that where a plaintiff who

owns a famous senior mark can show the commercial use of

an identical junior mark, such a showing constitutes

circumstantial evidence of the actual-dilution element of an

FTDA claim. Thus, for example, a store owner who loses a

7- Eleven franchise yet continues to use the famous

“7-Eleven” mark, in so doing, violates the FTDA and may

be enjoined thereunder from using the mark. See 7-Eleven,

300 F.Supp.2d at 357. Indeed, a number of commentators

have suggested that this is precisely what the Supreme Court

was getting at in Moseley—i.e., that an identity of marks

creates a presumption of actual dilution.'° This would

10. See, e.g., Stacey L. Dogan, An Exclusive Right to Evoke, 44

B.C. L.Rev. 291 (2003). Prof. Dogan writes:

[U]nder the [Supreme] Court’s suggested approach [in

Moseley |, proof of dilution requires either that a

defendant’s use by its very nature reduces the singularity

of the famous mark @s when the defendant uses an

identical mark ) or that a defendant’s use actually reduces

the singularity of the famous mark (by, for example,

reducing its selling power, as proven through surveys or

direct financial evidence).

Id. at 315-16 (second emphasis added); accord David M. Klein &

Daniel C. Glazer, Reconsidering Initial Interest Confusion on the

Internet, 93 Trademark Rep. 1035, 1048 n.70 (Sept./Oct.2003):

Although the Supreme Court’s decision in Moseley

appears to require proof of actual harm to a famous mark

in order to prevail on an FTDA claim, the Court suggests

that the junior user’s exact copying of the mark will be

(Cont'd)

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comport with the holdings of other courts in analogous

contexts. See, e.g., Am. Honda Motor Co., 325 F.Supp.2d at

1085 (“{W]hen identical marks are used on similar goods,

dilution .. . obviously occurs.”).

It cannot be overstated, however, that for the presumption

of dilution to apply, the marks must be identical. In other

words, a mere similarity in the marks—even a close

simila-ity—will not suffice to establish per se evidence of

actual dilution. Further, “where the marks at issue are not

identical, the mere fact that consumers mentally associate

the junior user’s mark with a famous mark is not sufficient

to establish actionable dilution.” Moseley, 537 U.S. at 433.

“{S]uch mental association will not necessarily reduce the

capacity of the famous mark to identify the goods of its owner,

the statutory requirement for dilution under the FTDA.” Jd.

Strictly enforcing the identity requirement comports well with

the purposes of the FTDA and with the principle previously

elucidated by this Court that the class of parties protected by

the federal dilution statute is narrow indeed. See TCPIP

Holding Co., 244 F.3d at 95 (“The [FTDA] further differs

from traditional trademark law in that the class of entities

for whose benefit the law was created is far narrower.”).

(Cont'd)

sufficient circumstantial evidence to demonstrate

dilution. 123 S.Ct. at 1125. Presumably, a junior user’s

transaction of business at a website under a domain name

incorporating a mark identical to a famous fanciful mark

[such as “xerox.com”] would constitute such

circumstantial evidence.

20a

Appendix A

Oftentimes, the issue of whether the marks are identical

will be context-and/or-media-specific and factually intensive

in nature. For instance, marks that are textually identical may

appear very different from one another (e.g., in terms of font,

size, color, etc.) where they are used in the form of dissimilar

corporate logos, either in traditional media or on the Internet.

Depending on the circumstance, this may or may not

determine the outcome of the identity analysis. Similarly,

marks that are textually identical may be pronounced

differently, which also could be relevant under certain

circumstances, such as, for example, where the marks are

used in radio advertising. Indeed, the need for careful and

exacting analysis of the identity issue highlights the basis

for our emphasis on the famousness factor as a more

expeditious avenue of resolution, given the case law in this

Circuit limiting application of the FTDA to only the most

famous of marks. See id.

Here, the marks at issue may be identical in some

contexts but not in others. Where the senior and junior

“Savin” marks both are used in website addresses, the marks

may be identical. On the other hand, where the “Savin” marks

at issue appear in stylized graphics on webpages, the

competing marks may be found merely to be very similar.

For its part, the District Court appears to have concluded,

without analysis, that the at-issue marks are identical:

“{P]laintiff offers no circumstantial evidence of any kind

tending to show actual dilution other than the fact that the

marks are identical.” 2003 WL 22451731, at *15 (emphasis

added). In analyzing the similarity of the marks in the context

21a

Appendix A

of assessing Plaintiff's infringement claim, however, the court

found as follows:

[P]laintiff and [D]fendants both use the name

“Savin,” and their logos display similar block

letter fonts, with one arm of the letter “V” slanted

at a greater angle than the other. The only apparent

difference in the marks is that [D]efendants’ logo

incorporates four squares, one slightly tilted, to

the left of the name. Given that both marks feature

the same name, such a difference is

inconsequential.

Id. at *7 (citations omitted).

We find the District Court’s language in this regard to

be somewhat ambiguous. In particular, we are uncertain

whether, in analyzing the FTDA claim, the court

(a) concluded that “the marks are identical,” id. at *15, based

on its previous determination regarding the similarity of the

marks in the infringement context; (b) simply assumed them

to be identical, arguendo; or (c) arrived at its determination

by some altogether different route, perhaps as an effect of

choices made by Plaintiff in pleading its case and presenting

its evidence. In light of the lack of any detailed analysis in

the opinion of the District Court regarding the issue of the

identity of the marks for purposes of the FTDA claim, we

deem it necessary to remand the issue to the District Court

for clarification and specific findings as to whether the junior

and senior marks are identical.

22a

Appendix A

In this regard, we caution that although the differences

between the marks noted by the court in the infringement

context may be inconsequential in that context, such

differences may indeed be relevant in the analysis of the

dilution issue. The fact that Defendants have used the marks

somewhat differently than has Plaintiff—e.g., by registering

the domain name www.thesavingroup.com as opposed to

simply www.savin.com—may also be relevant. We

emphasize, however, that it is the identity of the marks

themselves that is germane in the dilution context, and the

modifying of the mark—by adding one or more generic

descriptors to the mark in a website address, for example—

will not necessarily defeat a showing that the marks

themselves are identical in specific contexts. See, e.g., A.C.

Legg Packing Co. v. Olde Plantation Spice Co., 61 F.Supp.2d

426, 430-31 (D.Md.1999) (““OPSC’s OLDE PLANTATION

SPICE mark is nearly identical in appearance to A.C. Legg’s

OLD PLANTATION mark, differing only in the spelling of

‘olde’ and the addition of the generic word ‘spice.’” The

marks are identical in sound and connotation.” (emphasis

added)); cf Golden Door, Inc. v. Odisho, 646 F.2d 347, 350

(9th Cir.1980) (focusing, in the infringement context, on

identical portions of a junior and senior mark).

For all of the foregoing reasons, we vacate that portion

of the judgment of the District Court dismissing Plaintiff's

claim of a violation of the FTDA, and remand for proceedings

consistent with this opinion.

23a

Appendix A

Il. The State-Law Dilution Claim

In ruling on Plaintiff's state-law dilution claim, brought

under New York General Business Law § 360-1, the District

Court held that “[t]he standards for dilution under Section

360-1 are ‘essentially the same as that under § 43(a) of the

Lanham Act.’” Savin Corp. v. Savin Group, 2003 WL

22451731, at *16 (quoting Winner Int'l LLC v. Omori Enters.,

Inc., 60 F.Supp.2d 62, 73 (E.D.N.Y.1999)). The District Court

then held that “[a]s [PJlaintiff failed to produce sufficient

evidence to create a triable issue under the FTDA, it follows

that the Section 360-1 claim also fails.” Jd. Based on this

conclusion, the court granted summary judgment to

Defendants on the Section 360-1 claim. The District Court

was incorrect, however, to rely on Winner International LLC

v. Omori Enterprises, Inc., and the sources cited therein, for

the proposition that the same showing must be made to

sustain an FTDA claim as to sustain a claim under Section

360-1. Indeed, a careful reading of the relevant language in

Winner makes clear that the particular point of federal-state

equivalence that was dispositive in that case is inapposite to

the case at bar.

In Winner, the district court was concerned principally

with the question of the similarity of two competing trade

dresses. See 60 F.Supp.2d at 64-65. In assessing the plaintiff's

claims for dilution under the FTDA and under state law, the

court found as follows:

In order to establish a claim for injury to

business reputation or dilution funder New York

law], plaintiff must establish two elements:

24a

Appendix A

(1) a distinctive mark capable of being diluted and

(2) a likelihood of dilution....

Dilution has been defined as either a blurring

of a mark’s product identification or the

tarnishment of the affirmative associations a mark

has come to convey. A prerequisite to a finding of

dilution is that the marks are substantially similar.

That standard has been applied to a finding of

dilution under federal law as well.

Id. at 73 (citations and internal quotation marks omitted).

The Winner court concluded that because the at-issue trade

dresses were not substantially similar, a claim for dilution

was not sustainable under either the FTDA or the New York

statute.

Here, in contrast, the District Court impliedly found the

at-issue marks to be not only substantially similar but in some

contexts virtually identical. See 2003 WL 22451731, at *7,

*15; see also discussion supra part I.B. This case, then, is

plainly distinguishable from Winner on the facts. In any event,

regarding the issue of the standard of proof for a claim of a

violation of the FTDA, neither Winner nor the sources cited

therein and relied on by the District Court represent a correct

view of the law as it now stands.

A likelihood of dilution may have been enough to sustain

a claim for dilution under the FTDA in 1999. In 2003,

however, the Supreme Court decided Moseley, which changed

25a

Appendix A

the landscape of the law on this issue. As the Sixth Circuit

noted in AutoZone, Inc. v. Tandy Corp.:

To resolve a circuit split, the Supreme Court

addressed the discrete issue of whether a dilution

claim required proof of actual dilution or whether

proof of a likelihood of dilution would suffice.

Analyzing the text of [the FTDA], the Court held

that the statute “unambiguously requires a

showing of actual dilution, rather than a likelihood

of dilution.”

373 F.3d 786, 804 (6th Cir.2004) (quoting Moseley, 537 U.S.

at 433) (citations omitted).

This Circuit was one of those which, before Moseley,

required a showing of a mere likelihood of dilution to sustain

a claim of a violation of the federal statute. See, e.g., Nabisco,

Inc. v. PF Brands, Inc., 191 F.3d 208, 224-25 (2d Cir.1999)

(reading the federal anti-dilution “statute to permit

adjudication granting or denying an injunction, whether at

the instance of the senior user or the junior seeking

declaratory relief, before the dilution has actually occurred”).

Now, of course, the federal standard requires a showing of

actual dilution, Moseley, 537 U.S. at 434; see discussion

supra part I, and, thus, is more stringent than the New York

standard. Therefore, the District Court erred in dismissing

Plaintiff's Section 360-1 dilution claim based solely on the

court’s determination that Plaintiff had “failed to produce

sufficient evidence to create a triable issue under the

26a

Appendix A

FTDA.”"! 2003 WL 22451731, at *16. Accordingly, we vacate

that portion of the judgment of the District Court dismissing

the state-law dilution claim and remand for consideration of

that claim under the appropriate standard.

III. The Trademark Infringement Claim

“A claim of trademark infringement ... is analyzed under

[a] familiar two-prong test[.] ... The test looks first to

whether the plaintiff's mark is entitled to protection, and

second to whether [the] defendant’s use of the mark is likely

to cause consumers confusion as to the origin or sponsorship

of the defendant’s goods.” Virgin Enters., Ltd. v. Nawab, 335

F.3d 141, 146 (2d Cir.2003) (citing Gruner + Jahr USA

Publ’g v. Meredith Corp., 991 F.2d 1072, 1074 (2d

Cir.1993)).

A. Validity of Plaintiff's Marks

Defendants admit that three of Plaintiff's marks are

incontestable. Savin Corp. v. Savin Group, 2003 WL

22451731, at *4. Accordingly, we need not tarry with the

first prong of the infringement test.

11. Defendants tacitly concede that the District Court erred in

this regard, but advance a sort of “harmless error” argument, asserting

that the District Court’s determinations relating to other issues—the

Polaroid factors, for example—make clear that Plaintiff failed to

show even a likelihood of dilution. This argument has no merit, as

the various analyses undertaken by the court are fact-intensive, highly

specific, and hardly interchangeable.

27a

Appendix A

B. Likelihood of Confusion

“(T]he crucial issue in an action for trademark

infringement ... is whether there is any likelihood that an

appreciable number of ordinarily prudent purchasers are

likely to be misled, or indeed simply confused, as to the

source of the goods in question.” Mushroom Makers, Inc. v.

R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978); Maternally

Yours, Inc. v. Your Maternity Shop, Inc., 234 F.2d 538, 542

(2d Cir.1956). “The court, in making this determination and

fashioning suitable relief, must look ... to a host of other

factors.” Mushroom Makers, 580 F.2d at 47. First articulated

in the seminal case Polaroid Corp. v. Polarad Electronics

Corp., 287 F.2d at 495, the eight principal factors, known as

the Polaroid factors, are as follows: (1) the strength of the

senior mark; (2) the degree of similarity between the two

marks; (3) the proximity of the products; (4) the likelihood

that the prior owner will “bridge the gap”; (5) actual

confusion; (6) the defendant’s good faith (or bad faith) in

adopting its own mark; (7) the quality of defendant’s product;

and (8) the sophistication of the buyers. Jd. Moreover,

depending on the complexity of the issues, “the court may

have to take still other variables into account.” Jd.

Here, Plaintiff argues that the District Court erred in its

application of the first and sixth factors—i.e., in assessing

(i) the strength of Plaintiff's mark and (ii) the good faith of

Defendants in adopting their own mark. Plaintiff also notes

that if theDistrict Court erred in assessing the strength of the

senior mark, then error would be implied in the court’s

analysis of proximity as well. For their part, Defendants argue

that even if the court erred in analyzing the strength of the

28a

Appendix A

senior mark and the good faith of Defendants, any “such error

would be insufficient to overturn the ruling of the [D]istrict

,.C]Jourt on likelihood of confusion, as five of the other

Polaroid factors weigh in favor of [Defendants], and no single

factor of the analysis is dispositive.”

“In reviewing the [District [C]ourt’s evaluation of the

Polaroid factors, each individual factor is reviewed under a

clearly erroneous standard, but the ultimate determination

of the likelihood of confusion is a legal issue subject to de

novo review.” Brennan’s, Inc. v. Brennan’s Rest. L.L.C., 360

F.3d 125, 130 (2d Cir.2004).

1. Strength of the Senior Mark

“{T]he strength of a mark depends ultimately on its

distinctiveness, or its ‘origin-indicating’ quality, in the eyes

of the purchasing public.” McGregor-Doniger Inc. v. Drizzle,

Inc., 599 F.2d 1126, 1131-32 (2d Cir.1979), overruled on

other grounds by Bristol-Myers Squibb Co. v. McNeil-P.P.C.,

Inc., 973 F.2d 1033, 1043-44 (2d Cir.1992). As noted above,

an incontestible registered trademark enjoys a conclusive

presumption of distinctiveness. See Park ‘N Fly, Inc. v. Dollar

Park and Fly, Inc., 469 U.S. 189, 204-05 (1985); see also

discussion supra part I. Yet even if a mark is registered and,

thus, afforded the utmost degree of protection, Lois

Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867,

871 (2d Cir.1986), the presumption of an exclusive right to

use the mark extends only so far as the goods or services

noted in the registration certificate, Mushroom Makers,

580 F.2d at 48.

29a

Appendix A

Here, the District Court made the following findings:

Three of [P]laintiff's marks are incontestable and

hence are presumptively strong as applied to the

goods and services listed on the registrations,

namely: Liquid and paper for photocopiers;

photocopiers and parts thereof; and maintenance

and repair services for photocopiers and word

processors. Plaintiff is also able to show that its

marks possess secondary meaning in the market

for high-quality business machinery and related

services. Plaintiff has submitted evidence that it

sells it [sic] products through seventeen branches

and over [250] trained dealers throughout the

United States; spent over $20 million in

advertising in 2002; and realized annual revenues

of over $675 million. Such evidence is sufficient

to establish that [P]laintiff’s marks possess

secondary meaning in [P]laintiff's market.

2003 WL 22451731, at *6 (footnote and citations omitted).

Critically, however, the court also found that Plaintiff had

not shown “that its marks [were] strong in the market for

professional engineering” services, and had not “submitted

[any] evidence that its marks possess[ed] secondary meaning

in the market for professional engineering” services. Jd.

As we find no clear error in these findings, we conclude

that the District Court did not err in determining that the

presumption of the strength of Plaintiff's mark does not

extend to the field of professional engineering. See Mushroom

Makers, 580 F.2d at 48; Paco Sport, Ltd. v. Paco Rabanne

30a

Appendix A

Parfums, 86 F.Supp.2d 305, 312 (S.D.N.Y.2000).

Accordingly, we also agree with the court’s ultimate

determination that the first Polaroid factor, strength of the

mark, weighs in favor of Defendants.

2. Similarity of the Marks

“[E]ven close similarity between two marks is not

dispositive of the issue of likelihood of confusion.”

McGregor-Doniger, 599 F.2d at 1133. “Rather, the crux of

the issue is whether the similarity is likely to cause confusion

among numerous customers who are ordinarily prudent.”

Swatch Group (U.S.) Inc. v. Movado Corp., 01 Civ. 0286,

2003 U.S. Dist. LEXIS 6015, at *11 (S.D.N.Y. Apr. 10, 2003)

(citing Morningside Group Ltd. v. Morningside Capital

Group L.L.C., 182 F.3d 123, 139-40 (2d Cir.1999)). Thus,

“an inquiry into the degree of similarity between two marks

does not end with a comparison of the marks themselves.”

Spring Mills, Inc. v. Ultracashmere House, Ltd., 689 F.2d

1127, 1130 (2d Cir.1982). As this Court has stated, “the

setting in which a designation is used affects its appearance

and colors the impression conveyed by it.” McGregor-

Doniger, 599 F.2d at 1133 (internal quotation marks omitted).

Indeed, the “ ‘impression’ conveyed by the setting in which

the mark is used is often of critical importance.” Spring Mills,

689 F.2d at 1130.

Here, the District Court found that:

[P}laintiff and Defendants both use the name

“Savin,” and their logos display similar block

letter fonts, with one arm of the letter “V” slanted

31a

Appendix A

at a greater angle than the other. The only apparent

difference in the marks is that [D]efendants’ logo

incorporates four squares, one slightly tilted, to

the left of the name. Given that both marks feature

the same name, such a difference is

inconsequential.

2003 WL 22451731, at *7. In addition, one of the settings in

which the junior mark has allegedly infringed the senior mark

is the Internet, where the subtle differences in font and other

characteristics noted by the District Court are of even less

significance, given that the overarching concern of the

individual searching the Internet is to arrive at the correct

website, which is ultimately identified by a purely text-based

website address.'2 We find no clear error in the District

Court’s determinations on this point and, in light of the

foregoing, agree that this factor weighs in Plaintiff's favor.

12. See Pinehurst, 256 F.Supp.2d at 431:

A significant purpose of a domain name is to identify

the entity that owns the [website]. Customers searching

for a company’s website wiil often search using a domain

name identical or similar to the company’s name or

mark... . Customers unable to locate [a plaintiff’s]

website using domain names identical to its marks,

.. . may fail to continue to search for [the plaintiff’s]

own home page, due to anger, frustration, or the belief

that [the plaintiff's] home page does not exist.

(citations and internal quotation marks omitted).

32a

Appendix A

3. Proximity of the Entities’ Products and/or

Services

“This factor focuses on whether the two products

compete with each other. To the extent goods (or trade names)

serve the same purpose, fall within the same general class,

or are used together, the use of similar designations is more

likely to cause confusion.” Lang v. Ret. Living Pub. Co., 949

F.2d 576, 582 (2d Cir.1991). In assessing this factor, “the

court may consider whether the products differ in content,

geographic distribution, market position, and audience

appeal.” W.W.W. Pharm. Co. v. Gillette Co., 984 F.2d 567,

573 (2d Cir.1993); see, e.g., Arrow Fastener Co. v. Stanley

Works, 59 F.3d 384, 396 (2d Cir.1995) (holding that

customers were not likely to be confused when both parties

sold staplers in the same stores, but one party sold a

pneumatic stapler and the other a lightweight small stapler).

Here, the District Court found, inter alia, as follows:

[Tjhe [proportional] difference in price between

[Plaintiff's back office facilities management

services and [DJefendants’ professional

engineering services is at least as great as, if not

greater than, that between the two types of staplers

in Arrow Fastener. Similarly, the expertise of

[P]laintiff's engineers in information technology

and that of ([D]efendants’ [engineering

professionals] in construction and waste

management projects serve very different needs

within the sectors from which both parties draw

their customers.

33a

Appendix A

«

~ 9 SC

Even though [P]laintiff's marks may be strong in

the market for sophisticated business equipment \

and services, professional engineering services do

not reasonably fall within the broadly defined

market of potentially related services. Although

the marks are very similar, consumers are unlikely

to be confused as to source because [of] the i

competitive distance between the parties’ services !

f

2003 WL 22451731, at *8-9. We discern no clear error in

the District Court’s findings on this point, and thus we concur

in the court’s determination that the at-issue products and i

services are not proximate as a matter of law. i

|

4. Actual Confusion

“{T]t is black letter law that actual confusion need not be

shown to prevail under the Lanham Act, since actual

confusion is very difficult to prove and the Act requires only |

a likelihood of confusion as to source.” Lois Sportswear, 799

F.2d at 875. Nonetheless, it has been noted that: 7

There can be no more positive or substantial proof a

of the likelihood of confusion than proof of actual

confusion. Moreover, reason tells us that while

very little proof of actual confusion would be

necessary to prove the likelihood of confusion,

an almost overwhelming amount of proof would

be necessary to refute such proof.

34a

Appendix A

World Carpets, Inc. v. Dick Littrell’s New World Carpets,

438 F.2d 482, 489 (Sth Cir.1973).

In the instant case, the District Court found that Plaintiff

had submitted as evidence of actual confusion only the single

incident at the chamber of commerce meeting, see supra,

where “someone who had previously sold an exhibit to

[D]efendants mistakenly concluded that one of [P]laintiff’s

executives was associated with [Savin Engineers].” 2003 WL

22451731, at * 10. A single “anecdote[ ] of confusion over

the entire course of competition,” however, “constitute[s]

de minimis evidence insufficient to raise triable issues.” See

Nora Beverages, Inc. v. Perrier Group of Am., Inc., 269 F.3d

114, 124 (2d Cir.2001). The District Court’s findings on this

point are not clearly erroneous, and we find that the court

committed no error in concluding that this factor weighs in

Defendants’ favor.

5. Bridging the Gap

The question under this factor is the likelihood that

Plaintiff will enter the market for professional engineering

services relating to the construction industry. See W.W.W.

Pharm. Co., 984 F.2d at 574. “This factor is designed to

protect the senior user’s ‘interest in being able to enter a

related field at some future time.’” Jd. (quoting Scarves by

Vera, Inc. v. Todo Imports Ltd., 544 F.2d 1167, 1172 (2d

Cir.1976)).

35a

Appendix A

Here, the District Court found that:

Plaintiff claims that it intends to expand its

involvement in the area of facilities management,

but the only evidence [P]laintiff presents to

support this aliegation is a statement [by Thomas

Salierno, Piaintiff’s President and Chief Operating

Officer,] that [P]laintiff intends to “work{ ] in an

office environment and expand[ ] [into] whatever

the customer needs.” This statement fails to

support any inference that [P]laintiff intends to

enter [D]efendants’ market.

2003 WL 22451731, at *9 (citations omitted). We agree with

the District Court’s conclusion that even drawing all

inferences in Plaintiff's favor, this bare assertion fails to raise

a genuine issue of material fact that Plaintiff is likely to enter

Defendants’ corner of the marketplace.

6. Good Faith

The good-faith factor “considers whether the defendant

adopted its mark with the intention of capitalizing on [the]

plaintiff's reputation and goodwill and [on] any confusion

between his and the senior user’s product.” W.W.W. Pharm.

Co., 984 F.2d at 575 (internal quotation marks omitted).

Here, Plaintiff asserts that Defendants acted in bad faith

because (i) Dr. Nivas “had knowledge of [Plaintiff's] products

and services for approximately ten years”; (ii) Savin

Engineers “never performed a search or investigation prior

to adopting and launching their trade names incorporating

36a

Appendix A

the term SAVIN”; and (iii) Savin Engineers were aware of

Plaintiff's “savin.com domain name prior to registering their

thesavingroup.com and savinengineers.com domains.”

Therefore, Plaintiff argues, the District Court clearly erred

in finding that Defendants did not act in bad faith.

Notably, however, the District Court also found, in

particular, that Defendants:

had no reason to believe that they might be

infringing another’s marks [,] because they were

not copying the mark from another entity. In fact,

[D]jefendants’ founder was not even aware of

[Pjlaintiff's existence at the time he adopted his

mark, and arrived at the name “Savin”

independently by reversing the spelling of his

nickname “Nivas.”

2003 WL 22451731, at *10. Moreover, as the District Court

observed, even if Defendants had conducted a trademark

search, they would have discovered only that the “Savin”

mark was registered for photocopiers and related goods and

services and, hence, would have had no reason to believe

that using the same name for professional engineering

services would infringe Plaintiff's marks. Jd. at *11.

In any event, “failure to perform an official trademark

search, ... does not[,] standing alone[,] prove that

[Defendants] acted in bad faith.” Streetwise Maps, Inc. v.

VanDam, Inc., 159 F.3d 739, 746 (2d Cir.1998). Nor is

“(prior knowledge of a senior user’s trade mark” inconsistent

with good faith. See Arrow Fastener, 59 F.3d at 397.

37a

Appendix A

Accordingly, we conclude that the District Court was correct

in determining that Plaintiff has failed to raise a material

issue of fact regarding Defendants’ alleged bad faith.

7. Quality of the Entities’ Product and/or Services

“The next factor, quality of the junior user’s product, iS

the subject of some confusion.” Hasbro, Inc. v. Lanard Toys,

Ltd., 858 F.2d 70, 78 (2d Cir.1988). Essentially, there are

two issues with regard to quality, but only one has relevance

to determining the likelihood of confusion. If the quality of

the junior user’s product is low relative to the senior user’s,

then this increases the chance of actual injury where there iS

confusion, i.e., through dilution of the senior user’s brand.

Id.; see, e.g., Lois Sportswear, 799 F.2d at 875. A marked

difference in quality, however, actually tends to reduce the

likelihood of confusion in the first instance, because buyers

will be less likely to assume that the senior user whose

product is high-quality will have produced the lesser-quality

products of the junior user. Conversely, where the junior

user’s products are of approximately the same quality as the

senior user’s, there is a greater likelihood of confusion, but

less possibility of dilution. Hasbro, 858 F.2d at 87; see, e.g.,

Lois Sportswear, 799 F.2d at 875.

In this case, the District Court found that as Defendants’

services were “not closely similar to those provided by

[P}laintiff,” any equivalence in “quality between their

products [was] unlikely to cause confusion.” 2003 WL

22451731, at *11 (citation omitted). This finding is neither

clearly erroneous nor, for that matter, even challenged on

appeal.

Set eee

38a

Appendix A

8. Sophistication of Purchasers

As the theory goes, the more sophisticated the purchaser,

the less likely he or she will be confused by the presence of

similar marks in the marketplace. See Maxim’s, Ltd. v.

Badonsky, 772 F.2d 388, 393 (7th Cir.1985) (“{I]n general,

where ‘the cost of the defendant’s trademarked product is

high, the courts assume that purchasers are likely to be more

discriminating than they might otherwise be.’ “ (quoting

Jerome Gilson, Trademark Protection and Practice § 5.08

(1985))).

Here, the District Court found that both Plaintiff and

Defendants:

offer highly priced services that do not usually

invite impulse buying and are ordinarily purchased

by experienced professionals in the course of

business. The decision to invest in new business

equipment or to engage professional engineers is

often the result of careful deliberation by more

than one individual in the purchasing

organization. The likelihood that such

sophisticated consumers will be confused as to

the source of the services is remote.

2003 WL 22451731, at *12. On appeal, Plaintiff does not so

much challenge this finding as sidestep it, implying that the

District Court erred because “most individuals, whether they

are sophisticated or unsophisticated, come into contact with

the type of office equipment manufactured by [Plaintiff].”

Indeed, notes Plaintiff, “[e]veryone uses photocopiers and

fax machines.”

39a

Appendix A

Of course, the relevant inquiry is not whether daily users,

or, even more amorphously, “individuals .. . com[ing] into

contact” with Plaintiffs products, would likely confuse them

with those of Defendants. Rather, the pertinent question is

whether “numerous ordinary prudent purchasers” would

likely “be misled or confused as to the source of the product

in question because of the entrance in the marketplace of

[Defendants’] mark.” Gruner + Jahr USA Publ’g, 991 F.2d

at 1077 (emphasis added); see also Brennan ’s, 360 F.3d at

134 (“To succeed on an infringement claim, plaintiff must

show that it is probable, not just possible, that consumers

will be confused.” (emphasis added)). The District Court’s

findings on this point, which are not squarely challenged on

appeal, may have been somewhat in the nature of “common

sense” assumptions, but this does not make them clearly

erroneous. In any event, we find no error in the court’s

determination that this factor weighs in Defendants’ favor.

C. Balancing the Factors

As the District Court found, one of the Polaroid factors—

similarity of marks—weighs in Plaintiff's favor, while the

other factors weigh in favor of Defendants." Having

13. The District Court also included an “Internet initial interest

confusion factor” in the Polaroid balancing test. See 2003 WL

22451731, at *12-13. Such confusion arises when a consumer who

searches for the plaintiff's website with the aid of a search engine is

directed instead to the defendant’s site because of a similarity in the

parties’ website addresses. See BigStar Entm’t, Inc. v. Next Big Star,

Inc., 105 F.Supp.2d 185, 207 (S.D.N.Y.2000). Because consumers

diverted on the Internet can more readily get back on track than those

in actual space, thus minimizing the harm to the owner of the

(Cont'd)

RS et te

fa ear me neat fi oer te RA A OPO, A

on ier ba

re ey cere

40a

Appendix A

undertaken our own, de novo review of the balancing of the

various factors, we find nothing to quarrel with in the District

Court’s analysis of the Lanham Act infringement claim and

ultimate conclusion that that claim cannot survive summary

judgment. In sum, Plaintiff “has not at this point

demonstrated a likelihood of confusion.” Brennan’s, 360 F.3d

at 130. Accordingly, we affirm that portion of the District

Court’s judgment dismissing the infringement claim.

We have considered the parties’ remaining arguments

and find them to be without merit.

CONCLUSION

For the foregoing reasons, we vacate those portions of

the judgment of the District Court dismissing Plaintiff's

FTDA and state-law dilution claims; remand for further

proceedings consistent with this opinion; and affirm the

judgment in all other respects.

(Cont’d)

searched-for site from consumers becoming trapped in a competing

site, Internet initial interest confusion requires a showing of

intentional deception. See id.; see also Bihari v. Gross, 119 F.Supp.2d

309, 319 (S.D.N.Y.2000). Here, the District Court found that Plaintiff

had failed to raise a triable issue of fact with regard to either a

likelihood of confusion or intentional deception, and, accordingly,

the court concluded that this factor, too, weighs in Defendants’ favor.

We find no error in the court’s determination on this issue, which, in

any event, Plaintiff does not directly challenge on appeal.

4la

APPENDIX B — OPINION AND ORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF NEW YORK DATED

OCTOBER 24, 2003

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

No. 02 Civ. 9377 (SAS)

SAVIN CORPORATION,

Plaintiff,

-against-

THE SAVIN GROUP, SAVIN ENGINEERS, PC.,

SAVIN CONSULTANTS, INC., d/b/a

SAVIN ENGINEERS, P.C., and JMOA

ENGINEERING P.C.,

Defendants.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, U.S.D.J.:

Savin Corporation (“Savin”) brings this action against

The Savin Group, Savin Engineers, P.C., Savin Consultants,

Inc. d/b/a Savin Engineers, P.C., and JMOA Engineering,

P.C. (“Savin Engineers”) alleging: (1) trademark infringement

under the Lanham Act, 15 U.S.C. § 1114; (2) false designation

of origin under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A);

(3) dilution under the Federal Trademark Dilution Act

42a

Appendix B

(“FTDA”), 15 U.S.C. § 1125(c); (4) violation of the Anti-

Cybersquatting Consumer Protection Act (“ACPA”),

15 U.S.C. § 1125(d); (5) dilution in violation of New York

General Business Law (“N.Y.Gen.Bus.L.”) § 360-1;

(6) violation of the New York Unfair Businesses Act, N.Y.

Gen. Bus. L. § 349; (7) violation of the New York False

Advertising Act, N.Y. Gen. Bus. L. § 350; and (8) unfair

competition. Plaintiff now moves for partial summary

judgment on its claims for trademark infringement and false

designation of origin under the Lanham Act, violations of

N.Y. Gen. Bus. L. §§ 349, 350, and common law unfair

competition.

Defendants cross-move for summary judgment,

contending that plaintiff's claims all must fail because: (1)

plaintiff cannot prove likelihood of confusion; (2) plaintiff's

mark is neither famous nor distinctive, and plaintiff cannot

prove actual dilution; (3) plaintiff cannot prove that

defendants had a bad-faith intent to profit from using the

name “Savin;” and (4) the standards under New York law

for finding infringement are analogous to those of the Lanham

Act.

Jurisdiction is based on the Lanham Act, 15 U.S.C.

§ 1051 et seq., 28 U.S.C. §§ 1331 (federal question), 1332

(diversity of citizenship), 1338 (jurisdiction to adjudicate

cases involving trademark infringement and accompanying

claims of unfair competition), and 1367(a) (supplemental

jurisdiction). For the reasons stated below, plaintiff's motion

is denied and defendants’ motion is granted in its entirety.

43a

Appendix B

I. BACKGROUND

Savin is a corporation organized under the laws of

Delaware, with its principal place of business in Stamford,

Connecticut. See 8/21/03 Declaration of Peter Heinsohn,

Director of Business Development of Savin (“Heinsohn

Decl.”) 4 2. Savin was founded in 1959 and is engaged in

the business of marketing, selling, and distributing state-of-

the-art business equipment for commercial, business, and

home office use. See id. ¥ 3. Savin’s products include color

and digital imaging technology for photocopying, printing,

facsimile, and other multifunctional digital systems and

personal computer compatible machines. See Plaintiff's Local

Civil Rule 56.1 Statement of Undisputed Facts (“P1.56.1”)

4 15. Through its Network Services Division, Savin also

offers consulting and support services related to information

technology and office management. See Form Letter

Introducing Savin Network Servs. Div., Ex. 1 to Heinsohn

Decl. (“Network Servs. Ltr.”). Savin’s products are sold

through seventeen company-owned branches consisting of

over sixty sales and service offices and over two hundred

and fifty trained dealers throughout the United States.

See Pl. 56.1 4 6. Plaintiff realizes annual revenues of over

$675 million from sales of its products and services in the

United States. See id. ¥ 13.

Savin and its dealer network employ a wide array of

consultants, pre-sale engineers, post-sale engineers, and

certified technicians. See Letter Network Servs; Pl. 56.1

4 17. Many of Savin’s customers communicate with the

corporation through its pre- and post-sale engineers.

44a

Appendix B

See Pl. 56.1 9 18. Savin’s largest class of customers is

from the government, education, and military sectors.

See id. ¥ 29.

Max Lowe, Savin’s founder, named the corporation after

his brother-in-law, Robert Savin. See 6/3/03 Deposition of

Mark Pollack, Vice President of Marketing of Savin (“Pollack

Dep.”), Ex. F to 8/25/03 Declaration of Alfred D’Isernia,

counsel for defendants (“D’Isernia Decl.”), at 4, 79. Since

1959, plaintiff has used the trade name “Savin” in various

forms in connection with various products and services.

See Pl. 56.1 4 1. Savin owns three incontestable marks:

SAVIN for (i) developing liquid for office copiers and

photocopy machines and copy paper for photocopy machines;

(ii) photocopying machines and parts thereof; and (iti)

maintenance and repair services for photocopiers and word

processors. See id. §§ 2, 3, 4. Plaintiff also owns the mark

SAVIN for facsimile machines. See id. ¥ 5.

Considerable sums of money have been spent in

advertising Savin’s products and services over the years,

including over $20 million during 2002. See id. | 7. Plaintiff's

products and services are regularly featured in print

advertisements, trade magazines, and tradeshow promotions

worldwide. See id. | 10. Its advertisements have appeared in

magazines such as Newsweek, Time, and Business Week.

See id. § 11. Plaintiff maintains an active website on the

Internet located at www.savin.com through which it markets

and promotes its products and services. See id. { 8.

Defendants Savin Engineers, P.C. and JMOA

Engineering are New York professional engineering

45a

Appendix B

corporations with offices in Pleasantville, Syracuse, and

Hauppauge, New York. See Defendants’ Local Civil Rule 56.1

Statement of Undisputed Facts (“Defs.56.1”) n. 1; 5/1/03

Deposition of Rengachari Srinivasaragahavan, founder and

sole shareholder of Savin Engineers (“Nivas Dep. 1”), Ex. 2

to 9/8/03 Opposition Declaration of David A. Einhorn,

counsel for plaintiff (“Einhorn Opp’n Decl.”), at 44, 99.

These two corporations comprise The Savin Group, also a

named defendant in this litigation. See Defs. 56.1 n. 1. The

defendant Savin Consultants, Inc. is a New Jersey corporation

that was incorporated in 1987 and ceased to be actively

engaged in business after Savin Engineers, P.C. was

incorporated in 1988. See id. n. 1, 4 1. Dr. Rengachari

Srinivasaragahavan is the sole shareholder of each of the

defendant corporations. See 5/1/03 Deposition of Rengachari

Srinivasaragahavan, founder and sole shareholder of Savin

Engineers (“Nivas Dep. 2”), Ex. B to D’Isernia Decl., at 23.

Defendants provide professional engineering consulting

services to the public. See Defs. 56.1 § 10(b). In particular,

they provide civil engineering consulting services to entities

concerned with ervironmental waste management. See id.

Defendants also offer professional engineering services in

checking the “validity” of buildings and providing building

maintenance plans. See Defendants’ Response to Pl. 56.1

(“Defs. 56.1 Resp.”) 4 32.

Dr. Rengachari Srinivasaragahavan, whose nickname

since college has been “Nivas,” chose the name “Savin” by

spelling “Nivas” backwards. See Defs. 56.1 4 2; Nivas Dep.

2, at 65. Since 1987, defendants have continually used the

name “Savin” in commerce. See id. 4 5. Defendants did not

46a

Appendix B

perform a search or investigation prior to adopting and

launching their trade names. See id. 4 38. Defendants became

aware of plaintiff's products and services about ten years

ago. See Pl. 56.1 4 37.

Defendants have registered the domain names

www.thesavingroup.com and www.savinengineers.com.

See Defs. 56.1 4 6. These websites, which became accessible

over the Internet after June 2001, provide information about

the defendants’ engineering services. See id. J 7, 23.

Defendants did not perform a search or investigation prior

to adopting and launching their websites utilizing the term

“Savin.” See id. 4 38. Defendants were aware, however, of

plaintiff's www.savin.com domain prior to registering their

domains. See id. 4 39. Other than their websites, defendants

have not advertised their services in any general interest

media. See id. 4 24.

In July 2002, plaintiff discovered defendants’ domain

name registrations. See 8/25/03 Plaintiff's Memorandum of

Law in Support of Summary Judgment (“Pl.Mem.”) at 6.

Plaintiff proceeded to send cease and desist letters to

defendants on July 12, 2002 and again on August 29, 2002.

See Plaintiff's Cease and Desist Letters, Ex. 5 to 8/25/03

Declaration of David Einhorn, counsel for plaintiff (“Einhorn

Decl.”). Defendants failed to take any action in response to

plaintiff's cease and desist letters.

In May 2003, someone who had previously “sold an

exhibit” to defendants approached one of plaintiff's

executives at a Chamber of Commerce meeting in Stamford,

Connecticut and asked if she was associated with Savin

47a

Appendix B

Engineers. See 6/5/03 Deposition of Louise Stix, Vice-

President of Savin (“Stix Dep.”), Ex. 14 to Einhorn Decl., at

35-36. The executive was wearing a name tag that displayed

the name “Savin.”

II. LEGAL STANDARD FOR SUMMARY JUDGMENT

Summary judgment is permissible “if the pleadings,

depositions, answers to interrogatories, and admissions on

file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving

party is entitled to judgment as a matter of law.” Fed.R.Civ.P.

56(c). “An issue of fact is genuine ‘if the evidence is such

that a jury could return a verdict for the nonmoving party.””

Gayle v. Gonyea, 313 F.3d 677, 682 (2d Cir.2002) (quoting

Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). A

fact is material when “it ‘might affect the outcome of the

suit under the governing law.”” Jd. (quoting Anderson, 477

U.S. at 248).

The party seeking summary judgment has the burden of

demonstrating that no genuine issue of material fact exists.

See Marvel Characters, Inc. v. Simon, 310 F.3d 280, 286 (2d

Cir.2002) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144,

157 (1970)). In turn, to defeat a motion for summary

judgment, the non-moving party must raise a genuine issue

of material fact. To do so, it “‘must do more than simply

show that there is some metaphysical doubt as to the material

facts,” Caldarola v. Calabrese, 298 F.3d 156, 160 (2d

Cir.2002) (quoting Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 586 (1986)), and it “‘may

not rely on conclusory allegations or unsubstantiated

48a

Appendix B

speculation.” Fujitsu Ltd. v. Federal Express Corp., 247 F.3d

423, 428 (2d Cir.2002) (quoting Scotto v. Almenas, 143 F.3d

105, 114 (2d Cir.1998)). See also Gayle, 313 F.3d at 682.

Rather, the non-moving party must produce admissible

evidence that supports its pleadings. See First Nat’l Bank of

Arizona v. Cities Serv. Co., 391 U.S. 253, 289-90 (1968). In

this regard, “[t]he ‘mere existence of a scintilla of evidence’

supporting the non-movant’s case is also insufficient to defeat

summary judgment.” Niagara Mohawk Power Corp. v. Jones

Chem., Inc., 315 F.3d 171, 175 (2d Cir.2003) (quoting

Anderson, 477 U.S. at 252).

In determining whether a genuine issue of material fact

exists, the court must construe the evidence in the light most

favorable to the non-moving party and draw all inferences

in that party’s favor. See Niagara Mohawk, 315 F.3d at 175.

Accordingly, the court’s task is not to “weigh the evidence

and determine the truth of the matter but to determine whether

there is a genuine issue for trial.” Anderson, 477 U.S. at 249.

Summary judgment is therefore inappropriate “if there is any

evidence in the record that could reasonably support a jury’s

verdict for the non-moving party.” Marvel, 310 F.3d at 286

(citing Pinto v. Allstate Inc. Co., 221 F.3d 394, 398 (2d

Cir.2000)).

49a

Appendix B

lil. DISCUSSION

A. Lanham Act Claims of Trademark Infringement

and False Designation of Origin

The Lanham Act protects the first user of a trademark

by barring a later user from employing a similar mark that

can confuse purchasers and besmirch the reputation of the

first user. See Streetwise Maps, Inc. v. Vandam, Inc., 159 F 3d

739, 742 (2d Cir.1998). In order to prevail on the Lanham

Act claims of trademark infringement and false designation

of origin, plaintiff must show (1) that it has a valid mark that

is entitled to protection and (2) that defendants’ actions are

likely to cause confusion between plaintiff's and defendants’

services. See Virgin Enters., Ltd. v. Nawab, 335 F.3d 141,

146 (2d Cir.2003) (citing Gruner + Jahr USA Publ’g v.

Meredith Corp., 991 F.2d 1072, 1074 (2d Cir.1993)).

1. Validity of the Marks

The Lanham Act provides that a mark registered by its

owner becomes incontestable if it has been in continuous

use for five consecutive years subsequent to its registration

and it is still in use. See 15 U.S.C. § 1065; Gruner + Jahr,

991 F.2d at 1076. If a mark becomes incontestable, its

registration shall be “conclusive evidence of the registrant’s

exclusive right to use the registered mark,” subject to a

limited number of defenses. 15 U.S.C. § 1115(b); Park ‘N

Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 196

(1985).

50a

Appendix B

Defendants admit that three of plaintif.’s marks are

incontestable. Defs. 50.1 Resp. {fj 2, 3, 4. Further, defendants

have not raised any defenses to the incontestable status of

plaintiff's marks. Because plaintiff's marks are valid and

entitled to protection, I will only address the second prong

of the trademark infringement test.

2. Likelihood of Confusion

Likelihood of confusion is a “key element” that plaintiff

must prove in order to prevail in a trademark infringement

suit. Gruner + Jahr, 991 F.2d at 1077. Plaintiff must show

that numerous ordinary prudent purchasers are likely to be

misled or confused as to the source of the product in question

because of the entrance in the marketplace of defendant’s

mark.” /d. The possibility of confusion is insufficient to meet

this standard; rather, consumer confusion must be probable.

See Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503, 1510

(2d Cir.1997) (quoting 3 J. McCarthy, McCarthy on

Trademarks and Unfair Competition § 23:2, at 23-10 to -11

(1996)).

The Second Circuit routinely weighs eight non-exclusive

factors, also known as the Polaroid factors, to determine

likelihood of confusion. Virgin Enters., 335 F.3d at 147.

These factors are: (1) the strength of the plaintiff's mark;

(2) the similarity of the defendant’s mark to plaintiff's;

(3) the proximity of the products sold under defendant’s mark

to plaintiff's products; (4) where the products are different,

the likelihood that plaintiff will “bridge the gap” by selling

products being sold by defendant; (5) the existence of actual

confusion among consumers; (6) whether defendant acted

Sla

Appendix B

in bad faith in adopting the mark; (7) the quality of the

defendant’s products; and (8) the sophistication of the

consumers. See Polaroid Corp. v. Polarad Elecs. Corp., 287

F.2d 492, 495 (2d Cir.1961).

In determining an infringement suit, the court must

consider ail eight factors, bearing in mind that no single factor

is dominant. See Thompson Medical Co., Inc. v. Pfizer Inc.,

753 F.2d 208, 214 (2d Cir.1985). The factors are designed to

help the court weigh the significant elements in a likelihood

of confusion analysis, and “the ultimate conclusion as to

whether a likelihood of confusion exists is not to be

determined in accordance with some rigid formula .” Bristol-

Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1038

(2d Cir.1992) (queting Lois Sportwear, U.S.A., Inc. v. Levi

Strauss & Co., 799 F.2d 867, 872 (2d Cir.1986)) (citations

and quotations omitted).

a. Strength of the Mark

There are two measures of a mark’s strength: First, its

“inherent distinctiveness” and second, “the degree to which

it indicates the source or origin of the product.” Streetwise

Maps, 159 F.3d at 744; Bristol-Myers, 973 F.2d at 1044

(citing McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126,

1133 (2d Cir.1979)). A mark’s inherent distinctiveness is

evaluated according to its classification into four categories

which, listed from least to most distinctive, are: (1) generic,

(2) descriptive, (3) suggestive, and (4) arbitrary or fanciful.

See Abercrombie & Fitch Co. v. Hunting World, Inc., 537

F.2d 4, 9-11 (2d Cir.1976); Arrow Fastener Co., Inc. v. Stanley

Works, 59 F.3d 384, 391 (2d Cir.1995). Generic marks are

52a

Appendix B

never protected under the Lanham Act, while arbitrary or

fanciful marks are accorded the highest degree of protection.

See Sports Authority, Inc., v. Prime Hospitality Corp., 89

F.3d 955, 961 (2d Cir.1996).

The second measure of strength, the mark’s source-

indicating capacity, is assessed by “the extent to which

prominent use of the mark in commerce has resulted in a

high degree of consumer recognition.” Virgin Enters., 335

F.3d at 147. A mark that commands a high degree of consumer

recognition is said to have acquired distinctiveness or to

possess secondary meaning. See id. at 148; Sports Authority,

89 F.3d at 961.

Marks that have achieved incontestable status are deemed

to have acquired distinctiveness as a matter of law and are

presumed strong for the purposes of the Polaroid analysis

on a summary judgment motion. See Times Mirror

Magazines, Inc. v. Field & Stream Licenses Co., 294 F.3d

383, 391 (2d Cir.2002); Sports Authority, 89 F.3d at 961.

This presumption, however, “applies only when the

trademark is used on the products specified in the

registration.” Paco Sport, Ltd. v. Paco Rabanne Parfums,

86 F.Supp.2d 305, 312 (S.D.N.Y.2000) (citing 15 U.S.C. §§

1115(a), (b); Mushroom Makers, Inc. v. R.G. Barry Corp.,

850 F.2d 44, 48 (2d Cir.1978); Avon Shoe Co. v. David

Crystal, Inc., 279 F.2d 607, 613 n.7 (2d Cir.1960)).

Three of plaintiff's marks are incontestable and hence

are presumptively strong as applied io the goods and services

listed on the registrations, namely: Liquid and paper for

photocopiers; photocopiers and parts thereof; and

53a

Appendix B

maintenance and repair services for photocopiers and word

processors. See Pl. 56.1 4 2, 3, 4. Plaintiff is also able to

show that its marks possess secondary meaning in the market

for high quality business machinery and related services.

Plaintiff has submitted evidence that it sells it products

through seventeen branches and over two hundred and fifty

trained dealers throughout the United States; spent over $20

million in advertising in 2002; and realized annual revenues

of over $675 million.' See Pl. 56.1 4 6, 7, 13. Such evidence

is sufficient to establish that plaintiff's marks possess

secondary meaning in plaintiff's market. Cf, TCPIP Holding

Co. v. Haar Communications, Inc., 244 F.3d 88, 96 (2d

Cir.2001) (expressing confidence that plaintiff could show

secondary meaning on evidence that it operated two hundred

and thirty retail stores in twenty-seven states; sold $280

million worth ds in 1998; and expended tens of

millions of dollars in advertising in the last decade).

Plaintiff, however, does not seek to enjoin defendants’

use of the name “Savin” as applied to photocopiers and

related parts and services, but rather as applied to defendants’

business of professional engineering. Therefore, the relevant

inquiry is whether plaintiff can show that its marks are strong

in the market for professional engineering. The presumption

of strength accorded to plaintiff's incontestable marks does

not extend so far. Cf. Paco Sport, 86 F.Supp.2d at 312

(holding that plaintiff's mark was not presumptively

1. Defendants dispute plaintiff’s statement about its advertising

expenditure as a conclusory statement without factual support. See

Defs. 56.1 Resp. § 7. Because it is a sworn statement by plaintiff's

Director of Business Development, however, plaintiff may rely on it

to support its showing of secondary meaning.

54a

Appendix B

distinctive for clothing when registration was for fragrances

and cosmetics). Similarly, plaintiff has submitted no evidence

that its marks possess secondary meaning in the market for

professional engineering. Therefore, this factor weighs in

defendants’ favor.

b. Similarity of the Marks

In applying this factor, the court examines whether the

“overall impression” created by the marks in relation to the

“context in which they are found” is likely to confuse

potential customers. Gruner + Jahr, 991 F.2d at 1079.

Differences in typeface and color are minor when marks use

the same name, because consumers encounter the marks in

ways that do not transmit these features, such as over the

radio or by word-of-mouth. See Virgin Enters., 335 F.3d

at 149.

Here, plaintiff and defendants both use the name “Savin,”

and their logos display similar block letter fonts, with one

arm of the letter “V” slanted at a greater angle than the other.

See Parties’ Logos, Ex. 9 to Einhorn Decl. The only apparent

difference in the marks is that defendants’ logo incorporates

four squares, one slightly tilted, to the left of the name.

See id. Given that both marks feature the same name, such a

difference is inconsequential. See Virgin Enters., 335 F.3d at

149 (concluding that “Virgin” and “Virgin Wireless” are

“sufficiently similar ... to increase the likelihood of

confusion” because both marks use the same name). This

factor weighs in favor of plaintiff.

55a

Appendix B

«. Proximity of the Products

Under this factor, the court focuses on “whether and to

what extent the two products compete with each other” and

“the nature of the products themselves and the structure of

the relevant market.” Morningside Group Ltd. v. Morningside

Capital Group, L.L.C., 182 F.3d 133, 140 (2d Cir.1999)

(quoting Cadbury Beverages, Inc. v. Cott Corp., 73 F.3d 474,

480 (2d Cir.1996)). The relevant inquiry is whether customers

are likely to be confused about the source of the products,

rather than about the products themselves. See Arrow

Fastener, 59 F.3d at 396. A showing of direct competition is

not required. See id. As a general rule, however, customers

are more likely to be confused as to the source of goods when

the secondary user’s goods are similar to the prior user’s and

the two users operate in similar areas of commerce. See Virgin

Enters., 335 F.3d at 150.

Plaintiff asserts that there is a substantial overlap between

the services offered by the two parties and the areas of

commerce in which they operate. Specifically, plaintiff points

out that both parties serve customers primarily in the

government, education, and military sectors and both offer a

wide array of consulting and engineering services including

facilities management services. See Pl. Mem. at 13-15.

Plaintiff overstates the similarities. Plaintiff employs

certified NetWare engineers whose expertise lies in

information technology. See Plaintiff Employee Resumes,

Ex. 5 to 9/15/03 Reply Declaration of James M. Andriola,

counsel for plaintiff (“Andriola Decl.”). In contrast,

defendants employ professional engineers licensed by the

56a

Appendix B

State of New York to perform engineering services in

connection with ensuring the soundness and safety of

construction and waste management projects. See N.Y. Educ.

Law §§ 7201, 7206 (McKinney 2001) (defining practice of

professional engineering and listing requirements for license

as professional engineer); Defs. Mem. at 1. Plaintiff uses the

term “facilities management” to refer to back office

operations such as photocopying, mail room management,

and document management. See 5/30/03 Deposition of

Thomas Salierno, President and Chief Operating Officer of

Savin (“Salierno Dep. 1”), Ex. C to 9/8/03 Opposition

Declaration of David A. Beke, counsel for defendants (“Beke

Opp’n Decl.”), at 4, 110-12. Defendants, however, use the

term to mean a professional engineering service of checking

the “validity” of a building and providing building

maintenance plans. See Defs. 56.1 Resp. 4 32.

Plaintiff cites thirty-two cases in which courts found

likelihood of confusion when the competitive distance

between the goods and services of the parties appeared at

least as great as, if not greater than, that between the parties

in this case. See 9/8/03 Plaintiff's Memorandum of Law in

Opposition to Defendants’ Motion for Summary Judgment

(“Pl. Opp’n Mem.”) at 9-12. Although only a handful of those

cases have precedential value, I have nonetheless considered

all of them and conclude that the instant case is

distinguishable because one or more of the following

circumstances that prompted the findings of confusion in

those cases are absent in this case: First, the goods were sold

in the same channels of trade, and were often used together

as complementary products, such as wine and cheese, or beer

and deli products. See, e.g., Frank Brunckhorst Co. v.

57a

Appendix B

G. Heileman Brewing Co., 875 F.Supp. 966 (E.D.N.Y.1994);

E. &J. Gallo Winery v. Gallo Cattle Co., 12 U.S.P.Q.2d 1657

(E.D.Cal.1989); In re Opus One Inc., 60 U.S.P.Q.2d 1812

(T.T.A.B.2001). Second, the goods were closely related in

industry practice, such as designer fashions and fragrance.

See, e.g., Scarves by Vera, Inc. v. Todo Imports Ltd., 544

F.2d 1167 (2d Cir.1976); Tiffany & Co. v. Classic Motor

Carriages Inc., 10 U.S.P.Q.2d 1835 (T.T.A.B.1989).

Third, the goods were impulse items sold in the same

channels of trade to the same consumers, such as soft drinks

and cigarettes. See, e.g., Turner Entm't Co. v. Nelson, 38

U.S.P.Q.2d 1942 (T.T.A.B.1996); Helene Curtis Indus. Inc.

v. Suave Shoe Corp., 13 U.S.P.Q.2d 1618 (T.T.A.B.1989);

The Coca-Cola Co. v. Consol. Cigar Corp., 177 U.S.P.Q.

607 (T.T.A.B.1973). Fourth, the senior user had already

expanded into the junior user’s market. See, e.g., Jaguar Cars

Ltd. v. Skandrani, 18 U.S.P.Q.2d 1626 (S.D.Fla.1991); Wells

Fargo & Co. v. Wells Fargo Constr. Co ., 619 F.Supp. 710

(D.Ariz.1985); Allstate Ins. Co. v. DeLibro, 6 U.S.P.Q.2d

1220 (T.T.A.B.1988). Fifth, plaintiff promoted the type of

goods defendant sold, or both parties were associated through

sponsorship of the same events. See, e.g., Vogue Co. v.

Thompson-f udson Co., 300 F. 509 (6th Cir. 1924); K2 Corp.

v. Philip Morris Inc., 192 U.S.P.Q. 174 (T .T.A.B.1976). Sixth,

defendant adopted plaintiff's name with the intent of

benefiting from plaintiff's reputation in the marketplace.

See, e.g., HMH Publ’g Co. v. Brincat, 504 F.2d 713 (9th

Cir.1974); Hallmark Cards, Inc. v. Hallmark Dodge, Inc.,

634 F.Supp. 990 (W.D.Mo.1986); Tonka Corp. v. Tonka

Phone Inc., 229 U.S.P.Q. 747 (D.Minn.1985).

58a

Appendix B

This circuit has found no confusion when the goods at

issue were in much closer proximity than the goods described

in several of the cases cited by plaintiff. In Arrow Fastener,

this circuit held that customers were not likely to be confused

when both parties sold staplers in the same stores, but one

party sold a pneumatic stapler and the other a lightweight

small stapler. See 59 F.3d at 396 (explaining that there was a

significant difference in price between the two staplers, and

that they served different purposes and types of customers).

In the instant case, the difference in price between plaintiff's

back office facilities management services and defendants’

professional engineering services is at least as great as, if

not greater than, that between the two types of staplers in

Arrow Fastener. Similarly, the expertise of plaintiff's

engineers in information technology and that of defendants’

engineers in construction and waste management projects

serve very different needs within the sectors from which both

parties draw their customers.

In Arrow Fastener, the court cautioned that competitive

proximity should be assessed in relation to the first two

Polaroid factors. See id. at 396. The Arrow Fastener court

had found that the prior user’s mark was weak and the marks

were not confusingly similar, thus the prior user was not

entitled to trademark protection over a broad range of related

goods, and consumers were unlikely to be confused as to

source. See id.

Here, plaintiff's marks are weak as applied to

professional engineering services, and are not entitled to

protection in that field. Even though plaintiff's marks may

be strong in the market for sophisticated business equipment

59a

Appendix B

and services, professional engineering services do not

reasonably fall within the broadly defined market of

potentially related services. Although the marks are very

similar, consumers are unlikely to be confused as to source

because the competitive distance between the parties’ services

is greater than in Arrow Fastener. This conclusion is

supported by New York’s stringent requirements restricting

defendants’ field of operations to state licensed professional

engineers. See infra Part III.A.2.d. Therefore, this factor

weighs in favor of defendants.

d. Bridging the Gap

This factor asks whether the plaintiff is likely to bridge

the competitive gap between the two parties’ operations by

entering defendant’s market. See Morningside, 182 F.3d at

141. This inquiry “recognizes ‘the senior user’s interest in

preserving avenues of expansion and entering into related

fields.”” Id. (quoting Hormel Foods Corp. v. Jim Henson

Productions, Inc., 73 F.3d 497, 504 (2d Cir.1996)).

Defendants emphasize that New York’s professional

engineering licensing laws stringently limit the class of

persons who may enter defendants’ market. See N.Y. Educ.

Law § 7202, 7206 (McKinney 2001) (restricting practice of

professional engineering to individuals who meet

requirements for license). Plaintiff claims that it intends to

expand its involvement in the area of facilities management,

see Pl. 56.1 4 19, but the only evidence plaintiff presents to

support this allegation is a statement that plaintiff intends to

“work[] in an office environment and expand{] [into]

whatever the customer needs.” 5/30/03 Deposition of Thomas

60a

Appendix B

Salierno, President and Chief Operating Officer of Savin

(“Salierno Dep. 2”) Ex. 1 to Einhorn Decl., at 68. This

statement fails to support any inference that plaintiff intends

to enter defendants’ market. Plaintiff further argues that New

York’s professional engineering laws are irrelevant because

it objects to defendants’ use of “Savin” in all fifty states.

Even drawing all inferences in plaintiff's favor, this bare

assertion fails to raise a genuine issue of material fact that

any differences in the laws of other states would increase the

likelihood of plaintiff entering defendants’ market. This factor

weighs in defendants’ favor.

e. Actual Confusion

In assessing this factor, the court may consider evidence

of actual consumer confusion about the source, sponsorship,

or affiliation of plaintiff's goods and services. See

Morningside, 182 F.3d at 141; Sports Authority, 89 F.3d at

963. Such evidence must be more than de minimis. See Nora

Beverages, Inc. v. Perrier Group of America, Inc., 269 F.3d

114, 124 (2d Cir.2001).

Plaintiff submits as evidence of actual confusion the

Chamber of Commerce incident in which someone who had

previously sold an exhibit to defendants mistakenly

concluded that one of plaintiff's executives was associated

with defendants. See Pl. Mem. at 17-18. This single instance

of non-purchaser confusion is insufficient to support a finding

that a reasonable trier of fact could find actual confusion.

See id. (affirming that “two anecdotes of confusion .. .

constituted de minimis evidence insufficient to raise triable

issues”); Trustees of Columbia University v. Columbia/HCA

6la

Appendix B

Healthcare Corp., 964 F.Supp. 733, 746 (S.D.N.Y.1997)

(holding that momentary confusion of a small number of non-

purchasers constituted de minimis showing of actual

confusion). This factor weighs in favor of defendants.

f. Good Faith

This factor focuses on “whether the defendant adopted

its mark with the intention of capitalizing on plaintiff's

reputation and goodwill” or of benefiting from consumer

confusion between its product and that of the first user. Arrow

Fastener, 59 F.3d at 397 (quoting Lang v. Ret. Living Publ’g

Co., 949 F.2d 576, 583 (2d Cir.1991)). This circuit has

indicated that the failure to conduct a proper trademark search

may be significant evidence of bad faith. See Int’l Star Class

Yacht Racing Ass’n v. Tommy Hilfiger, U.S.A., Inc., 80 F.3d

749, 753-54 (2d Cir.1996). A showing of such failure does

not, however, constitute bad faith as a matter of law on a

summary judgment motion. See Jeri-Jo Knitwear, Inc. v. Club

Italia, Inc., No. 98 Civ. 4270, 1999 WL 500146, at *4

(S.D.N.Y. July 15, 1999).

Plaintiff points to Int’! Star Class Yacht in asserting that

defendants acted in bad faith by adopting their mark without

having first performed a trademark search. See Pl. Mem. at

20. The facts in that case, however, are quite different from

those in the instant litigation. The defendant in Int’! Star

Class Yacht had copied “authentic details ... from the sport

of competitive sailing.” 80 F.3d at 753. This court reasoned

that defendant’s awareness that it was copying put it on notice

that it might be infringing another’s mark. Jd. Under those

circumstances, the court held that defendant’s failure to

62a

Appendix B

follow its counsel’s advice to conduct a thorough trademark

search before adopting its mark must “factor into an

assessment of [its] bad faith.” Jd. at 754. In the instant case,

defendants had no reason to believe that they might be

infringing another’s marks because they were not copying

the mark from another entity. In fact, defendants’ founder

was not even aware of plaintiff's existence at the time he

adopted his mark, and arrived at the name “Savin”

independently by reversing the spelling of his nickname

“Nivas.”

Even if dexndants had conducted a trademark search,

they would have discovered only that plaintiff had registered

“Savin” for photocopiers and related goods and services, and

would have had no reason to believe that their use of the

same name for professional engineering services would

infringe on plaintiff's marks. See Arrow Fastener, 59 F.3d at

397 (holding that “[p]rior knowledge of a senior user’s

trademark .. . may be consistent with good faith” particularly

when “the presumption of an exclusive right to use a

registered mark extends only to the goods and services noted

in a registration certification”).

Plaintiff further contends thet defendants acted in bad

faith by continuing to use the name “Savin” after they had

become aware of plaintiff's products and services ten years

ago. See Pl. Mem. at 20. This argument is without merit.

Knowledge that plaintiff used the mark “Savin” in relation

to sophisticated business equipment would not have given

defendants reason to believe that their use of the same name

in the field of professional engineering was infringing. The

fact that plaintiff did not give defendants any notice of

63a

Appendix B

infringement until July of 2002 would have reinforced

defendants’ reasonable belief that their use of “Savin” was

non-infringing.

Neither of plaintiff's arguments shows a genuine issue

of material fact that defendants acted with a bad faith intent

to profit from plaintiffs reputation and good will. This factor

weighs in favor of defendants.

g. Quality

This factor is primarily concerned with whether the

inferior quality of a junior user’s goods could jeopardize the

senior user’s reputation. See Arrow Fastener, 59 F.3d at 398.

However, “[p]roducts of equal quality may [also] create

confusion as to source’.” Morningside, 182 F.3d at 142.

Equality of quality tends to cause consumer confusion when

the products or services are closely similar. See Arrow

Fastener, 59 F.3d at 398 (holding that the equal quality of

pneumatic and hand held staplers is not likely to cause

consumer confusion, whereas the equal quality of stitching

on the back pockets of jeans is likely to create confusion as

to source); Morningside, 182 F.3d at 136 (finding confusion

when plaintiff and defendant both offered financial services

of comparable quality to U.S. companies in relation to their

acquisition of assets).

Plaintiff alleges that the equal quality of defendants’

services is likely to cause customers to assume that

defendants are affiliated with plaintiff. See 9/15/03 Plaintiff's

Reply Memorandum of Law in Further Support of Plaintiff's

Motion for Summary Judgment (“Pl. Reply Mem.”) at 9-10.

64a

Appendix B

As defendants’ services are not closely similar to those

provided by plaintiff, however, see supra Part III.A.2.c,

equivalent quality between their products is unlikely to cause

confusion. This factor weighs in defendants’ favor.

h. Sophistication of Consumers

The expense of the products, the manner and market

conditions in which the products are purchased, and whether

purchasers may be subject to impulse are relevant in

determining the sophistication of the buyers. See Gruner +

Jahr, 991 F.2d at 1079; Streetwise Maps, 159 F.3d at 746;

Sports Authority, 89 F.3d at 955. Generally, purchasers who

are “highly trained professionals ... know the market and

are less likely than untrained consumers to be misled or

confused by the similarity of different marks.” Virgin Enters.,

335 F.3d at 151.

Both plaintiff and defendants offer highly priced services

that do not usually invite impulse buying and are ordinarily

purchased by experienced professionals in the course of

business. The decision to invest in new business equipment

or to engage professional engineers is often the result of

careful deliberation by more than one individual in the

purchasing organization. The likelihood that such

sophisticated consumers will be confused as to the source of

the services is remote. This factor weighs in favor of

defendants.

65a

Appendix B

i. Initial Interest Confusion

Plaintiff raises the issue of initial interest confusion on

the Internet in relation to actual confusion and consumer

sophistication. As initial interest confusio.1 does not fall

neatly under any of the Polaroid factors, and as the law

regarding this issue is the same as applied to either of the

contexts in which plaintiff has raised it, I treat it as a separate

factor here.

Internet initial interest confusion arises when a consumer

who searches for plaintiff's website with the aid of a search

engine is directed instead to defendants’ site because of a

similarity in the parties’ web addresses. See Bigstar Entm

Inc. v. Next Big Star, Inc., 105 F.Supp.2d 185, 207

(S.D.N.Y.2000). The first court to address initial interest

confusion on the Internet found that the defendant had

infringed the plaintiff's trademark by using marks

confusingly similar to plaintiff's in its metatags. See

Brookfield Communications, Inc. v. West Coast Entm't Corp.,

174 F.3d 1036, 1062 (9th Cir.1999). Metatags are a “buried

code” that companies create in the process of registering their

domain names to characterize the contents of and directions

to their websites. See Bigstar, 105 F.Supp.2d at 208. When

someone types in a keyword during an Internet search,

domain name search engines use the metatags to display a

list of websites that correspond to the keyword. See id.

Through a strategic use of metatags, a company is able to

divert Internet traffic to its site. See id . Harm occurs when

potential customers assume that a competitor’s website is

associated with the website for which they were originally

looking and cease to search for the original site. See Bihari

v. Gross, 119 F.Supp.2d 309, 319 (S.D.N.Y.2000).

66a

Appendix B

As this court explained in Bihari, consumers diverted

on the Internet can more readily get back on track than those

in actual space, and thus the harm from consumers becoming

trapped in a competing site is easily avoided. See id. at 320

n. 15 (expiaining that resuming one’s search for the original

website is comparatively easy, involving only one click of

the mouse and a few seconds’ delay). As a result, the few

decisions in this circuit that have addressed Internet initial

interest confusion require a showing of intentional deception

on the part of the defendant before imposing liability.

Compare Bigstar, 105 F.Supp.2d at 211 and Bihari, 119

F.Supp.2d at 321 (declining to find initial interest confusion

when there was no evidence that defendants used plaintiffs’

marks in their metatags in bad faith) with N.Y. State Soc’y of

Certified Pub. Accountants v. Eric Louis Assocs., Inc., 79

F.Supp.2d 331, 341 (S.D.N.Y.2000) and OBH, Inc. v.

Spotlight Magazine, Inc., 86 F.Supp.2d 176, 190 n.9

(W.D.N.Y.2000) (finding initial interest confusion when

defendants intentionally copied and used plaintiffs’ marks

in metatags and domain names).

Plaintiff offers the following evidence: (1) because

defendants’ website received 48,949 hits in March 2003 there

is circumstantial evidence of actual confusion as this is a

“disproportionately high” number for a small engineering

firm, see Pl. Reply Mem. at 18; and (2) Internet website

advertising attracts unsophisticated as well as sophisticated

consumers, demonstrating that many of the consumers in this

case are unsophisticated, see Pl. Mem. at 20. Plaintiff also

claims that defendants acted in bad faith by registering their

domain names even though they were aware of plaintiff's

savin.com domain. See id. at 20.

67a

Appendix B

The relevant enquiry in likelihood of confusion analysis

is whether “numerous ordinary prudent purchasers” are likely

to be misled. Gruner + Jahr, 991 F.2d at 1077. Neither of

plaintiff's contentions supports this proposition. Plaintiff's

first argument is based on a lone statistic of a single month’s

hits. This figure, standing alone, is too speculative to raise a

material issue of fact as to consumer confusion. Plaintiff's

second claim is equally immaterial. Plaintiff has offered no

evidence that visitors to its website form a significant part

of its ordinary, prudent customer base. Finally, the fact that

defendants were aware of plaintiff's domain name before they

registered their own domain names is insufficient to raise a

genuine issue of fact that defendants acted in bad faith.

Defendants’ domain names reflect the marks defendants had

been using for about nine years without any reason to believe

that their use infringed plaintiff's mark. See supra Part

I11.A.2.f. This factor weighs in defendants’ favor.

j. Balancing the Factors

In sum, one of the Polaroid factors weighs in plaintiff's

favor and the other seven weigh in favor of defendants. The

Internet initial interest confusion factor also weighs in

defendants’ favor. In light of the overwhelming number of

factors favoring defendants, defendants are entitled to

summary judgment. Accordingly, defendants’ motion to

dismiss plaintiff's trademark infringement and false

designation of origin claims is granted.

68a

Appendix B

B. Lanham Act Dilution Claim

The FTDA provides that “[t]he owner of a famous mark

shall be entitled ... to an injunction against another person’s

commercial use in commerce of a miark or trade name, if

such use begins after the mark has become famous and causes

dilution of the distinctive quality of the mark.” 15 U.S.C.

§ 1125(c)(1). This circuit reads the Act’s requirement of

distinctiveness to mean that the mark must possess a

“significant degree of [inherent] distinctiveness.” TCPJP

Holding Co., 244 F.3d at 95, 97. To qualify as famous, a

mark must also demonstrate a high degree of acquired

distinctiveness. See id. at 97.

Next, a plaintiff suing under the FTDA must show “actual

dilution, rather than a likelihood of dilution.” Moseley v.

Secret Catalogue, Inc., 123 S.Ct. 1115, 1124 (2003). The

FTDA defines dilution as “the lessening of the capacity of a

famous mark to identify and distinguish goods or services,

regardless of the presence or absence of (1) competition

between the owner of the famous mark and other parties, or

(2) likelihood of confusion, mistake, or deception.” 15 U.S.C.

§ 1127. Actual dilution may be shown through circumstantial

evidence, particularly when the marks in question are

identical. See Moseley, 123 S.Ct. at 1125.

Plaintiff has created a material issue of fact as to the

distinctiveness and fame of its marks. Plaintiff correctly

claims that its incontestable marks are presumed to possess

the requisite degree of inherent distinctiveness. See Sporty’s

Farm L.L.C. v. Sportsman’s Market, Inc., 202 F.3d 489, 497

(2d Cir.2000).' Plaintiff has also produced enough evidence

69a

Appendix B

to raise a genuine issue of material fact with regard to the

fame of its marks. It spent over $20 million on advertising

in 2002 and has achieved annual revenues of $675 million.

See Pl. 56.1 44 7, 13. Further, plaintiff's products and services

are regularly featured in print advertisements, trade

magazines and tradeshow promotions. See id. { 10. Plaintiff's

advertisements have appeared in well known magazines such

as Newsweek, Time, and Business Week.” See id. { 11.

Finally, plaintiff has produced evidence that an adversary in

a previous federal litigation and an arbitrator with the

National Arbitration Forum have acknowledged that “Savin”

is a famous mark. See Savin Corp. v. Rayne, 00-CV-11728-

PBS, 2001 U.S. Dist. LEXIS 20581, at *11 (D.Mass. Mar.

26, 2001); Savin Corp. v. Copier Dealers, Inc., (Case No.

FA 0304000155903, National Arbitration Forum, July 9,

2003). While not sufficient to conclusively establish fame,

plaintiff's evidence certainly represents more than a mere

scintilla of evidence. Cf. Nabisco, Inc. v. PF Brands, Inc.,

50 F.Supp.2d 188, 202 (S.D.N.Y.1999), aff'd, 191 F.3d 208

(2d Cir.1999) (finding top ranking sales dollars and

advertising expenses of more than $120 million in a three

year period to be significant indicators of fame).

Plaintiff fails, however, to rebut defendants’ allegation

that plaintiff is unable to show actual dilution. See Defs.

Mem. at 20-21. Plaintiff maintains that under Moseley, there

is no need to prove actual dilution when the marks at issue

2. Defendants dispute this statement as conclusory and

unsupported by fact. See Defs. 56.1 Resp. J 11. Because this is a

sworn statement by plaintiffs Director of Business Development,

however, plaintiff may rely on it to show fame.

70a

Appendix B

are identical. Plaintiff bases this statement on a single

sentence in the Moseley opinion which is clearly dicta.

In Moseley, the Court responded to an argument that it would

be difficult for plaintiffs to provide evidence of an actual

diminution in the capacity of a famous mark to identify goods

and services. The Court wrote:

It may be, however, that direct evidence of dilution

such as consumer surveys will not be necessary if

actual dilution can reliably be proven through

circumstantial evidence—the obvious case is one

where the junior and senior marks are identical.

Moseley, 123 S.Ct. at 1125.

This sentence is not easy to interpret, as is apparent from

the differing interpretations of lower courts. Is the Court

saying, as plaintiff maintains, that when the junior and senior

marks are identical, that in itself is sufficient circumstantial

evidence to prove actual dilution? See Nike Inc. v. Variety

Wholesalers, 274 F.Supp.2d 1352, 1372 (S.D.Ga.2003)

(basing finding of dilution on identity of the marks). Or, is

the Court saying that circutmstantial evidence of actual

dilution, as opposed to direct evidence, is sufficient when

the marks are identical? See Pinehurst, Inc. v. Wick, 256

F.Supp.2d 424, 431-32 (M.D.N.C.2003) (holding that

defendant’s use of plaintiff's marks in its domain names

constituted circumstantial evidence sufficient to support

finding of dilution because defendant’s use hindered plaintiff

from engaging in electronic commerce under those domain

names, hence “reduc[ing] the selling power of plaintiff's

Tla

Appendix B

marks”)? The latter interpretation seems more likely because,

in the sentence following its statement that actual dilution

may be proven through circumstantial evidence, the Moseley

Court says:

Whatever difficulties of proof may be entailed,

they are not an acceptable reason for dispensing

with proof of an essential element of a statutory

violation.

123 S.Ct. at 1125. Indeed, in Moseley, where the marks were

not identical, the Court concluded that there was no proof of

actual dilution. In the instant case, plaintiff offers no

circumstantial evidence of any kind tending to show actual

dilution other than the fact that the marks are identical. This

is not sufficient. Hence, plaintiffs have failed to raise a

material issue of fact with regard to an essential prong of the

dilution test.

Drawing all inferences in favor of the plaintiff, the non-

moving party, there is no material issue of fact with respect

to actual dilution. Accordingly, defendants’ motion for

summary judgment dismissing plaintiff's dilution claim

under the FTDA is granted.

3. The Nike court cited Pinehurst in support of its view that

identical marks in themselves constitute sufficient circumstantial |

evidence to prove actual dilution. The analysis in Pinehurst, however, .

demonstrates that the court in that case read Moseley to mean that

when marks are identical, circumstantial evidence, rather than direct

evidence, may be used to prove actual dilution.

72a

Appendix B

C. ACPA

ACPA prohibits cybersquatting, defined as the “bad-faith

and abusive registration of distinctive marks as Internet

domain names with the intent to profit from the goodwill

associated with such marks.” Sporty’s Farm, 202 F.3d at 495

(quoting S.Rep. No. 106-140, at 4). The Act imposes civil

liability in favor of a mark’s owner on anyone who: (1) has a

bad faith intent to profit from a protected mark; and (2)

registers, traffics in, or uses a domain name that is identical

or confusingly similar to a distinctive mark; or is

identical, confusingly similar to, or dilutive of a famous mark.

See 15 U.S.C. § 1125(d)(1)(A).

This court has already found that defendants did not act —

in bad faith in adopting the name “Savin” nor in registering

its domain names. See supra Parts III.A.2.f, IifI.A.2.i. Further,

defendants assert that they have never offered to sell, transfer,

or assign their domain names to plaintiff. See Defs. Mem. at

23. Plaintiff has produced no evidence to the contrary.

Therefore, there is no genuine issue of material fact regarding

plaintiffs ACPA claim. Defendants’ motion for summary

judgement dismissing the ACPA claim is granted.

D. New York General Business Law Claims

1. Sections 349 and 350

Section 349 ohibits “deceptive acts and practices” and

Section 350 proscribes false advertising in commerce. A

successful claim under either statute must prove “consumer

injury or harm to the public interest.” Securitron Magnalock

73a

Appendix B

Corp. v. Schnabolk, 65 F.3d 256, 264 (2d Cir.1995). To

demonstrate such harm, a practice must be the “sort of offense

to the public interest which would trigger FTC intervention

under 15 U.S.C.A. § 45.” Horn’s, Inc. v. Sanofi Beaute, Inc.,

963 F.Supp. 318, 328 (S.D.N.Y.1997) (quoting R. Givens,

Practice Commentaries on N.Y. Gen. Bus. Law § 349, at 567-

68 (McKinney 1988)). Concerns with public health and safety

would trigger such intervention. See Securitron Magnalock

Corp., 65 F.3d at 264 (holding that false information about

security equipment given to regulatory agency responsible

for public safety affected public interest); Weight Watchers

Int’l Inc. v. Stouffer Corp., 744 F.Supp. 1259, 1285

(S.D.N.Y.1990) (holding that false advertising in food

products would pose harm to public if proved).

Plaintiff alleges that defendants’ use of “Savin” in its

trade and domain names has misled, confused, and deceived

consumers as to the source of defendants’ services, and

established irreparable harm to plaintiff. See Pl. Mem. at 22.

Harm ts a business from a competitor, however, does not

constitute the kind of detriment to the public interest required

by the statutes. See Fashion Boutique of Short Hills, Inc. v.

Fendi USA, Inc., No. 91 Civ. 4544, 1992 WL 170559 at *4

(S.D.N.Y. July 2, 1992) (dismissing Section 349 claim

because alleged harm to plaintiff's business outweighed any

incidental harm to the public). Accordingly, as plaintiff has

failed to produce evidence of harm to the public interest,

defendants’ motion for summary judgment on the Sections

349 and 350 claims is granted.

74a

Appendix B

2. Section 360-1

The standards for dilution under Section 360-1 are

“essentially the same as that under § 43(a) of the Lanham

Act.” Winner Int'l LLC v. Omori Enters., Inc., 60 F .Supp.2d

62, 73 (E.D.N. Y.1999) (citing Safeway Stores, Inc. v. Safeway

Props., Inc., 307 F.2d 495, 498 n. 1 (2d Cir.1962)).

As plaintiff failed to produce sufficient evidence to create a

triable issue under the FTDA, it follows that the Section 360-

1 claim also fails. Therefore, defendants’ motion for summary

judgment dismissing the Section 360-1 claim is granted.

E. New York Common Law Claims

Unfair competition under New York common law

requires a showing of bad faith. See Genesee Brewing Co. v.

Stroh Brewing Co., 124 F.3d 137, 149 (2d Cir.1998). As

discussed in Parts III.A.2.f and IIIL.A.2.i1 supra, there is no

showing that defendants acted in bad faith. Accordingly,

defendants’ motion for summary judgment dismissing

plaintiff's New York common law claims is granted.

IV. CONCLUSION

For the reasons set forth above, plaintiff's motion for

partial summary judgment is denied, and defendants’ cross-

motion for summary judgment is granted in its entirety. The

Clerk is directed to close this motion and this case.

75a

Appendix B

- $0 ORDERED:

s/ Shira A. Scheindlin

Shira A. Scheindlin

U.S.D.J.

Dated: New York, New York

October 24, 2003

76a

APPENDIX C — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

DENYING PETITION FOR REHEARING

FILED FEBRUARY 28, 2005

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

THURGOOD MARSHALL U.S. COURT HOUSE

40 FOLEY SQUARE

NEW YORK 10007

Roseann B. MacKechnie

CLERK

At a stated term of the United States Court of Appeals

for the Second Circuit, held at the Thurgood Marshall United

States Courthouse, Foley Square, in the City of New York,

on the 28th day of February two thousand five.

Present:

Hon. Thomas J. Meskill,

Hon. Roger J. Miner,

Hon. Robert A. Katzmann,

CIRCUIT JUDGES.

Savin v. The Savin Group

A petition for panel rehearing and a petition for rehearing

en banc having been filed herein by the appellees The Savin

Group, et al. Upon consideration by the panel that decided

the appeal, it is Ordered that said petition for rehearing is

DENIED.

——————eVOiOee

77a

Appendix C

It is further noted that the petition for rehearing en banc has

been transmitted to the judges for the court in regular active

service and to any other judge that heard the appeal and that

no such judge has requested that a vote be taken thereon.

For the Court,

Roseann B. MacKechnie, Clerk

By: s/ Tracy W. Young

Motion Staff Attorney