Monday, December 24, 2007

New York Court of Appeals Says Yes and No to "Famous Marks" Doctrine

In its March 28, 2007 decision, the United States Court of Appeals for the Second Circuit held that the Lanham Act cannot be read to include a "famous marks" exception. (TTABlogged here). The court certified to the New York State Court of Appeals the question of whether New York common law recognizes the doctrine. The New York court has now ruled that "New York recognizes common law unfair competition claims, but not the 'famous' or 'well-known' marks doctrine." ITC Ltd. v. Punchgini, Inc.,___ N.E.2d ___, 2007 WL 4334177 (N.Y.) (New York Court of Appeals Dec. 13, 2002).


The federal court was unable to find authoritative law on the issue of whether New York's common law recognizes the famous marks doctrine. Consequently, the court certified two questions to the New York Court of Appeals: (1) Does New York Recognize the Famous Marks Doctrine? and (2) How Famous Must a Mark Be to Come Within the Famous Marks Doctrine?

The New York court's answer to the first question was rather self-contradictory: "while we answer 'Yes' to the first certified question, we are not thereby recognizing the famous or well-known marks doctrine, or any other new theory of liability under the New York law of unfair competition." It was simply reaffirming that:

"when a business, through renown in New York, possesses goodwill constituting property or a commercial advantage in this State, that goodwill is protected from misappropriation under New York unfair competition law. This is so whether the business is domestic or foreign."

As to the second question, the court set the bar very high for the plaintiff:

"ITC would have to show first, as an independent prerequisite, that defendants appropriated (i.e., deliberately copied), ITC's Bukhara mark or dress for their New York restaurants. If they successfully make this showing, defendants would then have to establish that the relevant consumer market for New York's Bukhara restaurant primarily associates the Bukhara mark or dress with those Bukhara restaurants owned and operated by ITC."

Now that the New York Court of Appeals has provided its answers to the certified questions, the case will return to the Second Circuit, who will presumably apply the New York court's stringent standard of proof. Note that the federal district court found that "even if it were to assume the applicability of the famous marks doctrine, ITC had failed to adduce sufficient evidence to permit a reasonable jury to conclude that the name or trade dress of its foreign restaurants had attained the requisite level of United States recognition to trigger the doctrine." In short, things are not looking good for plaintiff ITC.

TTABlog comment: The bottom line seems to be that New York will protect a famous foreign mark, but not under the rubric "famous mark doctrine" and only in the rarest cases.

For further commentary, see Professor Tushnet's 43(b) blog (here).

Text Copyright John L. Welch 2007.


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