Cerutti 1881 v. Cerutti, inc., No. 95 CIV 7782 WL 3350 (S.D.N.Y. Jan. 5, 1998)

OPINION AND ORDER

MUKASEY, D.J.

After plaintiff amended the complaint to allege that defendant Leo E.Q. Cerruti ("Leo Cerruti") has been maintaining a Cerruti website on the internet, and to demand that he and his co-defendants [FN1] be barred from doing so, a preliminary injunction hearing was held on October 7, 1997. For the reasons set forth below, defendants will be barred from using the Cerruti name in connection with selling goods or designs, or describing such goods or designs, unless they comply with the restrictions set forth below.

This is the second opinion in this case. In an earlier opinion, Cerruti 1881 S.A. v. Cerruti, Inc., 169 F.R.D. 573, 584 (S.D.N.Y.1996), familiarity with which is assumed for current purposes, I granted plaintiffs a declaratory judgment that defendants' trademark rights in the name Cerruti had been abandoned and were therefore cancelled. As established at the October 7 hearing, plaintiffs are designers and marketers of high-priced clothing, fabrics and accessories under marks that use the Cerruti name. (Tr. 53-54) Plaintiffs have expended sums in the millions of dollars in this country alone to advertise and market their products, including an expenditure of $4.3 million in 1997. (Tr. 70) Plaintiffs also plan to open a boutique in New York. (Id.) Their goods range in price from moderate to highly expensive, and none are sold in such mass-market stores as K-Mart. (Tr. 71)

Following the earlier opinion in this case, defendant Leo Cerruti has been maintaining an internet website on which he advertises and offers for sale clothing, fabrics and accessories under the name "Q, by Leo Cerruti." (PX 7; Tr. 105, 108) Notwithstanding the decree in the earlier opinion invalidating Leo Cerruti's use of trademarks employing the word Cerruti, the website he maintains continued to use such marks, although he claimed at the hearing that such use was inadvertent. (Tr. 103-04) The website is accessible through the domain name, inter alia, "Cerruti USA.com," which Leo Cerruti claims, remarkably, was chosen "to prevent any confusion with Nino Cerruti, Cerruti in France or in Italy." (Tr. 92) However, the surname Cerruti appears 22 times on the six pages of the website, including seven times on the first page. (PX 5A) That website has also included a statement from Leo Cerruti that he is "pleased to announce the launch of my new line of fabric and accessories called Q which will carry on the proud tradition of quality and craftsmanship you have always expected from the Cerruti family." (Tr. 99)

According to Leo Cerruti, his goods "are of the highest quality and are of such high quality and standard that they cannot be sold in many of the lower and mid-range stores and discount houses that the plaintiff sells to and where his product can be found." (Tr. 105) He has a swimwear fabric collection he is currently marketing (Tr. 100), and plans "finished products, such as men's neckwear, probably sometime I would say for fall '98." (Tr. 106) He is "using the Leo Cerruti name on the website to promote Leo Cerruti, myself, and what I do, which includes my products." (Tr. 108)

Based on the above facts, and the facts set forth in the earlier opinion, it is apparent that defendant Leo Cerruti, himself and through the corporate defendants, is using the name Cerruti in a manner calculated to create and take advantage of confusion between his own products and those of plaintiffs.

From these facts, certain legal conclusions follow. First, plaintiffs' marks contain a heavily advertised and marketed proper name, and are registered; therefore, they are strong. See Lois Sportswear U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 871 (2d Cir.1986). The owner of a strong mark is entitled under 43(a) of the Lanham Act to an injunction against anyone using a mark sufficiently similar to make it likely that confusion, mistake or deception will be created as to the origin of the defendant's goods. See 15 U.S.C. 1125(a)(1994).

Likelihood of confusion is assessed by considering the eight factors articulated by Judge Friendly in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961), and any others that may be relevant in a particular case. See Paddington Corp. v. Attiki Importers & Distrib., 996 F.2d 577, 583 (2d Cir.1993).

The eight Polaroid factors apply as follows to the facts of this case: (i) As noted, the name Cerruti is part of several registered marks, and is presumptively strong. Lois Sportswear, 799 F.2d at 871.(ii) The name Leo Cerruti is highly similar and could suggest a line of products from the same manufacturer as plaintiffs' pervasively marketed products. (iii and iv) The products involved are close if not directly competing, and there is no gap to be bridged. (v) There has been no evidence presented of actual confusion, but we are at the preliminary stage of this case, and thus this factor weighs only lightly in defendants' favor. (vi) Leo Cerruti is the junior user here by virtue of the lapse of all of defendants' Cerruti marks, and there is little doubt as to his bad faith. Apart from the repeated perjury he committed in connection with the hearing that preceded the earlier opinion, the pervasiveness of his use of the name Cerruti in the pages of the website, along with highly ambiguous references to his family's history of high-quality workmanship, leaves little doubt that he is intent on creating and exploiting as much confusion as possible. (vii) The quality of defendants' products, if any, is not yet apparent. Although Leo Cerruti testified that his products would be of the highest quality, his record as to truthfulness in presenting even objectively verifiable facts is not encouraging. (viii) Finally, although the consumers at the high end of plaintiffs' product line may be quite sophisticated, those at the lower end may not. In any event, all consumers of plaintiffs' products may be aware that plaintiffs produce and distribute a range of products, and therefore also might believe that even a low-quality product could be included within that range. In sum, other than the absence of evidence of actual confusion, all the Polaroid factors favor plaintiffs.

In the ordinary case, that would end the inquiry and an injunction would follow. However, this case is somewhat unusual in that Leo Cerruti wishes to do business under his actual name, and has a history of having done so in the past. Plaintiffs protest that Leo Cerruti cannot be trusted to abide by any injunction short of an outright ban on the continued use of his name. That may be, but barring him outright from using his name is simply too radical a step to take in the first instance. Indeed, the cases plaintiffs cite to support their demand for an injunction barring Leo Cerruti from using his name did not grant that relief. In both John B. Stetson Co. v. Stephen Stetson Co., 85 F.2d 586, 587 (2d Cir.), cert. denied, 299 U.S. 605, 57 S.Ct. 232, 81 L.Ed. 446 (1936), and L.E. Waterman Co. v. Modern Pen Co., 193 F. 242, 247-48 (S.D.N.Y.) (L.Hand, D.J.), aff'd as mod., 197 F. 534 (2d Cir.1912), aff'd, 235 U.S. 88, 35 S.Ct. 91, 59 L.Ed. 142 (1914), the Courts required the defendants to distinguish their confusingly named products--Stetson hats and Waterman pens--from the well-known products of the plaintiffs. I will do the same here, at least in the first instance, unless and until Leo Cerruti shows himself unable or unwilling to comply with such an injunction, at which time I will consider barring him from use of the Cerruti name.

For the above reasons, I find that defendants' use of the Cerruti name creates the danger of confusion as to source between their products and those of plaintiffs. Accordingly, defendants are barred from using the name Cerruti, standing alone, to designate or advertise any product, and are directed to include the following entry, in capital letters, in all places where their products are referred to--including without limitation labels, tags, websites, advertisements and literature of any kind--such lettering to be in type no smaller and no less bold than the largest and/or boldest typeface in which the word Cerruti appears: LEO CERRUTI PRODUCTS ARE NOT RELATED TO OR AUTHORIZED BY THE WORLDWIDE CERRUTI FASHION FIRM BASED IN ITALY.

Settle order containing the above terms on ten days' notice.

SO ORDERED:

FN1. It appears that defendant Leo E. Cerruti Sr. died on October 21, 1997. On that date as well, counsel submitted a letter brief in his behalf arguing his continued right to use the Cerruti name to designate products he himself designs. (Snyder letter at 4) Plainly, that right is no longer at issue and Leo E. Cerruti Sr. need no longer be considered a defendant in this case. Should his estate choose to assert any right in the use of the Cerruti name to market goods, that issue can be dealt with in a subsequent proceeding. The corporate defendants did not appear at all at the hearing.