American Express Co. v. American Express Limousine Service Ltd.
21 U.S.P.Q. 2d (BNA) 1009, 772 F. Supp. 729, 1991 U.S. Dist. LEXIS 12402 (1991)
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Rule of Law:
The use of a strong, famous trademark as the dominant part of a business name in a related field creates a likelihood of consumer confusion and constitutes trademark infringement. Such use also unlawfully dilutes the distinctive quality of the famous mark by blurring its unique association with the senior user.
Facts:
- American Express Company has used its trademark 'AMERICAN EXPRESS' since 1850 in connection with financial and travel-related services, investing millions of dollars annually in promotion.
- By 1990, the American Express mark was highly recognized, with over thirty-six million cardholders and acceptance at over three million establishments worldwide.
- On October 26, 1989, a car service business was incorporated in New York under the name 'American Express Limousine Service, Ltd.' (AELS).
- On November 15, 1989, AELS entered into a service contract with a subsidiary of American Express to become an authorized establishment for accepting the American Express card.
- On March 8, 1991, an attorney for American Express sent a letter to AELS demanding that it cease and desist from using the name 'American Express' in its business.
- The service contract between the parties required AELS to display American Express identification, such as signs and decals.
Procedural Posture:
- American Express Company filed a lawsuit against American Express Limousine Service, Ltd. in the U.S. District Court for the Eastern District of New York.
- The complaint alleged trademark infringement and unfair competition under the federal Lanham Act, and trademark dilution and deceptive trade practices under New York law.
- American Express Limousine Service, Ltd. filed counterclaims for breach of a license agreement and for bad faith and deception.
- The plaintiff, American Express Company, moved for a preliminary injunction and for summary judgment on its infringement and dilution claims.
- The plaintiff also filed a motion to dismiss the defendants' counterclaims for failure to state a claim upon which relief can be granted.
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Issue:
Does a limousine service's use of the name 'American Express Limousine Service, Ltd.' create a likelihood of confusion with the well-established 'AMERICAN EXPRESS' trademark, thereby constituting trademark infringement under the Lanham Act and trademark dilution under New York law?
Opinions:
Majority - Wexler, District Judge
Yes, the limousine service's use of the name creates a likelihood of confusion and constitutes trademark infringement and dilution. The court applied the Second Circuit's eight-factor Polaroid test and found that the overwhelming balance of factors supported a finding of likelihood of confusion. The 'AMERICAN EXPRESS' mark is exceptionally strong and famous. The defendant's name incorporates the plaintiff's entire mark, with the only addition being the generic term 'Limousine Service,' which does not lessen the similarity. The services are in proximate, complementary industries (travel services), and even sophisticated consumers are likely to be confused. This likelihood of confusion is sufficient for a finding of infringement and also establishes the irreparable harm necessary for an injunction. Furthermore, the defendant's use 'whittles away' at the distinctive quality of the plaintiff's famous mark, constituting dilution under New York's anti-dilution statute, which does not require a finding of consumer confusion.
Analysis:
This case serves as a clear application of the Polaroid factors for likelihood of confusion, emphasizing the extensive protection afforded to strong, arbitrary, and famous trademarks. The decision reinforces the principle that adding a generic or descriptive term to a well-known mark does not shield a junior user from infringement claims, particularly when the parties operate in related industries. The ruling highlights that for famous marks, the proximity of products can be interpreted broadly, encompassing complementary services within the same general industry, such as travel. It solidifies the idea that the strength of the senior mark is often the most determinative factor in the infringement analysis.
