National Football League Properties, Inc. v. New Jersey Giants, Inc.
1986 U.S. Dist. LEXIS 25732, 637 F. Supp. 507, 229 U.S.P.Q. (BNA) 785 (1986)
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Rule of Law:
The unauthorized use of a professional sports team's well-known trademark on merchandise creates a likelihood of consumer confusion and constitutes unfair competition under Section 43(a) of the Lanham Act, particularly when there is evidence of bad faith intent to trade on the team's goodwill.
Facts:
- The New York Football Giants, Inc. is a professional football team that has used the registered service marks 'Giants' and 'New York Giants' since 1925.
- Since 1976, the team has played all its home games at Giants Stadium in East Rutherford, New Jersey, but has retained the 'New York Giants' name.
- National Football League Properties, Inc. (NFLP) is the exclusive licensing agent for the team's marks and oversees a large, profitable program for official merchandise.
- New Jersey Giants, Inc. was incorporated and began selling sports-related apparel bearing the words 'New Jersey GIANTS'.
- The principals of New Jersey Giants, Inc. admitted that their purposes were either to sell the corporate name to the football team for a profit or to sell merchandise to fans who would associate it with the team.
- The defendant's merchandise displayed the word 'GIANTS' more prominently than 'New Jersey' and used navy blue lettering, one of the football team's official colors.
- NFLP sent two cease-and-desist letters to New Jersey Giants, Inc., which were ignored as the company continued to advertise and sell its products.
- The quality of the defendant's merchandise was found to be inferior to the quality control standards required for officially licensed NFL products.
Procedural Posture:
- The New York Football Giants, Inc. and National Football League Properties, Inc. filed a lawsuit against New Jersey Giants, Inc. in the U.S. District Court for the District of New Jersey.
- Plaintiffs alleged trademark infringement, unfair competition under the Lanham Act, and various state law violations.
- The court granted the plaintiffs' request for a temporary restraining order, prohibiting the defendant from selling its merchandise.
- By consent of the parties, the temporary restraining order was extended, and the court consolidated the hearing on the preliminary injunction with a full trial on the merits.
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Issue:
Does the sale of merchandise bearing the name 'New Jersey GIANTS' by New Jersey Giants, Inc. create a likelihood of confusion as to its source or sponsorship by the New York Football Giants, thereby constituting unfair competition under Section 43(a) of the Lanham Act and related state laws?
Opinions:
Majority - Barry, District Judge
Yes, the sale of 'New Jersey GIANTS' merchandise creates a likelihood of confusion and constitutes unfair competition. The defendant's use of the plaintiff's mark on competing goods violates Section 43(a) of the Lanham Act because it is likely to confuse consumers as to the source, sponsorship, or approval of the merchandise. The court applied the six-factor test from Scott Paper Co. and found overwhelming evidence of likely confusion. The marks are highly similar, with the dominant element 'GIANTS' being identical. The plaintiff's mark is exceptionally strong. The goods are low-priced, suggesting consumers will not exercise a high degree of care. Most significantly, the defendant acted in bad faith, admitting an intent to capitalize on the team's reputation, which raises a presumption of confusion. This presumption was bolstered by a consumer survey showing over 57% of respondents were actually confused. While the conduct did not violate § 32 for service mark infringement because the defendant sold goods rather than providing entertainment services, it clearly constituted unfair competition under § 43(a), as well as violations of state law.
Analysis:
This decision solidifies the power of Section 43(a) of the Lanham Act as a crucial tool for brand owners to protect their marks on merchandise, even when a technical service mark infringement claim under Section 32 might fail. It underscores that the legal analysis hinges on consumer perception and the likelihood of confusion in the marketplace. The case is also significant for its emphasis on the defendant's intent; it establishes that a bad faith intent to trade on a famous mark's goodwill creates a strong presumption of confusion, effectively shifting the burden of proof to the defendant. Furthermore, it affirms the evidentiary weight of properly conducted consumer surveys in trademark litigation, treating them as powerful proof of actual confusion.
