Erickson Beamon Ltd. v. CMG Worldwide, Inc., No. 12 Civ. 5105, 2014 WL 3950897 (S.D.N.Y. Aug. 13, 2014)
EB sought a declaratory judgment of non-infringement of trademark and rights of publicity based on its “Bette Davis Eyes” jewelry collection, launched in 2010. CMG and the Bette Davis Estate counterclaimed for infringement of those rights. EB argued that the jewelry was a reference to the 1974 song well-known for the Kim Carnes recording of 1981, while CMG argued that consumers would mistakenly believe that the jewelry was affiliated with the actress.
|Erickson Beamon Bette Davis Eyes ring at Barneys|
Addressing EB’s motion to strike affirmative defenses, the court first determined that Twiqbal’s plausibility standard need not be satisfied by the defenses. This is a question that has divided district courts—even district courts trying to count which is the more common approach. Textually, all that’s required is notice pleading, and equitably it would be unfair to hold a defendant to the same pleading standard, given the defendant’s limited time to respond. Nonetheless, some of the affirmative defenses went away because they didn’t provide proper notice or were otherwise inappropriate.
The “bad faith” affirmative defense survived because the answer sufficiently claimed bad faith in EB’s alleged misappropriation of “Bette Davis.” Bad faith is “very fact intensive.”
Turning to the counterclaims, CMG sufficiently pled trademark infringement under the Lanham Act. If they/their licensees didn’t actually use the claimed mark in commerce, that would “undermine” their Lanham Act claims. (There’s an interesting “Stealth” type issue here: suppose CMG only got people to take licenses by threatening them with infringement claims. How should that count as “use”?) But that was a question of fact, as was consumer confusion.
And here we take our first detour from the unremarkable to the deeply misguided: “And finally, the name ‘Bette Davis’ is certainly distinctive with regard to its source—this was a woman, after all, whose eyes inspired a chart-topping song well after her popularity had peaked.” No, that’s not “distinctive with regard to its source.” Source has a particular meaning in trademark law. The song is evidence that Bette Davis herselfwas well-known at least as of 1981, but that doesn’t mean her name was or is recognized by consumers as a designation of the source of goods or services (cf. Dastar), any more than William Shakespeare’s is despite its high non-trademark level of distinctiveness.
Naturally, NY common law unfair competition claims also survived, since they’re infringement plus bad faith, which we already know is fact-intensive even if the allegations of bad faith were “reasonably thin” at this stage. Likewise with unjust enrichment.
Now the court repeats its initial error with the federal dilution claim. EB argued that CMG merely made a “threadbare recital” of fame, but CMG pled that Bette Davis was “widely recognized” and that she had an “acclaimed career [with] the attendant fame and prominence.” She was renowned (and had a song written about her eyes), so it was plausible that “Bette Davis” was a famous mark. This is an even more egregious mistake with dilution than it was with infringement. Again: The Mona Lisa is famous; it is not famous as a mark for anything, and no MONA LISA trademark owner should be able to bring a federal dilution claim. While this may be the wrong stage for full resolution of this issue, truly pleading—much less proving—dilution should have to involve the fame of the mark CMG claims to own, not the words comprising the alleged mark.
NY dilution was of course easier, since it just requires distinctiveness plus likely dilution, so that’s that. (It also requires substantial similarity, but that was “obvious” here.)
NY deceptive business practices under GBL §349 requires (1) that the challenged act or practice was consumer-oriented; (2) that it was misleading in a material way; and (3) that the claimant suffered injury as a result of the deceptive act. EB didn’t challenge (1), which is a bit surprising since there’s a fair amount of precedent that ordinary business harms aren’t consumer oriented just because consumer behavior changed, but the result on (2) suggests the court wasn’t going to make those distinctions anyway.
EB argued that CMG didn’t plead materiality, but the court disagreed. CMG alleged that “Bette Davis Eyes” was materially misleading as to the source of the merchandise, and the court saw it as a question of fact whether the name actually caused consumers to believe that the Estate endorsed the jewelry. Comment: Why would that belief in the Estate’s endorsement, even if it existed, be material? Especially since Davis herself is dead, why would anyone care? But I forgot, this is trademark land, not advertising land: “This prong is akin to the ‘likelihood of consumer confusion’ element of an unfair competition claim,” which must mean materiality doesn’t actually matter! Also, it’s usually not resolvable on the pleadings.
However, intentional interference with prospective economic advantage failed—CMG alleged future harm to licensing opportunities, but no present relations with a third party that were harmed by EB’s conduct.