The opinion of the court was delivered by: BRIAN BARNETT DUFF
On May 21, 1993, Spex, Inc. ("Plaintiff") filed a complaint against The Joy of Spex, Inc., and Craig Scott individually and d/b/a Craig Scott Optician, Inc. ("Defendants") in the Circuit Court of Cook County, Illinois, that was removed to this court on June 23, 1993 ("Complaint"). The six-count Complaint seeks injunctive and other relief from the Defendant for violations of (1) section 43(a) of the Lanham Act, 15 U.S.C. § 1125; (2) the Deceptive Trade Practices Act, 815 ILCS 510/2; (3) The Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2; (4) the Anti-Dilution Act, 765 ILCS 1035/15; and for (5) Theft of Business; and (6) Common Law Fraud.
On July 1, 1993, the Plaintiff moved for a Preliminary Injunction prohibiting the Defendants from using the word, "Spex" or any misspelling or homonym thereof in connection with their business. Subsequently, the Defendant moved to consolidate the Preliminary Injunction hearing with a final hearing on the merits for injunctive relief only.
This Court granted that motion and, accordingly, conducted a bench trial on July 14, 1993 through July 19, 1993. On July 14, 1993, the Court decided that the issues warranted further consideration and took the case under advisement, declining to issue any injunction against the Defendant. Since that time, this Court has considered the evidence and the credibility of the witnesses, the testimony, exhibits, memoranda of law, arguments of counsel, and each party's proposed findings of fact and conclusions of law. Now fully advised in the matter, the full trial on injunctive relief having been concluded, this Court reports the following findings.
1. Plaintiff, Spex, Inc., has been incorporated under Illinois law since 1979. Its principal place of business is in Chicago, Illinois.
2. Defendant, The Joy of Spex, Inc., has been incorporated under Illinois law since December 1991, with its principal place of business also in Chicago, Illinois. The Joy of Spex, Inc. has had one store located at 3341 North Broadway in Chicago since its incorporation.
3. Defendant, Craig Scott, is the President and 50% owner of the Joy of Spex, Inc. Scott is also the President of Craig Scott Optician, Inc., an eyewear and eye care establishment in Illinois. Michael Sauer, the other 50% owner of The Joy of Spex, Inc., has managed that corporation's 3341 North Broadway store since January, 1992.
4. Both the Plaintiff and the Defendant sell lenses and "high end" fashion quality eyewear frames. "High end" fashion eyewear does not mean, "expensive," but connotes exclusive, quality eyewear. Although their inventories are riot identical, the Plaintiff and the Defendant carry many of the same brands of "high end" eyewear.
5. Allan Weiner is the owner of Spex, Inc. Spex, Inc. has four stores located at Skokie, Illinois, 680 North Lake Shore Drive, 1800 North Clybourn Street and 700 North Michigan Avenue. The downtown Skokie store opened in 1980, the North Lake Shore Drive store opened in 1983, the 1800 North Clybourn Street store in 1987, and the North Michigan Store in 1991. Each store has operated under the name, "Spex, Inc." since its opening. Beginning in 1983, Spex, Inc. started to concentrate on exclusive, quality fashion eyewear.
6. Weiner chose his company's trade name after overhearing a group of young men talking about their "specs" and seeing a picture of a store in Boston, Massachusetts, called "Spex." He incorporated his business under the name Spex, Inc. after determining that this trade name was not being used in Illinois.
7. Defendant Scott chose the name, "The Joy of Spex, Inc." because it is a parody of a title of a book called "The Joy of Sex." Scott thought of this name sometime between 1983 and 1985.
8. The Joy of Spex, Inc. opened at North Broadway in March 1992. At the time The Joy of Spex was incorporated, Scott was aware of the presence of Spex, Inc. in Chicago. It was the parody, however, and not the name, "Spex Inc." which prompted him to choose the name, "The Joy of Spex, Inc." Before incorporating, Scott called the State of Illinois which informed him that he was free to use "The Joy of Spex" as a business name.
9. The "Joy of Spex, Inc." logo, which was personally selected by Scott, consists of the words, "The Joy of" separated by a pair of eyeglasses from the words, "Spex, Inc.," that appear immediately below the eyeglasses.
10. The word "spex," which cannot be found in the dictionary, is a homonym for "specs," which does appear in standard American dictionaries. The definition of "specs" includes "specifications"; when that word is used with respect to eyeglasses, however, it means "spectacles." Another homonym for "spex" is "specks," which can refer to small particles of dust or other materials.
11. A significant number of distributors and retailers selling optical frames and products available throughout the Chicago area and nationally use the word "Specs" and "Spex" in their names for eyewear. Telephone book listings from throughout the nation list several optical businesses that use the words "specs" or (less frequently) "spex."
12. Spex, Inc. regularly runs adds in the Chicago newspaper, The Reader. The Plaintiff has also advertised in The Chicago Tribune, The Chicago Sun-Times, and in national and regional publications such as Playboy, Elle, and North Shore magazines. Weiner also promotes the "Spex, Inc." trade name through such means as a toll-free telephone number, "1-800-SpexInc" and by having the last four telephone number digits of his four stores spell the word, "Spex." Wiener promotes the Spex, Inc. trade name in his role as a consultant to other "high-end" eyewear establishments in a 10-state area.
13. Spex, Inc. targets its advertising to attract affluent customers with discriminating and sophisticated tastes. Nevertheless, 75 - 80% of Spex, Inc.'s business comes from opthamologists who refer business to that company.
14. 3-5% of The Joy of Spex, Inc.'s business comes from physician referrals, and the vast majority of its business comes directly from customers. The Joy of Spex, Inc. attempts to attract business specifically from the homosexual community through advertisements in publications such as Lamda and Windy City Times which are targeted to that community. In March 1992, the Defendants also began advertising in The Reader.
15. About 10% of Spex, Inc.'s sales are interstate. The Joy of Spex, Inc. has significantly fewer out-of-state customers, but occasionally ships products to customers who live in other states and Canada.
16. On approximately four occasions, The Joy of Spex Inc. advertised discounts on frames in The Reader. This was problematic because suppliers for the frames so advertised do not permit retailers to offer discounts. The Defendants explained to customers that these advertisements were errors and that any honored discounts pertained to lenses and not frames.
18. Sauer, who works at the Joy of Spex, Inc. five days per week, received one or two telephone calls from persons who inquired whether the two businesses were affiliated. Two drop-in customers at The Joy of Spex, Inc. also asked whether there was a connection between the stores. Scott, who works at The Joy of Spex, Inc. two days per week, once encountered a consumer who asked him, "This isn't Spex, is it?" Scott also received other inquiries from people who wondered whether the Joy of Spex, Inc. was "Contacts & Specs, Inc." -- another store in the Chicago area.
19. Weiner, who works at different Spex, Inc. stores three to four days per week, received more than 10 telephone calls from persons inquiring whether his stores were affiliated with The Joy of Spex, Inc. or whether it offered discounts. He also dealt with approximately the same number of customers on his premises who thought there was such an affiliation. On occasion, these customers would ask for the store's advertised discounts; in at least one instance, a sale was lost because Spex, Inc. would not honor an advertised Reader discount from The Joy of Spex, Inc.
20. While at the Spex, Inc. store on North Lake Shore Drive between December 1992 and March 1993, Pelz received between 15 and 20 calls from persons inquiring about The Joy of Spex, Inc. Many of these callers would ask for the Defendants' advertised discounts on eyewear. On two occasions, customers entered the Spex, Inc. store on Lake Shore Drive, agreed to purchase eyeglass frames, and then left when Pelz told them that they were not in the store that was offering discounts.
21. During the days when he works at Spex, Inc. stores, Weiner generally receives approximately 5-6 calls per day from potential customers. On those days, approximately 10 to 30 people typically visit the store. Weiner has not conducted any market surveys regarding advertising for Spex, Inc., nor has he conducted surveys to estimate the level of confusion in the market existing between Spex, Inc. and The Joy of Spex, Inc.
22. Joanne Frey, a Spex, Inc. customer, first saw an advertisement for The Joy of Spex, Inc. in The Reader in January or February 1993. Ms. Frey, who has a Ph.D. in Education and teaches at Northeastern Illinois University, testified that when she saw the advertisement, she assumed that Spex, Inc. and The Joy of Spex, Inc. were affiliated because the word, "Spex" drew her attention.
The Plaintiff seeks to enjoin the Defendants from using the word, "Spex" or any homonym thereof in their trade name. Injunctive Relief is inappropriate, however, because the Plaintiff fails to show that "Spex, Inc." is a protectible trade name.
The trade name, "Spex, Inc." is not entitled to protection under section 43(a) of the Lanham Act. See, McCarthy on Trademarks and Unfair Competition, 3rd Ed., Vol. 1 § 4.04, 4-15 (1993). Section 43(a) provides that:
Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or ...