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November 30, 1995

TV Land, L.P., and TV Land, Inc., Plaintiffs,
Viacom International, Inc., and Viacom Networks, Inc., Defendants.

The opinion of the court was delivered by: DUFF

 On October 30, 1995, TV Land, L.P., and TV Land, Inc. ("Plaintiffs"), sued Viacom International, Inc., and Viacom Networks, Inc. ("Defendants"), alleging (1) infringement of a federally registered servicemark; (2) false designation of origin under Section 43(a) of the Lanham Act; (3) common law trademark infringement; (4) dilution of mark and injury to business reputation, (5) unfair competition; (6) violation of the Illinois Uniform Deceptive Trade Practices Act; and (7) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. On November 9, the Plaintiffs moved for a temporary restraining order. Subsequently, they moved for a preliminary injunction. On November 16, 17 and 20, we conducted a preliminary injunction hearing. On November 21, the parties submitted their proposed Findings of Fact and Conclusions of Law ("FF & CL"). Below, we present our findings and conclusions, and we grant the Plaintiffs' motion for a preliminary injunction.


 I. The Parties

 TV Land, L.P., is an Illinois limited partnership organized and existing under the laws of the State of Illinois with its principle office in Chicago, Illinois. TV Land, Inc., is the limited partnership's general partner, and it is an Illinois corporation with its principal place of business in Chicago, Illinois. Compl. at P 1.

 The Plaintiffs operate three retail stores called TV Land. In November 1991, they opened the first store, and in November 1992, they opened the second and third stores. Compl. at P 5. The stores are in shopping malls in suburban Chicago. Over fifteen million people each year visit those malls. Tr. at 109-10.

 The stores sell gifts and apparel relating to television networks, programs and characters. Compl. at P 5. The merchandise includes t-shirts, hats, books, calendars, coffee mugs, keychains, stuffed animals, neckties, watches, clocks, posters, sweatshirts, jackets, sweatpants, pencils, pens, bumper stickers, greeting cards, gym bags and other apparel, gifts and novelty items. Compl. at P 8. The merchandise relates primarily (80%-90%) to current networks, programs and characters. It relates secondarily (10%-20%) to classic, non-current networks, programs and characters.

 Viacom Networks has a programming service called Nickelodeon, which airs 24 hours each day and, during the day, caters mainly to children. Tr. at 246 and 276. Since 1985, Nickelodeon has had a programming segment called Nick at Nite, which airs approximately 10 hours each night and caters mainly to adults. Tr. at 246-48 and 278. Nick at Nite features exclusively classic, non-current television shows. Nickelodeon/Nick at Nite is available in more than 50 million households nationwide, including households in the Chicago metropolitan area. Compl. at P 14.

 II. The Plaintiffs' Use of "TV Land "

 On October 4, 1991, the Plaintiffs filed for federal registration of the mark "TV land." In November 1991, they first used the mark. On June 8, 1993, the U.S. Patent and Trademark Office issued Certificate of Registration Number 1,776,083 for the mark for a "retail store selling merchandise related to television networks, programs, and characters." Pls.' Ex. 1.

 Since 1991, the Plaintiffs have used their mark continuously in association with their retail stores. They display the mark in bold, large letters on the stores' exteriors and interiors. Compl. at P 10; Pls.' Ex. 4.

 Since 1991, the Plaintiffs have used their mark continuously in association with their merchandise. They sell and distribute t-shirts and distribute hats bearing the mark. Moreover, they use bags, buttons, tags, stickers and gift boxes bearing the mark. Compl. at P 10; Pls.' Exs. 6-10 and 14-17; Tr. at 128, 132-35 and 137-38.

 Since 1991, their mark's reputation has grown throughout the consumer and vending markets in Illinois and other states. The stores have received press coverage in national, regional and local newspapers and on Superstation WGN television. Compl. at P 10; Pls.' Ex. 2; Tr. at 144-47.

 Around May 1995, the Plaintiffs obtained the telephone number 1-800-66-TV-LAND to enable customers throughout the country to place toll-free orders for their products. Tr. at 141-42. They included this 800 number in an advertisement in the June 10-16, 1995, issue of TV Guide for Cleveland, Ohio. Pls.' Ex. 13.

 The Plaintiffs have plans to expand the TV Land business to a national chain of retail stores. Mr. Joshua Lowitz, president of TV Land, contacted an investment banker to formulate a proposal for expansion, and Mr. Lowitz regularly considers leasing opportunities for bringing TV Land to malls throughout the country. Compl. at P 10; Tr. at 115 and 118.

 III. The Defendants' Use of "TV Land "

 In 1988, the Defendants hired an advertising agency to design a campaign that would create viewer loyalty to Nick at Nite. The agency designed a campaign that used the concept of "TV Land," a fictitious Nick at Nite environment in which Donna Reed lives down the street from Mr. Ed, and Car 54 patrols the neighborhood. Tr. at 249-50, 280-81, and 283.

 Beginning in 1988, the Defendants used the phrases "Hello out there from TV land" and/or "TV Land" in on-air promotions, billboards, trade advertising, live events, direct mail campaigns to the public, off-channel consumer advertising, and on merchandise. Defs.' Exs. 4, 8, and 11-17; Tr. at 325 and 263.

 Between 1988 and 1992 and in 1995, the Defendants spent over $ 4.5 million to produce over 100 promotional spots that refer to "Nick at Nite" and to "TV Land," although not to "Nick at Nite TV Land." Since 1988, they have aired those spots. Defs.' Ex. 1a; Tr. at 269, 284, 325-6, and 394-5.

 Since 1989, the Defendants have often placed an "SM" or "TM" symbol following their use of the phrase "Hello out there from TV land." Defs.' Exs. 3, 8, and 10-17; Tr. at 300, 302, 304-05, and 310-14.

 In 1989 and 1990, the Defendants sponsored national Nick at Nite TV Land Tours. The Tours visited numerous cities, including Chicago, with interactive, nostalgic television exhibits, performances, and celebrity guest appearances. Defs.' Exs. 1-4; Tr. at 284, 287-88, and 292. The Tours cost approximately $ 800,000. Defs.' Ex. 4; Tr. at 263, 290-91, 294, and 297. They received wide media attention. Defs.' Ex. 4; Tr. at 269, and 289-90.

 During the Tours, the Defendants sold t-shirts with the logo "Nick at Nite TV Land Tour." After the Tours and prior to 1995, they sold a few items containing the phrase "Hello out there from TV land." Defs.' Exs. 9-30; Tr. at 294-95, 309-314 and 335-36.

 In 1995, the Defendants decided to spin off a stand-alone, 7-day-a-week, 24-hour-a-day programming network called "Nick at Nite TV Land." Tr. at 315-16 and 329. They further decided that the new network would feature exclusively classic, non-current television shows. Tr. at 317, 338, 340-42 and 391.

 Although the Defendants claim that they intend officially to call the new network "Nick at Nite TV Land," press reports indicate that they and others will primarily call it "TV Land." Compl. at Ex. E; Pls.' Ex. 20; Defs.' Ex. 31; Tr. at 278, 290-91, 294, 297, 336 and 338. The Defendants did not request that the press retract those reports. Tr. at 349-50.

 In anticipation of the new network, the Defendants use the phrase "Nick at Nite TV Land" in on-air promotions and on a variety of merchandise. Defs.' Exs. 1, 1a and 18-30; Tr. at 269 and 335-36. They intend to continue using the phrase in connection with the new network and the sale of merchandise. Defs.' Ex. 18-30; Tr. at 315-19, 324-25 and 340-42.

 On September 15, 1995, the Defendants filed fourteen applications for intent to use the mark "TV LAND" and one application predicated upon use of the mark "TV LAND" in connection with a variety of goods and services. Pls.' Ex. 26; Aff. of Richard Cronin at Ex. F. They filed no federal trademark application for the mark "Nick at Nite TV Land". Pls.' Ex. 3.

 Among the goods and services for which the Defendants seek trademark protection, the Plaintiffs sell the following: keychains, watches, time pieces, printed matter, books, calendars, posters, decals, bumper stickers, note cards, bags, knapsacks, fanny packs, tote bags, briefcases, furniture, namely director's chairs, non-metal keychains, mugs, tumblers, containers for food or beverage (thermal insulated), clothing, headgear, games and play things and toy dolls. Compl. at P 16.

 Among the goods and services for which the Defendants seek trademark protection, the Plaintiffs may eventually sell the following: audio and visual sound recordings, earrings, bracelets, dog tags, necklaces, identification bracelets, paper, newspapers, magazines, playing cards, trading cards, portfolios, pillows, towels, handkerchiefs, sew-on patches for clothing, amusement articles, video games and board games, computerized amusement apparatus, decorations for Christmas trees, computer products, namely game cartridges for computer video games and video output game machines and instructional material sold as a unit, computer game cassettes, computer game tapes and manuals sold as a unit, CD ROM games, and audio output games. Id.

 The Defendants intend to sell the merchandise from stores that they do not own such as Nordstroms and Target. Tr. at 355.

 The Defendants also intend to sell the merchandise from stores that they do own. In 1995, they opened a retail kiosk at an Orlando, Florida amusement facility, which kiosk sells a variety of goods, including hats and shirts, prominently displaying the phrase "TV Land." Defs.' Ex. 27. The Defendants intend to open a retail store on Michigan Avenue in Chicago, Illinois. Compl. at P 20. ...

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