mailed. Just because plaintiff's 1995 brochure proclaims "STEALTH TM . . . .Brand computer products continuously since at least 1985" does not make it so.
Similarly, even though plaintiff may have entered into advertising and distribution contracts with retailers in 1986, 1987 and 1989, plaintiff presents no evidence to show that the contracts were implemented or that the retailers ever advertised or distributed any STEALTH computers or related goods in the years designated or at anytime.
The single laptop computer produced by plaintiff with the STEALTH mark affixed in some manner is equally unhelpful to plaintiff. No evidence has been produced that demonstrates when or even if laptops bearing the STEALTH mark were sold or transported to purchasers in commerce. Moreover, S Industries' evidence does not establish that the laptops were available prior to defendants' use of the mark. Similarly, the manuals and specifications supplied by plaintiff are ineffective. Plaintiff has provided no affirmative evidence demonstrating that the manuals were supplied to purchasers at any time or that the products described in the manuals ever existed.
Indeed, the remainder of plaintiff's evidence is inconsequential. Licensing and settlement agreements for goods unrelated to computers and importation documentation do not establish that plaintiff actually used the STEALTH mark in connection with computers at any time. See e.g. Avakoff, 765 F.2d at 1098 (shipment from manufacturer to applicant does not constitute trademark use); CTC Int'l, Inc. v. Hero Cycles Private, Ltd., 1992 U.S. Dist. LEXIS 22131, 26 U.S.P.Q.2D (BNA) 1309, 1312 (C.D. Cal. 1992) (summary judgment granted because shipments from the manufacturer to the claimed trademark owner are insufficient to establish priority). Furthermore, Leo Stoller's self-serving affidavit, which has no factual support in the record, cannot defeat defendants' motion for summary judgment. Slowiak v. Land O'Lakes, Inc., 987 F.2d 1293, 1295 (7th Cir. 1993). The affidavit of an S Industries' customer also contains conclusory statements which do not substantiate the affiant's claim of long-time familiarity with plaintiff's STEALTH computer products. Finally, the internal strategy memoranda dated 1985 and 1986 merely demonstrate an intent to expand plaintiff's sales of STEALTH products into computers. However, "just as an intent to buy a choice parcel of land does not prevent a rival from closing the deal first, so an intent to use a mark creates no rights a competitor is bound to respect." Zazu Designs, 979 F.2d at 504.
In sum, the documentation supplied by plaintiff is woefully inadequate to support its § 1125 claims. The evidence does not remotely demonstrate that S Industries actively and continuously attempted to or succeeded in establishing a trade in computers and related goods under the STEALTH mark, let alone since 1985. Viewed in a light most favorable to plaintiff and making all inferences in its favor as we must, we find that plaintiff's evidence creates no triable issues of fact as to whether plaintiff has acquired protectable common law rights in the STEALTH mark for computers and computer related goods. Accordingly, summary judgment is granted in defendants' favor on Counts II and III.
IV. Count IV: The Federal Dilution Act
Section 1125(c) of the Lanham Act, the Federal Dilution Act, provides remedies for the dilution of the distinctive quality of famous marks. To prove this claim, a plaintiff must show that its mark is famous and that the defendant's use of the same or similar mark creates a likelihood of dilution through tarnishment or blurring. R.J. Corr Naturals, Inc. v. The Coca-Cola Co., 1997 U.S. Dist. LEXIS 6020, No. 97 C 1059, 1997 WL 223058, *8 (N.D. Ill. 1997); Intermatic Inc., 947 F. Supp. at 1238.
Defendants assert two grounds for summary judgment on Count IV. First, defendants contend that, as a matter of law, the Federal Dilution Act cannot be applied retroactively. Second, defendants claim that, as a matter of law, plaintiff's STEALTH mark is not famous and, thus, is not entitled to protection under the Federal Dilution Act. We agree with defendants.
Prior to the adoption of the Federal Dilution Act, a federal claim for use of a trademark could be brought only if the use caused a "likelihood of confusion" with a senior user's mark. Under the Federal Dilution Act, however, once a mark is adjudged famous a senior user need only show that its mark is diluted or tarnished by the junior user's use of the sanime or similar mark. "Thus, the [Federal] Dilution Act significantly expanded the reach of the Lanham Act by creating new obligations, imposing new duties, and attaching new disabilities with respect to marks already adopted." Circuit City Stores, Inc. v. OfficeMax, 949 F. Supp. 409, 414 (E.D. Va. 1996).
Absent specific legislative direction, statutes are presumed to be applied prospectively. Landgraf v. USI Film Prod., 511 U.S. 244, 270, 128 L. Ed. 2d 229, 114 S. Ct. 1483 (1994). In Landgraf, the Supreme Court refused to make a new statute, the Civil Rights Act of 1991, "applicable to conduct that occurred, and to cases that were filed, before the Act's effective date." 511 U.S. at 250. Moreover, the Landgraf Court found that a new provision which attaches new legal consequences to events completed before its enactment could not be applied retroactively. Id. at 270. Accordingly, the Federal Dilution Act, which contains no express retroactivity language, cannot be applied to conduct completed before its enactment on January 16, 1996. Resorts of Pinehurst, Inc. v. Pinehurst Nat'l Dev. Corp., 973 F. Supp. 552, 557 (M.D.N.C. 1997); Viacom, Inc. v. Ingram Enter., Inc., 965 F. Supp. 1278, 1281 (W.D. Mo. 1997); Circuit City Stores, Inc., 949 F. Supp. at 415.
Here, plaintiff seeks to apply the Federal Dilution Act to conduct which began in 1991, well before the Act's effective date, but continues afterwards. Clearly, any alleged acts defendants committed before January 16, 1996 are not actionable. Therefore, we must determine whether the Federal Dilution Act applies to defendants' alleged use of the STEALTH mark after January 16, 1996.
Because trademark rights accrue with selection and use of a mark, there is no way to effectively distinguish the time of adoption from the rights that accrue though continuous use. Thus, if the selection and adoption of a mark is lawful, its continued use cannot be interrupted by a law such as the Federal Dilution Act which imposes new legal duties, utilizes a new legal standard and crafts a new legal remedy. Accord Resorts of Pinehurst, Inc., 973 F. Supp. at 559 (the Federal Dilution Act did not apply to ongoing conduct because the defendant completed its the selection and initial publicizing of its trade names well before enactment). Accordingly, if a defendant adopted and used a mark before January 16, 1996, the plaintiff's federal claims "must be measured under the law of infringement and the confusion standard, not under the dilution concept created by the [Federal] Dilution Act." Id. (citing Circuit City Stores, Inc., 949 F. Supp. 409 at 418-419).
Diamond selected, adopted, and first used the STEALTH mark for its video and graphics computer boards in 1991. Relying on the law that existed in 1991, Diamond spent a significant amount of money publicizing its mark and sold millions of video and graphics computer boards bearing its STEALTH mark. Indeed, during the four year period before the Federal Dilution Act created a new claim, defendants used and promoted a valid legal mark. Defendants therefore 'completed' the section and publicizing of the mark prior to the enactment of the Federal Dilution Act. See Resorts of Pinehurst, Inc., 973 F. Supp. 552 at 558. It would be manifestly unfair to require Diamond to abandon its investment and accompanying goodwill associated with its name in light of a new law which departs from the traditional "likelihood of confusion" standard. Therefore, application of the Federal Dilution Act in this case would have an impermissible retroactive effect by "attaching a new disability in respect to transactions or considerations already past." Landgraf, 511 U.S. at 270 (citations omitted). Defendants' purported conduct is not actionable under the Federal Dilution Act.
In any event, plaintiff's STEALTH mark is not famous. To determine whether a mark is distinctive and famous, the court must consider factors such as:
(A) the degree of inherent or acquired distinctiveness of the mark; (B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used; (C) the duration and extent of the advertising and publicity of the mark; (D) the geographical extent of the trading area in which the mark is used; (E) the channel of trade for the goods or services with which the mark is used; (F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought; (G) the nature and extent of use of the same or similar marks by third parties; and (H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.
15 U.S.C. § 1125(c)(1)(A)-(H). Examples of marks found to be famous include: INTERMATIC, Intermatic Inc., 947 F. Supp. at 1239 (exclusive use for 50 years); TOYS "R" US, Toys "R" Us. Inc. v. Akkaoui, 1996 U.S. Dist. LEXIS 17090, 40 U.S.P.Q.2D (BNA) 1836, 1838 (N.D. Ca. 1996) (exclusive use since 1960, extensive advertising of inherently distinctive mark); DON'T LEAVE HOME WITHOUT. . ., American Express Co. v. CFK, Inc., 947 F. Supp. 310, 316 (E.D. Mich. 1996) (exclusive worldwide use for 20 years, millions expended on advertising); and PANAVISION, Panavision Int'l, L.P. v. Toeppen, 945 F. Supp. 1296, 1302 (C.D. Ca. 1996) (continuous use since 1954 and extensive advertising generating daily public exposure to the mark).
Significantly, plaintiff never even alleges in its complaint or offers proof that its STEALTH mark is "famous" now or was "famous" before Diamond starting using the mark on its video and graphics computer boards in 1991. Nevertheless, plaintiff's STEALTH mark does not remotely meet the criteria of a famous mark.
S Industries' own use of the STEALTH mark has been adjudged by a federal court to infringe the STEALTH trademark owned by the Timex Corporation. Timex Corp. v. Stoller, 961 F. Supp. 374, 379-380 (D. Conn. 1997) (Timex awarded treble damages and reasonable attorney's fees from defendant Stealth Industries, but case settled during the appeal). Moreover, S Industries has not used the STEALTH mark for an extended time period like PANAVISION or TOYS "R" US. Plaintiff has presented no evidence of any substantial publicity or advertising, other than two catalogs, a few advertising contracts with retailers, and three solicitation letters, to establish the extent to which plaintiff's STEALTH mark is recognized or promoted in the marketplace. Thus, as a matter of law, we find that plaintiff's evidence is insufficient to establish that its STEALTH mark is famous. Summary judgment on Count IV is granted in defendants' favor.
V. Count V: The Illinois Consumer Fraud and Deceptive Trade Practices Act and The Illinois Uniform Deceptive Trade Practices Act
Claims under the Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 ILCS 505/1 et seq., and the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq., are resolved in the same manner as Lanham Act claims. D 56, Inc. v. Berry's Inc., 955 F. Supp. 908, 920 (N.D. Ill. 1997). To prevail on Count V, S Industries must establish that it has a protectable mark, and if so, that defendants' use of the mark brings about a likelihood of confusion. Thompson v. Spring-Green Lawn Care Corp., 126 Ill. App. 3d 99, 104, 466 N.E.2d 1004, 1010, 81 Ill. Dec. 202 (1984). For the same reasons stated in Section III, supra, summary judgment is granted in defendants' favor on Count V.
VI. Count VI: The Illinois Counterfeit Trademark Act
The Illinois Counterfeit Trademark Act, 765 ILCS 1040/1 et seq. prohibits the counterfeiting or imitating of a trademark by anyone other than the mark's rightful owner. After plaintiff filed this action, the Illinois General Assembly enacted an amendment on June 1, 1997 expressly repealing § 7 of the Act which allowed private civil actions. "'The legislature has the power to withdraw jurisdiction of the courts over statutory causes of action and the exercise of that power leaves all such causes of action and pending suits where the repeal finds them.'" Shelton v. City of Chicago, 42 Ill. 2d 468, 248 N.E.2d 121, 123 (1969) (citation omitted), cert. denied, 396 U.S. 906, 24 L. Ed. 2d 182, 90 S. Ct. 222 (1969). Accord Scott v. Midwest, Ltd., 933 F. Supp. 735, 736 (C.D. Ill. 1996). The bill repealing § 7 did not contain a savings clause. Moreover, the Statute Savings (1874) Act, 5 ILCS 85/2, which saves actions pending under specified repealed statutes, does not list the Illinois Counterfeit Trademark Act.
No Illinois court has addressed how the repeal of § 7 affects private civil actions pending under the Illinois Counterfeit Trademark Act. However, "where the legislature passes a repealing act and nothing is substituted for the act that is repealed, the effect is to obliterate such statute as completely as if it had never been passed." Tyrrell v. Mun. Employees Annuity and Benefit Fund of Chicago, 32 Ill. App. 3d 91, 336 N.E.2d 97, 105 (1975). By repealing § 7, the Illinois General Assembly indicated that it no longer wanted private citizens to police the counterfeiting of trademarks. Rather, only criminal penalties remain and enforcement is now left exclusively to the State of Illinois. Thus, we find that Illinois courts would hold that the unconditional repeal of § 7 bars all private plaintiffs, including S Industries, from further pursuing private claims brought under the Illinois Counterfeit Trademark Act. Summary judgment is granted in defendants' favor on Count VI.
Even if plaintiff's claim remained after the amendment, the claim would fail. In order to state its claim, plaintiff must show that defendants intended to deceive customers as to the source of Diamond's product. Dorr-Oliver, Inc. v. Fluid-Quip, Inc., 894 F. Supp. 1190, 1204 (N.D. Ill. 1995), rev'd on other grounds, 94 F.3d 376 (1996). Mere imitation is not enough. S Indus. v. GMI Holdings, Inc., 1996 U.S. Dist. LEXIS 13297, No. 96 C 2232, 1996 WL 526792, *4 (N.D. Ill. 1996); People v. Revlon, 99 Ill. App. 2d 463, 241 N.E.2d 554, 559 (1968). "S Industries must [prove] that defendants engaged in imitation in conjunction with other acts of misrepresentation and that the defendants intended to deceive the public by use of the word 'STEALTH'." S Indus., 1996 WL 526792, at *4 (S Industries' claim under the Illinois Counterfeit Act cannot survive even a motion to dismiss).
Here, plaintiff provides no affirmative evidence to establish that defendants intended to deceive customers or that they misrepresented the source of Diamond's products. Indeed, nothing indicates that defendants' tried to pass off Diamond's goods as the goods of S Industries. Diamond's product is referred to as the "Diamond Stealth VRAM." Eg. Lynda Radosevich, Windows on Fast Forward; Ratings Review, Lotus, April 1992, at 84; Winn L. Rosch, Graphics Accelerators: Pump up the Power, PC Magazine, March 17, 1992 at 364; Oscar Rojo, Sales Increases Lead to Expansions for Office Systems Firm, Toronto Star, February 10, 1992, at B3; see also Affidavit of plaintiff's customer, Pl. Ex. C20 (refers to the "Diamond STEALTH video card 3-D 2000"). Thus, plaintiff's claim under the Illinois Counterfeit Trademark Act cannot survive defendants' motion for summary judgment.
VII. Plaintiff's Cross Motion for Summary Judgment
In its cross motion for summary judgment, plaintiff contends "that it is clear beyond reasonable dispute that Plaintiff has priority of use of its mark STEALTH as a trademark, trade name, 'house mark' and service mark over Defendants. . . . on a wide range of consumer products, including computer hardware, computer software and related computer products. . . ." (Pl. Resp. and Cross Motion for S.J., p. 7). Plaintiff requests summary judgment on Counts I - III and V - VI. For the reasons stated above, see Sections II, III, V and VI supra, plaintiff's motion is denied.
VIII. Attorney's Fees
The Lanham Act authorizes an award of attorneys' fees to the prevailing party in a trademark dispute "in exceptional cases." 15 U.S.C. § 1117. The matter is within the district court's discretion and the standard is "a generous one." FASA Corp. v. Playmates Toys, Inc., 108 F.3d 140, 143 (7th Cir. 1997). Bad faith is not the correct standard for determining whether a case is extraordinary. Rather "the canonical formula in this and other circuits is 'malicious, fraudulent, deliberate, or willful." Door Systems, Inc. v. Pro-Line Systems, Inc., 126 F.3d 1028, 1031 (7th Cir. 1997). The Illinois Consumer Fraud and Deceptive Trade Practices Act also authorizes the court to award reasonable attorney's fees and costs to a prevailing party. 815 ILCS 505/10a(c); Door Systems. Inc., 126 F.3d at 1029-1030.
S Industries' claim of actual infringement of its registered marks, Count I, crosses the border of legal frivolousness, as its § 1114 claim utterly lacks merit on its face. The claims made by plaintiff are unsupportable and even a cursory examination of the law demonstrates that fact. Plaintiff's claim under the Federal Dilution Act, Count IV, is not only poorly drafted, but frivolous as well. In its complaint, plaintiff never alleges that its STEALTH mark is famous, the essential element necessary to support its dilution claim, and supplies no evidence to show that its STEALTH mark is famous now or when Diamond first used the mark. As the prevailing parties, therefore, the Court awards defendants the reasonable attorneys' fees and costs incurred for the defense of Counts I and IV. Additionally, as the prevailing parties on Counts II, III, and, V, the Court invites defendants to submit a petition for the fees and costs incurred for the defense of these counts. Count VI is brought under the Illinois Counterfeit Trademark Act which does not authorize this Court to award fees and costs.
Defendants have until February 13, 1998 to file a bill of fees and costs for Counts I and IV (see Local Rules 46 and 47) and any petition regarding Counts II, III and V. This Court will deem the failure to file the bill of fees and costs or the petition by the deadline as a waiver of defendants' right to fees and costs.
For the foregoing reasons, defendants' motion for summary judgment on plaintiff's second amended complaint is granted. Plaintiff's cross-motion for summary judgment on Counts I-III and V-VI of its second amended complaint is denied. The defendants are directed to file their bill of fees and costs for the defense of Counts I and IV and any petition regarding Counts II, III, and, V by February 13, 1998. All other pending motions are moot. This is a final appealable order.
It is so ordered.
Wayne R. Andersen
United States District Judge
Dated: January 20, 1998
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