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PEACEABLE PLANET, INC. v. TY

August 27, 2003

PEACEABLE PLANET, INC., A GEORGIA CORPORATION, PLAINTIFF
v.
TY, INC., A DELAWARE CORPORATION AND H. TY WARNER, AN INDIVIDUAL ILLINOIS RESIDENT, DEFENDANTS



The opinion of the court was delivered by: John W. Darrah, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, Peaceable Planet, Inc. ("Peaceable Planet"), filed a six-count complaint against Defendants, Ty, Inc. ("Ty") and H. Ty Warner ("Warner"), alleging trademark infringement under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (Count I); false advertising in violation of § 43(a) of the Lanham Act (Count II); violation of the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/2 (Count III); violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/2 (Count IV); common law trademark infringement (Count V); and common law trade disparagement (Count VI). Defendants, pursuant to Federal Rules of Civil Procedure 56, move for summary judgment on the issues of whether "Niles" is a protectible trademark, likelihood of confusion, and monetary relief. Warner also moves for summary judgment Peaceable Planet moves for summary judgment on Defendants' Sixth Affirmative Defense.

For the reasons that follow, Defendants' Motion for Summary Judgment on the Issue of Whether the Mark "Niles" is a Protectible Trademark is granted; and Peaceable Planet's Motion for Partial Summary Judgment on Defendants' Sixth Affirmative Defense is denied. Because the Court [ Page 2]

finds that Peaceable Planet's "Niles" mark is not protectible under the Lanham Act, Defendants' Motions for Partial Summary Judgment on the Issues of No Likelihood of Confusion and Monetary Relief and Warner's Motion for Summary Judgment are denied as moot.

LEGAL STANDARD

Summary judgment is appropriate when there remains no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c); Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150(7th Cir. 1994). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses" Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Thus, although the moving party on a motion for summary judgment is responsible for demonstrating to the court why there is no genuine issue of material fact, the non-moving party must go beyond the face of the pleadings, affidavits, depositions, answers to interrogatories, and admissions on file to demonstrate, through specific evidence, that there remains a genuine issue of material fact and show that a rational jury could return a verdict in the non-moving party's favor. Celotex, 477 U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254-56 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87(1986); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).

Disputed facts are material when they might affect the outcome of the suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion for summary judgment, a court must view all inferences to be drawn from the facts in the light most favorable to the opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999). However, a metaphysical doubt will not suffice. Matsushita, 475 U.S. at 586. If the evidence is merely colorable or is not significantly probative or is no more than a scintilla, [ Page 3]

summary judgment may be granted. Anderson, 477 U.S. at 249-250.

BACKGROUND

The undisputed facts taken from the parties' Local Rule 56.1(a) & (b) statements of material facts (referred to herein as "Pl.'s 56.1" and "Def.'s 56.1") and exhibits are as follows.

Peaceable Planet is a Georgia corporation with its principal place of business in Savannah, Georgia. (Def.'s 56.1 ¶ 1.) Peaceable Planet makes plush toy educational products that are targeted at adults and children. (Pl's 56.1 ¶¶ 2, 6.) Ty is a Delaware corporation with its principal place of business in Westmont, Illinois. (Def.'s 56.16 ¶ 2.) H. Ty Warner ("Warner"), an Illinois resident, is the founder, president, and chief executive officer ("CEO") of Ty. (Def.'s 56.1 ¶ 3.)

Warner designed "Beanie Babies", Ty's plush toys, specifically for children. (Pl's 56.1 ¶ 32.) One of Ty's philosophies in selling and marketing "Beanie Babies" is to focus on children. (Pl.'s 56.1 ¶¶ 38, 39.)

Peaceable Planet introduced Series I of its plush toys in November 1998. (Def.'s 56.1 ¶ 6.) Peaceable Planet later introduced a plush toy camel named "Niles" ("Peaceable Planet's Niles the Camel") in 1999 and began shipping the plush toy camel in the first half of 1999. (Def.'s 56.1 ¶ 7; Pl's 56.1 ¶ 7.) Peaceable Planet did not seek legal advice relating to its use of the "Niles" name in conjunction with a plush toy camel before it first used "Niles" in commerce nor did it obtain an opinion of counsel before using the names of its plush toy products. (Def.'s 56.1 ¶¶ 14, 15.)

From May 1999 through the end of February 2000, Peaceable Planet shipped approximately 3,217 of its "Niles" plush toy camel. (Def.'s 56.1 ¶ 7.) In 1999, Peaceable Planet's advertising and promotion expenses for its products was $112,711.59. (Pl.'s 56.1 U 73.) In 2000, Peaceable Planet's advertising and promotion for its products was $78,708.07. (Pl's 56.1 ¶ 73.) [ Page 4]

On February 13, 2000, at the New York Toy Fair, Ty introduced a plush camel as part of its "Beanie Babies" collection. (Def.'s 56.1 ¶ 8.) The "Beanie Babies" plush toys introduced by Ty at the New York Toy Fair were prototypes that had no hang tags or names associated with them. (Pl's 56.1 ¶ 4.) The name "Niles" first appeared on Ty's website introducing its plush camel to the public on March 1, 2000. (Def.'s 56.1 ¶ 8.)

Ty uses the symbol "TM" following the name "Niles" on its plush toy camel on the hang tag and on the cloth tag on the rear of the toy. (Pl.'s 56.1 ¶ 8.) Ty's use of the "TM" symbol means that Ty is claiming that the word "Niles" as a trademark. (Pl.'s 56.1 ¶ 9.) Ty's website informs consumers that it owns the "Niles" "trademark". (Pl.'s 56.1 ¶ 10.) Ty shipped approximately 1.8 million plush camel toys bearing the word "Niles" accompanied by the "TM" symbol. (Pl.'s 56.1 ¶ 11.) Ty states that "Niles" is a trademark in its catalog by using the "TM" symbol next to "Niles" and through legal notice at the front and back of the catalog. (Pl.'s 56.1 ¶ 12.) On or ...


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