Enchante Accessories, Inc. v. Turko Textile, LLC

Background

Enchante Accessories, Inc. had used “Enchante Accessories” as a trade name for a business selling household products, including pillows, towels, and bathrobes. Turko Textile, LLC later adopted “Enchante Home” for a product line that also included pillows, towels, and bathrobes. Enchante sued under the Lanham Act, a federal trademark law, and several New York laws.

Both parties moved for summary judgment. Summary judgment is a decision without a trial when the evidence shows that no genuine dispute over an important fact requires a jury’s decision. Magistrate Judge Sarah Netburn issued a Report and Recommendation recommending that both motions be denied on the federal trademark claims and certain New York trademark claims, while Turko’s motion be granted on Enchante’s unfair-competition, deceptive-name, and business-reputation claims.

Trademark-confusion claims

The court adopted the recommendation to deny both parties’ motions on Enchante’s Lanham Act claims, its New York common-law trademark-infringement claims, and its claims under New York General Business Law § 360-o. The central question was whether consumers or buyers were likely to be confused about the source of the products. That question required evaluating the eight factors from Polaroid Corp. v. Polarad Electronics Corp., including the strength and similarity of the marks, the products’ competitive proximity, actual confusion, the defendant’s good faith, product quality, and buyer sophistication.

The court held that the record contained factual disputes concerning several of those factors, including the strength of Enchante’s mark and the competitive proximity of the parties’ products. Because a reasonable jury could draw different conclusions from the evidence, the court ruled that summary judgment was inappropriate on these claims.

New York unfair competition and deceptive-name claims

The court granted Turko’s motion for summary judgment on Enchante’s common-law unfair-competition claim and its claim under New York General Business Law § 133 for using a name with intent to deceive. The court explained that these claims required evidence that Turko acted in bad faith. Enchante relied mainly on testimony about the searches Turko’s founder performed before adopting “Enchante Home.”

The court concluded that this evidence did not show that Turko knew of Enchante’s mark and deliberately adopted a similar mark to take advantage of Enchante’s reputation. It also found no evidence that Turko intentionally avoided finding potentially conflicting marks. The court therefore held that Enchante’s arguments were based on speculation and did not create a genuine factual dispute about bad faith.

New York dilution claim

The court rejected the recommendation to grant Turko summary judgment on Enchante’s claim under New York General Business Law § 360-l, which concerns injury to a business reputation through dilution. New York’s test for dilution by blurring considers six nonexclusive factors, including the marks’ similarity, the products’ similarity, buyer sophistication, predatory intent, and the renown of both marks.

The court held that the fact that Turko’s mark was not shown to be popular enough to overwhelm Enchante’s mark did not resolve the claim. Because factual disputes concerning the first five factors overlapped with the unresolved trademark-confusion issues, a factfinder had to determine whether Turko’s mark was likely to diminish Enchante’s mark as a unique identifier of its source.

Disposition

The court adopted Magistrate Judge Netburn’s Report and Recommendation in part. It denied Enchante’s motion for summary judgment. It granted Turko’s motion for summary judgment on Enchante’s unfair-competition claim and its claim under New York General Business Law § 133. It denied Turko’s motion on the remainder of Enchante’s claims. The court directed the clerk to terminate the two pending motions.