Vaad L'Hafotzas Sichos, Inc. v. Kehot Publication Society et al

Filing 131

MEMORANDUM & ORDER: Merkoss motion to amend the Courts factual findings and judgment is granted insofar as the Court now finds that the Kehot logo is a strong mark, and there is insufficient evidence of third-party use to weaken it. With this new fac tual finding, the Courts balance of the Polaroid factors is amended to reflect there is a likelihood of confusion. However, the motion 125 is denied with respect to amending the judgment, because Merkoss claim remains barred by the doctrine of laches. Ordered by Judge Frederic Block on 7/25/2016. (Innelli, Michael)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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VAAD L’HAFOTZAS SICHOS, INC.,
Plaintiff/Counterclaim Defendant
-against-

MEMORANDUM AND ORDER
10-CV-4976 (FB) (JO)

KEHOT PUBLICATION SOCIETY, a
division of MERKOS L’INYONEI
CHINUCH, INC.,
Defendant/Counterclaim
Plaintiff/Third-Party Plaintiff,
-againstZALMAN CHANIN,
Third-Party Defendant.
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Appearances:
For the Plaintiff/Counterclaim Defendant
and Third-Party Defendant:
MITCHELL C. SHAPIRO
Carter Ledyard & Milburn LLP
2 Wall Street
New York, NY 10005

For the Defendant/Counterclaim
Plaintiff/Third-Party Plaintiff
J. CHRISTOPHER JENSEN
Cowan, Liebowitz & Latman, P.C.
1133 Avenue of the Americas
New York, NY 10036

BLOCK, Senior District Judge:
On January 14, 2016, following a four-day bench trial, the Court issued a
memorandum and order in which it determined that Merkos L’Inyonei Chinuch’s
(“Merkos”) trademark-infringment claim failed because Vaad L’Hafotzas Sichos’s
(“Vaad”) use of the Kehot logo did not result in a likelihood of consumer confusion, and

even if it did, Merkos’s claim was barred by the doctrine of laches. Merkos now moves the
Court pursuant to Rule 52(b) to amend its factual findings and judgment.
To determine whether Merkos set out a valid infringment claim under the Lanham
act, the Court applied the eight-factor balancing test set forth in Polaroid Corp. v. Polarad
Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961). With respect to the first factor—the
strength of the mark—the Court found that the Kehot logo was fanciful and inventive,
which means, absent third-party usage, the Kehot logo would be considered the strongest
type of mark.

See Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F.3d 373, 384 (2d Cir.

2005). But because “the logo has been and continues to be used by numerous entities other
than Merkos in the production of books for sale in the Hasidic community,” the Court
determined that the logo “does not provide strong source identification for Merkos,” and
that this factor does not weigh in Merkos’s favor. Vaad L’Hafotzas Sichos, Inc. v. Kehot
Publ’n Soc’y, –F. Supp. 3d–, 2016 WL 183226, at *4 (Jan. 14, 2016 E.D.N.Y.). Merkos
argues in its motion for reconsideration that the evidence in the record relating to thirdparty use was not sufficient to “sap the strength of an otherwise robust mark.” Merkos
Motion at 14 (citing Lexington Mgmt. Corp. v. Lexington Capital Partners, 10 F. Supp. 2d
271, 281 (S.D.N.Y. 1998)).
The Court relied on the title pages of books bearing the Kehot logo by entities others
than Merkos and the testimony of Yaakov Chazan identifying other organizations that

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publish under the Kehot logo to find that third-party usage was prominent and weakened
the strength of the Kehot. However, upon reconsideration, this evidence, although credible,
falls short of what is required to weaken a strong mark.
“The purpose of a defendant introducing third party uses is to show that customers
have become so conditioned by a plethora of such similar marks that customers have been
educated to distinguish between different such marks on the basis of minute distinctions.”
2 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 11:88
(2016). In Scarves by Vera, Inc. v. Todo Imports Ltd., the Second Circuit rejected an
infringer’s claim that a mark was used by third parties because it “introduced no evidence
that these trademarks were actually used by third parties, that they were well promoted or
that they were recognized by consumers.” 544 F.2d 1167, 1173 (2d Cir. 1976).
Here, while there is certainly evidence that third parties have used the Kehot logo on
publications for the Hasidic community, the record is devoid of evidence of how those
publications were marketed or recognized by consumers. See Sunenblick v. Harrell, 895
F. Supp. 616, 627 (S.D.N.Y. 1995) (citing Scarves by Vera for the proposition that “thirdparty trademarks [are] signficant not by virtue of their mere existence but upon proof of
their usage and customer awareness of such marks”). Merkos points out that the books in
evidence that demonstrate third-party use were published by organizations that are legally
related to it based on the fact that the Previous Rebbe, the Rebbe, and their secretaries

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served as officers of the third parties as well as of Merkos. But it is not necessary for the
Court to decide whether these organizations were “related” to Merkos under the Lanham
Act, because the record does not demonstrate whether consumers recognized publications
from organizations run by the Rebbe and his secretariat—but not from Merkos—as being
derived from a different source. Moreover, the onus is on the alleged infringer to introduce
competent evidence of third-party use to weaken a mark. See Scarves by Vera, 544 F.2d
at 1173; Lexington Mgmt. Corp., 10 F. Supp. 2d at 281. The Court now finds that there is
insufficient evidence of third-party use in the record to weaken the strength of the Kehot
logo, and this factor weighs in favor of finding a likelihood of confusion.
When the Court first balanced the Polaroid factors, three factors weighed in favor
of finding a likelihood of confusion (similarity of the marks, proximity and competitiveness
of the products, and respective quality of the products), three factors weighed against
(strength of the mark, lack of evidence of actual confusion, and bad faith), and two factors
(bridging the gap and consumer sophistication) were inapplicable or not worthy of much,
if any, weight. Vaad, 2016 WL 183226, at *6. Because the Court’s assessment of the
strength of the Kehot logo is now in Merkos’s favor, Vaad is left with the facts that Merkos
did not produce much evidence of actual consumer confusion and it acted in good faith.
These are outweighed by Merkos’s strong mark, and the fact that Vaad uses the identical
mark on virtually identical products in the same market. Accordingly, Merkos proved its
claim for trademark infringement.
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Nevertheless, the Court’s ultimate judgment remains unchanged because—as the
Court found in its memorandum and order—Merkos’s claim is barred by Vaad’s
affirmative defense of laches. Merkos argues that the Court should—now that it has found
a likelihood of confusion—go on to find “inevitable confusion,” which would allow the
Court to exercise its equitable discretion to disregard Vaad’s laches defense. See Profitness
Physical Therapy Ctr. v. Pro-Fit Orthopedic & Sports Physical Therapy P.C., 314 F.3d 62,
68 (2d Cir. 2002) (“Even where laches and acquiescence would bar damages, . . . a court
may nonetheless grant injunctive relief if it determines that the likelihood of confusion is
so great that it outweighs the effect of plaintiff’s delay in bringing suit.”).
The present circumstances do not call for a finding of “inevitable confusion.” For
one, despite Vaad’s unauthorized use of the Kehot logo since the mid-1990s, Merkos did
not produce sufficient evidence of actual consumer confusion. Vaad, 2016 WL 183226,
at *4-5. Moreover, Rabbi Krinsky acknowledged that there “‘are many savvy enough’ in
the [Hasidic] community to recognize the difference between a Vaad and Merkos
publication.” Id. at *6. Accordingly, consumer confusion is not “inevitable,” and Vaad’s
affirmative defense of laches prevents the Court from imposing injunctive relief.
For the foregoing reasons, Merkos’s motion to amend the Court’s factual findings
and judgment is granted insofar as the Court now finds that the Kehot logo is a strong mark,
and there is insufficient evidence of third-party use to weaken it. With this new factual
finding, the Court’s balance of the Polaroid factors is amended to reflect there is a
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likelihood of confusion. However, the motion is denied with respect to amending the
judgment, because Merkos’s claim remains barred by the doctrine of laches.

SO ORDERED.
/S/ Frederic Block___________
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
July 25, 2016

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