Allied Maintenance Corp. v. Allied Mechanical Trades, Inc.

369 N.E.2d 1162, 42 N.Y.2d 538, 399 N.Y.S.2d 628, 198 U.S.P.Q. (BNA) 418, 1977 N.Y. LEXIS 2429
CourtNew York Court of Appeals
DecidedOctober 18, 1977
StatusPublished
Cited by208 cases

This text of 369 N.E.2d 1162 (Allied Maintenance Corp. v. Allied Mechanical Trades, Inc.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allied Maintenance Corp. v. Allied Mechanical Trades, Inc., 369 N.E.2d 1162, 42 N.Y.2d 538, 399 N.Y.S.2d 628, 198 U.S.P.Q. (BNA) 418, 1977 N.Y. LEXIS 2429 (N.Y. 1977).

Opinions

Jasen, J.

We are called upon today to decide whether the trade name "Allied Maintenance” is entitled to protection pursuant to section 368-d of the General Business Law—commonly referred to as the anti-dilution statute.

The plaintiff, Allied Maintenance Corporation, has been in business, in one form or another, since 1888. Throughout the many years since its inception, Allied Maintenance has concentrated the scope of its services upon the cleaning and maintenance of large office buildings. The defendant, Allied Mechanical Trades, Inc., a corporation organized in 1968 as a successor to Controlled Weather Corporation, is engaged primarily in the installation and repair of heating, ventilating and air-conditioning equipment.

Alleging that the defendant performed maintenance services identical to those it performed, Allied Maintenance brought this action to enjoin Allied Mechanical from operating under the name "Allied” or "Allied Mechanical Trades, Inc.”, or using the word "Allied” in any way in connection with its business. The trial court granted the injunction, finding that the parties were actual and potential competitors in the cleaning and maintenance industry in the metropolitan New York City area and that the auditory and visual similarity between their names created a likelihood of confusion. On this basis, the court concluded that defendant’s use of the name Allied Mechanical would result in irreparable injury to plaintiffs reputation, good will, and proprietary business interests, and would thus constitute unfair competition. The Appellate Division reversed, however, finding an absence of either competition or confusion, actual or potential. The court concluded that "no user of the services of either party has been or may probably be confused or deceived by any similarity in the names of the parties.” (55 AD2d 865, 866.)

In addition to the protection of trade-marks and trade names afforded by the traditional actions for trade-mark infringement and unfair competition, New York, as well as a number of other States,1 has adopted an anti-dilution statute. (General Business Law, § 368-d.) This statute provides: "Likeli[542]*542hood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief in cases of infringement of a mark registered or not registered or in cases of unfair competition, notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.” (Emphasis added.) The purpose behind the enactment of this statute was the prevention of trade-mark or trade name dilution—i.e., "the whittling away of an established trade-mark’s selling power and value through its unauthorized use by others upon dissimilar products.” (NY Legis Ann, 1954, p 49 [emphasis added].) In the absence of a statute of this nature, a plaintiff seeking to prohibit the use of a trade name by another would be required to frame his complaint within the strictures of an action for either trade-mark infringement or unfair competition. A brief review of the elements of these actions is useful in interpreting the legislative intent behind the enactment of section 368-d.

Historically, two causes of action have existed to protect the user of a trade-mark or trade name from its improper use by another—viz., trade-mark infringement and unfair competition. Trade-mark infringement developed as the remedy designed to protect technical trade-marks—i.e., those marks which were arbitrary, fanciful or coined. (See 3 Callman, Unfair Competition, Trademarks and Monopolies [3d ed], § 66.1.) Trade-marks such as "Kodak”, "Xerox”, "Exxon” and "Coke” would fall within this category. As the law evolved, the protection provided by an action for trade-mark infringement was supplemented by the formulation of a broader remedy—an action for unfair competition. (See Dell Pub. Co. v Stanley Pub., 9 NY2d 126, 133.) This remedy was intended to protect nontechnical, common-law trade-marks—marks used although not registered—as well as trade names. (1 Callman, Unfair Competition, Trademarks and Monopolies [3d ed], § 4.1.)2

[543]*543Today, in an action for trade-mark infringement brought pursuant to either New York (General Business Law, § 368-b) or Federal law (Lanham Act, § 32, subd [1], US Code, tit 15, § 1114, subd [1]), it is necessary to show that the defendant’s use of the trade-mark is likely to cause confusion, mistake or to deceive; actual confusion need not be shown. (See Dell Pub. Co. v Stanley Pub., 9 NY2d, at p 134, supra; James Burrough Ltd. v Sign of Beefeater, 540 F2d 266, 274; Bunn Co. v AAA Replacement Parts Co., 451 F2d 1254, 1261; General Mills v Regnery Co., 421 F Supp 359, 361; Chips 'n Twigs v Chip-Chip, 414 F Supp 1003, 1013.) Similarly, it has been held that in an action for unfair competition a showing of a likelihood of confusion, rather than actual confusion, is all that is required to state a cause of action. (See Dell Pub. Co. v Stanley Pub., 9 NY2d, at p 132, supra; Avon Shoe Co. v David Crystal, Inc., 279 F2d 607, 614; Field Enterprises Educ. Corp. v Grossett & Dunlap, 256 F Supp 382, 390.)

Since an action for infringement as well as an action for unfair competition both require a showing that the public is likely to confuse the defendant’s product or service with that of the plaintiff, relief may be difficult to secure in situations in which the parties are not in competition, nor produce similar products or perform similar services. It is for this reason that section 368-d specifically provides that an injunction may be obtained notwithstanding the absence of competition or confusion.

Generally, courts which have had the opportunity to interpret an anti-dilution statute have refused to apply its provisions literally. New York courts, State and Federal, have read [544]*544into the statute a requirement of some showing of confusion, fraud or deception. (See, e.g., Cue Pub. Co. v Colgate-Palmolive Co., 45 Misc 2d 161, affd 23 AD2d 829; King Research v Shulton, Inc., 324 F Supp 631, affd 454 F2d 66; Geisel v Poynter Prods., 295 F Supp 331; but see National Lampoon v American Broadcasting Cos., 376 F Supp 733, affd 497 F2d 1343.)

Judicial hesitance to enforce the literal terms of the anti-dilution statute has not been limited to New York. In Illinois, for example, some courts have gone so far as to declare the statute inapplicable where the parties are competitors and a likelihood of confusion does exist. These decisions were premised upon the belief that a plaintiff who can frame his complaint under a theory of infringement or unfair competition— albeit unsuccessfully perhaps—should not succeed under a dilution theory. (See Filter Dynamics Int. v Astron Battery, 19 111 App 3d 299, 314-315; Edgewater Beach Apts. Corp. v Edgewater Beach Mgt. Co., 12 111 App 3d 526, 534; AlbertoCulver Co. v Andrea Dumon, Inc., 466 F2d 705, 709.) However, one court in Illinois has interpreted the anti-dilution statute literally, reasoning that unless recovery for dilution is permitted in the absence of competition or confusion the statute adds nothing to existing law. (Polaroid Corp. v Polaraid, Inc., 319 F2d 830, 836-837.) This approach has also been taken in Massachusetts. (See, e.g., Tiffany & Co. v Boston Club, 231 F Supp 836, 844; Clairol, Inc. v Cody’s Cosmetics, 353 Mass 385, 391.)

Free access — add to your briefcase to read the full text and ask questions with AI

Related

City of New York v. TAVERN ON THE GREEN, LP
427 B.R. 233 (S.D. New York, 2010)
Adams v. Warner Bros. Pictures
289 F. App'x 456 (Second Circuit, 2008)
Tiffany (NJ) Inc. v. eBay, Inc.
576 F. Supp. 2d 463 (S.D. New York, 2008)
ITC Ltd. v. Punchgini, Inc.
880 N.E.2d 852 (New York Court of Appeals, 2007)
Information Superhighway, Inc. v. Talk America, Inc.
395 F. Supp. 2d 44 (S.D. New York, 2005)
MetLife, Inc. v. Metropolitan National Bank
388 F. Supp. 2d 223 (S.D. New York, 2005)
New Sensor Corp. v. CE DISTRIBUTION LLC
303 F. Supp. 2d 304 (E.D. New York, 2004)
Katz v. Modiri
283 F. Supp. 2d 883 (S.D. New York, 2003)
Scholastic, Inc. v. Stouffer
221 F. Supp. 2d 425 (S.D. New York, 2002)
GTFM, Inc. v. Solid Clothing, Inc.
215 F. Supp. 2d 273 (S.D. New York, 2002)
Welch Allyn, Inc. v. Tyco International Services AG
200 F. Supp. 2d 130 (N.D. New York, 2002)
National Distillers Products Co. v. Refreshment Brands, Inc.
198 F. Supp. 2d 474 (S.D. New York, 2002)
Landscape Forms, Inc. v. Columbia Cascade Co.
117 F. Supp. 2d 360 (S.D. New York, 2000)
Greenpoint Financial Corp. v. Sperry & Hutchinson Co., Inc.
116 F. Supp. 2d 405 (S.D. New York, 2000)
Eastern America Trio Products, Inc. v. Tang Electronic Corp.
97 F. Supp. 2d 395 (S.D. New York, 2000)
Paco Sport, Ltd. v. Paco Rabanne Parfums
86 F. Supp. 2d 305 (S.D. New York, 2000)
Nabisco, Inc. v. PF Brands, Inc.
50 F. Supp. 2d 188 (S.D. New York, 1999)
Nadel v. Play by Play Toys & Novelties, Inc.
34 F. Supp. 2d 180 (S.D. New York, 1999)
Regal Jewelry Co., Inc. v. Kingsbridge Intern., Inc.
999 F. Supp. 477 (S.D. New York, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
369 N.E.2d 1162, 42 N.Y.2d 538, 399 N.Y.S.2d 628, 198 U.S.P.Q. (BNA) 418, 1977 N.Y. LEXIS 2429, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allied-maintenance-corp-v-allied-mechanical-trades-inc-ny-1977.