Disney Enters., Inc. v. Sarelli
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Opinion
GEORGE B. DANIELS, United States District Judge:
Plaintiffs Disney Enterprises, Inc. ("Disney"), Marvel Characters, Inc. ("Marvel"), LucasFilm Ltd, LLC, and LucasFilm Entertainment Company Ltd. LLC (together with LucasFilm Ltd. LLC, "LucasFilm") bring this copyright and trademark infringement action against Defendant Characters for Hire, LLC ("CFH") and its principal, Defendant Nick Sarelli. (See 2d Am. Compl. ("SAC"), ECF No. 51.) Plaintiffs assert multiple claims against Defendants under federal and New York common law, principally alleging that Defendants infringed on Plaintiffs' intellectual property rights by marketing and operating a party services and entertainment business that uses Plaintiffs' copyrighted works and trademarks without authorization. (SAC ¶¶ 1, 33-37, 39-42, 44-17, 49-52, 54-57, 59-64.)
Plaintiffs move pursuant to Rule 56 of the Federal Rules of Civil Procedure seeking partial summary judgment with respect to their federal claims for copyright and trademark infringement, as well as *424their claim for trademark dilution under Section 360-1 of New York's General Business Law. (See Pl's.' Mot. for Summ. J. ("Pls.' Mot"), ECF No. 59, at 1; Pls.' Mem. in Supp. of Mot. for Summ. J. ("Pls,' Mem. in Supp."), ECF No. 60, at 13 n.4.) In addition, Plaintiffs seek summary judgment on the issue of willfulness. (See Pls.' Mot. at 1.) Defendants also move under Rule 56, seeking summary judgment dismissing all claims asserted in the SAC. (See Defs.' Mot. for Summ, J. ("Defs.' Mot."), ECF No. 66, at 1.) They argue, among other things, that Plaintiffs' alleged copyrighted works are based on prior works that are part of the public domain and that their use of Plaintiffs' trademarks is protected by the nominative fair use defense. (See Defs.' Mem. in Supp. of Summ. J. ("Defs.' Mem."), ECF No. 67, at 5-6, 7-9.)
Defendants' motion for summary judgment dismissing Plaintiffs' claims for (i) trademark infringement, (ii) unfair competition, and (iii) false designation of origin is GRANTED. However, Defendants' motion for summary judgment dismissing Plaintiffs' claims for (i) trademark dilution, and (ii) copyright infringement is DENIED. Plaintiffs' motion for partial summary judgment on its claims of (i) trademark infringement, (ii) copyright infringement, and (iii) trademark dilution is similarly DENIED.
I. FACTUAL BACKGROUND1
A. The Parties
Plaintiffs are large, related entertainment companies responsible for creating and bringing to life popular characters through comic books, animated series, motion picture films, video games, and theme parks. (Pls.' 56.1 Stmt, ECF No. 61, ¶ 1.) Plaintiffs claim intellectual property rights with respect to these characters, as well as their brands, titles, and properties, and those of its affiliates. (Id. ¶ 4.) Disney claims that it is the owner of federally-registered trademarks and copyrights in the "Mickey Mouse" and "Minnie Mouse" characters, among others, as well as the "Elsa" and "Anna" characters featured in the Disney motion picture film "Frozen."2
*425(Id. ¶¶ 18-25, 41-47.) Marvel claims ownership of federally-registered trademarks and copyrights in the "Avengers" characters, including "Captain America," "Hulk," and "Iron Man." (Id. ¶¶ 26-32, 48-56.) LucasFilm claims that it owns federally-registered trademarks and copyrights in several characters featured in the "Star Wars" motion picture films, including the "Stormtrooper," "Darth Vader," "Darth Maul," "Chewbacca," "Luke Skywalker," "Princess Leia," "Han Solo," "Obi-Wan Kenobi," and "Yoda" characters.3 (Id. ¶¶ 33-40, 57-62.) Although Plaintiffs and their affiliates engage in licensed merchandising of their intellectual property, they maintain quality and other controls over authorized uses of those rights. (Id. ¶¶ 4, 9.) Such authorized uses include live appearances and meet-and-greet opportunities with Plaintiffs' characters at theme parks located in Florida and California, among other places. (Id. ¶ 10.)
Defendant CFH is in the business of advertising, promoting, producing, and selling themed entertainment party services for private parties and corporate events. (Id. ¶ 12; Defs.' 56.1 Stmt, ECF No. 71, ¶ 2.) Defendant Nick Sarelli, who uses the pseudonym "Avi Lieberman," is CFH's sole owner and managing director. (Pls.' 56.1 Stmt. ¶ 15.) As part of its business, CFH provides its customers with a wide variety of costumed characters for entertainment purposes.4 (Defs.' 56.1 Stmt. ¶ 2.) CFH promotes its business through its own website, as well as on several social media accounts. (Id. ¶ 3.)
B. Alleged Infringing Conduct
Plaintiffs allege that CFH copied and used the images, likenesses, personas, and names of Plaintiffs' characters, as well as Plaintiffs' trademarks, to promote and advertise its services online. (Pls.' 56.1 Stmt. ¶¶ 13, 63.) For instance, Plaintiffs claim that promotional videos on CFH's website and YouTube and Facebook pages depict costumed individuals portraying Disney's Mickey and Minnie Mouse characters. (Id. ¶¶ 64-66.) Plaintiffs also claim that CFH advertised "Frozen Theme[d] Parties" on their website and social media sites, offering "Anna and Elsa [to] delight your children as they sing their favorite songs." (Id. ¶ 67; see also Decl. of Louis S. Ederer dated Oct. 13, 2017 ("Ederer Decl."), Ex. T, ECF No. 62-31, at DEI00009368-69.) The advertisements contained videos and/or hyperlinks to videos of costumed actors portraying the Elsa and Anna characters singing songs from the Disney motion picture film Frozen. (Pls.' 56.1 Stmt. ¶¶ 68, 72; see also Ederer Decl., Ex. X at DEI00009367.) One such advertisement included the caption "Delight your children as they watch the Frozen Snow Queen Elsa and her sister, Princess Anna[,] tell their story in this professional adaptation." (Pls.' 56.1 Stmt. ¶ 73.) Another read, "Frozen themed kids party entertainment: Bring these professional musical theatre performers to your next kids [sic] birthday party as they retell the story of two sisters." (Id. ¶ 74.) Plaintiffs claim that CFH posted photographs on its Facebook page of costumed actors dressed in full costume *426as the Elsa and Anna characters. (Id. ¶ 75.)
Plaintiffs claim that CFH's website also advertised "Avenging Team" themed parties, with images of several costumed actors portraying the Marvel franchise's Captain America, Hulk, and Iron Man characters described as "The Soldier," "Man of Iron," and "Big Green Guy," respectively. (Id. ¶¶ 77-79.) One such advertisement offers "the most amazing premium entertainment" featuring "high flying action and incredible acrobatic stunts." (Id. ¶ 77.) Another notes that CFH's actors "are very authentic and remain in character throughout [the] event" and that "[s]ome of [CFH's] actors have even been trained by the actual Avengers stunt team." (Id. ¶ 79.)
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GEORGE B. DANIELS, United States District Judge:
Plaintiffs Disney Enterprises, Inc. ("Disney"), Marvel Characters, Inc. ("Marvel"), LucasFilm Ltd, LLC, and LucasFilm Entertainment Company Ltd. LLC (together with LucasFilm Ltd. LLC, "LucasFilm") bring this copyright and trademark infringement action against Defendant Characters for Hire, LLC ("CFH") and its principal, Defendant Nick Sarelli. (See 2d Am. Compl. ("SAC"), ECF No. 51.) Plaintiffs assert multiple claims against Defendants under federal and New York common law, principally alleging that Defendants infringed on Plaintiffs' intellectual property rights by marketing and operating a party services and entertainment business that uses Plaintiffs' copyrighted works and trademarks without authorization. (SAC ¶¶ 1, 33-37, 39-42, 44-17, 49-52, 54-57, 59-64.)
Plaintiffs move pursuant to Rule 56 of the Federal Rules of Civil Procedure seeking partial summary judgment with respect to their federal claims for copyright and trademark infringement, as well as *424their claim for trademark dilution under Section 360-1 of New York's General Business Law. (See Pl's.' Mot. for Summ. J. ("Pls.' Mot"), ECF No. 59, at 1; Pls.' Mem. in Supp. of Mot. for Summ. J. ("Pls,' Mem. in Supp."), ECF No. 60, at 13 n.4.) In addition, Plaintiffs seek summary judgment on the issue of willfulness. (See Pls.' Mot. at 1.) Defendants also move under Rule 56, seeking summary judgment dismissing all claims asserted in the SAC. (See Defs.' Mot. for Summ, J. ("Defs.' Mot."), ECF No. 66, at 1.) They argue, among other things, that Plaintiffs' alleged copyrighted works are based on prior works that are part of the public domain and that their use of Plaintiffs' trademarks is protected by the nominative fair use defense. (See Defs.' Mem. in Supp. of Summ. J. ("Defs.' Mem."), ECF No. 67, at 5-6, 7-9.)
Defendants' motion for summary judgment dismissing Plaintiffs' claims for (i) trademark infringement, (ii) unfair competition, and (iii) false designation of origin is GRANTED. However, Defendants' motion for summary judgment dismissing Plaintiffs' claims for (i) trademark dilution, and (ii) copyright infringement is DENIED. Plaintiffs' motion for partial summary judgment on its claims of (i) trademark infringement, (ii) copyright infringement, and (iii) trademark dilution is similarly DENIED.
I. FACTUAL BACKGROUND1
A. The Parties
Plaintiffs are large, related entertainment companies responsible for creating and bringing to life popular characters through comic books, animated series, motion picture films, video games, and theme parks. (Pls.' 56.1 Stmt, ECF No. 61, ¶ 1.) Plaintiffs claim intellectual property rights with respect to these characters, as well as their brands, titles, and properties, and those of its affiliates. (Id. ¶ 4.) Disney claims that it is the owner of federally-registered trademarks and copyrights in the "Mickey Mouse" and "Minnie Mouse" characters, among others, as well as the "Elsa" and "Anna" characters featured in the Disney motion picture film "Frozen."2
*425(Id. ¶¶ 18-25, 41-47.) Marvel claims ownership of federally-registered trademarks and copyrights in the "Avengers" characters, including "Captain America," "Hulk," and "Iron Man." (Id. ¶¶ 26-32, 48-56.) LucasFilm claims that it owns federally-registered trademarks and copyrights in several characters featured in the "Star Wars" motion picture films, including the "Stormtrooper," "Darth Vader," "Darth Maul," "Chewbacca," "Luke Skywalker," "Princess Leia," "Han Solo," "Obi-Wan Kenobi," and "Yoda" characters.3 (Id. ¶¶ 33-40, 57-62.) Although Plaintiffs and their affiliates engage in licensed merchandising of their intellectual property, they maintain quality and other controls over authorized uses of those rights. (Id. ¶¶ 4, 9.) Such authorized uses include live appearances and meet-and-greet opportunities with Plaintiffs' characters at theme parks located in Florida and California, among other places. (Id. ¶ 10.)
Defendant CFH is in the business of advertising, promoting, producing, and selling themed entertainment party services for private parties and corporate events. (Id. ¶ 12; Defs.' 56.1 Stmt, ECF No. 71, ¶ 2.) Defendant Nick Sarelli, who uses the pseudonym "Avi Lieberman," is CFH's sole owner and managing director. (Pls.' 56.1 Stmt. ¶ 15.) As part of its business, CFH provides its customers with a wide variety of costumed characters for entertainment purposes.4 (Defs.' 56.1 Stmt. ¶ 2.) CFH promotes its business through its own website, as well as on several social media accounts. (Id. ¶ 3.)
B. Alleged Infringing Conduct
Plaintiffs allege that CFH copied and used the images, likenesses, personas, and names of Plaintiffs' characters, as well as Plaintiffs' trademarks, to promote and advertise its services online. (Pls.' 56.1 Stmt. ¶¶ 13, 63.) For instance, Plaintiffs claim that promotional videos on CFH's website and YouTube and Facebook pages depict costumed individuals portraying Disney's Mickey and Minnie Mouse characters. (Id. ¶¶ 64-66.) Plaintiffs also claim that CFH advertised "Frozen Theme[d] Parties" on their website and social media sites, offering "Anna and Elsa [to] delight your children as they sing their favorite songs." (Id. ¶ 67; see also Decl. of Louis S. Ederer dated Oct. 13, 2017 ("Ederer Decl."), Ex. T, ECF No. 62-31, at DEI00009368-69.) The advertisements contained videos and/or hyperlinks to videos of costumed actors portraying the Elsa and Anna characters singing songs from the Disney motion picture film Frozen. (Pls.' 56.1 Stmt. ¶¶ 68, 72; see also Ederer Decl., Ex. X at DEI00009367.) One such advertisement included the caption "Delight your children as they watch the Frozen Snow Queen Elsa and her sister, Princess Anna[,] tell their story in this professional adaptation." (Pls.' 56.1 Stmt. ¶ 73.) Another read, "Frozen themed kids party entertainment: Bring these professional musical theatre performers to your next kids [sic] birthday party as they retell the story of two sisters." (Id. ¶ 74.) Plaintiffs claim that CFH posted photographs on its Facebook page of costumed actors dressed in full costume *426as the Elsa and Anna characters. (Id. ¶ 75.)
Plaintiffs claim that CFH's website also advertised "Avenging Team" themed parties, with images of several costumed actors portraying the Marvel franchise's Captain America, Hulk, and Iron Man characters described as "The Soldier," "Man of Iron," and "Big Green Guy," respectively. (Id. ¶¶ 77-79.) One such advertisement offers "the most amazing premium entertainment" featuring "high flying action and incredible acrobatic stunts." (Id. ¶ 77.) Another notes that CFH's actors "are very authentic and remain in character throughout [the] event" and that "[s]ome of [CFH's] actors have even been trained by the actual Avengers stunt team." (Id. ¶ 79.)
CFH's website similarly advertised "Star Battles" events, with images of characters from the Star Wars motion picture series, as well as images of costumed actors portraying LucasFilm's characters such as Luke Skywalker ("Young Luke"), Darth Vader ("The Dark Lord"), Chewbacca ("Smugglers Co Pilot [sic]"), and Princess Leia ("The Princess"), and Obi-Wan Kenobi ("Old Ben"). (Id. ¶¶ 87-88; see also Ederer Decl., Ex. A, ECF No. 62-1, at 4.) In addition, CFH's website featured a video entitled "Star Wars Episode VII Themed Birthday Party," which portrayed various Star Wars characters dressed in full costume and CFH's "Special Effects, Robotics, and Lighting" design services, (Pls.' 56.1 Stmt. ¶ 89.) CFH also posted promotional videos on its Yelp, YouTube, Facebook, and Instagram webpages featuring actors depicting various Marvel and LucasFilm characters.5 (Id. ¶¶ 80-86, 90-96.)
Plaintiffs assert that Defendants infringed their trademarks and copyrights not only with respect to CFH's advertising and marketing materials, but also by providing customers with the live costumed actors portraying Plaintiffs' copyrighted and trademarked characters. (Id. ¶¶ 101-210.) To support this claim, Plaintiffs point to several dozen, largely unsigned CFH event contracts offering various "party packages."6 (See Ederer Decl., Exs. N-P.7 ) One such contract purports to book an event at which CFH was to provide the "Captain America, Iron Man, [and] Hulk" characters, among others, who would perform an "Avengers Stage Combat Stunt Show" and run an "Avengers Camp." (Id. , Ex. O at CFH000194.) Another contract requires CFH to provide the "Darth Vader" and "Luke Skywalker" characters for a "Meet and Greet Plus" party, with CFH providing "Jedi Training, [an] Interactive Stage Show, [and] Darth Vader Combat" services. (Id. , Ex. P at CFH000188.) A different event contract had CFH providing the "Captain America" and "Iron man [sic]" characters for an "Interactive Theatrical Performance," (id. , Ex. O at CFH000198), while another purports to book an event with CFH providing the "Princess Anna" and "Snow Queen" characters *427for a "Meet and Greet with 3 songs." (Id. , Ex. N at CFH000232.)
Plaintiffs' claim that evidence of Defendants' bad faith and willful infringement can be inferred from the standard form language in CFH's event contracts. They cite, for example, language added to CFH's contracts in or about November 2013 stating that, "[f]or copyright reasons, costumes may vary from design, pattern & color & will not be the same exact costume seen on the internet, movies[,] or other media format [sic]." (Pls.' 56.1 Stmt. ¶ 218 (quoting Ederer Decl., Ex. O at CFH000206).) In or about March 2014, the contracts were amended to add, "CFH does not and will not use trademarked or licensed characters." (Pls.' 56.1 Stmt. ¶ 219 (quoting Ederer Decl., Ex. P at CFH000215).) CFH amended the form language in their event contracts yet again in or about January 2015 to state the following:
Client understands that costumed characters are generic/inspired and are NOT affiliated, licensed or associated with any copyright or trademark. It is not our intention to violate any copyright laws. The characters that we offer are NOT name brand copyrighted characters, and Characters for Hire, LLC costumed characters are named of our own creation. Any resemblance to nationally known copyrighted characters is strictly coincidental. We DO NOT offer nor do we present any licensed and/or copyrighted characters.8
(Pls.' 56.1 Stmt. ¶ 220 (quoting Ederer Decl., Ex. P at CFH000258).)
Notwithstanding these disclaimers, Plaintiffs claim that CFH's customers remained confused as to whether the services CFH offers are sponsored, endorsed, or otherwise affiliated with Disney, Marvel, and/or LucasFilms. For instance, Plaintiffs point to customer reviews posted on CFH's website that reference Plaintiffs' characters by their real, trademarked names rather than the fake, generic ones used by CFH. (See Pls.' 56.1 Stmt. ¶¶ 224-29.) Plaintiffs' claim that this confusion is detrimental to their brands because of CFH's allegedly poor reputation. They note, for example, that three customer complaints have been filed with the Better Business Bureau ("BBB") against CFH since 2014, resulting in the BBB giving CFH an "F" rating. (Id. ¶ 231.) In addition, Plaintiffs claim, CFH has at least seventeen unfavorable reviews on its Yelp webpage commenting on Defendants' allegedly rude and unprofessional treatment of its customers.9 (Id. ¶¶ 232-39.)
C. Plaintiffs' Cease-and-Desist Letters
On November 24, 2015, Plaintiffs mailed Defendants a cease-and-desist letter. (Id. ¶ 212; see also Ederer Decl., Ex. F-1, ECF No. 61-7, at 3.) The letter, addressed to Sarelli, advised that CFH was "engaged in selling and offering for sale live party entertainment services featuring .... character impersonations as well as themed movie and television ... characters that reproduce" Plaintiffs' intellectual property. (Ederer Decl., Ex. F-1 at 4.) Accordingly, Plaintiffs demanded that CFH "immediately cease and desist all sale, advertising, *428marketing, promotion[,] and/or provision" of the infringing services, as well as remove any infringing marketing materials from its website and other online platforms. (Id. at 4-5.)
Plaintiffs' letter attached various printouts from CFH's website containing the allegedly infringing images and videos and asked for a response from Defendants within seven days. (See id. at 5-16; Ederer Decl., Ex. F-2, ECF No. 61-8, at 1-16; Ederer Decl., Ex. F-3, ECF No. 61-9, at 1-16.) When no response came, Plaintiffs sent Defendants a second cease-and-desist letter on December 9, 2015. (Pls.' 56.1 Stmt. ¶ 213; Ederer Decl., Ex. G-1, ECF No. 61-10, at 3.) Plaintiffs advised that if they did not receive a response within five days, they would take further action, including filing a lawsuit in federal court to enforce their intellectual property rights. (Ederer Decl., Ex. G-1 at 3.)
On December 10, 2015, Plaintiffs' counsel received an email signed by "Avi Lieberman," indicating that "all images ... pertaining to" Plaintiffs' intellectual property were removed from CFH's website. (Pls.' 56.1 Stmt. ¶ 214; Ederer Decl., Ex. PI, ECF No. 61-14, at 3.) The email further stated that CFH did not "inten[d] to disregard [Plaintiffs'] intellectual property rights ... and meant no harm in doing so." (Ederer Decl., Ex H, at 3.) However, on January 28, 2016, Plaintiffs sent a third cease-and-desist letter stating that not all infringing materials were removed from CFH's website and demanding that Defendants completely disable access to the website accordingly. (See Ederer Decl., Ex. I-1, ECF No. 62-15, at 3-4.) When Defendants failed to do so, Plaintiffs filed this action, asserting claims against Defendants under federal and New York law for trademark infringement and copyright infringement, unfair competition and false designation of origin, and trademark dilution.10 (See SAC ¶¶ 33-37, 39-12, 44-47, 49-52, 54-57, 59-64.)
Plaintiffs now seek summary judgment on their federal trademark and copyright infringement claims, as well as their claim under New York law for trademark dilution. (Pls.' Mot. at 1.) In addition, Plaintiffs seek summary judgment on the issue of willfulness. (Id. ) Defendants also move for summary judgment, seeking to have the entire lawsuit dismissed. (Defs,' Mot. at 1.)
II. LEGAL STANDARDS
Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). "An issue of fact is 'genuine' if 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.' " Gayle v. Gonyea ,
The party seeking summary judgment has the burden of demonstrating that no genuine issue of material fact exists. See Marvel Characters, Inc. v. Simon ,
In determining whether a genuine issue of material fact exists, the court must "construe[ ] the evidence in the light most favorable to the non-moving party" and "draw[ ] all inferences in [that party's] favor. See Niagara ,
III. PLAINTIFFS' CLAIMS
Plaintiffs' SAC asserts federal claims for trademark infringement, copyright infringement, and unfair competition and false designation of origin. Plaintiffs' also assert claims under New York law for trademark infringement, unfair competition, and trademark dilution. Although Plaintiffs seek summary judgment on only some of its claims, Defendants seek summary judgment with respect to all claims asserted in the SAC. Accordingly, this Court addresses each of Plaintiffs' claims as alleged.
A. Trademark Infringement, Unfair Competition and False Designation of Origin
Plaintiffs' federal trademark infringement claims arise under Section 32 of the Lanham Act.11 (See SAC ¶¶ 39-42.) Under Section 32, "the owner of a mark registered with the Patent and Trademark Office can bring a civil action against a person alleged to have used the mark without the owner's consent." ITC Ltd. v. Punchgini, Inc. ,
Where the marks in question are registered, as here, their entitlement to protection is presumed. See *430Slep-Tone Entm't Corp. v. Golf 600 Inc. ,
(1) strength of the trademark; (2) similarity of the marks; (3) proximity of the products and their competitiveness with one another; (4) evidence that the senior user may "bridge the gap" by developing a product for sale in the market of the alleged infringer's product; (5) evidence of actual consumer confusion; (6) evidence that the imitative mark was adopted in bad faith; (7) respective quality of the products; and (8) sophistication of consumers in the relevant market.
Starbucks Corp. v. Wolfe's Borough Coffee, Inc. ,
Plaintiffs assert that CFH's use of Plaintiffs' marks to advertise and promote its business, as well as its provision of live costumed actors pretending to be Plaintiffs' characters, are likely to cause consumer confusion as to the origin, source, and/or sponsorship of CFH's unlicensed services. (Pls.' Mem. in Supp. at 6, 13-16.) Defendants, however, contend that there is no likelihood of consumer confusion and that their use of Plaintiffs' marks is a non-infringing, fair use under Section 33(b) of the Lanham Act insofar as they only use Plaintiffs' marks to describe the goods and services they offer their customers. (See Defs.' Mem. at 6-8; Defs.' Mem. in Opp'n to Pls.' Mot. for Summ. J. ("Defs.' Opp'n"), ECF No. 85, at 9-10, 13-14.) Defendants also argue that their use of Plaintiffs' marks is protected by the doctrine of nominative fair use, which they claim permits them to use the names of Plaintiffs' characters to identify the services CFH provides. (Defs.' Mem. at 8-9; Defs.' Opp'n at 11-13.)
Neither of Defendants' fair use defenses have merit.
1. Descriptive Fair Use
Section 33(b) of the Lanham Act provides an affirmative defense to a claim of trademark infringement where "the use of the name[ ] ... charged to be an infringement is a use, otherwise than as a mark, ... which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin."
Here, CFH's promotional materials do not use Plaintiffs' marks like "Frozen," the "Avengers," or "Star Wars," in a descriptive sense at all. To be sure, the use of a mark can be "descriptive" without actually describing physical characteristics of the good. See Cosmetically Sealed Indus., Inc. v. Chesebrough-Pond's USA Co. ,
Defendants argue incorrectly that this case is on all fours with Naked Cowboy v. CBS ,
Moreover, whereas a reasonable consumer could view the video in Naked Cowboy and understand the clip to be depicting a nearly naked man pretending to be a cowboy-independent of the street performer known as The Naked Cowboy-a reasonable consumer viewing CFH's advertisements offering, for example, a "Frozen Themed Party" would understand the nature of the services being offered only by reference to Plaintiffs' marks. See Car-Freshner Corp. ,
*432Thus, Defendants have failed to meet their burden of demonstrating, under Section 33(b) of the Lanham Act, that CFH uses Plaintiffs' marks in a "descriptive sense."12
2. Nominative Fair Use
"[N]ominative fair use occurs when [a] plaintiff's mark is used to describe [the] plaintiff's own product." Jackson v. Odenat ,
Plaintiffs argue persuasively that the nominative fair use defense is inapposite to facts presented here. Among other things, Plaintiffs point out that Defendants use Plaintiffs' marks to identify Defendants' character-for-hire services, rather than any of Plaintiffs' goods or services. (Pls.' Mem. in Opp'n to Mot. for Summ. J, ECF No. 77, at 19-20; Pls.' Reply, ECF No. 87, at 6.) Yet, as the Second Circuit has explained, the nominative fair use defense exists to protect the "use of another's trademark to identify, not the defendant's goods or services, but the plaintiff's goods or services." Int'l Info. Sys. ,
3. Likelihood of Consumer Confusion
The touchstone of a meritorious trademark infringement claim is likelihood of consumer confusion. Kelly-Brown ,
An application of the Polaroid factors to the present facts readily demonstrates that Plaintiffs have not shown a likelihood of consumer confusion as to the origin, source, and/or sponsorship of Defendants' character-for-hire services.
a. Strength of Plaintiffs' Marks
"[T]he strength of a mark depends ultimately on its distinctiveness, or its 'origin-indicating' quality, in the eyes of the purchasing public." Savin Corp. v. Savin Grp. ,
Plaintiffs claim that their marks "are some of the most recognizable ... in the world of entertainment." (Pls.' Mem. in Supp. at 15.) Defendants do not contest this point, nor could they given the ubiquity of Plaintiffs' well-known and highly popularized marks. Accordingly, the first Polaroid factor weighs in Plaintiffs' favor.
b. Similarity of the Marks
"When comparing two marks, courts consider their 'overall impression,' including 'the context in which they are found and the totality of factors that could cause confusion among prospective purchasers.' " Advance Magazine ,
Plaintiffs argue this factor weighs in their favor because the costumed characters that CFH advertises and supplies its customers "are either identical or virtually identical to Plaintiffs' characters in image, costume, name, and/or total 'look and feel[.]' " (Pls.' Mem. in Supp. at 15 (citation omitted).) Defendants do not contest this point, and their fair use arguments concede the use of Plaintiffs' exact marks to identify Defendants' services. This factor thus appears to favor Plaintiffs. See Audi AG v. Shokan Coachworks, Inc. ,
On the other hand, however, few, if any, of Plaintiffs' marks are used in CFH's advertisements in their original fonts, styles, and colors. See MetLife, Inc. v. Metro. Nat'l Bank ,
c. Competitive Proximity and Bridging the Gap
The third and fourth Polaroid factors, respectively, address the proximity of the goods or services at issue and the possibility that the senior user will "bridge the gap," or expand the scope of its business and enter the market of the junior user. See Akiro ,
Courts analyzing these factors take into account "whether and to what extent the [parties'] products compete with each other[,]" as well as "the nature of the products themselves and the structure of the relevant market." Joules Ltd. v. Macy's Merch. Grp., Inc. ,
Plaintiffs argue that the third and fourth Polaroid factors weigh in their favor because they present their fictional characters "in live form at Plaintiffs' themed amusement parks" and thus engage in the "exact same business" as CFH. (Pls.' Mem. in Supp. at 15.) Defendants, however, assert that unlike Plaintiffs, CFH markets and offers entertainment at private birthday parties and corporate events. (Defs.' Opp'n at 13.) In response, Plaintiffs argue that even if they do not actually provide live costumed characters at private parties, ordinary consumers, particularly children, would reasonable perceive that *435they could provide such services. (Pls.' Reply at 7.)
These factors both tip in Defendants' favor. Although Plaintiffs present their trademarked characters in costume at theme parks located in Florida and California, there is no evidence that they currently, or are likely to at any point in the future, compete with CFH by offering character-for-hire services for private entertainment purposes. Nor is there any evidence that Plaintiffs' theme parks and CFH's marketing and provision of character-for-hire services have an overlapping customer base sufficient to create a potential for confusion. For instance, it is plain that theme park guests are in a different market altogether from those looking to hire a costumed character to appear at a child's birthday party or a corporate event.
In addition, Plaintiffs cite no evidence to support their conclusory assertion that it is reasonable for ordinary customers to perceive that Plaintiffs could or are likely to expand their offerings into providing costumed character services at private events. Moreover, Plaintiffs offer no basis in fact, law, or logic to believe that the relevant market for CFH's party and entertainment services are children; adults, not children, plan parties. Indeed, CFH's advertisements exclusively target parents and other adults, not children. (See, e.g. , Ederer Decl., Ex. S-1, ECF No. 61-29, at DEI00009377 ("Bring the excitement of winter to your next Frozen themed event. Let Ana [sic] and Elsa delight your children as they sing their favorite songs.");
Accordingly, the third and fourth Polaroid factors weigh in Defendants' favor.
d. Evidence of Actual Confusion
The fifth Polaroid factor asks courts to consider the evidence that consumers are actually confused as to the origin of a particular product or service or as to whether the junior user of a mark is sponsored by or affiliated with the senior user. Although actual confusion need not be demonstrated to prevail on a claim for trademark infringement, Guthrie Healthcare Sys. v. ContextMedia, Inc. ,
Such evidence "may consist of anecdotal or survey evidence." LVL XIII Brands ,
Here, there is no evidence of actual consumer confusion. The only anecdotal "evidence" Plaintiffs can muster are a handful of instances where CFH's customers referred to the actual names of Plaintiffs' characters in online reviews rather than using the names provided for such characters on CFH's website.14 (See Pls.' Mem. in Supp. at 16 (citing Pls.' 56.1 Stmt. ¶¶ 233-30); Pls.' Reply at 7 & n.5.) Yet, none of the customer reviews suggest the slightest sign of confusion as to the origin, source, affiliation, or sponsorship of CHF's services, much less confusion likely to produce "a diversion of sales, damage to goodwill, or loss of control over reputation." LVL XIII Brands ,
Accordingly, this factor, too, weighs in Defendants' favor.
e. Defendant's Intent and Evidence of Bad Faith
The sixth Polaroid factor focuses on "whether the defendant adopted [the plaintiff's] mark with the intention of capitalizing on plaintiff's reputation and goodwill and any confusion between his and the senior user's product." Bath & Body Works Brand Mgmt., Inc. v. Summit Entm't, LLC ,
As evidence of Defendants' bad faith, Plaintiffs' point to: (1) the disclaimer in CFH's event contracts that any similarity between their character costumes and Plaintiffs' characters is coincidental; (2) CFH's use of "slightly altered character names that nevertheless remain recognizable" as Plaintiffs' characters; (3) CFH's surreptitious removal of Plaintiffs' characters' names from its own customers' online reviews; (4) and Sarelli's false representation to Plaintiffs' counsel that CFH would cease its infringing activity in response to Plaintiffs' cease and desist letters. (Pls.'
*437Mem. in Supp. at 16.) Plaintiffs also claim that Defendants' bad faith can be inferred from the fact that CFH knew of Plaintiffs' marks but nevertheless decided to copy them to further its business. (Id. )
Plaintiffs' claimed evidence of Defendants' bad faith misses the mark. CFH's event contract disclaimer, the use of "slightly altered character names" from those of Plaintiffs' characters, and edits of customer reviews are not evidence of bad faith at all. To the contrary, they are more likely to put customers on notice that CFH's services were not sponsored or affiliated by Plaintiffs, and if anything, signify efforts to avoid "deceiving customers into believing that its products were related to" Plaintiffs.' Dooney & Bourke ,
Absent evidence that Defendants acted to deceive customers into believing their character-for-hire services were related to Plaintiffs, this factor also weighs in Defendants' favor.
f. Quality of Defendant's Products
The seventh Polaroid factor-the quality of the defendant's products-involves two concepts seemingly at odds with each other. On the one hand, where "the quality of a junior user's product or service is low compared to the senior user, 'there is an increased chance of actual injury when there is confusion.' " Flushing Bank ,
Plaintiffs argue that this factor weighs in their favor because "CFH's substandard operations present a serious risk of devaluing or tarnishing Plaintiffs' reputation for providing high quality goods and services." (Pls.' Mem. in Supp. at 16.) For example, they point to the three customer complaints lodged with the BBB and a number of "not currently recommended" reviews posted on CFH's Yelp webpage. (Pls.' 56.1 Stmt. ¶¶ 231-39.) Yet, the evidence in the record demonstrates that CFH receives many positive reviews for its services, as well. (See id. ¶¶ 224-29.) Moreover, none of the reviews cited in the record betray any sign of consumer confusion as to the source, sponsorship, or affiliation of CFH's products or services. Nor do they suggest that Plaintiffs' reputations are being tainted as a result of being confused with Defendants' allegedly inferior services. To the contrary, in light of Plaintiffs' well established and highly regarded reputations in the entertainment industry, (see, e.g., id. ¶¶ 5-8), if Defendants' services are in fact of a lesser quality, it is *438likely that ordinary consumers will assume Plaintiffs are not responsible for them.
Accordingly, this factor tips in Defendants' favor.
g. Consumer Sophistication
The final Polaroid factor considers the sophistication of the consumers purchasing the goods or services in question. Generally, "[t]he more sophisticated or discriminating the purchaser, the lower the likelihood of confusion[ ]" since "a discriminating purchaser will examine the product or service carefully, dispelling any initial questions as to the origin or association of the product." Flushing Bank ,
Courts analyzing this factor typically "consider[ ] the general impression of the ordinary purchaser, buying under the normally prevalent conditions of the market and giving the attention such purchasers usually give in buying that class of goods." Star Indus., Inc. v. Bacardi & Co. Ltd. ,
Plaintiffs argue in conclusory fashion that this factor weighs in their favor because "[t]he target audience for CFH's costumed characters is oftentimes unsophisticated children ..., who are likely to believe that they are being entertained by genuine Disney/Marvel/Lucasfilm [sic] characters."15 (Pls.' Mem. in Supp. at 16.) However, they cite no evidence to support that proposition, either by way of an expert opinion or consumer surveys. Cf. Warner Bros., Inc. v. Gay Toys, Inc. ,
This factor therefore tips in Defendants' favor, as well.
h. Balancing the Polaroid Factors
On balance, the Polaroid factors weigh in Defendants' favor and against a finding of likelihood of consumer confusion. Although "the Polaroid inquiry is not a mere mechanical counting exercise[,]" Coty ,
Accordingly, Plaintiffs' motion for summary judgment on their federal trademark infringement claim is DENIED, while Defendants' motion for summary judgment dismissing Plaintiffs' claims under federal and New York law for trademark infringement, unfair competition, and false designation of origin is GRANTED.
B. Trademark Dilution
Plaintiffs' SAC asserts a claim for trademark dilution under Section 360-1 of New York's General Business Law. (SAC ¶¶ 59-64.) Section 360-1 provides protection against an "injury to business reputation or of dilution of the distinctive quality of a mark or trade name." N.Y. Gen, Bus. Law § 360-1. Trademark dilution claims are principally concerned with "the gradual whittling away of a [plaintiff's] distinctive [mark]," Allied Maint. Corp. v. Allied Mech. Trades, Inc. ,
Unlike claims for trademark infringement, no proof of "competition between the parties or ... confusion as to the source of goods or services" is required.
(1) that it possesses a strong mark, one which has a distinctive quality or has acquired a secondary meaning such that the trade name has become so associated in the public's mind with the plaintiff that it identifies goods sold by that entity as distinguished from goods sold by others, and (2) a likelihood of dilution by either blurring or tarnishment.
Gucci Am., Inc. v. Guess?, Inc. ,
Here, it is undisputed that Plaintiffs' trademarks are strong. (See supra Section III. A.3.a.) Thus, Plaintiffs' trademark dilution claim turns on whether there is a likelihood of dilution. Plaintiffs contend that Defendants' use of their marks in connection with the provision of character-for-hire services creates a likelihood of dilution by both blurring and tarnishment. (Pls.' Mem. in Supp, at 17-18.) The record evidence does not support a cause of action for trademark dilution based a theory of blurring, However, a genuine issue of fact exists with respect to whether CFH's use of Plaintiffs' marks in connection with its character-for-hire business tarnishes Plaintiffs' marks, Accordingly, summary judgment on Plaintiffs' trademark dilution claim is inappropriate.
1. Blurring
"Blurring occurs where the defendant uses or modifies the plaintiff's trademark to identify the defendant's goods and services, raising the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff's product." N.Y. Stock Exch. ,
In determining whether a likelihood of blurring exists, courts typically consider six factors-many of which mirror the Polaroid factors described above-including: "(i) the similarity of the marks; (ii) the similarity of the products covered; (iii) the sophistication of the consumers; (iv) the existence of predatory intent; (v) the renown of the senior mark; and (vi) the renown of the junior mark."
As an initial matter, Plaintiffs do not allege that Defendants coopt their marks in connection with unrelated products, like "Frozen Snow Boots" or "Avengers Chewing Gum." Rather, they claim Defendants use Plaintiffs' marks in connection with the provision of character-for-hire services in a manner that specifically evokes Plaintiffs' characters. Accordingly, Plaintiffs have not shown that their marks "will lose [their] ability to serve as a unique identifier of [their] produce[s]" as a result of Defendants' conduct. N.Y. Stock Exch. ,
Moreover, the relevant factors confirm that no reasonable jury could find a likelihood of dilution by blurring based on these facts. Plaintiffs' marks clearly have renown. However, as already discussed, there is some measure of difference in the way Defendants use and present Plaintiffs' marks, and a substantial dissimilarity between the types of goods and services offered by Plaintiffs and Defendants.
In addition, as discussed, there is no evidence regarding the sophistication level of the relevant consumers, nor is there any evidence in this record of predatory intent. As in the trademark infringement context, "[p]redatory intent involves more than mere knowledge of the senior mark-it requires a showing that the junior user adopted its mark hoping to benefit commercially from association with the senior mark." Mead Data Cent., Inc. v. Toyota Motor Sales, Inc. ,
Finally, although there is no evidence as to Defendants' renown, it seems improbable Defendants' marks' will "become so famous that [they] will overwhelm" Plaintiffs' mark and cause Plaintiffs' "consumers to draw the associations identified with" Defendants' marks. Landscape Forms, Inc. v. Columbia Cascade Co. ,
Thus, on balance, the relevant factors militate against a finding of likelihood of dilution by blurring.
2. Tarnishment
"[D]ilution by tarnishment 'arises when the plaintiff's trademark is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner's product.' " Coty ,
Plaintiffs do not contend that Defendants present their marks in an "unwholesome or unsavory context[.]" Coty ,
If CFH's character-for-hire services are of a markedly poor quality, a jury could reasonably find that Plaintiffs' marks may suffer from the negative associations formed as a result of Defendants' conduct. Coty ,
Plaintiffs' and Defendants' motions for summary judgment on Plaintiffs' trademark dilution claim are therefore DENIED.
C. Copyright Infringement
Plaintiffs' copyright infringement claims arise under the federal Copyright Act of 1976,
1. Ownership of a Valid Copyright
It is well settled that certificates of copyright registration constitute prima facie evidence of copyright ownership. See Fonar Corp. v. Domenick ,
2. Infringing Activity
To prove the second element of a copyright claim, Plaintiffs must show that Defendants "actually copied [their] work, and that such copying was illegal because a 'substantial similarity' exists between the allegedly infringing work ... and the protectable elements of the copyrighted work[.]" Porto v. Guirgis ,
The substantial similarity inquiry is also governed by an "ordinary observer test." Porto ,
Plaintiffs claim that CFH reproduced and publicly displayed Plaintiffs' copyrighted characters by "upload[ing] still and video images of those characters" on CFH's website and other social media sites. (Pls.' Mem. in Supp. at 22.) Plaintiffs also claim that CFH publicly performed their copyrighted characters, including the characters' "personas and story lines," by providing live costumed actors to perform as Plaintiffs' characters at themed entertainment events and by making videos and images of such performances available on its website and other social media sites. (Id. )
Defendants dispute that they have reproduced, copied, displayed, or performed any of Plaintiffs' copyrighted characters. (See Defs.' Opp'n at 7.) Defendants also dispute the accuracy of some images of CFH's website that Plaintiffs submitted in support of their motion. (See Defs.' Resp. to Pls.' 56.1 Stmt. ¶ 67; see also Sarelli Decl. ¶ 7.) In addition, Defendants contend that their use of characters from Norse mythology and "centuries-old fairy tales and folk tales" do not infringe on any original expression Plaintiffs have added to *443these "public domain characters." (Defs.' Mem. at 6.)
Based on the current record, this Court cannot conclude that Defendants have infringed Plaintiffs' copyrighted characters because Plaintiffs do not point to any admissible evidence demonstrating that Defendants have engaged in the alleged infringing conduct. See Presbyterian Church of Sudan v. Talisman Energy, Inc. ,
The screenshots and videos, however, have not been properly authenticated and are submitted to this Court through an attorney declaration, which claims in boilerplate fashion that it is "based upon [the attorney's] personal knowledge of matters detailed [t]herein." Such evidence is not admissible and cannot be considered in deciding the instant motions for summary judgment. Cf. United States v. Gasperini ,
At any rate, issues of material fact exist with respect to whether the images and videos on CFH's website and the alleged public performances by Defendants' costumed characters are substantially similar to Plaintiffs' characters, their personas, and their "story lines." Summary judgment on Plaintiffs' claims for copyright infringement is therefore inappropriate.
Accordingly, Plaintiffs' and Defendants' motions for summary judgment on Plaintiffs' copyright infringement claim are DENIED.
D. Willfulness
Plaintiffs seek a determination that there is no dispute of material fact that Defendants' conduct was willful. (Pls.' Mem. at 24.) A finding of willful infringement would entitle Plaintiffs to an enhanced *444award of statutory damages. See Shamir v. Anchor-Int'l Found., Inc. , No. 10 Civ. 725 (PGG),
"To prove 'willfulness' under the Copyright Act, the plaintiff must show (1) that the defendant was actually aware of the infringing activity, or (2) that the defendant's actions were the result of 'reckless disregard' for, or 'willful blindness' to, the copyright holder's rights." Island Software , 413 F.3d at 263. "[K]knowledge .... need not be proven directly but may be inferred from the defendant's conduct." N.A.S. Imp., Corp. v. Chenson Enters., Inc. ,
Since summary judgment is denied with respect to Plaintiffs' claims for copyright infringement, a determination at this stage that Defendants' infringement was willful is premature. In any event, "summary judgment is not a tool well suited to determining willfulness, especially when it turns on '[d]eterminations of credibility,' which 'are within the province of the jury.' " Close-Up Int'l, Inc. v. Berov ,
IV. CONCLUSION
Defendants' motion for summary judgment, (ECF No. 66), dismissing Plaintiffs' claims for (i) trademark infringement, (ii) unfair competition, and (iii) false designation of origin is GRANTED. However, Defendants' motion for summary judgment dismissing Plaintiffs' claims for (i) trademark dilution, and (ii) copyright infringement is DENIED. Plaintiffs' motion for partial summary judgment on its claims of (i) trademark infringement, (ii) copyright infringement, and (iii) trademark dilution, (ECF No. 59), is similarly DENIED.
SO ORDERED.
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