Forschner Group, Inc. v. Arrow Trading Co.

124 F.3d 402
CourtCourt of Appeals for the Second Circuit
DecidedSeptember 4, 1997
DocketNos. 1249, 1382, Dockets 96-7945(L), 96-7999(XAP)
StatusPublished
Cited by35 cases

This text of 124 F.3d 402 (Forschner Group, Inc. v. Arrow Trading Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Forschner Group, Inc. v. Arrow Trading Co., 124 F.3d 402 (2d Cir. 1997).

Opinion

ALTIMARI, Circuit Judge:

Plaintiffs-appellants-cross-appellees The Forschner Group, Inc. and its subsidiary Swiss Army Brands, Ltd. (collectively “Forschner”) appeal from a judgment and order of the United States District Court for the Southern District of New York (Preska, J.) enjoining defendant-appellee-cross-appellant Arrow Trading Co., Inc. (“Arrow”) from advertising, promoting or selling any multifunction pocketknife represented as a “Swiss Army knife” unless: (1) the phrase is immediately preceded by or immediately followed by the name of the defendant in such a way as to clearly designate its origin; (2) the term “original” is not used to describe the knife; and (3) the language “the Swiss Army logo design is a trademark used under license by Arrow Trading Co., Inc.,” or any similar language, is not used. Subsequent to the entry of the judgment, the district court found Arrow in contempt for its failure to comply with the judgment and order when Arrow promoted its knives at a trade show without properly designating their origin. On appeal, Forschner challenges the scope of the district court’s injunction, arguing that the district court erred in failing to enjoin Arrow from using the color red on its knife handle or in any marketing materials in conjunction with the phrase “Swiss Army knife.” On cross-appeal, Arrow principally challenges the district court’s subsequent interpretation of its judgment and order at the contempt hearing, arguing that the district court improperly enjoined Arrow from (1) using another name or mark to indicate the origin of its goods and (2) using the term “Swiss Army knife” in a purely generic sense. Because we find both Forschner’s and Arrow’s arguments unavailing, we affirm the district court in full. Inasmuch as the cross-appeal seeks relief from the order holding Arrow in contempt, we dismiss the cross-appeal for lack of appellate jurisdiction.

BACKGROUND

This trademark and unfair competition case returns to this Court after vacatur and remand, see Forschner Group, Inc. v. Arrow Trading Co., 30 F.3d 348 (2d Cir.1994), to the district court, see Forschner Group, Inc. v. Arrow Trading Co., 904 F.Supp. 1409 (S.D.N.Y.1995). The undisputed facts of this appeal are set forth by the district court in its original decision, see Forschner Group, Inc. v. Arrow Trading Co., 833 F.Supp. 385 (S.D.N.Y.1993), and familiarity therewith is presumed. We recapitulate only the facts relevant to this appeal.

Since the beginning of this century, two Swiss firms, Victorinox Cutlery Company (“Victorinox”) and Wenger, S.A. (“Wenger”), have been the only purveyors of the well-known “Swiss Army knife” to the Swiss Armed Forces. Victorinox first designed its multifunction pocketknives in 1891, and Wen-ger began producing its knife in 1908. The [405]*405knives achieved prominence in the United States when American soldiers returning from Europe after World War II brought this well-crafted, intricate poeketknife used by the Swiss military home with them. The Swiss Army knife is renowned for its quality and durability, familiar red color, its multipurpose blades and utensils, and its eross- and-shield insignia.

While the phrase “Swiss Army knife” has never enjoyed trademark protection, the two Swiss firms have agreed between themselves to share the use of the phrase. Vietorinox has exclusive use of the term “original” Swiss Army knife, Wenger may call its knife “genuine,” and their American distributors have accepted the same terms with respect to promoting the pocketknives. Forsehner has continuously imported Swiss Army knives manufactured by Vietorinox since 1950. Precise Imports Corporation, which is not a party to this litigation, distributes Wenger multifunction pocketknives in the United States.

Early in 1992, Arrow began marketing a red poeketknife containing multiple utensils manufactured in China (the “Arrow knife”) and called it a Swiss Army knife. Despite a similar physical appearance, it is undisputed that the Arrow knife is comparatively inexpensive, is markedly inferior and fails to meet the standard of high quality found in a Swiss Army knife distributed by Forsehner.

On September 22, 1992, Forsehner commenced an action in the United States District Court for the Southern District of New York (Preska, J.) seeking to enjoin Arrow from marketing knives made in China as Swiss Army knives. The Complaint alleged three causes of action: Count I alleged misrepresentation as to the characteristics, qualities and origin of its goods pursuant to § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A) (1988), a claim which included “passing off’; Count II alleged false advertising with respect to geographic origin and quality pursuant to § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B); and Count III alleged unfair competition under New York State common law. After a bench trial, the district court found that Arrow’s use of the phrase “Swiss Army knife” in connection with a multifunction poeketknife that was manufactured outside of Switzerland and was of inferior quality constituted a misrepresentation as to geographic origin and quality, in violation of § 43(a) of the Lanham Act. Forsehner, 833 F.Supp. at 398. Thus, the district court enjoined Arrow’s use of the phrase “Swiss Army knife” to advertise, promote, or sell its knives. Id. at 398.

Arrow appealed ahd this Court vacated the district court’s order, holding as a matter of law that the phrase “Swiss Army knife”, as applied to a multifunction poeketknife that was not manufactured in Switzerland, was neither geographically nor qualitatively descriptive and thus was not deceptive under § 43(a) of the Lanham Act. Forsehner, 30 F.3d at 350. This Court remanded the case for consideration of whether Arrow’s remaining claims — essentially alleging unfair competition under both federal law and New York common law — had been proved so as to provide alternative grounds to deny, restrict or circumscribe Arrow’s use of the phrase “Swiss Army knife.” Id.

On remand, the district court rejected Forschner’s trademark claims, but found the trade dress of Arrow’s knife, particularly its red color, had substantially increased the likelihood of consumer confusion, and concluded that Forsehner had adequately supported its allegations of false designation of origin, under 15 U.S.C. § 1125(a)(1)(A), and unfair competition, under New York common law. Forsehner, 904 F.Supp. at 1429. In its decision, the district court defined the scope of relief to which Forsehner was entitled as follows:

[t]he relief granted should go only so far as to alleviate the source confusion caused by Arrow, and no further. The relief named here is designed to protect Forsehner from unfair competition without unnecessarily burdening Arrow. I thus order that Arrow, although free to use the phrase “Swiss Army knife” to designate its product, must amply distinguish it from the Forsehner product. Two salient means that come to mind are changing the color of its knife to a color not used by Forsch-[406]*406ner and adding its name to its designation of its knife____

Id. at 1428.

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124 F.3d 402, Counsel Stack Legal Research, https://law.counselstack.com/opinion/forschner-group-inc-v-arrow-trading-co-ca2-1997.