Universal City Studios, Inc. v. Nintendo Co., Ltd., Nintendo of America, Inc.

746 F.2d 112, 223 U.S.P.Q. (BNA) 1000, 1984 U.S. App. LEXIS 17945
CourtCourt of Appeals for the Second Circuit
DecidedOctober 4, 1984
Docket1208, Docket 84-7095
StatusPublished
Cited by215 cases

This text of 746 F.2d 112 (Universal City Studios, Inc. v. Nintendo Co., Ltd., Nintendo of America, Inc.) 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
Universal City Studios, Inc. v. Nintendo Co., Ltd., Nintendo of America, Inc., 746 F.2d 112, 223 U.S.P.Q. (BNA) 1000, 1984 U.S. App. LEXIS 17945 (2d Cir. 1984).

Opinion

MESKILL, Circuit Judge:

This is an appeal from an order of the United States District Court for the Southern District of New York, Sweet, J., granting the motion for summary judgment by the defendants, Nintendo Co., Ltd. and Nintendo of America, Inc. (Nintendo), in the action brought by plaintiff Universal City Studios, Inc. (Universal) under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1982), the New York anti-dilution statute, N.Y.Gen.Bus.Law § 368-d (McKinney 1984), and common law unfair competition, trademark and trade name principles. Universal City Studios, Inc. v. Nintendo Co., 578 F.Supp. 911 (S.D.N.Y.1983). We affirm.

Background

Nintendo Co., and its wholly owned subsidiary Nintendo of America, has engaged in the design, manufacture, importation and sale of the extraordinarily successful video game known as “Donkey Kong.” Nintendo has realized over $180 million *114 from the sale of approximately 60,000 video arcade machines in the United States and Canada. Donkey Kong requires the player to maneuver a computerized man named Mario up a set of girders, ladders and elevators to save a blond pigtailed woman from the clutches of a malevolent, yet humorous gorilla, while simultaneously avoiding a series of objects such as barrels and fireballs hurled at him by the impish ape.

Universal, a giant in the entertainment industry, maintains that it owns the trademark in the name, character and story of “King Kong.” The King Kong character and story, of course, need no introduction. Universal traces its ownership of the trademark from RKO General’s (RKO) efforts to exploit the goodwill created by its 1933 film classic of the same name. It asserts that RKO’s commercial use of the name and character of King Kong created the trademark; that the rights to the trademark were passed from RKO to Richard Cooper, son and heir of King Kong creator Merian Cooper, pursuant to a judgment resulting from a claim brought by Richard Cooper against RKO alleging that RKO had exceeded the license originally granted by Merian Cooper to make the original King Kong motion picture; and that Richard Cooper subsequently transferred to Universal for consideration the rights he obtained from RKO. 1

Universal filed its complaint against Nintendo in 1982, approximately nine months after Nintendo began marketing Donkey Kong. Universal alleged that the Donkey Kong name, character and story constituted false designation of origin in violation of 15 U.S.C. § 1125(a) because Nintendo’s “actions falsely suggest to the public that [its] product originates with or is authorized, sponsored or approved by the owner of the King Kong name, character and story.” Universal also asserted claims based upon the New York anti-dilution statute, N.Y. Gen.Bus.Law § 368-d, and common law unfair competition, trademark and trade name principles. 2 Neither side requested a jury trial.

After extensive discovery, Nintendo moved for summary judgment. The motion was granted by the district court. Specifically, the court held that (a) Universal failed to derive trademark rights from RKO because the transfer from RKO to Cooper was an invalid assignment in gross; (b) any trademark that Universal purported to own could not be the basis of a successful action under the Lanham Act because it lacked “secondary meaning” as a matter of law; (c) even if Universal’s trademark had secondary meaning, there was no question of fact as to whether consumers were likely to confuse Donkey Kong and King Kong; (d) Universal did not state a claim under the New York anti-dilution statute because it lacked a distinctive trademark and there were no triable issues as to whether Donkey Kong blurred the King Kong mark; and (e) the common law trade *115 mark, trade name and unfair competition claims should be dismissed. 3 The district court subsequently certified its decision as final under Fed.R.Civ.P. 54(b) even though Nintendo’s counterclaim remained unadjudieated. 4 This appeal followed.

Discussion

We turn first to what Universal labels the “main” issue, whether the district court’s decision that Universal failed to raise a question of fact as to the likelihood of consumer confusion concerning the origin of Donkey Kong was erroneous. Because we affirm the holding of the district court on this issue, we need not and do not decide if the district court was correct in finding that the King Kong mark was not validly developed and conveyed to Universal and that the King Kong mark has not acquired secondary meaning. Rather, we assume only arguendo that the King Kong trademark was validly developed and conveyed to Universal and that the King Kong mark has secondary meaning. See Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905, 918 (2d Cir.1980) (“even if we assume for purposes of this appeal that [counterclaim plaintiff] could demonstrate secondary meaning at trial, since likelihood of consumer confusion could not be established [counterclaim defendant] was entitled to summary judgment”).

To be entitled to summary judgment, Nintendo must demonstrate “the absence of any material factual issue genuinely in dispute,” Heyman v. Commerce & Industry Insurance Co., 524 F.2d 1317, 1320 (2d Cir.1975) (citation omitted), and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The record must be construed in the light most favorable to Universal and all reasonable inferences must be drawn to its advantage. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam); Sterling National Bank & Trust Co. v. Fidelity Mortgage Investors, 510 F.2d 870, 875 (2d Cir.1975). We hold that Universal failed to raise a question of fact on the issue of the likelihood of consumer confusion and thus Nintendo was entitled to summary judgment on the Lanham Act claim.

“It is well settled that the crucial issue in an action for trademark infringement or unfair competition is whether there is any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question.” Mushroom Makers, Inc. v. R.G.

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746 F.2d 112, 223 U.S.P.Q. (BNA) 1000, 1984 U.S. App. LEXIS 17945, Counsel Stack Legal Research, https://law.counselstack.com/opinion/universal-city-studios-inc-v-nintendo-co-ltd-nintendo-of-america-ca2-1984.