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NEW DANA PERFUMES CORP. v. THE DISNEY STORE

January 29, 2001

NEW DANA PERFUMES CORP., NEW TINKERBELL INC., ST. HONORE HOLDING INC. AND FINANZ ST. HONORE, B.V., PLAINTIFFS,
V.
THE DISNEY STORE, INC. D/B/A THE DISNEY STORE, DEFENDANT.



The opinion of the court was delivered by: Vanaskie, Chief Judge.

MEMORANDUM

On July 28, 2000, plaintiffs New Dana Perfumes Corporation, New Tinkerbell Inc., St. Honore Holding Inc. and Finanz St. Honore B.V. (collectively referred to at times as "New Tinkerbell") brought this action against the defendant, The Disney Store, asserting claims of trademark infringement under federal and state law, dilution of trademark under 15 U.S.C. § 1125(c), and unfair competition under Pennsylvania state law. The New Tinkerbell plaintiffs, which market a line of children's cosmetics, fragrances and accessories under the registered trademark "Tinkerbell®," contend that The Disney Store's marketing of products with the name "Tinker Bell" or "Tink," or with the character image of Tinker Bell from the Disney movie "Peter Pan," violates their trademark rights. Additionally, the New Tinkerbell plaintiffs contend that The Disney Store has violated its license in the trademark "Heaven Sent®" by selling a children's perfume named "Heaven Scent."

On August 1, 2000, New Tinkerbell moved for a preliminary injunction, requesting that the Court restrain The Disney Store "from using, in commerce, the mark `Tinkerbell,' any reproduction, counterfeit, copy or colorable imitation of Tinkerbell, including but not limited to `Tink,' `Tinker Bell' or a female fairy symbol known as `Tinkerbell,' in connection with the sale, offering for sale, distribution, importation or advertising of any product or apparel except those products which are, by themselves, exact replicas of Disney's copyrighted character `Tinkerbell.'" (Proposed Order for Preliminary Injunction submitted by plaintiffs' counsel on or about November 22, 2000; emphasis added.) Plaintiffs make this blunderbuss request for extraordinary relief despite the fact that The Disney Store and affiliated Disney entities have sold products bearing Disney's depiction of the fairy image, and, at times, the name of the fictional character Tinker Bell since Disney released the animated movie Peter Pan in 1953. Prior to moving for a preliminary injunction, neither the plaintiffs nor their predecessors ever objected to the use by The Disney Store or any Disney company of the image of Tinker Bell on any products sold at Disney theme parks, hotels and stores. Moreover, plaintiffs waited more than one year after concluding that The Disney Store was infringing their registered trademark and six months after sending to The Walt Disney Company's Chief Executive Officer a cease and desist letter (which concerned only the use of the character name) before asking for relief that would remove from any product but figurines in over 500 Disney Stores not only the word Tinkerbell, but also the image of the Disney character.

The fact that The Disney Store has sold products and apparel bearing the image and, at times, name of the fictional character for a number of years without objection from plaintiffs and their predecessors, coupled with the plaintiffs' delay in seeking a preliminary injunction, preclude a finding of immediate irreparable harm necessary to warrant the extraordinary relief sought here. Moreover, plaintiffs have not demonstrated a likelihood of prevailing on their request for expansive relief concerning the use of the Disney depiction of Tinker Bell, by which The Disney Store seeks to exploit customer affinity for the Disney character. Accordingly, the New Tinkerbell plaintiffs will not be afforded a preliminary injunction as to the registered trademark "Tinkerbell®."

Plaintiffs also are not entitled to a preliminary injunction with respect to bottles of perfume labeled "Heaven Scent" that were included in a boxed package of children's perfumes sold by The Disney Store. The evidence shows that The Disney Store did not promote the labeled bottle in question and that, in any event, it has discontinued its sale. Accordingly, plaintiffs' motion for a preliminary injunction will be denied.

I. FINDINGS OF FACT

A. The Tinkerbell® Trademark

Tinker Bell originated as a character in the 1911 play and 1921 novel titled "Peter and Wendy" authored and copyrighted by Sir James Matthew Barrie. After Barrie's death, the Barrie copyright to the "Peter Pan" works was left to the Hospital for Sick Children of London, England.

In 1952, Myron Greenfield founded Tom Fields (UK) Ltd. for the purpose of selling and manufacturing a line of children's cosmetics and toiletries. After learning the trademark rights to "Tinker Bell" were available, Tom Fields paid an honorarium to the Hospital for Sick Children and began to use the trademark "Tinkerbell" in connection with its children's cosmetics product line. Tom Field's earliest products included: lip pomade in a folding box with a mirror, powder mitt, toilet water, hand lotion, bubble bath, dressing table, soap, cologne, bath powder, jewelry box (which contained cologne, lotion, bubble bath and powder mitt) and a traveling suitcase (which contained lipstick, cologne, and soap).

Tom Fields filed its registration of the Tinkerbell® mark with the United States Patent and Trademark Office (USPTO) on March 27, 1952. The trademark was for use on Class 3 products — toilet water, bubbling bath preparation, hand lotion and bath powder. The registration was accepted on October 12, 1954. Tom Fields (and subsequently MEM) acquired additional registrations of the Tinkerbell® mark for a number of goods, including: soap, lip pomade, nail polish, nail polish remover, cologne, bath oil, body lotion, body powder, blue jeans, bath oil, dusting powder, shampoo, tote bags, cosmetic cases, jewelry (not made of precious metal), sunglasses, stationery, wallets, purses, pillow and pajama bags, umbrellas, sheets and pillow cases, barrettes, ponytail holders, apparel, dolls, combs, brushes, and wound dressings. For each registration, Fields filed the appropriate affidavits with the USPTO to verify its continued use pursuant to 15 U.S.C. § 1058 and to register it as an incontestable mark under 15 U.S.C. § 1605.

In 1967, MEM Company Inc. (MEM) acquired the rights and associated goodwill in the Tinkerbell® trademark. MEM assigned some of the rights in the trademark to Martin Freres Inc. and English Leather, Inc., wholly-owned subsidiaries of MEM. Myron and Martin Greenfield continued to operate Tom Fields under MEM's ownership until 1981 and 1996, respectively.

In 1996, Renaissance Cosmetics, Inc., and its wholly-owned subsidiary Dana Perfume Corporation acquired MEM. The acquisition included the rights in the trademark Tinkerbell®. On June 2, 1999, Renaissance filed petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States District Court for the District of Delaware. The Bankruptcy Court subsequently signed an order approving the auctioning of the Renaissance assets (including trademarks and other intellectual property). On June 28, 1999, non-party DPC Acquisition Corporation and Renaissance entered into an Asset Purchase Agreement by which DPC purchased certain assets of Renaissance, including all property, title and interest in the trademark Tinkerbell®. After acquiring the Renaissance assets, DPC formed New Tinkerbell as a DPC subsidiary to receive assets of Renaissance's Tinkerbell subsidiary. New Tinkerbell was to conduct the business of selling, inter alia, children's products and apparel bearing the Tinkerbell® trademark.

B. Product Sales under the Tinkerbell® Trademark

Starting in the 1960's, the Tinkerbell® mark was accompanied by a fairy image, which has changed dramatically over the years. The original figure was a black and white image of a fairy in a dress with wings. In the 1970's, the image, drawn in black and white, resembled a little girl in a dress, wearing a bonnet and carrying flowers. The image again was transformed in the early eighties, when the fairy was depicted in color with long blonde hair, a flowing red dress, wings and carrying a wand, or resting in a cloud in a red jump-suit. In the late eighties and early nineties, the image was further modified to a fairy figure wearing a long blue dress with wings and a wand; the depictions of the fairy included both an African American fairy with dreadlocks and a crown, and a blonde-hair, blue-eyed fairy with a garland of flowers in her hair. The current fairy image was created in 1997. That image, which appears on the plaintiffs' packaging, is a fairy figure with blonde hair in a ponytail, blue eyes, a short blue dress, wings, slippers, and carrying a wand. The latest version of the image used by plaintiffs bears a striking resemblance to the depiction of Tinker Bell in the animated movie Peter Pan.*fn1 New Tinkerbell's fairy image is not registered as a trademark. Until the late nineties, plaintiffs packaged their products in pink packaging. Today, the plaintiffs use both pink and purple packaging. The name Tinkerbell appears predominantly on the top of the package, accompanied by a small depiction of the fairy image.

The Tinkerbell® products have been marketed and sold at supermarkets, toy stores, national retail chains, department stores and drug stores. The products have also been sold at military exchanges and at amusement parks. In this regard, Disney purchased products from plaintiffs' predecessors for resale at Disney's theme parks and hotels. Neither plaintiffs nor their predecessors, however, sold any products for resale by The Disney Store, and The Disney Store never displayed products of the plaintiffs or their predecessors bearing the Tinkerbell® mark. New Tinkerbell and its predecessors have traditionally advertised their Tinkerbell® line of products in women's and parenting magazines (e.g., McCall's, Redbook, Good Housekeeping, Parenting), as well as trade magazines. On a few occasions, plaintiffs' predecessors advertised in Disney publications.

Sales figures of the Tinkerbell® product line steadily increased from 1952 to 1988, when sales reached a peak of $18 million. Since 1988, sales of plaintiffs' Tinkerbell product line have declined significantly, to the point that sales in 1999 were only $1.5 million.*fn2

C. The Heaven Sent® Trademark

Before registering the mark in 1987, Rubenstein had granted an exclusive license to Allegheny Pharnaco Corporation in 1980 to use the trademark in connection with the design, marketing, advertising and sale of perfume and related products. Allegheny granted a sublicense to MEM to use the trademark in 1982.

As discussed above, MEM was acquired by Renaissance and its wholly owned subsidiary Dana, which was in turn acquired by DPC. Dana was renamed New Dana Perfumes, and the exclusive license for Heaven Sent® was assigned to New Dana. On July 27, 2000, Parbel of Florida (the current trademark owner), Alleghany (the licensor) and New Dana (the licensee) entered into an agreement which permitted New Dana to enforce the Heaven Sent trademark against Disney. New Dana and its predecessors have sold perfume and related products bearing the Heaven Sent® trademark since 1992. Heaven Sent® perfume is marketed to an adult/pre-adult audience.

The Heaven Sent® products have been sold nationally in supermarkets and drug stores. Advertising has included advertisements in trade publications, brochures in local papers and promotional advertising in store circulars.

D. The Disney Store and Disney's Tinker Bell Character

The Disney Store, a wholly-owned subsidiary of Disney Enterprises Inc., was founded in 1987. The original store opened in Glendale, California. Today, there are approximately 500 Disney Stores in the United States and 740 stores worldwide. The Disney Store sells products bearing the image, and sometimes the name, of characters from Disney motion pictures or other Disney productions. Consumers shop at The Disney Store for the purpose of purchasing items which bear a particular character's name or image. All character-affiliated products sold at The Disney Store bear an image or likeness of a Disney character. In this manner, The Disney Store exploits the affinity its customers have with characters depicted in Disney productions.

E. Disney's Tinker Bell character

On February 5, 1953, Walt Disney Productions released the motion picture "Peter Pan" based upon the Barrie play. In the movie, Disney depicted the character "Tinker Bell" as a sprite or pixie.

Disney's Tinker Bell character is depicted as a fairy-like figure with blonde-hair in a ponytail, blue eyes, wearing a green dress, green slippers and wings, and sometimes carrying a wand. (See DX-5 attached hereto as part of Appendix "A.") The Tinker Bell image from the Peter Pan movie is copyrighted. Disney typically spells the character's name with two words: Tinker Bell (rather than Tinkerbell).

At about the time the Peter Pan movie was released in 1953, Walt Disney Productions began using the name and image of Tinker Bell in conjunction with various products. Those products included, but were not limited to, children's costumes, dolls, shoes, scarfs, jewelry, children's clothing, purses and shoulder bags. Most of the products used only the copyrighted image of the Tinker Bell character. The Tinker Bell image was one of several character images on many of the products. Some products, such as the scarf and shoulder bag, included both the image of the Disney character and the name Tinker Bell. Advertisements for these products were placed in national newspapers and magazines.

Besides the two theme parks, Disney has marketed Tinker Bell character items since at least 1993 through the Disney Catalog. Tinker Bell items which have been advertised in the catalog have included, but are not limited to, costumes (199394, 2000), wands and pixie dust (1993), sculpture (1993), figurines (1993 — 1995, 2000), children's clothing (1994, 2000), adult clothing (2000), dolls (1994), swimsuits (1994), jewelry (1994, 2000), watches (1994, 1998, 2000), note cards (1994), sericels (1994, 1998, 2000), and collector plates (1994, 1995, 1998, 2000).*fn3

Tinker Bell products have been sold at The Disney Store since it first opened in 1987. During 1990-1995, the following were some of the items bearing the Disney Tinker Bell image that were available at the Disney Store: toys, figurines, T-shirts, souvenir items, dolls, dress-up kits and snow globes. Some of these items, including the figurines, dolls and dress-up kits, carried the name "Tinker Bell" or "Tink," either on the product or the packaging. From 1995 through 1998, the Disney Store offered the following additional items in their Tinker Bell line: sericels, plates, stationery, sweatshirts, adult apparel, swimwear, sleepwear, watches and costumes. It is undisputed that in 1998 and 1999 The Disney Store sold costumes, wands, shoes, crowns, swimsuits and T-shirts bearing the Disney image of Tinker Bell. (Defendant's Proposed Findings of Fact at ¶ 19.)*fn4 In 1999 and 2000, products sold at the Disney Store depicting the image of Tinker Bell and/or the name Tink, Tinkerbell or Tinker Bell, included: postcards, ornaments, pins, frames, jewelry, diaries, stamping kits, pens, stickers, watches, children's clothing, adult clothing, shoes, costumes, bubble glasses, towels, candles, snow globes, handbags, backpacks, swimsuits, and nail polish.

For The Disney Store's fiscal year ending September 30, 2000, products bearing Disney's depiction of the character Tinker Bell exceeded $16 million. While sales figures by character for the fiscal year ending September 30, 1999 are incomplete, it appears that The Disney Store sold at least $6 million in Tinker Bell products, and as much as $16 million. (Cox Supplemental Decl.)*fn5

The Disney Store introduced its preteen Tinker Bell product line in July of 2000. The product line included T-shirts, stationery items, bracelets, clothing, beads, backpacks, handbags and pre-teen cosmetics (such as lip gloss and nail polish). This product line, especially the cosmetics and personal grooming products, parallel the New Tinkerbell offerings. In fiscal year 1999, before the introduction of the preteen line, The Disney Store carried the following product types with the Tinker Bell character image or both her image and name: frames, ornaments, key rings, pins, batons, jewelry, diaries, ...


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