Summary
The Seventh Circuit addressed trademark infringement and unfair competition claims arising from defendants’ recasing of Bulova watch movements into non-Bulova cases and marketing the resulting watches. The court held that the recasing created a new and different product and that defendants could not retain the Bulova trademark on the watch face, while permitting qualified references to the Bulova movement in advertising with full disclosures. The court also held that damages could be pursued for conduct occurring after service of the complaint, reversed the judgment, and remanded for appropriate injunctive relief and further proceedings.
Topics
Practice areas
Questions Presented
- Whether defendants' removal of Bulova watch movements from Bulova cases and installation of those movements in non-Bulova cases created a new product such that defendants could not retain the Bulova trademark on the watch dial without causing deception.
- Whether defendants could use the Bulova trademark in catalogs, display-case legends, or other advertising or product identification, and what disclosures were required to prevent public deception.
- Whether the district court properly limited damages to acts occurring after entry of the decree or whether Bulova could pursue damages for the period after defendants were served with the complaint.
Holdings
- The recasing operation created a new and different watch, and defendants must be completely enjoined from using the Bulova trademark on the recased watch itself. Adding only the word "Movement" was insufficient to prevent deception.
- Defendants could make a collateral reference to the source of the movement, but any use of the Bulova trademark in connection with the product required a full and prominent disclosure that defendants removed the Bulova movement from a Bulova watch, recased it in a non-Bulova case, were not connected with Bulova, and alone guaranteed the resulting watch.
- The district court erred by limiting damages to conduct occurring after entry of the decree. Bulova was entitled to proceed to trial on damages for the period beginning when defendants were served with the complaint, but not for acts occurring before service of the complaint.
Key quotations
“The watch is no longer a Bulova watch. It is a new and different “watch” albeit one containing a “movement” manufactured by Bulova.” (23)
“A complete and full disclosure is required.” (24)
“It was error for the District Court to limit plaintiff’s claim to post-decree damages. It is entitled to proceed to trial on its claim of damages limited only to the post-complaint period.” (24)
Factual background
Bulova manufactured and sold watches bearing its registered "Bulova" trademark and had invested substantially in advertising and establishing public recognition of that mark. Defendants purchased Bulova watches, removed the movements from their original Bulova cases, installed them in diamond-decorated cases manufactured by another company, and sold the resulting watches under the name "Treasure Mates." Defendants' catalogs and packaging prominently used the Bulova name while giving comparatively inconspicuous identification to Allerton, and some purchasers sent the recased watches to Bulova for repair, indicating source confusion.
Procedural history
Bulova sued Allerton and A. Hirsch in the United States District Court for the Northern District of Illinois for trademark infringement and unfair competition arising from defendants' removal of Bulova watch movements from Bulova cases and installation of those movements in defendants' diamond-decorated cases. The district court found infringement and unfair competition, granted injunctive relief, and denied damages for pre-decree conduct. Both parties appealed: defendants challenged the requirement that the word "Movement" be added to the Bulova mark on the watch dial, while Bulova challenged the adequacy of the injunction and the limitation of damages.
Remand instructions
The district court was directed to enter an order granting injunctive relief consistent with the appellate opinion, completely prohibiting use of the Bulova trademark on the recased watches; permitting use in catalogs, display-case legends, or other advertising only with the specified full disclosures and greater prominence for Allerton; denying damages only for acts before service of the complaint; and proceeding to trial on damages for the post-complaint period. Defendants were ordered to pay the district court costs, and Bulova received costs in both appeals.