Reference no: EM131674982

Question: TOYS "R" US, INC. V. CANARSIE KIDDIE SHOP, INC. DISTRICT COURT OF THE EASTERN DISTRICT OF NEW YORK

FACTS: In 1961, plaintiff Toys "R" Us, Inc., obtained a trademark for "Toys ‘R' Us" and aggressively advertised its products, children's toys and clothing, in stores across the country. In the late 1970s, defendant Canarsie Kiddie Shop opened two clothing shops called "Kids ‘r' Us" within 2 miles of a Toys "R" Us shop. The defendant never tried to register its name. Toys "R" Us sued for trademark infringement in federal district court.

ISSUE: Does "Kids ‘r' Us" infringe on the "Toys ‘R' Us" mark?

REASONING: To determine the likelihood of confusion associated with the defendant's mark, the court considered these factors:

• Strength of the senior user's mark: A mark can fall into one of four general categories, which, in order of ascending strength, are (1) generic (is entitled to no protection); (2) descriptive (has a secondary meaning and informs public about uses of product); (3) suggestive (suggests qualities of product but requires imagination); and (4) arbitrary or fanciful (does not describe the qualities of the product). The plaintiff's mark has a strong secondary meaning as a source of children's products, so the court determines the mark has medium strength. But it falls short of the arbitrary or fanciful protection.

• Degree of similarity between the two marks: The key question is whether consumers have the impression that purchasing from the junior user is purchasing from the senior user. Both parties use the phrase "R Us." However, the plaintiff uses an inverted capitalized "R," whereas the defendant uses a noninverted lowercase "r." The plaintiff uses "Toys" while the defendant uses "Kids." The plaintiff's letter is usually multicolored.

• Proximity of the products: Both the plaintiff and the defendant sell children's clothing and are direct competitors.

• The likelihood that plaintiff will bridge the gap: First, the senior user will expand sales efforts to compete with the junior user. Second, consumers will assume that both parties are related companies.

• Evidence of actual confusion: When there is proof that consumers are actually confused by the use of the name, the senior user has a stronger case.

• Junior user's good faith: The owner of Kids ‘r' Us asserted that he did not recall whether he was aware of the plaintiff's mark. The court does not believe him and concludes that the defendant adopted the "Kids ‘r' Us" mark with knowledge of the plaintiff's mark.

• Quality of the junior user's product: The court is much more concerned about the possible violation if the quality of the clothing is poor because such clothing would then refl ect poorly on the senior user.

• Sophistication of the purchasers: Because children's clothing is not a major expenditure, customers will not exercise the same degree of care in evaluating the clothes.

• Junior user's goodwill: The junior user did not expend a lot of money advertising and promoting its own name. Thus, the defendant doesn't have a strong equitable interest in retaining its name.

DECISION AND REMEDY: Judgment for the plaintiff. The defendant's use of its mark creates the likelihood of confusion and constitutes trademark infringement.

SIGNIFICANCE OF THE CASE: This case clarifies the factors to consider in a trademark infringement case.

CRITICAL THINKING: How does this case depend to a large extent on the definitions of a few particular terms? How good are the definitions used? What standard are you using to determine whether the definitions are good?

ETHICAL DECISION MAKING: If you were the owner of Canarsie Kiddie Shop, Inc., how would your decision to refer to your store as "Kids ‘r' Us" change if you were to act in accordance with the Golden Rule? What values are in conflict when considering the decisions of the owner of Canarsie Kiddie Shop, Inc., and of one who follows the Golden Rule?