A great manipulator fails in its Lanham Act claims

Toni & Guy (USA) Limited v. Nature's Therapy, Inc., 2006 WL 1153354 (S.D.N.Y.)

Plaintiff, a hair care company, uses the mark TIGI generally and “Catwalk Root Boost” mousse and “Bed Head Manipulator” pomade on two of its products. Defendant attempted to create lower cost versions of those products. Catwalk is packaged in an 8-ounce metal canister with a white top and a translucent cap, as is defendant’s Professionäl Lift and Texture Root Boost, though both prominently display their distinctive marks. Below the house mark and “Lift & Texture Root Boost,” defendant’s package states, “TIGI’s Catwalk Root Boost is a competing product,” and there’s a tiny disclaimer on the back of the canister. Defendant took similar steps with its Professionäl Extreme Molding Crème.

Along with its trademark claims, plaintiff asserted false advertising based on the “competing product” claim. As part of the trademark claims, plaintiff argued unconvincingly that defendant’s use wasn’t comparative advertising because it didn’t identify any measurable attributes of the parties’ products and that comparative advertising didn’t allow use of a competing brand name directly on packaging or on the product itself. The court found confusion unlikely based on a thorough analysis of the usual factors.

One of the factors allegedly distinguishing the products was that plaintiff attempts to limit distribution to salons, though its product does “occasionally” show up in pharmacies and stores like Wal-Mart. I’ve seen plaintiff’s products in lots of places, including the CVS a block away; I would have considered them direct competitors using overlapping channels of trade. For whatever reason, distribution contracts in the hair care product market don’t seem well-enforced at all; salon products end up everywhere, and not just in pharmacies in New York City.

The court also found that the level of care likely to be exercised by consumers was high, since they pay attention to the products they apply to their hair. It’s good to see a court recognizing a high level of care with respect to a relatively cheap purchase, since it’s not always the money that matters. The court did misstep, though, by relying on the greater sophistication of plaintiff’s consumers, who buy more expensive products in salons; the key is defendant’s consumers, who could easily be aware of plaintiff’s product (and, in other circumstances, might have perceived a grocery-store version of a salon product as a product line extension).

Plaintiff’s dilution claim fared similarly, despite its argument that only true and fair comparative advertising is exempt from dilution liability. Under Second Circuit precedent, comparative advertising does not dilute. I’m inclined to agree with Judge Kozinski’s reasoning in Mattel v. MCA that, like parody, comparative advertising does dilute (whatever that means) but is excepted from liability on policy grounds. Either way, defendant wins.

Plaintiff argued that defendant’s comparative advertising is false because defendant argued to the court that the products were not in direct competitive proximity. The court found the claim not literally false because the products are “somewhat similar and are sometimes sold in the same stores.” Without evidence that consumers were misled, plaintiff couldn’t prevail.