Perfect Pearl Co. v. Majestic Pearl & Stone, Inc.

Prior use of a mark in commerce is sufficient to earn trademark rights and trumps those rights in the marks that were later obtained by another by registering the marks.

Opinion (Engelmayer): Perfect Pearl Co. (“Perfect”) claimed unfair competition and false advertising against Majestic Pearl & Stone, Inc. (“Majestic”), under the Lanham Act and New York common law. Plaintiff alleged that Majestic infringed on its exclusive right to use the trademarks MAJESTIC and MAJESTIC PEARL. Both Perfect and Majestic were in the business of selling jewelry, primarily pearl jewelry. Perfect used the name Majestic Pearl Company and identified itself as representing “Majestic Pearl.” It entered the United States market before Majestic; however, Majestic obtained a trademark registration with the PTO for MAJESTIC. Before commencement of the lawsuit, Majestic’s trademark had expired, but it continued to represent itself as the valid holder of the mark. The court found that Perfect used the MAJESTIC mark in commerce before Majestic, and that Perfect’s prior use in commerce was sufficient to give it a right to the marks. The court declared that Perfect’s marks were protectable since the marks were suggestive, and therefore inherently distinctive. The Court then concluded that Majestic’s use of the marks in connection with pearl jewelry created a likelihood of confusion, constituting trademark infringement. The court also concluded that Perfect adequately proved that Majestic’s promotion of the goods amounted to false advertisement. The New York common law claim of trademark infringement mirrored the Lanham Act, but diverged for unfair competition requiring a showing of bad faith by the infringing party which was not established. Summary judgement was GRANTED for Perfect.