Kaplan, Inc. v. Yun, 16 F.Supp. 3d 341(S.D. N.Y. 2014)

Kaplan, Inc. and Tracy Yun both offered graduate test preparation services under trademarks that incorporated the term "Manhattan;" Kaplan operated under MANHATTAN PREP, and Yun operated under MANHATTAN ELITE PREP. Prior to initiating its action, Kaplan had filed an application with the U.S. Patent and Trademark Office (USPTO) in 2012 to register its MANHATTAN PREP mark on an "intent to use" basis. After initially refusing to register the mark, the USPTO ultimately reversed its refusal approved MANHATTAN PREP for publication in October 2013. 

Three months after it filed its application with the USPTO, Kaplan wrote to Yun, demanding that she and her company cease infringing the MANHATTAN PREP mark through the use of the MANHATTAN ELITE PREP mark. Yun's response claimed superior trademark rights to Kaplan, as well as the invalidity of the MANHATTAN PREP mark. Despite efforts to reach a settlement, Kaplan filed its action in February 2013, alleging, inter alia, trademark infringement under the Lanham Act. Kaplan claimed senior rights in its mark, based on seven months of use of MANHATTAN PREP prior to Yun's first use of MANHATTAN ELITE PREP, as well as extensive marketing and investment in the MANHATTAN PREP mark. 

Yun moved to dismiss Kaplan's action for failure to state a claim under the Lanham Act. To state a claim of trademark infringement under the Lanham Act, a party must show that it has a distinctive mark entitled to protection, and that use of the allegedly infringing mark is likely to cause confusion. Yun's motion to dismiss attacked Kaplan's assertion that MANHATTAN PREP is a distinctive mark. Yun contended that MANHATTAN PREP was, in fact, merely descriptive, and therefore not entitled to Lanham Act protection. 

The parties had agreed that MANHATTAN PREP is a descriptive name, and it could only be a protectable trademark if it had acquired secondary meaning in the marketplace. Yun contended, inter alia, that Kaplan had alleged seven months of use of MANHATTAN PREP prior to Yun's first use of MANHATTAN ELITE PREP. This amount of time, Yun argued, was insufficient for MANHATTAN PREP to have acquired distinctiveness in the marketplace. Therefore, the MANHATTAN PREP mark could not be distinctive and entitled to protection under the Lanham Act. 

The Court disagreed with Yun's argument and denied summary judgment as to Kaplan's Lanham Act infringement claim. To the Court, the length of time necessary for a mark to acquire distinctiveness is a question of fact that cannot be determined at the summary judgment stage. The Court opined: "[T]here is no magic time span that confers secondary meaning. It is not implausible for a mark to acquire secondary meaning within months in certain peculiar and extraordinary factual circumstances." 

Here, the Court held out the possibility that "extraordinary factual circumstances" could have conferred secondary meaning on MANHATTAN PREP in a very short time. Even though it would still ultimately fall on Kaplan to demonstrate such circumstances were indeed present, Kaplan's action survived Yun's motion to dismiss on the strength of seven months of use.