42 N.Y.2d 538 (1977)

New York’s anti-dilution statute (General Business Law § 368-d) protects against the weakening of a distinctive trade name or mark, even without competition or confusion, but only if the name is truly distinctive or has acquired a secondary meaning.

Summary

Allied Maintenance Corp. sued Allied Mechanical Trades, Inc., seeking an injunction to prevent the latter from using “Allied” in its name, alleging trade name dilution under New York’s anti-dilution statute. The trial court granted the injunction, but the Appellate Division reversed, finding no competition or confusion. The New York Court of Appeals affirmed the Appellate Division, holding that while the anti-dilution statute protects against the gradual weakening of a distinctive trade name, it applies only to names that are either inherently distinctive or have acquired a secondary meaning. Because “Allied” was a common, generic term without secondary meaning in this context, it was not entitled to protection under the statute.

Facts

Allied Maintenance Corporation, in business since 1888, provided cleaning and maintenance services for large office buildings. Allied Mechanical Trades, Inc., formed in 1968, installed and repaired heating, ventilating, and air-conditioning equipment. Allied Maintenance alleged that Allied Mechanical performed similar maintenance services and sought to enjoin them from using “Allied” in their name.

Procedural History

The trial court granted an injunction, finding actual and potential competition and a likelihood of confusion. The Appellate Division reversed, finding an absence of competition or confusion. The New York Court of Appeals granted leave to appeal.

Issue(s)

Whether the trade name “Allied Maintenance” is entitled to protection under New York General Business Law § 368-d, the anti-dilution statute, despite the absence of competition or confusion.

Holding

No, because the trade name “Allied Maintenance” is a weak, generic name that has not acquired a secondary meaning, and therefore does not qualify for protection under the anti-dilution statute.

Court’s Reasoning

The court acknowledged the purpose of New York’s anti-dilution statute: to prevent the erosion of a trade-mark’s selling power through unauthorized use on dissimilar products. The statute allows injunctions even without competition or confusion. However, the court emphasized that the statute requires a “likelihood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name.”

The court stated that to merit protection under the statute, a plaintiff must possess a strong mark—one with a distinctive quality or a secondary meaning. A secondary meaning is established when, through exclusive use and advertising, a name becomes so associated with an entity that it identifies the goods sold by that entity and distinguishes them from others.

The court found “Allied” to be a weak, generic trade name. It is a common word, and the plaintiff failed to prove that it had acquired a secondary meaning associating it exclusively with their services. The court noted the numerous other businesses in the New York City area using “Allied” in their names. The court emphasized that only truly distinctive names or those with secondary meaning should be protected by the anti-dilution statute. As the court stated, “Although section 368-d should be interpreted literally to effectuate its intended purpose—protection against dilution—only those trade names which are truly of distinctive quality or which have acquired a secondary meaning in the mind of the public should be entitled to protection under the anti-dilution statute. “Allied Maintenance” cannot be said to have attained this stature.”