McDonald's Corp. v. DRUCK AND GERNER, DDS., PC

MEMORANDUM-DECISION AND ORDER

INTRODUCTION

From October 19 through October 21, 1992, this court presided over the non-jury trial in the above-captioned case in the United States Courthouse in Albany, New York. This Memorandum-Decision constitutes the court’s findings of fact and conclusions of law, in accordance with Fed.R.Civ.Pro. 52.

BACKGROUND 2

Plaintiff McDonald’s Corporation (“Plaintiff’ or “McDonald’s”) is a Delaware corporation whose principal place of business is in Oak Brook, Illinois. McDonald’s and its franchisees operate over 8,000 restaurants in the United States, over 400 of which are located in New York State. McDonald’s maintains a regional office in Latham, New York (the “Latham office”), located approximately 150 miles from Plattsburgh, New York.

Defendant Druck and Gerner, D.D.S., P.C., d/b/a McDental (“McDental” or “Defendant”) 3 is a New York professional corporation located in Plattsburgh, New York that *1129 provides dental services under the name “MeDental.” Drs. Druck and Gerner named their corporation “MeDental,” and have operated under this name since the business opened on March 20, 1981 in the Pyramid Mall in Plattsburgh. At the time that they opened, Drs. Druck and Gerner placed an orange illuminated sign with the name “MeDental” above the front of the office, and placed a fee schedule sign in the window. Shortly after opening in 1981, Defendant obtained a state service mark for the name “MeDental” from the State of New York. 4 Defendant also applied to register the name “MeDental” with the United States Patent and Trademark Office [hereinafter “USP-TO”] in 1981, but the application process was not completed at that time and Defendant did not receive a federal trademark for “MeDental.” 5

In 1985, Defendant opened a second “MeDental” office in South Burlington, Vermont. As with the Plattsburgh office, Defendant contends that this office was “heavily advertised,” and, like the Plattsburgh office, was similarly successful. However, apparently sometime subsequent to 1987, Defendant changed the name of the South Burlington office, and the business was sold in 1989. See Plaintiffs Statement of Contested Facts at 12, ¶2. Plaintiff alleges that Defendant changed the name after receiving its first protest letters. See id.

McDonald’s alleges that it first learned of MeDental in 1987, and that it quickly communicated its concern of Defendant’s use of its name by way of protest letters sent to Defendant. The parties communicated via correspondence regarding the use of the name MeDental, and engaged in settlement discussions, but were unable to reach an agreement.

Having been unsuccessful in its attempts to persuade Defendant to cease using the name “MeDental,” McDonald’s initiated this lawsuit on August 30, 1990, alleging trademark infringement pursuant to 15 U.S.C. §§ 1114, 1121 and 1125, dilution of business pursuant to N.Y.Gen.Bus.Law § 368-d and unfair competition under New York common law. Plaintiff seeks a permanent injunction against all further use of “MeDental,” all costs associated with this action (including the cost of its consumer survey), and reasonable attorney’s fees.

Defendant claims, first of all, that any infringement alleged to have occurred would have had to commence in 1981 when Defendant began using the name “MeDental,” and that Plaintiff had notice of such use. Defendant then asserts that in 1981 Plaintiffs family of “Me” marks combined with generic words was not substantial enough to entitle it to enjoin the use of “MeDental;” that even if it were, there is no likelihood of confusion between Plaintiff and Defendant; and, since Plaintiff had notice of the use of MeDental in 1981, this action is barred under the doctrine of laches.

Plaintiff presented a number of exhibits, and the following witnesses during the trial:

Roy Bergold, Sr. Vice-President, Marketing of McDonald’s Corp.;

*1130 Philip Johnson, Pres., Leo Shapiro & Associates, who conducted a consumer survey on McDonald’s behalf;

Dr. William J. Gromie, who is associated with Ronald McDonald charities;

John R. Horwitz, Assistant General Counsel, McDonald’s Corp.; and Dr. Jeffrey Druck, Partner in and Vice-President of Defendant.

The defendant likewise introduced a number of exhibits, and called the following witnesses:

Dr. Jeffrey Druck;

Dr. George Najim, a dentist from Essex County;

Paul E. Pontiff, an attorney from Glens Falls, New York;

Dr. Carl T. Gerner, Partner in and President of Defendant.

The issues in this case as framed by the parties’ positions in their briefs and/or the trial testimony include the following: (1) whether Plaintiff owns trademark rights in a family of marks featuring the prefix “Me” connected to generic non-food terms, (2) whether there is any likelihood that ordinary consumers are likely to be confused as to the source of Defendant’s services, (3) whether Defendant’s use of its name will dilute Plaintiffs business (4) whether Defendant is entitled to an affirmative defense of laches, and (5) whether defendant’s default in the USP-TO proceeding precludes defendant from asserting an affirmative defense of laches in the instant case under the doctrine of claims preclusion. Of these issues, the court finds it necessary to address only the first, second, and fourth.

DISCUSSION

I. TRADEMARK INFRINGEMENT CLAIMS

15 U.S.C. § 1114 states, in pertinent part: (1) Any person who shall, without the consent of the registrant—

(a) use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in

connection with which such use is likely to cause confusion, or to cause mistake, or to deceive ...

shall be liable in a civil action by the registrant for the remedies hereinafter provided....

15 U.S.C.A. § 1114 (West 1963).

And, 15 U.S.C. § 1125(a) states, in pertinent part:

(a) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which — •

(1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person ... shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C.A. § 1125 (West Supp.1992).

The first step in resolving this case is determining whether Plaintiff possesses a trademark entitled to protection; if this is established, the court must then determine the “likelihood of confusion” with Plaintiffs marks that will result from Defendant’s use of its mark. See McDonald’s Corp., Inc. v. McBagel’s, Inc., 649 F.Supp. 1268, 1272 (S.D.N.Y.1986).

A. FAMILY OF MARKS

McDonald’s has used in commerce, and obtained federal registrations for, a number of marks distinguished by the “Me” formative and is the exclusive owner of numerous registrations issued by the USPTO. These registrations encompass both food-related (e.g., “McDonuts”) and non-food/generic (“generic”) (e.g., “McD”, an all-purpose cleaner) items. Underlying its trademark infringement claims is Plaintiffs contention that it possessed at the time of McDental’s inception, and continues to possess, a family of

*1131 “Me” marks such that Defendant’s use of “McDental” is likely to cause confusion among consumers. This contention has been addressed by other courts in litigation involving this plaintiff. See, e.g., J & J Snack Foods Corp. v. McDonald’s Corporation, 932 F.2d 1460 (Fed.Cir.1991) (in affirming USP-TO ruling that denied trademark registration to snacks food company, court held that McDonald’s possesses a family of marks wherein the prefix “Me” is used with generic food names); McDonald’s Corp. v. McBagel’s Inc., 649 F.Supp. 1268, 1272 (S.D.N.Y.1986) (court held that McDonald’s owned a family of marks using “Me” in combination with a generic food item).

The McBagel’s court, which granted McDonald’s request to enjoin the defendant’s use of the name “McBagel’s” for its restaurant, stated that, “[wjhile it does not hold a registered mark in ‘Me’, plaintiff may claim protection for this prefix as a common component of a ‘family of marks.’ ” Id. at 1272 (reference omitted). And, the McBagel’s court noted that, “[t]he existence vel non of a family of marks is a question of fact based on the distinctiveness of the common formative component and other factors, including the extent of the family’s use, advertising, promotion, and its inclusion in a number of registered and unregistered marks owned by a single party.” Id. On an appeal from the USPTO, the Federal Circuit Court of Appeals defined a “family of marks” as

a group of marks having a recognizable common characteristic, wherein the marks are composed and used in such a way that the public associates not only the individual marks, but the common characteristic of the family, with the trademark owner. Simply using a series of similar marks does not of itself establish the existence of a family. There must be a recognition among the purchasing public that the common characteristic is indicative of a common origin of the goods.

J & J Snack Foods at 1462.

Evidence produced at trial and recent caselaw clearly establish that Plaintiff possesses a family of marks comprised of the prefix “Me” combined with food items. However, in the present case, Plaintiff must show that it has a protectable family of marks using the “Me” prefix such that the use of “McDental” would be confused with Plaintiffs family of marks. As the McBagel’s court explained:

Under the Lanham Act, Section 32(l)(a), 15 USC § 1114(l)(a); as well as Section 43(a), 15 USC § 1125(a), defendants are liable for infringement if their use of the name [McDental] is likely “to cause confusion, or to cause mistake or to deceive” typical consumers into believing some sponsorship, association, affiliation, connection or endorsement exists between McDonald’s and defendants.

McBagel’s, 649 F.Supp. at 1273.

1. Family of Marks

Before the court may assess Plaintiffs family of marks vis-a-vis the name McDental, it must address an apparently somewhat unique problem not present in the other cited cases, to wit, resolving a dispute between the parties as to the proper date from which to assess the strength of Plaintiffs family of marks. Defendant argues that the court should assess the strength of Plaintiffs family of “Me” marks by a 1981 time frame, based on its contention that Plaintiff had constructive and/or actual notice of Defendant’s alleged infringement in 1981. Defendant contends that this is significant in that, while recognizing that Plaintiff may presently possess a family of marks, McDonald’s did not possess a family of marks featuring the “Me” prefix in combination with generic terms in 1981. 6 See Defendant’s Pre-Trial Memorandum at 7.

McDonald’s contends that the court should assess the strength of its “Me” family from a present standpoint, as confusion is measured in this manner, not retroactively, and that *1132 the time frame is only relevant, if at all, to the elements of notice and delay in the laches issue. Regarding the issue of laches, Plaintiff argues that it had no notice of McDental until 1987, as this was when the corporate officers with the responsibility as to trademark matters received notice of Defendant’s use of the name. Plaintiff further asserts that it took prompt action to compel Defendant to cease its use of its name. Finally, Plaintiff states that regardless of the date employed, the result is the same, as the family of marks was strong enough to justify an injunction as early as 1981 and has continued to be thereafter.

The court notes that Plaintiff is requesting equitable (injunctive) relief only; Plaintiff is not asking for any damages. As injunctive relief is prospective, it would seem illogical to suggest that the court determine “the likelihood of confusion” retroactively. The more rational approach would be to measure the strength of the “family of marks” and the “likelihood of confusion” from a present standpoint. Defendant has not provided, nor has the court located, any authority to the contrary.

In fact, as its only support for its contention that the 1981 date should be utilized, Defendant cites to a USPTO Trademark Trial and Appeal Board decision, wherein the Board considered Marion Laboratories’ opposition to Biochemical’s application for the trademark, “TOXI-PREP”, based on the strength of its family of marks featuring the “TOXI” prefix. See Manon Laboratories Inc. v. Biochemical/Diagnostics Inc., 6 U.S.P.Q.2d 1215 (1988). In addressing Marion’s contention that “it has a family of ‘TOXF marks and that purchasers are likely to believe that applicant’s ‘TOXI-PREP’ products are part of opposer’s family,” the Board stated:

It has been held that in order to establish ownership of a family of marks it must be shown by competent evidence “first, that prior to the entry into the field of the opponent’s mark, the marks containing the claimed ‘family’ feature or at least a substantial number of them, were used and promoted together by the proponent in such a matter as to create public recognition coupled with an association of common origin predicated on the ‘family’ feature; and second, that the ‘family’ feature is distinctive.... ”

Id. at 1218 (quoting Land-O-Nod Co. v. Paulison, 220 U.S.P.Q. 61, 65-66 (T.T.A.B.1983) (emphasis added)).

Defendant emphasizes the underlined portion above as support for its contention that 1981 is the date from which the court must measure the strength of Plaintiffs family of marks, as this was the year that Defendant entered the opponent’s field. As Marion involved an opposition proceeding, and not a trademark infringement action, it is not binding authority for this court. It establishes no legal precedent on this issue. More importantly, although Defendant emphasizes the highlighted language above, Defendant omitted the Board’s subsequent explanation that “prior to” means “prior to the [ ] filing date of [Biochemical’s] application [to the USPTO to register the trademark], the earliest date on which applicant may rely.” Id. (emphasis added). In other words, an oppo-ser (e.g., McDonald’s) may only measure its family of marks as of the date that the applicant (e.g., McDental) filed its application to register its trademark (“McDental”) with the USPTO — he cannot linger after receiving notice of Defendant’s application until his family’s strength increases, and then measure his family strength from that date, i.e., “entry into the market” refers to the date of a defendant’s trademark application, and not the date that the defendant began using the allegedly infringing name. 7

Thus, even if Marion’s rationale were relevant to the present case, 1989 (and not *1133 1981) would be the proper year to utilize, as this was the date that Defendant’s application for its trademark “McDental” was finally noticed for opposition.

The court therefore finds that the strength of Plaintiffs family of marks should be measured from a present standpoint, and that the dispute over the dates is relevant only to the issue of notice in the laches defense.

As stated, numerous courts have held that Plaintiff possesses a family of marks using the “Me” formative entitled to trademark protection. See, e.g., McBagel’s, 649 F.Supp. 1268; J & J Snack Foods, 932 F.2d 1460. Defendant, however, while acknowledging that “courts have held that plaintiff has a family of marks comprising [sic] of ‘Me’ followed by a generic /ood-related word,” Defendant’s Pre-Trial Memorandum at 7 (reference omitted), disputes whether Plaintiff possesses a family of marks consisting of “Me” in combination with all generic terms. See id. at 8.

As support for this contention, Defendant cites to Quality Inns International, Inc. v. McDonald’s Corp., 695 F.Supp. 198 (D.Md.1988), wherein, in determining whether to enjoin Quality Inns from using the term “McSleep Inn” for a chain of economy hotels, the court stated:

that is not to say that the prefix “Me” coupled with any generic word may be precluded by McDonald’s. Each allegedly offending use must be tested against the likelihood of confusion, for the scope of enforceability ... is measured by the scope of confusion. In this case the only examination that is made, and the only conclusions that are reached, relate to the allegedly infringing use of “McSleep Inn” by Quality International in the lodging business.

Id. at 212.

The Quality Inns court determined, nonetheless, that Plaintiff was entitled to enjoin Defendant’s use of the term “McSleep Inn”, noting “that the name McSleep is so similar to the McDonald’s family of marks that in whatever clothing it is dressed, the public will persist in perceiving some connection with McDonald’s.” Id. at 220. In arriving at this determination, the court noted that, “[t]he marks that are owned by McDonald’s and that were formulated by combining ‘Me’ and a generic word are fanciful and enjoy a meaning that associates the product immediately with McDonald’s and its products and service.” Id. at 212.

2. Likelihood of Confusion

Whether the family of marks possessed by Plaintiff is entitled to protection from Defendant’s use of “McDental” turns on “whether there exists a ‘likelihood that an appreciable number of ordinarily prudent purchasers [will] be misled, or indeed simply confused, as to the source of the goods in question.’ ” Thompson Medical Co., Inc. v. Pfizer, Inc., 753 F.2d 208, 213 (2d Cir.1985) (citation omitted). The Second Circuit has held that “such an assessment properly turns on the examination of many factors,” and that this list is not exhaustive — the court may consider others. Id. at 213-214 (citation omitted). The factors are:

[The] strength of the mark, the degree of similarity between the marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of defendant’s good faith in adopting its own mark, the quality of defendant’s product, and the sophistication of the buyers.

Id. at 213 (citing Polaroid Corp. v. Polarad Elects. Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961)). “No single Polaroid factor is pre-eminent, nor can the presence or absence of one without analysis of the others, determine the outcome of an infringement suit.” Id. at 214.

Applying the- Polaroid factors, the court finds that, as in Quality Inns, the following factors are of particular importance in assessing the likelihood of confusion in this case: the strength of the mark; the evidence of confusion; the similarity between the marks (including signage and advertising); the proximity of the markets for the products and services identified for the marks, and the likelihood that Plaintiff will bridge the gap; and the intent of Defendant in choosing its mark and its good faith in doing so. See *1134 Quality Inns, 695 F.Supp. at 217. The court will discuss each of these seriatim.

a. Strength of the mark

Although the strength of Plaintiffs family of marks has already been discussed at some length, it should be noted that Plaintiff offered at trial numerous exhibits and testimony attesting to the widespread familiarity of the public with’ Plaintiffs use of the “Me” language. Based on all of the evidence this court concludes, as others have, that Plaintiffs family of marks is a strong one. See, e.g., id. at 211-212; McBagel’s, 649 F.Supp. at 1274-1275.

b. Evidence of confusion

Plaintiff also presented survey evidence through its witness, Philip Johnson. Johnson conducted two surveys, in 1988 and 1991, both of which evidenced a likelihood of confusion resulting from Defendant’s name. Among the conclusions drawn from the surveys was a finding that some 30% of the population surveyed associated Defendant’s name with Plaintiff, the same percentage that another court found to be “substantial.” Quality Inns at 218. The court rejects Defendant’s bases for disallowing the survey evidence, and credits the survey evidence. 8

In addition to the survey evidence, Plaintiff introduced into evidence deposition testimony including that of former employees of Defendant. See Deps. of Kari Hathaway; William Miller; Holly Lamar. This testimony supports a finding that Defendant’s name caused confusion among the public as to whether Defendant was somehow associated with Plaintiff. The court finds simply incredible Dr. Druck’s testimony that he never heard anyone, even in a joking manner, associate McDental with McDonald’s prior to the commencement of this lawsuit, nor did he himself ever associate the name with that of the Plaintiff.

c. Similarity between the two marks

The Quality Inns court stated that, “it is not the logo or the word ‘sleep’ that causes the [infringement] problem; it is the use of the fancifully coined word ‘McSleep’.” Id. at 220. Likewise, the similarity between Defendant’s name and Plaintiffs various “Me” marks is obvious, and Defendant cannot hope to distinguish the two on the basis that it is the “Dental” and not the “Me” that makes the name “instantly recognized.” See id.

d. Proximity of the products and the likelihood that Plaintiff will bridge the gap

This factor involves the likelihood “that customers mistakenly will assume either that [the defendant’s goods] are somehow associated with [the plaintiffs] or are made by [the plaintiff].” Centaur Communications, Ltd. v. A/S/M Communications, Inc., 830 F.2d 1217, 1226 (2d Cir.1987) (citation omitted). Initially, it would appear that dental services and fast food have nothing in common, except for the obvious connection between eating and dentistry, and that this factor should thus be weighed in Defendant’s favor.

There was no showing at trial that the Plaintiff planned to enter the dental business per se. However, Dr. Cromie, who works with the Ronald McDonald charity houses, testified that since 1985, Plaintiff has included toothbrushes and other similar products in certain of its “Happy Meals” (a product for children). Dr. Cromie also 'testified that Plaintiff has sponsored dental cleaning via a mobile van that has travelled to different parts of the country, including parts of northern New York. Finally, Dr. Cromie added that the University of Mississippi, through a grant from Plaintiff, has been devising a dental machine for children. Although Dr. Cromie testified that Plaintiff provided the money for this machine, he could not say for certain whether the Plaintiffs name is on the machine.

The Quality Inns court found a connection between fast food and lodging, as one is *1135 logically associated with the other. See Quality Inns, 695 F.Supp. at 220-221. However, notwithstanding the fact that oral hygiene normally follows the ingestion of fast (or any other) food, this court is disinclined to find that Plaintiff, even if it begins providing dental floss with its french fries, is likely to “bridge the gap” in any appreciable manner in this case. The evidence presented by Plaintiff did not convince the court that the proximity of the products in this case, or the likelihood that Plaintiff will “bridge the gap,” i.e., enter the field of dental service, weighs in Plaintiffs favor.

e. Intent of Drs. Druck and Gerner and good faith in choosing the name “McDental”

When asked at trial why the name “McDental” was chosen for the business, Dr. Druck testified that the name was chosen because it had a “cute” sound to it, and a “quality of retentiveness.” Dr. Druck disavowed any attempt to capitalize on the Plaintiffs well-recognized name and its association with family service and quality. He claimed, in essence, that the name was chosen because a friend of his and Dr. Gerner’s, Mr. Josh Patrick, thought it was a name that they could remember — more so than other type names — that he never perceived any association with the two names, nor did he perceive anyone else having any association between the two, even in a social or humorous context.

Dr. Gerner echoed Dr. Druck’s testimony in stating that the two had chosen “McDen-tal” because they wanted a short, memorable name; that Mr. Patrick had agreed that this was the best name to use; and that Dr. Gerner never considered that there was any similarity between McDental and McDonald’s. Dr. Gerner further testified that, prior to 1987, he never heard of anyone making any association between the business and the Plaintiff. However, Dr. Gerner was quoted in a news article as saying, in essence, that the choice of the name “should have been a compliment to McDonald’s.”

Interestingly enough, Dr. Druck also testified that a local Plattsburgh newspaper published an article entitled, “McDental Being McHassled Over McTrademark,” that he “did not know” how the media learned of the lawsuit, but did admit to framing a copy of one of Plaintiffs protest letters and displaying it at the McDental office.

Contrasting with the testimony of the dentists was the testimony of Paul Pontiff, an attorney who advised Drs. Druck and Gerner regarding their name selection. In or about 1981, he had opined that “McDental” would not conflict with Plaintiff, apparently due to the dissimilar nature of the two services, although he informed Druck and Gerner that this was not a legal opinion, as he was not a patenVtrademark attorney. It is difficult not to infer that the reason why the dentists sought Mr. Pontiffs opinion in this regard was that they had indeed considered the similarity with McDonald’s in selecting their name.

The court need not deliberate long on the question of intent here. In short, the court finds that the explanations and statements of Drs. Druck and Gerner regarding the choice of the name “McDental” defy common sense and credibility; that they were fully cognizant of the name’s similarity to McDonald’s and chose to capitalize on Plaintiffs popularity. Consequently, the court easily finds that the good faith factor weighs in Plaintiffs favor.

Summarizing the relevant Polaroid factors, the court concludes that the strength of Plaintiffs mark, evidence of confusion, similarity of the marks and lack of good faith on the part of the individual defendants in choosing their name together support a finding of trademark infringement that warrants the issuance of an injunction in this case absent a valid defense. Thus, the only remaining issue is whether Defendant has proven a defense of laches.

II. LACHES DEFENSE

Laches is a statutory defense against trademark infringement actions. See 15 U.S.C.A. § 1115(b)(8) (West Supp.1992). Moreover, a laches defense is applicable to all of Plaintiffs causes of action based on the federal trademark act and New York’s anti-dilution statute. See Saratoga Vichy Spring *1136 Co., Inc. v. Lehman, 625 F.2d 1037, 1040-41 (2d CIr.1980) (citations omitted).

A. ELEMENTS

In order for Defendant to prevail under a defense of laches, it

must show that plaintiff had knowledge of defendant’s use of its marks, that plaintiff inexcusably delayed in taking action with respect thereto, and that defendant will be prejudiced by permitting plaintiff inequitably to assert its rights at this time.

Cuban Cigar Brands N.V. v. Upmann Intern., Inc., 457 F.Supp. 1090, 1096 (S.D.N.Y. 1978), aff'd without op., 607 F.2d 995 (2d Cir.1979). In addition, Defendant must show that it adopted its mark in good faith. Id. at 1098.

1. Knowledge

In the instant case, it is undisputed that Defendant began using the name “McDental” in 1981. Defendant alleges that Plaintiff had actual as well as constructive notice of Defendant’s mark in 1981. Defendant avers that Plaintiff received actual notice via communications to the Latham office from Mr. William R. Miller, Jr., who in 1981 was a first-year marketing assistant with the Wallace Organization, the corporation that owned the two McDonald’s restaurants (franchises) in the Plattsburgh area in 1981. 9

While Defendant claims that Plaintiff had actual and/or constructive notice of Defendant in 1981, Plaintiff maintains that it first received notice of Defendant when information regarding McDental was sent to its corporate headquarters and received by the corporate officers responsible for handling trademark affairs in 1987. Mr. Horwitz, Plaintiffs corporate employee responsible for investigating trademark issues, testified that he received notification in 1987 from a paralegal at the Latham office who was then responsible for the reporting of trademark matters, and that he promptly initiated an investigation which eventually resulted in Plaintiffs sending protest letters to Defendant in 1987.

In response to Defendant’s contention that Mr. Miller’s alleged notice to the La-tham office in 1981 constituted notice to Plaintiff, Plaintiff averred that Mr. Miller is not an agent of McDonald’s, and therefore any communication from Mr. Miller to the Latham office 10 concerning Defendant did not constitute proper notice as this did not amount to notice to those employees of Plaintiff who were responsible for trademark enforcement.

The testimony of John Horwitz and other trial evidence support Plaintiffs position that the McDonald’s franchisees in Plattsburgh are not agents of Plaintiff. See, e.g., exh. 27 (licensing agreement between the Wallace Organization and Plaintiff clearly disclaims an agency relationship). The Second Circuit has held that, in a case such as the present one, knowledge will not be imputed in the absence of an agency relationship. Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc., 267 F.2d 358 (2d Cir.1959).

[6] As to the question of constructive notice, the Second Circuit has noted that, “[a]l-though the defense of laches generally includes proof of actual knowledge by the party claimed to be barred, as in Polaroid Corp. v. Polarad Electronics Corp., [supra ], this is not an inflexible rule; a plaintiff may be barred when the defendant’s conduct has been open and no adequate justification for *1137 ignorance is offered.” Chandon Champagne Corp. v. San Marino Wine Corp., 335 F.2d 531, 535 (2d Cir.1964) (citation omitted).

Defendant argues that the factors that warrant a finding of constructive notice in this case include the proximity of Defendant’s operation with the Upper Cornelia Street McDonald’s (allegedly less than one mile away), the presence of the Defendant in the Pyramid Mall, “a highly trafficked area,” widespread advertising by Defendant in various media, the regular presence of Plaintiffs corporate employees in the Plattsburgh area, Mr. Miller’s deposition testimony as to his communications with the Latham office, Plaintiffs self-proclaimed aggressive policing of its marks (and, the court adds, the opening of Defendant’s second office in Vermont in 1985). Together, these factors make Plaintiffs professed ignorance of Defendant unfathomable.

The court finds merit in Defendant’s argument, as it is difficult to reconcile Plaintiffs own emphasis on its aggressive policing of its trademarks with its simultaneous claims of ignorance of Defendant’s existence. By Plaintiffs own admissions, its extensive family of marks requires constant vigilance in the fight against potential parasites of its good name. To attempt to persuade this court that Defendant’s open and overt operation of its business (indeed, Defendant did everything short of mailing a brochure advertising its services to Plaintiffs corporate headquarters) did not constitute constructive notice simply because a certain corporate officer in Illinois had not received proper notice concerning Defendant defies logic to the same degree as each individual defendant’s insistence that Plaintiffs well-known “Me” never entered into either of their minds when selecting their name.

Plaintiffs only explanation for its apparent unawareness of Defendant .is the same one offered for its lack of actual notice: that those corporate designees responsible for trademark policing had not received notice of Defendant. However, this explanation is insufficient to prevent a finding of constructive notice, and the court therefore finds that Defendant has proven constructive notice under the facts in this case, as of 1985 at the latest. If this were the only required element in the laches analysis, the court could find that the Defendant had met its burden. However, that is not the case.

2. Delay

It should be noted that a “ ‘mere delay’ will not, by itself, bar a plaintiffs suit, but that there must be some element of estoppel, such as reliance by the defendant.” Saratoga Vichy Spring, 625 F.2d at 1040 (other references omitted). And, a defendant must show that the plaintiff “inexcusably delayed” in asserting its trademark rights against the defendant. Cuban Cigar, 457 F.Supp. at 1096. In other words, Defem dant must show that Plaintiff did, (or did not do), something as to give Defendant the belief that Plaintiff was going to “sleep on its rights.” See Citibank, N.A. v. Citytrust, 644 F.Supp. 1011, 1014 (E.D.N.Y.1986) (citation omitted).

It is undisputed that Plaintiffs first correspondence with Defendant regarding its name was in 1987, over six years after Defendant started using its mark, and that Plaintiff did not commence its suit until August 30, 1990, which was over nine years after McDental opened its doors for business.

Although Defendant failed to prove by a preponderance of the evidence that Plaintiff received actual notice of Defendant prior to 1987, as the court finds that Plaintiff had constructive notice of Defendant at least as early as 1985, the court must measure Plaintiffs delay from this point, and not 1987 as Plaintiff argues.

Measuring from 1985 to 1987, when Plaintiff sent its first protest letters to Defendant, and considering, inter alia, Plaintiffs self-proclaimed vigilance in trademark matters and its feeble explanation for its ignorance of Defendant, the court finds that Plaintiff did inexcusably delay in asserting its trademark rights against Defendant.

3. Prejudice

In determining whether Defendant will be prejudiced by an injunction the court must assess “the injury to which the defendant ... will be subjected if the injunction is *1138 issued.” Cuban Cigar Brands, 457 F.Supp. at 1098 n. 33 (citation omitted); i.e., whether Defendant relied on Plaintiffs conduct. See Saratoga Vichy Spring, 625 F.2d at 1042. Defendant generally argues that it will be prejudiced if Plaintiff prevails on its claims, citing to a case wherein the court stated that “[cjommonly cited criteria of prejudice are the expenditure of significant amounts for the advertising and promotion of the mark or a general business expansion as a result of the increased demand for the product being sold under the mark in question.” Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons, 365 F.Supp. 707, 718 (S.D.N.Y.1973), modified, 523 F.2d 1331 (2d Cir.1975).

Defendant contends that “[i]t is submitted that the facts before the Court clearly show that defendant will be prejudiced by a name change, as it is clear that defendant did not merely remain in business during the period of delay.” Defendant’s Pre-Trial Memorandum of Law at 43. Presumably, Defendant argues that it would be prejudiced by a name change since its success has been the result of, among other things, its past expenditures in' advertising and promotion of its business under its present name, as the other criterion, expansion of the business, is not present here. 11 Defendant began as, and is presently limited to, its one “MeDental” office, in Plattsburgh.

George Najim, a dentist from Essex county who testified that he had referred patients to Defen