4 Pillar Dynasty LLC v. Saucony, Inc.

• Decision Date: 08 May 2017
• Docket Number: 1:16-cv-2824-GHW
• Parties: 4 PILLAR DYNASTY LLC, and REFLEX PERFORMANCE RESOURCES, INC., Plaintiffs, v. SAUCONY, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

4 PILLAR DYNASTY LLC, and REFLEX PERFORMANCE RESOURCES, INC., Plaintiffs, v. SAUCONY, INC., Defendant.

1:16-cv-2824-GHW

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

May 8, 2017

MEMORANDUM OPINION AND ORDER

GREGORY H. WOODS, United States District Judge:

In this suit, Plaintiffs 4 Pillar Dynasty LLC and Reflex Performance Resources, Inc. allege that Defendant Saucony, Inc. has infringed its trademark for the word "Velocity" for use on clothes and performance wear. Not so fast, says Saucony, which seeks a declaration of non-infringement and asserts counterclaims alleging that it was first out of the blocks as the senior user of the "Velocity" mark, making Plaintiffs the infringers. Saucony has moved for summary judgment for dismissal of the complaint and on its counterclaims. Because a triable issue of fact exists at least with respect to the threshold question of which party is the senior user of the mark at issue, Saucony's motion for summary judgment is DENIED.

I. BACKGROUND¹

Plaintiff 4 Pillar Dynasty LLC ("4 Pillar") holds a federal trademark registration for the word "Velocity" for use on clothes and performance gear. Pls.'/Countercl. Defs.' Local Rule 56.1 Counterstatement (ECF No. 65) ("Pls.' 56.1") ¶ 42;² Decl. of Edward F. Maluf in Supp. of Mot. for Summ. J. (ECF No. 58) ("Maluf Decl."), Ex. R (certificate of registration). 4 Pillar filed anapplication to register the "VELOCITY" mark (the "Mark") with the United States Patent and Trademark Office (the "PTO") on March 12, 2012. Pls.' 56.1 ¶ 30. 4 Pillar filed pursuant to Section 1(b) of the Lanham Act, which permits the filing of a registration application on the basis of a "bona fide intention to use" a trademark in commerce rather than on the basis of the applicant's prior use of the trademark. Pls.' 56.1 ¶ 31; 15 U.S.C. § 1051(b). On December 3, 2013, 4 Pillar updated its application and requested registration of the Mark by filing with the PTO a Trademark/Service Mark Statement of Use. Pls.' 56.1 ¶ 39. The Statement of Use included the following "allegation of use," made under penalty of perjury:

The mark is in use in commerce on or in connection with all of the goods/services, or to indicate membership in the collective organization listed in the application or Notice of Allowance or as subsequently modified for this specific class.

The mark was first used by the applicant, or the applicant's related company, licensee, or predecessor in interest at least as early as 01/13/2010, and first used in commerce at least as early as 01/13/2010, and is now in use in such commerce.

Maluf Decl., Ex. Q; Pls.' 56.1 ¶ 40. The PTO granted 4 Pillar's application to register the Mark on March 11, 2014. Pls.' 56.1 ¶ 42. The registration certificate contains a "first use" date of "1-13-2010" and an "in commerce" date of "1-13-2010." Maluf Decl., Ex. R.

Both 4 Pillar and Plaintiff Reflex Performance Resources, Inc. ("Reflex") are owned by Behrooz, Leon, and Faramarz Hedvat. Decl. of Behrooz Hedvat in Opp'n to Mot. for Summ. J. (ECF No. 64) ("Hedvat Decl.") ¶¶ 3,7 & Exs. A & B. It is undisputed that the Hedvats have manufactured and/or sold apparel through several different companies and under several different brand names for the past twenty-five years. Pls.' 56.1 ¶ 10. Currently, Reflex licenses the Mark from 4 Pillar and sells products bearing the Mark to retail stores and on the internet. Pls.' 56.1 ¶¶ 44-48; Hedvat Decl. ¶ 4. The date on which Plaintiffs—or the Hedvats, through a related or predecessor company—began using the Mark lies at the heart of this dispute and will be discussed further in Section 3, infra.

Defendant Saucony, Inc. ("Saucony") also manufactures and sells apparel, specifically, "[t]echnical performance wear and lifestyle" apparel. Dep. of Todd P. Dalhausser ("Dalhausser Dep.") 26:10-23 (Dec. 5, 2016), annexed to Maluf Decl as Ex. B. Like Plaintiffs, Saucony sells its "Velocity"-branded products both in brick-and-mortar retail stores and online. Pls.'s 56.1 ¶¶ 13-14; Dalhausser Dep. 28:5-30:2.³ As with Plaintiffs, the date on which Saucony began using the word "Velocity" in connection with its products lies at the center of the dispute and will be discussed further in Section 3, infra.

Plaintiffs initiated this lawsuit on April 15, 2016. ECF No. 1. In their complaint, Plaintiffs bring claims for federal trademark infringement and common law trademark infringement, as well as state-law claims for unlawful and deceptive acts and practices pursuant to N.Y. Gen. Bus. Law §§ 133 and 349. Compl. at pp. 5-10. Each of Plaintiffs' claims is premised on Saucony "offering for sale a line of clothing and performance wear . . . under the brand name 'Velocity,'" including "performance wear, namely shirts, t-shirts and shorts." Compl. ¶¶ 9-10. Plaintiffs alleged that Saucony is using the Mark "in the exact same category and style of goods as Plaintiffs' [p]roducts" and that Saucony's use has caused and is "likely to continue to cause confusion as to the source, sponsorship and/or affiliation of the [i]nfringing [p]roducts." Compl. ¶¶ 11-12. Although Plaintiffs specifically alleged that 4 Pillar became the owner of the registered Mark effective March 12, 2012, Compl. ¶ 5, the complaint contains no allegations concerning use of the Mark prior to that date.

Saucony filed an answer with counterclaims on July 8, 2016. ECF No. 20 ("Countercls."). In its counterclaims, Saucony alleged that, while "4 Pillar only filed an Intent-to-Use application for the 'VELOCITY' mark in 2012," Saucony has been continuously using "its 'VELOCITY' mark . . . throughout the United States since no later than 2008," giving Saucony "superior rights" in the Mark. Countercls. ¶ 1. As a result, Saucony asserts counterclaims for trademark infringement and unfair competition under federal and state law and also seeks (i) "a judicial declaration that Saucony's use of the "VELOCITY" mark in connection with athletic shoes and apparel does not constitute trademark infringement, unfair competition, false designation of origin, dilution or unlawful and deceptive acts and practices under federal and state law" and (ii) cancellation of 4 Pillar's federal registration of the Mark. Countercls. ¶ 1 & pp. 14-18.

After Plaintiffs failed to timely respond to Saucony's counterclaims, the Clerk of Court issued a certificate of default, ECF No. 26, and the Court issued an order to show cause why a default judgment should not be entered against Plaintiffs (in their capacity as counterclaim defendants). ECF No. 27. After a hearing on September 19, 2016, the Court issued an order setting aside Plaintiffs' entry of default. ECF No. 37. After a number of limited-scope extensions, discovery closed on December 5, 2016. See ECF No. 51.

Saucony filed its motion for summary judgment on January 27, 2017. ECF Nos. 56-62. Plaintiffs filed an opposition on February 24, 2017. ECF Nos. 63-67. Saucony filed a reply in support of its motion on March 10, 2017. ECF Nos. 71-72.

II. LEGAL STANDARD

Defendants are entitled to summary judgment on a claim if they can "show[ ] that there is no genuine dispute as to any material fact and [they are] entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) ("[S]ummary judgment is proper 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that themoving party is entitled to a judgment as a matter of law.'" (quoting former Fed. R. Civ. P. 56(c))). A genuine dispute exists where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," while a fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Factual disputes that are irrelevant or unnecessary will not be counted." Id.

To defeat a motion for summary judgment, Plaintiff "must come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting former Fed. R. Civ. P. 56(e)). "[M]ere speculation or conjecture as to the true nature of the facts" will not suffice. Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (internal quotation marks and citations omitted). Plaintiff "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586.

In determining whether there exists a genuine dispute as to a material fact, the Court is "required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." Johnson v. Killian, 680 F.3d 234, 236 (2d Cir. 2012) (internal quotation marks and citation omitted). The Court's job is not to "weigh the evidence or resolve issues of fact." Lucente v. Int'l Bus. Machs. Corp., 310 F.3d 243, 254 (2d Cir. 2002); see also Hayes v. N.Y. City Dep't of Corr., 84 F.3d 614, 619 (2d Cir. 1996) ("In applying th[e] [summary judgment] standard, the court should not weigh evidence or assess the credibility of witnesses."). "Assessments of credibility and choices between conflicting versions of the events are matters for the jury, not for the court on summary judgment." Jeffreys v. City of New York, 426 F.3d 549, 553-54 (2d Cir. 2005) (citation omitted). "[T]he judge must ask . . . not whether . . . the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented." Id. at 553 (quoting Anderson, 477 U.S. at 252).

III. DISCUSSION

A. The Relevant Law

To prevail on a claim of trademark infringement for a registered trademark, pursuant to 15 U.S.C. § 1114(1), or an unregistered trademark, pursuant to 15 U.S.C. § 1125(a), a plaintiff must prove that (1) it has a valid mark entitled...