Parfums Stern, Inc. v. United States Custom Ser.

• Citation: 575 F. Supp. 416
• Decision Date: 14 June 1983
• Docket Number: No. 83-1116-Civ-SMA.,83-1116-Civ-SMA.
• Parties: PARFUMS STERN, INC., Plaintiff, v. UNITED STATES CUSTOMS SERVICE, United States Food and Drug Administration and certain John Does unknown to Plaintiff, Defendants.
• Court: U.S. District Court — Southern District of Florida

575 F. Supp. 416

PARFUMS STERN, INC., Plaintiff, v. UNITED STATES CUSTOMS SERVICE, United States Food and Drug Administration and certain John Does unknown to Plaintiff, Defendants.

No. 83-1116-Civ-SMA.

United States District Court, S.D. Florida.

June 14, 1983.

Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, Fla., for plaintiff.

Greenberg, Traurig, Askew, Hoffman, Lipoff & Wolf, Jon May, U.S. Atty., Sandler & Travis, Miami, Fla., Bass, Ullman & Lustigman, New York City, for defendants.

ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION AND VACATING TEMPORARY RESTRAINING ORDER

ARONOVITZ, District Judge.

THIS MATTER comes before the Court upon the Plaintiff's Motion for Preliminary Injunction and the various John Doe Defendants' Motions to Dismiss. The Court has received evidence, taken testimony, heard oral argument of counsel for the parties, reviewed the motions, the memoranda of law in support thereof, and the responses thereto, the record, and the law. Having been fully advised in the premises, it is thereupon

ORDERED AND ADJUDGED, for reasons as are more fully set forth in this Court's Memorandum Opinion which follows, that:

1. Plaintiff's Motion for Preliminary Injunction is DENIED;

2. The Temporary Restraining Order heretofore entered is VACATED as of 5:00 p.m., June 13, 1983, as to each consignee who has by that time filed herein an appearance setting forth the name of the consignee or owner/claimant;

3. Each consignee, through counsel, shall identify himself or itself forthwith or this Court will order and direct the Federal Defendants to substitute the redacted copy of that consignee's "Notice of Detention and Hearing" from Government's Exhibit 1 with an unredacted copy thereby identifying the importers. Plaintiff could then identify, add, and serve the consignees;

4. Any and all pending motions seeking to impose continuing anonymity on the John Doe Defendants are DENIED upon a finding that the argument of such anonymity by reason of alleged trade secrets is not supported by law or evidence; and

5. The Court RESERVES RULING on the Motions to Dismiss and will address them at a later time.

MEMORANDUM OPINION

The Court has before it a Motion for Preliminary Injunction filed by the Plaintiff and several motions to dismiss, some on similar grounds and some on other grounds, filed on behalf of some of the John Doe Defendants. Heretofore, the Court held an abbreviated evidentiary hearing on the afternoon of June 3, 1983, and found it necessary to adjourn or recess that proceeding. On the basis of the testimony at that point adduced and supported additionally by affidavits submitted by the Plaintiff, this Court entered a Temporary Restraining Order for the purpose of maintaining the status quo pending a hearing on the Motion for Preliminary Injunction and the motions to dismiss.

The Court has, on June 9 and 10, 1983, held a continuation of that evidentiary hearing and has received testimony and exhibits offered by all parties. At the outset, the Court observes the following:

1. The burden of proof of establishing the four prerequisites for the issuance of a preliminary injunction rests on the Plaintiff. Canal Authority of the State of Florida v. Callaway, 489 F.2d 567 (5th Cir.1974). In the view of the Court, the Plaintiff has not met that burden in a sufficient basis as will be noted herein and hereafter.

2. The Court likewise notes and takes recognition that the bare issuance of a trademark under most circumstances constitutes a prima facie showing of entitlement to the protections arising therefrom.

3. The Court also notes that at a final hearing, wherein the testimony would be more complete and set forth with documentary evidence, before which discovery would be permitted of the John Doe Defendants, there exists a likelihood that there would be a different result achieved from that upon which this Order rests.

4. The Court notes, finally, that Plaintiff has not established that Oscar de la Renta products presently being held under the auspices of the United States Customs, under Order of this Court, are counterfeit, copied, or adulterated. That burden also rests on the Plaintiff. The Court understands that, without access to the products, Plaintiff had difficulty making that determination. Nevertheless, the burden is on the Plaintiff in that regard.

Findings of Fact

In support of its Order Denying Plaintiff's Motion for Preliminary Injunction, and pursuant to Rule 56, Fed.R.Civ.P., the Court enters the following Findings of Fact:

Plaintiff is a cog or entity in what appears to be a single international enterprise operating through an amoeba-like structure consisting of members of Milton Stern's family, various parent and subsidiary corporate enterprises, both foreign and domestic, interrelated, each to the other or to the Sterns. This conglomerate consists of corporations incorporated under the laws of several states of the United States as well as several foreign corporations organized under the laws of the Channel Islands, France, and, formerly, Monaco. This entity, either by reason of holding the Oscar de la Renta trademark or by way of license and/or contractual rights granted to it or one of its entities, holds the right to manufacture, distribute, promote, or otherwise utilize Oscar de la Renta fragrance products throughout the world. As such, this single international enterprise has caused to be manufactured and sold abroad, in particular, products bearing the Oscar de la Renta trademark to distributors and licensees. In most instances, these products are offered for resale in various countries throughout the world under standards and criteria developed by the enterprise.

It also appears that, in some instances, the distributors, licensees, and/or users of the tradename and products have included designations stating that the recipients would exercise their or its best efforts to use or cause to be used the products in a certain territorial area. Evidently, some of the enterprise's foreign distributors, licensees, or users in the chain are selling what appears to the Court circumstantially, if not directly, to be genuine Oscar de la Renta products for re-sale or ultimate importation into the United States through what is known as the "parallel" or "gray market". "Gray market" goods are goods produced by a foreign manufacturer and bearing that manufacturer's trademark, which are purchased abroad and imported into this country by persons other than the manufacturer's authorized United States distributor.

As a result, there were, at the time this suit was filed, eighteen consignments of such products within the custody of or under the control or direction of the United States Customs Service in Miami, Florida. Plaintiff filed this action against the United States Customs Service and the United States Food and Drug Administration, naming additionally various John Does, presumably the consignees or owners/claimants of the consignments. That complaint sought relief under Titles 15, 19, and 21 of the United States Code, and specifically under the provisions of the Lanham Act, 15 U.S.C. § 1051, et seq., and the Tariff Act, 19 U.S.C. § 1526.

The various consignees were served with an In Camera Order to Show Cause issued by this Court on May 26, 1983, as a result of a stipulation entered into between the Plaintiff and the Federal Defendants. The consignees have appeared herein as John Does through counsel, each of whom has identified their clients through the consignment numbers. There now appears to be represented before the Court fifteen of the remaining sixteen consignees (two other consignees having been previously voluntarily dismissed by the Plaintiff).

The Court has allowed such incognito appearances up to this point for the purpose of testing the Motion for Preliminary Injunction and the other proceedings before the Court, in that there were substantial property rights and property interests presented before the Court. However, the Court hereafter rejects the requests of any John Doe Defendant who has claimed a right of secrecy or anonymity by reason of alleged trade secrets finding no satisfactory showing having been made thereon.

The Court finds that Plaintiff and its related or affiliated companies have spent considerable money in advertising and promoting the name "Oscar de la Renta" in the United States and elsewhere throughout the world. The Plaintiff stands behind its product and has developed goodwill in conducting its business.

The Court further finds that in the exercise of its prerogative to cause the Oscar de la Renta products to be placed into the international stream of commerce, the Plaintiff and its affiliated companies have found themselves in circumstances wherein their products are finding their way into the United States not by way of or through any illegal means and therefore the Plaintiff which holds the United States trademark is seeking the protection of the trademark laws to insulate itself from what it placed in motion itself through its own foreign manufacturing and distribution sources.

Additionally, the Court finds that the Plaintiff's international enterprise was paid and receives compensation for the Oscar de la Renta products which are manufactured and produced by one of the Plaintiff's entities and that Mr. Oscar de la Renta or Oscar de la Renta, Ltd., receives the royalties due it. Therefore, there is no evasion of legal rights flowing either to the manufacturer in the first instance or to the person or entity entitled to the royalties. What is occurring is that a complete circle has brought some of the Plaintiff's products back to haunt it in the United States.

Conclusions of Law

Initially, the Court finds that it does have jurisdiction over the subject matter of this action and personal jurisdiction over the Defendants. 15 U.S.C. § 1121, 28 U.S.C. §§ 1332, 1346.

Having made that determination, the Court moves to the question of...