Hermès Intern. v. Lederer De Paris Fifth Avenue
| Decision Date | 19 March 1999 |
| Docket Number | No. 98 CIV 2820(SAS).,98 CIV 2820(SAS). |
| Citation | 50 F.Supp.2d 212 |
| Parties | HERMÈS INTERNATIONAL, Hermès Sellier, Hermès Gestion, Inc., and Hermès of Paris, Inc., Plaintiffs, v. LEDERER DE PARIS FIFTH AVENUE, INC., Pelle Via Roma, Inc. Artbag Creations, Inc., and Rene Wang, d/b/a Rene Collection, Defendants. |
| Court | U.S. District Court — Southern District of New York |
John M. Desmarais, David S. Brafman, Joseph C. Gioconda, Kirkland & Ellis, New York City, James M. Amend, P.C., Kirkland & Ellis, Chicago, IL, for Plaintiffs.
Anthony H. Handal, Esq, Handal & Morofsky, Norwalk, CT, for Defendants.
Plaintiffs Hermès International, Hermès Sellier, Hermès Gestion, Inc., and Hermès of Paris, Inc. (collectively "Hermès" or "plaintiff") bring this action seeking both injunctive and monetary relief against defendants Lederer De Paris Fifth Avenue, Inc. ("Lederer"), Pelle Via Roma, Inc. ("Pelle"), Artbag Creations, Inc. ("Artbag"), and Rene Wang, d/b/a Rene Collection ("Rene")1 claiming that defendants infringed plaintiff's trademark and trade dress rights in its line of women's handbags and other leather goods. Hermès alleges (i) trademark infringement in violation of Section 32 of the Lanham Act of 1946, 15 U.S.C. § 1114; (ii) false designation of origin, trade dress infringement and unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (iii) trademark dilution in violation of Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c); (iv) trademark infringement and unfair competition in violation of New York common law; and (v) trademark dilution in violation of New York General Business Law § 360-1. Defendants now move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, claiming that plaintiff's relief is barred by the doctrines of abandonment and estoppel by laches.2 For the reasons stated below, defendants' motion is granted in part and denied in part.
Hermès, a French company with eleven stores in the United States, has produced high-quality leather products since 1837.3 See Declaration of Joseph C. Gioconda, counsel for plaintiff ("Gioconda Decl.") at Ex. 1, Hermès' Statement of Material Facts at ¶¶ 138, 141 ("Pl.'s 56.1 Stmt.").
Hermès' products have been sold in the United States since 1950 in both Hermès boutiques and upscale department stores.4 See id. at ¶ 141. Between 1996 and 1998, United States sales of Hermès belts exceeded $5.8 million, sales of Hermès watches reached almost $3.5 million and sales of Hermès handbags topped $25.7 million. See Plaintiff's Responses and Objections to Defendant Pelle's First Set of Interrogatories, Attachment A, contained in Defendants' Motion for Summary Judgment ( ) at Ex. SJ1. In 1997, Hermès budgeted over $2 million for advertising in magazines, such as Elle, Vogue, Forbes, and the New Yorker. See Gioconda Decl. at Ex. 126.
All of its handbags are handmade by skilled craftsmen at Hermès' workshop in France. Hermès destroys any bag containing an imperfection. The interior of every bag identifies the craftsman who made it; if the bag ever needs repair, it is sent back to the original craftsman. See Pl.'s 56.1 Stmt. at ¶¶ 170-174. The products at issue in this dispute contain a combination of various characteristics that Hermès claims as its famous mark and trade dress. I shall briefly describe these characteristics.
Hermès originally designed the Kelly bag in the 1930s and introduced it in the United States in approximately 1949. See Pl.'s 56.1 Stmt. at ¶ 141. Hermès named the Kelly bag for Grace Kelly, Princess of Monaco, who was often photographed carrying the bag. See Gioconda Decl. at Ex. 70. Hermès asserts that through public association with Princess Grace, the name "Hermès" became synonymous with "the maker of the Kelly bag." See Pl.'s 56.1 Stmt. at ¶¶ 140, 145-149. This famous association between the Kelly bag and Hermès remains to this day.5
A skilled craftsman spends approximately 16 hours creating each Kelly bag. Hermès asserts that elements of its Kelly bag are distinctive, such as its closure design of two thin, horizontal leather straps with metal plates at their ends that fit over a circular turn-lock, optionally secured with a small padlock.6 See Gioconda Decl. at Exs. 11, 72; Pl.'s 56.1 Stmt. at ¶ 142. Hermès also claims that the bag's trapezoidal shape, its small semi-circular handle and its flap design are all features that are strongly associated with Hermès. See id. Since its introduction to the United States, Hermès has sold tens of thousands of Kelly bags. See Complaint ("Compl.") at ¶ 14.
In 1975, Hermès introduced the Kelly watch to the United States. See id. at ¶ 17. The watch consists of a leather band, a gold "Kelly" turn-lock, and a timepiece shaped as a padlock hanging from the wristband. See Pl.'s 56.1 Stmt. at ¶ 165; Compl. at Ex. 5. The Kelly line also includes the Kelly Sport and Kellyado backpack, both of which feature the closure design.
Hermès introduced the Birkin bag to the United States in 1984.7 See Compl. at ¶ 15. The Birkin bag is a larger bag featuring the same characteristics as the Kelly bag, such as the lock closure and the trapezoidal shape.8 See Pl.'s 56.1 Stmt. at ¶ 150; Compl. at Ex. 3.
Several of Hermès' products, including handbags, shoes, belts, billfolds and watches bear the "H" design. Hermès introduced the Constance bag to the United States in approximately 1969.9 See Compl. at ¶ 19. The Constance bag features a large gold "H" used as the closure on the bottom front of the bag.10 See Pl.'s 56.1 Stmt. at ¶ 155; Gioconda Decl. at Ex. 13.
Hermès introduced the "H" belt (leather belt with a gold "H" buckle) to the United States in 1967. See Compl. at ¶ 21 and Ex. 8. Hermès introduced "H" shoes (leather loafers with an "H" buckle across the tongue of the loafer) to the United States in the early 1970's. See id. at ¶ 22 and Ex. 9. In 1996, Hermès introduced the "H" watch, featuring a gold "H" design as the watch face, to the United States. See id. at ¶ 23 and Ex. 10. Hermès also designed an "H" wallet featuring a gold "H" as the clasp.11 See id. at Ex. 12.
In approximately 1979, Hermès introduced the Evelyne bag to the United States. See Correspondence of David Brafman, Counsel for Hermès to the Court, dated February 22, 1998. The Evelyne features an "H" shape surrounded by an oval imprinted into the leather with perforations. See Compl. at Ex. 11.
For many years, Hermès has been aware of the availability of copies of its merchandise made and sold by others who are not defendants in this action. Customers periodically informed Hermès of the availability of knock-off copies of its bags. See Pl.'s 56.1 Stmt. at ¶ 17. Hermès' communications department forwarded magazine articles to Mr. Dumas containing information about Hermès knock-offs. See id. at ¶ 18. In addition, Hermès' in-house legal department had been notified of knock-offs of Hermès products. See Deposition of Jean-Louis Dumas ("Dumas Dep.") at 57, attached to Defs.' Mot.
Hermès states that it implemented a two-pronged approach to combat copying. First, Hermès sent letters to department stores with which it had a contractual arrangement to sell Hermès merchandise to discourage them from selling knock-offs. See, e.g., Defs.' Mot. at Ex. AK; Pl.'s 56.1 Stmt. at ¶ 33 (I. Magnin Department Store, 1984-87); Defendants' Reply Memorandum ( ) at Exs. 7, 8 (Bergdorf Goodman, 1991-92); Gioconda Decl. at Exs. 62-63 (Bloomingdale's, 1995). The tone and language of Hermès' correspondence indicates that Hermès' strategy was to discourage the sale of knock-offs by suggesting that the stores were violating the "spirit" of their contractual relationships with Hermès, rather than to assert its trademark or trade dress rights by threatening litigation.
Second, because of the financial and physical difficulties of policing local retailers in many different countries, Hermès attempted to cut-off their supply at its source by litigating against overseas manufacturers. Hermès asserts that it has successfully sued over 100 manufacturers within the past 25 years. See Pl.'s 56.1 Stmt. at ¶¶ 179-182. Hermès has sued at least 93 infringers in Italy, has enjoined the activities of many manufacturers in Italy and France and has negotiated several settlement agreements in which infringers agreed to cease producing copies. See Gioconda Decl. at Ex. 8, Declaration of Pierserafino Marsico, Plaintiff's counsel in Italy, ("Marsico Decl.") at ¶ 1.
The four defendants operate retail stores selling handbags and accessories, including belts, wallets, shoes, and watches in the high-fashion shopping district on Manhattan's Upper East Side.12 Two defendants, Lederer and Artbag have been selling Hermès' copies for approximately forty years. Pelle and Rene, by contrast, have been selling copies for only two or three years. Generally, the copies are indistinguishable from genuine Hermès products, except that the interior of each genuine Hermès bag contains its craftsman's stamp.
Lederer claims that it has been selling a version of the Kelly bag since the 1950s. See Defendants' Notice of Motion for Summary Judgment ( ) at 5. Artbag reports that it has sold $1.2 million worth of its Kelly knock-off in the past thirty-eight years; $500,000 worth of its knock-off Constance bag in the past twenty years; $100,000 of its knock-off Birkin bag in the past four years; $300,000 of its knock-off Bugatti bag13 in the...
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