Coach Leatherware Co., Inc. v. AnnTaylor, Inc.

Decision Date15 May 1991
Docket NumberD,1276,Nos. 1275,s. 1275
Citation933 F.2d 162,18 USPQ2d 1907
PartiesCOACH LEATHERWARE COMPANY, INC., Plaintiff-Appellee, v. ANNTAYLOR, INC.; Laura Leather Goods, Ltd.; A & R Handbag, Inc. and Ron's Elegance Center, Inc., Defendants, AnnTaylor, Inc.; Laura Leather Goods, Ltd.; and A & R Handbag, Inc., Defendants-Appellants. ockets 90-9082, 90-9124.
CourtU.S. Court of Appeals — Second Circuit

Luigi P. De Maio, De Maio & Hughes, New York City, for defendants-appellants Laura Leather Goods, Ltd. and A & R Handbags, Inc.

James A. Beha II, Hertzog, Calamari & Gleason, New York City, for defendant-appellant AnnTaylor, Inc.

Daniel S. Ebenstein, Amster, Rothstein & Ebenstein, New York City (Anthony F. Lo Cicero, Steven M. Levy, Amster, Rothstein & Ebenstein, New York City, of counsel), for plaintiff-appellee Coach Leatherware Co., Inc.

Before KAUFMAN, WINTER and MINER, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge:

Copying women's designer handbags appears to be a convenient device for those seeking to ride fashion's often unpredictable waves. Abundant support for this observation is provided on Manhattan's Fifth Avenue where within close proximity of the flagship stores of Louis Vuitton, Gucci and Chanel, street vendors peddle imitations of these familiar designs. More confusing, and thus more troublesome, is the sale of copies by respected retailers. At the heart of this case is just such a circumstance--the sale of imitation Coach Leatherware Company, Inc. ("Coach") handbags by the AnnTaylor, Inc. ("AnnTaylor") chain of retail stores. At issue is the potential for consumer confusion caused by this situation.

In an effort to maintain its market share and its preferred status among customers, Coach instituted this action against appellants AnnTaylor, Laura Leather Goods, Inc. ("Laura") and A & R Handbag, Inc. ("A & R") for trademark infringement pursuant to section 43(a) of the Lanham Act and for unfair competition under New York State common law. Coach alleged that appellants had produced limitations of its distinctive leather handbags in a manner likely to cause confusion in the marketplace. Following Coach's motion for a preliminary injunction and appellants' cross-motion for summary judgment, Judge Duffy, sua sponte, granted summary judgment in favor of the nonmoving party, Coach. See Coach Leatherware Co. v. AnnTaylor, Inc., 751 F.Supp. 1104 (S.D.N.Y.1990). In addition, he enjoined appellants from substantially emulating any of Coach's more than fifty handbag designs. We believe, however, the record does not support the grant of summary judgment regarding those unregistered aspects of Coach's products. Accordingly, we affirm in part, reverse in part and remand for further proceedings consistent with our decision.

I. Background

We need discuss only those facts and prior proceedings relevant to the disposition of this appeal. Some contextual detail, however, is unavoidable because of the complex nature of trademark infringement claims.

Coach, a New York corporation, has been engaged in the design, manufacture, marketing, distribution and sale of high quality, leather fashion products for approximately fifty years. Coach products are sold exclusively under its own label and are marketed in about fifty Coach-owned stores, in clearly designated Coach displays situated in expensive department stores and through Coach mail order catalogues.

AnnTaylor, a prominent retailer of quality women's apparel, is a wholly-owned subsidiary of AnnTaylor Holding, Inc., which in turn is owned by Merrill Lynch Co., Inc. AnnTaylor, like Coach, considers its market to consist of the stereotypical successful career women. Presently, the more than 160 AnnTaylor stores are located primarily in upscale malls, exclusive thoroughfares, and specialty retail centers. Laura, and its affiliate, A & R (collectively "Laura"), are also New York corporations engaged in the business of designing, manufacturing and selling handbags.

The instant litigation was initiated after Coach learned that some of its "classic" handbag designs, which have been part of its product line for the past fifteen years, were being copied and sold at AnnTaylor. AnnTaylor and Laura had allegedly replicated for sale three handbag styles made prominent by Coach: the "Dinky Bag"--a small handbag with a narrow profile, a flap that extends to cover the entire face of the bag and a shoulder length strap; the "Duffle Sac"--a large handbag with a circular bottom, tapered sides and a leather strap affixed to its top by solid brass hardware; and the "Convertible Clutch"--a larger version of the Dinky Bag. Though dissimilar in several significant respects, each Coach bag shares several features: all are produced from full-grain cowhide, contain exterior binding at external seams and incorporate brass hardware components. In addition, the inside of each bag contains a Coach registration number and various informational paraphernalia unique to Coach marketing tactics.

Over the years, Coach has attached to all of its handbags distinctive lozenge-shaped leather tags embossed with the name "Coach Leatherware." The tags, suspended from beaded brass chains, have become distinctive and valuable through Coach's promotional efforts and by virtue of its upscale reputation--Coach store managers report that the tags alone are often subject to theft. Though Coach bags are not themselves registered, the Coach tag is registered on the Principal Register of the United States Patent and Trademark Office. Apparently seeking to capitalize on the popularity of the Coach "look", the AnnTaylor handbags, in the Coach style, carry a similar leather tag embossed, however, with AnnTaylor's name and distinctive typeface.

II. Proceedings Below

In May 1990, Coach filed a complaint alleging that Laura and AnnTaylor manufactured and sold handbags which essentially mimic design features made famous by Coach. Subsequently, the parties engaged in extensive discovery: both sides retained experts, took depositions, secured affidavits and exchanged documents. Coach went so far as to conduct a survey to determine whether consumers would confuse the AnnTaylor bags with Coach bags, even when the products were clearly labelled. AnnTaylor, though it has not elicited its own evidence to challenge the survey data, contends it should be given no weight since serious methodological flaws, including result-oriented questions, biased the results.

In August 1990, Coach moved preliminarily to enjoin appellants from replicating the Dinky Bag, the Duffle Sac, and the Convertible Clutch. Coach argued that it was likely to succeed on its trademark infringement and unfair competition claims, and contended that failure to issue an injunction immediately would result in irreparable loss of profits and goodwill.

In response, appellants cross-moved for summary judgment, alleging that Coach had not established a prima facie case of infringement. AnnTaylor averred that its clear labelling of the merchandise, its dissimilar trade name and logo, and its failure to parody Coach's unique product packaging, eliminated any likelihood that customers were confused as to the source of the product.

After searching the record and examining the submissions, Judge Duffy determined appellants' handbags were confusingly similar to those manufactured by Coach. Accordingly, in his November 8, 1990 Memorandum and Order, he denied appellants' summary judgment motion and instead granted summary judgment in favor of Coach, finding AnnTaylor and Laura liable, as a matter of law, for trade dress infringement and common law unfair competition. Coach's motion for a preliminary injunction was denied as moot.

The judgment permanently enjoined appellants from replicating any of Coach's approximately fifty handbag styles. Further proceedings concerning possible monetary relief were referred to Magistrate Judge Naomi Buchwald, pursuant to 18 U.S.C. Sec. 636(b)(1)(B).

Because we believe the district court's action prevented AnnTaylor and Laura from raising a genuine issue of material fact, we reverse the summary judgment insofar as it determines appellants' copying of the bags violates section 43(a) of the Lanham Act and the New York common law of unfair competition. We affirm, however, the grant of summary judgment with regard to the copying of the registered Coach tags. We find such replication violates section 32 of the Lanham Act which provides protection for registered marks.

III. Summary Judgment

Though the principles governing summary judgment are by no means novel, they bear repeating for purposes of this appeal. Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith 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 the moving party is entitled to a judgment as a matter of law." In reaching this determination, a court's responsibility is to assess whether there are any material factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); Knight v. United States Fire Ins. Co., 804 F.2d 9, 11-12 (2d Cir.1986), cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987). "The judge's inquiry ... unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the plaintiff is entitled to a verdict." Anderson, 477 U.S. at 252, 106 S.Ct. at 2512. Entry of summary judgment indicates that no reasonable jury could return a verdict for the losing party. See Issacharoff and Loewenstein, Second Thoughts About Summary Judgment, 100 Yale L.J. 73, 84-89 (1990).

In the instant proceeding, we are presented with the somewhat unusual...

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