Aini v. Sun Taiyang Co., Ltd.

• Decision Date: 06 May 1997
• Docket Number: No. 96 Civ. 9318 (LAK).,No. 96 Civ. 7763 (LAK).,96 Civ. 7763 (LAK).,96 Civ. 9318 (LAK).
• Citation: 964 F.Supp. 762
• Parties: Charles AINI, I.C.E. Marketing Corporation, Jacob Aini and Topiclear Beauty Products, Inc., Plaintiffs, v. SUN TAIYANG CO., LTD., Palms Fashion, Inc., Jigu Trading Co., Inc., Societe Internationale de Cosmetiques, Marcel Cohne, CCI Co., REC Co., Emile Garou, Ismael Jedouane, Michel Farah, Mitchell Pharmaceuticals, New York Line Manufacture, and Choice International, Defendants. SOCIETE INTERNATIONALE de COSMETICS, a French Corporation, Plaintiff, v. Charles AINI, Jacob Aini, Michael Aini, Raquel Aini, a/k/a Rachel Aini, and I.C.E. Marketing Corp., Defendants.
• Court: U.S. District Court — Southern District of New York

964 F.Supp. 762

Charles AINI, I.C.E. Marketing Corporation, Jacob Aini and Topiclear Beauty Products, Inc., Plaintiffs, v. SUN TAIYANG CO., LTD., Palms Fashion, Inc., Jigu Trading Co., Inc., Societe Internationale de Cosmetiques, Marcel Cohne, CCI Co., REC Co., Emile Garou, Ismael Jedouane, Michel Farah, Mitchell Pharmaceuticals, New York Line Manufacture, and Choice International, Defendants.

SOCIETE INTERNATIONALE de COSMETICS, a French Corporation, Plaintiff, v. Charles AINI, Jacob Aini, Michael Aini, Raquel Aini, a/k/a Rachel Aini, and I.C.E. Marketing Corp., Defendants.

No. 96 Civ. 7763 (LAK).

No. 96 Civ. 9318 (LAK).

United States District Court, S.D. New York.

May 6, 1997.

COPYRIGHT MATERIAL OMITTED

Peter L. Berger, Levisohn, Lerner, Berger & Langsam, Martin R. Friedman, O'Rourke & Friedman, for Plaintiffs in No. 96 Civ. 7763 and for Defendants in No. 96 Civ. 9318.

Harry Frischer, Solomon, Zauderer, Ellenhorn, Frischer & Sharp, Bernardo Burstein, Akerman, Senterfitt & Eidson, P.A., Ivan F. Blejec, Share & Blejec, P.C., for Certain Defendants in No. 96 Civ. 7763 and for Plaintiffs in No. 96 Civ. 9318.

OPINION

KAPLAN, District Judge.

The prize for which these actions contend is the United States and worldwide rights in the TOPICLEAR trademark, a mark used on skin cream, lotions and soaps sold primarily to African American, Caribbean and African communities both here and abroad. The contenders are the French successors of Odette Anne-Marie Saffroy, the widow Triquet ("Triquet"), who was the first user of the mark and originator of TOPICLEAR products, and the Aini family.¹ In briefest summary, the genesis of the dispute is as follows:

Triquet invented a cleansing cream in the late 1970's, began selling it in France under the name TOPICLEAR, and registered the TOPICLEAR mark in France in 1980. In 1989, Charles Aini, whose family previously had purchased TOPICLEAR product from the Triquet interests, applied to register the mark in the United States. Triquet and later her successors in interest opposed the registration. In 1992, the parties resolved their dispute by (a) Triquet's successors withdrawing their opposition, (b) the formation of Topiclear Beauty Products, Inc. ("TBPI"), jointly owned by the Ainis and the Triquet successors, to exploit the mark, (c) an agreement by Jacob Aini, Charles' son, to contribute $100,000 to TBPI, and (d) an agreement by both sides to transfer all of their respective trademark rights to TBPI. Charles Aini subsequently obtained the U.S. registration for TOPICLEAR. Later in 1992, the parties considered and, allegedly, entered into a loan agreement that contemplated a $300,000 loan by Jacob Aini to certain of the Triquet successors, secured by a pledge of the borrowers' rights in the mark.

The Aini interests now claim that Charles Aini is the rightful owner of the U.S. registration which, they claim, is valid and enforceable, and that TBPI and/or Jacob Aini own all other worldwide rights in the mark by virtue of the 1992 agreement and an alleged default by and foreclosure of the interests of the Triquet successors under the loan agreement. They claim that the Triquet successors' use of TOPICLEAR infringes the Aini's mark.

The Triquet successors take a fundamentally different view. They begin from the premise that the Ainis are, in their words, "trademark pirates." They contend that the Ainis regularly appropriate in the United States marks used abroad by others and then apply those "pirated" marks to counterfeit goods the Ainis obtain from brokers. In this case, they assert, the Ainis adopted the TOPICLEAR mark in furtherance of just such a scheme and sought to register it here, fraudulently claiming priority of use. When the Triquet successors opposed the registration application, the Ainis first offered perjurious evidence in support of the application and then procured the withdrawal of the opposition — and thus procured the U.S. registration itself — by tricking them into signing the 1992 agreement. They contend that the 1992 agreement never came into force or was abandoned and therefore transferred no rights either to the Ainis or to TBPI. And they assert that no loan ever was made pursuant to the loan agreement and that no default therefore occurred. The Ainis' use of the TOPICLEAR mark, they maintain, infringes their rights. They seek cancellation of the U.S. registration and other relief.

The case was tried without a jury. This opinion contains the Court's findings of fact and conclusions of law pursuant to FED. R. CIV. P. 52(a).

Background

The Parties and Their Initial Involvements With TOPICLEAR

The French Parties

Following Triquet's invention of the cleansing cream and the adoption of the TOPICLEAR mark, TOPICLEAR cream was promoted and distributed throughout the early and mid-1980's by Aqua Bella International ("ABI"), a company owned and controlled by Triquet. In 1984, she began distributing as well through Afro Stars Distributors ("ASD"), a company owned by Ismael Jedouane. The line was expanded in 1987 to include soaps and lotions and, in 1988, Office Central D'Achats ("OCA"), another company owned and controlled by Triquet, became an additional TOPICLEAR distributor.

In 1991, Triquet sold the TOPICLEAR business and mark to Creation Cosmetique International ("CCI"), a company of which Jedouane then was the president or general manager. Jedouane's associates in CCI included Emile Garau and, during part of the relevant period, Simone Mamane. This trio was associated also in a number of related companies including Laboratoire REC ("REC"), which had manufactured TOPICLEAR products for Triquet. In 1992, REC and other companies in which Jedouane and Garau held interests merged to form GMJ, which became a licensee of CCI for the manufacture and distribution of TOPICLEAR product.

In 1993, GMJ sought protection from the French bankruptcy courts. Two years later, Marcel Cohen invested in the reorganization plan of GMJ. Societe Internationale Cosmetique ("SIC"), owned 64 percent by Cohen and 12 percent each by Jedouane, Garau and Mamane. It was formed in furtherance of the reorganization and purported to acquire the TOPICLEAR business and mark from CCI in January 1996. (DX YG, ¶ 20; DX UO)

The Aini Family

The members of the Aini family relevant to this dispute are Charles Aini, his sons Jacob (Jack), Michael, and Howard, and Jack's wife, Raquel or Rachel Aini.

Charles Aini was born in Lebanon and emigrated to the United States in 1967. In 1973, he opened a retail store in Jamaica, Queens, called Cheila's which sold and continues to sell a variety of consumer products including cosmetics. In the mid-1980's, Charles Aini left Cheila's and went to work in a supermarket then owned by Michael Aini. He continues to this day to devote his business efforts exclusively to the supermarket.

Jack Aini began working part-time at Cheila's at about the time it opened and had a full-time role in the business by the time he reached age 13 in 1975, ultimately becoming the manager of the cosmetics section. He was expansion minded. In 1981, he opened his own retail store, Parkside Discount. In 1983, he opened the first of a number of Homeboys Discount Stores in Brooklyn. In the late 1980's, he decided to reach beyond his retail operations to manufacturing. importing and distributing products in the United States. He has been involved in doing so since the 1980's through a dizzying array of companies that have appeared and disappeared with some frequency. All have been little more than names used by Aini as a matter of convenience.

The first of these enterprises appears to have been A.B.C.E. Wholesale, Inc. ("ABCE"), which was formed in 1987 or 1988. In 1992 or 1993, ABCE was replaced by Zuri International, Inc. ("Zuri International"), which in turn was succeeded by Aya Products, Inc. ("Aya Products"). Jack Aini has been the eminence behind a number of other companies including Roldan Corporation ("Roldan"),which is discussed in greater detail below, RNM and King Cosmetics Co. His wife has been involved in all of the businesses, usually as a partner, and she frequently is the record holder of the Ainis' stock in them.

In the fall of 1995, Jack and his wife moved to Paris. They sold their interests in the U.S. retail and wholesale businesses to his brothers, Harry and Michael Aini, the latter of whom then left the family supermarket and became president of I.C.E. Marketing Co. ("ICE"), also an Aini company.² Since the fall of 1995, Jack has been involved in real estate and other businesses and owns interests in companies which have opened Homeboys stores in Paris. He continues to be involved with Topiclear products.

In view of the claims asserted in this case, the adoption of the names of certain of Jack Aini's companies is of more than passing interest. Prior to the formation of Zuri International. Jack was aware that the word "Zuri" was the name of a brand of cosmetics well known in the African community. He nonetheless took the name for his new company, discontinuing its use only after the owner of the "Zuri" mark sued on trademark grounds.

Similarly, "Aya" was the name of a brand of cosmetics manufactured by Otentika in the 1980's which was known to Jack because he was a distributor of Aya products. Claiming that Otentika had abandoned the mark, Jack adopted "Aya" as the name of the company he formed to succeed Zuri International, promptly drawing litigation from Otentika which Jack won.

Following the Aya controversy, Jack formed Roldan, an episode which has been the subject of a reported decision by the United States District Court for the Southern District of Florida. According to the findings in that case, which were not seriously disputed at trial, Laboratorios Roldan, C. por A., is a long established Dominican company, the owner of the Dominican registration for the "Roldan" trademark, and the manufacturer of a very successful soap marketed in the Dominican...