Borghese Trademarks Inc. v. Borghese, 10 Civ. 5552 (JPO) (AJP)
| Decision Date | 14 January 2013 |
| Docket Number | 10 Civ. 5552 (JPO) (AJP) |
| Parties | BORGHESE TRADEMARKS INC., BORGHESE INC., and BORGHESE INTERNATIONAL LIMITED, Plaintiffs, v. FRANCESCO BORGHESE, AMANDA BORGHESE, SCIPIONE BORGHESE, LORENZO BORGHESE, KATIE BORGHESE, MULTIMEDIA EXPOSURE INC., GT PARTNERS LIMITED, PERLIER INC., EBPD LLC, ORLANE INC. and HSN INC., Defendants. |
| Court | U.S. District Court — Southern District of New York |
This action involves several claims and counterclaims between plaintiffs Borghese Trademarks Inc. ("BTI"), Borghese Inc., and Borghese International Limited ("BIL") (collectively, "Plaintiffs" or "Borghese") and defendants Francesco Borghese, Amanda Borghese, Scipione Borghese, Lorenzo Borghese, Katie Borghese, Multimedia Exposure, Inc. ("MME"), GT Partners Limited, Perlier, Inc., EBPD, LLC, Orlane, Inc., and HSN, Inc. ("HSN") (collectively, "Defendants") under, inter alia, the Lanham Act, codified at 15 U.S.C. §§ 1051 et seq.
Plaintiffs market and sell products including cosmetics, skin, hair, and nail care products, and other consumer goods all sold under the Borghese name trademark (the "Borghese-branded products"). (Dkt. No. 74 ( ; see also Pls.' Ex. 120("Mosbacher Dep.") Plaintiffs brought this action as a result of Defendants' alleged use of Plaintiffs' trademarks in connection with Defendants' sale, advertising, marketing, and promotion of home fragrances and bath, body, and skin care products for humans and pets. (Dkt. No. 1 ("Compl.") at ¶ 25.) Also at the center of this action is a 1993 agreement between the parties , which each side claims has been breached by the other.
Plaintiffs and Defendants have both moved for partial summary judgment. In their motion, Plaintiffs argue (1) that Francesco Borghese is liable for breach of contract as a matter of law, and (2) that Defendants' counterclaims for false advertising, breach of contract, and unjust enrichment all fail as a matter of law. Defendants argue in their motion (1) that Plaintiffs' claims for trademark infringement are barred by the doctrine of laches, (2) that Plaintiffs have no intellectual property right in the Borghese family history, and (3) that Plaintiffs cannot make out prima facie breach of contract claims against either MME or Francesco Borghese. For the reasons that follow, both motions are granted in part and denied in part.
This litigation concerns the value of the intellectual property of the Borghese family name. Indeed, Plaintiffs claim that the Borgheses' rich family history "gives allure and cache" to the "Borghese" Brand. (Compl. at ¶ 35.) The Borghese family lineage is replete with prominent figures, including Pope Paul V, Cardinal Scipione Borghese, Pauline Bonaparte (the sister of Napoleon) and numerous princes and princesses. (Dkt. No. 83 ( ) at ¶¶ 13-14.) In the modern era, the Borghese family is perhaps best known for one such princess, Princess Marcella Borghese ("the Princess"), who began the family legacy in the beauty industry. (Id. at ¶ 20; Pls.' SUF at ¶ 4.)
In 1937, and after marrying Prince Paolo Borghese, the Princess began having her cosmetics specially made for her. (Pls.' SUF at ¶ 7.) As a fashion and beauty icon the world over, in the late 1950s Princess Marcella Borghese attracted the attention of Charles Revson, founder of Revlon Overseas Corporation, C.A. ("Revlon"). (Compl. at Ex. G.) The two entered into a partnership on October 16, 1957, to create a Princess Marcella Borghese line of cosmetics from the secret recipe for cosmetics and skin creams that she had commissioned. (Pls.' Ex. 3 (the "1957 Agreement").) On January 1, 1958, the contract between Revlon and Princess Marcella Borghese took effect and the Borghese cosmetics line was officially born. (Id. at 1.) The contract guaranteed a four-year partnership, ending December 31, 1962. (Id. at 1.)
From 1958 until 1976, Princess Marcella Borghese controlled the Borghese brand, and with help from her partnership with Revlon, advertised, promoted, marketed, distributed, and sold Borghese products in the United States. On July 1, 1976, Revlon acquired all of Princess Marcella Borghese's right, title, and interest in and to "the words and phrases BORGHESE, MARCELLA BORGHESE, PRINCESS MARCELLA BORGHESE, and all counterparts, renewals, substitutions, simulations and variations thereof, whether used as a personal name, trade name or trademark" and any registrations and applications for the same along with the associated good will. Through the execution of the 1976 Agreement, Revlon also gained exclusive license to the Princess' family history and crest. (1976 Agreement at ¶ 6.) Unlike the previous 1957 Agreement, the 1976 Agreement bound the signatories—Prince Paolo Borghese and the Princess—as well as their heirs. (Id. at ¶ 11.)
In 1990, the Princess and Revlon amended the 1976 Agreement, incorporating the same terms as the previous contract. (Pls.' Ex. 6 ("1990 Agreement").) Pursuant to the amended 1990 Agreement, the Princess acknowledged that Revlon was the sole owner of the trademarks "BORGHESE," "MARCELLA BORGHESE," and "PRINCESS MARCELLA BORGHESE" as they applied to "men's and women's fragrances, cosmetics, beauty treatment products, skin and hair care products, sun tan preparations, nail care products, and jewelry, clothing and clothing accessories sold in conjunction with and to promote such products." (1990 Agreement at ¶ 1.)
On January 17, 1992, Revlon assigned the 1976 Agreement and the 1990 Agreement to Halston Borghese International Limited ("HBIL"). (1993 Agreement at Preamble ¶ 4.) Following HBIL's purchase of the Borghese brand from Revlon, there was "some disagreement between [the Princess and her sons Livio and Francesco Borghese] and HBIL concerning the meaning of the 1990 Agreement and its assignment, with the 1976 Agreement, to HBIL. (Id. at Preamble ¶¶ 5.) To "resolve their differences amicably," the disputing parties executed the 1993 Agreement, which conveyed ownership of certain intellectual property rights to HBIL, now Plaintiff BIL. (Id. at Preamble ¶ 6; id. at § II.A.)
Under the 1993 Agreement, the Princess and Francesco Borghese receive royalty payments in connection with the sale of cosmetic products until one year following the Princess's death, and for the sale of non-cosmetic products for the remainder of Francesco's life. (Id. at § III.B.) In exchange, the Agreement provides that HBIL receives the following rights in the "Borghese Name":
To the extent Princess Marcella Borghese and her Eligible Descendants1 have the authority to do so, the Princess has assigned, transferred and conveyed all the right, title and interest of the Princess in and to the BORGHESE name as applied to any and all consumer products. Notwithstanding the foregoing, the Princess does not represent, warrant or covenant that the Princess has assigned to HBIL the exclusive right, title or interest in or to the BORGHESE name as it is applied to Other Consumer Products.
(Id. at § IV.H.) Elsewhere, the Agreement explains that "[t]he Princess [as defined] has no right whatsoever to own, use or license any of the Intellectual Property, except to the extent that such ownership and use would not be inconsistent with the rights of HBIL as set forth herein." (Id. at § II.D.) It also provides that the signatories from the Borghese family must "refrain from being engaged by or interested in any other business, firm or corporation which directly or indirectly is in competition with HBIL in its business of selling . . . consumer products and services related thereto, without the prior written approval of HBIL." (Id. at § IV.G.)
The Agreement also includes the following obligation of the signatory Defendants:
A. Protection of Intellectual Property. The Princess [as defined] shall do whatever HBIL reasonably requests to obtain and protect HBIL's Intellectual Property . . . Further, the Princess [as defined] will, at HBIL's request and expense, assist in the enforcement of Intellectual Property against infringing uses by others as may be deemed reasonably necessary by HBIL. The Princess [as defined] shall promptly inform HBIL of any suspected infringements of which the Princess has actual knowledge.
(Id. at § IV.A.)
Finally, the Agreement contains the following provision concerning the duty of HBIL to maintain a certain quality of their products ("the Quality Provision"):
D. Quality: In order to ensure that the Princess is not subjected to public ridicule or contempt, HBIL agrees that the Intellectual Property shall be used only on consumer products, and services related thereto, of a quality customarily sold or provided through stores of high reputation and prestige; provided, however, that neither the foregoing, nor anything else in this Agreement, shall limit or be construed as limiting HBIL's ownership rights in and to the Intellectual Property.
(Id. at § III.G.)
To this day, the Borghese-branded products are available throughout the world. (Petrocelli Dep. at 101:21-23.) In the United States, Borghese-branded products are sold at cosmetics boutiques and department stores, including Bloomingdale's and Lord & Taylor. Certain Borghese products under the "Kirkland Signature, by Borghese" brand ("KS By Borghese") are now available nationwide at Costco stores, and at more than 17,000 pharmacies nationwide, including CVS, Walgreens, Rite Aid, and Duane Reade. Borghese also has a presence in the television shopping world; beginning in 2010, its products were also available for sale on...
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