Diesel S.p.A. v. Diesel Power Gear, LLC
| Decision Date | 30 March 2022 |
| Docket Number | 1:19-cv-9308-MKV |
| Parties | DIESEL S.p.A.; and DIESEL U.S.A., INC., Plaintiffs, v. DIESEL POWER GEAR, LLC, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiffs Diesel S.p.A. and Diesel U.S.A., Inc. (collectively “Plaintiffs”) bring this action under the Lanham Act and New York state law against Defendant Diesel Power Gear, LLC, alleging infringement of registered trademarks trademark dilution, federal unfair competition, and unfair competition under New York common law. . The parties have cross moved for summary judgment on the issue of liability. [ECF No. 36]; [ECF No. 38].
Plaintiffs are the owner and exclusive licensee of the DIESEL brand and DIESEL Marks. (Joint Local Rule 56.1 Statement of Undisputed Facts (“JSUF”) [ECF No. 35] ¶¶ 1-2). Plaintiffs design, manufacture, market, and distribute apparel, footwear and accessories for men, women and children, along with home and lifestyle products, among other things, under or in connection with trademarks incorporating the word “diesel.” (JSUF ¶ 1). Plaintiffs and their DIESEL Products have generated millions of dollars of annual sales in the United States. Plaintiffs have expended millions of dollars in advertising and promoting their DIESEL Products, and have been prominently featured in a number of press publications, including, but not limited to Details, GQ, In Style Interview, Nylon, The New York Times, Cosmopolitan, W, Elle, and Esquire. (JSUF ¶¶ 15-19).
Diesel S.p.A. has applied for and been granted the DIESEL Registrations covering the DIESEL Marks, many of which are incontestable. (JSUF ¶ 23). Plaintiffs have also instituted an active enforcement program, through which they vigorously enforce their rights in and to the DIESEL Marks. (JSUF ¶ 27).
Diesel Power Gear, formed in 2013, is owned by David Sparks, David Kiley, and Josh Stuart, all of whom were, or currently are, on a Discovery Channel television show entitled “Diesel Brothers.” (JSUF ¶ 28). Each month, Defendant hosts a sweepstakes contest whereby consumers are entered into a drawing to win a custom-built diesel truck for every five dollars spent on apparel and gear on dieselpowergear.com. (JSUF ¶¶ 30-32). Defendant's principal revenue stream comes from sales of apparel and gear promoting and used for recreational diesel trucks. (JSUF ¶ 29).
Defendant uses, or has used, the word “diesel” on or in connection with its online retail services, apparel, accessory products, and business. (JSUF ¶¶ 35-36). Defendant also uses the alleged infringing marks in connection with its marketing and promotion of its products, including via social media promotions, and as paid keywords.[1] (JSUF ¶¶ 50-51).
In 2015, Defendant filed an application to register the trademark DIESEL POWER GEAR with the United States Patent and Trademark Office (“USPTO”) for use on apparel. (JSUF ¶ 55). Plaintiffs opposed the application, (JSUF ¶¶ 55-56), and Defendant failed to respond to Plaintiffs' opposition. The Trademark Trial and Appeal Board (the “TTAB”) entered a notice of default on September 21, 2016. (JSUF ¶ 57). Defendant failed to answer the Notice of Default, and on November 14, 2016, the TTAB entered judgment against Defendant, sustained the opposition and refused the registration in light of Defendant's default (the “11/14 Judgment”). (JSUF ¶ 58).
In 2017, Defendant again applied to register the trademark DIESEL POWER GEAR with the USPTO for the use on apparel. (JSUF ¶¶ 59-60). Plaintiff Diesel S.p.A. opposed the second application, and on September 16, 2019 the TTAB granted summary judgment to Plaintiff Diesel S.p.A. regarding the DIESEL POWER GEAR trademark, finding that “the elements of claim preclusion” had been satisfied, given the 11/14 Judgment. (JSUF ¶ 61). At the same time, Defendant also applied to register the trademark DIESELSELLERZ with the USPTO for clothing. (JSUF ¶ 60). Plaintiff Diesel S.p.A. likewise opposed the DIESELSELLERZ mark and that proceeding is currently pending before the TTAB. (JSUF ¶ 62).
On July 21, 2017, Plaintiff Diesel S.p.A. sent a cease-and-desist letter to Defendant related to its use of the DIESEL POWER GEAR mark. (JSUF ¶ 63).
Plaintiffs commenced this action against Defendant in October 2019. Plaintiffs allege the following causes of action: (1) infringement of registered trademarks under section 32(a) of the Lanham Act, 15 U.S.C. § 1114, (Compl. ¶¶ 45-55); (2) trademark dilution under the Lanham Act section 43(c), 15 U.S.C. § 1125(c), (Compl. ¶¶ 56-65); (3) federal unfair competition under the Lanham Act section 43(a), 15 U.S.C. § 1125, (Compl. ¶¶ 66-73); and (4) unfair competition under New York State common law, (Compl. ¶¶ 74-80).
Discovery is closed [ECF No. 31] and the parties now cross move for summary judgment on the issue of liability. [ECF No. 36]; [ECF No. 38]. The parties submitted a joint local rule 56.1 statement of undisputed facts. (See JSUF). In support of its motion, Defendant filed the Declaration of Joseph Shapiro, counsel for Defendant, with several exhibits, (Shapiro Decl. [ECF Nos. 40-2-40-5, 45]), the Declaration of Caleb Perkins, Chief Operating Officer for Defendant, (Perkins Decl. [ECF No. 40-1]), a local 56.1 statement, (Def. 56.1 Stmt. [ECF No. 40]), and a memorandum of law, (Def. Mot. [ECF No. 38]). In support of their motion, Plaintiffs filed the declaration of Kerry Brownlee, counsel for Plaintiffs, with several exhibits, (Brownlee Decl. [ECF No. 42]), the declaration of Stefano Iesurum, the head of Plaintiff Diesel S.p.A.'s legal department, with several exhibits, (Iesurum Decl. [ECF No. 39]), a local 56.1 statement, (Pl. 56.1 Stmt. [ECF No. 43]), and a memorandum of law, (Pl. Mot. [ECF No. 37]). In opposition to Defendant's motion, Plaintiffs filed a local rule 56.1 counterstatement, (Pl. 56.1 Response [ECF No. 47]), and a memorandum of law, (Pl. Opp'n [ECF No. 46]). In opposition to Plaintiffs' motion, Defendant filed a local rule 56.1 counterstatement, (Def. 56.1 Response [ECF No. 49]), and a memorandum of law, (Def. Opp'n [ECF No. 48]). Both sides filed replies, (Def. Reply [ECF No. 52]; Pl. Reply [ECF No. 51]), and Plaintiffs filed a response to Defendant's local rule 56.1 statement of additional facts, (Pl. 56.1 Reply [ECF No. 50]).
A party is entitled to summary judgment when there is no “genuine dispute as to any material fact” and the undisputed facts warrant judgment for the moving party as a matter of law. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party has the initial burden of demonstrating the absence of a disputed issue of material fact. Celotex v. Catrett, 477 U.S. 317, 322-23 (1986). Once the motion for summary judgment is properly made, the burden shifts to the non-moving party, which “must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 250. The Court must view the record in the light most favorable to the non-moving party, Tolan v. Cotton, 572 U.S. 650, 657 (2014) (citation omitted), and must “resolve all ambiguities and draw all reasonable inferences against the movant, ” Caronia v. Phillip Morris USA, Inc., 715 F.3d 417, 427 (2d Cir. 2013) (citation omitted).
However, a party “may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citation omitted). Rather, to survive a summary judgment motion, the opposing party must establish a genuine issue of fact by “citing to particular parts of materials in the record.” Fed.R.Civ.P. 56(c)(1)(A); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). To defeat a motion for summary judgment, the non-moving party must demonstrate more than “some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The non-moving party “cannot defeat the motion by relying on the allegations in [its] pleading, or on conclusory statements, or on mere assertions that affidavits supporting the motion are not credible.” Gottlieb v. Cnty. of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (citation omitted). “Mere conjecture or surmise by the nonmovant in support of his or her case is inadequate.” UMB Bank, N.A. v. Bluestone Coke, LLC, No. 20-CV-2043 (LJL), 2020 WL 6712307, at *3 (S.D.N.Y. Nov. 16, 2020) (quoting Am. Home Assurance Co. v. Jamaica, 418 F.Supp.2d 537, 546 (S.D.N.Y. 2006)).
As a preliminary matter, under the doctrine of claim preclusion the 11/14 Judgment by the TTAB precludes Defendant from relitigating the issues of likelihood of confusion and dilution between the DIESEL marks and Defendant's DIESEL POWER GEAR mark. Under the doctrine of claim preclusion, “a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Cayuga Nation v. Tanner, 6 F.4th 361, 375 (2d Cir. 2021) (quoting TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 499 (2d Cir. 2014). Claim preclusion “prevents parties from raising issues that could have been raised and decided in a prior action-even if they were not actually litigated.” Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S.Ct. 1589, 1594 (2020). The Second Circuit has consistently...
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