Espn, Inc. v. Quiksilver, Inc.
| Decision Date | 14 November 2008 |
| Docket Number | No. 08-CV-4222.,08-CV-4222. |
| Citation | 586 F.Supp.2d 219 |
| Parties | ESPN, INC., Plaintiff, v. QUIKSILVER, INC., Defendant. Quiksilver, Inc., Counterclaimant, v. ESPN, INC., Counterdefendant. |
| Court | U.S. District Court — Southern District of New York |
Sara Jaclyn Goldfarb, Kenneth Conboy, Latham & Watkins LLP, New York, NY, Jennifer L. Barry, Latham & Watkins LLP, San Diego, CA, Mark Andrew Finkelstein, Latham & Watkins, Costa Mesa, CA, for Defendant.
DECISION AND ORDER DENYING PLAINTIFF/COUNTERDEFENDANT'S MOTION TO DISMISS
I. Introduction
On May 2, 2008, ESPN, INC. ("ESPN") filed a complaint against Quiksilver, Inc. ("Quiksilver"), alleging trademark infringement under Section 32(a) of the Lanham Trademark Act, 15 U.S.C. § 1114(a), trademark infringement and unfair competition under 15 U.S.C. § 1125(a), anti-dilution under New York GBL § 360-1, and trademark infringement under New York common law. On June 16, 2008, Quiksilver filed an answer, in which it denied many of the complaint's allegations, asserted affirmative defenses, and counterclaimed for declaratory relief, trademark infringement under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), trademark dilution under N.Y. GBL § 360-1, unfair competition under New York common law, and cancellation of federal registrations under 15 U.S.C. § 1064 and 15 U.S.C. § 1119.
Plaintiff/Counterdefendant has moved to dismiss all but one of Quiksilver's counterclaims.
The motion is denied.
II. Background
The issue in this case is who rightfully owns the intellectual property rights in a stylized "X," which each party claims is its well-recognized trademark.
ESPN, a Delaware corporation with a principal place of business in Bristol, Connecticut, is a multinational sports entertainment company. See Cplt. ¶ 2. In the mid-1990's, ESPN created the X Games, an international alternative sports competition featuring "sports" like skateboarding, snowboarding, and surfing. Id. ¶¶ 4-5. ESPN owns pending trademark applications for its stylized X Games mark, which it affixes on goods that are sold at X Games events, on the internet, and in department stores. Id. ¶¶ 13-16.
Quiksilver, a Delaware corporation with a principal place of business in Huntington Beach, California, is a manufacturer of boardshorts and other clothing products for surfers. See Counterclaim ¶¶ 6-7. Quiksilver products are sold throughout the world, primarily in surf shops, snow shops, skate shops, and department stores. Id. ¶ 11. Quiksilver claims that it began using the "X" symbol on its products since no later than 1986. Id. ¶ 15.
Quiksilver claims its use of the X as a mark, "which has been incorporated into many different designs, constitutes a trademark of Quiksilver." Id. ¶ 15. Quiksilver asserts that the many different designs "are collectively referred to as the `Gen X Brand.'" Id. It claims that the Gen X Brand "has been used in connection with a variety of products and marketing materials." Id. ¶ 16. All of the Gen X designed feature the letter X. Id. ¶ 16. Quicksilver contends that its use of the Gen X Brand, with its complementary "X" ornamentation on its products and in its advertising, continued through the present; it cites in particular the "Quiksilver X" design as being first introduced no later than 1994. Id. ¶ 26. The "Quiksilver X" design features the Quiksilver Logo—a mountain and wave logo used as a standalone mark—inside a thick black X. Id.
Quiksilver believes that ESPN turned to Quiksilver for inspiration for use of the term "X" in the mid 1990s. Id. ¶¶ 27-28. ESPN originally called its extreme sports competition "Extreme Games," but changed that to "X Games" after the inaugural 1995 event. Id. ¶¶ 27, 30. Defendant pleads, "that long after Quiksilver launched its Gen X Brand, ESPN and its sales staff still did not even understand the significance of the letter `X' as it related to Generation X, and requested information on that significance." Id. ¶ 29.
Quiksilver alleges five counterclaims against ESPN. The First Counterclaim is for Declaratory Relief. Quiksilver asks the Court to declare that (a) Quiksilver is the senior user of the Gen X Brand; (b) Quiksilver's use of Xs on its products as complementary ornamentation to the Gen X Brand is non-trademark use; (c) Quiksilver's use of the Gen X Brand does not infringe or dilute ESPN's X Games Marks because Quiksilver has priority of use and/or the use of Xs as ornamentation is non-trademark use; (d) Quiksilver's use of the Gen X Brand does not constitute unfair competition vis-à-vis ESPN's X Games Marks because Quiksilver has priority of use and/or the use of Xs as ornamentation is non-trademark use; and (e) Quiksilver's use of the Gen X Brand does not dilute ESPN's X Games Marks because the X Games Marks are sufficiently diluted by the voluminous third party use of X-related marks such that Quiksilver's marks cannot further dilute them. ESPN has not moved to dismiss this counterclaim.
Quiksilver's Second Counterclaim is for a violation of 15 U.S.C. § 1125(a). It alleges that Quiksilver has consistently used the Gen X Brand on its products and has established significant common-law trademark rights in connection with its Gen X Brand. Quicksilver alleges that it has "superior rights and priority in and to the Gen X Brand" by virtue of having adopted the logo a decade before ESPN invented The X Games, and avers that ESPN, as the junior user, "has been and is engaged in trademark infringement and unfair competition" which is "knowing and willful." Id. ¶¶ 48-49.
Quiksilver's Third Counterclaim alleges Trademark Dilution under N.Y. GBL § 360-1 due to ESPN's alleged dilution of Quiksilver's Gen X Brand by virtue of the X Games Marks. Id. ¶¶ 54-56.
Quiksilver's Fourth Counterclaim is for New York Common Law Unfair Competition and alleges that ESPN's "bad faith misappropriation of Quiksilver's Gen X Brand, in particular, its copying of the "Quiksilver X" design, violates New York common law." Id. ¶ 58.
Quiksilver's Fifth Counterclaim seeks cancellation of the X Games trademark registrations based upon fraud and ESPN's failure to inform the USPTO of Quiksilver's alleged senior rights in the Gen X Brand. Id. ¶¶ 60-64. It alleges it is being damaged by the fraudulently obtained X Games federal registrations, because those registrations are either being asserted against it now or may be asserted in future lawsuits. Id.
In its request for dismissal of the counterclaims, ESPN claims that Quiksilver fails to state a claim upon which relief can be granted. See Motion to Dismiss at 7. Specifically, ESPN contends that, "Nowhere in Quiksilver's pleading does it allege, either outright or by implication, the necessary elements of a trademark or an unfair competition claim under the Lanham Act or New York common law." Id. at 2. According to ESPN, Quiksilver has never alleged that it owns a valid and protectible trademark that it uses in commerce as an indication of source or origin; that such trademark is being or was infringed by ESPN; or that a likelihood of confusion exists between any of Quiksilver's designs and any mark used by ESPN, Id. at 2, 7. ESPN further contends that Quiksilver does not allege that its mark or marks is or are famous, extremely strong, or even distinctive, a threshold requirement for a claim of trademark dilution under New York General Business Law. Id. at 2. Finally, ESPN claims that Quiksilver "lacks standing to assert its claim for cancellation of ESPN's incontestable trademarks and trademark applications for the X Games trademarks because it has not (and cannot) allege the type of damage required under the Lanham Act to assert such a claim." Id.
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of a complaint that fails to state a claim upon which relief can be granted. "The standard of review on a motion to dismiss is heavily weighted in favor of the plaintiff." In re Bayou Hedge Fund Litigation, 534 F.Supp.2d 405, 413 (S.D.N.Y.2007) (McMahon, J.). On a motion to dismiss, the court must accept all factual allegations in the complaint as true. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, ___, 127 S.Ct. 2499, 2509, 168 L.Ed.2d 179 (2007); see also Fershtadt v. Verizon Communications Inc., 550 F.Supp.2d 447, 451 (S.D.N.Y.2008) (McMahon, J.). "The court is also required to read a complaint generously, drawing all reasonable inferences from its allegations in favor of the plaintiff." Lee v. Sony BMG Music Entertainment, Inc., 557 F.Supp.2d 418, 423 (S.D.N.Y.2008) (citation omitted); accord Thomas v. City of New York, 143 F.3d 31, 37 (2d Cir.1998). "The issue [on a motion to dismiss] is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir.1995).
In Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007), the United States Supreme Court "retired" the Conley v. Gibson standard, which had previously held that dismissal is inappropriate "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief," 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80(1957). The Bell Atlantic Court held that "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitlement] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 1964-65 (internal citations and quotations omitted). To survive a motion to...
To continue reading
Request your trial
-
Gym Door Repairs, Inc. v. Young Equip. Sales, Inc.
..."[i]t is not." SAC ¶ 114. These allegations suffice to state a claim for relief under Rule 8(a). See, e.g. , ESPN, Inc. v. Quiksilver, Inc. , 586 F.Supp.2d 219, 225 (S.D.N.Y.2008). Second, Total Gym contends that, even if the claims are sufficient, Total Gym is not liable because the owners......
-
Ritani, LLC v. Aghjayan
...mark and a likelihood of confusion between the marks of the alleged infringer and the charging party. See ESPN, Inc. v. Quiksilver, Inc., 586 F.Supp.2d 219 (S.D.N.Y.2008); see e.g., Tiffany (NJ) Inc. v. eBay, 600 F.3d 93, 102 n. 6 (2d Cir.2010). As the Plaintiff has sufficiently pled the fe......
-
Franklin v. X Gear 101, LLC
...Sara Designs, Inc. v. A Classic Time Watch Co. Inc., 234 F. Supp. 3d 548, 556 (S.D.N.Y. 2017) (quoting ESPN, Inc. v. Quiksilver, Inc., 586 F. Supp. 2d 219, 230 (S.D.N.Y. 2008)). Thus, the common law trademark claims should be dismissed as to Instagram and GoDaddy but survive as to X Gear an......
-
R.F.M.A.S., Inc. v. Mimi So
...either [1] actual confusion in an action for damages or [2] a likelihood of confusion for equitable relief." ESPN, Inc. v. Quiksilver, Inc., 586 F.Supp.2d 219, 230 (S.D.N.Y.2008) (quoting Jeffrey Milstein, 58 F.3d at 35). The Court has already determined that questions of fact exist as to w......