I.M. Wilson, Inc. v. Otvetstvennostyou "Grichko"

• Decision Date: 12 November 2020
• Docket Number: CIVIL ACTION NO. 18-5194
• Citation: 500 F.Supp.3d 380
• Parties: I.M. WILSON, INC., Plaintiff v. OTVETSTVENNOSTYOU "GRICHKO", et al., Defendants
• Court: U.S. District Court — Eastern District of Pennsylvania

500 F.Supp.3d 380

I.M. WILSON, INC., Plaintiff

v.OTVETSTVENNOSTYOU "GRICHKO", et al., Defendants

CIVIL ACTION NO. 18-5194

United States District Court, E.D. Pennsylvania.

Signed November 12, 2020

Filed November 13, 2020

Brian A. Coleman, Katlyn Moseley, Drinker Biddle& Reath LLP, Washington, DC, Nicholas Stratton Feltham, Faegre Drinker Biddle & Reath LLP, Philadelphia, PA, for Plaintiff.

Brian Patrick Kinder, The Kinder Law Group, Irvine, CA, David Scott Hollander, Robert A. McKinley, Lauletta Birnbaum LLC, Sewell, NJ, for Defendants.

MEMORANDUM

PRATTER, United States District Judge

Baryshnikov graced the stage of the American Ballet Theatre. Balanchine set Tchaikovsky in motion. And Marc Chagall designed murals for ballets at the Metropolitan Opera House. The ballet world is replete with successful partnerships between Russia and the United States. Here, however, the ongoing drama of a once famed partnership has leapt off stage and into the courtroom.

Counterclaim plaintiffs in this case—OOO Grichko, Nicolay Grishko, and Grishko S.R.O. (collectively, "Grishko")¹ —are Russian and Czech entities that manufacture and sell ballet and pointe shoes under the name GRISHKO. In the early 1990s, Grishko and I.M. Wilson partnered to distribute Grishko-branded products in the United States via an exclusive licensing agreement. Around that time, Mr. Grishko wrote two letters that allowed I.M. Wilson to register the GRISHKO house mark² , the ownership of which, among other things, is currently contested here. The partnership lasted until the music stopped in 2016, when Grishko terminated the exclusive licensing agreement. The exclusivity arrangement officially ended in March 2018 and Grishko began directly selling to U.S. customers.

In response to Grishko's solo entree into the U.S. dance market, I.M. Wilson filed an initial complaint and motion for preliminary injunction against Grishko in December 2018. Although the Court initially granted I.M. Wilson preliminary injunctive relief, the Court has since vacated the preliminary injunction.³ At the Court's invitation, Grishko has now amended its counterclaims for the third time against I.M. Wilson and the Individual Counterclaim Defendants—Irene Wilson, Christine Wilson, Justin Wilson, and Leonard Gage, officers of I.M. Wilson, Inc.⁴ In a medley of claims designed to keep the Court on its toes, Grishko alleges 13 counterclaims. I.M. Wilson and the individual counterclaim defendants both move to dismiss or strike with prejudice all 13 counterclaims. Doc. Nos. 166, 168. The Court heard oral argument on these two motions and now addresses both motions in this Memorandum.

These counterclaims can broadly be trifurcated into (1) Lanham Act and common law claims arising from I.M. Wilson's use of disputed marks and trade dress, (2) claims arising from the parties’ since-terminated licensing agreement, and (3) claims arising from I.M. Wilson's actions while this litigation is pending. For the reasons that follow, the Court grants in part and denies in part I.M. Wilson's and the individual counterclaim defendants’ motions.

BACKGROUND

I. The Parties

I.M. Wilson, a Pennsylvania corporation operating in King of Prussia, Pennsylvania, sells a variety of dance-related products, including ballet shoes and pointe shoes. Irene is the founder and president of I.M. Wilson. The other counterclaim defendants include (1) Leonard Gage, I.M. Wilson's Chairman; (2) Christine Wilson, I.M. Wilson's Secretary and Treasurer; and (3) Justin Wilson, the "Chief Business Officer" who "provides consulting services" to I.M. Wilson.

OOO Grichko is a Russian company that manufactures and sells dancewear products, including ballet shoes and pointe shoes. Grishko Dance, S.R.O. is a Czech company that obtains GRISHKO-branded products from OOO Grichko and sells these products through the website grishkoshop.com.⁵ Nicolay Grishko holds an ownership interest in the Grishko group of companies, which collectively sell products in more than 70 countries. These parties collectively identify themselves as "Grishko."

Relevant here, Grishko produces several lines of pointe shoes, each bearing unique model names—or "model marks."⁶ Grishko alleges that it is exclusively responsible for selecting, adopting, and using the model marks. Grishko's applications to register certain of the model marks with the U.S. Patent and Trademark Office (USPTO) are pending.

II. 1992 Exclusive Trademark Licensing and Distribution Agreement (the 1992 Agreement)

In April 1990, I.M. Wilson and Mr. Grishko's "kooperativ" formalized their relationship in an exclusive trademark licensing and distribution agreement (the 1990 Agreement).⁷ This agreement was followed by a nearly identical agreement that I.M. Wilson and Grishko entered into in March 1992. The 1992 Agreement provides:

[Grishko] has agreed to sell and [I.M. Wilson] has agreed to buy ballet shoes, toe shoes and such other footwear, athletic equipment or other items as the parties hereto may later agree (the "Goods"), in quantity and assortment, at prices and according to specifications, all as attached hereto in Appendix I, which constitutes an integral part of this Agreement....

XV. License

The Seller hereby grants the Buyer an exclusive right, for the duration of this Agreement, to use the name "Grishko" in connection with the sale of the Goods in the United States. In consideration of such right, the Buyer shall pay the Seller a royalty equal to 10% of the value of each shipment of Goods ....

3d Am. Counterclaims, Ex. B. ¶¶ I, XV (Doc. No. 148). According to the agreement, "[a]ny alterations or additions to this Agreement are valid only if in writing and signed by persons duly authorized by both parties." Id. ¶ XVIII. The agreement automatically renewed each year for successive one-year terms provided neither party advised the other of its intent to terminate. Id. ¶ XVIII. The agreement also contained a one-year "black out period" clause prohibiting Grishko from selling Grishko-branded products in the U.S. through any entity other than I.M. Wilson for a year following the termination of the agreement.

III. I.M. Wilson's Federal Trademarks

Grishko alleges that while memorializing the 1992 Agreement, Irene proposed to Mr. Grishko that the parties should register the GRISHKO trademark with the USPTO. Irene proposed to register the GRISHKO trademark in I.M. Wilson's name to allow the company to enforce the trademark rights domestically for the duration of the 1992 Agreement. Mr. Grishko purportedly gave Irene permission to proceed based on the understanding that I.M. Wilson would own the registration so long as that I.M. Wilson remained in an exclusive relationship with Grishko. In August 1992, Mr. Grishko signed a two-line document that Ms. Wilson presented to him in English stating: "I agree that I.M. Wilson, Inc. is the owner of the Trademark, GRISHKO and its goodwill in the United States of America. I further consent to the use of my name in that trademark[,]" ("the August 1992 document"). Am. Compl., Ex. B (Doc. No. 138-2). The writing is silent regarding the model marks and Grishko's trade dress.

After the USPTO rejected the August 1992 document, Mr. Grishko signed another document Ms. Wilson presented to him in English in March 1993 which stated: "In addition to the consent to I.M. Wilson, Inc. that I previously granted on August 5, 1992, I hereby grant I. [sic] Wilson, Inc. the right to register the trademark GRISHKO in the U.S. patent and trademark office[,]" ("the March 1993 document"). Id. at Ex. C.⁸ Grishko alleges that Mr. Grishko did not understand or intend that complete ownership of the GRISHKO trademark would pass to I.M. Wilson through either document. Instead, Grishko alleges that Mr. Grishko understood his relationship with I.M. Wilson to remain as an exclusive licensor/licensee relationship and that the writing was time and purpose limited.

I.M. Wilson relied on those documents to obtain its first GRISHKO trademark registration in November 1993. Some years later, the USPTO declined to register Mr. Grishko's applications for the marks GRISHKO and NICOLAY GRISHKO due to the existence of I.M. Wilson's registration. After learning that he was barred from registering the GRISHKO and NICOLAY GRISHKO marks, Mr. Grishko called Irene to revoke his consent to I.M. Wilson owning the GRISHKO trademark registration and to demand that I.M. Wilson transfer the registration to him. Instead, I.M. Wilson and Grishko allegedly reached an agreement that I.M. Wilson would not renew that registration upon its expiration. Apparently in accordance with this agreement, I.M. Wilson did not file a renewal application, resulting in the cancellation of the registration in September 2004.

In March 2007, I.M. Wilson filed an application with the USPTO to register the GRISHKO house mark in connection with "ballet slippers; dance shoes; dance tights; dance leotards; and dance dresses." 3d Am. Counterclaims ¶ 85 (Doc. No. 148). I.M. Wilson did not initially submit the August 1992 or March 1993 documents to the USPTO. After the USPTO demanded additional materials from I.M. Wilson, I.M. Wilson, through Christine and Irene, eventually submitted the August 1992 and March 1993 documents to support its application, despite Mr. Grishko apparently having orally revoked his consent. The USPTO permitted the application to mature into a registration in February 2009. I.M. Wilson then used this registration, as well as the August 1992 and March 1993 documents, to apply for and obtain various other registrations. I.M. Wilson currently owns seven federal trademarks consisting of or incorporating the GRISHKO name, four of which are now incontestable under Sections 15 and 33 of the Lanham Act. Pub. L. 79-489, 60 Stat. 427. According to Grishko, the individual counterclaim defendants, as members of I.M. Wilson's board of directors, "approved, authorized, consented," "acquiesced" "instructed and/or participated" in such conduct. 3d Am. C...