I.M. Wilson, Inc. v. "grichko
| Decision Date | 25 July 2019 |
| Docket Number | CIVIL ACTION NO. 18-5194 |
| Citation | 397 F.Supp.3d 721 |
| Parties | I.M. WILSON, INC., Plaintiff, v. OTVETSTVENNOSTYOU "GRICHKO" et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Brian A. Coleman, Katlyn Moseley, Drinker Biddle & Reath LLP, Washington, DC, Daniel E. Brewer, Drinker Biddle & Reath LLP, Philadelphia, PA, for Plaintiff.
Brian Patrick Kinder, The Kinder Law Group, Irvine, CA, David S. Hollander, Robert A. McKinley, Lauletta Birnbaum LLC, Sewell, NJ, for Defendants.
Pratter, District Judge The defendants in this case—OOO Grichko, Nicolay Grishko, and Grishko S.R.O.1 —are Russian and Czech entities that manufacture and sell ballet shoes under the name GRISHKO. They own the trademark GRISHKO everywhere in the world, except for the United States. In this country, Plaintiff I.M. Wilson, Inc. owns the GRISHKO trademarks and has since the early 1990s when Mr. Grishko wrote two letters that allowed I.M. Wilson to register the mark.
For decades, I.M. Wilson was the defendants' exclusive distributor in the United States and, until recently, the parties had an amicable working relationship. In 2016, the defendants terminated the exclusive licensing agreement under which the parties were operating, and the exclusivity of the relationship officially came to an end in March 2018. Around that time, the defendants began selling products directly to U.S. consumers, increasing their sales activities around the holidays. This prompted I.M. Wilson to seek a preliminary injunction to prevent the defendants from infringing on the U.S. GRISHKO trademarks. The defendants countered by filing a motion to dismiss or stay the case pending arbitration and argue that this dispute is covered by an arbitration clause in the parties' 1992 exclusive licensing agreement.
This Memorandum addresses both motions in the order that they were filed.2 The Court is prepared to grant I.M. Wilson's Motion for Preliminary Injunction because I.M. Wilson has demonstrated a sufficient likelihood of success on the merits, irreparable harm, and that the equities balance in its favor. The Court does so with some reticence, however, because it is questionable whether a preliminary injunction is in the public interest. Moreover, because it is by no means inevitable that I.M. Wilson will prevail at the next phase of this litigation, the Court will entertain submissions on the issue of the amount of a bond to be posted by I.M. Wilson in connection with issuance of a preliminary injunction. The Court denies the Motion to Dismiss for Failure to State a Claim or, Alternatively, Stay this Action Pending Arbitration because the agreement containing the arbitration clause was terminated, and this dispute does not relate back to that agreement.
Some nine months after seeing that the defendants were selling ballet shoes in the United States, I.M. Wilson filed a Motion for Preliminary Injunction on December 4, 2018, alleging that the defendants are actively infringing on its GRISHKO trademarks. Since then, there have been numerous rounds of briefing (with and without oral arguments), several days of hearings, post-hearing submissions, and two motions to supplement the record.3 Upon consideration of all these materials, the Court makes the following findings of fact and conclusions of law.
The Court held three days of hearings on the factual issues underlying this preliminary injunction. Those hearings were held on February 15, February 27, and April 5, 2019.4
1. I.M. Wilson is a Pennsylvania corporation with its principal place of business located in King of Prussia, Pennsylvania. I.M. Wilson sells a variety of dance related products, including ballet shoes and pointe shoes. Feb. 15 Hrg. Tr. 36:4-6; 38:2-7.
2. I.M. Wilson is owned by Irene Wilson, a citizen of the United States. Feb. 15 Hrg. Tr. 34:9-11. Ms. Wilson danced ballet in her youth. Feb 27 Hrg. Tr. 13:20-14:16. She later obtained degrees in Russian and Communications. Feb. 15 Hrg. Tr. 34:12-17.
3. Defendant Obchtchestvo S Organtichennoy Otvetstvennostyou "Grichko" (OOO Grichko) is a Russian company that manufactures and sells dancewear products, including ballet shoes and pointe shoes. Apr. 5. Hrg. Tr. 143:8–144:3.
4. Defendant Grishko Dance, S.R.O. is a company organized under the laws of the Czech Republic. Apr. 5 Hrg. Tr. 141:15–23. Grishko Dance obtains GRISHKO-branded products, including ballet and pointe shoes, from OOO Grichko and sells these products through the website grishkoshop.com. Apr. 5 Hrg. Tr. 138.T–22; 141:24–143:7.
5. Defendant Nicolay Grishko5 is a 60 percent owner of Defendant OOO Grichko and serves as the company's President and General Director. Apr. 5 Hrg. Tr. 141:9–13. Mr. Grishko is a 100 percent owner of Defendant Grishko Dance and serves as that company's co-administrator. Apr. 5 Hrg. Tr. 141:15–23.
6. Mr. Grishko is married to a former Russian professional ballerina, Tamara Grishko. Apr. 5 Hrg. Tr. 45:7–12. Mr. and Mrs. Grishko had friends that profited from selling Russian-made ballet shoes, which inspired Mr. Grishko to manufacture and sell Russian-made ballet shoes. Apr. 5 Hrg. Tr. 46:2–47:20.
7. In 1988, Mr. Grishko launched a "Kooperativ" (a worker-owned enterprise that differed from the historically state-owned enterprises of the past) because, at that time, the U.S.S.R. did not allow for the formation of private companies or private property ownership. Apr. 5 Hrg. Tr. 44:17-22. He named the Kooperativ "Tanyets" (the Russian word for "dance"). Apr. 5 Hrg. Tr. 48:20-49:16. Kooperativ Tanyets was formed for the purpose of manufacturing ballet and pointe shoes. Apr. 5 Hrg. Tr. 44:9–22; 48:20–25.
8. Each and every pair of GRISHKO ballet pointe shoes is hand crafted in Russia by skilled cobblers and inspected by quality control specialists who place unique identification numbers inside the fold of the seam within the shoes. Ex. D26.
9. In the late-1980s, Ms. Wilson wanted to start an import business with the goal of importing goods from Russia. Feb. 27 Hrg. Tr. 15:22–16:13. Ms. Wilson worked with Amtorg, an international company that matches importers with exporters. Feb. 27 Hrg. Tr. 16:18–22.
10. Ms. Wilson originally considered importing vodka, but Amtorg ultimately connected her with Mr. Grishko to discuss importing his ballet shoes. Feb. 15 Hrg Tr. 54:11–55:3; Feb. 27 Hrg. Tr. 16:18-25. Ms. Wilson made arrangements with Amtorg to travel to Russia in 1990 with the goal of meeting a ballet shoe manufacturer. Feb. 27 Hrg. Tr. 17:13–20.
11. While in Russia, Ms. Wilson met Mr. Grishko, and the parties agreed that I.M. Wilson would sell Tanyets-manufactured shoes in the United States under the brand name "GRISHKO."6 Feb. 15 Hrg. Tr. 54:11–56:9.
12. On April 25, 1990, I.M. Wilson entered into an exclusive trademark license and distribution agreement (ETLDA) with the Tanyets Kooperativ. Ex. D10.
13. The agreement stated that:
[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.
14. The 1990 ETLDA granted I.M. Wilson an exclusive license to sell Grishko products in the United States. Ex. D10 at ¶ XV. In that regard, the agreement stated:
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.
15. The agreement remained in effect for one year and automatically renewed for successive one-year terms unless a party provided notice that it was terminating the agreement at least 90 days prior to the "anniversary of [the] Agreement." Ex. D10 at ¶ XVIII.
16. The agreement further provided that I.M. Wilson was the exclusive distributor of GRISHKO products in the United States during the pendency of the agreement and for a period of one year after the agreement's termination. Ex. D10 at ¶ XIV.
17. Any alterations or additions to the agreement were "valid only if in writing and signed by persons duly authorized by both parties." Ex. D10 at ¶ XVIII.
18. The agreement further provided that:
19. On March 1, 1992, the parties entered into an identical agreement that substituted Grishko, Inc. for the Tanyets Kooperativ. Ex. D11.7
20. The parties agreed that I.M. Wilson should register the trademark in the United States. Feb. 15 Hrg. Tr. 58:20–60:6; Apr. 5 Hrg. Tr. 69:18–70:7.
21. On July 24, 1992, Ms. Wilson completed a trademark application for "dancing shoes" using the mark "GRISHKO." Ex. D9 at pp. 42–43 of 138. In that application, Ms. Wilson signed a declaration that stated she "declares that she is properly authorized to execute this application on behalf of the applicant; [and] she believes the applicant to be the owner of the trademark sought to be registered...." Ex. D9 at 42–43...
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I.M. Wilson, Inc. v. Otvetstvennostyou "Grichko"
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