TechnoMarine Sa v. Jacob Time, Inc.

• Decision Date: 24 October 2012
• Docket Number: No. 12 Civ. 0790(KBF).,12 Civ. 0790(KBF).
• Citation: 905 F.Supp.2d 482
• Parties: TECHNOMARINE SA, a Swiss Corporation, Plaintiff, v. JACOB TIME, INC., a New York Corporation; and Does 1–10, inclusive, Defendants.
• Court: U.S. District Court — Southern District of New York

905 F.Supp.2d 482

TECHNOMARINE SA, a Swiss Corporation, Plaintiff,

v.JACOB TIME, INC., a New York Corporation; and Does 1–10, inclusive, Defendants.

No. 12 Civ. 0790(KBF).

United States District Court, S.D. New York.

Oct. 24, 2012.

Brent Herbert Blakely, Cindy Chan, Blakely Law Group, Hollywood, CA, for Plaintiff.

Saritha Chandrupatla Reddy, William Laurence Charron, Pryor Cashman LLP, New York, NY, for Defendants.

MEMORANDUM AND ORDER

KATHERINE B. FORREST, District Judge:

On February 1, 2012, TechnoMarine SA (“TechnoMarine”) filed this action against Jacob Time, Inc. (“Jacob Time”) and unnamed Does 1 through 10. TechnoMarine alleges that Jacob Time engaged in trademark infringement and dilution and false designation of origin under the Lanham Trademark Act of 1946, 15 U.S.C. § 1051 et seq. (the “Lanham Act”), copyright infringement under 17 U.S.C. § 501, and tortious interference with contract, unfair competition, and conversion under New York Law. TechnoMarine also seeks declaratory relief.

TechnoMarine, a company that sells watches exclusively through authorized channels, commenced this suit after allegedly learning that Jacob Time, a watch distributor that is not an authorized retailer of TechnoMarine branded goods, was selling watches bearing the TechnoMarine marks through its website. (Second Am. Compl. ¶¶ 24–25.) TechnoMarine also alleges that defendant has sold a stolen TechnoMarine watch. ( Id. at ¶ 31.)

Faced with an initial motion to dismiss, TechnoMarine amended its original complaint on April 4, 2012. (Docket No. 16.) On May 4, 2012, Jacob Time moved to dismiss the amended complaint in its entirety. The Court granted that motion to dismiss with one final leave to replead. TechnoMarine SA v. Jacob Time, Inc. et al., No. 12 Civ. 0790(KBF), 2012 WL 2497276 (S.D.N.Y. June 22, 2012). TechnoMarine filed a second amended complaint (“SAC”) on July 3, 2012. (Docket No. 28.) Jacob Time has now moved to dismiss the second amended complaint in its entirety, pursuant to Federal Rule 12(b)(6). (Docket No. 31.)

For the reasons set forth below, the Court GRANTS that motion IN PART and DENIES it IN PART.

FACTUAL ALLEGATIONS

TechnoMarine has designed, manufactured, distributed and sold fashionable watches under the TechnoMarine marks since 1997, generating hundreds of millions of dollars in worldwide sales. (SAC ¶¶ 12, 16.) In addition to trademark registrations, the Swiss corporation also owns a U.S. copyright certificate for its logo. ( Id. ¶ 14.) Sales of TechnoMarine products are contractually permitted only through authorized dealers, most of which are not authorized to sell the products on the Internet. ( Id. ¶ 21.) TechnoMarine's authorized retailers have entered into agreements with the watchmaker prohibiting them from transshipping and selling TechnoMarine products to unauthorized third parties or online retailers. ( Id. ¶ 22.)

Based on plaintiff's information and belief, Jacob Time is a watch distributor in New York, New York that offers premium brand watches at discounted prices through its website. ( Id. ¶ 23.) Jacob Time is not an authorized retailer of TechnoMarine watches, but “has purchased, advertised, offered for sale, and/or sold watches” bearing the TechnoMarine marks. ( Id. ¶¶ 24–25.)

TechnoMarine contends that watches sold by Jacob Time are “not genuine TechnoMarine branded products” because a sample TechnoMarine watch purchased by TechnoMarine from Jacob Time's website “was not intended for sale and distribution in the United States,” was missing the “tags and labeling ... which accompany genuine TechnoMarine watches,” is missing the “standard warranty card” that accompanies genuine TechnoMarine watches, and allegedly did not undergo the post-shipment quality control procedure that applies to TechnoMarine watches sold through authorized channels. ( Id. ¶¶ 26–30.) The Second Amended Complaint adds an additional allegation that defendant Jacob Time is selling stolen watches, based on an analysis of the serial number of a sample watch TechnoMarine purchased from Jacob Time.¹ ( Id. ¶¶ 31–32.)

On or about November 7, 2011, TechnoMarine sent a cease and desist letter to Jacob Time, notifying it of plaintiffs rights and warning that further purchase of TechnoMarine watches from authorized distributors or retailers would render it liable for tortious interference with contract. ( Id. ¶ 33.) Jacob Time has continued to purchase, advertise, promote, offer for sale and/or sell the watches on its website. ( Id. ¶¶ 34–35.)

STANDARD OF REVIEW

On a motion to dismiss, this Court accepts as true all well-pleaded factual allegations. See Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949–50, 173 L.Ed.2d 868 (2009). This means that this Court must accept a plaintiff's factual allegations in his complaint as true and draw all reasonable inferences in the plaintiff's favor. See Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir.2010). Taking those factual allegations as true, to withstand dismissal, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Iqbal, 129 S.Ct. at 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Thus, while “Rule 8 marks a notable and generous departure from hyper-technical, code-pleading regime of a prior era, [ ] it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 1950. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not shown—that the pleader is entitled to relief.” Id. (internal punctuation omitted); see alsoFed.R.Civ.P. 8(a)(2).

DISCUSSION

First and Second Claims for Relief

A. Legal Standard for Infringement and False Designation

Plaintiff's first two claims allege trademark infringement and false designation of origin under the Lanham Act. 15 U.S.C. §§ 1114, 1125 (West 2012). In order to state a trademark infringement claim, plaintiff must satisfy a two-prong test: first, that it has a valid mark entitled to protection under the Lanham Act and, second, that defendant's use of the mark (or any “reproduction, counterfeit, copy, or colorable imitation” thereof), in commerce, is likely to cause consumer confusion “as to the origin, sponsorship, or approval of [defendant's] goods, services, or commercial activities by [plaintiff].” 15 U.S.C. § 1114(1)(a) (West 2012); Gruner + Jahr USA Publ'g v. Meredith Corp., 991 F.2d 1072 (2d Cir.1993). The same analysis applies to claims of false designation of origin under § 43 of the Lanham Act. Louis Vuitton Malletier v. Dooney & Bourke, Inc., 454 F.3d 108, 114 (2d Cir.2006). Plaintiff adequately alleges a valid trademark. (SAC ¶¶ 11, 37.) To determine whether plaintiff has pled claims for trademark infringement or false designation of origin therefore depends on the adequacy of the allegations with respect to consumer confusion.

Consumer confusion may be alleged in at least three ways. First, plaintiff may plead sufficient facts to satisfy the non-exclusive 8–factor test of Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir.1961): (1) the strength of the senior user's mark; (2) the degree of similarity between the two marks; (3) the proximity of the products; (4) the likelihood that the prior owner will bridge the gap; (5) actual confusion; (6) the junior user's good faith in adopting its own mark; (7) the quality of defendant's product; and (8) the sophistication of the buyers.

Though Polaroid itself dealt with trademark infringement between two different types of noncompeting products, the Second Circuit has held that the Polaroid analysis applies to claims involving identicaland competing products as well. Physicians Formula Cosmetics, Inc. v. W. Cabot Cosmetics, Inc., 857 F.2d 80, 83 (2d Cir.1988).

In addition to the Polaroid analysis, consumer confusion may be inferred where the alleged infringer used a “counterfeit” mark. The Lanham Act defines a “counterfeit” as “a spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” 15 U.S.C. § 1127 (West 2012). Courts determining whether goods are counterfeit (and therefore, for present purposes, whether consumer confusion may be inferred) have found a prima facie case is satisfied where the plaintiff made evidentiary allegations based on falsified logos, inferior workmanship and materials, and combinations of colors and markings not found in a non-counterfeit product. See, e.g., Fendi Adele S.R.L. v. Burlington Coat Factory Warehouse Corp., 689 F.Supp.2d 585, 597 (S.D.N.Y.2010), amend. on recon. (Mar. 23, 2010); Motorola, Inc. v. Abeckaser, 07 Civ. 3963, 2009 WL 962809, at *5–*6 (E.D.N.Y. Apr. 8, 2009).

Third, for “grey market” goods—goods that are resold through unauthorized channels—a court may find that consumer confusion is adequately alleged when goods are asserted to be not “genuine.” The Second Circuit has observed that “[a]s a general rule, ‘trademark law does not reach the sale of genuine goods bearing a true mark even though the sale is not authorized by the mark owner.’ ” See Helene Curtis v. Nat'l Wholesale Liquidators, Inc., 890 F.Supp. 152, 157 (E.D.N.Y.1995) ( quoting Polymer Technology Corp. v. Mimran, 975 F.2d 58, 61 (2d Cir.1992)). Allegations of interference with quality control procedures, Polymer Tech. Corp. v. Mimran, 37 F.3d 74, 78 (2d Cir.1994), or material differences in the goods sold, Original Appalachian Artworks. Inc. v. Granada Electronics. Inc., 816 F.2d 68, 72–73 (2d Cir.1987), are among the factors that can render grey goods non-genuine and therefore support the consumer confusion element of a trademark infringement claim.

B. Dismissal of the Infringement Claim in the...