Telebrands Corp. v. Del Laboratories Inc.
| Decision Date | 15 June 2010 |
| Docket Number | No. 09 Civ. 1001(NRB).,09 Civ. 1001(NRB). |
| Citation | 719 F.Supp.2d 283 |
| Parties | TELEBRANDS CORP., Plaintiff, v. DEL LABORATORIES, INC., Coty U.S., and Coty, Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
OPINION TEXT STARTS HERE
COPYRIGHT MATERIAL OMITTED.
COPYRIGHT MATERIAL OMITTED.
Norman H. Zivin, Tonia A. Sayour, Wendy Ellen Miller, Cooper & Dunham LLP, New York, NY, for Plaintiff.
Lisa Pearson, Amr O. Aly, Kilpatrick Stockton LLP, New York, NY, for Defendants.
Plaintiff Telebrands brought this action against Del Laboratories, Inc., Coty U.S., and Coty, Inc. (collectively “Coty” or “defendants”). On August 11, 2009, Telebrands filed their Third Amended Complaint (“TAC”) asserting the following claims, four of which are under federal law and two of which are under New York state law:
(1) patent infringement under Section 35 of the Patent Laws of the United States, 35 U.S.C. §§ 271, 289;
(2) registered trademark infringement under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1);
(3) federal unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a);
(4) copyright infringement under Section 501 of the 1976 Copyright Act, 17 U.S.C. § 101 et seq ;
(5) common law unfair competition under New York law; and
(6) statutory unfair competition under New York General Business Law § 360-k.
Presently before the Court is defendants' motion to dismiss, brought pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, we dismiss the federal unfair competition claim, the copyright claim and both state law claims. With respect to the remaining claims, defendants' motion to dismiss is denied and the parties are directed to conduct discovery focusing on the dispositive issue in this case.
Telebrands markets a product known as the Fed Egg, which is a foot file designed to remove calluses and dead skin from a user's feet. TAC ¶ 10. Coty markets a similar foot file known as the Pedi-Perfect, which is sold under the “Sally Hansen LA CROSS” brand. TAC ¶ 19.
The Ped Egg consists of three components that fit together neatly to form an ovoid shape which looks roughly like an egg (except that it is symmetrical, i.e., the product has two tapered ends, rather than the off-center bulge of a natural egg). The product fits comfortably in the palm of the hand so that it can be gripped with ease. The Ped Egg's top component (the “handle”) is a plastic, convex-curved ovoid that gives the whole product its egg-like appearance. The handle is white but displays a blue “Ped Egg Professional” logo along one side.
The middle component of the Ped Egg is a flat, stainless steel grater that contains 135 micro files sharp enough to remove calluses and dead skin. The grater and the handle clip together to form a complete, hollow shell so “that, when applied to the user's foot, the shavings are trapped inside. When these two components are combined on their own, the Ped Egg is in its active mode and is ready to use, with the sharp grater surface exposed.
The third component is a white, plastic cover with a flat base and sides. The cover fits over the grater and meets the handle neatly so that the whole makes a contiguous ovoid shape, but with a flat base. The cover and the handle do not meet along a flat plane, but rather along curved or wavy sides. When all three components are assembled, the product is in its inactive, storage mode.
The Ped Egg is sold in a clear “blister” 2 package that displays the product alongside marketing text and a picture of the product being used on a foot. TAC ¶ 14. On the reverse side of the package there are more pictures, instructions for how to use the product, and two full paragraphs of text. The text states, inter alia, that the Ped Egg is “economically designed to fit perfectly into the palm of your hand for easy and convenient use.” The phrase “ergonomic design” appears four times on the Ped Egg packaging, once on the front and three times on the back.
The Ped Egg is the subject of a design patent that protects the product's “ornamental design.” U.S. Design Patent No. D596,802 (issued July 21, 2009); 3 TAC Ex. B. The design patent is owned by International Edge, Inc., who is not a party to this suit. TAC ¶ 11. International Edge also submitted a utility patent application for the Ped Egg, which, at the time defendants filed this motion before the Court, was pending before the United States Patent and Trademark Office (“PTO”). U.S. Patent Application No. 12/074,603 (filed March 4, 2008). According to the PTO's public records, that application has since been rejected on the grounds that the Ped Egg's innovations would have been “obvious to one of ordinary skill” based on previously existing devices. U.S. Patent Application No. 12/074, 603, “Final Rejection” (issued March 17, 2010) ¶ 8. However, since there remains an opportunity to appeal the rejection, no “final denial” has yet been rendered on the utility patent application. See Defs. Letter to the Court, dated May 17, 2010.
International Edge is also the registrant of a federal trademark for the Ped Egg product configuration. U.S. Trademark Registration No. 3,633,750 (issued June 9, 2009); TAC ¶ 12. This trademark protects the configuration of the Ped Egg foot file, “specifically, the entire implement.” TAC Ex. C. The Ped Egg packaging is the subject of a copyright issued to International Edge on October 18, 2007. U.S. Copyright Registration No. VA 1-629-218; TAC ¶ 15. This copyright protects the two-dimensional image of the Ped Egg packaging, both the front and the back. TAC Ex. E.
Telebrands is the exclusive licensee of International Edge's intellectual property rights in the Ped Egg. TAC ¶¶ 11, 12, 15. The two companies entered a License Agreement in which International Edge grants Telebrands an “exclusive, royalty-free, license to make, distribute and sell the [Ped Egg and related products] throughout the United States, its territories and possessions, and over the internet, including the right to sublicense others.” Decl. of A.J. Khubani in Support of Pl.'s Application for a Limited TRO and Preliminary Injunction, Ex. 3 (the “License Agreement”) § 1. Telebrands is also granted the right to assert the intellectual property rights in the Ped Egg and to “maintain any action against others in its own name.” License Agreement § 6. The agreement further provides:
[International Edge] need not be joined as a party to any such action to the extent permitted by applicable law. [International Edge] will join any action brought by Licensee [ i.e., Telebrands] upon request. Licensee also shall have the authority to send in Licensee's own name cease-and-desist letters to infringers of the [intellectual property] [r]ights. Licensee will bear the legal fees and any expenses of infringement actions and oppositions and will keep any damages awarded and any settlement payments.
Telebrands sells the Ped Egg through direct response television marketing and through major retail stores. TAC ¶ 13. According to plaintiff, the Ped Egg is a great commercial success, with approximately twenty-two million units sold. TAC ¶ 16; Khubani Decl. to PTO ¶ 4. Telebrands claims to have expended millions of dollars advertising and promoting the Ped Egg on television, on the internet and in print. TAC ¶ 16.
Coty sells the Pedi-Perfect product though national retailers, including retailers that also sell the Ped Egg. TAC ¶ 21. The Pedi-Perfect is a white, ovoid foot file of approximately the same size as the Ped Egg. The Pedi-Perfect contains three components that work essentially in the same manner as the Ped Egg, although the product is assembled differently. The top component or handle is a plastic, convex-curved ovoid with slight indentations on either side. According to the packaging, these “finger indents” provide a secure grip on the product. The handle is all white and has “Sally Hansen” written in raised lettering in the middle.
The Pedi-Perfect is sold in a blister pack that contains the three components of the foot file as well as a toe-spacer and nail clipper. The toe-spacer is bright pink in color, shaped as the silhouette of a foot, and displayed at the top left quadrant of the pack. The handle of the foot file ( i.e., the white curved component that gives the product its recognizable shape) is mostly concealed by a raised portion of the blister pack. The reverse side of the pack shows pictures of the product being used and contains directions and marketing text.
Plaintiff alleges that Coty's Pedi-Perfect product infringes Telebrands' intellectual property rights in the Ped Egg and has caused Telebrands monetary and reputational harm. TAC ¶ 25.
Plaintiff filed the first complaint in this action on February 4, 2009, seeking various forms of relief including a preliminary injunction against Coty to enjoin them from selling the Pedi-Perfect product. Later that month, plaintiff substituted their counsel, filed the First Amended Complaint and moved for a temporary restraining order (“TRO”) and preliminary injunction. Both parties appeared before the Court for oral argument on the requested TRO on February 27, 2009 (the “TRO Oral Argument”). The Court denied the TRO from the bench and plaintiff subsequently withdrew their motion for preliminary injunction. Plaintiff substituted their counsel again on June 23, 2009, returning to the counsel that originally represented them; plaintiff's new counsel then filed the Second Amended Complaint.
On August 7, 2009, the Court so ordered a stipulation entered by the parties, stating that defendants would consent to plaintiff filing a third amended complaint in exchange for plaintiff agreeing not to seek to file any additional amended complaint thereafter (with one exception not pertinent to this motion). Telebrands filed the TAC on August 11, 2009. Defendants then brought this motion to...
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