A.V. by Versace, Inc. v. Gianni Versace S.P.A.

• Decision Date: 30 August 2006
• Docket Number: No. 96 Civ. 9721 PKL/THK.,No. 98 Civ. 0123 PKL/THK.,No. 98 Civ. 9645 PKL/THK.,96 Civ. 9721 PKL/THK.,98 Civ. 0123 PKL/THK.,98 Civ. 9645 PKL/THK.
• Citation: 446 F.Supp.2d 252
• Parties: A.V. BY VERSACE, INC., Plaintiff, v. GIANNI VERSACE S.p.A. and Alfredo Versace, Defendants. Gianni Versace S.p.A., Plaintiff, v. Alfredo Versace and Foldom International (U.S.A.), Inc., Defendants. Gianni Versace S.p.A., Plaintiff, v. Alfredo Versace, L'Abbigliamento, Ltd. et al. Defendants.
• Court: U.S. District Court — Southern District of New York

446 F.Supp.2d 252

A.V. BY VERSACE, INC., Plaintiff, v. GIANNI VERSACE S.p.A. and Alfredo Versace, Defendants.

Gianni Versace S.p.A., Plaintiff, v. Alfredo Versace and Foldom International (U.S.A.), Inc., Defendants.

Gianni Versace S.p.A., Plaintiff, v. Alfredo Versace, L'Abbigliamento, Ltd. et al. Defendants.

No. 96 Civ. 9721 PKL/THK.

No. 98 Civ. 0123 PKL/THK.

No. 98 Civ. 9645 PKL/THK.

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

August 30, 2006.

Elizabeth A. Adinolfi, Phillips, Nizer, Benjamin, Krim & Ballon LLP, New York, New York, for Plaintiff Gianni Versace S.p.A.

Leonard Zack, Leonard Zack & Associates, New York, New York, for Defendant Alfredo Versace.

OPINION AND ORDER

LEISURE, District Judge.

This litigation between Gianni Versace S.p.A. ("Gianni") and Alfredo Versace ("Alfredo") arose in December 1996 in connection with defendant Alfredo's infringing use of certain Versace trademarks. Since that time, the Court has issued more than a dozen decisions, including several findings of contempt against Alfredo. Nearly a decade later, the case still lumbers forward. On January 24, 2005, the Court granted Gianni's request for the entry of a permanent injunction against Alfredo similar in all material respects to the modified preliminary injunction that had been in force since January 27, 2003 (the "Modified Preliminary Injunction"). See A.V. By Versace, Inc. v. Versace, Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364, at *8 (S.D.N.Y. Jan.24, 2005). On January 12, 2006, the Court signed the permanent injunction (the "Permanent Injunction"). Meanwhile, Gianni has moved the Court to hold Alfredo in further contempt for continuing and ongoing violations of the Modified Preliminary Injunction. Specifically, Gianni requests that the Court refer the matter to the United States Attorney's Office for investigation into whether Alfredo has committed perjury before this Court. For the reasons set forth herein, Gianni's motion is granted.

BACKGROUND

I. The Consolidated Actions

The factual and procedural background of these consolidated actions has been set forth in the Court's numerous decisions, with which the Court presumes familiarity. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2006 WL 90062 (S.D.N.Y. Jan.12, 2006); A.V. By Versace, 2005 WL 147364; A.V. By Versace, Inc. v. Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2004 WL 691243 (S.D.N.Y. Mar.31, 2004); Gianni Versace, S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 22023946 (S.D.N.Y. Aug.27, 2003); Gianni Versace, S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 470340 (S.D.N.Y. Feb.25, 2003); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2002 WL 2012618 (S.D.N.Y. Sept.3, 2002); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 191 F.Supp.2d 404 (S.D.N.Y.2002); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 160 F.Supp.2d _657 (S.D.N.Y.2001); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 126 F.Supp.2d 328 (S.D.N.Y.2001); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F.Supp.2d 281 (S.D.N.Y.2000); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., No. 96 Civ. 9721, 1998 WL 832692 (S.D.N.Y. Dec.1, 1998); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., No. 96 Civ. 9721, 1997 WL 31247 (S.D.N.Y. Jan.28, 1997).

This case consists of three separate actions which have been consolidated by the Court. In December 1996, A.V. By Versace ("A.V."), a corporation claiming to hold a license to use certain Versace trademarks, commenced an action seeking injunctive relief and damages against Gianni `and Alfredo after Gianni had sent a ceaseand-desist letter to one of A.V.'s vendors. See A.V. By Versace, 1997 WL 31247, at *1. Gianni cross-claimed against Alfredo for a declaration regarding the manner in which Alfredo could use the Versace surname in the future. See A.V. By Versace, 1998 WL 832692, at *1. In January 1998, Gianni filed a separate lawsuit against Alfredo and Foldom International (U.S.A.), Inc. ("Foldom"), alleging trademark infringement, unfair competition, and trademark dilution. The Court consolidated the 1996 and 1998 actions in December 1998. See id. at *3.

Gianni initiated the third and final action on November 1, 2001. In that case, Gianni alleged trademark infringement against Alfredo, L'Abbigliamento, Ltd. ("L'Abbigliamento"), and Esrim Ve Sheva Holding Corporation, in connection with the sale and promotion of a clothing line and watches. Gianni settled with Esrim Ve Sheva Holding Corporation and moved for summary judgment against Alfredo and L'Abbigliamento. See Gianni Versace, S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 22023946, at *1, *4 (S.D.N.Y. Aug.27, 2003). On August 27, 2003, the Court granted Gianni's motion with respect to certain claims in so far as they sought injunctive relief, but denied summary judgment for monetary damages. See id. at *15. On January 24, 2005, the Court (1) consolidated the third action with the two previously consolidated earlier actions; (2) entered default judgments against Alfredo in the first two actions; and (3) granted Gianni's request for the entry of a permanent injunction against Alfredo that would be similar in all material respects to the Modified Preliminary Injunction currently in force. See A.V. By Versace, Inc. v. Versace, Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364, at *15 (S.D.N.Y. Jan.24, 2005). Finally, as noted above, on January 12, 2006, the Court signed the Permanent Injunction.

II. The Preliminary Injunction

On February 4, 1998, Judge Sidney H. Stein granted Gianni's request for a preliminary injunction against Alfredo Versace, issuing his decision from the bench. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F.Supp.2d 281, 284 (S.D.N.Y.2000) (noting that Judge Stein issued his decision from the bench and then issued the preliminary injunction in writing on February 10, 1998). The preliminary injunction entered by Judge Stein (the "Preliminary Injunction") barred Alfredo from, inter alia, using or licensing the use of various "Infringing Marks" that incorporated the name "Versace" as well as the use of any other trademarks confusingly similar to those of Gianni. (Prelim.Inj.¶¶ 6-8, Feb. 10, 1998.) Although the injunction enjoined Alfredo from using his name as a trademark, it allowed him to use his name to identify goods that he had designed by use of the phrase "Designed by Alfredo Versace" as long as such goods prominently displayed the following disclaimer: "not affiliated with or authorized by Gianni Versace S.p.A." (Prelim.Inj.¶¶ 6-10.) The Preliminary Injunction also prohibited Alfredo Versace from delegating or licensing his rights to a middleman. However, it allowed manufacturers and distributors to use the name "Alfredo Versace" in accordance with the Preliminary Injunction, provided that they first agreed in writing to be bound by the Preliminary Injunction. (Prelim.Inj.¶13.)

In an Opinion and Order issued on January 4, 2001 (the "January 2001 Opinion and Order"), this Court clarified that the Preliminary Injunction applied extraterritorially. See A.V. By Versace, 87 F.Supp.2d at 341.

III. The Modified Preliminary Injunction

On September 3, 2002, the Court found Alfredo in contempt of Court because of his numerous violations of the Preliminary Injunction. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2002 WL 2012618, at *9 (S.D.N.Y. Sept.3, 2002). Specifically, the Court found that Alfredo had been involved in the improper sale of watches, jeans, and handbags without the disclaimer required by the Preliminary Injunction; that Alfredo had marketed various products featuring the Infringing Marks on the Internet and failed to take the steps mandated by a previous Court order to stop such activities; and that Alfredo had been involved in a clothing enterprise with L'Abbligiamento using Infringing Marks and failing to use the required disclaimer. See id. at *7-9. In addition, the Court granted Gianni's motion to modify the preliminary injunction to prohibit Alfredo from using the Versace surname in any commercial context whatsoever. See id. at *13. In so doing, the Court noted that "the record reflects a deliberate pattern of deception by which Alfredo Versace has repeatedly used his surname in ways designed to create the impression that his goods are associated with those of Gianni Versace, in violation of judicial orders to the contrary." Id. at *12. The Court directed Gianni to submit a proposed modified preliminary injunction, and ultimately signed the Modified Preliminary Injunction on January 27, 2003. (See Modified Prelim. Inj., Jan. 27, 2003.)

IV. The History of Alfredo's Contempts

The list of sanctions this Court has ordered against Alfredo is extensive, to state the matter lightly. It was on March 6, 2000, that the Court first found Alfredo in civil contempt for violating the preliminary injunction. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F.Supp.2d 281, 294-95 (S.D.N.Y.2000). Specifically, the Court held that Alfredo violated the preliminary injunction by using offshore Internet sites to advertise and distribute his products in the United States. See id. at 295. As a result of this violation, the Court ordered Alfredo to pay Gianni the sum of one-third of its costs and attorneys' fees incurred in making the contempt motion. See id. at 296.

In an Opinion and Order and Report and Recommendation dated January 9, 2002, United States Magistrate Judge Theodore H. Katz granted Gianni's motion for sanctions against Alfredo for his longterm refusal to obey three discovery orders issued by the Court. As a sanction for his misconduct under Rule 37 of the Federal Rules of Civil Procedure, Magistrate Judge Katz ordered Alfredo to pay Gianni's costs and attorneys' fees incurred in attempting to secure compliance with the discovery orders, and recommended that both Alfredo's answer in...