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GEMVETO JEWELRY CO. v. JEFF COOPER

July 19, 1985

GEMVETO JEWELRY COMPANY, INC., Plaintiff,
v.
JEFF COOPER, INCORPORATED and JEFF COOPER, individually, Defendants



The opinion of the court was delivered by: WEINFELD

EDWARD WEINFELD, UNITED STATES DISTRICT JUDGE

The plaintiff, Gemveto Jewelry Company, Inc. ("Gemveto"), has a preeminent reputation as a designer and manufacturer of extra high quality jewelry, in terms of craftsmanship, style, and design. Its products are so distinctive that they are recognized in the trade as the "Gemveto look." Jean Vitau, principal of Gemveto and the inventor of two patents at issue, has been described by his principal customers as a genius in designing, styling, and producing fine quality jewelry.

In 1981, Gemveto commenced this action against Jeff Cooper, Incorporated, another jewelry manufacturer, and Jeff Cooper, its principal (collectively "Cooper"), for selling a wide variety of Gemveto "knockoffs," less expensive, lower quality copies of many items in Gemveto's widely marketed product line. plaintiff charged Cooper with infringement of two patents, the so-called 245 and 818 patents; *fn1" copyright infringement of three items of jewelry; trademark infringement and unfair competition in violation of section 43 of the Lanham Act; *fn2" , and unfair competition in violation of New York's statutory and common law.

 After a bench trial, the Court, in an opinion dated July 15, 1983, *fn3" familiarity with which is assumed, dismissed all of plaintiff's federal claims. As to the patent infringement claims, the Court held that the 245 patent was valid but had not been infringed and that the 818 patent was invalid because of prior art references, as discussed hereafter. As to the copyright claims, the Court held that plaintiff had failed to comply with the notice requirement of the Copyright Act of 1976 *fn4" or to make a reasonable effort to rectify the omission. Finally, as to the Lanham Act claims, it held that, while there was proof of intentional copying of several items of Gemveto jewelry by Cooper, plaintiff had failed to prove that the copied items had acquired a "secondary meaning" apart from that attributable to their settings -- i.e., the method by which the stones are held in position -- which were found to be functional and therefore unprotectable.

 With respect to the state claims, the Court held that Cooper had engaged in unfair competition in violation of New York common law and that Gemveto was entitled to injunctive relief. The Court found that many items in Cooper's line of jewelry are "mirror images" or "knockoffs" of Gemveto products and that Cooper intentionally copied plaintiff's jewelry *fn5" Accordingly, judgment was entered permanently enjoining defendants from selling or offering for sale "any piece of jewelry which is confusingly similar in appearance to any piece of Gemveto jewelry, having nonfunctional attributes that are original with Gemveto."

 Soon after the entry of judgment, Cooper moved for modification of the order and judgment "to specifically denominate the attributes which defendants may not use in combination in their jewelry or, in the alternative, to itemize defendants' styles, received in evidence, which may no longer be offered for sale." Defendants also moved for reconsideration of the judgment upon the ground that the authorities cited by the Court in upholding plaintiff's claim of unfair competition do not apply in a case of product design simulation. Plaintiff then cross-moved to punish Cooper for contempt for violating the terms of the injunction. This motion was referred to Magistrate Buchwald to hear and report; following a hearing, the Magistrate recommended that Cooper not be held in contempt. Thereafter, plaintiff further moved, upon the ground of newly discovered evidence, to vacate the judgment insofar as it held the 818 patent invalid.

 Thus, the Court now has before it the Magistrate's report concerning plaintiff's contempt motion, together with the parties' objections and responses thereto; defendants' motion for modification or reconsideration of the judgment concerning plaintiff's claim of unfair competition, as well as their motion to stay the judgment pending disposition thereof; and plaintiff's motion to vacate the judgment that the 818 patent is invalid upon the ground of newly discovered evidence and for a new trial on that issue.

 THE CONTEMPT MOTION AND THE MAGISTRATE'S REPORT

 Defendants assert that shortly after judgment was entered they and their attorney reviewed their entire product line and were unable to determine which pieces are "confusingly similar in appearance to any piece of Gemveto jewelry, having nonfunctional attributes that are original with Gemveto." Specifically, they claim they are uncertain whether the jewelry settings -- which dominate the overall appearance of the jewelry despite differences in the color arrangements, numbers, and sizes of the stones but which were found to be functional and therefore unprotectable -- should be considered in determining whether Cooper's jewelry is "confusingly similar in appearance" to Gemveto's. They also assert they are uncertain about which nonfunctional attributes of Gemveto jewelry are "original with Gemveto," since the Court found that the identifiable and distinctive feature of Gemveto's jewelry is the settings, which are functional. Finally, defendants say they are uncertain whether they are prohibited from copying Gemveto's original nonfunctional attributes singly or only as combined by Gemveto.

 In sum, defendants claim they cannot be sure they have complied with the terms of the injunction and ask the Court to clarify its order by specifying those attributes of Gemveto jewelry that, in combination, defendants may not employ, or, if the Court declines to do so, by specifying those pieces of defendants' jewelry that may no longer be offered for sale and as to which defendants must deliver up for destruction the molds, models, waxes, catalogues, and advertisements. In the meantime, defendants have eliminated four items from their product line that they believe are very similar in appearance to Gemveto jewelry and have ceased distributing the catalogue in which those items appear. However, they have not delivered up the molds for those items and have continued to sell the remainder of their product line and to distribute a brochure containing samples from their line.

 Magistrate Buchwald essentially found that defendants' uncertainty is justified for at least one of the reasons they assert. She recommends that Cooper not be held in contempt because the injunction is not sufficiently clear and specific as required by Fed. R. Civ. P. 65(d) and because Cooper promptly moved for clarification and modification of the decree. The Court accepts the Magistrate's finding that the injunction requires clarification. The Court also accepts the statement of defense counsel that he made a good faith effort to advise his clients as to the scope of the injunction. By promptly reviewing their product line with counsel, eliminating four items therefrom, and moving for clarification of the decree, all within ten days after entry of the Court's order, defendants were reasonably diligent and energetic in attempting to comply with the decree. Under the circumstances, an order of contempt is not justified. *fn6" Accordingly, plaintiff's contempt motion is denied.

 THE MOTION TO VACATE AS TO THE 818 PATENT

 Both the 245 and 818 patents concern methods developed by Gemveto for setting precious stones in jewelry. Although the 818 contains improvements over the 245, there are substantial similarities between the, two patents and the Court found that the 818 teachings are obvious in light of the 245. By itself, however, this finding did not invalidate the 818 because plaintiff filed a terminal disclaimer, which rendered the then pending 245 application not prior art as to the 818. The Court also found that plaintiff introduced the public to the 245 teachings by placing on sale in the market two items employing these teachings, a ruby ring and a sapphire ring, more than one year prior to the filing date of the 818 application -- in fact, some thirteen to fourteen months previously. The Court held that despite the terminal disclaimer, these rings, on sale more than one year prior to the filing of the 818 application, were prior art references as against the 818. Because the 818 teachings were obvious in light of this prior art, the 818 patent was declared invalid under 35 U.S.C. § 1O3. *fn7"

 The finding that the ruby and sapphire rings employed the 245 teachings was the underpinning of the holding that the 818 was invalid. Gemveto now claims that this finding is erroneous in view of newly discovered evidence and moves pursuant to Fed. R. Civ. P. 60(b)(2) to vacate the judgment as to the 818 and for a new trial of its claim of infringement of the 818 patent. It claims it recently located the model used to make the ruby ring and that the model lacks several features included in the 245 teachings as set forth in the 245 patent application. It further claims that the sapphire ring, though shaped differently from the ruby ring, employs the same construction -- that of the ruby ring model. Thus, it contends, the newfound model is concrete proof that neither ring employed the teachings of the 245 ...


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