which the goods are sold, and the extent to which the goods or services
fall within the same class or are used together. See Cadbury Beverages,
Inc. v. Cott Corp., 73 F.3d 474, 480 (2d Cir. 1996).
Although a few modifications were made to CELLULIFT 2, the products are
quite similar and are designed for the same purpose. Tactica sells
CELLULIFT and TOUCH'N'GO to catalog distributors and retail stores, the
same distribution channels Elysee plans on using for its products. In
fact, TG, who is now. purchasing these products directly from Elysee,
formerly bought them from Tactica. The proximity of the products is
therefore sufficiently close to create a likelihood of confusion.
(4) Bridging the Gap
"The issue here is whether the two companies are likely to compete
directly in the same market." Charles of the Ritz Group, Ltd. v. Quality
King Distribs., Inc., 832 F.2d 1317, 1322 (2d Cir. 1987). There is no
doubt that Tactica and Elysee would compete directly against each other
in the same market.
(5) Sophistication of Buyers and Quality of Defendants' Product
As Tactica has presented no evidence with respect to the sophistication
of buyers or the quality of defendants' products, these factors are not
(6) Actual Confusion
The Lanham Act does not require evidence of actual confusion as a
prerequisite to recovery. See Lois Sportswear U.S.A., Inc. v. Levi Strauss
& Co., 799 F.2d 867, 875 (2d Cir. 1986) ("[I]t is black letter law that
actual confusion need not be shown to prevail under the Lanham Act, since
actual confusion is very difficult to prove and the Act requires only a
likelihood of confusion as to source."). While Tactica has not presented
any evidence of actual consumer confusion, it has presented some evidence
of confusion in the marketplace. During the week ending February 2,
2001, an infomercial for CELLULIFT aired in the United States. The
marketing company behind the product was not identified. Although Tactica
was not involved with this production, Infomercial Monitoring Service
("IMS"), a tracking service that monitors paid programming in the United
States, assumed Tactica was the marketing company and noted this fact in
its records. See Pl. Ex. 58; Transcript of 4/10/01 Telephone Hearing at
3-7 (Testimony of Samuel Catanese, Publisher and CEO of IMS).
(7) Good or Bad Faith
This factor concerns whether the defendants adopted the marks with the
intention of capitalizing on Tactica's reputation and goodwill, as well
as any customer confusion as to the source of the products. See Cadbury,
73 F.3d at 482-83. Tactica has presented insufficient evidence to warrant
giving this factor any weight in its favor.
Weighing all of these factors, I conclude that defendants' use of the
CELLULIFT and TOUCH'N'GO marks in the United States is likely to cause
3. Irreparable Harm
Generally, once a likelihood of confusion is shown for a trademark or
trade dress infringement claim, the requisite irreparable harm is
established. See Toy Mfrs. of Am. v. Helmsley-Spear, Inc.,
960 F. Supp. 673, 678 (S.D.N.Y. 1997) (a presumption of irreparable harm
arises where "`there is any likelihood that an appreciable number of
ordinarily prudent purchasers are likely to be misled, or indeed simply
confused, as to the source of the goods in question.'") (quoting Joseph
Scott Co. v. Scott Swimming Pools, Inc., 764 F.2d 62, 66 (2d Cir.
1985)); see also Tough Traveler, Ltd. v. Outbound Prods., 60 F.3d 964,
967 (2d Cir. 1995).
Defendants argue that Tactica's delay in seeking a preliminary
injunction negates any inference of irreparable harm. As the Second
[A]ny such presumption of irreparable harm is
inoperative if the plaintiff has delayed either in
bringing suit or in moving for preliminary injunctive
relief. Though such delay may not warrant the denial
of ultimate relief, it may, standing alone, . . .
preclude the granting of preliminary injunctive
relief, because the failure to act sooner undercuts
the sense of urgency that ordinarily accompanies a
motion for preliminary relief and suggests that there
is, in fact, no irreparable injury.
Tough Traveler, 60 F.3d at 968 (internal quotations and citations
omitted); see also Gidatex, S.r.L. v. Campaniello Imports, Ltd.,
13 F. Supp.2d 417, 419 n. 1 (S.D.N.Y. 1998) ("Even in the absence of
prejudice, an unwarranted delay may demonstrate that the movant has no
need for the drastic remedy of a preliminary injunction."). However, "a
delay in filing suit will not rebut the presumption of irreparable harm
if the plaintiff does not know how severe the infringement is. . . .
Similarly, a delay caused by a plaintiff's good faith efforts to
investigate an infringement does not rebut the presumption of irreparable
harm." Tom Doherty Assocs., Inc. v. Saban Entm't, Inc., 60 F.3d 27, 39
(2d Cir. 1995).
While Tactica learned in September 2000 that Elysee would no longer
ship Tactica CELLULIFT and TOUCH'N'GO, see Def. Ex. 42, it did not learn
until January 2001 that these products were being sold in the United
States under the Elysee brand name. See Tr. at 433 (Sivan). Tactica
immediately began to investigate defendants' activities, and commenced
this action and moved for injunctive relief only a month later. Tactica's
request for injunctive relief is timely. See Eve of Milady v. Impression
Bridal, Inc., 957 F. Supp. 484, 490 (S.D.N.Y. 1997) ("The requirement
that a plaintiff must seek injunctive relief in a timely manner is
flexible, and courts look to the facts of each case to determine the
consequences of a plaintiff's delay.").
B. Trade Dress
Following the Supreme Court's recent decision in Wal-Mart, recovery for
product design trade dress infringement under Section 43(a) of the Lanham
requires a showing that (1) the trade dress has acquired a secondary
meaning in the marketplace, and (2) there is a likelihood of confusion of
the allegedly infringed and infringing products. See Wal-Mart, 529 U.S.
at 213-216; see also Eastern America Trio Prods., Inc. v. Tang Elec.
Corp., 97 F. Supp.2d 395, 414 (S.D.N.Y. 2000). In addition, functional
product design is not protected under Section 43(a) of the Lanham Act.
See 15 U.S.C. § 1125(a)(3)("In a civil action for trade dress
infringement under this chapter for trade dress not registered on the
principal register, the person who asserts trade dress protection has the
burden of proving that the matter sought to be protected is not
functional."). The Supreme Court recently stated that placing the burden
of proof as to functionality on the party asserting infringement "gives
force to the well-established rule that trade dress protection may not be
claimed for product features that are functional." Traffix Devices, Inc.
v. Mktg. Displays, Inc., 121 S.Ct. 1255, 1259 (2001).
Tactica has failed to meet its burden on this claim. Tactica's trade
dress claim in CELLULIFT is based upon the design of the handle. Tactica
has introduced no evidence that the handle of CELLULIFT has acquired a
secondary meaning. Further, Sivan testified that the "main" reason he
chose the shape of the handle was to make it easy and comfortable for a
woman to hold the product on her thighs and back. See Tr. at 387-89
(Sivan). As functional product design is not protected by the Lanham
Act, Tactica's trade dress claim must fail.
D. Other Federal Claims
Tactica also alleges that defendants are infringing upon its design
patent for its PROTONIQUE hair brush and engaging in false advertising by
using the IGIA name to promote Elysee's TOUCH'N'GO and CELLULIFT 2
products. On the first day of the hearing, defendants represented that
they are not selling an ionic hairbrush and therefore have no objection
to being preliminary enjoined from doing so in the future. See Tr. at
28-29. As defendants recognize Tactica's ownership of the IGIA mark, they
have also consented to being enjoined from using the IGIA name to promote
their products. See id.
C. Claims under New York Law
1. Unfair Competition
"[T]he essence of unfair competition under New York common law is the
`bad faith misappropriation of the labors and expenditures of another,
likely to cause confusion or to deceive purchasers as to the origin of
the goods.'" Rosenfeld v. W.B. Saunders, A Div. of Harcourt Brace
Jovanovich, Inc., 728 F. Supp. 236, 249-50 (S.D.N.Y. 1990) (quoting
Computer Assocs. Int'l, Inc. v. Computer Automation, Inc.,
678 F. Supp. 424, 429 (S.D.N.Y. 1987)), aff'd, 923 F.2d 845 (2d Cir.
As Tactica is entitled to a preliminary injunction with respect to the
CELLULIFT and TOUCH'N'GO marks, there is no need to address this claim.
2. Misappropriation of Trade Secrets
According to Tactica, Ferreira and Ricafort are misappropriating
Tactica's customer lists and confidential price, discount and volume
information relating to its transactions with suppliers, manufacturers,
fulfillment houses and retailers.
To succeed on a claim for
misappropriation of trade secrets under New York law Tactica must
demonstrate: "(1) that it possessed a trade secret, and (2) that the
defendants used that trade secret in breach of an agreement, confidential
relationship or duty, or as a result of discovery by improper means."
North Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 43-44 (2d Cir.
1999). "[A] trade secret is `any formula, pattern, device or compilation
of information which is used in one's business, and which gives [the
owner] an opportunity to obtain an advantage over competitors who do not
know or use it.'" Softel, Inc. v. Dragon Med. & Scientific
Communications, Inc., 118 F.3d 955, 968 (2d Cir. 1997) (quoting
Restatement of Torts § 757 cmt. b (1939)). In determining whether
information constitutes a trade secret, New York courts have considered
the following factors: (1) the extent to which the information is known
outside of the business; (2) the extent to which it is known by employees
and others involved in the business; (3) the extent of measures taken by
the business to guard the secrecy of the information; (4) the value of
the information to the business and its competitors; (5) the amount of
effort or money expended by the business in developing the information;
and (6) the ease or difficulty with which the information could be
properly acquired or duplicated by others. See Ivy Mar Co. v. C.R. Seasons
Ltd., 907 F. Supp. 547, 556 (E.D.N.Y. 1995).
a. Customer Information
First, with respect to the identity of Tactica's customers, courts have
held that "where a company's customers are not readily ascertainable, but
must be cultivated with great effort and secured through the expenditure
of considerable time and money, the names of those customers are
protectible trade secrets." Id. at 556-57; see also Panther Sys. II, Ltd.
v. Panther Computer Sys., Inc., 783 F. Supp. 53, 67 (E.D.N.Y. 1991);
Webcraft Technologies, Inc. v. McCaw, 674 F. Supp. 1039, 1045 (S.D.N.Y.
1987); Leo Silfen Inc. v. Cream, 29 N.Y.2d 387, 393 (1972). However, "a
former employee may not be enjoined from soliciting his or her former
employer's customers where the names and addresses of potential customers
are readily discoverable through public sources." Ivy Mar, 907 F. Supp.
at 557; see also Reed, Roberts Assocs. v. Strauman, 40 N.Y.2d 303, 308-09
AHI sells its products to catalog companies. Tactica has produced no
evidence showing that it spent a great deal of time, money or effort in
cultivating a list of catalog companies with which it does business.
Moreover, Tactica admitted that the identity of the catalog companies to
which it sells its beauty-products is "not a secret." Tr. at 359
Second, with respect to customer preferences, "remembered information
as to specific needs and business habits of particular customers is not
confidential." Catalogue Serv. of Westchester, Inc. v. Henry,
484 N.Y.S.2d 615, 616 (2d Dep't 1985) (quoting Anchor Alloys, Inc. v.
Non-Ferrous Processing Corp., 336 N.Y.S.2d 944 (2d Dep't 1972)); see
also DataType Int'l, Inc. v. Puzia, 797 F. Supp. 274, 283 (S.D.N.Y.
1992). Tactica has not produced any evidence showing that Ferreira or
intentionally memorized, or stole any information. See
Levine v. Bochner, 517 N.Y.S.2d 270, 271 (2d Dep't 1987) ("The use of
information about an employer's customers which is based on casual memory
is not actionable."). Information concerning the preferences of Tactica's
customers could easily be recalled by Ferreira or Ricafort, or obtained
by contacting the customers directly. Accordingly, this information is
not a trade secret.
b. Pricing Information
Tactica also alleges that while employed at Tactica, Ferreira and
Ricafort learned the prices Tactica paid its manufacturers (i.e., Elysee)
for its products and the prices Tactica charged its customers (i.e.,
TG), and is currently using this information to Tactica's detriment.
Although this information may have a competitive value, it does not
necessarily follow that an injunction should issue.
In order to obtain a preliminary injunction, Tactica must "put forth
sufficient evidentiary proof to show what specific data the individual
defendants misappropriated . . . H. Meer Dental Supply Co. v. Commisso,
702 N.Y.S.2d 463, 465 (3rd Dep't 2000). Tactica has failed to do so.
Ferreira and Ricafort stated in their affidavits that they never used
Tactica's proprietary or pricing information in connection with AHI. See
Ferreira Aff. ¶ 36; Ricafort Aff. ¶ 6. In light of the lack of
specific evidence to the contrary, Tactica has failed to make the
requisite evidentiary showing that it is likely to succeed on the merits
of this claim.*fn20 See Hancock v. Essential Resources, Inc.,
792 F. Supp. 924, 928 (E.D.N.Y. 1992) ("Preliminary injunctive relief
cannot rest on mere hypotheticals" concerning a former employee's
3. Breach of the Confidentiality Agreements
The Confidentiality Agreement that Ferreira and Ricafort signed
1. The Employee hereby agrees that the Employee will
not reveal . . . any information whatsoever obtained
in the course of his/her employment relating to any
aspect whatsoever of the Employer's business
strategies, decision making process, customers,
sources, or related information, to any other person,
company, entity, group or individual.
2. The Employee shall keep confidential any and all
information obtained in the course of employment about
the Employer, its affairs, relationships to actual or
potential customers, and the needs and requirements of
any such actual or potential customers, and shall not
directly or indirectly enter the employ of or render
any service to any person, partnership, association or
corporation engaged in the business of mail order
marketing or telemarketing for a period of one (1)
year from the departure of the employ of the
Pl. Exs. 54 and 55. Tactica asserts that "[i]n using Tactica's
confidential price, discount and volume information, [Ferreira and
Ricafort have] breached these agreements." Memorandum in Support of
Motion for Temporary Restraining Order and Preliminary Injunction at 18.
Ferreira and Ricafort stated in their affidavits that they have not used
Tactica's proprietary or confidential information in connection with
AHI. See Ferreira Aff. ¶ 36; Ricafort Aff.
¶ 6. Again,
Tactica's vague allegations to the contrary are insufficient to show a
likelihood of success on the merits of this claim.
4. Breach of Fiduciary Duty
In the absence of a non-compete or confidentiality agreement, an
employee may still be enjoined from using confidential information where
he or she has obtained such information by wrongful means, such as theft
or intentional memorization. See Ivy Mar, 907 F. Supp. at 560. The
rationale for an injunction in such cases is that the ex-employee has
breached a fiduciary duty to the former employer by engaging in
misconduct during the course of his or her employment. See id.
Tactica relies on Doubleclick Inc. v. Henderson, No. 116914/97, 1997 WL
731413, at *5 (Sup.Ct.N.Y.Co. 1997), for the proposition that even if it
cannot prove Ferreira and Ricafort's unlawful activities, the "inevitable
disclosure" of trade secrets or confidential information in this case
warrants injunctive relief. However, this case is easily distinguished.
In Doubleclick, the defendants were senior executives working for an
Internet company who were caught misappropriating trade secrets as they
attempted to form a competing company. Based on the evidence of actual
misappropriation, which was "bolstered by . . . a high probability of
`inevitable disclosure' of trade secrets," the court enjoined the
defendants from launching their company, or accepting employment with any
competing company, for a period of six months. Id. at *5-6.
Doubleclick's holding rested heavily on evidence of defendants' overt
In this case, neither Ferreira nor Ricafort were senior level
executives at Tactica. At the time of their resignation Ferreira and
Ricafort were respectively earning $700 and $650 in gross weekly income.
See W-2 Form, Ex. A to Ricafort Aff.; W-2 Form, Ex. C to Ferreira Aff.
Further, Tactica has not presented any evidence of overt theft or actual
misappropriation of either trade secrets or confidential information.
See Earthweb, Inc. v. Schlack, 71 F. Supp.2d 299, 310 (S.D.N.Y. 1999)
("[I]n its purest form, the inevitable disclosure doctrine treads an
exceedingly narrow path through judicially disfavored territory. Absent
evidence of actual misappropriation by an employee, the doctrine should
be applied in only the rarest of cases."). Tactica has not shown a
likelihood of success on the merits of this claim.
5. Tortious Interference with Contractual Relations
Tactica asserts that Ferreira, Ricafort and AHI have tortiously
interfered with Tactica's supply, manufacture, and retail contracts, as
well as its contracts with employees. To prove tortious interference with
contracts under New York law, Tactica must show: (1) the existence of a
contract between itself and a third party; (2) defendants' knowledge of
the contract; (3) defendants' intentional procurement of the third party
to breach or otherwise render performance impossible; and (4) damages.
See Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 424 (1996); see
also Shannon v. MTA Metro-North R.R., 704 N.Y.S.2d 208, 209 (1st Dep't
2000). The evidence in the record does not support the likelihood of such
In addition to seeking preliminary injunctive relief, Tactica has moved
for an Order of Contempt requiring TG to pay Tactica's reasonable costs
and attorneys' fees arising from TG's alleged breach of the TRO. Tactica
alleges that TG was still
advertising and selling Elysee's TOUCH'N'GO and
CELLULIFT 2 products through its website after the TRO had been entered.
A contempt order is a "potent weapon," Int'l Longshoremen's Ass'n v.
Philadelphia Marine Trade Ass'n, 389 U.S. 64, 76 (1967), to which courts
should not resort "where there is a fair ground of doubt as to the
wrongfulness of the defendant's conduct." California Artificial Stone
Paving Co. v. Molitor, 113 U.S. 609, 618 (1885). It is only warranted
when "(1) the order . . . is clear and unambiguous; (2) the proof of
non-compliance is clear and convincing, and (3) the contemnor has not
diligently attempted to comply in a reasonable manner." King v. Allied
Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995).
The TRO states that "the defendant is temporarily restrained and
enjoined from intentionally infringing Tactica's trademark and patent
rights." It does not delineate the activities defendants are prohibited
from engaging in or what trademark and patent rights are at issue. Mark
Wills, Director of Operations and Purchasing for TG, stated in his
declaration that he did not understand the TRO to require preexisting
copy regarding the TOUCH'N'GO and CELLULIFT to be removed from TG's
website. See Declaration of Mark Wills in Response to Motion for Contempt
¶ 3. Further, Tactica has not shown that TG's actions were
intentional. Although Tactica has produced evidence that Elysee's
CELLULIFT and TOUCH'N'GO products were being sold through TG's website
after entry of the TRO, see Declaration of Maria Fostieris ¶¶ 6-10,
this was due to TG's innocent failure to ensure that returned CELLULIFT
and TOUCH'N'GO products were not re-entered into inventory. See
Supplemental Declaration of Mark Wills ¶¶ 2-3. Upon learning of this
oversight, Wills immediately corrected the problem. See id. Tactica's
request is denied.
In accordance with the rulings set forth above, it is hereby ORDERED
Defendants, Atlantic Horizon International, Inc.,
Robert Ferreira, Alice Ricafort, Taylor Gifts, Elysee
Cosmetics, Ltd., Elysee Beauty Products, Ltd., and
Patrick Bousfield, their agents, servants and
employees and all those in active concert and
participation with them, are preliminarily enjoined
from (1) using the TOUCH'N'GO trademark in any manner
to sell, distribute, advertise or promote Elysee's
TOUCH'N'GO product in the United States; (2) using the
CELLULIFT trademark in any manner to sell,
distribute, advertise or promote Elysee's CELLULIFT or
CELLULIFT 2 products in the United States; (3) using
Tactica's patented design in the PROTONIQUE product in
any manner to sell, distribute, advertise or promote
the Ionic Hair Brush product in the United States; (4)
using Tactica's IGIA trademark in any manner,
including but not limited to the sale, distribution,
advertising or promotion of Elysee's products.
Defendant Taylor Gifts is preliminary enjoined
from any further sale of Elysee's TOUCH'N'GO,
CELLULIFT and CELLULIFT 2 products.
It is further ORDERED that:
Tactica shall issue a bond in the amount of $100,000
for the payment of such costs and damages as may be
incurred or suffered by any party who is found to have
been wrongfully enjoined or restrained.
This ORDER does not prohibit defendants from selling
TOUCH'N'GO, CELLULIFT or CELLULIFT 2 products
under different names, nor does it apply to any of
defendants' activities outside the United States.
While this ORDER applies to all defendants, because
Elysee Cosmetics Ltd., Elysee Beauty Products, Ltd.,
and Patrick Bousfield were not made parties to this
action until the preliminary injunction proceedings
had begun, should they wish to offer additional
evidence warranting their exclusion from this ORDER,
they may seek leave to submit such evidence to the