GTFM employed private investigators from July 2000 to March
2001, to visit Solid's retail premises in Los Angeles and make
purchases of Solid apparel. One of the investigators conducted
an undercover purchase of Solid garments on March 5, 2001, and
recorded that purchase on videotape.
Solid's Conduct of Discovery
On March 28, 2001, GTFM filed this lawsuit. Based on Solid's
conduct during discovery, GTFM has moved to preclude Solid from
presenting evidence at trial of its sales or expenses, of a lack
of knowledge of the plaintiffs' "05" mark and products, and of a
lack of intent to copy and infringe the "05" mark. Through the
course of this litigation, Solid systematically concealed its
sales of apparel bearing the "05" designation and its profits
from those sales. While the motion to preclude Solid's evidence
is denied, the evidence and arguments submitted by the parties
in connection with this motion shall be used in evaluating the
evidence and arguments presented by the defendant at trial.
Solid's conduct in discovery reflects directly on the
credibility of its statements of profits and expenses and on its
denial of predatory intent.
On May 7, 2001, counsel for Solid produced a chart showing
that Solid had sold a total of nine different styles of garments
bearing the "05" designation or 19,271 garments. It represented
that Solid had not sold "any items with the `PLAYERS 05' or `05'
marks since June 23, 2000."*fn6 When GTFM responded that the
two Solid catalogues it then had in its possession included at
least twenty-three different styles of goods bearing the "05"
mark, Solid continued to assert through its counsel that the
nine style numbers it listed in its letter were "the only
items . . . that have been sold. None of the other styles were sold
so no other information exists or is needed." Solid reported that
its total profits from the sale of 19,271 units of "05" apparel
amounted to $21,154.95.
On August 17, 2001, Solid made its initial mandatory
disclosure pursuant to Rule 26(a), Fed.R.Civ.P. It produced 421
documents, of which 397 related to GTFM's application for
registration of the "05" trademark and the other twenty-four
consisted of the Solid catalogues that Solid's counsel knew GTFM
already had. In response to GTFM's First Request for the
Production of Documents and Things, Solid referred to its
earlier production and produced no further documents.
After further prompting from plaintiff, and extended
negotiations regarding a protective order, Solid made another
production of documents on November 8, 2001, which consisted of
seventy-three additional pages. Of these, ten pages consisted of
copies of commercial invoices issued by Solid's suppliers and
the remainder consisted of Solid's insurance policy. In light of
what Solid produced on November 8, it is apparent that its
negotiations with GTFM for a protective order were conducted in
bad faith for purposes of delaying the discovery process.
GTFM then presented Solid with a copy of an invoice that it
had obtained from a retailer reflecting Solid's sale of an "05"
style number not previously disclosed by Solid and occurring on
January 15, 2001, nearly six months after the date Solid's
counsel had given as its last sale of "05" merchandise. GTFM
demanded that Solid produce all responsive documents by December
7, 2001. By letter dated November 29, 2001, Solid's counsel
stating that its records were "incomplete and not organized in
accordance with a particular product," but that it would produce
any additional relevant documents by December 7. On that date,
Solid produced an additional 168 pages, which consisted of
copies of ten commercial invoices from Solid's suppliers,
sixty-six sales invoices issued by Solid to retailers, and
eighty-two pages of largely illegible courier slips.
In January 2002, Park wrote directly to Weisfeld, stating: "My
company . . . did not sell many `Players 05' shirts. My company
stopped selling those shirts more than a year ago." Park made
this statement notwithstanding the fact that Solid had sold
"PLAYERS 05" merchandise at least as late as November 2001, and
published a 2002 catalogue featuring "PLAYERS 05" apparel.
On February 11, 2002, Solid produced four more commercial
invoices, fourteen more sales invoices, and three courier
receipts. Based upon the documents produced by Solid as of that
date, GTFM calculated that Solid had sold 27,287 units of
apparel bearing the "05" mark, generating revenue of
By letter dated March 5, 2002, defendant's counsel made to
this Court the following representation:
Plaintiffs claims about being provided with
incomplete discovery are false. Defendant has
conducted yet a further investigation after receiving
plaintiffs letter of March 4, 2002, and has
determined there are no additional documents
responsive to plaintiffs requests.
(Emphasis in original). On April 5, 2002, the Court entered a
Discovery Order directing Solid, inter alia, to comply with
the Order by April 19, 2002, and its counsel to submit a written
statement at the time of production confirming the completeness
of the search for and production of documents covered by the
Order. On April 19, Solid produced approximately 10,000
additional pages of documents. Among these documents were
thousands of sales invoices not previously produced. Also
produced were the cease and desist letters Solid had received
alleging that Solid had engaged in trademark and/or copyright
infringement. These letters were requested by GTFM in its First
Request for the Production of Documents and Things, dated August
21, 2001. It was now clear that Park had testified falsely at
his February 14, 2002 deposition when he asserted that neither
Solid nor its principals had ever received any such letters and
that Solid had already produced all of its documents relating to
"PLAYERS 05" garments that were in its possession.
On May 13, Solid produced an additional 600 pages of invoices.
On May 16, it disclosed that its calculation of gross revenue
from the sale of "05" apparel had increased by $500,000 to
$4,178,000, but claimed a net profit from the sale of "05"
apparel of $200,000 less than what it claimed before. On June
6, Solid produced an additional 1,000 pages of documents
including 400 additional invoices relating to "05" apparel, and
on June 18, Solid also produced an additional 413 pages of
documents, including approximately 400 additional invoices.
From June 18 to June 20, 2002, GTFM conducted an onsite
inspection of Solid's place of business. The inspection
revealed, inter alia, that Solid maintained in good order
binders containing commercial invoices, letter of credit
information and shipping documents. These binders included, in
addition to the letters of credit themselves, computer-generated
tables summarizing shipments of goods to Solid involving letters
of credit. GTFM also found twelve boxes containing bound volumes
of sales invoices for the period 1999 to 2001. GTFM's brief
inspection of these volumes revealed numerous invoices for
the sale of "05" apparel that Solid had never produced to GTFM.
Solid was also shown to maintain detailed computer records of
its sales going back at least to September 27, 2001. GTFM also
discovered twelve computer disks whose labels suggested that
they were backup disks for Solid's computer records before
September 2001. Solid claims that it no longer possesses the
software capable of reading the disks. Although GTFM had
specifically requested from Solid all relevant "documents stored
in any computer memory (or retrievable by a computer)" in its
August 21, 2001 First Request for Documents and Things, Solid
never produced any computer data for GTFM's review. In addition,
GTFM's counsel discovered a "FUBU Jeans" hat, "FUBU" hangtags,
and the 1998 FUBU summer catalogue. Of these, the "FUBU Jeans"
hat and some of the "FUBU" hangtags disappeared through the
course of the onsite inspection. Kim has admitted that he was
responsible for the removal of the "FUBU Jeans" hat but claims
no knowledge of why or how the hangtags were removed.
Conclusions of Law
I. Solid's Infringement of GTFM's "05" Trademark
To establish a trademark infringement claim under either
Section 32 or 43(a) of the Act, 15 U.S.C. § 1114(1), 1125(a), a
plaintiff must show that (1) it has a valid mark entitled to
protection and (2) the defendant's use of the mark is likely to
cause confusion. Time, Inc. v. Petersen Publ'g Co., L.L.C.,
173 F.3d 113, 117 (2d Cir. 1999).
A. The Validity of the "05" Trademark
Solid's sales of apparel bearing the number "05" began in
February 1999. Because a substantial portion of Solid's
infringing conduct occurred before the "05" mark was registered,
the "05" mark will be analyzed as an unregistered mark.
The owner of an unregistered mark bears the burden of proving
that the mark is valid and entitled to protection. Reese Publ'g
Co. v. Hampton Int'l Communications, 620 F.2d 7, 11 (2d Cir.
1980). "To be valid and protectible [sic], a mark must be
capable of distinguishing the products it marks from those of
others." Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc.,
192 F.3d 337, 344 (2d Cir. 1999). "An identifying mark is
distinctive and capable of being protected if it either (1) is
inherently distinctive or (2) has acquired distinctiveness
through secondary meaning." Two Pesos, Inc. v. Taco Cabana,
Inc., 505 U.S. 763, 769, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992)
(emphasis in original).
[A] mark is inherently distinctive if its intrinsic
nature serves to identify a particular source. In the
context of word marks, courts have applied the
now-classic test originally formulated by Judge
Friendly, in which word marks that are "arbitrary"
("Camel" cigarettes), "fanciful" ("Kodak" film), or
"suggestive" ("Tide" laundry detergent) are held to
be inherently distinctive.
Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205,
210-11, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000) (citations
omitted). Inherently distinctive marks "almost automatically
tell a customer that they refer to a brand," Qualitex Co. v.
Jacobson Prod. Co., 514 U.S. 159, 162-63, 115 S.Ct. 1300, 131
L.Ed.2d 248 (1995) (emphasis in original), and "immediately . . . signal
a brand or a product `source,'" id. at 163, 115 S.Ct. 1300.
"[A] mark has acquired distinctiveness, even if it is not inherently
distinctive, if it has developed secondary meaning, which occurs when,
in the minds of the public, the primary significance of a mark is to
identify the source of the product rather than the product itself."
Wal-Mart Stores, 529 U.S. at 211, 120 S.Ct. 1339 (citation
omitted). Trademarks which are,
in Judge Friendly's terminology, "descriptive" of the goods to
which they are affixed require a showing of secondary meaning to
be entitled to protection. Abercrombie & Fitch Co. v. Hunting
World, Inc., 537 F.2d 4, 10 (2d Cir. 1976). Secondary meaning
exists where "the public is moved in any degree to buy an
article because of its source." Genesee Brewing Co. v. Stroh
Brewing Co., 124 F.3d 137, 143 n. 4 (2d Cir. 1997).
The appearance of the number "05" on a sports jersey does not
"automatically" signal to a consumer that it refers to a brand.
On the contrary, it has the appearance of an athlete's
identifying number, albeit an uncommon one that begins with the
number "0." This is especially the case on GTFM's sports
jerseys, where the "05" number is deliberately given the
appearance, both in its placement and font, of a baseball or
football player's identifying number. The "05" mark as used by
GTFM on its sportswear is "descriptive" of the athletic activity
for which the apparel is ostensibly designed.
Because the "05" mark is descriptive, GTFM must show that it
had acquired secondary meaning during the period when it was
infringed. The Second Circuit has identified six non-exclusive
factors in assessing the acquired distinctiveness or secondary
meaning of a mark: "(1) advertising expenditures, (2) consumer
studies linking the mark to a source, (3) unsolicited media
coverage of the product, (4) sales success, (5) attempts to
plagiarize the mark, and, (6) length and exclusivity of the
mark's use." Centaur Communications, Ltd. v. A/S/M
Communications, Inc., 830 F.2d 1217, 1222 (2d Cir. 1987); see
also Genesee Brewing Co., 124 F.3d at 143 n. 4. No single
factor in this inquiry is dispositive. Thompson Med. Co. v.
Pfizer, Inc., 753 F.2d 208, 217 (2d Cir. 1985).
GTFM has shown that its "05" mark has acquired
distinctiveness. GTFM has spent in excess of $8 million to
advertise clothing bearing the "05" mark. "The characteristics
of the relevant market are important in considering advertising
expenditures," Centaur, 830 F.2d at 1222, and GTFM admits that
its advertising expenditures are relatively low as compared to
those of other apparel brands. GTFM has shown, however, that its
"05" mark has achieved widespread public exposure through its
affiliation with prominent celebrities. While it is true that
much of the advertising of GTFM clothing shows the "FUBU" mark
as well as the "05" mark, the "05" mark is clearly presented in
the advertising and in some of the publicity it is the only
visible mark. GTFM has also shown widespread unsolicited media
coverage of the "05" mark.
GTFM's sales of more than 3 million garments bearing the "05"
mark with gross revenues of nearly $87 million also supports a
finding of secondary meaning, as does GTFM's consistent use of
the number "05" since 1993, as a designation of source. While
the "FUBU" mark appears on all of GTFM's clothing, on many of
its most popular garments the "05" mark is the dominant mark.
Furthermore, the efforts of Solid and many others to copy the
"05" mark is strong evidence that these rivals recognized that
the "05" mark had acquired secondary meaning in the marketplace.
Finally, although plaintiffs have failed to present consumer
survey evidence of secondary meaning, "every element need not be
proved" for a determination of secondary meaning to be made.
Thompson Med., 753 F.2d at 217.
B. The Likelihood of Confusion Between GTFM's and Solid's
Uses of "05"
To show that defendant's mark is likely to cause confusion, a
plaintiff must prove that "numerous ordinary prudent purchasers
are likely to be misled orc