United States District Court, Southern District of New York
August 27, 2003
GIANNI VERSACE, S.P.A., PLAINTIFF, AGAINST ALFREDO VERSACE ET AL., DEFENDANTS
The opinion of the court was delivered by: Peter Leisure, District Judge [ Page 2]
OPINION AND ORDER
In this action, plaintiff seeks legal and equitable relief for alleged trademark infringement. No less than Judge Henry Friendly recognized that the "problem of determining how far a valid trademark shall be protected . . . has long been vexing and does not become easier of solution with the years." Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961); see also Coach Leatherware Co., Inc. v. Ann Taylor, Inc., 933 F.2d 162, 171 (2d Cir. 1991) (Kaufman, J.) ("Regretfully, the body of law relating to the Lanham Act has developed into a tangled morass. Courts struggling to move mountains often find they have only affected minuscule changes in trademark jurisprudence and occasionally have created their own likelihood of confusion." (internal citation omitted)). Plaintiff Gianni Versace, S.p.A. ("Gianni") now moves for an order granting (1) summary judgment against defendants Alfredo Versace ("Alfredo") and L'Abbigliamento Ltd. ("L'Abbigliamento") on its first, second, fourth and fifth claims in the complaint; and (2) partial summary judgment against Alfredo on liability for all plaintiff's claims. Gianni also asks the Court to grant it defendants' profits, treble damages, and attorneys' fees and costs in this action. For the following reasons, plaintiffs motion is granted in part and denied in part.
I. Procedural Problems
Before reciting the facts of this case, the Court must address the primary source of these facts. Plaintiff accompanied its motion for summary judgment with a statement of undisputed facts as required by Local Civil Rule 56.1(a). Both defendants, however, [ Page 3]
failed to file a counter Rule 56.1 statement.*fn1 Local Civil Rule 56.1(b) requires a party opposing summary judgment to "include a separate, short and concise statement of the material facts as to which it is contended that there exists a genuine issue to be tried." Importantly, if such a counter statement is not filed, the facts in the moving parties Rule 56.1 statement are deemed admitted by the opposing party. Local Civil Rule 56.1(c); see Gubitosi v. Kapica, 154 F.3d 30, 31 n. 1 (2d Cir. 1998) (stating that because of non-movant's failure to file a counter Rule 56.1 statement, material facts in movant's Rule 56.1 statement are deemed admitted); Maresco v. Evans Chemetics Div., 964 F.2d 106, 111 (2d Cir. 1992) ("Because [non-movant] did not respond to [movant's Rule 56.1 statement], [Rule 56.1] requires that they be deemed to be admitted for purposes of summary judgment." (footnote and internal quotations omitted)); Dusanenko v. Maloney, 726 F.2d 82, 84 (2d Cir. 1984) (stating that district court properly considered statements admitted because of opposing party's failure to object); Beckman v. United States Postal Service, 79 F. Supp.2d 394, 396 n. 2 (S.D.N.Y. 2000) (Leisure, J.) (accepting as admitted facts in movant's Rule 56.1 statement because non-movant did not file a counter statement); Commercial Union Ins. Co. v. M.V. Bremen Express, 16 F. Supp.2d 403, 409 (S.D.N.Y. 1998) (Leisure, J.) (same). The Second Circuit, however, recently made it clear in Giannullo v. City of New York, 322 F.3d 139, 140-43 (2d Cir. 2003), that a district court must ensure that there is support in the record for unopposed Rule 56.1 statements before accepting them as true. "[U]nsupported assertions must . . . be disregarded and the record independently reviewed." Id. at 140. In light of these principles, Gianni's assertions of fact in its Rule 56.1 statement are deemed admitted to [ Page 4]
the extent they are supported by admissible evidence. With respect to assertions unsupported by the provided citations, the Court has independently reviewed the submitted record in order to determine if there is support therein for those statements.*fn2
With respect to L'Abbigliamento, there is a further reason to accept plaintiff's Rule 56.1 statements as true, and that is L'Abbigliamento's failure to oppose the motion. Warren R. Hamilton, Esq., who maintains his office in Philadelphia, Pennsylvania, purportedly represents L'Abbigliamento. He is not a member of the Southern District bar. Despite the Court's repeated reminders to Mr. Hamilton that he needs to be admitted pro hac vice in order to represent L'Abbigliamento in this proceeding, see, e.g., Order of the Court, Apr. 17, 2003, at 2 n. 3; Gianni Versace S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 470340, at *3 (S.D.N.Y. Feb. 25, 2003); Order of the Court, Mar. 24, 2003, at [ Page 5]
2; Transcript of February 4, 2003 pre-trial conference at 2-4 ("Feb. 4 Tr."), he has steadfastly failed to do so.*fn3
The briefing schedule for this motion was set at a February 4, 2003 status conference, see Feb. 4 Tr. at 32-35, and Mr. Hamilton was in attendance.*fn4 In accordance with that schedule, Gianni served its summary judgment motion on Mr. Hamilton, on behalf of L'Abbigliamento, on March 17, 2003.*fn5 On April 16, 2003, Mr. Hamilton attempted to file an opposition on L'Abbigliamento's behalf. That response, however, was rejected on April 21, 2003, due to Mr. Hamilton's failure to include his signature on the brief, in contravention of Local Civil Rule 11.1(b), and also because of Mr. Hamilton's lack of membership in the Southern District bar. The Court was concerned, however, that Mr. Hamilton's status would unduly prejudice his client's rights. Therefore, on April 23, 2003, the Court issued a Memorandum Order in which it stated that it would withhold consideration of the instant summary judgment motion until at least June 16, 2003, in order to give Mr. Hamilton even more time to attain pro hac vice status or for L'Abbigliamento to retain new counsel. See Gianni Versace, S.p.A. v. Versace, 01 Civ. 9645, 2003 WL 1937201 (S.D.N.Y. Apr. 23, 2003). The Court ordered Mr. Hamilton to supply his client with a copy of the Memorandum Order "to ensure that L'Abbigliamento is aware of this deadline." Id. Despite this leeway from the Court, [ Page 6]
L'Abbigliamento has not filed an opposition to Gianni's motion, which was served well over four months ago.
According to Rule 56, if a non-movant fails to respond to a summary judgment motion, "summary judgment, if appropriate, shall be entered against the adverse party." Fed.R.Civ.P. 56(e). In this Circuit, failure to oppose a summary judgment motion "does not . . . mean that the motion is to be granted automatically." Champion v. Artuz, 76 F.3d 483, 486 (2d Cir. 1996). Therefore, in spite of L'Abbigliamento's failure to oppose the motion, the Court must consider the substantive merits of Gianni's motion to determine whether the movant has shown that there is no issue of material fact. See Amaker v. Foley, 274 F.3d 677, 681 (2d Cir. 2001) (Sotomayor, J.) ("[I]t is clear that even when a nonmoving party chooses the perilous path of failing to submit a response to a summary judgment motion, the district court may not grant the motion without first examining the moving party's submission to determine if it has met its burden of demonstrating that no material issue of fact remains for trial."). L'Abbigliamento's dereliction does, however, have consequences. The failure to oppose the motion further supports the Court's decision to accept Gianni's statement of facts in its Rule 56.1 statement, to the extent that they are supported by the record.*fn6 Cf. Gadsden v. Jones Lang Lasalle Americas, Inc., 210 F. Supp.2d 430, 438 (S.D.N.Y. 2002) (accepting facts in movant's Rule 56.1 statement as admitted because non-movant's opposition was rejected as untimely); Anderson v. Phoenix, No. 95 Civ. 4605, 1997 WL 362255, at *2 (S.D.N.Y. June 27, 1997) (accepting movant's factual assertions as true because of the lack of [ Page 7]
opposition to the summary judgment motion); Reaves v. Williams, No. 95 Civ. 0281, 1997 WL 10132, at *3 (S.D.N.Y. Jan. 10, 1997).
II. Factual Background
While the facts as recited here are largely taken from plaintiff's Rule 56.1 statement because of defendants' failure to file a counter statement, the Court must still construe these facts in the light most favorable to Alfredo and L'Abbigliamento. See Gadsden v. Jones Lang LaSalle Americas, Inc., 210 F. Supp.2d 430, 442 (S.D.N.Y. 2002).
Gianni is an Italian corporation and design house. It sells fashion apparel, accessories and other products. Alfredo is an Italian citizen and a resident of New York. L'Abbigliamento is a New York corporation based on Long Island. It is controlled by a man named Paolo Vista.
Plaintiff owns several trademarks that include the "Versace" surname. They include "Gianni Versace,"*fn7 "V2 By Versace,"*fn8 "Versus Gianni Versace,"*fn9 "Versace Red Jeans,"*fn10 "Versace Blue Jeans,"*fn11 and "Versace."*fn12 Significantly, each of these trademark registrations has become incontestable. Sales of products bearing these marks and others have lead to income for plaintiff of hundreds of millions of dollars each year from the United States/Caribbean area. Gianni has spent millions of dollars in advertising and promotion each year to promote its products and trademarks in the United States. Without question, these trademarks are nationally renowned. [ Page 8]
Alfredo and L'Abbigliamento entered into a clothing venture in which L'Abbigliamento sold clothing under the mark "Designed by Alfredo Versace." This mark was not used in conjunction with any other mark. The clothing was sometimes, but not always, accompanied by a disclaimer noting that Alfredo is not affiliated with plaintiff.*fn13 The clothing offered for sale under the "Designed by Alfredo Versace" label included men's pants, men's suits, men's canvas suits, men's neckties, men's shirts, polo shirts, men's sport coats and men's cashmere jackets. These goods were not actually designed by Alfredo.*fn14 L'Abbigliamento advertised these goods with a sign on its offices and distributed solicitation letters.
Alfredo never told L'Abbigliamento that it was subject to a preliminary injunction and never gave L'Abbigliamento a copy of the preliminary injunction.
III. Procedural Background
The procedural background of this case and the related cases is a quagmire into which this decision will only wade to the extent necessary. Before this action, the parties filed separate lawsuits in December 1996 and January 1998, filed as No. 96 Civ. 9721 and No. 98 Civ. 0123, respectively.*fn15 In the first action, Gianni claimed that Alfredo had licensed infringing trademarks to A.V. by Versace, Inc., for shoes and other products, beginning in 1995 and 1996. In the second filed action, Gianni brought claims against Alfredo and Foldom International (U.S.A.), Ltd., for their alleged efforts, beginning in [ Page 9]
1997, to license infringing trademarks worldwide. On December 1, 1998, the Court consolidated the two actions.
On February 4, 1998, Judge Sidney H. Stein granted Gianni's request for a preliminary injunction against Alfredo in the related cases, issuing his decision from the bench.*fn16 The preliminary injunction enjoins Alfredo from using or licensing the use of "Alfredo Versace" as well as a list of other specifically enumerated "Infringing Marks"*fn17 previously used by Alfredo, and enjoins the use any other trademarks confusingly similar to those of Gianni. See Preliminary Injunction, 98 Civ. 0123, Feb. 10, 1998 ("PI"), ¶¶ 6-8. Although the injunction bars Alfredo from using his name as a trademark, the preliminary injunction, when first entered, allowed him to use his name to identify goods that he has designed by use of the phrase "Designed by Alfredo Versace," as long as the goods so identified prominently display the disclaimer: "not affiliated with or authorized by Gianni Versace S.p.A." Id. ¶¶ 6-10. The disclaimer must be printed in the same size as the words "Designed by Alfredo Versace." See id. ¶¶ 9-10.
The preliminary injunction also prohibits Alfredo from delegating or licensing his rights to a middleman. However, under the original injunction, manufacturers and distributors could use the name "Alfredo Versace" in accordance with the preliminary injunction, provided that those manufacturers and distributors first agree in writing to be bound by the preliminary injunction. See PI ¶ 13. Alfredo was required to withdraw any [ Page 10]
pending trademark registrations consisting of, in part or in whole, any of the Infringing Marks. See id. ¶ 12. In addition, the preliminary injunction required Alfredo Versace to provide a copy of the preliminary injunction to all past and present licensees and distributors. See id ¶ 15. On January 4, 2001, the Court clarified that the preliminary injunction applies extraterritorially.
On March 6, 2000, the Court 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 long-term 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 No. 98 Civ. 0123, and his Answer and cross-claim in the related action, No. 96 Civ. 9721, be stricken. On March 21, 2002, this [ Page 11]
Court adopted Judge Katz's Opinion and Order and Report and Recommendation in its entirety, essentially causing a default for Alfredo in the consolidated action.*fn18
On September 3, 2002, the Court again found Alfredo in contempt for, inter alia, the manner in which his dealings with L'Abbigliamento have been conducted. A.V. by Versace, Inc. v. Gianni Versace, S.p.A., No. 96 Civ. 9721, 2002 WL 2012618 (S.D.N.Y. Sept. 3, 2002). That conduct is the same conduct that lead to this lawsuit. The contempt finding and the remedy ordered by the Court has lead to a procedural and substantive morass that is still pending resolution. Also in the September 3, 2002 Opinion and Order, the Court indicated that, in light of Alfredo's repeated violations of the preliminary injunction, it would modify that injunction to bar Alfredo from using the "Versace" name in connection with the licensing, manufacture, offering for sale, sale, distribution or promotion of goods or services. Id. at *12-13. That modified injunction was signed by the Court on January 27, 2003.
I. Alfredo's Failure to File a Memorandum of Law
Recognizing another procedural problem with Alfredo's opposition to this motion, Gianni urges the Court to grant the motion on default because of Alfredo's failure to comply with Local Civil Rule 7.1, which states that "[e]xcept as otherwise permitted by the court, all motions and all oppositions thereto shall be supported by a memorandum of law, setting forth the points and authorities relied upon in support of or in opposition to the motion." Local Civil Rule 7.1 (former Local Civil Rule 3(b)). The [ Page 12]
rule goes on to state that "[w]illful failure to comply with this rule may be deemed sufficient cause for denial of a motion or for the granting of a motion by default." Id.; see also Wenzhou Wanli Food Co., Ltd, v. Hop Chong Trading Co., Inc., No. 98 Civ. 5045, 2000 WL 964944, at *3 (S.D.N.Y. July 11, 2000) (Keenan, J.); East 65 Street Realty Corp. v. Rinzler, No. 98 Civ. 6555, 2000 WL 303279, at *2 (S.D.N.Y. Mar. 22, 2000); Toner v. United Bhd. of Carpenters, No. 96 Civ. 0023, 1999 WL 178784, at *1 (S.D.N.Y. Mar. 31, 1999); Sadowski v. Technical Career Inst., Inc., No. 93 Civ. 0455, 1995 WL 236725, at *1 n. 1 (S.D.N.Y. Apr. 24, 1995) (Leisure, J.); American Apparel Assoc., Inc. v. D'Mode Classix, Inc., No. 93 Civ. 7167, 1994 WL 176978, at *1 (S.D.N.Y. May 5, 1994) (Leisure, J.). The entirety of Alfredo's opposition to Gianni's motion is his own three-page affidavit,*fn19 which cites no case or statutory authorities.*fn20 An affidavit is not sufficient opposition under Local Rule 7.1. Microsoft Corp. v. K&E Computer Inc., No. 00 Civ. 7550, 2001 WL 332962, at *1 (S.D.N.Y. Apr. 4, 2001); Wenzhou Wanli Food [ Page 13]
Co., 2000 WL 964944, at *3; East 65 Street Realty Corp., 2000 WL 303279, at *3; Rotblut v. 300 East 74th Street Owners Corp., No. 96 Civ. 5762, 1997 WL 16063, at *1 (S.D.N.Y. Jan. 16, 1997); Washington Square Post #1212 v. City of New York. 808 F. Supp. 264, 269 (S.D.N.Y. 1992) (Leisure, J.).
Alfredo's insufficient opposition is emblematic of the slipshod and unprofessional manner in which this case (and the related cases) has been defended.*fn21 See, e.g., Order of the Court, June 23, 2003, at 2 (noting pro hac vice problems); Order of the Court, May 1, 2003, at 2 (noting Mr. Holzberg's failure to file affidavits with the Clerk of Court even though he represented that he had done so); Order of the Court, Mar. 24, 2003, at 2 (noting Mr. Holzberg's problems with filing documents with the Clerk of Court); Gianni Versace, S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 470340, at *3 (S.D.N.Y. Feb. 25, 2003) (noting pro hac vice problems); Feb. 4 Tr. at 2 (noting Mr. Carmen's failure to move for pro hac vice admission); Id. at 5 (noting defense counsels' "unfortunate sloppy way of handling this case"). The lacunae created by his deficiencies would require the Court to construct his defense to this motion and to do the research that should have been done in the first instance by Mr. Holzberg and Mr. Carmen. V.W. Broad v. DKP Corp., No. 97 Civ. 2029, 1998 WL 516113, at *3 (S.D.N.Y. Aug. 19, 1998) ("Plaintiff's failure to oppose [the motion at issue] would require [the Court] to construct plaintiff's legal arguments for him in order to reach the merits of defendant's motion. This is an [ Page 14]
unacceptable burden to place upon a court."); Rotblut 1997 WL 16063, at *1 (stating that a party's failure to file a memorandum of law "effectively places on the court the burden of conducting the initial legal analysis that is properly the responsibility of defendant's counsel"). Nonetheless, the Court is reluctant to award summary judgment to plaintiff based solely on this procedural ground. Therefore, in the interests of justice and a full hearing of the merits, the Court will not grant Gianni's motion on the basis of Alfredo's failure to file a memorandum of law. Cf. Kessenich v. Raynor, 120 F. Supp.2d 242, 247 (S.D.N.Y. Nov. 13, 2000); Wenzhou Wanli Food Co., 2000 WL 964944, at *4; Briarpatch Limited, L.P. v. Pate. 81 F. Supp.2d 509, 511 n. 2 (S.D.N.Y. 2000); Washington Square, 808 F. Supp. at 269. Alfredo, however, should not assume that the Court would excuse a future failure to include a memorandum of law or otherwise to comply with the Local Civil Rules. "The patience of the courts is enduring but not infinite." Savior v. Bastedo, 78 F.R.D. 150, 153 (S.D.N.Y. 1978).
II. The Merits of the Motion
A. Summary Judgment Standard
A moving party is entitled to summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Holt v. KMI-Continental Inc., 95 F.3d 123, 128 (2d Cir. 1996). The substantive law underlying a claim determines if a fact is material and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, [ Page 15]
Inc., 477 U.S. 242, 248 (1986). When considering the motion, the Court's responsibility is not "to resolve disputed issues of fact but to assess whether there are any factual issues to be tried." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986).
In determining whether genuine issues of material fact exist, the Court must resolve all ambiguities and draw all justifiable inferences in favor of the nonmoving party. See Anderson, 477 U.S. at 255; Holt, 95 F.3d at 129. The moving party bears the burden of demonstrating that no genuine issue of material fact exists. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Gallo v. Prudential Residential Serv. L.P., 22 F.3d 1219, 1223-24 (2d Cir. 1994). "[T]he movant's burden will be satisfied if he can point to an absence of evidence to support an essential element of the nonmoving party's claim." Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995). Once the moving party discharges his burden of demonstrating that no genuine issue of material fact exists, the burden shifts to the nonmoving party to offer specific evidence showing that a genuine issue for trial exists. See Celotex, 477 U.S. at 324. The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "A `genuine' dispute over a material fact only arises if the evidence would allow a reasonable jury to return a verdict for the nonmoving party." Dister v. Cont'l Group, 859 F.2d 1108, 1114 (2d Cir. 1988) (citing Anderson, 477 U.S. at 248).
In trademark infringement cases, "disposition by summary judgment is often appropriate where the protection of a registered trademark is at issue." Couch Leatherware, 933 F.2d at 170. Summary judgment should be granted in such situations "where the undisputed evidence would lead only to one conclusion as to whether [ Page 16]
confusion is likely." Cadbury Beverages, Inc. v. Cott Corp., 73 F.3d 474, 478 (2d Cir. 1996); Consolidated Cigar Corp. v, Monte Cristi De Tabacos, 58 F. Supp.2d 188, 195 (S.D.N.Y. 1999) ("Summary judgment is appropriate in a trademark case where the facts upon which an infringement or dilution analysis will rest are clearly beyond dispute."). However, that the basic facts in a case are undisputed "does not necessarily mean that these facts alone compel certain findings as to" each of the likelihood of confusion factors. Cadbury Beverages, 73 F.3d at 478. The application of uncontested facts to the likelihood of confusion analysis "is a legal issue which [is] appropriate for the district court to resolve on summary judgment." Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 876 (2d Cir. 1986). "If a factual inference must be drawn to arrive at a particular finding on a [likelihood of confusion] factor, and if a reasonable trier of fact could reach a different conclusion, the district court may not properly resolve that issue on summary judgment." Cadbury Beverages, 73 F.3d at 478.
B. Lanham Act Trademark Infringement Claim
Gianni first seeks summary judgment against both defendants on its trademark infringement claim under § 32 of Lanham Act, which is claim one in the complaint. In order to prevail on this claim, plaintiff must show (1) that its valid marks are entitled to protection and (2) that there is a likelihood of confusion between its product and Alfredo's products. The Sports Auth., Inc. v. Prime Hospitality Corp., 89 F.3d 955, 960 (2d Cir. 1996); Paddington Corp. v. Attiki Importers & Distributors, Inc., 996 F.2d 577, 582 (2d Cir. 1993); Gruner Jahr USA Publishing v. Meredith Corp., 991 F.2d 1072, 1075 (2d Cir. 1993); Gucci America, 759 F. Supp. at 1063. Both prongs of this test will be addressed in turn. [ Page 17]
1. Plaintiff's Marks Are Entitled to Protection
The Court need not tarry long on this prong. Under the Lanham Act, the fact that a mark is registered by its owner is "prima facie evidence of the registrant's exclusive right to use the mark in commerce on the product, without precluding an opposing party from proving any defense that might have been asserted had the mark not been registered." Gruner Jahr, 991 F.2d at 1076; Lois Sportswear, 799 F.2d at 871 (stating that "registered trademarks are presumed to be distinctive and should be afforded the utmost protection"); Playboy Enters., Inc. v. Chuckleberry Publishing, Inc., 687 F.2d 563, 567 (2d Cir. 1982) (Lumbard, J.); Abraham Zion Corp. v. Lebow, 593 F. Supp. 551, 566 (S.D.N.Y. 1984), aff'd, 761 F.2d 93 (2d Cir. 1985); see 15 U.S.C. § 1115(a). If a mark is registered for five consecutive years and has been in continuous use, that mark becomes incontestable. 15 U.S.C. § 1065; Gruner Jahr, 991 F.2d at 1076. By statute, if a mark is incontestable, its registration "shall be conclusive evidence . . . of the registrant's exclusive right to use the registered mark in commerce."*fn22 15 U.S.C. § 1115(b); Gruner Jahr, 991 F.2d at 1076.
Plaintiff owns numerous trademarks that include the name "Versace," including "Gianni Versace," "V2 by Versace," "Versus Gianni Versace," "Versace Red Jeans," "Versace Blue Jeans," and "Versace." Each of the foregoing marks has become incontestable. Therefore, it is indisputable that plaintiff's marks are entitled to [ Page 18]
protection. See Park 'N Fly, Inc. v. Dollar Park & Fly. Inc., 469 U.S. 189 (1985); Gruner Jahr, 991 F.2d at 1077.
2. There Is a Likelihood of Confusion
When assessing the likelihood of confusion, the Court must balance the eight factors set forth by Judge Friendly in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961). They are:
the strength of [the senior user's] mark, the degree
of similarity between the two marks, the proximity of
the products, the likelihood that the prior owner will
bridge the gap, actual confusion, and the reciprocal
of defendant's good faith in adopting its own mark,
the quality of defendant's product, and the
sophistication of the buyers.
Id. at 495; see also Cadbury Beverages, 73 F.3d at 478; Arrow Fastener Co., Inc. v. Stanley Works, 59 F.3d 384, at 391 (2d Cir. 1995). These factors are "not exclusive and the analysis of the factors is `not a mechanical process.'" Merriam-Webster, Inc. v. Random House, Inc., 35 F.3d 65
, 70 (2d Cir. 1994) (quoting Paddington Corp., 996 F.2d at 584). In other words, the party with the most factors in its favor does not automatically carry the day. Paddington Corp., 996 F.2d at 584; Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033
, 1044 (2d Cir. 1992) (noting that the Polaroid factors "are merely tools designed to help grapple with the `vexing' problem of resolving the likelihood of confusion, and that the ultimate conclusion as to whether a likelihood of confusion exists is not to be determined in accordance with some rigid formula" (internal quotations omitted)). "Rather, a court should focus on the ultimate question of whether consumers are likely to be confused." Id. Furthermore, the Court should "weigh each factor in the context of the others." W.W.W. Pharmaceutical Co., Inc. v. Gillette Co., 984 F.2d 567
, 572 (2d Cir. 1993). [ Page 19]
a. The Strength of Gianni's Marks
The first Polaroid factor is the strength of the senior user's marks. Strong marks are entitled to broad protection. Nikon Inc. v. Ikon Corp., 987 F.2d 91, 94 (2d Cir. 1993); Tri-Star Pictures, Inc. v. Unger, 14 F. Supp.2d 339, 355 (S.D.N.Y. 1998). In this case, plaintiff uses several marks that in some way include the surname "Versace," and those marks are strong as a matter of law.
The strength of a mark is its "tendency to identify the goods sold under the mark as emanating from a particular, although possibly anonymous, source." McGregor-Doniger, Inc. v. Drizzle, Inc., 599 F.2d 1126, 1131 (2d Cir. 1979); see also Centaur Communications, Ltd. v. A/S/M Communications, Inc., 830 F.2d 1217, 1225 (2d Cir. 1987); Lois Sportswear, 799 F.2d at 873. In considering this factor, the Court should also consider the commercial context of the mark. Bristol 973 F.2d at 1044. "If the mark . . . is such that it seems to the consumer uniquely intended to indicate a product's source, it will be strong whether or not the consumer is familiar with the mark or knows the source." Paddington Corp., 996 F.2d at 585.
Often, the analysis of the strength of a mark "parallels the inquiry concerning the mark's validity, inasmuch as the `strength or distinctiveness of a mark determines both the ease with which it may be established as a valid trademark and the degree of protection it will be accorded.'" Arrow Fastener, 59 F.3d at 391 (quoting McGregor-Doniger, 599 F.2d at 1131). Ultimately, however, "the strength of a mark depends . . . on [ Page 20]
its distinctiveness, or its `origin-indicating' quality, in the eyes of the purchasing public."*fn23 McGregor-Doniger, 599 F.2d at 1131.
In considering this factor, courts look to "(1) the degree to which it is inherently distinctive; and (2) the degree to which it is distinctive in the marketplace." W.W.W. Pharmaceutical, 984 F.2d at 572; see also McGregor-Doniger, 599 F.2d at 1131-33. In order to assess inherent distinctiveness, the Second Circuit has looked to the mark's classification, of which there are five. A trademark can be generic, descriptive, suggestive, arbitrary or fanciful. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976) (Friendly, J.); see also Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). Because "Versace" is a surname, it is a descriptive mark. See Lane Capital Mgmt., Inc. v. Lane Capital Inc., 192 F.3d 337, 345 (2d Cir. 1999); Abraham Zion Corp. v. Lebow, 761 F.2d 93, 104 (2d Cir. 1985) (Kearse, J.). As such, if the analysis stopped there, the mark would not be entitled to much protection because descriptive marks are not inherently distinctive. See Arrow Fastener, 59 F.3d at 391; McGregor-Doniger, 599 F.2d at 1131-32.
The analysis, however, does not stop there. Plaintiff has submitted ample evidence that Gianni's marks have become distinctive in the marketplace. Gianni's proffer includes evidence of sales associated with the marks in hundreds of millions of dollars, and millions of dollars spent on advertising and promotion. Plaintiff also [ Page 21]
submitted numerous articles in which the press covered Gianni Versace (the actual person) and the company. See Affidavit of Matteo Mascazzini, sworn to on Dec. 17, 1997, ex. D; see also Consolidated Cigar Corp., 58 F. Supp.2d at 198 (stating that plaintiff's "commercial success, as shown by widespread media exposure and advertising expenditures, reinforces the strength of the mark"); Tri-Star Pictures, 14 F. Supp.2d at 355; Kraft Gen. Foods, Inc. v. Allied Old English, Inc., 831 F. Supp. 123, 129-30 (S.D.N.Y. 1993) (Leisure, J.); Gucci America, 759 F. Supp. at 1064; cf. Playboy Enters., 68 F.2d at 566 ("`Playboy' is a mark of great value, due in large part to the long standing success of PLAYBOY magazine."). Neither Alfredo nor L'Abbigliamento has countered this evidence. All of the evidence in the record points to one conclusion — that plaintiff's marks are commercially distinctive, have acquired secondary meaning, and are strong. Therefore, those marks deserve broad protection. Cf. Kenner Parker Toys, Inc. v. Rose Art Indus., Inc., 963 F.2d 350, 352 (Fed. Cir. 1992) ("Famous or strong marks enjoy a wide latitude of legal protection."). This Polaroid factor favors plaintiff.
b. The Degree of Similarity Between the Marks
In judging the degree of similarity between marks, the Court must "look at the general impression created by the marks, keeping in mind all factors which the buying public will likely perceive and remember." W.W.W. Pharmaceutical, 984 F.2d at 573; see also Kraft Gen. Foods, 831 F. Supp. at 130. Included in that is the "context in which the respective marks are generally presented." McGregor-Doniger, 599 F.2d at 1133; see also Arrow Fastener, 59 F.3d at 394. "[D]issection of the mark into its various components is not appropriate, as `it is the impression which the mark as a whole creates on the average reasonably prudent buyer and not the parts thereof which is important.'" Kraft Gen. [ Page 22]
Foods, 831 F. Supp. at 130 (quoting Dreyfus Fund, Inc. v. Royal Bank of Canada, 525 F. Supp. 1108, 1117 (S.D.N.Y. 1981)): see also Arrow Fastener, 59 F.3d at 395 ("`While individual features may be dissimilar, the total effect may be one of similarity. Or the total effect may appear dissimilar despite similarities in individual features.'" (quoting Restatement of Torts § 729 cmt. B (1938))); Union Carbide Corp. v. Ever-Ready Inc., 531 F.2d 366, 382 (2d Cir. 1976) ("[A] side-by-side comparison of the marks is not the proper test. The test is the consumers' state of mind when faced with the marks individually."). Furthermore, it is important to remember that "`(t)he test is not whether the consumer will know the difference if (s)he sees the competing products on the same shelf. It is whether (s)he will know the difference if (defendant's product) is singly presented and (s)he has heard of (plaintiff's product).'" Spring Mills, Inc. v. Ultracashmere House, Ltd., 689 F.2d 1127, 1133 (2d Cir. 1982) (quoting American Home Prods, v. Johnson Chem. Co., 589 F.2d 103, 107 (2d Cir. 1978)) (alterations in original).
There is no question that there is similarity between Gianni's marks and the alleged infringing mark. Both marks have the surname "Versace" as the "focal point" of the designation. Lang v. Retirement Living Publ'g Co., Inc., 949 F.2d 576, 581 (2d Cir. 1991); Union Carbide, 531 F.2d at 382; cf Gucci v. Gucci Shops, Inc., 688 F. Supp. 916, 926 (S.D.N.Y. 1988) ("Plaintiff's `Paolo Gucci' mark incorporates the entirety of Gucci Shops' famous `Gucci' trademark."). While Alfredo's mark includes the phrase "Designed by Alfredo" before the word "Versace," the dominant part of the mark is the surname. Because of the presence of the Versace name in Alfredo's mark, "consumers would be `reasonably justified in believing both products come from the same [source].'" [ Page 23]
Nabisco Brands, Inc. v. Arnold Kaye and Arnie's Deli, Ltd., 760 F. Supp. 25, 27 (D. Conn. 1991) (quoting Harlequin Entere, v. Gulf & Western Corp., 644 F.2d 946, 949 (2d Cir. 1981)) (alternation in original). This is especially true in the fashion industry, an industry in which it is common for designers to be referred to by only their surnames. See Polo Fashions, Inc. v. La Loren, Inc., 224 U.S.P.Q. 509, 512 (T.T.A.B. 1984); Nina Ricci S.A.R.L. v. Haymaker Sports Inc., 134 U.S.P.Q. 26, 28 (T.T.A.B. 1962). The close proximity of the products, see infra, exacerbates this similarity. Furthermore, the Patent and Trademark Office has also noted the similarities between Gianni's marks and the mark "Alfredo Versace." Affidavit of David Jacoby, Esq., sworn to on Mar. 14, 2003, ex. C & D.
The presence of the disclaimer required by the preliminary injunction might have lessened the degree of similarity.*fn24 See Bristol-Myers Squibb, 973 F.2d at 1046. However, products were offered for sale and in fact sold that did not contain the required disclaimer. See P1. 56.1 S ¶¶ 24-26. Indeed, Alfredo himself seems to acknowledge this fact. See Affidavit of Alfredo Versace, sworn to on Apr. 7, 2003, at ¶ 4 ("As to the sale of `samples' to a private investigator hired by the plaintiff, I submit that the proper [ Page 24]
disclaimer should have been added by defendant [L'Abbigliamento] if and when such sale would have taken place."). Therefore, this Polaroid factor favors plaintiff.
c. Proximity of the Products and Likelihood of Bridging the Gap
Plaintiff sells apparel throughout the United States (and the world). Defendants also sell apparel in the United States. Therefore, the products are in close proximity and there is no gap to bridge. See Paddington Corp., 996 F.2d at 586; Consolidated Cigar Corp., 58 F. Supp.2d at 198. As such, these factors favor Gianni. See Paddington Corp., 996 F.2d at 586; Tri-Star Pictures, 14 F. Supp.2d at 355 ("Where the two products compete, there is a greater likelihood that the use of similar marks will cause consumer confusion.").
d. Actual Confusion
Before discussing the alleged incidents of actual confusion, it is important to note there are two different standards for actual confusion. If a plaintiff is seeking only injunctive relief, then there does not need to be evidence of actual confusion. However, if money damages are requested, a plaintiff is required to prove "actual consumer confusion or deception resulting from the violation." Getty Petroleum Corp. v. Island Transp. Corp., 878 F.2d 650, 655 (2d Cir. 1989); see also W.W.W. Pharmaceutical 984 F.2d at 576 n. 6 (stating that "in this circuit proof of real and precise actual consumer confusion is required to recover damages"); Coach Leatherware, 933 F.2d at 171 ("To warrant injunctive relief, plaintiffs were not required to establish unquestioned confusion but a mere likelihood of it; proof of real and precise confusion is necessary only for the recovery of monetary damages."). In this case, plaintiff seeks both an injunction and [ Page 25]
damages. Therefore, to obtain all of the relief requested, Gianni must show actual confusion.
Gianni argues that several discrete events show actual consumer confusion. Some of them, however, are plainly not instances of actual confusion. For example, Gianni argues that the Patent and Trademark Office's refusal to register "Alfredo Versace" as a trademark is evidence of actual confusion. See Plaintiff's Memorandum of Law in Support of its Motion for Partial Summary Judgment at 14. While such refusals are relevant to consideration of a likelihood of confusion, they do not show actual confusion. Similarly, plaintiff's statement that "L'Abbigliamento's side-by-side offering of the goods heightened the probability of confusion," id., also only goes to likelihood of confusion. Furthermore, Gianni's arguments regarding Paolo Vista's confusion when confronted with L'Abbigliamento's sales records is certainly not the type of consumer confusion that the Polaroid factors contemplate.
That leaves only one more arrow in Gianni's quiver of confusion. That is comments allegedly made by retailers and exhibitors at a large trade show in Las Vegas on August 28, 2000. According to the affidavit of Onoufrios Danny Argiros, who appears to be an employee of plaintiff, he was staffing plaintiff's booth at the show. Affidavit of Onoufrios Danny Argiros, sworn to on Jan. 25, 2001, ¶ 2. "Designed by Alfredo Versace" goods were also on display at the show at a booth registered to L'Abbigliamento. Id. ¶¶ 5, 6. According to Argiros,
a number of retailers and exhibitors who came to the
Versace Neckwear booth asked us if the Versace firm
had split in two and was now using two different
names, Alfredo Versace and Versace. They also
expressed skepticism about whether the items we were
offering for sale at the Versace Neckwear booth were
[ Page 26]
Id. ¶ 7. This, Gianni argues, is evidence of actual confusion. In the future, at a trial, it may well be sufficient evidence of actual confusion.*fn25
At this juncture, given the posture that must be assumed on a summary judgment motion, the Court cannot find that this somewhat speculative and sparsely documented evidence sufficiently establishes actual confusion.
This determination is fatal to Gianni's summary judgment motion in so much as it seeks monetary damages. As for injunctive relief, this factor favors defendants. As stated supra, however, actual confusion is not required for injunctive relief under the Lanham Act.
e. Good Faith
The next factor for the Court to consider is the good faith of defendants. This factor focuses on "whether the defendant adopted its mark with the intention of capitalizing on plaintiff's reputation and goodwill and any confusion between his and the senior user's product." Lang, 949 F.2d at 583. Bad faith on the part of a defendant "raises the presumption of a likelihood of confusion." Tri-Star Pictures, 14 F. Supp.2d at 357 (citing Paddington Corp., 996 F.2d at 586). One way in which bad faith can be demonstrated is through "a showing of actual or constructive knowledge of the prior user's mark." Tri-Star Pictures, 14 F. Supp.2d at 357; see also Paddington Corp., 996 F.2d at 587; Centaur Communications, 830 F.2d at 1228; Gucci America, 759 F. Supp. at 1065. But see Cadbury Beverages, 73 F.3d at 483 ("Full knowledge of a prior use of a [ Page 27]
protected mark is not necessarily inconsistent with a finding of good faith, particularly where the alleged infringer is unsure as to the scope of the protection.").
One could say that the history of this case and the related cases are a virtual monument to Alfredo's bad faith. There can be no question that he knew about plaintiff's marks at the time of the conduct at issue in light of the fact that the related actions were already pending at that time. In fact, Alfredo has been held in contempt of Court for violations of the preliminary injunction, and part of the conduct that lead to the contempt finding is the same conduct at issue in this lawsuit. The Court has already found that Alfredo "has shown no interest in establishing an enterprise in which his own skill can be made known to the public, and his use of his surname has been less than `honest and straightforward.'" A.V. by Versace, Inc., 2002 WL 2012618, at *12. Certainly the standard for a contempt finding differs from the standard for summary judgment and the Court must avoid making findings of fact in a summary judgment motion. Regardless, it is undisputed that Alfredo has participated in a clothing venture with L'Abbigliamento that used "Designed by Alfredo Versace" as a trademark, failed to use consistently the required disclaimer, and did not actually design the clothing, all clear violations of the preliminary injunction. Under these circumstances, it is inescapable that Alfredo has acted in bad faith as a matter of law, given his actions and the history of these litigations. With respect to Alfredo, this factor favors Gianni.
With respect to L'Abbigliamento, the record is more mixed. As such, the oft-stated maxim that "`[s]ubjective issues such as good faith are singularly inappropriate for determination on summary judgment,'" Cadbury Beverages, 73 F.3d at 483 (quoting [ Page 28]
American Int'l Group, Inc. v. London Am. Int'l Corp., 664 F.2d 348, 353 (2d Cir. 1981)) (alteration in original), controls here. Therefore, this factor favors L'Abbigliamento.
f. The Quality of Defendants' Products
None of the parties addressed this factor. Furthermore, there is no information regarding the quality of the products sold by defendants. Therefore, the Court will not consider this factor in its analysis.
g. Sophistication of the Buyers
While there were arguments regarding this factor, they were just that — arguments. There is no actual evidence in the record concerning this factor. Therefore, the Court will not consider this factor in its analysis.
h. Balancing These Factors
To review the foregoing, the strength of Gianni's marks, the degree of similarity between the marks, the proximity of the products, and the fact that there is no gap to bridge favors plaintiff with respect to both defendants. Additionally, Alfredo's bad faith favors Gianni. Actual confusion favors both defendants, and the good faith factor favors L'Abbigliamento. Also included in this mix is the fact that the Patent and Trademark Office has found that there is a likelihood of confusion between plaintiff and defendants' marks, a determination that "while not conclusive, is entitled to great weight." Syntax Labs., Inc. v. Norwich Pharmacal Co., 437 F.2d 566, 569 (2d Cir. 1971); Gucci, 688 F. Supp. at 927. As stated supra, the party who has the most factors in its favor does not automatically win. However, it is certainly worth noting that the overwhelming number of factors favor plaintiff. Even if the Court assumes that the last two factors, for which there was no evidence in the record, favor defendants, the balancing clearly favors Gianni [ Page 29]
with respect to both defendants. There is undoubtedly and as a matter of law a strong likelihood of confusion between plaintiff's products and those of the defendants. As such, summary judgment for defendant on claim one in the complaint for trademark infringement under § 32 of the Lanham Act is granted to the extent it seeks injunctive relief. Because plaintiff has not shown actual confusion as a matter of law, plaintiff's motion on claim one for damages is denied.*fn26
C. Lanham Act Unfair Competition Claim, Infringement of Common Law Trademark Rights Claim and Common Law Unfair Competition Claim
Plaintiff also requests summary judgment on its claim for unfair competition under § 43(a) of the Lanham Act, infringement of common law trademark rights and common law unfair competition. The focus under these causes of action is likelihood of confusion, a consideration that the Court has already discussed with respect to the Lanham Act trademark infringement claim. That analysis need not be repeated here. However, like the § 32 claim, these causes of action require a showing of actual confusion to recover monetary damages. See W.W.W. Pharmaceutical, 984 F.2d at 576; Warner Bros., Inc. v. Gay Toys, Inc., 658 F.2d 76, 79 (2d Cir. 1981); Perfect Fit Industries, Inc. v. Acme Quilting Co., Inc., 618 F.2d 950, 955 (2d Cir. 1980) (Kearse, J.). Therefore, based on the same analysis discussed above, to the extent that plaintiff requests money damages, the motion is denied and to the extent that plaintiff requests injunctive relief, the request is granted. [ Page 30]
D. Gianni's Arguments Based on Preclusion
Gianni argues that there is another reason to grant summary judgment on liability against Alfredo on all of plaintiff's claims: that the striking of his pleadings in the related cases has a preclusionary effect on this case. More specifically, Gianni relies on the doctrines of res judicata and collateral estoppel. This argument is intriguing, but it ultimately fails.
According to the doctrine of res judicata, "`[a] final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.'" St. Pierre v. Dyer, 208 F.3d 394, 399 (2d Cir. 2000) (quoting Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981)) (alteration in original). Collateral estoppel bars the relitigation of issues litigated in a previous action "if (a) the issues in both proceedings were identical, (b) the issue in the prior proceeding was actually litigated and actually decided, (c) there was a full and fair opportunity to litigate in the prior proceedings and (d) the issue previously litigated was necessary to support a valid and final judgment on the merits." Bronx Household of Faith v. Bd. of Educ. of City of New York, 331 F.3d 342, 362 (2d Cir. 2003). As such, both doctrines require that there be a final judgment in the prior proceeding on which the proponent of the doctrines relies.
What is fatal to plaintiff's preclusion argument in this case is the present status of the related actions. Even though Alfredo's pleadings have been stricken, which in effect is a default judgment, there has been no final judgment in those actions. Indeed, damages have not yet been determined and a permanent injunction has not been issued. The parties have allowed the related actions to lay fallow while litigating the instant action. [ Page 31]
Because there is as of yet no final judgment, plaintiff's preclusion analysis fails.
Summary judgment on this ground is denied.
III. The Status of L'Abbigliamento's Representation
There is one more issue that the Court must address. L'Abbigliamento is a corporation. It is settled law that under 28 U.S.C. § 1654, a corporation can only appear in Federal Court through a licensed attorney. See Eagle Assocs. v. Bank of Montreal 926 F.2d 1305, 1308 (2d Cir. 1991). In this action, as discussed above, no attorney has entered an appearance on behalf of L'Abbigliamento. The Court has exercised a great deal of patience in this regard only because Mr. Hamilton has been assuring the Court that he will enter an appearance as soon as his pro hac vice status is resolved. However, this has gone on far too long. Therefore, the Court orders L'Abbigliamento to direct an attorney to enter an appearance on its behalf within thirty days of this Opinion and Order or a default judgment will be entered against it.*fn27 See id. In plain English so that there is no confusion,*fn28 if L'Abbigliamento does not have an attorney (who is qualified to practice in this District) file a notice of appearance in this case within thirty days, L'Abbigliamento will lose the case and will quite likely have to pay damages to plaintiff.*fn29 [ Page 32]
Based on the foregoing, plaintiff's motion for partial summary judgment is denied in part and granted in part. Specifically, plaintiff is granted summary judgment with respect to its Lanham Act trademark infringement claim, its Lanham Act unfair competition claim, its infringement of common law trademark claim, and its common law unfair competition claim, in so far as it is seeking injunctive relief, but denied summary judgment for monetary damages. Plaintiff's motion for partial summary judgment with respect to Alfredo on liability for all claims based on preclusion doctrines is denied. Furthermore, L'Abbigliamento must be represented in this action by a qualified attorney within thirty days or a default judgment will be entered against it. The parties are hereby ordered to appear for a pre-trial conference on September 18, 2003, at 10:00 a.m., at which time they should be prepared to discuss how this case and the two related cases should move forward.