The opinion of the court was delivered by: Peter Leisure, District Judge [ Page 2]
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.
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).
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 ...