United States District Court, S.D. New York
December 29, 2005.
DE BEERS LV TRADEMARK LIMITED and DE BEERS LV LIMITED, Plaintiff,
DeBEERS DIAMOND SYNDICATE INC. and MARVIN ROSENBLATT, Defendants.
The opinion of the court was delivered by: DENISE COTE, District Judge
MEMORANDUM OPINION & ORDER
On November 14, 2005, plaintiffs in this action filed a motion
to amend the complaint (1) to add a new claim for relief for
violation of Section 32(1) of the Lanham Act,
15 U.S.C. § 1114(1), for infringement of the DE BEERS trademark registered by
De Beers LV Trademark Limited and (2) to make "minor amendments
to clarify the relief sought by [p]laintiffs for [d]efendants'
acts of trademark infringement and unfair competition under state
and federal law." Defendants' objections to the proposed
amendments center around the addition of the Lanham Act Section
Plaintiffs' DE BEERS trademark registration had not matured at
the time the original complaint was filed on June 1, 2004. The
registration of the DE BEERS mark for "retail store services
featuring luxury consumer goods" was issued by the U.S. Patent &
Trademark Office ("PTO") on September 13, 2005. The registration
specifies a first use date of June 23, 2005, the date a De Beers retail store opened in New York City.
Under Rule 15, once a pleading has been answered, it may be
amended "only by leave of court or by written consent of the
adverse party." Rule 15(a), Fed.R.Civ.P. Leave to amend "shall
be freely given as justice so requires." Id. "Leave to amend
`may only be given when factors such as undue delay or undue
prejudice to the opposing party are absent.'" In re Wireless
Telephone Servs. Antitr. Litig., No. (DLC), 2004 WL 2244502, at
*4 (Oct. 6, 2004) (quoting SCS Communications, Inc. v. The
Herrick Co., 360 F.3d 329, 345 (2d Cir. 2004) (emphasis in
original)). "A court may also refuse to grant leave to amend
under Rule 15(a) on grounds such as bad faith, or futility of
amendment." Id. (citing Foman v. Davis, 371 U.S. 178, 182
(1962)). "An amendment causes undue prejudice where it would `(i)
require the opponent to expend significant additional resources
to conduct discovery and prepare for trial; (ii) significantly
delay the resolution of the dispute; or (iii) prevent the
plaintiff from bringing a timely action in another
jurisdiction.'" Id. (quoting Block v. First Blood Assocs.,
988 F.2d 344, 350 (2d Cir. 1993)). In the present case, there is
no indication that plaintiffs seek to amend the complaint in bad
faith. Defendants have made no showing that the amendment would
expand the scope of discovery or cause undue delay. As plaintiffs
note, the original complaint reflected that the mark was then in
The defendants allege, however, that the amendment would be futile. Their primary contention centers around the fact that
plaintiffs' trademark registration is for retail store services,
whereas defendants use the mark for "discounted loose stones."
Plaintiff counter that the applicable law merely requires that
the parties' goods or services be "sufficiently related" such
that consumers are likely to confuse the source of origin, citing
Scarves by Vera, Inc. v. Todo Imports Ltd., 544 F.2d 1167, 1174
(2d Cir. 1976); see also Patsy's Brand, Inc. v. I.O.B. Realty,
Inc., 317 F.3d 209, 217 (2d Cir. 2003) ("A defendant will be
held to have infringed on a protected mark if numerous ordinary
prudent purchasers are likely to be misled or confused as to the
source of the product in question because of the entrance in the
marketplace of defendant's mark." (citation omitted)). Whether
consumers will in fact be confused by the use of the "De Beers"
name for both a retail store and loose diamonds is a question of
fact to be decided at trial; that this issue exists does not
render the proposed amendment futile.
In addition, defendants contend that plaintiffs are
contractually prohibited from applying for a trademark for
diamonds, a fact which plaintiffs concede in their reply, and
further, that plaintiffs intentionally hid this fact from the
PTO. On this basis, defendants argue that the trademark
registration is invalid. Whether plaintiffs' registration is
invalid on account of false representations before the PTO is
partly a question of fact; again, that this issue exists does not
render plaintiffs' proposed amendment futile on its face. Plaintiff's motion to amend is accordingly granted.
Plaintiffs' motion to amend the complaint is granted.
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