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Gucci America, Inc. v. Exclusive Imports International

March 19, 2007


The opinion of the court was delivered by: Richard Conway Casey, United States District Judge


This case involves the Gucci brand trademark and seven allegedly counterfeit watches. The Court has previously ruled on discovery issues, including a Rule 72(a) appeal by Plaintiff Gucci America, Inc. ("Plaintiff" or "Gucci"). Now before the Court are the parties' cross-motions for summary judgment.

For the following reasons, Plaintiff's motions are GRANTED and Defendants' motions are DENIED.


The following facts are undisputed unless otherwise indicated.

Gucci is a New York corporation in the fashion business. Both directly and through related companies and licensees, Gucci manufactures and sells jewelry, watches, handbags, fashion accessories, and apparel. Gucci owns the trademark and trade name GUCCI (the "Gucci Trademark") and has registered a number of related trademarks with the United States Patent and Trademark Office. (Compl. ¶ 2, 12-13.) Plaintiff adopted the Gucci Trademark as early as 1957 for various items of merchandise, including watches.

Defendants include three companies and three individuals (collectively, "Defendants").

Defendant Exclusive Import International, Inc. ("Exclusive Imports") is a New York corporation, formed in 1991, that buys and sells branded merchandise such as pens, ceramics, glassware, and watches. (Israelson Decl.) Defendant Cyril Israelson is the owner of Exclusive Imports. (Israelson Decl.) Defendant Innopex, Ltd. ("Innopex") is an Ontario, Canada corporation and a seller of chinaware, crystal, and giftware. Defendant Imperial Trading, Ltd. ("Imperial") is a Barbados corporation and a subsidiary of Innopex. Defendant Joshua Frankel is the president of Innopex and a director of Imperial. (Frankel Decl.) Defendant Aaron Wagschal, listed in the complaint as Aaron Wexel, is an employee of Innopex.

This litigation involves approximately 1200 watches purported to be genuine Gucci watches in three different Gucci styles: Gucci models 1400, 1500, and 1900. Gucci only seeks summary judgment on Defendant's liability with respect to seven watches. These watches are seven of nine watches taken as samples (the "Sample Watches") from a shipment of 500 watches sent in October 1999 by defendant Exclusive to Kay International, one of Exclusive's customers located in Woodland Hills, California. Kay International refused the shipment of 500 watches because it had been informed by Gucci that the watches it had been receiving likely were counterfeit. (Hira Decl.)

Exclusive had sent earlier shipments of purportedly genuine Gucci watches to Kay International in July, August, and September 1999. Exclusive acquired the watches in all of the shipments, including the October 1999 shipment of 500 watches, in New York by from defendants Imperial and Innopex, who, in turn, had obtained the watches from a Singapore supplier named Victron PTE, Ltd.

When Kay International refused the last shipment of 500 watches, sending them back to Exclusive in New York, Israelson, the principle of Exclusive, spoke on the phone with Wagshal and arranged to have the watches picked up for return. Boruch Teitelbaum then picked up the watches from Exclusive and returned them to the ultimate supplier, Victron, in Singapore. Teitelbaum kept the nine Sample Watches as a record of what was returned. These watches were later given to defense counsel and eventually marked as Defendants' Exhibits 3 through 11. For purposes of its summary judgment motion, Gucci relies on seven of these nine watches to show that Defendants infringed the Gucci trademark by selling or offering for sale counterfeit watches.

Plaintiff seeks partial summary judgment on the issue of liability for its Lanham Act trademark infringement claims. Plaintiff also asks for summary judgment on Defendant's counterclaim for tortious interference with contract. Defendants move for summary judgment on the issues of willfulness; the individual liability of and personal jurisdiction over defendants Innopex, Inc., Joshua Frankel, and Aaron Wagschall; and Plaintiff's claims for injunctive relief. The Court will address each motion in turn.


A. Standard of Review

The Court will grant summary judgment where "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 a judgment as a matter of law." Fed. R. Civ. P. 56(c). A genuine issue of material fact exists where "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In determining whether such issues exist, the Court must resolve ambiguities and draw reasonable inferences in favor of the non-moving party, see Tindall v. Poultney High Sch. Dist., 414 F.3d 281, 284 (2d Cir. 2005), or, "when cross-motions for summary judgment are filed, against the party whose motion is under consideration," id. (internal citations and quotations removed).

Of course, "[t]he mere existence of factual issues-where those issues are not material to the claims before the court-will not suffice" to survive a motion for summary judgment. Quarles v. General Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985) (per curiam). The substantive law establishes materiality, and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248.

The moving party bears the initial burden of showing an absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (U.S. 1986). Once the moving party makes such a showing, the burden shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); see also Matsushita Electric Indus. Corp. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (stating that a party opposing a summary judgment motion "must do more than simply show that there is some metaphysical doubt as to the material facts"). "The non-moving party may not rely on conclusory allegations or unsubstantiated speculation" to survive a summary judgment motion. Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998)

B. Lanham Act Liability

Gucci seeks partial summary judgment on the issue of liability for its Lanham Act claims against Defendants. Under Rule 56(c) of the Federal Rules of Civil Procedure, "summary judgment . . . may be rendered on the issue of liability alone although there is a ...

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