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Lucky Brand Dungarees, Inc. v. Ally Apparel Resources LLC

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK


February 5, 2008

LUCKY BRAND DUNGAREES, INC. AND LIZ CLAIBORNE, INC. PLAINTIFFS,
v.
ALLY APPAREL RESOURCES LLC, D/B/A GET LUCKY, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Laura Taylor Swain, Usdj

MEMORANDUM OPINION

Plaintiffs Lucky Brand Dungarees, Inc. and Liz Claiborne, Inc.*fn1 (collectively referred to as "Lucky Brand" or "Plaintiffs") bring this action against Defendants Ally Apparel Resources LLC d/b/a Get Lucky, Key Apparel Resources, Ltd., Marcel Fashion Group, Inc. and Ezra Mizrachi (collectively referred to as "Defendants"), alleging, inter alia, that the manner in which Defendants have used and continue to use the "Get Lucky" brand infringes several of Plaintiffs' trademarks.*fn2 Lucky Brand's complaint asserts the following claims: (1) trademark infringement in violation of 15 U.S.C. § 1114; (2) unfair competition in violation of 15 U.S.C. § 1125(a); (3) trademark dilution in violation of 15 U.S.C. § 1125(c); (4) injury to business reputation/dilution in violation of N.Y. Gen. Bus. Law § 360-l; (5) deceptive acts in violation of N.Y. Gen. Bus. Law § 349; (6) common law trademark infringement; and (7) common law unfair competition. Defendants move the Court for summary judgment in their favor on Plaintiffs' trademark infringement and unfair competition claims pursuant to Rule 56 of the Federal Rules of Civil Procedure. (Docket Entry No. 92.) This Court has jurisdiction of the parties' Lanham Act claims pursuant to 28 U.S.C. § 1338 and supplemental jurisdiction of the parties' state law claims pursuant to 28 U.S.C. § 1367.

The Court has considered carefully the parties' submissions and arguments. For the following reasons, the Court denies Defendants' motion for summary judgment.

BACKGROUND

The following material facts are not disputed unless otherwise indicated. In 1985, Ezra Mizrachi ("Mizrachi") founded a clothing company called Marcel Fashion Group, Inc. ("Marcel"). (Pls.' Opp'n to Defs.' Rule 56.1 Statement ("Pls.' 56.1 Stmt.") ¶ 1.)*fn3 On January 7, 1986, Marcel registered the mark "Get Lucky," which covered, inter alia, men's, women's, and children's clothing and sportswear, including jeans, on the principal register (Reg. No. 1,377,345). (Pls.' 56.1 Stmt. ¶¶ 13-14; Marcel Certificate of Registration,*fn4 annexed to July 30, 2007, Decl. of Ezra Mizrachi ("Mizrachi Decl. I") as Ex. N.) In January 1992, Marcel's registration for the "Get Lucky" mark was cancelled.*fn5 (Pls.' 56.1 Stmt. ¶ 15.) On September 23, 2003, Marcel registered a new "Get Lucky" mark on the principal register (Reg. No. 2,765,974). (Defs.' Answer and Countercl. ¶ 34; Pls.' Answer ¶ 34; Mizrachi Decl. I Ex. M.)

Lucky Brand, also a clothing company, was founded in 1991. (Joint Pre-Trial Stmt. ("JPTS") at 6.)*fn6 Between mid-1991 and early 2005, Lucky Brand obtained several registrations for the "Lucky Brand" mark and derivations thereof (hereinafter "Lucky-formative marks") for various articles of clothing, with a substantial majority of the registrations obtained after 2000. (See Ex. 1, annexed to Aug. 17, 2007, Decl. of Barry Perlman.)*fn7 All of the marks were registered on the principal register. (Id.)

In the spring of 2004, Marcel licensed Ally Apparel Resources LLC ("Ally") to use the "Get Lucky" mark.*fn8 (JPTS at 7.) Lucky Brand thereafter brought this action, alleging that, after obtaining a license from Marcel, Ally used and continues to use "Get Lucky" in a manner that infringes the trademarks owned and registered by Lucky Brand. (See Compl. ¶¶ 47-59.)

The extent to which and the geographic areas in which Marcel and/or its licensees have used the "Get Lucky" mark from 1985 until the present time are disputed.

DISCUSSION

Defendants move for summary judgment on Plaintiffs' trademark and unfair competition claims. Summary judgment is appropriate where "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). To defeat a motion for summary judgment, the non-movant must identify specific facts showing a genuine issue for trial, or demonstrate that the moving party is not entitled to judgment as a matter of law. Fed. R. Civ. P. 56(e)(2); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Defendants invoke the prior use defense codified in 15 U.S.C. § 1115(b)(6) in aid of their argument that they are entitled to summary judgment dismissing all of Plaintiffs' trademark infringement and unfair competition claims because Marcel had registered, and used, "Get Lucky" throughout the United States before Plaintiffs even registered their marks. (See Oral Argument Tr. at 3.)

Prior use defense under 15 U.S.C. § 1115(b)(6)*fn9

The prior use defense provision under subsection (b)(6) permits an alleged infringer to assert as a defense:

That the mark whose use is charged as an infringement was registered and used prior to the registration under this chapter . . . , and not abandoned: Provided, however, That this defense or defect shall apply only for the area in which the mark was used prior to such registration . . . .

15 U.S.C.A. § 1115(b)(6) (West 1998) (emphasis in original).

Plaintiffs contend that the Section 1115(b)(6) defense is unavailable to Defendants because Defendants cannot satisfy the "was registered" element of subsection (b)(6), in that Defendants' "Get Lucky" registration, though undisputedly entered prior to any of Plaintiffs' own registrations, was cancelled in 1992, prior to nearly all of Plaintiffs' registrations.*fn10 However, nothing in the plain language of subsection (b)(6) suggests that a mark that was registered but later cancelled cannot satisfy the "was registered" element of subsection (b)(6), nor do Plaintiffs cite any authority supporting such a proposition. Defendants' "Get Lucky" mark "was registered" in 1986, prior to any of Plaintiffs' registrations. Therefore, the "was registered" element of subsection (b)(6) is satisfied and Defendants are not precluded from invoking the subsection 1115(b)(6) defense.

There is a genuine factual issue as to geographic area

The statutory defense provided by subsection (b)(6) is, however, subject to the proviso that the defense shall apply "only for the area in which the mark was used prior to [claimant's] registration . . . ." Defendants claim the protection of the prior use defense as to the entire United States. (See Oral Argument Tr. at 4-5.)

The evidence proffered by Defendants is insufficient to establish as a matter of law their right to subsection 1115(b)(6) protection extending throughout the United States. Determining the geographic area in which an alleged infringer has successfully demonstrated prior use is an fact-intensive inquiry that includes questions of, inter alia, sales volume, proper definitions of the appropriate buyers' and sellers' markets, forms of advertising, customer association, and/or reputation. See, e.g., Sweetarts v. Sunline, Inc., 380 F.2d 923, 929 (8th Cir. 1967); Natural Footwear Ltd. v. Hart, Schaffner & Marx, 760 F.2d 1383, 1398-99 (3rd Cir. 1985).*fn11

The affidavit proffered by Defendants on this issue only includes generalized and conclusory statements concerning nationwide use that are called into question by Plaintiffs' counter-proffers, which include preliminary findings of fact and stipulated facts in separate litigation brought by Marcel suggesting only limited use in a niche market.*fn12 Defendants also rely on various exhibits that consist of, inter alia, advertisements, invoices, and trade show brochures, but a substantial portion of those exhibits do not actually show use of the "Get Lucky" mark, do not provide any indication whatsoever as to the geographic area in which the mark was used, and/or do not indicate when or how the mark was used. Genuine issues of material fact thus preclude the grant of Defendants' summary judgment motion.

Should the prior use defense be pursued at trial, specific evidence on these matters will have to be presented in order to enable the fact finder to make a proper determination as to whether Defendants have carried their burden of proof as to the geographic element of their prior use defense.

CONCLUSION

For the foregoing reasons, Defendants' motion for summary judgment on Plaintiffs' trademark infringement and unfair competition claims is denied. The Clerk of Court is respectfully requested to terminate Docket Entry No. 92.*fn13

When Magistrate Judge Dolinger decides Defendants' motion for sanctions under Rule 37 (Docket Entry No. 154), the parties shall notify Chambers and propose a deadline for submission of a revised set of joint proposed jury instructions as well as a time fram for the final pre-trial conference.

SO ORDERED.


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