The opinion of the court was delivered by: Hurley, Senior District Judge
Plaintiff The Proctor & Gamble Company ("Plaintiff" or "P&G") brought the present action against, inter alia, defendant Gary Gruenberg ("Gruenberg") alleging various causes of action, including trademark infringement and false designation of origin, see 15 U.S.C. §§ 1114, 1125, as well as common law unfair competition.*fn1 According to the complaint, Gruenberg and the other defendants sold and distributed counterfeit Head & Shoulders and Pantene shampoos. Presently before the Court is Plaintiff's second motion for summary judgment against Gruenberg.*fn2 For the reasons set forth below, the motion is denied.
On this motion, it is Plaintiff's position that Gruenberg sold shampoo labeled Pantene and Head & Shoulders to defendant APO Health Inc. ("APO"), who in turn sold the products to Defendants Quality King, Inc. ("Quality King") and Victory Wholesale Grocers ("Victory"); Victory then sold the products to Rite-Aid. The shampoo Quality King purchased from APO was counterfeit, as was the shampoo Rit-Aid purchased from Victory.
The following facts are derived from the evidentiary submissions and are undisputed, unless otherwise noted. When appropriate, the Court has noted where there is a lack of evidentiary support for relevant facts.
Plaintiff is the owner of various federal trademark registrations for the name "Pantene," and for certain aspects of the "Pantene" trade dress. Plaintiff is also the owner of various federal trademark registrations for "Pro-V" and "Head and Shoulders," as well as for certain aspects of "Pro-V" trade dress and "Head and Shoulders" trade dress.
In October 2004, Plaintiff obtained an order from a Panamanian court authorizing it to search the offices and computer of co-defendant Fred Harrick ("Harrick") for evidence concerning Harrick's counterfeiting activities. Computer experts copied the hard drives of Harrick's computers, then analyzed and forensically restored and retrieved data from the hard drives. Included in the retrieved and restored data are e-mails between Harrick and another co-defendant Paul Chou ("Chou"). These e-mails, all dated August, September and October of 2003, would appear to indicate that Harrick and Chou were engaged in manufacturing and selling counterfeit Pantene and Head & Shoulders shampoos, as well as other products. Four of these e-mails referring to shampoo, "H&S" or "Pant," were forwarded to Gruenberg. There is no evidence that Gruenberg received or replied to these e-mails.*fn3 In his affidavit, Gruenberg denies receiving the e-mails and claims that Harrick runs a legitimate import/export company that sells private labels as well as name brand products obtained through (1) legitimate factories licensed by, for example, Plaintiff to manufacture and sell its products, (2) authorized agents and (3) the gray market.*fn4 Gruenberg denies having ever met, talked to, or seen Chou and denies conspiring to manufacture counterfeit Proctor & Gamble products. According to Gruenberg, Harrick told him that ATM buys direct from the manufacturer and authorized distributors who distribute the products to the Caribbean Islands and that each market has different packaging requirements. He asserts that he did not directly sell any products, including Plaintiff's shampoos. Rather, he introduced customers to Harrick who, in turn, offered the goods for sale.
Defendant Jan Stahl ("Stahl"), an employee of APO, testified at his deposition that in or around July 2003, Gruenberg, through a company called ATM, offered to sell to APO certain Pantene and Head & Shoulders shampoos. APO, in turn, offered these items to Quality King and Victory. Quality King placed an order with APO, who then placed an order with ATM.*fn5 APO did not purchase products labeled Pantene or Head and Shoulders from anyone other than ATM. Stahl assumed that ATM was Gruenberg's company. Gruenberg denies that ATM is his company. No information is provided as to whether Quality King purchased shampoo products labeled Pantene or Head & Shoulders from anyone other than APO.
Alan Cohen ("Cohen"), an employee of Global Marketing, gave the following undisputed testimony at his deposition. In the latter part of 2003,*fn6 Cohen purchased Pantene and Head & Shoulders from Gruenberg for a client "Grapevine," a subsidiary of Defendant Victory. The products were refused by Grapevine. Cohen was "concerned that [he] may be stuck with some counterfeit products" but he did not send the products to any lab to be tested. The reasons why Grapevine refused the products and why Cohen was concerned the items might be counterfeit is not clear from the submitted testimony. In any event, Cohen called Gruenberg who agreed to accept a return of the product. One container was, in fact returned. When the second container was ready to be shipped, Gruenberg called Cohen and said not to ship it back to Uruguay because they had a customer who was going to buy it. The materials submitted on the motion do not indicate what then actually happened to the second container of shampoo.
In an effort to demonstrate the sale of counterfeit Pantene and Head & Shoulders products, Plaintiff submit the affidavit of Kyle Klas ("Klas"), an employee of P&G,*fn7 who inspected certain shampoos purchased by Quality King and by Rite-Aid.
Regarding the Quality King merchandise, Klas went to Quality King's warehouse in Suffolk County, New York in June 2004 to inspect samples of shampoo that King Quality thought might be counterfeit Pantene products. Klas's visual inspection led him to conclude the products were counterfeit because (1) the labels did not have a protective finish; (2) the color and ink on the logo were not as vibrant or metallic as those on genuine bottles; (3) the bottles did not bear a "supplier ID", "mold ID" or "cavity number"; (4) the label was bigger than on genuine bottles; (5) the bottles were not wrapped in individual bags; (6) the cases the product were shipped in differed from genuine cases in that the artwork was different and the cases contained pre-printed UPC bar codes/numbers and product information written entirely in English or entirely in Spanish; (7) one of the ingredients was misspelled; and (8) the cases contained pre-printed day code, product and plant information. Klas's determination that the products were counterfeit was later confirmed by chemical analysis. No information is provided as to who sold these products to Quality King.
Klas also inspected certain merchandise purchased by Rite-Aid. The first inspection occurred as a result of a telephone call to Plaintiff's toll-free hotline in March 2004. A customer called to complain that a bottle denoted Pantene and purchased at a Rite-Aid pharmacy in Queens, New York, did not smell or look like genuine Pantene. When the bottle was purchased at Rite-Aid is unknown. On an unspecified date, Klas inspected the bottle of Pantene which was returned by the customer. Based on the packaging alone, Klas determined that the bottle was counterfeit. "Except for the fact that the packaging did not contain the same spelling error in the ingredient list, and it may not have been shipped in counterfeit cases similar to those found at Quality King, the packaging used on this counterfeit Pantene was identical to the packaging used on the counterfeit Pantene . . . found at Quality King."
The second inspection of products purchased by Rite-Aid apparently resulted from Rite- Aid contacting Plaintiff about some Head & Shoulders and Pantene which Rite-Aid suspected might be counterfeit. On June 18, 2004, Klas went to a Rite Aid distribution center in Rome, New York to inspect the product. Klas determined that the Pantene was counterfeit because of the following difference between the inspected samples and genuine Pantene products: (1) the color and ink used were not as vibrant or metallic; (2) the inspected samples did not contain a "supplier ID", "mold ID" or "cavity number"; (3) the cases the counterfeit products were shipped in had no angled corners and contained preprinted day code, product and plant information and the day code on the case did not match the day code on the bottles. Klas also determined that the inspected samples of Head & Shoulders were counterfeit based on differences between the packaging of the inspected items and genuine Head & Shoulder products.
At another unspecified date, Klas made a third inspection of product purchased by RiteAid. Klas inspected a bottle of Pantene that he was told was found at a Rite-Aid distribution center in Perryman, Maryland. He determined that the bottle was counterfeit because the label was taller than a genuine Pantene label and the logo was less vibrant and metallic. In addition, the bottle had no mold markings and the back label contained a number of typographical errors.
Jan Grammerstorf, an employee of Plaintiff,*fn8 asserts that representatives of Rite-Aid have advised him that they "believe" and "think" they purchased the counterfeit products found in the Rite-Aid Rome distribution center, as well as that purchased ...