The opinion of the court was delivered by: Trager, J.
Plaintiff Krasnyi Oktyabr ("Red October" or "plaintiff") purports to have an exclusive license from a Russian manufacturer to import certain Russian candies into the United States for sale to the "Russian ethnic market." Notwithstanding plaintiff's license, defendant Trilini Imports and its related companies and officers (collectively, "defendants") began importing the same Russian chocolates, which they claim to have purchased from third parties who obtained them from the Russian manufacturer. Rather than sue the Russian manufacturer for breach of contract, plaintiff commenced this action against defendants alleging trademark infringement in violation of Section 32(1) of the Lanham Act, 15 U.S.C. § 1114 and Section 43(a) of the Lanham Act, 15 U.S.C. § 1125. Plaintiff also brings supplemental state law claims of unfair competition, violations of §§ 349, 350 and 360-l*fn1 of New York's General Business Law and tortious interference with prospective business relations against defendants.
Defendants counter that plaintiff's claims fail because plaintiff has no standing to bring the Lanham Act claims and, moreover, that the goods in question were genuine so that there could be no consumer confusion. Finally, defendants assert that plaintiff has presented insufficient evidence to support the supplemental claims. This court previously denied a motion to dismiss this case on grounds of standing brought by defendants in 2007. See Krasnyi Oktyabr, Inc. v. Trilini Imps., No. CV-05-5359, 2007 WL 1017620 (E.D.N.Y. Sept. 25, 2007) ("Trilini I").
Pursuant to Rule 56(c), the parties cross-move for summary judgment on plaintiff's claims. Additionally, the parties cross-move for summary judgment on defendants' counter-claims that plaintiff is guilty of abuse of process, committed fraud on the U.S. Patent and Trademark Office ("USPTO"), violated antitrust laws and has tortiously interfered with defendants' prospective business relations. Plaintiff opposes defendants' counter-claims on grounds that they are wholly meritless.
The Parties Many of the facts were already recited in the previous opinion and will only be briefly summarized. See Trilini I. Plaintiff is a Brooklyn-based importer and distributor of Russian candy marketed under the Krasnyi Oktyabr, Rot Front and Babayevsky trademarks. Trilini I, at *1. Defendants are also New York-based importers and distributors of Russian goods. Id.
Obeyediyonne Conditery ("United Confectioners") is a Russian holding company which owns and runs Moscow Confectionary Factory of Krasnyi Oktyabr ("Red October Moscow"), Rot Front and Confectionary Concern Babayevsky ("CCB"), the manufacturers, respectively, of the Krasnyi Oktyabr, Rot Front and Babayevsky brands of candy. Id. Plaintiff and United Confectioners are wholly unrelated to one another. Dec. of Charles H. Knull in Supp. of Defs. Mot. for Summ. J. ("Knull Dec."), Ex. A (Dep. of Gregory Kachura ("Kachura Dep.")) at 10-11, 25-26.
(2) Plaintiff's Agreements
On April 9, 1996, plaintiff entered into a licensing agreement with Red October Moscow granting plaintiff an exclusive license to use the "Krasny[i] O[k]tyabr*fn2 " trademarks in the United States. Knull Dec., Ex. J (1996 Licensing Agreement on Trademarks ("1996 Agreement")), ¶ 1.1. In late 1999, plaintiff obtained a United States trademark registration for the "Krasnyi Oktyabr" brand from the USPTO. Knull Dec., Ex. F (USPTO Registrant Information for the Two "KRASNYI OKTYABR" marks ("USPTO registrations")). Plaintiff obtained a trademark registration for a second "Krasnyi Oktyabr" logo in 2001. Id.
Acting on behalf of United Confectioners, on April 5, 2005, Rot Front entered into an additional agreement with plaintiff.*fn3
The agreement granted plaintiff the exclusive right to sell the "Krasnyi Oktyabr," "Rot Front" and "Babayevsky" brands to the "Russian Ethnic Market" in the United States. Knull Dec., Ex. E (AGREEMENT #581006 ("2005 Agreement")), ¶¶ 2.1, 2.12. Pursuant to this agreement, plaintiff assigned "the entire right, title, and interest" in both of its "Krasnyi Oktyabr" trademarks to Red October Moscow. Knull Dec., Ex. I ("Trademark Assignment").
United Confectioners' Managing Director has affirmed that plaintiff is the only company that has contracted with United Confectioners to distribute its candy in the United States. Aff. of Sergey Kolos ("Kolos Aff."), ¶ 6. Notwithstanding plaintiff's exclusive agreement, starting on or about April 5, 2005, defendants began importing and selling Krasnyi Oktyabr, Rot Front and Babayevsky chocolate bars and confections in the United States at prices below plaintiff's. Dec. of Matthew Sheppe in Opp. to Defs. Mot. on Summ. J. ("Sheppe Opp. Dec."), Ex. E ("Kachura Aff."), ¶ 12. Defendants purchased the candy from third parties, Russian distributors who obtained it directly from United Confectioners. Dec. of Malvina Kerzhner in Opp. to Pl's Mot. for Part. Summ. J. ("M. Kerzhner Dec."), ¶ 2. The packaging of the candy sold by defendants appears indistinguishable from that sold by plaintiffs.
In September of 2005, a representative of United Confectioners informed Malvina Kerzhner, one of the defendants, that United Confectioners would not sell defendants candy of the Krasnyi Oktyabr, Rot Front, and Babayevsky brands, but they remained free to purchase candy from United Confectioners' other brands. Knull Dec., Ex. C ("M. Kerzhner Dep."), at 53-54. Defendants continued selling the candy after this notification and on October 19, 2005 two of plaintiff's employees were able to purchase an assortment of Krasnyi Oktyabr, Rot Front and Babayevsky goods directly from defendants. Kachura Aff. ¶ 13. Plaintiff has not presented any evidence, nor does it claim, that the candy it purchased from the defendants differs from the candy plaintiff sells. Plaintiff claims that it is losing business because some of its customers had already purchased from defendants. Kachura Aff. ¶ 15.
(4) Quality Control Standards
The central factual dispute in determining whether defendant's goods are genuine focuses on any differences between plaintiff's and defendants' quality control standards. The parties do not dispute that the candy sold by defendants originated from the factories of one of United Confectioners' companies. M. Kerzhner Dec., ¶ 3. Plaintiff claims that the candy it sells has been selected for export, and is subjected to higher quality control standards than candy defendants sell, which has been selected for sale on the Russian domestic market. In support of this assertion it relies on a 2001 declaration from the director of the export department of Red October Moscow, which was originally submitted in a different case. Sheppe Opp. Dec., Ex. C ("Privezentsev Dec."), ¶¶ 9-15. Plaintiff further contends that its contract with United Confectioners obliges it to follow strict quality control standards for the transport and storage of the candy, whereas defendants are not contractually obliged to follow such standards. Kolos Aff. ¶¶ 4, 7-11. Because defendants are not contractually obliged to follow such standards, plaintiff argues, there is a high likelihood that defendants will sell expired or stale candy. Kachura Aff., ¶ 17. Nowhere, however, does plaintiff explain what exactly these alleged quality control standards require.
Defendants dispute plaintiff's contentions, arguing that there is no difference in the quality of the candy sold for domestic consumption in Russia and for export. Dec. of Leonard Kerzhner in Supp. of Defs. Mot. ("L. Kerzhner Dec."), ¶ 10. Defendants agree that they are not contractually obliged to follow any of United Confectioners' quality control standards, but contend that their candy is nevertheless subjected to quality control standards that conform to industry norms. Sheppe Opp. Dec., Ex. B ("L. Kerzhner Dep.") at 65-67. Defendants further claim that they do not sell expired candy and that their candy is of the same quality as the candy sold by plaintiff. M. Kerzhner Dec., ¶¶ 8, 12.
(1) Plaintiff's Standing Under the Lanham Act
Plaintiff claims that defendants' import and sale of candy infringes on its trademark rights under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114. It further claims that defendants falsely designated the origin of the candy and misrepresented facts in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125. Defendants, as a preliminary matter, counter that plaintiff has no standing to bring an action under either section of the Lanham Act.
a. Plaintiff's Standing under Section 32 of the Lanham Act
This court previously denied defendants' motion to dismiss based on standing under Section 32 of the Lanham Act, finding based on the allegations in the complaint and the documents attached thereto that plaintiff had standing as a legal representative. In particular, plaintiff's legal representative status was supported by the 2005 Agreement, which granted it certain trademark usage rights, and authorization from S.M. Nosenko, Managing Director of United Confectioners, to act as an agent of United Confectioners in protecting its trademark rights. Trilini I, at *4. By re-arguing plaintiff's standing, defendants are revisiting an issue that has already been decided.
Rather than move for reconsideration under Fed. R. Civ. P. 59(e) or 60(b), defendants raised the issue for a second time in their motion for summary judgment without acknowledging the court's earlier ruling. Ordinarily, under the law of the case doctrine, a decision of law made at one stage of a case will continue to govern in subsequent stages of the same case. United States v. Thorn, 446 F.3d 378, 383 (2d Cir. 2006) (citations omitted). However, the law of the case doctrine is discretionary, particularly when the initial ruling is made on a motion to dismiss and the issue is subsequently raised again after fact discovery in a motion for summary judgment. See DeStefano v. Miller, 67 F. Supp. 2d 274, 280 (S.D.N.Y. 1999), vacated in part on other grounds by De Stefano v. Emergency Housing Group, Inc., 247 F.3d 397 (2d Cir. 2001).
Defendants offer no new evidence, but offer new arguments that plaintiff's interpretation of standing as legal representative is overly broad and that by granting standing to plaintiff, the real party in interest, United Confectioners, is effectively being shielded from discovery. Plaintiff, presenting evidence only of its own damages, argues that it may protect not only United Confectioners' rights, but its own rights as exclusive distributor.
In its broadest sense, a representative can be seen as "one who stands for or acts on behalf of another." Black's Law Dictionary, Revised 8th Ed. (2004). More narrowly, a legal representative can be viewed as one who "manages the legal affairs of another because of incapacity or death, such as the executor of an estate." Id. The issue of who is a legal representative under Section 32 has not been widely litigated, but a district court in Washington took the position that a legal representative under Section 32 should follow the historically restrictive interpretation given to "registrant" and should not be "contrary to the ordinary meaning of the term, i.e.[,] one who appears on behalf of a party who is otherwise unable or incapable of doing so, for example by a guardian of a minor or an administrator of an estate." Nat'l Licensing Assoc., LLC v. Inland Joseph Fruit Co., 361 F. Supp. 2d 1244, 1255 (E.D. Wash. 2004) (emphasis in original).
Plaintiff has not cited any legal authority that supports a departure from the ordinary meaning of legal representative to act "on behalf" of another. Thus, under a theory of legal representative, plaintiff may only recover under Section 32 for damages incurred by United Confectioners. Any damages that plaintiff may have incurred personally may not be recovered under this section.
Plaintiff, however, has not offered any evidence of damages to United Confectioners. It has long been established that the constitutional minimum for establishing standing requires that a party suffer "an 'injury in fact' - an invasion of a legally protected interest which is (a) concrete and particularized and (b) 'actual or imminent, not conjectural or hypothetical.'" Port Wash. Teachers' Ass'n v. Board of Educ., 478 F.3d 494, 498 (2d Cir. 2007) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). Although plaintiff conjectures that defendants' conduct may have caused harm to United Confectioners, even after discovery, the evidence plaintiff presents of damages viewed in the light most favorable to it is insufficient to show lost profits by United Confectioners arising from defendants' conduct.
Plaintiff states that it would have paid $69,452.97 to purchase the same goods from United Confectioners that defendants purchased from its Russian supplier, Russkie Produkty Torg, for $73,661.27. Kachura Aff. ¶ 9; Sheppe Dec., Ex. D (Invoice No. 01/179E ("Russkie Produkty Torg Invoice")). Neither party presents evidence of what Russkie Produkty Torg paid United Confectioners for the goods. However, given that defendants paid approximately $4,200.00 more for the goods than plaintiff would have paid to purchase them directly from United Confectioners, it is entirely possible that Russkie Produkty Torg paid United ...