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Clinique La Prairie, S.A. v. Ritz Carlton Hotel Co.

March 27, 2009

CLINIQUE LA PRAIRIE, S.A., PLAINTIFF,
v.
THE RITZ CARLTON HOTEL COMPANY, L.L.C., DEFENDANT.



The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge

OPINION & ORDER

Plaintiff Clinique La Prairie, S.A. ("CLP") brings this action against Defendant Ritz Carlton Hotel Company, LLC ("Ritz Carlton") alleging injury to business reputation, unfair competition, and trademark infringement. CLP's claims stem from Ritz Carlton's operation of a spa called "La Prairie" at its hotel on Central Park South in Manhattan. On October 18, 2007, this Court allowed a third party, La Prairie, Inc. ("La Prairie"), to intervene as a defendant pursuant to Rule 24 of the Federal Rules of Civil Procedure.

There is a parallel Swiss arbitration proceeding between CLP and La Prairie. La Prairie claims that the arbitration panel's April 2008 decision settled the issue of each party's rights to use the name "La Prairie" and obliged CLP to terminate the instant proceedings against Ritz Carlton.

The Court is faced with four outstanding motions. For the reasons that follow, La Prairie's motion to stay the present proceedings pending clarification of the Swiss arbitration decision is DENIED as moot, and its motion to confirm the arbitration decision is GRANTED. Ritz Carlton's motion to dismiss the present action with prejudice is GRANTED, while CLP's motion to dismiss without prejudice is DENIED.

BACKGROUND

I. Facts

Plaintiff CLP is a Swiss company offering spa, health, and fitness services. (Complaint ("Compl.") ¶¶ 1, 13.) In 1982, Defendant La Prairie, known at the time as Aviatrix Corporation, acquired the "La Prairie" cosmetics line from CLP. (Id. ¶ 20.) According to La Prairie, under the terms of this deal, La Prairie was entitled to use the "La Prairie" name in connection with cosmetics and beauty products and services, while CLP reserved the right to use the name "Clinique La Prairie" in connection with its medical and health spas, food stuffs, and supplements. (La Prairie Mem. of Law in Support of Motion to Stay and Intervene ("La Prairie Mem. to Intervene") at 2.)

Over the following decade, CLP and La Prairie disagreed over the use of the "La Prairie" name. Consequently, in 1995, they entered into a clarifying agreement (the "1995 Agreement") that included a stipulation that future disputes would be resolved by arbitration in Zurich, Switzerland. (See Decl. of Lynne Florio ("Florio Decl.") Ex. A (1995 Agreement).)

Defendant Ritz Carlton operates a La Prairie-licensed spa under the name "La Prairie" at the Ritz Carlton Hotel on Central Park South in Manhattan. (Compl. ¶¶ 23-24.) CLP complains that Ritz Carlton's use of the "La Prairie" name is unlawful because it creates the illusion of an affiliation between CLP's spa services and the Ritz Carlton spa. (Id. ¶ 25.) CLP further argues that the Ritz Carlton spa's promotional materials wrongfully trade on CLP's name, international reputation, and signature use of cellular spa therapies, leading to confusion on the part of customers who wrongly believe that CLP is responsible for La Prairie products. (Id. at ¶¶ 26-32, 37-39.)

On November 21, 2005, CLP sent a cease-and-desist letter to La Prairie, complaining, among other things, about the use of the "La Prairie" name in connection with the Ritz Carlton spa. (Florio Decl. Ex. B.) CLP wrote that La Prairie's licensing of spas constituted a breach of the 1995 Agreement. (Id.) La Prairie responded in a letter dated December 7, 2005, arguing that nothing in the 1995 Agreement prevented La Prairie from being "present and active in spas." (Id. Ex. C.)

II. Procedural History

The procedural history relevant to the present motions is somewhat complicated, involving three parties in two separate proceedings on two continents.

CLP commenced the instant matter against Ritz Carlton in New York State Supreme Court on April 11, 2007. Ritz Carlton removed the matter to this Court on May 23, 2007.

On May 25, 2007, CLP initiated arbitration proceedings against La Prairie in Switzerland. Consequently, on June 27, 2007, La Prairie moved to intervene in the instant matter and asked the Court to stay proceedings pending the outcome of the Swiss arbitration. The Court permitted ...


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