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Motorola, Inc. v. Abeckaser

April 8, 2009

MOTOROLA, INC., PLAINTIFF,
v.
GAD ABECKASER A/K/A GADI ABECKASER, GADI'S CELL, INC. D/B/A GADICELL, INC., AND GADICELL, GADIS INC., MOBILE CELLULAR, INC., AND VARIOUS JOHN DOES, JANE DOES AND ABC COMPANIES, DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge.

MEMORANDUM OPINION AND ORDER

Plaintiff Motorola, Inc. brings this trademark action against defendants Gad Abeckaser a/k/a Gadi Abeckaser ("Abeckaser"); Gadi's Cell, Inc. d/b/a Gadicell, Inc. and Gadicell; Gadis Inc.; Mobile Cellular, Inc.; and various John Does, Jane Does and ABC Companies. Specifically, plaintiff alleges that defendants engaged in: (1) infringement of plaintiff's registered trademarks in violation of Section 32 of the Lanham Act, 15 U.S.C. § 1114 (Count I); (2) false designation of origin in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (Count II); and (3) unfair competition under New York State common law (Count III). Plaintiff's claims arise out of defendants' sale of allegedly counterfeit merchandise bearing trademarks that are allegedly unauthorized copies of plaintiff's trademarks.

Plaintiff moves for partial summary judgment on Counts I and II pursuant to Rule 56 of the Federal Rules of Civil Procedure, as well as for injunctive relief, damages, attorney's fees, and costs. For the reasons set forth below, plaintiff's motions are granted as to liability on Counts I and II and injunctive relief, and denied as to damages, attorney's fees, and costs.

BACKGROUND

The following facts are taken from the parties' affidavits and the exhibits attached thereto, and plaintiff's Local Rule 56.1 statement of undisputed facts ("Pl.'s Stmt."). Because defendants have not submitted a corresponding Local Rule 56.1 statement, in accordance with Local Rule 56.1(c), plaintiff's Local Rule 56.1 Statement is deemed admitted for the purposes of this motion to the extent the allegations of fact recited therein are supported by the record. Larsen v. JBC Legal Group, P.C., 533 F.Supp.2d 290, 295 (E.D.N.Y. 2008).

Plaintiff Motorola is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business in the State of Illinois. Pl. Stmt. ¶ 1. Defendant Abeckaser is an individual residing in Brooklyn, New York, who owns and controls defendants Gadi's Cell, Inc. d/b/a Gadicell, Inc., Gadicell, Mobile Cellular, Inc. and Gadis Inc. Id. ¶ 2. Defendants Gadi's Cell, Inc. and Mobile Cellular, Inc. are New York corporations doing business in Brooklyn, New York, and defendant Gadi's Inc. is a New York corporation with a New York Department of State Process address in Brooklyn, New York. Id. ¶¶ 3-5.

For many years, plaintiff has used the word trademark MOTOROLA(r) and design trademark comprised of a stylized M(r) design (the "Motorola trademarks") continuously on, and in connection with, the design, manufacture, and sale of, inter alia, mobile communication devices and accessories in interstate and intrastate commerce. Id. ¶ 6. The Motorola Trademarks are registered on the Principal Register of the United States Patent and Trademark Office ("PTO") for multiple goods, including the following: (1) MOTOROLA, registered June 27, 1981, No. 717,485 in International Class 9; (2) STYLIZED M Design, registered February 4, 1992, No. 1,674,103 in International Class 9; and (3) MOTOROLA and STYLIZED M Design, registered March 24, 2992, No. 1,680,185 in International Class 9. Id. ¶ 7.

Plaintiff actively promotes its trademarks and trade name, devoting substantial time, effort and resources to promoting the Motorola Trademarks and Motorola products. Declaration of David Lukasik dated September 28, 2007 ("Lukasik Decl.") ¶ 5. It maintains strict control over its products and advertising, which prominently feature the Motorola Trademarks. Id. Merchandise designed, manufactured and/or sold by plaintiff bearing one or more of the Motorola Trademarks (the "Authorized Merchandise") has been advertised and sold throughout the United States and within the State of New York and this District. Pl.'s Stmt. ¶ 10. Consumers understand and recognize that Motorola-branded products come from plaintiff and are of good quality, technology and design. Lukasik Decl. ¶ 5.

On March 6, 2007, United States Customs and Border Protection ("U.S. Customs") sent a notice to defendants that U.S. Customs had seized merchandise imported by defendants which bore counterfeit Motorola Trademarks. Pl.'s Stmt. ¶ 11. The notice specifically referenced the seizure of: 1029 manuals, 1087 boxes, 100 liners, 99 power cords, 99 data cables and 99 CD-Roms of software, all bearing counterfeit Motorola Trademarks. Id. ¶ 12.

On May 23, 2007, plaintiff sent a cease-and-desist letter to defendants, directing them immediately to refrain from transacting business in merchandise bearing counterfeit Motorola Trademarks, turn over all such merchandise to Motorola, and disclose business information and documents relating to the merchandise. Id. ¶ 14; Lukasik Decl. Ex. D (copy of cease-and-desist letter). Defendant Abeckaser personally signed a receipt for the cease-and-desist letter. Pl.'s Stmt. ¶ 15.

Following the notice from U.S. Customs and the cease-and-desist letter, on June 13, 2007 and August 30, 2007, private investigators acting on plaintiff's behalf and members of the New York City Police Department purchased several items from defendant Gadi's Cell, Inc. d/b/a Gadicell, Inc. Id. ¶ 16. Based on an examination of the products, David Lukasik, Manager of Quality for the MobileMe Division of plaintiff, determined that the products and packaging were counterfeits.*fn1 Id., see also Lukasik Decl. ¶¶ 1, 6. Mr. Lukasik made his determination based on the inferior quality of the headsets and packaging. Lukasik Decl. ¶ 6. He noted that the stylized M(r) design mark had been poorly affixed to the product; that the materials used for the headsets were not consistent with the materials used in the fabrication of the genuine product; and that the printing of words and images on the product and packaging were of inferior quality and inconsistent with the fabrication of genuine products and packaging. Id.

According to records submitted by defendants,*fn2 between December of 2006 and June of 2007, defendants purchased over 400,000 units of allegedly genuine Motorola merchandise from Motorola's online wholesale auction site, "Motorola Wholesale Private Auctions."*fn3 See Declaration of Mark Jay Heller dated March 4, 2009 ("Heller Decl."), Ex. 3 (email receipts from "Motorola Wholesale Private Auction" reflecting, inter alia, the type and quantity of Motorola merchandise purchased at auction, the amount paid and the date of purchase). According to counsel for defendants, merchandise purchased from Motorola Wholesale Private Auctions is "refurbished, 'end of life' stock (last available units of a model), discontinued units, customer return stock, irregular or defective units (sold 'as is'), as well as accessories and parts for these units[.]" Heller Decl. ¶ 13; see also id. Ex. 2 (email from lashonda.kelly@motorola.com to defendant Abeckaser referencing defendant's purchase of 12,763 v220 phones that were "refurbished by Motorola" and noting, inter alia, that some products are sold "as is" and that "[m]any of our auctions are for the last available units of a model"). Defendants have also submitted evidence that during the same time period, they purchased allegedly genuine Motorola merchandise from retailers allegedly authorized by Motorola to sell genuine Motorola merchandise. Id. Ex. 6 (copy of invoices for allegedly genuine Motorola products purchased by defendants from retailers such as PCS Wireless, Prime 1 Enterprises, Unified Distributors, and WinWin International Trading Limited).

On September 5, 2007, based on, inter alia, the allegedly counterfeit merchandise purchased by private investigators in June and August 2007, search warrants were issued and thereafter executed at defendants' two Brooklyn business locations. Pl.'s Stmt. ¶ 17. At these locations, the New York City Police Department confiscated more than 4,000 headsets and 360 cell phones bearing or packaged with allegedly counterfeit duplications of the Stylized M(r) Design and Motorola(r) word marks, and more than 62,000 allegedly counterfeit packaging inserts bearing allegedly counterfeit duplications of the Stylized M(r) Design and Motorola(r) word marks. Id. ¶ 18. The retail value of the allegedly counterfeit merchandise seized was in excess of $500,000. Id. ¶ 19. If all of the allegedly counterfeit packaging inserts were affixed to and sold with cellular telephone headsets, the retail value of the products would be more than $5,000,000. Id. ¶ 20.

During the execution of the search warrants, the New York City Police Department and David Lukasik observed that defendants were operating warehouse facilities and an assembly line, which, they concluded, were used to create counterfeit duplications of the Motorola Trademarks and to place the same on, inter alia, packaging inserts for headsets and cell phones, and thereafter to package the headsets and cell phones. Pl.'s Stmt. ¶ 21. Defendants' sales records, obtained during the execution of the search warrants, show that defendants issued invoices for $1,178,590 in March 2007, a period of time when defendants were selling allegedly counterfeit Motorola merchandise. Id. ¶ 23.

On September 5, 2007, two employees of defendants were arrested for the sale of counterfeit merchandise. Id. ¶ 24.

Plaintiff commenced the instant action on September 21, 2007, and immediately sought an ex parte temporary restraining order and preliminary injunction restraining defendants' assets. Declaration of Eddy Salcedo dated January 21, 2009 ("Salcedo Decl.") ¶ 30; see also Compl. By stipulation dated October 3, 2007, plaintiff withdrew its initial motion and defendants agreed to refrain from using the Motorola Trademarks in connection with any counterfeit merchandise.*fn4 Pl.'s Stmt. ¶ 25; Salcedo Decl. Ex. M (copy of stipulation).

On October 30, 2007, plaintiff conducted the inspection of defendants' business locations called for in the October 3, 2007 stipulation. Pl.'s Stmt. ¶ 26. During the inspection, the following types of merchandise, bearing allegedly counterfeit duplications of the Stylized M(r) Design and Motorola(r) word marks were found: (1) packaging inserts; (2) "Mobile Phone Tools" CDRoms; and (3) quick-start cellular phone chargers. Id. ¶ 27.

On or about August 12, 2008, defendant Abeckaser was indicted before the Queens County Supreme Court on charges of trademark counterfeiting. Heller Decl. ΒΆ 34; see id. Ex. 7 (copy of indictment). Counsel for defendants states that defendant Abeckaser was subsequently arrested and arraigned ...


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