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Oleg Cassini, Inc v. Serta

March 13, 2012

OLEG CASSINI, INC., PLAINTIFF,
v.
SERTA, INC. ET AL., DEFENDANTS.



The opinion of the court was delivered by: Paul A. Engelmayer, District Judge:

OPINION & ORDER

Plaintiff Oleg Cassini, Inc. ("OCI") brought this action against defendants Serta, Inc. ("Serta"), National Bedding Company, LLC ("National Bedding"), J.C. Penney Company, Inc., and J.C. Penney Corporation, Inc. (collectively, "Defendants") alleging that Defendants had infringed OCI's trademarks in violation of the Lanham Act, 15 U.S.C. § 1114(l) and New York state law. Defendants have moved to dismiss this action pursuant to Federal Rule of Civil Procedure 12(b), based on the first-filed doctrine. For the following reasons, the Court grants Defendants' motion to dismiss.

I.Background*fn1

Serta is a Delaware corporation with its principal place of business in Hoffman Estates, Illinois. Serta primarily manufactures, markets, and sells mattresses. J.C. Penney Company, Inc. and J.C. Penney Corporation, Inc. (collectively, "J.C. Penney") are Delaware corporations with department stores that sell, advertise, and distribute such mattresses throughout the country. National Bedding is a licensee and majority shareholder of Serta.

OCI is a New York corporation, originally founded by Oleg Cassini, a recognized designer. OCI trademarks have been licensed for a wide variety of merchandise, including a Cassini-branded line of mattresses.

In September 2011, OCI became aware that Serta mattresses branded under the name "Cassini" were being sold on the J.C. Penney website. On September 13, 2011, OCI sent a letter to Serta alerting Serta to its interest in Cassini-related trademarks and asking to speak with a Serta representative regarding the mattresses sold on the J.C. Penney website under the Cassini name. See Murray Decl. Ex. A. The letter further alerted Serta that a similar letter had been sent to J.C. Penney. Serta responded by letter 10 days later, stating that it would discontinue the Cassini-branded line of mattresses by the first quarter of 2012. Feb. 16, 2012 Hearing Tr. 10:18-- 20.

On October 6, 2011, OCI sent a second letter to Serta, asserting that Serta's sale of its Cassini-branded line of mattresses constituted trademark infringement and unfair competition under the Lanham Act. See Reppert Decl. ¶ 3; Murray Decl. Ex. F. The letter demanded that:

(1) Serta's marketing and sale of the allegedly infringing product immediately cease; (2) Serta furnish OCI with written assurance that all sales had been discontinued; (3) Serta provide written notice to all retailers that the line of mattresses had been discontinued; and (4) Serta provide OCI with an accounting that included, inter alia, the total sales of Cassini-branded mattresses. OCI's letter stated that if an appropriate response was not received, OCI would "take further action under the law to protect our client's rights." Murray Decl. Ex. F. On October 10, 2011, OCI sent a similar letter to J.C. Penney. See Reppert Decl. ¶ 3.

On October 14, 2011, Serta sent a response to OCI's second letter, stating that although it did not believe that OCI's claims of infringement were well founded,*fn2 Serta had discontinued the Cassini-branded line of mattresses on October 11, 2011. See Reppert Decl. Ex. A. Serta asserted that because the line of mattresses in question had been discontinued, and because all remaining floor samples were expected to be sold within two weeks, Serta considered the matter closed.

On October 17, 2011, OCI sent a third letter to Serta, asserting that discontinuing the Cassini-branded line of mattresses was insufficient to close the matter, and demanding (1) a full accounting of revenue received through sales of the Cassini mattresses, (2) that no floor samples of the Cassini mattresses be available for purchase, and (3) that Serta and J.C. Penney contact various search engines to remove all links to websites with information regarding Serta's Cassini-branded mattresses. OCI stated that if Serta did not supply the accounting, OCI would "proceed to file suit." Murray Decl. Ex. C. On November 1, 2011, OCI sent a similar letter to J.C. Penney reasserting its claims, and stating that if OCI did not receive a "full accounting" of revenues, OCI would "proceed to file suit." Murray Decl. Ex. A.

On October 20, 2011, counsel for J.C. Penney sent a letter responding to OCI's letter of October 10. It explained that "jcpenney is no longer using Cassini as a style designation on the products in question." Murray Decl. Ex. A. J.C. Penney asserted that because the line of mattresses in question had been discontinued, J.C. Penney considered the matter closed.

On November 1, 2011, the same date as OCI's second letter to J.C. Penney, counsel for OCI and Serta engaged in telephonic settlement discussions. Although OCI made a monetary demand, no resolution of the dispute was achieved.

On November 10, 2011, Serta filed an action against Cassini for declaratory relief in the United States District Court for the Northern District of Illinois (the "Illinois action"). The same day, Serta sent a final letter to OCI in which it reasserted that Serta had taken steps to discontinue all sales of the Cassini-branded line of mattresses as soon as it had received the initial communication from OCI. Serta further explained that it was "shocked" by OCI's demand for $100,000, explaining that "Serta's gross wholesale sales . . . was well less than this demand." Murray Decl. Ex. B. Serta alleged that the OCI demand was "not only unreasonable, it is sanctionable." Id. In a final attempt to resolve the matter outside of litigation, Serta informed OCI that, although it had filed the declaratory judgment action, it was withholding service of the Complaint in hopes that OCI would withdraw its monetary demand.

On November 18, 2011, OCI sent a letter to Serta asserting that it had a meritorious infringement claim, and demanding that Serta "withdraw its frivolous action" ...


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