The opinion of the court was delivered by: Paul A. Engelmayer, District Judge:
Plaintiff Robert G. Lopez brings this claim against The Gap, Inc., Gap International Sourcing, Inc., Old Navy, LLC, and Old Navy Apparel, LLC (collectively, "Defendants"). Lopez alleges that Defendants infringed his ownership and use rights in the marks "Lower East Side," "LES NYC," and "LES," resulting in unfair competition and false designation of origin in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and common law trademark infringement and unfair competition in violation of New York State law. Lopez seeks to enjoin Defendants from using the allegedly infringing marks, to destroy any remaining materials bearing the marks, and to notify past and present customers that Defendants have been improperly using the marks. Lopez also seeks to disgorge Defendants of the profits arising from their use of the allegedly infringing marks. Finally, he seeks treble damages, punitive damages, and attorney's fees.
Defendants move for summary judgment as to all claims. For the reasons set forth below, Defendants' motion is granted.
This case involves one neighborhood, two t-shirts, and three marks.
Lopez, a resident of the Lower East Side neighborhood of Manhattan,
started doing business as L.E.S. Clothing Co. in 1999.*fn2
Defs. 56.1 ¶ 2; Pl. 56.1 ¶ 1. In an effort to create designs
that customers perceive as representing the Lower East Side, Lopez
began selling t-shirts bearing the marks "Lower East Side" (the "Lower
East Side Mark") and "LES NYC" (the "LES NYC Mark"). Defs. 56.1 ¶ 12;
Pl. 56.1 ¶¶ 2, 12. The Lower East Side Mark is a mark consisting of
the words "Lower East Side," with "Lower" on line one, "East" on line
two, and "Side" on line three. See infra p. 3. There is a solid line
above "Lower," and a solid line below "Side." The LES NYC Mark
consists of the phrase "LES NYC" inside a circle of stars. See infra
In 2006 or 2007, Lopez expanded his product line to include various other products, including sweatshirts, vests, and caps. Defs. 56.1 ¶ 6; Pl. 56.1 ¶ 6. In December 2010, he also began using a third mark, the "LES Mark." Lopez Decl. ¶ 11. The LES Mark consists of the three capital letters: "L," "E," and "S." See id. Ex. 5. The letters appear in a design in which the lower portion of the "L" serves as the middle portion of the "E" and the lower portion of the "E" serves as the bottom portion of the "S." See infra p. 3. The LES Mark appears with a star in the upper right corner, near the top of the "S." These three marks-the Lower East Side Mark, the LES NYC Mark, and the LES Mark-form the basis of this action.
Lower East Side LES NYC LES
Before selling his products in a retail store in 2012, Lopez sold his merchandise on the street, in barbershops, and in locally owned clothing stores. See Defs. 56.1 ¶ 25; Pl. 56.1 ¶ 25.*fn3
He also made occasional sales through a PayPal account beginning in 2006, Lopez Decl. ¶ 19, and using a toll-free number that he purchased in 2009, id. ¶ 20. L.E.S. Clothing Co. has never had any employees. Defs. 56.1 ¶ 7; Pl. 56.1 ¶ 7. Instead, Lopez has occasionally solicited help from and compensated various individuals, some of whom are his friends and acquaintances, to design, create, print, and market his apparel. Pl. 56.1 ¶¶ 7--8. In 2010, Lopez also purchased the domain name www.lesclothing.com, a website that allows potential consumers to view and purchase his products. Lopez Decl. ¶ 21.
Since the inception of L.E.S. Clothing Co., the majority of Lopez's business transactions have been in cash. Defs. 56.1 ¶ 25; Pl. 56.1 ¶ 25. In fact, before February 2012, Lopez did not create business records of his sales. Pl. 56.1 ¶ 27. As partial documentation of his sales during this time period, he has produced sales receipts totaling $1,129.08 from Paypal orders: $40.00 from 2007; $54.80 from 2008; and the remainder from 2011. Id.; Weinberger Decl. Ex. E. Although he does not know the precise number of clothing units sold for any particular year, Lopez estimates that his annual sales ranged from $6,000 to $10,000 between 2007 and 2011, never exceeding $10,000 for any given year. Defs. 56.1 ¶¶ 35, 40; Pl. 56.1 ¶¶ 35, 40. Finally, the 2010 Schedule C filed with the IRS for L.E.S. Clothing Co. shows sales totaling $2,000 for 2010. Defs. 56.1 ¶ 36; Pl. 56.1 ¶ 36.
Before commencing this action, Lopez took steps to protect his Lower East Side Mark and his LES NYC Mark. In 2007, he obtained a New York State trademark registration for the Lower East Side Mark; in 2008, he received a New York State trademark registration for the LES NYC Mark. Lopez Decl. Exs. 2, 4. After the commencement of this action, on August 31, 2011, Lopez also obtained a New York State trademark registration for the LES Mark. Id. Ex. 5. The United States Patent and Trademark Office ("USPTO"), however, refused Lopez's federal trademark application for the LES NYC Mark on September 19, 2011, noting that the "proposed mark is primarily geographically descriptive of the origin of the applicant's goods." Weinberger Decl. Ex. I. As of the date of this Order, Lopez's USPTO application is suspended. Id. Ex. J; see USPTO website, http://tarr.uspto.gov, serial no: 85335314 (last visited July 26, 2012).
On a number of occasions, Lopez has sent cease-and-desist letters to website owners selling non-Lopez produced "Lower East Side" and "LES" apparel. Defs. 56.1 ¶ 48; Pl. 56.1 ¶ 48. Lopez is also no stranger to the judicial system. In addition to this lawsuit, he has brought five pro se lawsuits, against: Payless Shoesource Worldwide, Inc.; Aeropostale, Inc. and Aeropostale Procurement Company, Inc.; J. Crew International, Inc., J. Crew Group, Inc., and J. Crew Inc.; Urban Outfitters, Inc. and Fifth Sun, LLC; and Coat of Arms, LLC, Hanesbrands, Inc., and Mitchell & Ness Nostaligia, Co. Defs. 56.1 ¶ 50; Pl. 56.1 ¶ 50.*fn4 All lawsuits were based on Lopez's claimed rights in the Lower East Side Mark and the LES NYC Mark. In none of these prior lawsuits did a court reach the merits of any claim by Lopez to a right in the marks. Defs. 56.1 ¶ 53; Pl. 56.1 ¶ 53.
With respect to advertising, since 1999, Lopez has promoted his products in a variety of ways, including: distributing flyers and stickers of his marks, Lopez Decl. Exs. 15--18; wearing his products to events "virtually every day since late 2006,"Pl. 56.1 ¶ 22; and advertising in at least two magazines, id.*fn5 Aspiring musicians have worn Lopez's clothing during performances, Lopez Decl. Ex. 25, in self-made videos, id. Ex. 27, and in the online publication, "Hip Hop Game," id. Ex. 28. Lopez, however, has not maintained records of advertising expenditures, nor conducted market research to determine the number of consumers who are aware of his brand. Defs. 56.1 ¶¶ 22--23; Pl. 56.1 ¶¶ 22--23. Additionally, under a January 2011 settlement agreement with another retailer, Lopez is restricted from conducting advertising, marketing, promotion, or sales activity outside New York State as to items bearing the Lower East Side Mark, or confusingly similar variations thereof. Weinberger Decl. Ex. K. The settlement also prohibits Lopez from ever filing a federal trademark application for the term "Lower East Side." Id.
Lopez's lawsuits have been covered by several news sources. Taken together, this coverage has provided "the largest amount of press his business has received for any one event or related group of events." Defs. 56.1 ¶ 64; Pl. 56.1 ¶ 64.
Old Navy Apparel, LLC and Old Navy, LLC (together, "Old Navy")-subsidiaries of The Gap, Inc.-have sold casual apparel under the Old Navy brand since 1994. Defs. 56.1 ¶ 65; Pl. 56.1 ¶ 65. Old Navy products are sold nationwide both in Old Navy's full-priced retail store and through Old Navy's website. Defs. 56.1 ¶ 66; Pl. 56.1 ¶ 66. Each Old Navy product displays the "Old Navy" mark on a hangtag and also on the interior label. Defs. 56.1 ¶ 67; Pl. 56.1 ¶ 67.
This case involves the designs used by Old Navy on two of its casual t-shirts. On December 28, 2009, Old Navy began offering a women's t-shirt displaying the words "Lower East Side NYC" (the "Women's T-Shirt"). Defs. 56.1 ¶ 70; Pl. 56.1 ¶ 70. The letters appeared in cursive script, adjacent to a multi-colored, pastel flower. DeMartini Decl. Ex. B; see infra p. 7. In January 2011, Old Navy also began carrying a men's t-shirt (the "Men's T-Shirt"). Defs. 56.1 ¶ 70; Pl. 56.1 ¶ 70. The Men's T-Shirt is a sporty shirt, bearing the logo of a (fictitious) "Lower East Side Sports Club." DeMartini Decl. Ex. A. At the center of the Men's T-shirt there are three overlapping letters-"L," "E," and "S." The lower portion of the "L" runs through the middle portion of the "E," and the "S" overlaps portions of both the "L" and the "E." Id.*fn6 Unlike Lopez's LES Mark, the letters do not interlock. See infra p. 7. The overlapping letters appear in the center of a circle; the circle is comprised of the phrases "Lower East Side," "Sport Club," and "New York." DeMartini Decl. Ex. A. Although Old Navy no longer carries either t-shirt, Old Navy sold a combined total of 71,522 units of the t-shirts while they were in stock. Defs. 56.1 ¶ 71; Pl. 56.1 ¶ 71.
The Women's T-Shirt The Men's T-Shirt
In April 2011, Lopez learned that Old Navy was selling the Men's T-Shirt.*fn7 On May 5, 2011, Lopez, proceeding pro se, filed this action (Dkt. 1). The Complaint stated four causes of action: (1) federal trademark infringement under § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); (2) federal unfair competition and false designation of origin under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (3) common law trademark infringement and unfair competition under New York State law; and (4) unjust enrichment under New York State law. On September 7, 2011, Lopez amended the Complaint, adding claims of copyright infringement under the Copyright Act of 1976, 17 U.S.C. § 101 et seq., and conversion under New York State law (Dkt. 13). On January 18, 2012, this Court, pursuant to a stipulation signed by all parties, dismissed with prejudice Lopez's claims for (1) federal trademark infringement under § 32(1) of the Lanham Act and (2) federal copyright infringement (Dkt. 26). On June 5, 2012, at oral argument on Defendants' motion, Lopez-now represented by court-appointed pro bono counsel-agreed to voluntarily dismiss the state law claims for unjust enrichment and conversion. Tr. 62.*fn8
The ensuing analysis addresses Defendants' motion for summary judgment on Lopez's two remaining claims, for: (1) federal unfair competition and false designation of origin under § 43(a) of the Lanham Act, and (2) common law trademark infringement and unfair competition under New York State law.
II.Applicable Legal Standard
To prevail on a motion for summary judgment, the movant must "show that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the burden of demonstrating the absence of a material factual question, and, in making this determination, a court must view all facts "in the light most favorable" to the non-moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d Cir. 2008). As to any claim on which the opposing party bears the burden of proof at trial, the movant may discharge its burden by demonstrating that there is insufficient evidence to support the moving party's claim. See Celotex, 477 U.S. at 322--23.
If the moving party meets this burden, the nonmoving party must then establish a genuine issue of fact by "citing to particular parts of materials in the record." Fed. R. Civ. P. 56(c)(1)(A); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). The nonmoving party "may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible . . . ." Ying Jing Gan v. City of N.Y.,996 F.2d 522, 532 (2d Cir. 1993); see also Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) ("A party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment."). Only disputes over "facts that might affect the outcome of the suit under the governing law" will preclude a grant of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If factual disputes remain, the district court must "resolve all ambiguities" and "draw all reasonable inferences" in favor of the nonmoving party. Clarke v. Aetna Life Ins. Co., 471 F. Supp. 2d 463, 468--69 (S.D.N.Y. 2007) (citing Am. Cas. Co. v. Nordic Leasing, Inc., 42 F.3d 725, 728 (2d Cir. 1994)) (internal quotation marks omitted).
Section 43(a)(1)(A) of the Lanham Act protects registered and unregistered marks against the use of any word, term, name, symbol, or device that "is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person . . . ." 15 U.S.C. § 1125(a). To establish a claim under this provision, a plaintiff must show that he or she has a valid mark that is entitled to protection and that the defendant's actions are likely to cause confusion with the plaintiff's mark. See, e.g., Morningside Grp. Ltd. v. Morningside Capital Grp., LLC,182 F.3d 133, 137 (2d Cir. 1999).
Defendants make a number of arguments in support of summary judgment, including that: (1) Lopez failed to claim trademark rights in the LES Mark in his Complaint and his First Amended Complaint ("FAC"); (2) Lopez's marks are not protectable under the Lanham Act, either because the mark lacks inherent distinctiveness (the LES Mark) or because Lopez has failed to raise a genuine issue of material fact that the marks have acquired secondary meaning (the Lower East Side Mark and the LES NYC Mark); (3) Lopez has not produced sufficient proof of the use in commerce of any of the three marks; (4) Lopez has not come forward with evidence that consumers are likely to be confused as to Lopez's sponsorship of, connection to, or association with Defendants' t-shirts; and (5) Defendants' use of the terms "Lower East Side" and "LES" constitute fair use of these geographic terms.
The discussion that follows is divided into three parts. First, the Court considers Lopez's claims under § 43(a) of Lanham Act with respect to the LES Mark, beginning with whether that mark is appropriately part of this lawsuit. Second, the Court considers Lopez's Lanham Act claims with respect to the Lower East Side Mark and the LES NYC Mark. Finally, the Court analyzes Lopez's state law trademark infringement and unfair competition claims as to all three marks.
1.Inclusion of the LES Mark in this Lawsuit
As an initial matter, Defendants argue that the Court should disregard the interlocking LES Mark in considering Lopez's trademark claims, because he did not make such claims in either the Complaint or the FAC, and indeed explicitly disavowed pursuing any trademark rights in the LES Mark during discovery. The Court agrees. It is "well settled that a Court should not on summary judgment consider factual allegations and legal theories not raised in the complaint." Brown v. Magistro, No. 10-cv-3705, 2011 WL 6399514, at *3 (S.D.N.Y. Dec. 20, 2011); see also Southwick Clothing LLC v. GFT (USA) Corp., No. 99-cv-10452, 2004 WL 2914093, at *6 (S.D.N.Y. Dec. 15, 2004) (noting that "[a] complaint cannot be amended merely by raising new facts and theories in plaintiffs' opposition papers"). "[C]courts in this District have consistently ruled that 'it is inappropriate to raise new claims for the first time in submissions in opposition to summary judgment.'" Beckman v. U.S. Postal Serv., 79 F. Supp. 2d 394, 407 (S.D.N.Y. 2000) (quoting Bonnie & Co. Fashions v. Bankers Trust Co., 170 F.R.D. 111, 119 (S.D.N.Y. 1997)).
Because Lopez was initially proceeding pro se, the Court has read his "papers liberally[,] . . . interpret[ing] them to raise the strongest arguments that they suggest." Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994). But, although leniency is afforded a pro se litigant, "all normal rules of pleading are not absolutely suspended." Cusamano v. Sobek, 604 F. Supp. 2d 416, 462-- 63 (N.D.N.Y. 2009) (quoting Stinson v. Sheriff's Dep't of Sullivan Cty., 499 F. Supp. 259, 262 & n.9 (S.D.N.Y. 1980)).
Here, Lopez's FAC references the interlocking LES Mark only in the context of claims he has now voluntarily dismissed: his copyright infringement claim, brought under 17 U.S.C. §101 et seq., and his conversion claim, brought under New York State law. See FAC 8--9; see also Stipulation of Dismissal (Dkt. 26) (dismissing copyright infringement claim with prejudice); Tr. 62 (voluntarily dismissing the state law conversion claim). In his responses to interrogatories, Lopez disclaimed asserting that the interlocking LES Mark was a subject of his trademark claims. See Leipsic Decl. Ex. B, at 4, No. 12 ("Plaintiff . . . asserts that the mark LES is not the subject of this lawsuit so your inquiry is irrelevant to the present case."). Finally, during his deposition on January 10, 2012, Lopez was asked: "So LES is not the subject of this case?" Lopez Dep. 305. In response, Lopez answered, "No, it's not." Id. He thereupon clarified that the interlocking LES Mark related solely to his copyright claim. Id. ("Q: So you do not have a trademark claim against the Old Navy T-shirt for the overlapping LES design? A: That's a copyright claim . . . .").
Although it is true that Lopez was proceeding pro se both at his deposition and when filing the FAC, the Court cannot overlook the fact that he repeatedly represented that he was not asserting trademark rights in the LES Mark. The FAC, the interrogatories, and Lopez's deposition testimony, taken together, preclude trademark claims based on the LES Mark.
In any event, on the merits, the Court concludes that any claim of trademark protection for the LES Mark would be substantively deficient, counseling in favor of denying, without leave to amend, Lopez's trademark claim as to that mark. See Cusamano, 604 F. Supp. 2d at 462 (citing Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000) (finding that repleading would be futile)); see also Freeman v. Marine Midland Bank-New York, 494 F.2d 1334, 1338 (2d Cir. 1974) (no abuse of discretion by trial court when proffered amendment would fail to state a claim); Tr. 65 (statement of defense counsel, acknowledging that, notwithstanding Lopez's failure to plead a trademark claim as to LES Mark, Defendants would not be prejudiced if the Court reached this issue on the merits). The Court's substantive assessment as to that claim is as follows.
2.Trademark protection under the Lanham Act
An unregistered mark, such as Lopez's LES Mark, can be protected under the Lanham Act if it would qualify for registration as a trademark. See Courtenay Commc'ns Corp. v. Hall,334 F.3d 210, 214 n.2 (2d Cir. 2003). Therefore, to establish a claim under this provision, a plaintiff must first show that he has a valid mark entitled to protection. See, e.g., Morningside Grp. Ltd.,182 F.3d at 137. To be entitled to protection, a mark must be sufficiently "distinctive" to distinguish the registrant's goods from others. See Two Pesos, Inc. v. Taco Cabana, Inc.,505 U.S. 763, 768 (1992) (citing 15 U.S.C. § 1052). A mark may either be (1) "inherently distinctive," where its intrinsic nature serves to identify its particular source; or (2) distinctive by virtue of having acquired a "secondary meaning" in the minds of consumers. See Artisan Mfg. Corp. v. All Granite & Marble Corp., 559 F. Supp. 2d 442, 449 (S.D.N.Y. 2008).
In addition, to be protected under the Lanham Act, a mark must also be "used in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark." Gameologist Grp., LLC v. Scientific Games Int'l, Inc., 838 F. Supp. 2d 141, 154 (S.D.N.Y. 2011) (emphasis added). The mark must have been used in commerce, not merely adopted by the plaintiff. See id. (citing 15 U.S.C. § 1125).
Here, Defendants dispute Lopez's contentions that: (1) his LES Mark is inherently distinctive*fn9 and (2) he has ...