United States District Court, S.D. New York
OPINION & ORDER
KIMBA M. WOOD, District Judge.
On June 18, 2012, the Court issued a Consent Judgment entered into by Decorative Hardware Studio, Inc. ("Plaintiff") and Clawfoot Supply LLC d/b/a/Signature Hardware ("Defendant"). See (Consent Judgment [Dkt. No. 8]). The Consent Judgment provided that the Court retained jurisdiction over the parties for the purpose of interpreting and enforcing the Consent Judgment and a related Settlement Agreement between the parties. ( Id. ¶ 2). Plaintiff alleges that Defendant violated the Consent Judgment and Settlement Agreement and moves to hold Defendant in contempt. See (Letter in Supp. 1 [Dkt. No 9]). Plaintiff seeks compensatory damages, liquidated damages, a permanent injunction, and attorney's fees and costs. ( Id. at 4-5). For the reasons set forth below, Plaintiff's motion is DENIED.
Both Plaintiff and Defendant sell decorative hardware, including carpet rods. (Compl. ¶¶ 11, 31 [Dkt. No. 1]); (Letter in Opp. 1 [Dkt. No. 12)]). "A carpet rod... is a mechanism that holds carpet runners in place, typically on stairs. Most carpet rods consist of three component parts: a plain rod to hold the carpet in place; mounting brackets to hold the rod in place; and finials to hold the brackets in place." (Letter in Opp. 2). Plaintiff adorns the top portion of certain carpet rod brackets "with a stylized acanthus design." (Compl. ¶ 16). Plaintiff registered this design with the United States Patent and Trademark Office under Registration No. 3, 332, 100 (the "ACANTHUS Trademark"). ( Id. ¶ 22).
On April 20, 2012, Plaintiff filed a Complaint against Defendant alleging that Defendant was selling Leaf Stair Rod Brackets that infringed on Plaintiff's registered ACANTHUS Trademark. ( Id. ¶ 33). On June 14, 2012, the parties entered into a Settlement Agreement. (Letter in Supp. Ex. 2). On June 18, 2012, the Court issued a Consent Judgment entered into by the parties, which incorporated some of the terms of the Settlement Agreement. See (Consent Judgment). Under the relevant terms of the Settlement Agreement, Defendant "and its current owners and their families" agreed to not:
(a) sell, offer for sale, promote, or advertise in the United States any product bearing a trade mark, design, or symbol that is the same as or confusingly similar to the ACANTHUS Trademark;
(b) display in the United States, on or in connection with any decorative hardware product, a trade mark, design, or symbol that is the same as or confusingly similar to the ACANTHUS Trademark.
(Letter in Supp. Ex. 2, ¶ 2). The Settlement Agreement also required Defendant to "represent that all inventory of the Leaf Stair Rod Bracket has been returned to the manufacturer... or has been shipped to [Plaintiff]" and, "[n]otwithstanding this representation, if [Defendant] still holds inventory of the Leaf Stair Rod Bracket" it shall deliver to Plaintiff the remaining inventory or destroy it within five days. ( Id. ¶ 5).
The Settlement Agreement included a notice and cure provision. It provided that if either party alleges "that this Settlement Agreement has been breached or the Consent Judgment has been violated in any manner, the complaining party shall give the other party written notice thereof" and "15 days to cure any breach or violation." ( Id. ¶ 14). No litigation may be pursued unless the other party fails to cure. ( Id. ). However, "[i]f judicial intervention is thereafter sought, the prevailing party shall recover its reasonable costs and counsel fees, except if the Court finds that the complaining party acted in good faith in alleging that the other party breached [the] Settlement Agreement or violated the Consent Judgment." ( Id. ).
Prior to executing the Settlement Agreement, Defendant provided Plaintiff with an affidavit attesting to the fact that it no longer sold any products bearing the ACANTHUS mark, and no longer had any such products in its inventory. (Letter in Opp. 2, Ex. D). Defendant also "undertook extensive efforts to remove all references to the Acanthus mark from the company's promotional materials exceeding 60, 000 products on its website, exceeding 17, 000 on eBay, and in numerous catalogues and promotional materials. [Plaintiff] had full access to both [Defendant's] website and the eBay website to confirm that [Defendant] was no longer displaying the offending products." ( Id. at 2).
A. Events Leading to the Present Motion for Contempt
On February 13, 2013, Plaintiff discovered the Crown Stair Rod on Defendant's website. (Letter in Supp. 3). Plaintiff believes that the Crown Stair Rod includes a design confusingly similar to the ACANTHUS Trademark, and that the display of the stair rod thereby violates the Settlement Agreement and Consent Judgment. ( Id. at 2-3). On February 15, 2013, Plaintiff invoked the notice and cure provision of the Settlement Agreement, and sent a letter to Defendant, demanding that the product be removed from its website. See ( Id. at 3, Ex. 8). On February 21, 2013, Defendant notified Plaintiff that, although it was not "admitting any violation, " the company had removed the allegedly infringing product from its website. See ( Id. at 3, Ex. 10). Plaintiff added that the product would "not be further displayed, offered for sale, or sold." ( Id. ).
On March 7, 2013, a customer contacted Plaintiff about the Crown Stair Rod, which the customer claimed to have seen on Defendant's website. ( Id. at 3). Plaintiff's counsel notified Defendant's counsel of this call, and Defendant's counsel assured him that the product had remained on the website by inadvertence and that Defendant was not selling the product. ( Id. at 3, Ex. 11). Plaintiff's counsel "insisted on having sworn statements from his client; otherwise [he] would seek to have [Defendant] held in contempt of the Consent Judgment." ( Id. at 3). On April 2, 2013, Matthew Butler, Defendant's owner, affirmed that the Crown Stair Rod bracket was "no longer sold by [Defendant], " and that the company "has no such brackets in its inventory or otherwise in its possession." ( Id. at 3, Ex. 12). On June 12, 2013, Mr. Butler filed a supplement to his affidavit. ( Id. at 3-4, Ex. 13). Mr. Butler affirmed that the Crown Stair Rod bracket had "remained on [Defendant's] website by inadvertence, " but that the image had now been removed from the website and that the stair bracket had not been sold since the parties entered into the Settlement Agreement. ( Id. ).
On November 4, 2013, Plaintiff discovered photographs of the Crown Stair Rod and the Traditional Stair Rod on eBay. ( Id. at 4). Plaintiff believes that both products infringe on the ACANTHUS Trademark and, therefore, that Defendant had violated the Settlement Agreement and Consent Judgment. ( Id. at 2-3). However, rather than invoking the notice and ...