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The Gerffert Co., Inc. v. Dean

United States District Court, E.D. New York

August 29, 2014

THE GERFFERT COMPANY, INC. & STEPHEN PANIGEL, Plaintiffs,
v.
JAMES DEAN, et al., Defendants

Page 202

For The Gerffert Company, Inc., Stephen Panigel, Plaintiffs: John A. DeMaro, LEAD ATTORNEY, Jonathan C. Sullivan, Ruskin Moscou Faltischek, P.C., Uniondale, NY; Matthew Didora, Ruskin Moscou Faltischeck, Uniondale, NY.

For James Dean, Defendant: Courtney Elizabeth Scott, LEAD ATTORNEY, Tressler LLP, New York, NY; Jacqueline A. Criswell, LEAD ATTORNEY, PRO HAC VICE, Tressler Soderstrom Maloney Priess, Chicago, IL; James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Michael Paul Kandler, Goldberg Segalla LLP, White Plains, NY; Nikolai Guerra, Tressler LLP, Chicago, IL.

For Andrea Bonella, Defendant: James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Courtney Elizabeth Scott, Tressler LLP, New York, NY; Jacqueline A. Criswell, Tressler Soderstrom Maloney Priess, Chicago, IL; Nikolai Guerra, Tressler LLP, Chicago, IL.

For Dolores King, Defendant: Jacqueline A. Criswell, Tressler Soderstrom Maloney Priess, Chicago, IL; James K. Borcia, Tressler LLP, Chicago, IL; Michael Paul Kandler, Goldberg Segalla LLP, White Plains, NY.

For William J. Hirten Co. LLC., Defendant: James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Courtney Elizabeth Scott, Tressler LLP, New York, NY; Jacqueline A. Criswell, Tressler Soderstrom Maloney Priess, Chicago, IL; Nikolai Guerra, Tressler LLP, Chicago, IL.

For Mario Bonella, Defendant: James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Courtney Elizabeth Scott, Tressler LLP, New York, NY; Jacqueline A. Criswell, Tressler Soderstrom Maloney Priess, Chicago, IL; Nikolai Guerra, Tressler LLP, Chicago, IL.

For Gianfranco Bonella, Defendant: James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Courtney Elizabeth Scott, Tressler LLP, New York, NY; Jacqueline A. Criswell, Tressler Soderstrom Maloney Priess, Chicago, IL; Nikolai Guerra, Tressler LLP, Chicago, IL.

For HMH Religious Manufacturing Co., Inc., Defendant: Courtney Elizabeth Scott, LEAD ATTORNEY, Tressler LLP, New York, NY; Jacqueline A. Criswell, LEAD ATTORNEY, PRO HAC VICE, Tressler Soderstrom Maloney Priess, Chicago, IL; James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Nikolai Guerra, Tressler LLP, Chicago, IL.

For Fratelli Bonella, s.r.l., Defendant: James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Courtney Elizabeth Scott, Tressler LLP, New York, NY; Jacqueline A. Criswell, Tressler Soderstrom Maloney Priess, Chicago, IL; Nikolai Guerra, Tressler LLP, Chicago, IL.

Allen Reiter Arent Fox LLP, Objector, Pro se, New York, NY.

For Allen Reiter Arent Fox LLP, Objector: Allen G. Reiter, LEAD ATTORNEY, Arent Fox LLP, New York, NY.

For Fratelli Bonella, s.r.l., Counter Claimant: James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL.

For Fratelli Bonella, s.r.l., Counter Claimant: James K. Borcia, LEAD ATTORNEY, PRO HAC VICE, Tressler LLP, Chicago, IL; Courtney Elizabeth Scott, Tressler LLP, New York, NY; Jacqueline A. Criswell, Tressler Soderstrom Maloney Priess, Chicago, IL; Nikolai Guerra, Tressler LLP, Chicago, IL.

For Stephen Panigel, The Gerffert Company, Inc., Counter Defendants: John A. DeMaro, LEAD ATTORNEY, Jonathan C. Sullivan, Ruskin Moscou Faltischek, P.C., Uniondale, NY; Matthew Didora, Ruskin Moscou Faltischeck, Uniondale, NY.

Page 203

MEMORANDUM & ORDER

PAMELA K. CHEN, United States District Judge.[1]

Page 204

The main question raised by Defendants' summary judgment motion is: were The Gerffert Company, Inc.'s catalogs[2] for religious products, featuring the iconic artwork of Fratelli Bonella,[3] protectable trade dress infringed upon by William J. Hirten Co., LLC's catalogs[4] for the same product line? Because the Court answers this question in the negative, it grants summary judgment in favor of Defendants on Plaintiffs' federal Lanham Act claim, and declines to exercise supplemental jurisdiction over their state-law claims.[5]

I. Background[6]

A. The Facts[7]

Plaintiff The Gerffert Company, Inc. (" Gerffert" ), during the time period relevant to this lawsuit, was a New York distributor of Catholic-themed religious products, including prayer cards and framed prints. (Dkt. No. 335-1 (" Panigel Decl." ) ¶ 3.) As of 1984, Gerffert's owner and president was Plaintiff Stephen Panigel (" Panigel" ). ( Id. ¶ ¶ 3, 11.) Defendant James Dean (" Dean" ) was first employed by Gerffert, from 1988 to 2005, as an independent sales representative[8] and then, beginning in 2005, as an actual employee. (Defs.' 56.1 ¶ 64.) Defendant Fratelli Bonella

Page 205

(" Bonella" ), an Italian company, produces religious artwork. ( Id. ¶ 1.) Since 2005, Bonella's owners have been Defendant Andrea Bonella (" Andrea" ) and three other members of the Bonella family. ( Id.)

For approximately five decades, between the late 1950s and May 2007, Gerffert served as the sole distributor of Bonella artwork in the United States.[9] ( Id. ¶ 2.) In particular, Gerffert developed and sold products that incorporated Bonella artwork (" Bonella-related products" ). (Id. ¶ 70; Panigel Decl. ¶ ¶ 25-27.) According to Panigel, Gerffert also devised a " unique numbering system" for Bonella-related products, consisting of (i) a " series" identifier for the type of product ( e.g., " 81" for prints in 10-inch by 12-inch walnut frames; " 800" for English-language laminated holy cards; " M" for non-gold micro-perforated prayer cards; " FM" for magnetic framed prints; " KC" for key chains) followed by (ii) a three-digit " image" number for the Bonella artwork.[10] (Panigel Decl. ¶ ¶ 3, 29, 32, 34, 40, 43, 45, 47-48.)

In terms of Gerffert's marketing, Plaintiffs allege, but do not provide any evidence to establish, that Gerffert, in general, spent " in the millions of dollars" on " publicity and promotion of [its] products and services." (Dkt. No. 1 (" Compl." ) ¶ ¶ 112, 115.) Plaintiffs further allege that such marketing entailed " the use of catalogs, membership in trade groups and appearances at annual trade shows and conventions" by Gerffert, without indicating what portion of its advertising expenditures went toward catalogs for Bonella-related products.[11] ( Id. ¶ 114.)

Page 206

Gerffert incorporated certain basic elements consistently throughout its catalogs for Bonella-related products: a decorative cover; general descriptions of the products in the series, including their dimensions and composition, atop every page; individual photographs for the products, arranged in rows on a solid background; and a series identifier and image number below each photograph. ( See Defs.' Ex. 4, at Ex. K; Pls.' Ex. L; Pls.' Ex. O; Pls.' Ex. EE.)

But, in other ways, these catalogs also varied widely in their designs. First, one of these catalogs had a cover that bore the Gerffert and Bonella logos, reproduced below, and the Bonella slogan (" The World's Very Best" ) (Pls.' Ex. EE); another only bore on its cover the Bonella logo and slogan, with no reference to Gerffert (Pls.' Ex. O); a different one had a cover that only bore the Gerffert logo, but referenced " The Bonella Line" (Defs.' Ex. 4, at Ex. K); and a fourth had a cover that only bore the Gerffert logo, with no reference to Bonella (Pls.' Ex. L).

Second, two catalogs had copyright stamps for Bonella, not Gerffert, at the bottom of every page (Pls.' Ex. O; Pls.' Ex. EE); another had a disclaimer of copyrights belonging to Bonella and Gerffert beneath the table of contents (Defs.' Ex. 4, at Ex. K); and one attributed no copyrights to Bonella whatsoever (Pls.' Ex. L).

There is no evidence of Gerffert's success in generating sales from Bonella-related products, except for Panigel's inapposite statement that its sales from all product lines " eventually reach[ed] over $5,000,000.00 annually." (Panigel Decl. ¶ 50.) The evidence, in fact, belies such success. Starting in and around 2000, although Gerffert continued to send out its catalogs for Bonella-related products to customers,[12] Gerffert's sales of these products declined. For instance:

o Panigel acknowledges that there was growing concern among the Bonella family about Gerffert's " falling sales" of Bonella-related products, beginning in " about January 2000." ( Id. ¶ 52 (emphasis added); see also Compl. ¶ 27 (same).)
o In July 2004, the Bonella family stated, in a letter to Panigel, that " the survival of Fratelli Bonella itself is in danger," citing the fact that " the business is not increasing but strongly decreasing " and that, since 1995, Bonella had " lost 70% of [its] profitability in [the] USA." (Pls.' Ex. Q (emphasis added).) According to this letter, with annual sales of $1.2 million in 2003, Gerffert's line of Bonella-related products failed to generate any profit; and, with annual sales of $876,000 in 2002 and projected annual sales of $900,000 in 2004, respectively, the product line actually lost money. ( Id.)
o In an e-mail later that month, the Bonella family stated that " the time of the big monthly orders [of Bonella-related products] is over" and that they, along with Gerffert, needed a

Page 207

" way to substitute the decrease in our traditional products." (Pls.' Ex. S (emphasis added).)
o In May 2007, Panigel e-mailed the Bonella family, stating that he had endeavored to " salvage the situation" with respect to " sales of the Bonella line" which needed to be improved. ...

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