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Rolex Watch U.S.A., Inc. v. PRL USA Holdings, Inc.

United States District Court, S.D. New York

April 27, 2015

ROLEX WATCH U.S.A., INC., Plaintiff,
v.
PRL USA HOLDINGS, INC., Defendant.

OPINION

THOMAS P. GRIESA, District Judge.

This is a trademark case concerning whether defendant PRL USA Holdings, the company behind the brand Polo Ralph Lauren, may sell watches and jewelry bearing the trademarks RLX RALPH LAUREN or RALPH LAUREN RLX despite opposition from plaintiff, luxury watchmaker Rolex.

Against Rolex's opposition, PRL won a 2012 decision from the Trademark Trial and Appeal Board (TTAB) of the United States Patent and Trademark Office (USPTO) permitting it to register those two marks for use on watches and jewelry. Rolex now appeals, seeking to reverse the TTAB's decision. PRL opposes reversal and counterclaims for declaratory judgment affirming that it may use the marks RALPH LAUREN RLX and RLX RALPH LAUREN on watches and jewelry without infringing Rolex's trademarks.

Three motions are now before the court. First, Rolex moves to dismiss PRL's counterclaim for declaratory judgment. Second, Rolex moves for summary judgment on Count II of the complaint, which alleges that PRL's trademarks are invalid because PRL had no bona fide intention to use the marks in commerce at when it applied for them. Third, PRL cross-moves for summary judgment on Count II of the complaint, contending that PRL's trademarks cannot be voided.

For the reasons discussed below, the court grants Rolex's motion to dismiss PRL's counterclaim. The court denies both cross-motions for summary judgment on Count II of the complaint.

Background

1. Procedural History

Plaintiff Rolex is the exclusive importer and distributor of Rolex brand watches and jewelry in the United States. Defendant PRL is a Delaware corporation and a wholly-owned subsidiary of Ralph Lauren Corporation. PRL owns the trademark RALPH LAUREN and many related marks.

On December 7, 2004, PRL filed an application with the USPTO to register the mark RLX in International Class 14, the category of goods covering use on watches and jewelry. On January 19, 2006, Rolex notified PRL of its intention to oppose PRL's registration of RLX in Class 14. Four days later, on January 23, 2006, PRL filed two additional applications with the USPTO, seeking to register RLX RALPH LAUREN and RALPH LAUREN RLX, also in Class 14. In these applications, PRL represented that it had a bona fide intention to use these marks in commerce for watches and jewelry.

On February 1, 2006, Rolex filed a formal Notice of Opposition to PRL's registration of RLX. On May 12, 2006, Rolex filed a Notice of Opposition to PRL's registration of RLX RALPH LAUREN and RALPH LAUREN RLX. The TTAB consolidated the oppositions on September 18, 2006.

On April 17, 2009, PRL abandoned its application to register RLX in Class 14. On June 7, 2012, the TIAB dismissed Rolex's opposition to PRL's applications to register the marks RLX RALPH LAUREN and RALPH LAUREN RLX in Class 14.

On August 6, 2012, Rolex filed a complaint with this court, seeking review of the TIAB's dismissal. Rolex amended its complaint on January 15, 2014. PRL answered and counterclaimed on January 27, 2014.

On February 26, 2014, Rolex made the present motion for summary judgment on Count II of the amended complaint and for dismissal of PRL's counterclaim. On September 25, 2014, PRL cross-moved for summary judgment on Count II.

2. Facts

PRL designs and commercializes a broad array of branded consumer apparel and merchandise. It describes itself as a "design-led" company. This means that its design processes generally guide its business decisions, not the other way around. Thus, soon after PRL's leadership authorizes a finalized product design, PRL rapidly manufactures, distributes, markets, and otherwise commercializes the product. Dalla Val Decl. at ¶ 3.

Since 1998, PRL has sold a wide range of products bearing RLX and related trademarks. RLX stands for Ralph Lauren Extreme, and it denotes a line of Ralph Lauren products designed for active outdoor activities such as skiing and hiking. Amended Complaint at ¶¶ 20-21. These products have included coats, headwear, eyewear, and accessories, bearing various RLX-related trademarks such as RLX, RLX POLO SPORT, and RLX RALPH LAUREN. See PRL Exs. A-E. Many of these products displayed either RLX or RALPH LAUREN, without displaying those two elements (RLX and RALPH LAUREN) unified into a single trademark. However, certain apparel products and accessories, including ski jackets and backpacks marketed in 2004 and 2005, clearly featured RLX RALPH LAUREN as a unitary trademark, with the RLX and RALPH LAUREN elements integrated into a single image. PRL Exs. D, E.

[REDACTED\] Between 2004 and 2007, PRL sold a digital watch called the "RLX Vector" or "RLX Suunto" watch. Morgan Tr. at 11. A prominent logo near the watch's dial proclaimed "RLX" in capital letters, with the "RL" printed in black and the "X" printed in red. Rolex Ex. F. The watch also bore Suunto's mark. Id. Notwithstanding the RLX mark, the watch bore no mark reading "Ralph Lauren." Id. However, the watch was sold ...


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