United States District Court, N.D. New York
HALO OPTICAL PRODUCTS, INC.; and HALO SPORTS AND SAFETY, INC., Plaintiffs/Counter Defendants,
LIBERTY SPORT, INC., formerly known as LIBERTY OPTICAL MANUFACTURING COMPANY, INC., Defendant/Counter Claimant.
MCNAMEE, LOCHNER, TITUS & G. KIMBALL WILLIAMS, ESQ.
WILLIAMS, P.C. Attorneys for Plaintiffs/Counter Defendants
WHEELER, TRIGG LAW FIRM CAROLYN J. FAIRLESS, ESQ. GWEN J.
YOUNG, ESQ. Attorneys for Defendant/Counter Claimant
O'CONNELL & ARONOWITZ, P.CJEFFREY J. SHERRIN, ESQ.
Attorneys for Defendant/Counter Claimant
MEMORANDUM-DECISION AND ORDER
D'Agostino, U.S. District Judge.
Halo Optical Products, Inc. and Halo Sports and Safety, Inc.
(collectively "Halo") commenced this action on
March 13, 2014, alleging trademark infringement and breach of
contract by Defendant Liberty Sport, Inc.
("Liberty"). See Dkt. No. 1. In a
Memorandum-Decision and Order dated June 24, 2014 (the
"June 24 Order"), this Court granted Halo's
motion for a preliminary injunction. See Dkt. No.
34. On March 5, 2015, this Court denied Liberty's motion
for reconsideration of the preliminary injunction order.
See Dkt. No. 71. On February 22, 2016, this Court
denied Liberty's motion for partial summary judgment.
See Dkt. No. 102.
before the Court is another motion for partial summary
judgment filed by Liberty, see Dkt. No. 103, and
Halo's motion for summary judgment, see Dkt. No.
The June 24 Order
Court assumes the parties' familiarity with the
background of this case, as detailed in the June 24 Order.
See Dkt. No. 34. The Court is aware that some new
information has come to light during discovery, but the
Court's June 24 Order adequately sets forth the overall
background of the case. The Court will discuss any new
information to the extent that it is relevant in the
Court's analysis of the parties' current motions.
Liberty filed its motion for partial summary judgment before
Halo filed its motion for summary judgment, the Court will
discuss Halo's motion first.
Halo's Motion for Summary Judgment
argues that it is entitled to summary judgment on all of its
claims, and that the preliminary injunction granted in the
June 24 Order should now be made permanent. With respect to
Halo's breach of contract claims, Halo contends that,
when Liberty began directly ordering REC SPECS and certain
non-REC SPECS products from Hwa Meei Optical ("Hwa
Meei") instead of ordering the products through Halo,
Liberty breached "the parties' agreements and the
parties' custom and practice of implementing their
agreements." Dkt. No. 112-13 at 14. Halo also claims
that any ambiguity in the 1993 Trademark License Agreement
has been clarified by the parties' course of conduct over
the past several decades. Id. at 15-16. As such,
Halo believes that it is entitled to summary judgment on its
breach of contract claims.
response, Liberty argues that questions of material fact
preclude summary judgment on Halo's breach of contract
claims. Liberty claims that once it terminated the 2002
Outline of Understanding and the 2006 Memorandum of
Understanding, the only remaining contracts between the
parties are the 1992 Distribution Agreement and the 1993
Trademark Licensing Agreement. See Dkt. No. 113 at
21. Since neither contract sets forth the price that Halo may
charge Liberty for its inspection services or use of the REC
SPECS mark, Liberty claims that material facts exist
regarding the extent of Halo's damages. See Id.
also argues that it is entitled to summary judgment on its
Lanham Act claims for trademark infringement (see
section 32 of the Lanham Act, 15 U.S.C. § 1114(1)(a)),
and unfair competition (see section 43 of the Lanham
Act, 15 U.S.C. § 1125(a)(1)(A)). Halo claims that, when
Halo gave Liberty permission to sell REC SPECS and sports
protective eyewear that competes with REC SPECS, it did so on
the condition that Halo would continue to receive the orders
for such products and continue to inspect those products.
See Dkt. No. 112-13 at 20. Halo asserts that it lost
the ability to monitor and protect the quality of the
products bearing its trademark when Liberty began to purchase
such products directly from Hwa Meei. See Id. As
such, Halo argues that it is entitled to summary judgment on
its trademark infringement and unfair competition claims.
counters that Halo has not demonstrated a likelihood of
confusion, which is an essential element of Halo's claims
under the Lanham Act. See Dkt. No. 113 at 23-25.
Liberty notes that Halo failed to address the
Polaroid factors, which are factors that courts
consider when determining whether a likelihood of confusion
exists. See Id. at 24-25. Liberty further argues
that Halo has "merely dressed up its breach of contract
claim as trademark infringement claims in order to seek
damages beyond breach of contract damages, to which Halo is
not entitled." Id. at 24.
also contends that it is entitled to summary judgment on its
New York General Business Law ("N.Y. G.B.L.")
claims. Halo does not address the elements of its claims, but
refers the Court to its briefing on Liberty's motion for
partial summary judgment with respect to Halo's N.Y.
G.B.L. claims. See Dkt. No. 112-13 at 23. Halo also
seeks dismissal of Liberty's remaining counterclaims.
See Id. at 23-24.
argues that Halo's failure to address its N.Y. G.B.L.
claims precludes summary judgment on those claims.
See Dkt. No. 113 at 27. Liberty also purportedly
withdrew its remaining counterclaims in a footnote in
Liberty's opposition papers, see Id. at 28 n.19,
but Halo argues that any dismissal of Liberty's
counterclaims should be on the merits, see Dkt. No.
120-16 at 8. Liberty also makes several general arguments
with respect to Halo's request for a permanent
injunction, including that there is no reasonable likelihood
that the alleged wrong will be repeated, and that Halo has
failed to establish irreparable harm. See Dkt. No.
113 at 9-13. Liberty further makes several claims with
respect to damages that Halo seeks, including that Halo is
not entitled to any monetary damages under the Lanham Act,
that Halo is not entitled to attorney's fees, that Halo
is not entitled to recover both its actual damages and
Liberty's profits, and that Halo is not entitled to
enhanced or punitive damages. See Id. at 13-19.
Liberty's Motion for Partial Summary Judgment
motion for partial summary judgment seeks dismissal of
Halo's claim for enhanced damages under the Lanham Act,
and also seeks dismissal of Halo's claims under sections
349 and 350 of the N.Y. G.B.L. See Dkt. No. 103 at
1. Liberty also seeks dismissal of Halo's claim for
punitive damages and for damages under N.Y. G.B.L. §
respect to Halo's Lanham Act claims, Liberty argues that
treble or enhanced damages are inappropriate since Halo can
readily calculate its damages. See Dkt. No. 103-1 at
4. Liberty contends that Halo can use the documentation of
Liberty's direct purchases from Hwa Meei to calculate
Halo's damages for the time period that Liberty directly
ordered products from Hwa Meei instead of Liberty's
regular practice of first placing an order through Halo.
See Id. at 4-5. Liberty's Chief Financial
Officer, Franco Tommasino, calculated Halo's purported
damages based on the documentation of Liberty's direct
purchases from Hwa Meei using two different damage
calculations. Id.; Dkt. No. 108 at 2-3. As such, it
is Liberty's position that since Halo's damages are
readily calculable, any enhanced damages would be for
punitive purposes only, which are not permitted under the
argues that its damages are not readily calculable since Halo
never had the opportunity to confirm the quantities of the
products that Liberty directly purchased from Hwa Meei.
See Dkt. No. 109-2 at 9. Although Halo was able to
confirm the prices of the products that Liberty directly
purchased, without the quantities of those products, Halo
contends that it cannot accurately determine its damages.
See Id. at 6-7. Halo further argues that even if its
damages can be readily calculated, there is a split among
courts in the Second Circuit as to whether that precludes an
award of enhanced damages under the Lanham Act. See
Id. at 9-10.
also seeks dismissal of Halo's claims under sections 349
and 350 of the N.Y. G.B.L. Liberty argues that, along with
the elements of such claims, Halo "also must show that
the core harm at issue is 'to the public interest in New
York at large, ' rather than to the plaintiff's
business." Dkt. No. 103-5 at 7. Liberty further argues
that, in the context of alleged trademark violations, a
plaintiff must show that there is a specific and substantial
injury to the public interest over and above an ordinary
trademark infringement claim. Id. at 8. Liberty
contends that Halo has not demonstrated any injury to the
public over and above the injuries that Halo itself has
allegedly suffered. Id. at 10. Liberty further
argues that Halo has failed to demonstrate that the deceptive
acts or false advertising occurred in New York, which is
required by the statutes. See Id. at 11.
Accordingly, Liberty argues that its motion for summary
judgment seeking dismissal of Halo's N.Y. G.B.L. claims
should be granted.
argues that it has sufficiently demonstrated that this case
involves a potential harm to the public interest at large.
See Dkt. No. 109-3 at 10. Halo claims that, once
Liberty started directly purchasing products from Hwa Meei,
Halo was no longer able to inspect the products that Liberty
purchased directly. See Id. Since the products in
this case consist of sports protective eyewear that consumers
wear to protect their eyes, Halo argues that there is a
potential danger to public health and safety when Halo is not
given the opportunity to inspect the products. See
Id. at 10-11. Halo also argues that Liberty's
conduct in this case concerns harm to consumers in New York
State, thus satisfying that requirement in the statute.
See Id. at 9-10.
Liberty argues that Halo's claim for punitive damages and
Halo's claim for damages under N.Y. G.B.L. § 360-l
should be dismissed. See Dkt. No. 103-5 at 12-14.
Halo did not specifically respond to these arguments.
Standard of Review
may grant a motion for summary judgment only if it determines
that there is no genuine issue of material fact to be tried
and that the facts as to which there is no such issue warrant
judgment for the movant as a matter of law. See Chambers
v. TRM Copy Ctrs. Corp., 43 F.3d 29, 36 (2d Cir. 1994)
(citations omitted). When analyzing a summary judgment
motion, the court "'cannot try issues of fact; it
can only determine whether there are issues to be
tried.'" Id. at 36-37 (quotation and other
citation omitted). Moreover, it is well-settled that a party
opposing a motion for summary judgment may not simply rely on
the assertions in its pleading. See Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986) (quoting Fed.R.Civ.P.
assessing the record to determine whether any such issues of
material fact exist, the court is required to resolve all
ambiguities and draw all reasonable inferences in favor of
the nonmoving party. See Chambers, 43 F.3d at 36
(citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986)) (other citations omitted). Where the
non-movant either does not respond to the motion or fails to
dispute the movant's statement of material facts, the
court may not rely solely on the moving party's Rule 56.1
statement; rather, the court must be satisfied that the
citations to evidence in the record support the movant's
assertions. See Giannullo v. City of N.Y., 322 F.3d
139, 143 n.5 (2d Cir. 2003) (holding that not verifying in
the record the assertions in the motion for summary judgment
"would derogate the truth-finding functions of the
judicial process by substituting convenience for
judgment may be requested not only as to an entire case but
also as to a claim, defense, or part of a claim or
defense." Fed.R.Civ.P. 56(a) advisory committee's
note to 2010 amendment. Summary judgment may also be granted
against any part of the remedy sought by the opposing
party's claims. See Hamblin v. British Airways
PLC, 717 F.Supp.2d 303, 307 (E.D.N.Y. 2010).
Halo's Motion for Summary Judgment
Breach of Contract
has asserted three breach of contract claims: one for
Liberty's failure to continue to order REC SPECS products
and pay for Halo's inspection and testing of those
products in accordance with the parties' agreements and
their practice of implementing those agreements; one for
Liberty selling sports protective eyewear which competes with
REC SPECS eyewear in a manner not permitted by the 1993
Trademark License Agreement; and one for Liberty selling F803
products which compete with REC SPECS eyewear without having
those products inspected by Halo, in breach of the 1993
Trademark License Agreement and the 2006 Memorandum of
Understanding. See Dkt. No. 1 at 14-15.
New York law,  a plaintiff must allege the following
elements to state a claim for breach of contract: (i) the
existence of a contract; (ii) adequate performance of the
contract by the plaintiff; (iii) breach by the other party;
and (iv) damages suffered as a result of the breach.
See Harsco Corp. v. Segui, 91 F.3d 337, 348
(2d Cir. 1996) (citation omitted); see also Wolff v. Rare
Medium, Inc., 171 F.Supp.2d 354, 357-58 (S.D.N.Y. 2001)
(citation omitted). "In reviewing a written contract, a
trial court's primary objective is to give effect to the
intent of the parties as revealed by the language they chose
to use." Seiden Associates, Inc. v. ANC Holdings,
Inc., 959 F.2d 425, 428 (2d Cir. 1992) (citing Slatt
v. Slatt, 64 N.Y.2d 966, 967 (1985)). "When the
terms of a written contract are clear and unambiguous, the
intent of the parties must be found within the four corners
of the contract, giving practical interpretation to the
language employed and the parties' reasonable
expectations." 131 Heartland Blvd. Corp. v. C.J. Jon
Corp., 82 A.D.3d 1188, 1189 (2d Dep't 2011)
"a motion for summary judgment may be granted in a
contract dispute only when the contractual language on which
the moving party's case rests is found to be wholly
unambiguous and to convey a definite meaning." Topps
Co., v. Cadbury Stani S.A.I.C., 526 F.3d 63, 68 (2d Cir.
2008) (citation omitted). "To the extent the moving
party's case hinges on ambiguous contract language,
summary judgment may be granted only if the ambiguities may
be resolved through extrinsic evidence that is itself capable
of only one interpretation, or where there is no extrinsic
evidence that would support a resolution of these ambiguities
in favor of the nonmoving party's case."
Id. (citation omitted).
Second Circuit has "defined ambiguous language as that
which is '"capable of more than one meaning when
viewed objectively by a reasonably intelligent person who has
examined the context of the entire integrated agreement and
who is cognizant of the customs, practices, usages and
terminology as generally understood in the particular trade
or business."'" Seiden Associates, 959
F.2d at 428 (quotations omitted). "Conversely, language
is not ambiguous when it has '"a definite and
precise meaning, unattended by danger of misconception in the
purport of the [contract] itself, and concerning which there
is no reasonable basis for a difference in
opinion."'" Id. (quotations omitted).
"Ambiguity is determined within the four corners of the
document; it cannot be created by extrinsic evidence that the
parties' intended a meaning different than that expressed
in the agreement and, therefore, extrinsic evidence 'may
be considered only if the agreement is ambiguous.'"
Brad H. v. City of New York, 17 N.Y.3d 180, 186
(2011) (quotation and other citations omitted).
outlined in the June 24 Order, the parties have entered into
five agreements. The 1992 Distribution Agreement provides
that, among other things, Halo agrees "to continue to
manufacture high quality sports-safety eyewear products . . .
for distribution by Liberty" and that "Liberty
agrees to continue to be the exclusive distributor for those
Halo safety-eyewear products currently carried by
Liberty[.]" Dkt. No. 5-6 at 2. The 1992 Distribution
Agreement further provides that either party could terminate
the agreement "at anytime for any reason providing the
terminating party give the other party twelve (12) months
written notice of its desire to terminate." Id.
Finally, the 1992 Distribution Agreement states that
"Liberty shall acquire no rights to the name 'REC
SPECS' by virtue of its distribution of products supplied
by HALO." Id.
1993 Trademark License Agreement provides, in relevant part,
Now, therefore in consideration of One dollar (1.00) to each
in hand paid, receipt of which is hereby acknowledged and
other good and valuable consideration and the mutual
covenants and agreements herein contained, the ...