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LLC v. Harmon Stores, Inc.

United States District Court, S.D. New York

July 28, 2017

IT'S A NEW 10, LLC, Plaintiff,



         This is a case about trade dress infringement. Plaintiff It's a New 10, LLC (“New 10”) manufactures various hair-care products, including a conditioner called It's a 10 Miracle Leave-In Plus Keratin (“the New 10 product”). Defendants Harmon Stores, Inc. and Bed Bath & Beyond are large affiliated retailers that sell hair-care products made by national brands- including the New 10 product-next to cheaper, store-brand products. Plaintiff claims that one of these products, the Harmon Face Values Instant Therapy Leave-In Conditioner with Keratin (“the Harmon product”), infringes on New 10's trade dress rights. New 10 moved for a preliminary injunction requiring Defendants to refrain from using the trade dress. (Dkt. No. 6.) A hearing was held on July 5, 2017. For the reasons that follow, the motion is denied.

         I. Background

         New 10 manufactures many types of personal care products. Among them is a line of keratin-containing shampoos, conditioners, and hair sprays. (Dkt. No. 18 at 6.) These products are sold by retailers nationwide. (Dkt. No. 7 at 3-4.) Bed Bath & Beyond operates large retail stores under its own name, and also owns Harmon Stores and Christmas Tree Shops. Defendants' stores sell national brand products, but, like many large retailers, they also sell cheaper store-brand products under the "Harmon Face Values" brand. (Dkt. No. 13-2 ¶ 3.) This includes the New 10 product (pictured below on the left), which is sold alongside the Harmon product (pictured below on the right). (See Dkt. No. 8-1 at 3).[1] The Harmon product was introduced in 2015. (Dkt. No. 13 at 2-3.)

         As the picture shows, the products have some features in common. Both bottles have some form of blue color, though the parties dispute whether the New 10 product is blue or purple. (Dkt. No. 13 at 4; Dkt. No. 18 at 1.) Both bottles have an orange cap and a prominent circle on the label. There are some differences too, most significantly in the shape of the bottles, their labeling, and their brand names. The front bottom of the Harmon product reads: "Compare Ours to it's a 10® miracle leave-in plus KERATIN*." The asterisk leads to a note on the back of the container, which reads: “*This product is not manufactured or distributed by it's a 10® Inc., distributor of it's a 10 miracle leave-in plus Keratin.” Though the exact price difference between the two products is unclear, the Harmon product sells for less than the New 10 product. (See Dkt. No. 13 at 23.) Counsel for New 10 represented at oral argument that the price difference is approximately ten dollars.

         New 10 filed this suit on June 6, 2017. (Dkt. No. 4.) The complaint alleges trade dress infringement, false advertisement, and unjust enrichment under federal and state law. (Id.) On June 10, 2017, New 10 moved for a preliminary injunction to prohibit Defendants from infringing on their trade dress, including a condition requiring Defendants to recall the Harmon product from the shelves. (Dkt. No 6.)

         II. Discussion

         “A preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). Under Second Circuit law, a district court may grant a preliminary injunction if the moving party establishes “(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief.” Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings, Inc., 696 F.3d 206, 215 (2d Cir. 2012) (quoting UBS Fin. Servs., Inc. v. W.Va. Univ. Hosps., Inc., 660 F.3d 643, 648 (2d Cir. 2011) (internal quotation marks omitted)).

         The Court notes that this longstanding Second Circuit standard may be in conflict with the Supreme Court's more recent formulation in Winter, which held that “[a] plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter, 555 U.S. at 20; see also N.Y. City Triathlon, LLC v. NYC Triathlon Club, Inc., 704 F.Supp.2d 305, 313 (S.D.N.Y. 2010) (acknowledging this conflict); DAG Jewish Directories, Inc. v. Y & R Media, LLC, No. 09 Civ. 7802, 2010 WL 46016, at *1 (S.D.N.Y. Jan. 7, 2010) (same). In this case, however, the outcome would be the same regardless of the standard used because there is neither a “likelihood of success on the merits, ” Winter, 555 U.S. at 20, nor “sufficiently serious questions going to the merits to make them a fair ground for litigation, ” Louboutin, 696 F.3d at 215.

         To prevail on the merits in a trade-dress infringement case under the Lanham Act, “plaintiff must first demonstrate that its trade dress is either inherently distinctive or that it has acquired distinctiveness through a secondary meaning.” Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993, 999 (2d Cir. 1997). “Second, plaintiff must demonstrate that there is a likelihood of confusion between defendant's trade dress and plaintiff's.” Id.

         In deciding whether a given trade dress creates a likelihood of confusion, courts in the Second Circuit look to the eight factors articulated in Polaroid Corp. v. Polarad Electronics, Corp., 287 F.2d 492, 495 (2d Cir. 1961). “These non-exclusive factors are: (1) the strength of the plaintiff's trade dress, (2) the similarity between the two trade dress[es], (3) the proximity of the products in the marketplace, (4) the likelihood that the prior owner will bridge the gap between the products, (5) evidence of actual confusion, (6) the defendant's bad faith, (7) the quality of defendant's product, and (8) the sophistication of the relevant consumer group.” FunDamental Too, 111 F.3d at 1002-03. The ultimate question for likelihood of confusion, after weighing all the factors, “is not whether the products can be differentiated when [the plaintiff's] trade dress and [the defendant's] trade dress are subject to a side-by-side comparison. Instead, we must ask whether they create the same general overall impression such that a consumer who has seen [the plaintiff's] trade dress would, upon later seeing [the defendant's product] in its trade dress alone, be confused.” Id. at 1004. The Court considers each Polaroid factor in turn.

         A. Strength of Plaintiff's Trade Dress

         For this factor, “the essence of the analysis is to determine the strength of the trade dress in its commercial context.” Id. at 1003. Courts must therefore analyze “the tendency of the trade dress to identify the goods sold as emanating from a particular source, even when the source is unknown to the consumer.” Id. (quoting Centaur Commc'ns, Ltd. v. A/S/M Comms., Inc., 830 F.2d 1217, 1226 (2d Cir. 1987) (internal quotation marks and alterations omitted)).

         New 10 points to the brand recognition, sales numbers, and marketing expenditures of New 10's product lines, arguing that this created and reinforced a brand that is centered on a unique trade dress. (Dkt. No. 7 at 4-5, 10-11.) However, very little of New 10's evidence concerns the keratin conditioner that is the subject of this case or even the keratin product line that bears the blue-and-orange color scheme. Instead, New 10 provides generalized evidence about the success of its products, which is not directly relevant to the instant dispute. (See, e.g., Dkt. No. 7 at 4-5.) For example, to highlight its investment in brand recognition, New 10 points to an advertisement that ran during the 2017 Super Bowl.[2] (Id. at 11.) But the ad is not for the blue-and-orange keratin line but for two different products-one is blue and pink; one is dark gray and blue. While overall brand strength ...

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