Opinion
97 Civ. 8399 (RWS)
October 8, 2002
Attorneys for Plaintiff: RABINOWITZ, BOUDIN, STANDARD, KRINSKY LIEBERMAN, New York, NY, By: MICHAEL KRINSKY, ESQ., DAVID B. GOLDSTEIN, ESQ., Of Counsel; WINSTON STRAWN, New York, NY, By: KEVIN WALSH, ESQ., STEVE YOUNG, ESQ., Of Counsel.
Attorney for Defendants: LATHAM WATKINS, New York, N.Y. By: JOHN J. KIRBY, JR., ESQ., E. MARCELLUS WILLIAMSON, ESQ., ALEXANDRA A. E. SHAPIRO, ESQ., Of Counsel; MORGAN FINNEGAN, New York, NY, By: HARRY C. MARCUS, ESQ., JANET DORE, ESQ., Of Counsel.
OPINION
Plaintiff Empresa Cubana del Tabaco d/b/a Cubatabaco ("Cubatabaco") and defendants Culbro Corporation (now known as General Cigar Holdings, Inc.) and General Cigar Co., Inc. (collectively "General Cigar") have moved separately for reconsideration of portions of this Court's opinion dated June 26, 2002, Empresa Cubana del Tabaco v. Culbro Corp., 213 F. Supp.2d 247 (S.D.N.Y. 2002) (the "June 26 Opinion").
For the following reasons, those motions are denied.
Facts
The parties and facts discussed herein are described in greater detail in Empresa Cubana, 213 F. Supp.2d 247, familiarity with which is presumed.
At issue in the June 26 Opinion were three motions for summary judgment: (1) General Cigar filed for summary judgment on the basis of its equitable defenses; (2) Cubatabaco filed for summary judgment to dismiss General Cigar's equitable defenses; and (3) Cubatabaco filed for summary judgment on its claims under Articles 7 and 8 of the Inter-American Convention for Trade Mark and Commercial Protection ("IAC"); Article 6bis of the International Convention for the Protection of Industrial Property (the "Paris Convention"); the Federal Trademark Dilution Act; and New York common law. Those motions were considered fully submitted on March 13, 2002, and were decided in the single June 26, 2002 opinion. Empresa Cubana, 213 F. Supp.2d at 252. It was held that:
Cubatabaco's Count I (Article 6-bis of the Paris Convention) and III (Article 7 and 8 of the IAC) are dismissed. Cubatabaco's motions for summary judgment on its claim of abandonment (Count XI) and to dismiss General Cigar's equitable defenses are granted. General Cigar's motion for summary judgment on the basis of its equitable defenses is denied.Id. at 286-87.
The instant motions were filed on July 19, 2002, and were considered fully submitted on August 21, 2002.
Discussion I. Standards Under Local Rule 6.3
"To succeed on a motion for reargument, the moving party must demonstrate that the court overlooked the controlling decisions or factual matters that were placed before the court in the underlying motion." Lopez v. Comm'r of Soc. Sec., 2002 U.S. Dist. LEXIS 5091, *1-*2 (S.D.N.Y. March 27, 2002) (quotations and citations omitted); see also Shrader v. CSX Transp., 70 F.3d 255, 257 (2d Cir. 1995) (motion for reargument "will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked — matters, in other words, that might reasonably be expected to alter the conclusion reached by the court).
Rule 6.3 is intended to "ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters." Carolco Pictures, Inc. v. Sirota, 700 F. Supp. 169, 170 (S.D.N.Y. 1988) (citation omitted). The parties may not present new facts or theories at this stage. Ralph Oldsmobile Inc. v. General Motors Corp., 2001 WL 55729, at *2 (S.D.N.Y. Jan. 23, 2001) (striking affidavit that was filed in support of motion to reconsider without court's permission); Primavera Familienstifung v. Askin, 137 F. Supp.2d 438, 442 (S.D.N.Y. 2001) (party may not "advance new facts, issues or arguments not previously presented to the Court") (quoting Morse/Diesel Inc. v. Fidelity Deposit Co. of Md., 768 F. Supp. 115, 116 (S.D.N.Y. 1991)).
Rule 6.3 must be narrowly construed and strictly applied so as to avoid duplicative rulings on previously considered issues, and may not be employed as a substitute for appealing a final judgment. Lopez, 2002 U.S. Dist. LEXIS 5091, at *3; Shamis v. Ambassador Factors, 187 F.R.D. 148, 151 (S.D.N.Y. 1999). The decision to grant or deny the motion rests in the discretion of the district court. ATT Corp. v. Community Network Servs. Inc., 2000 WL 1174992, at *1 (S.D.N.Y. Aug. 18, 2000).
II. Cubatabaco's Motion Is Denied
Cubatabaco seeks reconsideration of the Court's determination that its claims under Article 6bis of the Paris Convention and Articles 7 and 8 of the Inter-American Convention should be dismissed.
Cubatabaco anchors its motion for reconsideration on two "controlling decisions" with regard to canons of statutory interpretation. As an initial matter, "the Court is mindful that canons of construction `are not in any true sense rules of law. So far as they are valid, they are what Mr. Justice Holmes called them, axioms of experience.'"Federal-Mogul Corp. v. United States, 63 F.3d 1572, 1581 (Fed. Cir. 1995) (quoting Justice Felix Frankfurter, Some Reflections on the Reading of Statutes 27 (1947)). Thus, it is unclear whether a Rule 6.3 motion for reconsideration may appropriately be based upon "axioms of experience" as opposed to rules of law in the "true sense." Given the importance of the issues of international law before the Court, however, the argument thatEmpresa Cubana somehow placed the United States in violation of its international obligations and that therefore this Court should have otherwise construed the statutes if possible will be addressed.
First, a statute must be construed to give effect to treat obligations if such a construction is possible. Cheung v. United States, 213 F.3d 82, 95 (2d Cir. 2000) (citing Weinberger v. Rossi, 456 U.S. 25, 32 (1982); The Charming Betsy, 2 Cranch. 64, 118, 6 U.S. 64, 2 L.Ed. 208 (1804)). Second, when Congress, in enacting subsequent legislation, interprets an existing statute, Congress's interpretation must be given "great weight." Loving v. United States, 517 U.S. 748, 770 (1996).
Cubatabaco's argument relies on the assumption that the earlier ruling places the United States in violation of the IAC and the Paris Convention. Empresa Cubana merely held that, based on the Second Circuit's discussion of Section 44(h) in Havana Club Holding, S.A. v. Galleon S.A., 203 F.3d 116 (2d Cir. 2000), a party may not utilize Sections 44(b) and 44(h) of the Lanham Act for treaty provisions that do not relate to "unfair competition," and further than Articles 7 and 8 of the IAC and Article 6-bis of the Paris Convention do not so relate. This holding does not prevent parties from obtaining rights under those provisions, however, either by complying with other subsections of the Lanham Act or through U.S. federal and common law.
As discussed in Empresa Cubana, the controlling decision Havana Club, held that any rights under the Paris Convention and the IAC must be enforced through Section 44 of the Lanham Act, 15 U.S.C. § 1126, which concerns international conventions. Empresa Cubana, 213 F. Supp.2d at 279, 283. Section 44(b) provides that:
Any person whose country of origin is a party to any convention or treaty relating to trademarks, trade or commercial names, or the repression of unfair competition, to which the United States is also a party, or extends reciprocal rights to nationals of the United States by law, shall be entitled to the benefits of this section under the conditions expressed herein to the extent necessary to give effect to any provision of such convention, treaty, or reciprocal law, in addition to the rights to which any owner of a mark is otherwise entitled by this chapter.15 U.S.C. § 1126 (b). Therefore a party must enforce its rights under an international convention through Section 44(b) and some other subsection of Section 44.
Cubatabaco appears to argue that the United States will be in violation of its international obligations if Cubatabaco cannot assert its rights specifically under Section 44(h). It ignores that there are other provisions of the Lanham Act under which Articles 7 and 8 of the IAC may be enforced and U.S. federal and common law under which they may vindicate their rights pursuant to Article 6-bis of the Paris Convention.
This Court has already detailed its reasons, based on Havana Club, for finding that Articles 7 and 8 of the IAC and Article 6-bis of the Paris Convention cannot be enforced through Section 44(h) of the Lanham Act. Because Cubatabaco has cited no controlling authority to the contrary, this issue will not be reviewed.
Further, Cubatabaco has not persuasively argued that the Court's conclusions to that effect were inconsistent with Havana Club. In Havana Club, the plaintiff sought to enforce the substantive provisions of Articles 23 and 21(c) of the IAC. Article 23 appears in Chapter V of the IAC entitled "Repression of False Indications of Geographical Origin or Source," and not in Chapter IV, which expressly addresses the "Repression of Unfair Competition." The Second Circuit quoted the heading of Article 23 and then ruled that "because the IAC does not treat rights under article 23 as rights related to the repression of unfair competition," the plaintiff could not assert a Section 44(h) claim based on Article 23. Havana Club, 203 F.3d at 135 n. 19. The Court also held that the plaintiff failed to state a viable claim under Article 21(c) of the IAC. Article 21(c) is included in Chapter IV and labeled by the IAC as an unfair competition provision. The Second Circuit treated it as an unfair competition provision incorporated into Section 44(h) but nonetheless dismissed it because unfair competition is already prohibited by U.S. law. Id. at 134-35. Thus, it was consistent with this opinion for this Court to determine whether a treaty provision involves "unfair competition" within the meaning of Section 44(h) by reference to the labels within the treaties themselves.
A. Articles 7 and 8 of the IAC
Article 7 of the IAC is related to the priority of use of marks. It explicitly states that a party may claim the preferential use of mark that it has registered in a contracting state but which another party is using or seeks to use in another contracting state "upon compliance with the requirements established by the domestic legislation in such country . . . ." Article 7. The Lanham Act is the domestic legislation at issue, and it specifically discusses the right of priority in Section 44(d). Thus, a party may enforce Article 7 through Sections 44(b) and 44(d) of the Lanham Act. As discussed in greater length in Empresa Cubana, if a party does not comply with Section 44(d), the party cannot attempt to gain priority of use through another provision of the Lanham Act. 213 F. Supp.2d at 280-81. That is exactly what Cubatabaco has tried unsuccessfully to do.
Similarly, Article 8 requires that a claimant "apply for and obtain the cancellation or annulment of the interfering mark . . . in accordance with the legal procedure of the country in which cancellation is sought." Article 8. Again, the legal procedure is by registering according to Section 44(d) of the Lanham Act.
Because Articles 7 and 8 mandate compliance with the domestic legislation, i.e. Section 44(d), the United States would be out of compliance with those articles only if it refused to recognize the rights of parties that had duly complied with Section 44(d).
The motion to reconsider the dismissal of Cubatabaco's claims pursuant to Articles 7 and 8 of the IAC is denied.
B. Article 6-bis of the Paris Convention
The holding in Empresa Cubana did not place the United States in violation of its treaty obligations for a different reason: the rights guaranteed under Article 6-bis have been subsumed by federal and common law. E.g., Piaggio S.S. p.A. v. Scooterworks USA, Inc., 1999 WL 674749, at *3 (N.D. Ill. Aug. 23, 1999) (rejecting claim under Article 6-bis asserted pursuant to Sections 44(b) and (h) as duplicative of cause of action under Section 43(a) of the Lanham Act); Empresa Cubana, 213 F. Supp.2d at 285-86 (discussing claims under the Federal Trademark Dilution Act and "well-known marks" doctrine).
This conclusion also answers Cubatabaco's argument that the U.S. Congress has expressed the position that Article 6-bis has already been implemented into federal law (see Uruguay Round Agreements Act, Pub.L. 103-465, § 101(d) (15); 108 Stat. 4809 (1994); TRIPS Article 2(1) ("Members shall comply with Articles 1-12" of the Paris Convention), reproduced in Message from the President of the United States, HR. Doc. No. 103-316, Vol. I. Annex 1C, at 319 (1994)), and that therefore to reject a claim under Sections 44(b) and (h) is to flout this determination. Because "well-known marks" are already protected under federal and common law, Section 6-bis has been duly implemented.
Therefore, by holding that Article 6-bis could not be implemented pursuant to Section 44(h), Empresa Cubana did not place the United States in violation of its treaty obligations, nor did it ignore a contrary Congressional interpretation.
Cubatabaco also suggests that the holding with regard to Article 6-bis incorrectly "placed particular weight on what it considered to be the Lanham Act's general preference that marks be registered" (Pl.'s Reply at 6), because Article 6-bis does not require such registration. The opinion, however, relied only on Havana Club and the statutory interpretation argument with regard to Article 6-bis's failing to involve "unfair competition." Empresa Cubana, 213 F. Supp.2d at 283-84. To the extent that the phrase "for the reasons stated above", Id. at 184, could somehow be construed to include the policy arguments with regard to registration discussed in the section regarding Articles 7 and 8 of the IAC, the opinion is now limited as stated above.
Cubatabaco's motion for reconsideration of the dismissal of its Article 6-bis claim is denied.
III. General Cigar's Arguments
General Cigar argues that summary judgment was improvidently granted on the issues of abandonment and equitable defenses as material issues of fact are present.
A. Abandonment 1. Equitable Defenses Do Not Apply
___________General Cigar first argues that this Court erroneously determined that equitable defenses could not apply to the defense of abandonment. Yet General Cigar cites no controlling authority for this argument. Instead, it relies on a case that it neglected to cite in its papers in support of its summary judgment motion and that arises in the District Court for the District of Columbia, Pro-Football Inc. v. Harlo, 57 U.S.P.Q.2d 1140 (D.D.C. 2000). Therefore, this argument is inappropriate for a Rule 6.3 motion and is rejected.
Moreover, General Cigar's argument that there was no legal support for this Court's conclusion is erroneous. E.g., Treadwell's Drifters Inc. v. Marshak, 18 U.S.P.Q.2d 1318, 1320 (T.T.A.B. 1990) ("[W]e can hold, as a matter of law, that respondent's asserted equitable defenses are not available against the claim of . . . abandonment."); Harjo v. Pro Football Inc., 30 U.S.P.Q.2d 1828, 1831 (T.T.A.B. 1994) ("The Board has held that the equitable defenses of laches and estoppel are not available against claims of . . . abandonment because there exists a broader public interest — a `public policy interest' — in addition to a private interest in removing from the register . . . those registrations for marks that have been abandoned."); TBC Corp. v. Grand Prix Ltd., 12 U.S.P.Q.2d 1311, 1989 WL 274376, at *2 (T.T.A.B. 1989) ("Where the proposed ground for cancellation is abandonment, equitable defenses should be unavailable for the same reason they have been held unavailable when the ground asserted is descriptiveness or fraud. It is in the public interest to remove abandoned registrations from the register."); Schenley Ind., Inc. v. Sterling Brewers, Inc., 157 U.S.P.Q. 593, 595 (T.T.A.B. 1968) ("The equitable defenses set forth in Section 19 [ 15 U.S.C. § 1069] of the Statute are for obvious reasons inapplicable in a proceeding involving abandonment and/or any of the other grounds for cancellation enumerated in Section 14(c). The rationale behind this is that if a mark had in fact become abandoned, an estoppel situation could not exist, that is, the registrant manifestly cannot logically claim that it suffered any damage or was placed in any adverse position by failure of petition to seek cancellation at any earlier date."); see also 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 20:36, at 20-79 (2002) ("The equitable defenses of laches and estoppel are not available as against claims of fraud and abandonment. The public policy of removing such registrations overcomes any equitable defense."); 3 Jerome Gilson, Trademark Protection and Practice, § 8.12[12] [d] [ii], at 8-263 (2001) ("[T]he Lanham Act provides that a petition to cancel a trademark registration may be filed `at any time' if the mark . . . has been abandoned . . . . The defense of laches is thus unavailable in cancellation proceedings in which these grounds are asserted.").
General Cigar argues that the above opinions "balance the equities" rather than establish a bright-line rule that equitable defenses may never apply. General Cigar is incorrect. While some courts may have relied on a "public policy" of clearing the register of abandoned marks instead of expressly relying on the "at any time" language, they did not determine on a case-by-case basis whether such public policy would be served. In any case, "the PTO has consistently held that the phrase `at any time' precludes a laches defense . . . ." Marshak v. Treadwell, 240 F.3d 184, 192-94 n. 2 (3d Cir. 2001) (cancellation based on analogous fraudulent procurement claim).
As a result, the earlier decision that General Cigar's equitable defenses could not apply to Cubatabaco's claim of abandonment stands.
2. There Are No Material Issues of Fact As to Abandonment
General Cigar does not appear to take issue with this Court's summary of the underlying legal framework that was necessary in order to rule in summary judgment that General Cigar had abandoned the COHIBA mark. Because it was undisputed that General Cigar did not use the COHIBA mark for five years, it was held that a presumption of abandonment was established. Empresa Cubana, 213 F. Supp.2d at 269. Further, "General Cigar may rebut [that presumption] by showing valid reasons for non-use and by proving intent to resume use. The ultimate burden remains with Cubatabaco, however." Id.
General Cigar argues, however, that this Court erred because to rebut the presumption of abandonment, "such evidence need not prove intent to resume use — it merely needs to raise a genuine issue of fact as to that intent." Defs.' Mem. at 7. This Court did not require any proof positive of intent to resume use. It did find, as it is permitted to do, that the evidence presented did not raise a material issue of fact as to intent to resume use, even construing the facts in the light most favorable to General Cigar, and that therefore the presumption of abandonment was not overcome. E.g., Silverman v. CBS, Inc., 870 F.2d 40, 47-48 (2d Cir. 1989) (affirming grant of summary judgment because evidence was insufficient to raise issue as to use or intent to resume use during period of abandonment) General Cigar has raised no new facts to forestall this conclusion, and it is inappropriate on a Rule 6.3 motion for this Court to review the analysis of the facts that were already discussed and found lacking. See Empresa Cubana, 213 F. Supp.2d at 269-71.
General Cigar does suggest that the June 26 Opinion misread Silverman in several ways. First, it claims that the Court incorrectly required a showing of "concrete plans" pursuant to dicta in Silverman. The use of the term "concrete plans" on two occasions in the opinion, Empresa Cubana, 213 F. Supp.2d at 268, 270, does not mean that the Court impermissibly placed a greater burden on General Cigar than required by the controlling law. The statement that "concrete plans" are required is another way of stating that "[a] bare assertion of possible future use is not enough," Id. at 269 (quoting Silverman, 870 F.2d at 47)) and that a party must "proffer more than conclusory testimony or affidavits." Id. (quoting Imperial Tobacco Ltd. v. Phillip Morris, Inc., 899 F.2d 1575, 1581 (Fed. Cir. 1990) Therefore, the opinion will not be overturned on this ground.
Second, it argues that the Court incorrectly applied Silverman's discussion of "minor activities" to the question of intent to resume use instead of merely the question of whether the mark had been used.Silverman, however, addressed both use and intent to resume use within the same paragraph. After discussing "minor activities" similar to the ones present in this case, the Court concluded that those activities were insufficient to raise a material issue as to use or to intent to resume use. Silverman, 870 F.2d at 48.
General Cigar finally argues that the Court should have viewed all the activities that took place during the period of nonuse in their totality, and that under such a holistic view of the facts, a material issue of fact would have been presented. Because the authorities cited for this proposition are not controlling authority (EH Yacht, LLC v. Ecig Harbor LLC, 84 F. Supp.2d 556, 565 (D.N.J. 2000); Miller Brewing Co. v. Olanci's Breweries Ltd., 548 F.2d 349, 352 (Cust. Pat. App. 1976)), this is an improper ground for review at this time. In any case, although the Court dealt with each piece of evidence separately, it considered the weight of the evidence as a whole. Taken as a whole, there was no legally sufficient evidence of an intent to resume use.
General Cigar's motion for reconsideration on the issue of abandonment is denied.
B. Equitable Defenses
___________General Cigar similarly argues that the Court failed to construe the facts in the light most favorable to it in granting summary judgment dismissing General Cigar's equitable defenses. As discussed above, the Court did not require any proof positive of General Cigar's equitable defenses, but merely found, as it is permitted to do, that the evidence presented did not raise a material issue of fact as to existence of equitable defenses, even construing the facts in the light most favorable to General Cigar.
General Cigar also notes that the June 26 Opinion did not look to events that happened prior to the new registration of the COHIBA mark in 1992 because of the determination that General Cigar had abandoned the earlier registration. Citing Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1041 (2d Cir. 1980), among other cases, General Cigar argues that all of the surrounding circumstances, i.e. evidence of estoppel or acquiescence prior to the abandonment, must be considered.
Saratoga belies this proposition. In Saratoga, the defendant held the Saratoga mark from 1910 to 1971, but it was alleged that the defendant had abandoned the mark over a seven-year period beginning in 1971. Id. at 1041. The plaintiff acknowledged that its suit should have been barred by the more than sixty years in which it failed to bring suit. Id. at 1041. However, it argued that the abandonment of the mark in 1971 essentially swept the slate clean and allowed it to bring the suit as if the prior sixty years had not occurred. Id. The Court did not reject this argument, as General Cigar suggests. Instead, the Court found that the plaintiff "continued to acquiesce as it had from 1910 to 1971, although it knew that the State was seeking a new licensee for the trademark that Saratoga Vichy had effectively accepted as valid." Id. The Court concluded, "[d]espite unquestioned knowledge for seven years that the State was seeking a licensee to put the product, and the product's long-established trademark, back on the market, [plaintiff] did nothing."Id. at 1042. The Court's finding of estoppel was therefore based on what occurred in the seven years following the abandonment, during which time the plaintiff had knowledge that the defendant was seeking to use the trademark again.
Saratoga thus supports the tabula rasa approach taken in the June 26 Opinion. To determine whether equitable defenses apply in a case where abandonment has occurred, one must look only as early as the time of alleged abandonment and the time when the party had knowledge that the alleged infringer had plans to put the product and trademark back on the market. Although the abandonment began in 1987, Cubatabaco did not have knowledge that General Cigar intended to reintroduce the COHIBA cigar until, at the earliest, 1994.
The June 26 Opinion analyzed actions and non-actions occurring in or after 1994. General Cigar has not cited any new facts occurring in or after 1994 that the Court did not consider, nor has it cited any controlling authority to alter the determination that it failed to present an issue of material fact as to its equitable defenses. As a result, the motion for reconsideration of the dismissal of General Cigar's equitable defenses is denied.
Conclusion
In light of the foregoing, Cubatabaco's and General Cigar's motions for reconsideration are denied.
It is so ordered.