Forever 21, Inc. v. Gucci America, Inc. et al

MEMORANDUM of CONTENTIONS of FACT and LAW

C.D. Cal.October 29, 2018

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership, Including Professional Corporations SEONG KIM, Cal. Bar No. 166604 shkim@sheppardmullin.com KENT RAYGOR, Cal. Bar No. 117224 kraygor@sheppardmullin.com 1901 Avenue of the Stars, 16th Floor Los Angeles, California 90067 Telephone: 310.228.3700 Facsimile: 310.228.3701 LAURA L. CHAPMAN, Cal. Bar No. 167249 lchapman@sheppardmullin.com TONI QIU, Cal. Bar No. 302268 tqiu@sheppardmullin.com Four Embarcadero Center, 17th Floor San Francisco, California 94111-4109 Telephone: 415.434.9100 Facsimile: 415.434.3947 Attorneys for Plaintiff and Counter-Defendant FOREVER 21, INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION FOREVER 21, INC., a Delaware corporation, Plaintiff and Counter-Defendant, v. GUCCI AMERICA, INC., a New York corporation, Defendant and Counter-Claimant. Case No. 2:17−cv−04706 SJO (Ex) PLAINTIFF AND COUNTER- DEFENDANT FOREVER 21, INC.’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Complaint Filed: June 27, 2017 First Amended Complaint Filed: November 17, 2017 Second Amended Complaint Filed: December 5, 2017 Pretrial Conference: October 5, 2018 Trial Date: October 23, 2018 Judge: Hon. S. James Otero GUCCI AMERICA, INC., a New York corporation, Counter-Claimant, v. FOREVER 21, INC., a Delaware corporation, Counter-Defendant. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 1 of 60 Page ID #:16897 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -i- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW TABLE OF CONTENTS Page(s) I. CLAIMS AND DEFENSES ............................................................................. 1 A. Forever 21’s Claims ................................................................................ 1 B. Elements Required to Establish Forever 21’s Claims ............................ 1 C. Brief Description of Forever 21’s Key Evidence in Support of Each of Its Claims ................................................................................... 6 D. Gucci America’s Counterclaims and Affirmative Defenses .................. 7 E. Elements Required to Establish Gucci America’s Counterclaims ......... 8 F. Elements Required to Establish Gucci America’s Affirmative Defenses ................................................................................................ 12 G. Brief Description of Forever 21’s Key Evidence in Opposition to All of Gucci America’s Counterclaims and Affirmative Defenses ...... 15 H. Forever 21’s Affirmative Defenses to Gucci America’s Counterclaims ....................................................................................... 15 I. Elements Required to Establish Forever 21’s Affirmative Defenses ................................................................................................ 15 J. Brief Description of Forever 21’s Key Evidence in Opposition to Each of Gucci America’s Counter-Claims and Affirmative Defenses ................................................................................................ 17 K. Similar Statement For All Third Parties ............................................... 18 L. Identification of Any Anticipated Evidentiary Issues and the Party’s Position on Those Issues ........................................................... 18 M. Identification of Any Issues of Law That Are Germane to the Case, Together With the Party’s Position on Those Issues .................. 20 II. BIFURCATION OF ISSUES .......................................................................... 43 III. JURY TRIAL .................................................................................................. 43 IV. ATTORNEYS’ FEES ...................................................................................... 44 V. ABANDONMENT OF ISSUES ..................................................................... 44 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 2 of 60 Page ID #:16898 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -ii- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW TABLE OF AUTHORITIES Page(s) FEDERAL CASES 1-800 Contacts, Inc. v. Whenu.com, Inc. and Vision Direct, Inc. 414 F.3d 400 (2d Cir. 2005) ................................................................................... 9 Abercrombie & Fitch Stores, Inc. v. Am. Eagle Outfitters, Inc. 280 F.3d 619 (6th Cir. 2002) .......................................................................... 29, 30 Adidas Am., Inc. v. Kmart Corp. No. CV-05-120-ST, 2006 U.S. Dist. LEXIS 49766 (D. Or. June 15, 2006) ....... 20 Adidas Am., Inc. v. Skechers USA, Inc. 890 F.3d 747 (9th Cir. 2018) .................................................................... 10, 11, 40 Adidas-Am., Inc. v. Payless Shoesource Inc. 546 F. Supp. 2d 1029 (D. Or. 2008) ..................................................................... 28 adidas-Salomon AG v. Target Corp. No. 01-1582-RE, 2003 U.S. Dist. LEXIS 28068 (D. Or. Jan. 29, 2003) ............. 28 Airs Aromatics, LLC v. Victoria’s Secret Stores Brand Management, Inc. 744 F.3d 595 (9th Cir. 2014) ................................................................................ 21 AirWair Int’l Ltd. v. Schultz 84 F. Supp. 3d 943 (N.D. Cal. Mar. 23, 2015) ......................................... 13, 14, 16 Ale House Mgmt., Inc. v. Raleigh Ale House, Inc. 205 F.3d 137 (4th Cir. 2000) ................................................................................ 28 AM Gen. Corp. v. DaimlerChrysler Corp. 311 F.3d 796 (7th Cir. 2002) ................................................................................ 24 Art Attacks Ink, LLC v. MGA Entm’t Inc. 581 F.3d 1138 (9th Cir. 2009) .............................................................. 5, 21, 27, 29 Bandag, Inc. v. Al Bolser Tire Stores, Inc. 750 F.2d 903 (Fed. Cir. 1984) .............................................................................. 41 Big Island Candies, Inc. v. Cookie Corner 269 F. Supp. 2d 1236 (D. Haw. 2003) ............................................................. 3, 28 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 3 of 60 Page ID #:16899 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -iii- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Binder v. Disability Grp., Inc. 772 F. Supp. 2d 1172 (C.D. Cal. 2011) ................................................................ 43 Bonazoli v. R.S.V.P. Intern., Inc. 353 F. Supp. 2d 218 (D.R.I. 2005) ....................................................................... 30 Braun, Inc. v. Dynamics Corp. of America 975 F.2d 815 (Fed. Cir. 1992) .............................................................................. 35 Brockmeyer v. Hearst Corp. 248 F. Supp. 2d 281 (S.D.N.Y. 2003) .................................................................. 33 Brooks Shoe Mfg. Co., Inc. v. Suave Shoe Corp. 716 F.2d 854 (11th Cir. 1983) .............................................................................. 27 Cairns v. Franklin Mint Co. 24 F. Supp. 2d 1013 (C.D. Cal. 1998) ............................................................ 26, 35 Carter-Wallace, Inc. v. Procter & Gamble Co. 434 F.2d 794 (9th Cir. 1970) ................................................................................ 29 Cellularm, Inc. v. Bay Alarm Co. No. C-89-3409 DLJ, 1991 U.S. Dist. LEXIS 20106, 1991 WL 332052 (N.D. Cal. Apr. 11, 1991)........................................................ 37 In the Matter of Certain Footwear Prods. No. 337-TA-936 (U.S. Int’l Trade Comm’n July 7, 2016) .................................. 29 Charles Jacquin et Cie, Inc. v. Destileria Serralles, Inc. 921 F.2d 467 (3d Cir. 1990) ................................................................................. 35 In re Charles N. Van Valkenburgh 97 U.S.P.Q.2d 1757, 2011 WL 165454 (T.T.A.B. 2011) .................................... 31 Chrysler Corp. v. Vanzant No. 93-56219, 1997 U.S. App. LEXIS 22860 (9th Cir. Aug. 28, 1997) ............. 22 Cicena, Ltd. v. Columbia Telecommunications Grp. 900 F.2d 1546 (Fed. Cir. 1990) ............................................................................ 30 CJC Holdings, Inc. v. Wright & Lato, Inc. 979 F.2d 60 (5th Cir. 1992) .................................................................................. 32 Cleary v. News Corp. 30 F.3d 1255 (9th Cir. 1994) ................................................................................ 12 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 4 of 60 Page ID #:16900 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -iv- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Coach Servs. v. Triumph Learning LLC 668 F.3d 1356 (Fed. Cir. 2012) .................................................................. 6, 35, 36 Coach, Inc. v. Asia Pac. Trading Co. 676 F. Supp. 2d 914 (C.D. Cal. 2009) .................................................................. 40 Computer Access Tech. Corp. v Catalyst Enters., Inc. 273 F. Supp. 2d 1063 (N.D. Cal. 2003) ................................................................ 37 Cont’l Lab. Prods. v. Medax Int’l, Inc. 114 F. Supp. 2d 992 (S.D. Cal. 2000) .................................................................. 33 Cross Commerce Media, Inc. v. Collective, Inc. 841 F.3d 155 (2d Cir. 2016) ................................................................................... 2 Custom Vehicles, Inc. v. Forest River, Inc. 476 F.3d 481 (7th Cir. 2007) ................................................................................ 23 D.C. Comics v. Towle 802 F.3d 1012 (9th Cir. 2015) .............................................................................. 41 Daubert v. Merrell Dow Pharmaceuticals 509 U.S. 579 (1993) ....................................................................................... 18, 19 Deere & Co. v. MTD Holdings, Inc. No. 00-Civ. 5936, 2004 U.S. Dist. LEXIS 2550 (S.D.N.Y. Feb. 18, 2004) ........ 32 Devan Designs, Inc. v. Palliser Furniture Corp. 25 U.S.P.Q.2d 1991, 1992 WL 511694 (M.D.N.C. 1992), aff’d, 27 U.S.P.Q.2d 1399 (4th Cir. 1993) ..................................................... 30, 31 Duncan v. Stuetzle 76 F.3d 1480 (9th Cir. 1996) ................................................................................ 43 Duraco Prods. v. Joy Plastic Enters. 40 F.3d 1431 (3d Cir. 1994) ........................................................................... 29, 31 Eagle Snacks, Inc. v. Nabisco Brands, Inc. 625 F. Supp. 571 (D.N.J. 1985) ............................................................................ 26 Echo Travel, Inc. v. Travel Assocs., Inc. 870 F.2d 1264 (7th Cir. 1989) .............................................................................. 29 Essence Comm., Inc. v. Singh Ind., Inc. 703 F. Supp. 261 (S.D.N.Y. 1988) ....................................................................... 26 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 5 of 60 Page ID #:16901 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -v- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Farouk Sys., Inc. v. AG Global Prods., LLC No. H-15-0465, 2016 WL 1322315 (S.D. Tex. 2016), appeal dismissed (5th Cir. 16-20289) (July 14, 2016) ......................................... 20 Fifty-Six Hope Rd. Music, Ltd. v. A.V.E.L.A. Inc. 778 F.3d 1059 (9th Cir. 2015) ........................................................................ 19, 43 First Brands Corp. v. Fred Meyer, Inc. 809 F.2d 1378 (9th Cir. 1987) .............................................................................. 27 In re Florists’ Transworld Delivery Inc. 106 U.S.P.Q.2d 1784 (T.T.A.B. 2013) ................................................................... 4 FlowRider Surf, Ltd. v. Pac. Surf Designs, Inc. No. 15cv1879-BEN (BLM), 2016 U.S. Dist. LEXIS 153563 (S.D. Cal. Nov. 3, 2016) ................................................................................. 14, 16 Forney Indus., Inc. v. Daco of Missouri, Inc. 835 F.3d 1238 (10th Cir. 2016) ............................................................................ 27 G. Heileman Brewing Co. v. Anheuser-Busch Inc. 676 F. Supp. 1436 (E.D. Wis. 1987), aff’d, 873 F.2d 985 (7th Cir. 1989) .......... 33 Gallo v. Proximo Spirits, Inc. No. CV-F-10-411 LJO JLT, 2012 U.S. Dist. LEXIS 10669 (E.D. Cal. Jan. 27, 2012) ...................................................................................... 34 Genesee Brewing Co., Inc. v. Stroh Brewing Co. 124 F.3d 137 (2d Cir. 1997) ................................................................................... 9 Gibson Brands, Inc. v. John Hornby Skewes & Co. No. CV 14-00609 DDP, 2014 U.S. Dist. LEXIS 117623 (C.D. Cal. Aug. 22, 2014) .................................................................................... 15 Glob. Mfg. Grp., LLC v. Gadget Universe.Com 417 F. Supp. 2d 1161 (S.D. Cal. 2006) ................................................................ 26 Globalaw Ltd. v. Carmon & Carmon Law Office 452 F. Supp. 2d 1 (D.D.C. 2006).......................................................................... 26 Glow Indus. v. Lopez 252 F. Supp. 2d 962 (C.D. Cal. 2002) ............................................................ 12, 42 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 6 of 60 Page ID #:16902 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -vi- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Groeneveld Transp. Efficiency, Inc. v. Lubecore Int’l, Inc. 730 F.3d 494 (6th Cir. 2013) ................................................................................ 31 Hanig & Co., Inc. v. Fisher & Co., Inc. 1994 WL 97758 (N.D. Ill. Mar. 24, 1994) ............................................................. 3 Harper House, Inc. v. Thomas Nelson, Inc. 889 F.2d 197 (9th Cir. 1989) ................................................................................ 37 Henri Bendel, Inc. v. Sears, Roebuck & Co. 25 F. Supp. 2d 198 (S.D.N.Y. 1998) .................................................................... 29 Herb Reed Enters., LLC v. Fla. Entm’t Mgmt., Inc. 736 F.3d 1239 (9th Cir. 2013) .............................................................................. 15 Highway Cruises of Cal. Inc. v. Sec. Indus., Inc. 374 F.2d 875 (9th Cir. 1967) ................................................................................ 41 Inc. v. Shah No. SACV1301321DMGJEMX, 2014 WL 10988347 (C.D. Cal. Nov. 12, 2014) .................................................................................... 40 Intel Corp. v. Terabyte Int’l, Inc. 6 F.3d 614 (9th Cir. 1993) .................................................................................... 36 J & J Snack Foods Corp. v. McDonald’s Corp. 932 F.2d 1460 (Fed. Cir. 1991) ............................................................................ 24 James R. Glidewell Dental Ceramics v. Keating Dental Arts, Inc. No. SACV 11-1309-DOC(ANx), 2013 U.S. Dist. LEXIS 24824 (C.D. Cal. Feb. 21, 2013) ..................................................................................... 34 Japan Telecom v. Japan Telecom Am. 287 F.3d 866 (9th Cir. 2002) .................................................................................. 5 Jarrow Formulas, Inc. v. Nutrition Now, Inc. 304 F.3d 829 (9th Cir. 2002) .......................................................................... 14, 17 Jay Franco & Sons, Inc. v. Franek 615 F.3d 855 (7th Cir. 2010) .................................................................................. 4 Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery 150 F.3d 1042 (9th Cir. 1998) .............................................................................. 28 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 7 of 60 Page ID #:16903 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -vii- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Kleven v. Hereford No. CV 13-02783-AB, 2015 U.S. Dist. LEXIS 111185 (C.D. Cal. Aug. 21, 2015) ...................................................................................... 3 Knitwaves, Inc. v. Lollytogs Ltd. 71 F.3d 996 (2d Cir. 1995) ................................................................................... 29 KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. 543 U.S. 111 (2004) ............................................................................................... 2 Kumho Tire Co. v. Carmichael 526 U.S. 137 (1999) ............................................................................................. 19 Landscape Forms, Inc. v. Columbia Cascade Co. 113 F.3d 373 (2d Cir. 1997) ............................................................................. 4, 25 Leatherman Tool Grp. v. Cooper Indus. 199 F.3d 1009 (9th Cir. 1999) .............................................................................. 30 Levi Strauss & Co. v. Blue Bell, Inc. 778 F.2d 1352 (9th Cir. 1985) .............................................................................. 22 LHO Chicago River, L.L.C. v. Rosemoor Suites, L.L.C No. 16 C 6863, 2017 WL 467687 (N.D. Ill. Feb. 3, 2017) .................................. 26 Lindy Pen Co. v. Bic Pen Corp. 982 F.2d 1400 (9th Cir. 1993) .................................................................. 36, 41, 43 Lions Gate Entm’t Inc. v. TD Ameritrade Servs. Co. 170 F. Supp. 3d 1249 (C.D. Cal. 2016) ................................................................ 11 Lovely Skin, Inc. v. Ishtar Skin Care Prod., LLC 745 F.3d 877 (8th Cir. 2014) ................................................................................ 26 Malaco Leaf, AB v. Promotion in Motion, Inc. 287 F. Supp.2d 355 (S.D.N.Y. 2003) ................................................................... 28 Mana Prods., Inc. v. Columbia Cosmetics Mfg., Inc. 65 F.3d 1063 (2d Cir. 1995) ............................................................................. 3, 30 Marketquest Grp., Inc. v. Bic Corp 862 F.3d 927 (9th Cir. 2017) .................................................................................. 9 Medtronic, Inc. v. Mirowski Family Ventures, LLC 134 S. Ct. 843 (2014).............................................................................................. 2 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 8 of 60 Page ID #:16904 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -viii- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Microsoft Corp. v. My Choice Software, LLC No. SA CV 15-0515-DOC, 2015 U.S. Dist. LEXIS 187011 (C.D. Cal. Sept. 22, 2015) ................................................................................ 9, 11 Minemyer v. B-Roc Representatives, Inc. 678 F. Supp. 2d 691 (N.D. Ill. 2009) .................................................................... 32 Mishawaka Rubber & Woolen Mfg. Co. v. S. S. Kresge Co. 316 U.S. 203 (1942) ............................................................................................. 42 Monster, Inc. v. Dolby Labs. Licensing Corp. 920 F. Supp. 2d 1066 (N.D. Cal. 2013) ................................................................ 25 Murphy v. Provident Mut. Life Ins. Co. of Philadelphia 923 F.2d 923 (2d Cir. 1990) ................................................................................. 32 Nalpac Ltd. v. Coming Glass Works 784 F.2d 752 (6th Cir. 1986) ................................................................................ 42 Nat’l Rural Telecommunications Cooperative, v. DIRECTV, Inc. 319 F. Supp. 2d 1059 (C.D. Cal. 2003) ................................................................ 43 Nike, Inc. v. Nikepal Int’l, Inc. No. 2:05-cv-1468-GEB-JFM, 2007 U.S. Dist. LEXIS 16966 (E.D. Cal. Feb. 27, 2007) ...................................................................................... 36 Nintendo of Am. v. Dragon Pac. Int’l 40 F. 3d 1007 (9th Cir. 1994) ............................................................................... 37 Nissan Motor Co. v. Nissan Computer Corp. 378 F.3d 1002 (9th Cir. 2004) ........................................................................ 35, 36 Nola Spice Designs, L.L.C. v. Haydel Enters. 783 F.3d 527 (5th Cir. 2015) ................................................................................ 35 Novadaq Techs. v. Karl Storz GMBH & Co. KG. No. 14-cv-04853- PSG, 2015 U.S. Dist. LEXIS 170423 (N.D. Cal. Dec. 18, 2015) ..................................................................................... 34 Or. Arms, Inc. v. Or. Arms, Ltd. Nos. 99-35768 & 99-35902, 2000 U.S. App. LEXIS 30215 (9th Cir. Nov. 27, 2000) ....................................................................................... 35 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 9 of 60 Page ID #:16905 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -ix- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW OraLabs, Inc. v. The Kind Grp., Ltd. Liab. Co. No. 13-cv-00170-PAB-KLM, 2015 U.S. Dist. LEXIS 98246 (D. Colo. July 28, 2015) ....................................................................................... 33 Paco Sport, Ltd. V. Paco Rabanne Parfums 86 F. Supp. 2d 305 (S.D.N.Y. 2000), aff’d without opinion, 234 F.3d 1262 (2d Cir. 2000) ............................................................................... 22 Pagliero v. Wallace China Co. 198 F.2d 339 (9th Cir. 1952) ................................................................................ 30 Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. DE C.V. 188 F. Supp. 3d 22 (D.D.C. 2016), aff’d on other grounds, 2018 U.S. App. LEXIS 22396 (D.C. Cir., Aug. 10, 2018) .................................... 2 Platinum Home Mortg. Corp. v. Platinum Fin. Grp., Inc. 149 F.3d 722 (7th Cir. 1998) ................................................................................ 26 Playboy Enters., Inc. v. Netscape Commcn’s Corp. 55 F. Supp. 2d 1070 (C.D. Cal. 1999) ............................................................ 26, 35 Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co. 324 U.S. 806 (1945) ....................................................................................... 14, 17 Predator Int’l, Inc. v. Gamo Outdoor USA, Inc. 669 F. Supp. 2d 1235 (D. Colo. 2009) ................................................................. 31 PrimeSource Bldg. Prods. v. Hillman Grp., Inc. No. 3:14-CV-2521-B, 2015 U.S. Dist. LEXIS 182056 (N.D. Tex. Mar. 31, 2015) .................................................................................... 34 Reebok Int’l v. Marnatech Enters. 970 F.2d 552 (9th Cir. 1992) ................................................................................ 43 Schutt Mfg. Co. v. Riddell, Inc. 673 F.2d 202 (7th Cir. 1982) ............................................................................ 9, 11 Seller Agency Council, Inc. v. Kennedy Ctr. for Real Estate Educ., Inc. 621 F.3d 981 (9th Cir. Cal. Sept. 3, 2010) ..................................................... 13, 16 Skechers U.S.A., Inc. v. Vans, Inc. No. CV 07-01703 DSF PLAX, 2007 WL 4181677, at *8 (C.D. Cal. Nov. 20, 2007) .................................................................................... 32 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 10 of 60 Page ID #:16906 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -x- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Somers v. Apple, Inc. 729 F.3d 953 (9th Cir. 2013) ................................................................................ 42 Spin Master, Ltd. v. Zobmondo Entm’t, LLC 944 F. Supp. 2d 830 (C.D. Cal. 2012) .................................................................. 41 Star Indus., Inc. v. Bacardi & Co. 412 F.3d 373 (2d Cir. 2005) ................................................................................. 35 Starbucks Corp. v. Wolfe’s Borough Coffee, Inc. 736 F.3d 198 (2d Cir. 2013) ................................................................................. 11 Steak Umm Co., LLC v. Steak “Em Up, Inc. 2011 WL 3679155 (E.D. Pa. 2011) ...................................................................... 35 Straumann Corp. v. Lifecore Biomedical Inc. 278 F. Supp. 2d 130 (D. Mass. 2003) ................................................................... 28 Stuart Spector Designs, Ltd. v. Fender Musical Instruments Corp. 2009 T.T.A.B. LEXIS 132 (T.T.A.B. 2009) .......................................................... 3 Taylor Made Golf Co. v. Carsten Sports 175 F.R.D. 658 (S.D. Cal. 1997) .......................................................................... 37 Thane Int’l, Inc. v. Trek Bicycle Corp. 305 F.3d 894 (9th Cir. 2002) ................................................................................ 35 Tie Tech, Inc. v. Kinedyne Corp. 296 F.3d 778 (9th Cir. 2002) ................................................................................ 23 Tomlinson v. IndymacBank, F.S.B. 359 F. Supp. 2d 891 (C.D. Cal. 2005) .................................................................. 42 TrafFix Devices, Inc. v. Mktg. Displays, Inc. 532 U.S. 23 (2001) ................................................................................................. 4 Universal Frozen Foods, Co. v. Lamb-Weston, Inc. 697 F. Supp. 389 (D. Or. 1987) ............................................................................ 27 Victoria’s Secret Stores Brand Mgmt. v. Sexy Hair Concepts, LLC No. 07 Civ. 5804 (GEL), 2009 U.S. Dist. LEXIS 30458 (S.D.N.Y. Apr. 8, 2009) ....................................................................................... 24 Vision Sports, Inc. v. Melville Corp. 888 F.2d 609 (9th Cir. 1989) ................................................................................ 25 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 11 of 60 Page ID #:16907 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -xi- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Vital Pharmaceuticals, Inc. v. Am. Body Building Prods., LLC 511 F. Supp. 2d 1303 (S.D. Fla. 2007) ................................................................. 26 Wal-Mart Stores, Inc. v. Samara Bros. 529 U.S. 205 (2000) ................................................................................... 5, 21, 31 Walker & Zanger, Inc. v. Paragon Indus., Inc. 549 F. Supp. 2d 1168 (N.D. Cal. 2007) ............................................................ 3, 32 Wallace Int’l Silversmiths, Inc. v. Godinger Silver Art Co. 916 F.2d 76 (2d Cir. 1990) ................................................................................... 30 Wells Fargo & Co. v. Stagecoach Properties, Inc. 685 F.2d 302 (9th Cir. 1982) .......................................................................... 14, 17 Westchester Media v. PRL USA Holdings, Inc. 214 F.3d 658 (5th Cir. 2000) ................................................................................ 22 Winning Ways, Inc. v. Holloway Sportswear, Inc. 913 F. Supp. 1454 (D. Kan. 1996) ....................................................................... 31 Yurman Design, Inc. v. PAJ, Inc. 262 F.3d 101 (2d Cir. 2001) ............................................................................. 4, 25 STATE CASES Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Telephone Co. 20 Cal.4th 163 (1999) ........................................................................................... 43 Gagnon v. Cont’l Casualty Co. 211 Cal.App.3d 1598 (Cal. App. 6th Dist. 1989) ................................................. 43 Kizer v. County of San Mateo 53 Cal.3d 139 (1991) ............................................................................................ 43 Korea Supply Co. v. Lockheed Martin Corp. 29 Cal.4th 1134 (2003) ......................................................................................... 42 FEDERAL STATUTES, RULES & REGULATIONS 37 C.F.R. § 2.52 .................................................................................................................... 22 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 12 of 60 Page ID #:16908 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -xii- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 15 U.S.C. § 1111 ................................................................................................................... 40 § 1114 ................................................................................................................. 7, 8 § 1114(1) ................................................................................................................. 9 § 1115(b) ................................................................................................................. 2 § 1116(d)(1)(B)(i) ................................................................................................. 40 § 1117(a) ................................................................................................... 41, 43, 44 § 1117(c) ............................................................................................................... 40 § 1125(a) ....................................................................................................... 7, 9, 37 § 1125(a)(1) ............................................................................................................ 9 § 1125(c) ............................................................................................................. 7, 9 § 1125(c)(2) .......................................................................................................... 35 § 1125(c) et seq. .................................................................................................... 10 28 U.S.C. § 2201 ..................................................................................................................... 1 § 2202 ..................................................................................................................... 1 Federal Rules of Civil Procedure Rule 12(b)(6) .................................................................................................. 12, 16 Federal Rules of Evidence Rule 402 .......................................................................................................... 19, 20 Rule 403 .......................................................................................................... 19, 20 Rule 702 ................................................................................................................ 19 Rule 801 ................................................................................................................ 20 Rule 802 ................................................................................................................ 20 Rule 901 ................................................................................................................ 20 Lanham Act § 29 ....................................................................................................................... 40 § 32 ..................................................................................................................... 7, 8 § 35(a) ................................................................................................................... 41 § 43(a) ........................................................................................................... 7, 9, 37 § 43(c) ................................................................................................................. 7, 9 Local Rule 16-4 et seq. ................................................................................................ 1 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 13 of 60 Page ID #:16909 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -xiii- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW STATE STATUTES California Business & Professions Code § 14247 ............................................................................................................. 7, 11 § 17200 ..................................................................................................... 12, 42, 43 § 17200 et seq. .................................................................................................. 8, 12 California Civil Code § 3333 ................................................................................................................... 37 OTHER AUTHORITIES 23 California Jurisprudence 3d Damages § 24 (2015) ............................................................................................................ 37 1 Gilson on Trademarks § 2.05 .................................................................................................................... 24 1 McCarthy on Trademarks and Unfair Competition § 7:38.50 (5th ed.) ................................................................................................. 20 § 7:103 (5th ed.) .................................................................................................... 27 2 McCarthy on Trademarks and Unfair Competition § 12:36.50 (5th ed.)................................................................................................. 4 4 McCarthy on Trademarks and Unfair Competition § 23:122 (5th ed.) ............................................................................................ 32, 33 5 McCarthy on Trademarks and Unfair Competition § 30:89 (5th ed.) .................................................................................................... 41 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 14 of 60 Page ID #:16910 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Pursuant to Local Rule 16-4 et seq., Paragraph (1)(B)(2) of the Court’s Order re Jury/Court Trial for Civil Cases and the Court’s Order Regarding Pretrial Schedule and Procedures (Dkt. No. 203), Plaintiff and Counter-Defendant Forever 21, Inc. (“Plaintiff” or “Forever 21”) hereby submits its Memorandum of Contentions of Fact and Law. I. CLAIMS AND DEFENSES A. Forever 21’s Claims 1. Claim 1: Declaratory Judgment of Non-Infringement, 28 U.S.C. §§ 2201-2202 2. Claim 2: Cancellation of U.S. Registration Nos. 1520796, 1495863, 1511774, and 4563151 on the Grounds that the Marks at Issue Are Generic, Aesthetically Functional, and/or Lack Secondary Meaning 3. Claim 3: Denial of Registration of U.S. Application Serial Nos. 87116368, 87206686, and 87391139 on the Grounds that the Marks at Issue Are Generic, Aesthetically Functional, and/or Lack Secondary Meaning B. Elements Required to Establish Forever 21’s Claims 1. Elements Required to Establish Forever 21’s Claim 1 for Declaratory Judgment of Non-Infringement, 28 U.S.C. §§ 2201- 2202 a. In a declaratory judgment action for non-infringement, the trademark claimant (here, Gucci America) bears the burden of proving the existence of a valid, protectable trademark, as well as infringement thereof. The party seeking declaratory relief (here, Forever 21) does not have any independent burden to prove invalidity or non- infringement. The test for validity of a trademark is Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 15 of 60 Page ID #:16911 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW whether the claimed mark has secondary meaning, i.e, that consumers perceive the claimed mark as signifying a single source of goods (here, clothing). The test for infringement is likelihood of confusion as to the source or affiliation of the goods. See KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 124 (2004) (“In sum, a [party] claiming infringement of an incontestable mark must show likelihood of consumer confusion as part of the prima facie case, 15 U.S.C. § 1115(b), while the [alleged infringer] has no independent burden to negate the likelihood of any confusion in raising the affirmative defense that a term is used descriptively, not as a mark, fairly, and in good faith ….”); see also Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843, 846 (2014) (“We hold that when a licensee seeks a declaratory judgment against a patentee to establish that there is no infringement, the burden of proving infringement remains with the patentee.”); Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. DE C.V., 188 F. Supp. 3d 22, 103 (D.D.C. 2016), aff’d on other grounds, 2018 U.S. App. LEXIS 22396 (D.C. Cir., Aug. 10, 2018); Cross Commerce Media, Inc. v. Collective, Inc., 841 F.3d 155, 166 (2d Cir. 2016) (In a declaratory judgment case involving an unregistered mark, the trademark claimant bears the burden of proving validity of the mark). The burden of proving both validity and infringement remains with the party claiming infringement even if the trademark claimant is the owner of a mark that is the subject of an “incontestable” registration. KP Permanent Make-Up, 543 U.S. at 117. 2. Elements Required to Establish Forever 21’s Claim 2 for Cancellation of U.S. Registration Nos. 1520796, 1495863, 1511774, and 4563151 on the Grounds that the Marks at Issue Are Generic, Aesthetically Functional, and/or Lack Secondary Meaning Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 16 of 60 Page ID #:16912 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW a. A party seeking cancellation of a trademark registration must prove that it has standing; and b. That there is a valid ground why the trademark should not continue to be registered. Kleven v. Hereford, No. CV 13-02783-AB (AGRx), 2015 U.S. Dist. LEXIS 111185, at *61 (C.D. Cal. Aug. 21, 2015) (citing Star-Kist Foods, Inc. v. P.J. Rhodes & Co., 735 F.2d 346, 348 (9th Cir. 1984)). c. Elements for Genericism (1) A design is generic when it is: (1) “overbroad or too generalized”; (2) “is the basic form of a type of product”; or (3) is “so common in the industry that it cannot be said to identify a particular source.” Walker & Zanger, Inc. v. Paragon Indus., Inc., 549 F. Supp. 2d 1168, 1174 (N.D. Cal. 2007) (citing cases); Big Island Candies, Inc. v. Cookie Corner, 269 F. Supp. 2d 1236, 1243-44 (D. Haw. 2003) (citing cases) (“Courts will not protect ‘basic’ design features because of the concern that producers will be able to use trademark law to monopolize products” as the Lanham Act “does not protect an idea, a concept, or a generalized type of appearance.”); Hanig & Co., Inc. v. Fisher & Co., Inc., 1994 WL 97758 at *4 (N.D. Ill. Mar. 24, 1994) (design is generic when it “is so common or unoriginal that it is utterly lacking in distinctiveness. If the first manufacturer to make a desktop electronic calculator used a rectangular case, we do not think it could claim trade dress protection and forbid others to make rectangular calculators, or even rectangular calculators having specified proportions, even if other shapes would not be more expensive to make.”); see also Mana Prods., Inc. v. Columbia Cosmetics Mfg., Inc., 65 F.3d 1063 (2d Cir. 1995) (black color for makeup compacts held generic and unprotectable because it was so widely used in the industry); Stuart Spector Designs, Ltd. v. Fender Musical Instruments Corp., 2009 T.T.A.B. LEXIS 132, at *14 (T.T.A.B. 2009) (electric guitar shapes generic; “In the Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 17 of 60 Page ID #:16913 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW context of product design, genericness may be found where the design is, at a minimum, so common in the industry that it cannot be said to identify a particular source.”); 2 McCarthy on Trademarks and Unfair Competition § 12:36.50 (5th ed.) (A design may be generic when it “is widely and commonly used by several producers,” such that it “cannot serve a trademark role of identifying only one source.”); Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 117-18 (2d Cir. 2001) (cautioning against protecting designs that consist of “commonly used or functional elements” that “should be regarded as unprotectible or ‘generic,’ to avoid tying up a product or marketing idea” because if the court cannot identify the types of designs that would be infringing, “how is a competitor … to know what new designs would be subject to challenge?”) (quoting Jeffrey Milstein, Inc. v. Gregor, Lawlor, Roth, Inc., 58 F.3d 27, 32 (2d Cir. 1995)); see also Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 380-81 (2d Cir. 1997) (where a claimed design is used on a series or line of products in a way that is too broad or too general to warrant protection, “litigation will be difficult, as courts will be unable to evaluate how unique and unexpected the design elements are in the relevant market.”). Here, the stripes at issue are generic when used on clothing. d. Elements for Aesthetic Functionality (1) A design is aesthetically functional if granting one party exclusive rights in the design would put competitors at a “significant non-reputation-related disadvantage.” TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 33 (2001) (quoting Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995)); Jay Franco & Sons, Inc. v. Franek, 615 F.3d 855, 860 (7th Cir. 2010) (“Granting a producer the exclusive use of a basic element of design (shape, material, color, and so forth) impoverishes other designers’ palettes.”); see also In re Florists' Transworld Delivery Inc., 106 U.S.P.Q.2d 1784, 1787 (T.T.A.B. 2013) (a design feature is Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 18 of 60 Page ID #:16914 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW “prohibited from registration if the exclusive appropriation of that feature would put competitors at a significant non-reputation related disadvantage.”). Here, the stripes at issue are aesthetically functional when used on clothing. e. Elements for Lack of Secondary Meaning (1) The claimant (here, Gucci America) has the burden of proving that the claimed design is distinctive, and therefore protectible, based on an acquisition of secondary meaning (that is, a mental recognition in buyers’ and potential buyers’ minds that products featuring the design are associated with the same single source). Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 211, 216 (2000) (A trademark acquires secondary meaning when, “in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself.”)(quoting Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 851, n.11, 102 S. Ct. 2182 (1982)); Art Attacks Ink, LLC v. MGA Entm't Inc., 581 F.3d 1138, 1145 (9th Cir. 2009); Japan Telecom v. Japan Telecom Am., 287 F.3d 866, 873 (9th Cir. 2002). Here, the stripes at issue lack secondary meaning when used on clothing. 3. Elements Required to Establish Forever 21’s Claim 3 for Denial of Registration of U.S. Application Serial Nos. 87116368, 87206686, and 87391139 on the Grounds that the Marks at Issue Are Generic, Aesthetically Functional, and/or Lack Secondary Meaning a. See Section I-B-2 supra. b. Gucci America has the burden to prove that blue-red-blue (“BRB”) is not generic nor aesthetically functional and has acquired secondary meaning for the goods identified in the Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 19 of 60 Page ID #:16915 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW applications. The existence of secondary meaning is determined at the time of trial (not at the time that Gucci filed the application). See Coach Servs. v. Triumph Learning LLC, 668 F.3d 1356, 1379-80 (Fed. Cir. 2012). C. Brief Description of Forever 21’s Key Evidence in Support of Each of Its Claims 1. Report, documents, and testimony from survey expert, Dr. Bruce Isaacson, showing lack of secondary meaning in BRB used on clothing (i.e., that consumers do not associate BRB on clothing with a single source). 2. Report, documents, and testimony from survey expert, Sarah Butler, showing lack of likelihood of confusion based on Forever 21’s use of BRB (and green red green (“GRG”)) on clothing and accessory products, and indicating lack of secondary meaning in BRG and GRG on clothing. 3. Report, documents, and testimony from marketing expert, Dr. Peter Golder. 4. Report, documents, and testimony from fashion historian expert, Edward Maeder. 5. Documents and testimony showing historical independent third party use of BRB and GRG stripes on clothing and accessory products advertised and sold in various geographical locations, marketing channels, and channels of trade nationwide. 6. The degree, manner, and length of use and advertising of BRB and GRG colored stripes on clothing and accessory products by Gucci America, and/or the lack thereof. 7. The degree, manner, and length of use and advertising of various different colored stripes other than BRB on clothing and Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 20 of 60 Page ID #:16916 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW accessory products by Gucci America. 8. File wrappers for Gucci America’s trademark applications and registrations. 9. Gucci’s brochures, catalogs, and advertisements. 10. Gucci’s sales information. 11. Representative examples of the Forever 21 products at issue. 12. Representative examples of the Gucci America products with BRB and GRG. 13. Representative examples of independent third party products with BRB and GRG. 14. Forever 21’s sales and cost information and rebuttal damages expert report and testimony. 15. Documents and testimony regarding Gucci America’s decision not to enforce its claimed rights in BRB and/or GRG against certain third parties. 16. Pleadings, discovery requests, and responses. 17. Documents and testimony relating to all claims and defenses. D. Gucci America’s Counterclaims and Affirmative Defenses 1. Counterclaim 1: Federal Trademark Infringement Under Lanham Act § 32, 15 U.S.C. § 1114 2. Counterclaim 2: Federal Trademark Infringement and False Designation of Origin Under Lanham Act § 43(a), 15 U.S.C. § 1125(a) 3. Counterclaim 3: Federal Trademark Dilution Under Lanham Act § 43(c), 15 U.S.C. § 1125(c) 4. Counterclaim 4: Common Law Trademark Infringement 5. Counterclaim 5: Trademark Dilution Under California Bus. & Prof. Code § 14247 Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 21 of 60 Page ID #:16917 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 6. Counterclaim 6: Unfair Competition Under California Common Law and Cal. Bus. & Prof. Code § 17200 et seq. 7. First Affirmative Defense: Forever 21 fails to state a claim on which relief can be granted. 8. Second Affirmative Defense: Forever 21’s use of BRB constitutes trademark infringement. 9. Third Affirmative Defense: Forever 21’s claims are barred by the doctrines of waiver, acquiescence, and estoppel. 10. Fourth Affirmative Defense: Forever 21’s claims are barred in whole or in part by laches. 11. Fifth Affirmative Defense: Forever 21’s claims are barred in whole or in part by the doctrine of unclean hands. 12. Sixth Affirmative Defense: Forever 21’s claims for injunctive relief are barred because Forever 21 cannot show that it will suffer any irreparable harm from Gucci America’s alleged actions. E. Elements Required to Establish Gucci America’s Counterclaims 1. Elements Required to Establish Gucci America’s Counterclaim 1 For Federal Trademark Infringement Under Lanham Act § 32, 15 U.S.C. § 1114 a. Gucci America owns a valid mark entitled to protection under the Lanham Act for clothing; b. Which Forever 21 used in commerce; c. Without Gucci America’s consent; d. In connection with the sale or advertising of goods or services (here, clothing); and e. Such use was in a manner that is likely to cause confusion among ordinary consumers as to the source, sponsorship, Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 22 of 60 Page ID #:16918 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW affiliation, or approval of the goods. See 15 U.S.C. §§ 1114(1) and 1125(a)(1); Marketquest Grp., Inc. v. Bic Corp, 862 F.3d 927 (9th Cir. 2017); 1-800 Contacts, Inc. v. Whenu.com, Inc. and Vision Direct, Inc., 414 F.3d 400, 406-07 (2d Cir. 2005) (citing Time, Inc. v. Petersen Publ’g Co., 173 F.3d 113, 117 (2d Cir. 1999); Genesee Brewing Co., Inc. v. Stroh Brewing Co., 124 F.3d 137, 142 (2d Cir. 1997) 2. Elements Required to Establish Gucci America’s Counterclaim 2 for Federal Trademark Infringement and False Designation of Origin Under Lanham Act § 43(a), 15 U.S.C. § 1125(a) a. See Section I-E-1 supra. Gucci America’s Counterclaims 1 and 2 share the same elements and are analyzed similarly. Microsoft Corp. v. My Choice Software, LLC, No. SA CV 15-0515-DOC (RNBx), 2015 U.S. Dist. LEXIS 187011, at *6-7 (C.D. Cal. Sept. 22, 2015) (citing Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1046 n.6 (9th Cir. 1999)); see also Schutt Mfg. Co. v. Riddell, Inc., 673 F.2d 202, 206 (7th Cir. 1982). 3. Elements Required to Establish Gucci America’s Counterclaim 3 for Federal Trademark Dilution Under Lanham Act § 43(c), 15 U.S.C. § 1125(c) a. Gucci America’s claimed mark is famous and distinctive; b. Forever 21’s use of the disputed mark is commercial; c. Forever 21’s use of the disputed mark was in commerce; d. Forever 21’s use of the disputed mark began after Gucci America’s claimed mark became famous; and e. Forever 21’s use of the disputed mark is likely to cause dilution of the disputed mark’s distinctive quality through Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 23 of 60 Page ID #:16919 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW blurring or tanishment. f. A mark is famous “if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the marks’ owner.” The statutory factors for determining whether a mark is sufficiently famous are: (1) The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties. (2) The amount, volume, and geographic extent of sales of goods or services offered under the mark. (3) The extent of actual recognition of the mark. (4) Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register. 15 U.S.C. § 1125(c) et seq.; Adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 758 (9th Cir. 2018). “[T]he court may consider all relevant factors to determine whether dilution is likely, including: (a) The degree of similarity between the mark or trade name and the famous mark. (b) The degree of inherent or acquired distinctiveness of the famous mark. (c) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark. (d) The degree of recognition of the famous mark. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 24 of 60 Page ID #:16920 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW (e) Whether the user of the mark or trade name intended to create an association with the famous mark. (f) Any actual association between the mark or trade name and the famous mark. Adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 758- 59 (9th Cir. 2018) (citing 15 U.S.C. § 1125(c)(2)(B)) (internal quotations omitted). No one factor is necessarily determinative. Id.; see also Starbucks Corp. v. Wolfe's Borough Coffee, Inc., 736 F.3d 198, 207, 211 (2d Cir. 2013) (noting that "the importance of each factor will vary with the facts" and that "the test is not an inflexible one"). 4. Elements Required to Establish Gucci America’s Counterclaim 4 for Common Law Trademark Infringement a. See Section I-E-1 supra. Gucci America’s Counterclaims 1, 2, and 4 share the same elements and are analyzed similarly. Microsoft Corp. v. My Choice Software, LLC, No. SA CV 15-0515-DOC (RNBx), 2015 U.S. Dist. LEXIS 187011, at *6-7 (C.D. Cal. Sept. 22, 2015) (citing Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1046 n.6 (9th Cir. 1999)); see also Schutt Mfg. Co. v. Riddell, Inc., 673 F.2d 202, 206 (7th Cir. 1982). 5. Elements Required to Establish Gucci America’s Counterclaim 5 for Trademark Dilution Under California Bus. & Prof. Code § 14247 a. See Section I-E-3 supra. Gucci America’s Counterclaims 3 and 5 share the same elements and are analyzed similarly. Lions Gate Entm’t Inc. v. TD Ameritrade Servs. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 25 of 60 Page ID #:16921 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -12- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Co., 170 F. Supp. 3d 1249, 1269 (C.D. Cal. 2016) (dilution claims under federal and state law have the same elements). 6. Elements Required to Establish Gucci America’s Counterclaim 6 for Unfair Competition Under California Common Law and Cal. Bus. & Prof. Code § 17200 et seq. a. See Section I-E-1 supra. Gucci America’s Counterclaims 1, 2, 4, and 6 share the same elements and are analyzed similarly. Glow Indus. v. Lopez, 252 F. Supp. 2d 962, 975 (C.D. Cal. 2002) (elements of California state claims for trademark infringement and unfair competition are substantially similar to those of comparable federal claims.); Cleary v. News Corp., 30 F.3d 1255, 1262-63 (9th Cir. 1994) (actions pursuant to § 17200 are “‘substantially congruent’ to claims made under the Lanham Act”) (quoting Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1178 (9th Cir. 1988)). F. Elements Required to Establish Gucci America’s Affirmative Defenses 1. Elements Required to Establish Gucci America’s First Affirmative Defense of Failure to State a Claim a. Forever 21 has the burden of proof to plead and prove each of its claims, except for declaratory relief. b. See Section I-B-2 to I-B-3 supra; see also Fed. R. Civ. P. 12(b)(6). 2. Elements Required to Establish Gucci America’s Second Affirmative Defense of Alleged Trademark Infringement a. See Section I-E-1 supra. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 26 of 60 Page ID #:16922 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -13- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 3. Elements Required to Establish Gucci America’s Third Affirmative Defense of Waiver, Acquiescence, and Estoppel a. Elements of Waiver (1) Intentional relinquishment of a known right. See AirWair Int'l Ltd. v. Schultz, 84 F. Supp. 3d 943, 957 (N.D. Cal. Mar. 23, 2015). b. Elements of Acquiescence (1) Forever 21 gave its assent or express/implied assurance that it would not assert a right or claim; (2) The delay between Forever 21’s assent and the assertion of the right or claim was not excusable; and (3) The delay caused Gucci America undue prejudice based on Gucci America’s reasonable reliance on Forever 21’s affirmative act or deed. See Seller Agency Council, Inc. v. Kennedy Ctr. for Real Estate Educ., Inc., 621 F.3d 981, 988-989 (9th Cir. Cal. Sept. 3, 2010) citing ProFitness Physical Therapy Ctr. v. Pro–Fit Orthopedic & Sports Physical Therapy P.C., 314 F.3d 62, 67 (2d Cir.2002)). c. Elements of Estoppel (1) Forever 21 intentionally, or through culpable negligence, leads Gucci America to rely on certain facts; and (2) In such a way that Gucci America will be harmed if the Forever 21 is permitted to repudiate or deny those facts. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 27 of 60 Page ID #:16923 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -14- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW See AirWair Int'l Ltd. v. Schultz, 84 F. Supp. 3d 943, 958 (N.D. Cal. Mar. 23, 2015); see also FlowRider Surf, Ltd. v. Pac. Surf Designs, Inc., No. 15cv1879-BEN (BLM), 2016 U.S. Dist. LEXIS 153563, at *12-13 (S.D. Cal. Nov. 3, 2016). 4. Elements Required to Establish Gucci America’s Fourth Affirmative Defense of Laches a. Forever 21 unreasonably delayed in asserting its claims; and b. The unreasonable delay has prejudiced Gucci America. See Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002). 5. Elements Required to Establish Gucci America’s Fifth Affirmative Defense of Unclean Hands a. Forever 21’s conduct was knowingly and intentionally illegal or otherwise unconscionable; and b. Was related to Forever 21’s cause of action, i.e., material to Forever 21’s claimed right to use colored stripes on clothing. See Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S. 806, 815 (1945); Wells Fargo & Co. v. Stagecoach Properties, Inc., 685 F.2d 302, 308 (9th Cir. 1982). 6. Elements Required to Establish Gucci America’s Sixth Affirmative Defense of Lack of Irreparable Harm a. A claim of lack of irreparable harm is typically raised against a plaintiff seeking to obtain a preliminary injunction, since an award of preliminary injunctive relief requires proof of irreparable harm such that remedies available at law (e.g., monetary damages), are inadequate Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 28 of 60 Page ID #:16924 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -15- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW to compensate for the alleged injury. An alleged lack of irreparable harm is not an independent basis to deny Forever 21’s requested relief, and is not a true affirmative defense. Gibson Brands, Inc. v. John Hornby Skewes & Co., No. CV 14-00609 DDP (SSx), 2014 U.S. Dist. LEXIS 117623, at *8 (C.D. Cal. Aug. 22, 2014); see also Herb Reed Enters., LLC v. Fla. Entm't Mgmt., Inc., 736 F.3d 1239, 1249 (9th Cir. 2013). G. Brief Description of Forever 21’s Key Evidence in Opposition to All of Gucci America’s Counterclaims and Affirmative Defenses1 1. See Section I-C supra. H. Forever 21’s Affirmative Defenses to Gucci America’s Counterclaims 1. First Affirmative Defense: Gucci America’s counterclaims fail to state a claim upon which relief can be granted. 2. Second Affirmative Defense: Gucci America’s counterclaims are barred by the doctrines of waiver, acquiescence, and/or estoppel. 3. Third Affirmative Defense: Gucci America’s counterclaims are barred by the doctrine of laches. 4. Fourth Affirmative Defense: Gucci America’s counterclaims are barred by the doctrine of unclean hands. I. Elements Required to Establish Forever 21’s Affirmative Defenses 1. Elements Required to Establish Forever 21’s First Affirmative Defense of Failure to State a Claim a. Gucci America has the burden of proof to plead and prove each of its counterclaims. 1 The following evidence will be used in opposition to each and every one of Gucci America’s claims, and therefore, Forever 21 only lists them once for the sake of brevity. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 29 of 60 Page ID #:16925 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -16- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW b. See Section I-E supra; see also Fed. R. Civ. P. 12(b)(6). 2. Elements Required to Establish Forever 21’s Second Affirmative Defense of Waiver, Acquiescence, and/or Estoppel a. Elements of Waiver (1) Intentional relinquishment of a known right. See AirWair Int'l Ltd. v. Schultz, 84 F. Supp. 3d 943, 957 (N.D. Cal. Mar. 23, 2015). b. Elements of Acquiescence a. Gucci America gave its assent or express/implied assurance that it would not assert a right or claim; b. The delay between Gucci America’s assent and the assertion of the right or claim was not excusable; and c. The delay caused Forever 21 undue prejudice based on Forever 21’s reasonable reliance on Gucci America’s affirmative act or deed. See Seller Agency Council, Inc. v. Kennedy Ctr. for Real Estate Educ., Inc., 621 F.3d 981, 988 (9th Cir. Cal. Sept. 3, 2010). d. Elements of Estoppel a. Gucci America intentionally, or through culpable negligence, leads Forever 21 to rely on certain facts; and b. In such a way that Forever 21 will be harmed if Gucci America is permitted to repudiate or deny those facts. See AirWair Int'l Ltd. v. Schultz, 84 F. Supp. 3d 943, 958 (N.D. Cal. Mar. 23, 2015); see also FlowRider Surf, Ltd. v. Pac. Surf Designs, Inc., Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 30 of 60 Page ID #:16926 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -17- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW No. 15cv1879-BEN (BLM), 2016 U.S. Dist. LEXIS 153563, at *12-13 (S.D. Cal. Nov. 3, 2016). 3. Elements Required to Establish Forever 21’s Third Affirmative Defense of Laches a. Gucci America unreasonably delayed in asserting its claims; and b. The unreasonable delay has prejudiced Forever 21. See Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002). 4. Elements Required to Establish Forever 21’s Fourth Affirmative Defense of Unclean Hands a. Gucci America’s conduct was knowingly and intentionally illegal or otherwise unconscionable; and b. Was related to Gucci America’s cause of action, i.e., material to Gucci America’s claimed trademark rights. See Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S. 806, 815 (1945); Wells Fargo & Co. v. Stagecoach Properties, Inc., 685 F.2d 302, 308 (9th Cir. 1982). J. Brief Description of Forever 21’s Key Evidence in Opposition to Each of Gucci America’s Counter-Claims and Affirmative Defenses First Affirmative Defense: Failure to State a Claim Forever 21 will present the following evidence showing that Gucci America has failed to state a claim upon which relief can be granted: 1. See Section I-C supra. Second Affirmative Defense: Waiver, Acquiescence, Estoppel Forever 21 will present the following evidence showing that Gucci America’s counterclaims are barred by the doctrines of waiver, acquiescence, and estoppel: Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 31 of 60 Page ID #:16927 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -18- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 1. Third party use. 2. Documentary and testimonial evidence regarding Gucci America’s cease and desist letters and enforcement efforts and failure to file any lawsuits over BRB and GRG on clothing. . Third Affirmative Defense: Laches Forever 21 will present the following evidence showing that Gucci America’s counterclaims are barred by the doctrine of laches: 1. Third party use. 2. Documentary and testimonial evidence regarding Gucci America’s cease and desist letters and enforcement efforts. Fourth Affirmative Defense: Unclean Hands Forever 21 will present the following evidence showing that Gucci America’s counterclaims are barred by the doctrine of unclean hands: 1. Third party use. 2. Documentary and testimonial evidence regarding Gucci America’s cease and desist letters and enforcement efforts and failure to file any lawsuits over BRB and GRG on clothing. K. Similar Statement For All Third Parties 1. Not applicable; no third parties in the case. L. Identification of Any Anticipated Evidentiary Issues and the Party’s Position on Those Issues 1. Forever 21 will seek to exclude from evidence and from the jury any and all documentary and testimonial evidence of Gucci America’s designated marketing experts, Dr. Yoram (Jerry) Wind and William D’Arienzo, on the grounds that their testimony and opinions do not meet the standard of Federal Rule of Evidence (“FRE”) 702, Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 32 of 60 Page ID #:16928 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -19- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 579 (1993) and Kumho Tire Co. v. Carmichael, 526 U.S. 137, 148- 51 (1999). 2. Forever 21 will seek to exclude from evidence and from the jury any and all documentary and testimonial evidence of Gucci America’s designated damages expert, Mr. Karl Schulze, on the issue of actual damages on the grounds that his testimony and opinions do not meet the standard of FRE 702 and Daubert, 509 U.S. 579 and Kumho, 526 U.S. at 148-51. His testimony on the issue of disgorgement of Forever 21’s profits will not be challenged by a Daubert motion. His testimony on the issue of disgorgement of Forever 21’s profits should not be presented to the jury, as it is an equitable issue to be decided by the judge. Fifty- Six Hope Rd. Music, Ltd. v. A.V.E.L.A. Inc., 778 F.3d 1059, 1074 & n.6 (9th Cir. 2015). 3. Forever 21 will seek to exclude from evidence and from the jury any and all questioning and documentary and testimonial evidence regarding alleged prior claims of copyright and trademark infringement brought against Forever 21 by third parties on the grounds that they are irrelevant to the parties, facts, and issues of this case under FRE 402, and because any probative value is substantially outweighed by a danger of unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence under FRE 403. 4. Forever 21 will seek to exclude from evidence and from the jury any and all documentary and testimonial evidence regarding online social media commentary regarding the parties and the products at issue on the grounds that the “evidence” is Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 33 of 60 Page ID #:16929 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -20- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW unauthenticated, inadmissible hearsay under FRE 901, 801, and 802, irrelevant to the parties, facts, and issues of this case under FRE 402, and unreliable, biased, and prejudicial under FRE 403. M. Identification of Any Issues of Law That Are Germane to the Case, Together With the Party’s Position on Those Issues 1. Whether Gucci America makes consistent, uniform trademark use of BRB and GRG To be a valid trademark that serves to identify and distinguish source, the trademark must be used in a consistent manner. Gucci America does not make the necessary consistent, uniform trademark use of BRB and GRG—nor any other stripe combination—on clothing or other goods. Thus, Gucci’s claimed BRB and GRG stripe design, particularly when used on clothing, do not constitute protectable designs under the Lanham Act. Farouk Sys., Inc. v. AG Global Prods., LLC, No. H-15-0465, 2016 WL 1322315, at *4 (S.D. Tex. 2016), appeal dismissed (5th Cir. 16-20289) (July 14, 2016) (black and red color combinations not protectable because plaintiff does not use the color combinations on products “in any consistent manner”); 1 McCarthy on Trademarks and Unfair Competition § 7:38.50 (5th ed.) (a claimant should exercise “extreme caution” to avoid changing the visual appearance of a claimed mark, as “[o]nly uniform and consistent appearance will allow uses of the mark to continue to imprint the image of the mark in the public mind as an easily and quickly recognized symbol.”). Gucci America does not use blue-and-red or green-and-red stripe designs in the same size, dimensions, orientation, number of stripes, or placement position on the product. Gucci America’s trademark registrations for BRB and GRG on various goods are also unavailing because Gucci America does not consistently use the BRB and GRG stripe designs that are the subject of those registrations on the identified goods. Cf. Adidas Am., Inc. v. Kmart Corp., No. CV-05-120-ST, 2006 U.S. Dist. LEXIS 49766, at *8 (D. Or. June 15, 2006) (each of adidas’s trademark registrations Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 34 of 60 Page ID #:16930 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -21- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW for footwear “prominently displays three, parallel, equidistant and diagonal stripes on the side of the footwear.”). Thus, Gucci America does not have exclusive rights to BRB and GRG as a trademark. 2. Whether Gucci America has used BRB and GRG on clothing continuously and consistently since Gucci America’s claimed first use dates To establish ownership of a mark, the claimant must prove prior continuous use of the same mark. Airs Aromatics, LLC v. Victoria's Secret Stores Brand Management, Inc., 744 F.3d 595, 599 (9th Cir. 2014) (quoting Watec Co., Ltd. v. Liu, 403 F.3d 645, 654 (9th Cir.2005)). The evidence shows that Gucci America has not made prior continuous use of BRB and GRG on clothing. Thus, Gucci America cannot establish ownership for BRB and GRG on clothing. 3. Whether a product feature like stripes on clothing can be inherently distinctive or must acquire secondary meaning to be protectable as a trademark A design incorporated into the product itself (rather than shown on the packaging of the product) can never be inherently distinctive, and must acquire “secondary meaning” to be protectable as a trademark. Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 214-16 (2000). Secondary meaning is “a mental recognition in buyers’ and potential buyers’ minds that products connected with the [mark] are associated with the same source.” Art Attacks Ink, LLC v. MGA Entm't Inc., 581 F.3d 1138, 1145 (9th Cir. 2009) (citation omitted). Here, the designs at issue are BRB and GRG featured on clothing, i.e., designs incorporated in to the product itself. Thus, BRB and GRG must each acquire secondary meaning to serve as protectable trademarks on clothing. Neither stripe design has achieved secondary meaning on clothing and therefore are not valid trademarks on clothes. // Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 35 of 60 Page ID #:16931 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -22- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 4. Whether Gucci America is entitled to any presumption of validity or secondary meaning for GRG or BRB on clothing based on its asserted trademark registrations Gucci America owns certain trademark registrations for the GRG and BRB stripe designs for certain goods identified in the registration that do not consist of clothing. Gucci America owns a contestable trademark registration for a GRG stripe design on clothing in U.S. Reg. No. 4379039, in which the GRG stripe design is shown in vertical orientation. Gucci America does not own a trademark registration for a BRB stripe design on clothing. Gucci America cannot rely on any of its trademark registrations for GRG and BRB to create an evidentiary presumption of secondary meaning for Gucci America’s various uses of GRG and BRB on clothing because the presumption of secondary meaning is limited to the exact mark as registered for use with the exact goods specified in the registration. See, e.g., Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352 (9th Cir. 1985) (a registrant cannot rely upon a registration for pants as prima facie evidence of secondary meaning for shirts); Chrysler Corp. v. Vanzant, No. 93- 56219, 1997 U.S. App. LEXIS 22860, at *7 (9th Cir. Aug. 28, 1997) (“Chrysler may not rely on its trademark [registration] of a grille design to establish a prima facie case of a protected interest with regard to goods not specified in the registration”); Paco Sport, Ltd. V. Paco Rabanne Parfums, 86 F. Supp. 2d 305, 312 (S.D.N.Y. 2000), aff’d without opinion, 234 F.3d 1262 (2d Cir. 2000) (incontestable registration only applies to exact mark as registered and to goods listed in registration; registration for fragrances cannot create presumption of distinctiveness for mark on clothing); Westchester Media v. PRL USA Holdings, Inc., 214 F.3d 658, 669 (5th Cir. 2000) (presumption for “Polo” mark used for sport magazine did not transfer to a different magazine); 37 C.F.R. § 2.52. At best, Gucci America owns a contestable registration for GRG in vertical orientation for use in connection with clothing. Gucci America does not own any trademark registration for any BRB design for use in connection Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 36 of 60 Page ID #:16932 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -23- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW with clothing. Nor does Gucci America own any trademark registrations for GRG and BRB in the various decorative manners that Gucci uses GRG and BRB on clothing. Thus, Gucci America cannot rely on the benefit of a trademark registration for any evidentiary presumption of validity and secondary meaning. 5. If Gucci America is entitled to rely on a registration as evidence of secondary meaning and validity of BRB or GRG on clothing, whether the presumption is rebutted here Even if Gucci America is entitled to rely on its trademark registrations for a BRB or GRG stripe design for an evidentiary presumption of secondary meaning and validity, the presumption is weak and “bursts” in the face of evidence of trademark invalidity. Tie Tech, Inc. v. Kinedyne Corp., 296 F.3d 778, 783 (9th Cir. 2002) (“In the face of sufficient and undisputed facts demonstrating functionality, as in our case, the registration loses its evidentiary significance.”); see also Custom Vehicles, Inc. v. Forest River, Inc., 476 F.3d 481 (7th Cir. 2007) (presumption of secondary meaning is “easily rebuttable”; no secondary meaning proven; summary dismissal affirmed). Here, Forever 21 has rebutted any alleged presumption of validity and secondary meaning based at least on the results of Forever 21’s secondary meaning survey (which shows that consumers do not associate BRB on clothing with a single source), likelihood of confusion survey (which shows that consumers are not likely to be confused by Forever 21’s use of BRB and GRG on clothing and that consumers do not associate BRB and GRG with a single source), and the numerous examples of third party use of BRB and GRG. 6. Whether Gucci America is entitled to rely on a “family of marks” argument to prove secondary meaning Gucci America claims that its BRB and GRG stripe designs are valid because they are part of Gucci’s “family of marks.” “A family of marks is a group of marks having a recognizable common characteristic, wherein the marks are composed and used in such a way that the public associates not only the individual marks, but the Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 37 of 60 Page ID #:16933 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -24- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW common characteristic of the family, with the trademark owner.” J & J Snack Foods Corp. v. McDonald's Corp., 932 F.2d 1460, 1462 (Fed. Cir. 1991); AM Gen. Corp. v. DaimlerChrysler Corp., 311 F.3d 796, 804 (7th Cir. 2002) (a “family of marks” “ordinarily means a group of marks, each individual member of which uses a common element that consumers associate with the mark’s owner”); 1 Gilson on Trademarks § 2.05 (the party claiming to own a “family of marks” “must show that the family of marks has a distinctive and recognizable common element that it has promoted as a source indicator”). The mere fact of registering marks with a common element does not in itself prove that a family of marks exists. Victoria's Secret Stores Brand Mgmt. v. Sexy Hair Concepts, LLC, No. 07 Civ. 5804 (GEL), 2009 U.S. Dist. LEXIS 30458, at *9- 10 (S.D.N.Y. Apr. 8, 2009) (“Merely adopting and using—and even registering—a group of marks with a common feature does not create a family of marks, even if the user intended to create a family.”). “Simply using a series of similar marks does not of itself establish the existence of a family. There must be a recognition among the purchasing public that the common characteristic is indicative of a common origin of the goods.” Id. For example, McDONUT for doughnuts, McPIZZA for a pizza product, and McMUFFIN, McCHICKEN and McRIB for sandwich-type products, as used with the primary mark McDONALDS, is a family of marks because “Mc” is combined with the generic name of a food product, and there was evidence that the public has come to associate such marks with McDonald’s. Id. Gucci America has not shown GRG and BRB as members of a family of marks; indeed, the only common element shared between the two is three colored stripes with a red stripe in the middle, and there is no evidence that these common elements are distinctive. Nor is there evidence that the public associates GRG or BRB with a single source, let alone Gucci. In fact, the evidence shows the opposite. Thus, Gucci America does not own a “family of marks” for GRG or BRB. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 38 of 60 Page ID #:16934 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -25- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW While blue-and-red and green-and-red stripes (among many other colored stripes) may be a design element that has been featured on some of Gucci America’s products at some point in time (e.g., clothing, handbags, footwear, and/or accessories), Gucci America’s random, sporadic, inconsistent use of colored stripes across these product lines in various dimensions, colors, orientations, use of number of stripes, and placement on the product, certainly does not render BRB and GRG part of Gucci America’s “family” of marks. Rather, it shows Gucci America’s generic, ornamental, and decorative use of a basic, ordinary, commonplace feature on clothing that is not distinctive nor protectable and should be available for use by the public. E.g., Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 117-18 (2d Cir. 2001) (cautioning against protecting designs that consist of “commonly used or functional elements” that should be regarded as unprotectible or ‘generic,’ to avoid tying up a product or marketing idea” because if the court cannot identify the types of designs that would be infringing, “how is a competitor … to know what new designs would be subject to challenge?”) (quoting Jeffrey Milstein, 58 F.3d at 32); see also Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 380-81 (2d Cir. 1997) (where a claimed design is used on a series or line of products in a way that is too broad or too general to warrant protection, “litigation will be difficult, as courts will be unable to evaluate how unique and unexpected the design elements are in the relevant market.”). 7. Whether Forever 21 is entitled to an inference that there is no secondary meaning based on Gucci America’s failure to produce a survey Forever 21 is entitled to an inference that there is no secondary meaning in BRB and GRG based on Gucci’s failure to present a survey, the “most persuasive evidence of secondary meaning.” Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 615 (9th Cir. 1989); see also Monster, Inc. v. Dolby Labs. Licensing Corp., 920 F. Supp. 2d 1066, 1072 (N.D. Cal. 2013) (“[A] trier of fact may be entitled to presume that one Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 39 of 60 Page ID #:16935 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -26- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW party’s failure to conduct a survey concedes that the survey evidence would be unfavorable to it.”); Playboy Enters., Inc. v. Netscape Commcn’s Corp., 55 F. Supp. 2d 1070, 1084 (C.D. Cal. 1999) (failure to conduct a survey “warrants a presumption that the results would have been unfavorable”); Cairns v. Franklin Mint Co., 24 F. Supp. 2d 1013, 1041-42 (C.D. Cal. 1998) (failure to conduct a survey “may lead to an inference that the results of such a survey would be unfavorable”); Glob. Mfg. Grp., LLC v. Gadget Universe.Com, 417 F. Supp. 2d 1161, 1172-73 (S.D. Cal. 2006) (“Significantly, [plaintiff] did not conduct any survey” to measure secondary meaning); Essence Comm., Inc. v. Singh Ind., Inc., 703 F. Supp. 261, 269 (S.D.N.Y. 1988) (noting that “failure to offer a survey showing the existence of confusion is evidence that the likelihood of confusion cannot be shown”); Eagle Snacks, Inc. v. Nabisco Brands, Inc., 625 F. Supp. 571, 583 (D.N.J. 1985) (noting that “[f]ailure of a trademark owner to run a survey” can “give rise to the inference that the contents of the survey would be unfavorable”); LHO Chicago River, L.L.C. v. Rosemoor Suites, L.L.C, No. 16 C 6863, 2017 WL 467687, at *9 (N.D. Ill. Feb. 3, 2017) (“Consumer testimony and consumer surveys are the only direct evidence of secondary meaning; the other factors are relevant in a more circumstantial fashion... . [A] plaintiff’s failure to conduct a consumer survey, assuming it has the financial resources to do so, may lead to an inference that the results of such a survey would be unfavorable.”) (internal formatting omitted); Platinum Home Mortg. Corp. v. Platinum Fin. Grp., Inc., 149 F.3d 722, 728 (7th Cir. 1998) (same); Globalaw Ltd. v. Carmon & Carmon Law Office, 452 F. Supp. 2d 1, 42-43 (D.D.C. 2006) (same); Vital Pharmaceuticals, Inc. v. Am. Body Building Prods., LLC, 511 F. Supp. 2d 1303, 1311 (S.D. Fla. 2007) (plaintiff’s failure to offer own survey where defendant offered one “mitigates against any finding that secondary meaning exists”); Lovely Skin, Inc. v. Ishtar Skin Care Prod., LLC, 745 F.3d 877, 888 (8th Cir. 2014) (same). The inference for lack of secondary meaning is also supported by Forever 21’s secondary meaning survey, the Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 40 of 60 Page ID #:16936 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -27- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW numerous examples of third party use, and Gucci America’s own use of colored stripes as a decorative, ornamental feature on clothing. 8. Whether Gucci America’s advertising of BRB and GRG—which is not “look for” advertising—is proof of secondary meaning Gucci America’s recent, minimal, and intermittent advertising is not proof of secondary meaning of BRB or GRG on clothes, because Gucci America’s advertising does not draw attention and create a consumer association in the alleged designs, i.e., “look for” advertising. Art Attacks Ink, LLC v. MGA Ent. Inc., 581 F.3d 1138, 1146 (9th Cir. 2009); Forney Indus., Inc. v. Daco of Missouri, Inc., 835 F.3d 1238, 1254 (10th Cir. 2016) (advertising did not mention or emphasize claimed design in any way). Gucci’s advertisements display decorative, ornamental, and aesthetic features of Gucci’s clothing—they do not call out BRB or GRG as source identifiers on clothing. Universal Frozen Foods, Co. v. Lamb-Weston, Inc., 697 F. Supp. 389, 394 (D. Or. 1987); Brooks Shoe Mfg. Co., Inc. v. Suave Shoe Corp., 716 F.2d 854, 860 (11th Cir. 1983). “Unless the allegedly distinctive elements of the garment design have been extensively pointed out in advertising, (such as by “look for” ads) it will not be possible to prove acquisition of a secondary meaning by which customers associate appearance with a single source.” 1 McCarthy on Trademarks & Unfair Comp. § 7:103 (5th ed.) (citing Express, LLC v. Forever 21, Inc., 2010 WL 3489308 (C.D. Cal. 2010) (design and decorations of a jacket were not proven to have acquired a secondary meaning; summary dismissal granted, noting that plaintiff “made no efforts to individually advertise or promote the Express Jacket.”) and Olem Shoe Corp. v. Washington Shoe Co., 101 U.S.P.Q.2d 1462, 1483, 2011 WL 6202282 (S.D. Fla. 2011) (designs of polka dots and zebra stripes on boots: no secondary meaning was proven, so no valid trade dress.)); see also First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1383 (9th Cir. 1987) (affirming district court finding that plaintiff’s extensive advertising budget failed to show secondary meaning and noting plaintiff Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 41 of 60 Page ID #:16937 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -28- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW did not try to “engender consumer identification” with its yellow jug with “look for” ads); Straumann Corp. v. Lifecore Biomedical Inc., 278 F. Supp. 2d 130, 139 (D. Mass. 2003) (“Advertising and marketing expenses are truly probative of secondary meaning only when they encourage consumers to make the connection between a product feature and the origin of the product, i.e. when a manufacturer’s promotion of its device tells consumers to ‘look for’ a specific feature as indicative of source.”) (citing Yankee Candle Co. v. Bridgewater Candle Co., 259 F.3d 25, 45 (1st Cir. 2001)). 9. Whether the stripes at issue as used on clothing are a generic, decorative, merely ornamental, and/or aesthetically functional product feature such that they cannot serve as protectable trademarks Stripes are generic features on clothing and are not protectable. adidas- Salomon AG v. Target Corp., No. 01-1582-RE, 2003 U.S. Dist. LEXIS 28068, at *14 (D. Or. Jan. 29, 2003) (cautioning against granting “a virtual monopoly on stripes, a generic design element”); Big Island Candies, Inc. v. Cookie Corner, 269 F.Supp.2d 1236, 1244-46 (D. Hi 2003); Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery, 150 F.3d 1042, 1049 (9th Cir. 1998) (grape leaf common and generic for wine; used very much in the industry). When a design is so common or unoriginal that it is lacking in distinctiveness, it is generic and not entitled to trademark protection. Big Island, 269 F.Supp.2d at 1244. (citing Hanig & Co., Inc. v. Fisher & Co., Inc., 1994 WL 97758 at *4 (N.D.Ill. Mar. 24, 1994)); Ale House Mgmt., Inc. v. Raleigh Ale House, Inc., 205 F.3d 137, 142 (4th Cir. 2000); Malaco Leaf, AB v. Promotion in Motion, Inc., 287 F. Supp.2d 355, 364 (S.D.N.Y. 2003). In addition, stripes on the clothing items at issue serve “an aesthetic propose wholly independent of any source-identifying function.” Adidas-Am., Inc. v. Payless Shoesource Inc., 546 F. Supp. 2d 1029, 1083 (D. Or. 2008) (quoting Au–Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062, 1073 (9th Cir. 2006)) (emphasis Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 42 of 60 Page ID #:16938 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -29- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW omitted). “Were the law to grant” a party trademark protection in features such as “primary color combinations, such as red [and] blue … in connection with solid, plaid and stripe designs” competitors would have “a significant non-reputational competitive disadvantage and would, therefore, prevent effective competition in the market.” Abercrombie & Fitch Stores, Inc. v. Am. Eagle Outfitters, Inc., 280 F.3d 619, 642-44 & n.19 (6th Cir. 2002) (noting that unspecified stripe designs used on clothing “are indisputably generic” and “obviously functional standing alone”); Henri Bendel, Inc. v. Sears, Roebuck & Co., 25 F. Supp. 2d 198, 202 (S.D.N.Y. 1998) (dismissing complaint with prejudice and cautioning against granting one party exclusive rights to features such as vertical stripes as stripes are “extremely common features” that “must remain available to competitors” to avoid inhibiting “legitimate competition”);. The hundreds of examples of third party use of blue-and-red and green-and-red stripes on clothing further demonstrates such colored stripes on clothes is not protectable, and no party should be awarded a monopoly over such basic designs. See, e.g., Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 802 (9th Cir. 1970) (lack of exclusivity militates against finding that claimed mark identified a single source); see also Echo Travel, Inc. v. Travel Assocs., Inc., 870 F.2d 1264, 1269 (7th Cir. 1989) (same); Art Attacks Ink, LLC v. MGA Entm’t Inc., 581 F.3d 1138, 1146 (9th Cir. 2009) (affirming summary judgment for defendant where plaintiff failed to prove that “purchasers of a product [with certain] characteristics typical of the [plaintiff’s product] would link that product with a single source.”); Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1009 (2d Cir. 1995) (plaintiff’s sweater designs “fail to qualify for protection” under the Lanham Act because the designs were “primarily aesthetic” rather than source-identifying); Duraco Prods. v. Joy Plastic Enters., 40 F.3d 1431, 1449-50 (3d Cir. 1994) (to be protectable against copying by competitors, the design must “act as an independent signifier of origin” and “must not appear to the consumer as a mere component, or the essence, of the product”); In the Matter of Certain Footwear Prods., No. 337-TA-936 (U.S. Int’l Trade Comm’n July 7, 2016), Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 43 of 60 Page ID #:16939 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -30- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW available at http://www.itcblog.com/images/commopin936.pdf); Pagliero v. Wallace China Co., 198 F.2d 339 (9th Cir. 1952) (floral designs on china plates not protectable as they do not indicate source); Abercrombie & Fitch Stores, Inc. v. Am. Eagle Outfitters, Inc., 280 F.3d 619, 642-45 (6th Cir. 2002); Wallace Int’l Silversmiths, Inc. v. Godinger Silver Art Co., 916 F.2d 76, 82 (2d Cir. 1990); Bonazoli v. R.S.V.P. Intern., Inc., 353 F. Supp. 2d 218 (D.R.I. 2005). consumers are confronted with these stripes on clothing from numerous sources and BRB and GRG on clothing do not denote a single source and Gucci cannot have secondary meaning for BRB or GRG on clothing. Mana Prod., Inc. v. Columbia Cosmetics Mfg., Inc., 65 F.3d 1063, 1071 (2d Cir. 1995) (no secondary meaning in black color for compact mirrors given “countless numbers” of companies selling black compacts). 10. Whether alleged copying of a generic product feature or design, such as the disputed stripes on clothing at issue, is lawful and permissible or, on the other hand, evidence of secondary meaning or likelihood of confusion To the extent Forever 21 is found to have “copied” the GRG or BRB stripe design, that alleged copying is lawful, permissible, even encouraged for a competitive economy, and is not evidence of secondary meaning, likelihood of confusion, or willfulness on the part of Forever 21. Product designs that are “widely used and therefore in the public domain” may be “copied faithfully,” i.e., “slavishly.” Leatherman Tool Grp. v. Cooper Indus., 199 F.3d 1009, 1013 (9th Cir. 1999); see also Cicena, Ltd. v. Columbia Telecommunications Grp., 900 F.2d 1546, 1552 (Fed. Cir. 1990) (copying did not prove secondary meaning but was more likely a desire to capitalize on the consumer popularity of the attractive design); Devan Designs, Inc. v. Palliser Furniture Corp., 25 U.S.P.Q.2d 1991, 2000, 1992 WL 511694 (M.D.N.C. 1992), aff'd, 27 U.S.P.Q.2d 1399 (4th Cir. 1993) (“Especially in product design cases, there may be an even more likely reason why one might copy another's trade dress such as to capitalize on a Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 44 of 60 Page ID #:16940 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -31- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW particularly attractive or saleable product design.”); Duraco Prods. v. Joy Plastic Enters., 40 F.3d 1431, 32 U.S.P.Q.2d 1724, 1742 (3d Cir. 1994) (“the copier may very well be exploiting a particularly desirable feature, rather than seeking to confuse customers as to the source of the product”); In re Charles N. Van Valkenburgh, 97 U.S.P.Q.2d 1757, 1768, 2011 WL 165454, at *13 (T.T.A.B. 2011) (same). And for designs in the public domain, for which there is no secondary meaning or trademark ownership, “[f]ree copying remains the rule,” as “imitation is the life blood of competition.” Devan Designs, Inc. v. Palliser Furniture Corp., No. 2:91CV00512, 1992 WL 511694, at *5 (M.D.N.C. Sept. 15, 1992), aff’d, 998 F.2d 1008 (4th Cir. 1993) (quoting Am. Safety Table Co. v. Schreiber, 269 F.2d 255, 272 (2d Cir.1959)); Groeneveld Transp. Efficiency, Inc. v. Lubecore Int'l, Inc., 730 F.3d 494, 513-14 (6th Cir. 2013) (“That is why, in the absence of consumer confusion, and in the absence of any copyright or patent protection, copying is perfectly legal. “Indeed, such copying is more than just legal; it is often beneficial,” as “allowing competitors to copy will have salutary effects in many instances” in our competitive economy.) (quoting TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 29, 121 S. Ct. 1255, 149 L.Ed.2d 164 (2001)); see also Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 213-14 (2000). “If copying alone were sufficient to establish secondary meaning, then all product features that might attract copying by competitors would achieve secondary meaning upon the first instance of such copying. That would gut ‘secondary meaning’ of any substance, replacing it with a rule that the first person to market a feature may prevent others from incorporating the feature into their products.” Predator Int’l, Inc. v. Gamo Outdoor USA, Inc., 669 F. Supp. 2d 1235, 1249-50 (D. Colo. 2009); see also Winning Ways, Inc. v. Holloway Sportswear, Inc., 913 F. Supp. 1454, 1472-73 (D. Kan. 1996) (no secondary meaning where defendant’s competing jackets were “stitch-for-stitch” copies; copying was “to take advantage of those jackets’ popular styles and not their source identification”); Id. at 1250 (citing 2 McCarthy on Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 45 of 60 Page ID #:16941 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -32- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Trademarks § 15:38 (alleged infringer may seek to “capitalize on a nonprotected design because of the design’s ‘intrinsic consumer-desirability’ as opposed to any secondary meaning it may have.”)); Murphy v. Provident Mut. Life Ins. Co. of Philadelphia, 923 F.2d 923, 930 (2d Cir. 1990) (“Absent some legally defined exclusive right, the law permits and encourages imitation and copying of marks that are in the public domain.”); CJC Holdings, Inc. v. Wright & Lato, Inc., 979 F.2d 60, 65-66 (5th Cir. 1992) (if a design is “not protected by patent or copyright,” “a corporation normally has a right to make ‘knock-off’ copies” and indeed might do so “in order to compete with [plaintiff], not because it believed it could fool customers into thinking [defendant] made the [“copied” product]”); Skechers U.S.A., Inc. v. Vans, Inc., No. CV 07-01703 DSF PLAX, 2007 WL 4181677, at *8 (C.D. Cal. Nov. 20, 2007) (copying “the appealing look” of a design, without an intent to profit by confusing the public, is not actionable under trademark law); Walker & Zanger, Inc. v. Paragon Indus., Inc., 549 F. Supp. 2d 1168, 1181 (N.D. Cal. 2007) (competitors may choose to copy design traits “in response to consumer preference. … Proof of deliberate copying is not determinative, however, as it does not necessarily establish that the copying is intended to confuse customers and capitalize on recognition of the plaintiff's product.”); Deere & Co. v. MTD Holdings, Inc., No. 00-Civ. 5936 (LMM), 2004 U.S. Dist. LEXIS 2550, at *48-50 (S.D.N.Y. Feb. 18, 2004) (“The intent to compete by imitating the successful features of another's product is vastly different from the intent to deceive purchasers as to the source of the product. Only the latter form of imitation is bad-faith copying.”) (quoting Best Cellars, Inc. v. Wine Made Simple, Inc., No. 01 Civ 11780, 320 F. Supp. 2d 60, 2003 U.S. Dist. LEXIS 3958, at *42 (S.D.N.Y. March 11, 2003)); Minemyer v. B-Roc Representatives, Inc., 678 F. Supp. 2d 691, 705 (N.D. Ill. 2009) (“Copying is only evidence of secondary meaning if the defendant’s intent in copying is to confuse consumers and pass off his product as the plaintiff's”) (quoting Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 663 (7th Cir.1995)); 4 McCarthy on Trademarks and Unfair Competition §23:122 (5th Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 46 of 60 Page ID #:16942 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -33- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW ed.) (“[L]egitimate copying is a large part of what makes a free market economy work;” copying a market fad can be permissible; “Copying is not per se illegal”). “There is absolutely nothing legally or morally reprehensible about exact copying of things in the public domain.” Id. § 23:122; 15:38. “For example, evidence that a junior user exactly copied unprotected descriptive, generic or functional public domain words or shapes does not prove any legal or moral wrongs.” Id. Other courts have similarly held that evidence of copying the generic, unprotectable designs or features of a product provides little to no evidentiary weight in proving secondary meaning. See, e.g., OraLabs, Inc. v. The Kind Grp., Ltd. Liab. Co., No. 13-cv-00170-PAB-KLM, 2015 U.S. Dist. LEXIS 98246, at *19-20 (D. Colo. July 28, 2015) (“Intent to copy a product's design features is given minimal weight in the trade dress context. … The only evidence that [claimant] points to is evidence that [alleged infringer] intended to design a similar product. Trademark law does not protect against competition from imitative products, however.”) (internal citations omitted); Cont'l Lab. Prods. v. Medax Int'l, Inc., 114 F. Supp. 2d 992, 1010 (S.D. Cal. 2000) (“A competitor may copy a product design or feature to exploit public demand, and have no knowledge of a secondary meaning and no intention of deceiving consumers.”). Nor is copying any evidence of bad faith or willfulness. See e.g., Brockmeyer v. Hearst Corp., 248 F. Supp. 2d 281, 293, 299 (S.D.N.Y. 2003) (in an analysis of the Polaroid “good faith on the defendants’ part” factor, holding that copying was no evidence of bad faith where the defendant “reasonably concluded that there would be no confusion between their mark used as it would be used and the plaintiff's use of his mark”); G. Heileman Brewing Co. v. Anheuser-Busch Inc., 676 F. Supp. 1436, 1461 (E.D. Wis. 1987), aff'd, 873 F.2d 985 (7th Cir. 1989) (“Heileman and Miller did not copy the LA mark with the intent to deceive the public into falsely believing that their LA beers emanate from Anheuser–Busch. They adopted and used the LA mark to convey the purpose and unique, low alcohol characteristic of their beers.”); Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 47 of 60 Page ID #:16943 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -34- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW PrimeSource Bldg. Prods. v. Hillman Grp., Inc., No. 3:14-CV-2521-B, 2015 U.S. Dist. LEXIS 182056, at *40-42 (N.D. Tex. Mar. 31, 2015) (“even if [defendant] did design its FAS-N-RITE mark with the GRIP-RITE Marks in mind, intent to copy does not necessarily equal intent to deceive.”). 11. Whether Gucci America can show a likelihood of confusion based on Forever 21’s use of colored stripes on clothing and accessories There is no likelihood of confusion based on Forever 21’s use of blue-and-red and green-and-red stripe designs on clothing and accessories products. Consumers do not perceive basic, ordinary, decorative design elements on products, such as the stripes on clothing at issue here, as source-identifying and are therefore not likely to be confused by Forever 21’s use of stripes on clothes, particularly due to the numerous third parties making similar use of stripes on clothes. Survey evidence also proves there is no confusion or likelihood of confusion. Moreover, Gucci America’s own expert witnesses concede that confusion is unlikely due to the difference in quality between Forever 21 products and Gucci America products. 12. Whether Forever 21 is entitled to an inference of no likelihood of confusion based on Gucci America’s failure to provide a survey Forever 21 is entitled to an inference of no likelihood of confusion based on Gucci America’s failure to submit any survey evidence. “A trier of fact may be entitled to presume that one party’s failure to conduct a survey concedes that the survey evidence would be unfavorable to it.” Novadaq Techs. v. Karl Storz GMBH & Co. KG., No. 14-cv-04853- PSG, 2015 U.S. Dist. LEXIS 170423, at *11 (N.D. Cal. Dec. 18, 2015); James R. Glidewell Dental Ceramics v. Keating Dental Arts, Inc., No. SACV 11-1309-DOC(ANx), 2013 U.S. Dist. LEXIS 24824, at *25-26 (C.D. Cal. Feb. 21, 2013) (plaintiff’s lack of confusion survey “warrants a presumption that the results would have been unfavorable.”); Gallo v. Proximo Spirits, Inc., No. CV-F-10-411 LJO JLT, 2012 U.S. Dist. LEXIS 10669, at *50-52 (E.D. Cal. Jan. 27, 2012) (same); Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 48 of 60 Page ID #:16944 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -35- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Playboy Enters. v. Netscape Commc’ns Corp., 55 F. Supp. 2d 1070, 1084 (C.D. Cal. 1999) (same); see also Star Indus., Inc. v. Bacardi & Co., 412 F.3d 373, 388 (2d Cir. 2005); Braun, Inc. v. Dynamics Corp. of America, 975 F.2d 815, 828 (Fed. Cir. 1992); Charles Jacquin et Cie, Inc. v. Destileria Serralles, Inc., 921 F.2d 467, 475 (3d Cir. 1990); Cairns v. Franklin Mint Co., 24 F. Supp. 2d 1013, 1041-42 (C.D. Cal. 1998). Gucci’s “lack of survey evidence counts against finding actual confusion.” Or. Arms, Inc. v. Or. Arms, Ltd., Nos. 99-35768 & 99-35902, 2000 U.S. App. LEXIS 30215, at *10 (9th Cir. Nov. 27, 2000). 13. Whether the BRB or GRG stripe designs claimed by Gucci America are famous under the Lanham Act To be “famous” for purposes of dilution, a mark must be “widely recognized by the general consuming public of the United States” as a designation indicating a single source of goods or services to the point that it has become a “household name.” 15 U.S.C. § 1125(c)(2); Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002, 1012 (9th Cir. 2004); Thane Int’l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 907 (9th Cir. 2002); Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1373 (Fed. Cir. 2012) (“It is well-established that dilution fame is difficult to prove.”) Here, because Gucci has not even proven that BRB as used on clothing is distinctive, Gucci cannot prove that BRB on clothing is famous or diluted. Steak Umm Co., LLC v. Steak “Em Up, Inc., 2011 WL 3679155, *9 (E.D. Pa. 2011) (finding on summary judgment that “no reasonable jury could conclude” that the mark was famous); Nola Spice Designs, L.L.C. v. Haydel Enters., 783 F.3d 527, 546-47 (5th Cir. 2015) (summary judgment proper for lack of fame). Gucci’s dilutions claim fail because BRB and GRG on clothes are not even distinctive, let alone “famous,” Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1376 (Fed. Cir. 2012). 14. Whether Forever 21’s use of BRB or GRG stripe designs is likely to cause dilution under the Lanham Act “Dilution is ‘the lessening of the capacity of a famous mark to identify and Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 49 of 60 Page ID #:16945 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -36- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW distinguish goods or services, regardless of the presence or absence of—(1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception.’” Nissan Motor Co. v. Nissan Compt. Corp., 378 F.3d 1002, 1011 (9th Cir. 2004) (quoting 15 U.S.C. § 1127). A dilution plaintiff must show at least that it owns a famous mark that is distinctive and the defendant’s use is likely to cause dilution by blurring (i.e., diluting or blurring the mark’s distinctiveness) or dilution by tarnishment (disparaging or tarnishing the reputation of the mark holder). Id.; see also Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1372 (Fed. Cir. 2012) (citing 15 U.S.C. § 1125(c)(2)(C)); see also Nike, Inc. v. Nikepal Int’l, Inc., No. 2:05-cv-1468-GEB-JFM, 2007 U.S. Dist. LEXIS 16966, at *8-10, 13-14 (E.D. Cal. Feb. 27, 2007). Gucci’s dilution claims fail because BRB and GRG on clothes are not even distinctive, let alone “famous,” Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1376 (Fed. Cir. 2012), and because Gucci has presented no evidence of dilution whatsoever. In fact, evidence showing that Gucci America fails to consistently enforce its claimed rights in at least BRB against all third party use is proof of Gucci America’s own admission that third party use of BRB on clothing is not likely to lessen any alleged distinctiveness in BRB (which does not exist in the first place, as explained above). Because BRB and GRG on clothing are not distinctive, let alone famous, and because the evidence shows that there are a number of third parties other than Forever 21 also using BRB and GRG on clothing, Forever 21’s use of BRB and GRG on clothing is not likely to dilute BRB and GRG by blurring or by tarnishment. 15. Whether Gucci America has met its burden of proof to show Forever 21’s actions caused Gucci America any harm Gucci America does not have any evidence that Forever 21’s actions caused Gucci America any of the harm claimed. To recover monetary damages, a plaintiff must prove the fact and amount of damages. Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614, 620 (9th Cir. 1993); Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1407 (9th Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 50 of 60 Page ID #:16946 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -37- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Cir. 1993). “Because awards can only compensate actual injuries, they cannot be either speculative or punitive.” Taylor Made Golf Co. v. Carsten Sports, 175 F.R.D. 658, 662 (S.D. Cal. 1997). To be entitled to damages, a plaintiff must prove that the damages were the certain result of the wrong. Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 210 (9th Cir. 1989). A jury cannot infer trademark damages based solely on evidence of a decline in sales or willful misconduct; the law requires Gucci America to distinguish between damages caused by lawful and unlawful conduct. See Computer Access Tech. Corp. v Catalyst Enters., Inc., 273 F. Supp. 2d 1063, 1075 (N.D. Cal. 2003). Where a plaintiff seeks damages for injuries to the plaintiff’s business, including damages based on a loss of goodwill, “the burden is on the plaintiff to come forward with evidence establishing that defendant’s infringing conduct caused the injuries for which the plaintiff seeks compensation.” Cellularm, Inc. v. Bay Alarm Co., No. C-89-3409 DLJ, 1991 U.S. Dist. LEXIS 20106, at *15, 1991 WL 332052, at *5 (N.D. Cal. Apr. 11, 1991) (citing Harper House, 889 F.2d at 210) (emphasis added). “In a suit for damages ... actual evidence of some injury resulting from the deception is an essential element of plaintiff’s case.” Harper House, 889 F.2d at 210 (emphasis in original) (applying section 43(a) of the Lanham Act).[3] Gucci’s claimed injury and actual damages consists of alleged harm to goodwill and alleged lost sales due to the allegedly inferior quality of the Forever 21 products at issue. Gucci relies on expert testimony from Dr. Yoram (Jerry) Wind and William D’Arienzo, two marketing experts, for the proposition that Forever 21’s sales of products cause actual damages and harm. Gucci has limited its legal theory to alleged [3] Nor is Gucci entitled to recover damages under its claim for common law misappropriation. Cal. Civ. Code § 3333; see also 23 Cal. Jur. 3d Damages § 24 (2015). In addition, Gucci is not entitled to recover both damages and disgorgement of Forever 21’s profits because in doing so, Gucci is seeking an impermissible double recovery. See Nintendo of Am. v. Dragon Pac. Int’l, 40 F. 3d 1007, 1010 (9th Cir. 1994). Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 51 of 60 Page ID #:16947 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -38- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW post-sale confusion by Gucci customers who see the Forever 21 product worn by others in public. But Wind testified that Gucci customers who see the quality of the Forever 21 product in the post-sale context are not confused because they are very quality conscious and know that the quality of the Forever 21 product is inferior to the quality of the Gucci product. Based on their sophistication, they can tell the difference in quality and thus, the difference in source, with no confusion. (Forever 21’s Mot. Summ. J., Dkt. No. 184-1, p. 6 (citing Stmt. Undisp. Mat’l Facts, Dkt. No. 184-2, ¶¶ 67, 74 (Gucci’s expert, Dr. Wind, testifying that because Gucci consumers are “very quality conscious” and “have unbelievable ability” to identify quality, they “most likely will be able to tell the difference” between Forever 21’s products and Gucci’s products).) Gucci thereafter limited its claim to confusion by Gucci customers who see the quality of the Forever 21 product in the post-sale context but are not close enough to see the quality of the Forever 21 product. Gucci cannot be harmed in that scenario, however. As explained by the Ninth Circuit, a case that involves similar facts: adidas’s theory of harm is in tension with the theory of customer confusion that adidas has advanced to establish [liability]. adidas did not argue in the district court, and has not argued on appeal, that a Cross Court purchaser would mistakenly believe he had bought adidas shoes at the time of sale. Indeed, this argument would be implausible because the Cross Court contains numerous Skechers logos and identifying features. Instead, adidas argues only that after the sale, someone else looking at a Cross Court shoe from afar or in passing might not notice the Skechers logos and thus might mistake it for an adidas. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 52 of 60 Page ID #:16948 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -39- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW The tension between adidas’s consumer confusion and irreparable harm theories, then, boils down to this: How would consumers who confused Cross Courts for adidas shoes be able to surmise, from afar, that those shoes were low quality? If the “misled” consumers could not assess the quality of the shoe from afar, why would they think any differently about adidas’s products? How could adidas’s “premium” brand possibly be hurt by any confusion? Indeed, such a claim is counterintuitive. If a consumer viewed a shoe from such a distance that she could not notice its Skechers logos, it is unlikely she would be able to reasonably assess the quality of the shoes. And the consumer could not conflate adidas’s brand with Skechers’s supposedly “discount” reputation if she did not know the price of the shoe and was too far away to tell whether the shoe might be a Skechers to begin with. In short, even if Skechers does make inferior products (or even if consumers tend to think so), there is no evidence that adidas’s theory of post-sale confusion would cause consumers to associate such lesser-quality products with adidas. And, even if we agree with the district court that some consumers are likely to be confused as to the maker of the Cross Court shoe, we cannot simply assume that such confusion will cause adidas irreparable harm where, as here, adidas has failed to provide concrete evidence that it will. See Herb Reed, 736 F.3d at 1250-51. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 53 of 60 Page ID #:16949 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -40- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 760-61 (9th Cir. 2018) Because Gucci cannot show harm, actual damage or causation, all of its claims for injunctive relief, actual damages and disgorgement fail. 16. Whether Gucci America is statutorily barred from recovering any monetary damages due to Gucci America’s failure to provide notice of registration Gucci America is statutorily barred from recovering any monetary relief under the Lanham Act. Section 29 of the Lanham Act provides a statutory limitation on remedies available for trademark infringement. It states that “in any suit for infringement under this Act by such a registrant failing to give such notice of registration [e.g., the letter R enclosed within a circle, ®, the words “Registered in U. S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.”], no profits and no damages shall be recovered under the provisions of this Act unless the defendant had actual notice of the registration.” 15 U.S.C. § 1111. The undisputed evidence shows that Gucci America did not use the ® symbol or state that the BRB or GRG striped designs at issue are registered. Thus, no damages are awardable to Gucci for its Lanham Act claims because it failed to give notice as required under 15 U.S.C. § 1111. Coach, Inc. v. Asia Pac. Trading Co., 676 F. Supp. 2d 914, 925 (C.D. Cal. 2009) (plaintiffs were “not entitled to recover any damages—whether profits, actual damages, or statutory damages—on their Lanham Act claims” under § 1111 for lack of actual or constructive notice); mophie, Inc. v. Shah, No. SACV1301321DMGJEMX, 2014 WL 10988347, at *22 (C.D. Cal. Nov. 12, 2014) (citing § 1111 and Coach case).[1] [1] Gucci America is also barred from recovering statutory damages for alleged counterfeiting by Forever 21 for BRB on clothing under 15 U.S.C. § 1117(c) because Forever 21’s use of BRB on clothing did not arise to use of a counterfeit mark. Gucci does not have a registration for BRB covering clothing, as required for establishing a counterfeit mark under the Lanham Act. See 15 U.S.C. § 1116(d)(1)(B)(i) (“A counterfeit mark is one that is “a counterfeit of a mark that is Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 54 of 60 Page ID #:16950 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -41- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 17. Whether Gucci America is entitled to any monetary relief in light of the equities of the case and Forever 21’s lack of willfulness Section 35(a) of the Lanham Act provides for the award of a “(1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action,” “subject to the principles of equity.” 15 U.S.C. § 1117(a) (emphasis added). Monetary recovery is by no means routinely awarded in Lanham Act cases, even when a party claiming infringement prevails. 5 McCarthy on Trademarks and Unfair Competition §30:89 (5th ed.) (citing cases). The “subject to the principles of equity” language is “a control to carefully limit monetary recovery so that it is in proportion to the equities of the case … usually requir[ing] proof of some actual confusion or deception,” as well as “willful or intentional acts of infringement.” Id. (citing cases). All forms of monetary relief are denied where there has been no showing of willfulness, fraud or palming off. See Id. § 30:89 (citing Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (1947); Highway Cruises of Cal. Inc. v. Sec. Indus., Inc., 374 F.2d 875, 876 (9th Cir. 1967) (courts withhold a monetary award if, in view of the facts and equities of the case, it is not appropriate).2 “Willful trademark infringement occurs when the defendant’s actions are ‘willfully calculated to exploit the advantage of an established mark.’” D.C. Comics v. Towle, 802 F.3d 1012, 1026 (9th Cir. 2015). Willfulness requires a deliberate attempt to cause confusion or mistake or deceive purchasers, i.e., bad faith. See Lindy Pen, 982 F.2d at 1406. This includes “purposefully palm[ing] off the infringer’s registered on the principal register in the United States Patent and Trademark Office for such goods or services sold, offered for sale, or distributed.”) (emphasis added). 2 To disgorge profits, Gucci America must prove that infringement was committed willfully or fraudulently. Spin Master, Ltd. v. Zobmondo Entm’t, LLC, 944 F. Supp. 2d 830, 846 (C.D. Cal. 2012) (citing Adray v. Adry-Mart, Inc., 76 F.3d 984, 988 (9th Cir. 1996) and Lindy Pen, 982 F.2d at 1407 (9th Cir. 1993)). Bandag, Inc. v. Al Bolser Tire Stores, Inc., 750 F.2d 903, 919 (Fed. Cir. 1984) (affirming district court decision withholding monetary award where there was no showing of fraud). Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 55 of 60 Page ID #:16951 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -42- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW goods as those of the infringed.” Nalpac Ltd. v. Coming Glass Works, 784 F.2d 752, 755 (6th Cir. 1986). Gucci America has not shown any evidence of actual confusion, and the consumer confusion survey performed in this case shows there was none. Nor is there any evidence of willfulness. 18. Whether any money of any nature is awardable at all Gucci America is not entitled to any money of any nature because Gucci America has not met its burden of proof on its counterclaims and the equities of the case do not warrant any monetary relief to Gucci America. Gucci America is not entitled to any actual damages, because it has failed to establish that Forever 21’s use of colored stripe designs at issue caused any alleged harm to goodwill or was responsible for Forever 21’s sales of the accused products. Forever 21’s Motion In Limine Nos. 1 and 2 address the fatal flaws in Gucci’s expert’s methodology and testimony on actual damages. To the extent that Gucci America may be entitled to any monetary recovery, which Forever 21 denies, and with regard to Forever 21’s profits, only those profits attributable to the use of BRB and GRG can possibly be recovered if Gucci America proves liability (which it cannot for the reasons discussed above). Mishawaka Rubber & Woolen Mfg. Co. v. S. S. Kresge Co., 316 U.S. 203, 206-207 (1942); Ninth Cir. Model Civil Jury Instruction No. 15.29 (Trademark Damages— Defendant’s Profits). Remedies under California Business & Professions Code § 17200 are limited to injunctive relief and restitution. See Glow Indus., Inc. v. Lopez, 252 F.Supp.2d 962 (C.D. Cal. 2002); Tomlinson v. IndymacBank, F.S.B., 359 F. Supp. 2d 891, 894 (C.D. Cal. 2005). Money damages are not awardable under § 17200 et seq. Somers v. Apple, Inc., 729 F.3d 953, 962 (9th Cir. 2013). Restitution does not consist of a disgorgement of profits. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (2003). Restitution is limited to the return of specific, identifiable Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 56 of 60 Page ID #:16952 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -43- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW money or property in which the plaintiff had an identifiable interest. Nat’l Rural Telecommunications Cooperative, v. DIRECTV, Inc., 319 F. Supp. 2d 1059, 1079- 80 (C.D. Cal. 2003). Here there was none, and thus, no remedy may be awarded. Damages under the Lanham Act “shall constitute compensation and not a penalty.” 15 U.S.C. § 1117(a); see also Duncan v. Stuetzle, 76 F.3d 1480, 1490 (9th Cir. 1996); Binder v. Disability Grp., Inc., 772 F. Supp. 2d 1172, 1183 (C.D. Cal. 2011). Nor are punitive damages permitted under common law or California’s Unfair Competition Law, § 17200. Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 179 (1999); see also Kizer v. County of San Mateo, 53 Cal.3d 139, 147 (1991) (citing Cal. Civ. Code § 3294); Gagnon v. Cont'l Casualty Co., 211 Cal.App.3d 1598, 1602-03 & n.5 (Cal. App. 6th Dist. 1989). An award of attorneys’ fees is only appropriate in an “exceptional case.” 15 U.S.C. § 1117(a). A trademark case is exceptional only “when the infringement is malicious, fraudulent, deliberate or willful”; when there is a “deliberate intent to deceive.” See Lindy Pen Co., 982 F.2d at 1406-09. There is no such evidence. II. BIFURCATION OF ISSUES Forever 21 does not request any bifurcation of issues. III. JURY TRIAL There may be no right to a jury trial in this action. If Forever 21’s Daubert/Rule 702 challenge to Gucci America’s marketing experts, Wind and D’Arienzo, is successful, actual damages will no longer be at issue and there will be no basis for a jury trial since the only remaining remedies on Gucci’s counterclaim will be injunctive relief and disgorgement of Forever 21’s profits. Gucci America’s request for Forever 21’s profits is equitable in nature and should be determined by the judge, if it is not dismissed on summary judgment, rather than by the jury. A claim for disgorgement of profits is equitable relief. Fifty-Six Hope Rd. Music, Ltd. v. A.V.E.L.A., Inc., 778 F.3d 1059, 1075, (9th Cir. 2015) (“A claim for disgorgement of profits under § 1117(a) is equitable, not legal.”); Reebok Int’l v. Marnatech Enters., Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 57 of 60 Page ID #:16953 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -44- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW 970 F.2d 552, 559 (9th Cir. 1992) (“An accounting of profits under § 1117(a) is not synonymous with an award of monetary damages: ‘[a]n accounting for profits . . . is an equitable remedy subject to the principles of equity.’”) (citation omitted). The other equitable issues that remain for the judge are: whether Gucci America’s trademark registrations should be cancelled, whether Gucci America’s pending applications at issue should mature to registration, whether an injunction is warranted or should be denied (and whether an injunction is moot), whether the totality of facts of the case weighs in favor of denying Gucci America any monetary relief, if any monetary relief is to be awarded to Gucci America, whether the award should be increased or reduced, and whether this is an “exceptional case” for which the “prevailing party” is entitled to recover attorneys’ fees pursuant to the Lanham Act. IV. ATTORNEYS’ FEES Forever 21 reserves the right to seek to recover attorneys’ fees if it is held to be the “prevailing party” in this “exceptional case,” pursuant to the Lanham Act. 15 U.S.C. § 1117(a). The factual basis for Forever 21’s claim to recover attorneys’ fees includes: Gucci America’s attempt to monopolize a basic, ordinary, decorative design of stripes colored blue-and-red and green-and-red on clothing. V. ABANDONMENT OF ISSUES Forever 21 is not aware of any abandoned issues at this time. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 58 of 60 Page ID #:16954 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -45- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Dated: October 29, 2018 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By /s/ Laura L. Chapman SEONG KIM KENT RAYGOR LAURA L. CHAPMAN TONI QIU Attorneys for Plaintiff and Counter-Defendant FOREVER 21, INC. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 59 of 60 Page ID #:16955 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -46- Case No. 2:17−cv−04706 SJO (Ex) FOREVER 21’S MEMORANDUM OF CONTENTIONS OF FACT AND LAW CERTIFICATE OF SERVICE I hereby certify that I electronically filed the document(s) with the Clerk of the Court by using the CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the CM/ECF system. Participants in the case who are not registered CM/ECF users will be served by mail or by other means permitted by the court rules. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Dated: October 29, 2018 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By /s/ Laura L. Chapman LAURA L. CHAPMAN Attorneys for Plaintiff and Counter-Defendant FOREVER 21, INC. Case 2:17-cv-04706-SJO-E Document 219 Filed 10/29/18 Page 60 of 60 Page ID #:16956