Tuxton China, Inc. v. The Oneida Group Inc.

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.June 9, 2017

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 NOTICE OF MOTION AND MOTION TO DISMISS Mark C. Scarsi (SBN 183926) mscarsi@milbank.com Ashlee N. Lin (SBN 275267) anlin@milbank.com MILBANK, TWEED, HADLEY & McCLOY LLP 2029 Century Park East - 33rd Floor Los Angeles, CA 90067 Telephone: (424) 386-4000 Facsimile: (213) 629-5063 Attorneys for Defendant The Oneida Group Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA TUXTON CHINA, INC., Plaintiff, - against - THE ONEIDA GROUP INC., Defendant. Case No. 2:17-cv-02996-SVW-E DEFENDANT THE ONEIDA GROUP INC.’S NOTICE OF MOTION AND MOTION TO DISMISS Date: September 11, 2017 Time: 1:30 p.m. Courtroom: 10A - First Street Courthouse The Honorable Stephen V. Wilson TO PLAINTIFF AND ITS COUNSEL OF RECORD: PLEASE TAKE NOTICE that on September 11, 2017, at 1:30 p.m., or as soon thereafter as may be heard, in Courtroom 10A of the United States District Court for the Central District of California, Western Division, located at 350 W. 1st Street in Los Angeles, California, the Honorable Stephen V. Wilson presiding, Defendant The Oneida Group Inc. (“Oneida”) will and hereby does move this Court for an order dismissing the Complaint of Plaintiff Tuxton China, Inc. (“Tuxton”) pursuant to Federal Rule of Civil Procedure 12(b), 28 U.S.C. § 2201, and this Court’s inherent discretionary and equitable powers on the following grounds: Case 2:17-cv-02996-SVW-E Document 12 Filed 06/09/17 Page 1 of 4 Page ID #:39 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 NOTICE OF MOTION AND MOTION TO DISMISS - 2 -  A currently pending lawsuit in the Eastern District of New York, The Oneida Group Inc. v. Steelite International U.S.A. Inc. et al., No. 2:17-cv- 00957-ADS-AKT, substantially overlaps with the specific issues implicated in Tuxton’s Complaint. Because the New York litigation is the first-filed action, Oneida requests that this Court dismiss this action so that Tuxton may be joined in the ongoing New York litigation.  This action is an anticipatory suit filed by Plaintiff in bad faith in response to Oneida’s specific and “credible threat of immediate litigation” for the improper purpose of forum shopping and seizing from Oneida its ability as the aggrieved party to decide where to bring suit for Plaintiff’s infringement of Oneida’s trade dress. Oneida requests that this Court exercise its discretionary and equitable powers to decline jurisdiction and dismiss this action.  In addition to being an anticipatory suit, this action is also an improper use of the Declaratory Judgment Act because it is a tactical maneuver seeking only the adjudication of Tuxton’s anticipated defenses to Oneida’s imminent trade dress infringement claims without the necessary legal uncertainty from which declaratory relief may be granted. Accordingly, Oneida requests that this Court dismiss this improper declaratory judgment action. This Motion will be based upon this Notice, the accompanying Memorandum of Points and Authorities, the supporting declaration and attached exhibits filed concurrently herewith, all pleadings and exhibits on file in this action, argument of counsel at the hearing, and such further matters as this Court may consider. Prior to filing this Motion, pursuant to L.R. 7-3 counsel met and conferred by email and telephone on June 8, 2017. Case 2:17-cv-02996-SVW-E Document 12 Filed 06/09/17 Page 2 of 4 Page ID #:40 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 NOTICE OF MOTION AND MOTION TO DISMISS - 3 - Dated: June 9, 2017 Respectfully submitted, MILBANK, TWEED, HADLEY & MCCLOY LLP By: /s/ Mark C. Scarsi Mark C. Scarsi Ashlee N. Lin 2029 Century Park East - 33rd Floor Los Angeles, CA 90067 Telephone: (424) 386-4000 Facsimile: (213) 629-5063 Attorneys for Defendant The Oneida Group Inc. Case 2:17-cv-02996-SVW-E Document 12 Filed 06/09/17 Page 3 of 4 Page ID #:41 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 NOTICE OF MOTION AND MOTION TO DISMISS - 4 - CERTIFICATE OF SERVICE I hereby certify that the foregoing document was filed electronically on this 9th day of June, 2017, with the Clerk by using the CM/ECF system, which will send notification of such filing to all attorneys of record. /s/ Ashlee N. Lin Ashlee N. Lin Case 2:17-cv-02996-SVW-E Document 12 Filed 06/09/17 Page 4 of 4 Page ID #:42 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 MEMORANDUM OF POINTS AND AUTHORITIES Mark C. Scarsi (SBN 183926) mscarsi@milbank.com Ashlee N. Lin (SBN 275267) anlin@milbank.com MILBANK, TWEED, HADLEY & McCLOY LLP 2029 Century Park East - 33rd Floor Los Angeles, CA 90067 Telephone: (424) 386-4000 Facsimile: (213) 629-5063 Attorneys for Defendant The Oneida Group Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA TUXTON CHINA, INC., Plaintiff, - against - THE ONEIDA GROUP INC., Defendant. Case No. 2:17-cv-02996-SVW-E MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT THE ONEIDA GROUP INC.’S MOTION TO DISMISS Date: Monday, September 11, 2017 Time: 1:30 p.m. Courtroom: 10A - First Street Courthouse The Honorable Stephen V. Wilson Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 1 of 16 Page ID #:43 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 MEMORANDUM OF POINTS AND AUTHORITIES - i - TABLE OF CONTENTS Page I. INTRODUCTION ........................................................................................... 1 II. FACTUAL BACKGROUND ......................................................................... 1 III. ARGUMENT .................................................................................................. 3 A. Tuxton’s Complaint Should Be Dismissed in Favor of Oneida’s First-Filed Lawsuit in the Eastern District of New York....................................................................................................... 4 B. Tuxton’s Complaint Is Not an Actionable Declaratory Judgment Request ................................................................................. 6 1. Tuxton’s Complaint Merely Seeks to Adjudicate the Validity of the Defenses It Intends to Raise in Oneida’s Imminent Infringement Lawsuit ..................................... 7 2. Tuxton’s Lawsuit Should Be Dismissed Because It Was Filed in Anticipation of Oneida’s Specific, “Credible Threat of Immediate Litigation” ..................................... 8 IV. CONCLUSION ............................................................................................. 11 Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 2 of 16 Page ID #:44 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 MEMORANDUM OF POINTS AND AUTHORITIES - ii - TABLE OF AUTHORITIES Page(s) Cases Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622 (9th Cir. 1991) ............................................................................... 3 Cartier, Inc. v. Sardell Jewelry, Inc., 294 F. App’x 615 (2d Cir. 2008) ......................................................................... 5 Dumas v. Major League Baseball Props., Inc., 52 F. Supp. 2d 1183 (S.D. Cal. 1999), vacated on other grounds by Rodriguez v. Topps Co., 104 F. Supp. 2d 1224 (S.D. Cal. 2000), aff’d. Chaset v. Fleer/Skybox Int'l, LP, 300 F.3d 1083 (9th Cir. 2002) ......................................................................................................... 4, 5 First Fishery Dev. Serv., Inc. v. Lane Labs USA, Inc., No. CIV. 97-1069-R, 1997 WL 579165 (S.D. Cal. July 21, 1997) ........... passim Green Planet Inc. v. Int'l IP Holdings LLC, No. CV 13-01565 BRO, 2013 WL 12146119 (C.D. Cal. Nov. 25, 2013) .................................................................................................................... 7 Gribin v. Hammer Galleries, a Div. of Hammer Holding, Inc., 793 F. Supp. 233 (C.D. Cal. 1992) ........................................................ 6, 7, 9, 10 Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180 (1952) .................................................................................. 3, 7, 10 Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2001) ............................................................................... 2 Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93 (9th Cir. 1982) ......................................................................... 4, 6, 7 Peak v. Green Tree Fin. Servicing Corp., No. C 00-0953 SC, 2000 WL 973685 (N.D. Cal. July 7, 2000) ..................... 4, 6 Thomas Props. Grp., Inc. v. Strategic Advisory Inc., a Virginia corporation, No. CV 12-05331 MMM (Ex), 2012 WL 12952056 (C.D. Cal. Oct. 19, 2012) ................................................................................. 7, 9 Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 3 of 16 Page ID #:45 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 MEMORANDUM OF POINTS AND AUTHORITIES - iii - Xoxide, Inc. v. Ford Motor Co., 448 F. Supp. 2d 1188 (C.D. Cal. 2006) ...................................................... passim Z-Line Designs, Inc. v. Bell’O Int’l, LLC, 218 F.R.D. 663 (N.D. Cal. 2003) ............................................................... passim Statutes 28 U.S.C. § 2201 ....................................................................................................... 1 Other Authorities Federal Rule of Civil Procedure 12(b) ..................................................................... 1 Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 4 of 16 Page ID #:46 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 MEMORANDUM OF POINTS AND AUTHORITIES - 1 - Pursuant to Federal Rule of Civil Procedure 12(b), 28 U.S.C. § 2201, and this Court’s inherent discretionary and equitable powers, Defendant The Oneida Group Inc. (“Oneida”) respectfully asks the Court to dismiss this declaratory judgment action filed by Plaintiff Tuxton China, Inc. (“Tuxton”) in favor of a first- filed case in New York. I. INTRODUCTION A case in the Eastern District of New York, filed February 21, 2017, concerns both issues raised here: (i) trade dress rights in Oneida’s BOTTICELLI® dinnerware, and (ii) how similar Tuxton’s PACIFICA dinnerware is to that trade dress. Allowing the present case to proceed would impede judicial efficiency and present a significant risk of conflicting results. Accordingly, the Court should apply the “first-to-file” rule and dismiss this lawsuit in favor of the New York case. Furthermore, Tuxton’s Complaint is a bad faith anticipatory lawsuit and an attempt to engage in forum shopping that warrants dismissal. Tuxton asked Oneida for the courtesy of more time to respond to Oneida’s cease-and-desist letter and then, rather than respond, filed this action. The Court should reject Tuxton’s improper use of the Declaratory Judgment Act and dismiss this action so Oneida can join Tuxton in the New York litigation. II. FACTUAL BACKGROUND BOTTICELLI® is the name of Oneida’s premier line of foodservice dinnerware products. It is one of the most well-known and successful dinnerware lines in the entire foodservice industry. Oneida introduced this design in 2001 and has been continuously selling it ever since. By selling, advertising, marketing, and promoting the BOTTICELLI® design for nearly two decades - at enormous expense - Oneida has acquired trade dress rights in the design of Oneida’s BOTTICELLI® dinnerware. Recognizing the value of Oneida’s trade dress, others, including Tuxton, have begun selling products that infringe Oneida’s longstanding BOTTICELLI® Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 5 of 16 Page ID #:47 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 MEMORANDUM OF POINTS AND AUTHORITIES - 2 - trade dress. In turn, Oneida has begun to enforce its trade dress rights. Oneida’s suit in the Eastern District of New York against Steelite International U.S.A. Inc. is one example. The Oneida Group Inc. v. Steelite International U.S.A. Inc. et al., No. 2:17-cv-00957-ADS-AKT (E.D.N.Y.).1 The New York litigation has progressed into discovery after a five-day preliminary-injunction hearing on April 10-14, 2017. As another example, Tuxton sells a dinnerware product called PACIFICA that features design elements like Oneida’s BOTTICELLI® trade dress.2 On April 7, 2017, Oneida sent Tuxton a cease-and-desist letter. (Lin Decl. ¶ 3, Ex. 2.) This letter (i) informed Tuxton of Oneida’s intellectual property rights, (ii) stated that Tuxton’s activities were infringing those rights, and (iii) expressed Oneida’s intent to enforce its rights if Tuxton continued to infringe. Oneida informed Tuxton that if it did not assure Oneida of its willingness to stop infringing by April 17, 2017, Oneida would take formal action. (Id.) On April 17, Tuxton sent an email to Oneida requesting more time to respond to Oneida’s letter. Specifically, Tuxton stated that it would “not be able to respond to [Oneida’s] letter by the date set forth therein (April 17, 2017),” requested additional time while it “endeavor[ed] to thoroughly investigate the issues,” and agreed to provide Oneida with a “substantive response” to its letter by April 28. (Id. ¶ 4, Ex. 3.) Oneida complied. Then, without warning, on April 20, Tuxton secretly raced to the courthouse and filed the instant declaratory judgment action. (ECF No. 1.) Rather than cease its infringement or substantively respond to Oneida’s letter as it represented it would, Tuxton filed this action to avoid being joined in the New York litigation. 1 This Court may take judicial notice of parallel proceedings in a U.S. district court. Lee v. City of Los Angeles, 250 F.3d 668, 689-90 (9th Cir. 2001) (“A court may take judicial notice of ‘matters of public record’ without converting a motion to dismiss into a motion for summary judgment.”). 2 Even Steelite, Oneida’s litigation opponent in New York, argues that Tuxton’s PACIFICA is like Oneida’s BOTTICELLI® trade dress. (Declaration of Ashlee N. Lin in Support of Defendant The Oneida Group Inc.’s Motion to Dismiss (“Lin Decl.”) ¶ 2, Ex. 1 at 11-12.) Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 6 of 16 Page ID #:48 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 MEMORANDUM OF POINTS AND AUTHORITIES - 3 - Oneida has only a limited connection to California. Oneida is incorporated in Delaware and has a principal place of business in Lancaster, Ohio. Oneida Ltd. is a wholly owned subsidiary of Oneida and has a principal place of business in Oneida, New York. Oneida’s primary dinnerware showroom is in New York, New York. Although Tuxton alleges that Oneida “is continuously present in the State of California” for the purposes of jurisdiction, the core of Oneida’s dinnerware design and business operations relevant to the issues implicated in this action and the individuals involved in those activities are located in Ohio and New York, not in California. Tuxton is subject to jurisdiction in the Eastern District of New York, and hence venue is proper there, because Tuxton specifically targets that forum for the sale of its products. III. ARGUMENT This Court may decline jurisdiction over an issue that is properly before another district court under principles of federal comity. Kerotest Mfg. Co. v. C-O- Two Fire Equip. Co., 342 U.S. 180, 185-86 (1952). Comity promotes judicial efficiency by avoiding any unnecessary burden on the federal judiciary. Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir. 1991). This Court also “has substantial discretion in deciding whether to entertain a declaratory judgment action, even if the action properly falls within the court’s jurisdiction.” First Fishery Dev. Serv., Inc. v. Lane Labs USA, Inc., No. CIV. 97-1069-R, 1997 WL 579165, at *2 (S.D. Cal. July 21, 1997). Where a declaratory judgment plaintiff files a declaratory judgment action in “apparent anticipation of another pending proceeding” and to “deprive the [natural] plaintiff of his traditional choice of forum and timing” a court may decline to exercise jurisdiction over the declaratory judgment action. Id.; see also Xoxide, Inc. v. Ford Motor Co., 448 F. Supp. 2d 1188, 1193 (C.D. Cal. 2006); Z-Line Designs, Inc. v. Bell’O Int’l, LLC, 218 F.R.D. 663, 667 (N.D. Cal. 2003). Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 7 of 16 Page ID #:49 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 MEMORANDUM OF POINTS AND AUTHORITIES - 4 - A. Tuxton’s Complaint Should Be Dismissed in Favor of Oneida’s First-Filed Lawsuit in the Eastern District of New York A district court may dismiss an action where a similar complaint has been filed in another district court. Peak v. Green Tree Fin. Servicing Corp., No. C 00- 0953 SC, 2000 WL 973685, at *2 (N.D. Cal. July 7, 2000). Courts consider three factors when deciding whether to apply the “first-to-file” rule: the chronology of the two actions, the similarity of the issues, and the similarity of the parties. Id. The rule is not applied mechanically, “but rather it is to be applied with a view to the dictates of sound judicial administration.” Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). For this reason, the “first-to-file” rule does not require that parties and issues be identical so long as they are “similar” such that there is “substantial overlap.” Dumas v. Major League Baseball Props., Inc., 52 F. Supp. 2d 1183, 1188-89 (S.D. Cal. 1999), vacated on other grounds by Rodriguez v. Topps Co., 104 F. Supp. 2d 1224 (S.D. Cal. 2000), aff’d. Chaset v. Fleer/Skybox Int'l, LP, 300 F.3d 1083 (9th Cir. 2002) (collecting cases); Peak, 2000 WL 973685, at *2. This flexible approach promotes judicial efficiency by avoiding unnecessary burden on the judiciary and by avoiding duplicative or conflicting judgments. Peak, 2000 WL 973685, at *2. Because Oneida filed the New York case months before Tuxton filed the instant action, and the two cases concern substantially similar issues and parties, the first-to-file rule requires dismissal. The New York Court has already familiarized itself with the BOTTICELLI® trade dress. By the time Tuxton filed its Complaint, the Eastern District of New York had already issued a temporary restraining order based on Oneida’s BOTTICELLI® trade dress. (Lin Decl. ¶ 5, Ex. 4 at 1-2; ¶ 6, Ex. 5 at 17.) With knowledge of these developments, Tuxton tried to avoid the Eastern District of New York (and Oneida’s litigation successes there) by filing a declaratory judgment action in California. Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 8 of 16 Page ID #:50 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 MEMORANDUM OF POINTS AND AUTHORITIES - 5 - The issues being litigated in the New York case are virtually identical to those Tuxton raises here: (1) whether Oneida has enforceable trade dress rights in the BOTTICELLI® dinnerware, and (2) whether certain Tuxton dinnerware items are confusingly similar to the BOTTICELLI® trade dress. (Compare ECF No. 1 at 5-6, with Lin Decl. ¶ 7, Ex. 6 at 27-28). The first issue, trade dress protection of Oneida’s BOTTICELLI® dinnerware, is exactly identical between the two litigations. Establishing trade dress protection of the BOTTICELLI® dinnerware in this action would require a parallel analysis of the same evidence that Oneida is putting forward in New York. Cf. Cartier, Inc. v. Sardell Jewelry, Inc., 294 F. App’x 615, 618 (2d Cir. 2008) (listing the six factors for determining whether secondary meaning has attached to trade dress: (1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to plagiarize the mark, and (6) length and exclusivity of the mark’s use). Regarding the second issue of whether Tuxton’s PACIFICA dinnerware is similar to the BOTTICELLI® trade dress, that question also is currently being litigated in New York because Steelite argues, as part of its defense, that Tuxton’s PACIFICA design is similar to the claimed BOTTICELLI® trade dress. (Lin Decl. ¶ 2, Ex. 1 at 11-12.) The parties are sufficiently similar in the two actions. The intellectual property owner in both actions is the same: Oneida. The accused infringers are both foodservice dinnerware suppliers (Steelite in New York, Tuxton here) accused of selling dinnerware similar in appearance to Oneida’s BOTTICELLI® trade dress. Although Tuxton is not yet a party in the New York litigation, due to Tuxton’s preemptive suit, Steelite and Tuxton are similarly situated in their relationship to Oneida and its trade dress infringement claims, and are thus sufficiently similar parties for the purposes of satisfying the first-to-file rule’s requirement. See Dumas, 52 F. Supp. 2d at 1188-89 (holding that substantial Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 9 of 16 Page ID #:51 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 MEMORANDUM OF POINTS AND AUTHORITIES - 6 - similarity of parties, not strict identity, is the relevant consideration in the first-to- file rule analysis); Peak, 2000 WL 973685, at *2 (finding that similarity of the parties is satisfied where proposed classes in two separate class actions are identically defined, despite involving different individual parties). Oneida should not be penalized by Tuxton’s improper gamesmanship and be forced (i) to simultaneously litigate duplicative lawsuits in parallel and (2) to do so on opposite sides of the country. Because the parties and issues in the two litigations are so similar, declining jurisdiction and dismissing this case will also conserve judicial resources by avoiding conflicting and duplicative judgments. See Peak, 2000 WL 973685, at *2-3 (applying first-to-file rule in dismissing case where allowing case “to proceed would both impede judicial efficiency and run a significant risk of conflicting judgments”); Pacesetter, 678 F.2d at 96-97 (declining jurisdiction over a declaratory judgment action in favor of a similar first-filed infringement action because “economic use of both courts’ resources resulted from the California court’s refusal to consider [plaintiff’s] claims”). B. Tuxton’s Complaint Is Not an Actionable Declaratory Judgment Request Even if the New York litigation is not considered the first-filed action, Tuxton’s Complaint should still be dismissed for at least two reasons: (1) the action it seeks is not one contemplated by the Declaratory Judgment Act and (2) it is an anticipatory suit and an improper attempt at forum shopping. “The declaratory remedy is not a tactical device whereby a party who would be a defendant in a coercive action may choose to be plaintiff if he can beat the other party to the courthouse.” Gribin v. Hammer Galleries, a Div. of Hammer Holding, Inc., 793 F. Supp. 233, 236 (C.D. Cal. 1992) (emphasis in original). The Declaratory Judgment Act is intended to provide relief to a party suffering from a cloud of uncertainty and insecurity “engendered by a party who continually threatened litigation, but delayed in bringing suit”; it does not enable a would-be Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 10 of 16 Page ID #:52 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 MEMORANDUM OF POINTS AND AUTHORITIES - 7 - defendant to “file a declaratory relief action merely to assert what it ordinarily would raise as defenses in another pending action.” First Fishery, 1997 WL 579165, at *2-3; see also Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 97 (9th Cir. 1982) (holding that declaratory relief serves a unique function in intellectual property disputes “of protecting competitors from infringement actions that are threatened but not pursued”); Gribin, 793 F. Supp. at 236 (“[T]he anticipation of defenses is not a proper use of the declaratory judgment procedure.”). Tuxton’s Complaint Merely Seeks to Adjudicate the Validity of the Defenses It Intends to Raise in Oneida’s Imminent Infringement Lawsuit Tuxton’s declaratory judgment action does not deserve deference because its claims for relief are simply the defenses it expects to raise in response to Oneida’s infringement claims. “[T]he anticipation of defenses is not a proper use of the declaratory judgment procedure.” Gribin, 793 F. Supp. at 236. In other words, a party expecting to be sued may not file a declaratory relief to obtain “an anticipatory adjudication, at the time and place of its choice, of the validity of the defenses it expects to raise….” Id. (emphasis in original); First Fishery, 1997 WL 579165 at *2 (holding that “a party may not file a declaratory relief action merely to assert what it ordinarily would raise as defenses”); Thomas Props. Grp., Inc. v. Strategic Advisory Inc., a Virginia corp., No. CV 12-05331 MMM (Ex), 2012 WL 12952056, at *7 (C.D. Cal. Oct. 19, 2012) (dismissing declaratory judgment action asserting an anticipatory defense filed in response to threat of litigation). Especially in cases where “the declaratory judgment action is filed in anticipation of an infringement action, the infringement action should proceed, even when filed later.” Xoxide, Inc. v. Ford Motor Co., 448 F. Supp. 2d 1188, 1193 (C.D. Cal. 2006); Kerotest, 342 U.S. at 185 (noting that an alleged infringer cannot use the Declaratory Judgment Act to give it “a paramount right to choose the forum for trying out questions of infringement and validity”); Green Planet Inc. v. Int'l IP Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 11 of 16 Page ID #:53 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 MEMORANDUM OF POINTS AND AUTHORITIES - 8 - Holdings LLC, No. CV 13-01565 BRO (DTBx), 2013 WL 12146119, at *2 (C.D. Cal. Nov. 25, 2013) (dismissing declaratory judgment lawsuit asserting defenses to trademark infringement allegations raised in cease-and-desist letter). Oneida’s April 7 cease-and-desist letter informed Tuxton that Oneida intended to assert trade dress infringement claims against Tuxton. (Lin Decl. ¶ 3, Ex. 2.) Specifically, Oneida told Tuxton that (1) Oneida has enforceable trade dress rights in the BOTTICELLI® dinnerware sold since 2001 and (2) Tuxton’s PACIFICA dinnerware products infringe those trade dress rights. (Id.) In anticipation of these claims, Tuxton’s Complaint seeks as its only two claims for relief the Court’s preemptive adjudication of its defenses to Oneida’s trade dress infringement claims: First Claim for Relief seeks a declaration that Oneida’s alleged trade dress rights in BOTTICELLI® are not enforceable and Second Claim for Relief seeks a declaration that Tuxton does not infringe any enforceable trade dress rights Oneida may have in BOTTICELLI®. (ECF No. 1 at 5-6.) Therefore, Tuxton’s declaratory judgment action is merely “a preemptive maneuver in anticipation of [its] defense and in order to seize a California forum” and should accordingly be dismissed so that Oneida may proceed with its infringement action against it. Xoxide, 448 F. Supp. 2d at 1193. Tuxton’s Lawsuit Should Be Dismissed Because It Was Filed in Anticipation of Oneida’s Specific, “Credible Threat of Immediate Litigation” A district court may exercise its discretion to decline jurisdiction over a declaratory judgment action when its filing “evidences bad faith, anticipatory suit, or forum shopping.” Xoxide, 448 F. Supp. 2d at 1192; see also First Fishery, 1997 WL 579165, at *2 (noting that district courts will “declin[e] to hear an action for declaratory relief that was filed in anticipation of another federal suit”). District courts commonly dismiss declaratory judgment actions filed in an immediate response to cease-and-desist letters from an aggrieved party. See First Fishery, 1997 WL 579165, at *3-4; Xoxide, 448 F. Supp. 2d at 1193-94; Z-Line, 218 Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 12 of 16 Page ID #:54 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 MEMORANDUM OF POINTS AND AUTHORITIES - 9 - F.R.D. at 667. Even where the anticipated lawsuit has not yet been filed, the district court may still dismiss a declaratory judgment action improperly filed in anticipation of its filing. See Gribin, 793 F. Supp. at 235, 237 (dismissing first- filed declaratory judgment action as anticipatory even though natural plaintiff had not yet filed). All three reasons for dismissing Tuxton’s declaratory judgment action-bad faith, anticipatory suit, and forum shopping-are present here. First, Tuxton improperly and in bad faith filed this action as part of a scheme to deliberately mislead Oneida before Oneida filed. See Thomas Props., 2012 WL 12952056, at *7 (“Bad faith is evident when the plaintiff in the first action induces the other party to, in good faith, rely on representations made by the plaintiff that it will not file first in order to preempt the other party from filing a suit in its preferred forum”) (citing Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Payless Shoesource, Inc., No. C-11-1892 EMC, 2012 WL 3277222, at *7 (N.D. Cal. Aug. 9, 2012); Xoxide, 448 F. Supp. 2d at 1193-94 (dismissing declaratory judgment action where declaratory plaintiff secretly filed complaint shortly after misleading defendant into believing it would continue settlement discussions); Z- Line, 218 F.R.D. at 667 (dismissing declaratory judgment action where declaratory plaintiff filed complaint after misleading defendant about its intention to explore settlement). Oneida sent Tuxton a letter on April 7 demanding that Tuxton cease and desist its infringing activities and communicating Oneida’s intention to move forward with more formal trade dress infringement action on April 17. (Lin Decl. ¶ 3, Ex. 2.) On the April 17 deadline, Tuxton sent an email to Oneida requesting a nearly two-week extension to April 28 so that it could more fully investigate the issues raised in Oneida’s letter and provide a substantive response. (Id. ¶ 4, Ex. 3.) But on April 20, more than a week before the April 28 response date Tuxton requested, Tuxton turned around and secretly filed the instant Complaint without warning and without responding to Oneida’s letter. Indeed, Tuxton made no contact with Oneida between its April 17 email and its April 20 filing. Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 13 of 16 Page ID #:55 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 MEMORANDUM OF POINTS AND AUTHORITIES - 10 - Tuxton’s request for an extension was clearly a misleading communication designed in bad faith to feign interest in resolving matters out of court so that it could file its lawsuit before Oneida. This bad-faith behavior by itself weighs in favor of dismissal, and it also evidences anticipatory suit and forum shopping. Xoxide, 448 F. Supp. 2d at 1193-94; Z-Line, 218 F.R.D. at 667. Second, the timing and circumstances of Tuxton’s filing plainly demonstrates that it was anticipatory because it was in response to the threat of imminent litigation in Oneida’s cease-and-desist letter. Anticipatory suits are found when the plaintiff “filed suit on receipt of specific, concrete indications that a suit by the defendant was imminent, and are viewed with disfavor as examples of forum shopping and gamesmanship.” Xoxide, 448 F. Supp. 2d at 1192-93. Tuxton admits precisely this; it states that its Complaint was triggered by Oneida’s specific, “credible threat of immediate litigation.” (ECF No. 1 at 5.) In contrast to the typical declaratory judgment action, which seeks relief from an aggrieved party who continually threatens suit but fails to do so, Tuxton thus admits that its lawsuit is anticipatory. See Kerotest, 342 U.S. at 185 (holding that an accused infringer “cannot stretch the Federal Declaratory Judgments Act to give him a paramount right to choose the forum for trying out questions of infringement and validity”); Xoxide, 448 F. Supp. 2d at 1192-93 (“where … the declaratory judgment action is filed in anticipation of an infringement action, the infringement action should proceed”); Z-Line, 218 F.R.D. at 667 (finding that plaintiff’s declaratory judgment action was an anticipatory suit where it “filed its action because of the threat of imminent suit”). Third, preemptive forum shopping tactics, “used to deprive the plaintiff of his traditional choice of forum and timing,” are disfavored. First Fishery, 1997 WL 579165, at *2; Z-Line, 218 F.R.D. at 667; Xoxide, 448 F. Supp. 2d at 1194; Gribin, 793 F. Supp. at 237. As in First Fishery, where the declaratory judgment plaintiff filed suit a matter of days after receiving defendant’s cease-and-desist Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 14 of 16 Page ID #:56 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 MEMORANDUM OF POINTS AND AUTHORITIES - 11 - letter, Tuxton’s use of similar tactics here “indicates that, far from seeking to resolve uncertainty and settle legal relations,” it filed the declaratory judgment action simply “as a preemptive maneuver in anticipation of its defense and in order to seize a California forum.” First Fishery, 1997 WL 579165, at *1, 4. Furthermore, the fact that Tuxton made a misleading communication to stall Oneida’s own legal action to create an opportunity for Tuxton to file its Complaint in California is strong evidence that Tuxton engaged in improper forum shopping. See Xoxide, 448 F. Supp. 2d at 1193-94 (finding that a plaintiff who secretly filed a declaratory judgment action days after falsely representing that it needed more time to consider settlement committed anticipatory forum shopping); Z-Line, 218 F.R.D at 666-67 (finding that a plaintiff’s declaratory judgment action was an anticipatory suit where plaintiff filed complaint shortly after making a misleading communication requesting extension of a cease-and-desist deadline to explore settlement). IV. CONCLUSION Oneida respectfully requests that this Court dismiss Tuxton’s improper declaratory judgment action. Dated: June 9, 2017 Respectfully submitted, MILBANK, TWEED, HADLEY & MCCLOY LLP By: /s/ Mark C. Scarsi Mark C. Scarsi Ashlee N. Lin 2029 Century Park East - 33rd Floor Los Angeles, CA 90067 Telephone: (424) 386-4000 Facsimile: (213) 629-5063 Attorneys for Defendant The Oneida Group Inc. Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 15 of 16 Page ID #:57 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 MEMORANDUM OF POINTS AND AUTHORITIES - 12 - CERTIFICATE OF SERVICE I hereby certify that the foregoing document was filed electronically on this 9th day of June, 2017, with the Clerk by using the CM/ECF system, which will send notification of such filing to all attorneys of record. /s/ Ashlee N. Lin Ashlee N. Lin Case 2:17-cv-02996-SVW-E Document 12-1 Filed 06/09/17 Page 16 of 16 Page ID #:58 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 DECLARATION OF ASHLEE N. LIN Mark C. Scarsi (SBN 183926) mscarsi@milbank.com Ashlee N. Lin (SBN 275267) anlin@milbank.com MILBANK, TWEED, HADLEY & McCLOY LLP 2029 Century Park East - 33rd Floor Los Angeles, CA 90067 Telephone: (424) 386-4000 Facsimile: (213) 629-5063 Attorneys for Defendant The Oneida Group Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA TUXTON CHINA, INC., Plaintiff, - against - THE ONEIDA GROUP INC., Defendant. Case No. 2:17-cv-02996-SVW-E DECLARATION OF ASHLEE N. LIN IN SUPPORT OF DEFENDANT THE ONEIDA GROUP INC.’S MOTION TO DISMISS Date: September 11, 2017 Time: 1:30 p.m. Courtroom: 10A - First Street Courthouse The Honorable Stephen V. Wilson DECLARATION OF ASHLEE N. LIN 1. I am an associate with the law firm of Milbank, Tweed, Hadley & McCloy LLP, counsel for Defendant The Oneida Group Inc. (“Oneida”) in this matter. I am admitted to practice before this Court. I submit this declaration in support of Oneida’s Motion to Dismiss. I have personal knowledge of the facts set forth in this declaration and, if called upon as a witness, I could and would testify as follows. 2. Attached hereto as Exhibit 1 is a true and correct copy of Steelite International U.S.A. Inc.’s Post-Hearing Memorandum of Law, The Oneida Group Case 2:17-cv-02996-SVW-E Document 12-2 Filed 06/09/17 Page 1 of 3 Page ID #:59 Inc. v. Steelite International US.A. Inc. et al., No. 2:17-cv-00957-ADS-AKT 2 (E.D.N.Y. Apr. 28, 2017). 3 3. Attached hereto as Exhibit 2 is a true and correct copy of a cease-and- 4 desist letter Oneida sent to Tuxton on April 7, 2017, which was attached as Exhibit 5 A to Tuxton' s Complaint. 6 4. Attached hereto as Exhibit 3 is a true and correct copy of an April 17, 7 2017 email from counsel for Tuxton to associate general counsel for Oneida. 8 5. Attached hereto as Exhibit 4 is a true and correct copy of the 9 February 28, 2017 Report and Recommendation issued by Magistrate Judge 10 Tomlinson in The Oneida Group Inc. v. Steelite International US.A. Inc. et al., 11 No. 2:17-cv-00957-ADS-AKT (E.D.N.Y. Feb. 28, 2017). 12 6. Attached hereto as Exhibit 5 is a true and correct copy of the March 13 14, 2017 Report and Recommendation issued by Magistrate Judge Tomlinson in 14 The Oneida Group Inc. v. Steelite International US.A. Inc. et al., No. 2:17-cv- 15 00957-ADS-AKT (E.D.N.Y. Mar. 14, 2017). 16 7. Attached hereto as Exhibit 6 is a true and correct copy of Oneida's 17 Verified Complaint, The Oneida Group Inc. v. Steelite International US.A. Inc. et 18 al., No. 2:17-cv-00957-ADS-AKT (E.D.N.Y. Feb. 21, 2017). 19 20 I declare under penalty of perjury under the laws of the United States of 21 America that the foregoing is true and correct. 22 Executed this 9th day of June, 2017 at Los Angeles, California. 23 24 25 26 27 28 DECLARATION OF ASHLEE N. LIN -2- Case 2:17-cv-02996-SVW-E Document 12-2 Filed 06/09/17 Page 2 of 3 Page ID #:60 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 DECLARATION OF ASHLEE N. LIN - 3 - CERTIFICATE OF SERVICE I hereby certify that the foregoing document was filed electronically on this 9th day of June, 2017, with the Clerk by using the CM/ECF system, which will send notification of such filing to all attorneys of record. /s/ Ashlee N. Lin Ashlee N. Lin Case 2:17-cv-02996-SVW-E Document 12-2 Filed 06/09/17 Page 3 of 3 Page ID #:61 EXHIBIT 1 Case 2:17-cv-02996-SVW-E Document 12-3 Filed 06/09/17 Page 1 of 32 Page ID #:62 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK _______________________________________________ THE ONEIDA GROUP INC. Plaintiff, - against - STEELITE INTERNATIONAL U.S.A. INC., TABLEWERKS, INC., RICHARD ERWIN, STEVEN LEFKOWITZ, and ANTHONY DELOSREYES Defendants. __________ Civil Action No. 2:17-cv-00957 D _______________________________________________ STEELITE INTERNATIONAL U.S.A. INC.’S POST-HEARING MEMORANDUM OF LAW Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 1 of 31 PageID #: 1265Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 2 of 32 Page ID #:63 - i - TABLE OF CONTENTS Page I. ONEIDA HAS NOT PROVEN THAT IT IS ENTITLED TO THE EXTRAORDINARY AND DRASTIC REMEDY OF A PRELIMINARY INJUNCTION. .............................................1 II. ONEIDA OWNS NO RIGHTS TO THE DESIGNS EMBODIED IN THESE TABLWARE PRODUCTS. ............................................................................................................2 III. ONEIDA HAS NO RIGHTS TO THE TRADE DRESS IN THE BOTTICELLI BRANDED PRODUCT BECAUSE IT WAS NOT THE FIRST USER OF THE TRADE DRESS .............................................................................................................................................5 IV. AS THE MANUFACTURER’S EXCLUSIVE LICENSEE, STEELITE HAS SUPERIOR RIGHTS TO ONEIDA ................................................................................................6 V. ONEIDA DID NOT CREATE THE DESIGNS CONSTITUTING ITS CLAIMED TRADE DRESS, QUEENSBERRY HUNT DID, AT TABLEWERKS’ REQUEST. ...................7 VI. THE MANUFACTURER, ROYAL PORCELAIN, CONTROLS THE QUALITY OF THE PRODUCTS, NOT ONEIDA, AND CUSTOMERS ASSOCIATE THE PRODUCT DESIGNS WITH QUEENSBERRY HUNT AND ROYAL PORCELAIN ...................................9 VII. ONEIDA CANNOT SHOW THAT ITS CLAIMED TRADE DRESS DESIGNS ARE DISTINCTIVE TO ONEIDA AND THAT THE DESIGNS HAVE ACQUIRED SECONDARY MEANING. ..........................................................................................................11 A. The Trade Dress Directed to the So-called BOTTICELLI Product is Not Distinctive But Generic and is Not Entitled to Trade Dress Protection ............................11 B. The Disputed Trade Dress is Directed to a Product Design That is Not Distinctive and Does Not Have Secondary Meaning ...........................................................................12 VIII. THERE IS NO LIKELIHOOD OF CONFUSION FOR SALES OF STEELITE’S PRODUCTS...................................................................................................................................15 IX. NEITHER STEELITE NOR TABLEWERKS HAS A CONTRACT WITH ONEIDA AND THERE HAS BEEN NO BREACH.....................................................................................17 A. Steelite was not a party to either of the purported “contracts” ..........................................17 B. The Vendor Agreement Was Never Accepted By Tablewerks .........................................19 X. CONCLUSION ..............................................................................................................................24 Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 2 of 31 PageID #: 1266Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 3 of 32 Page ID #:64 - ii - TABLE OF AUTHORITIES Page(s) Cases 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 815 F.2d 8 (2d Cir. 1987) ..................................................................................................................... 12 Advanced Video Techs., LLC v. HTC Corp., 103 F. Supp. 3d 409 (S.D.N.Y. 2015) .................................................................................................... 8 Best Cellars, Inc. v. Grape Finds at Dupont, Inc., 90 F. Supp. 2d 431 (S.D.N.Y. 2000) ................................................................................................... 13 Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604 (7th Cir. 1986)................................................................................................................ 13 Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 US 141 (1989) ................................................................................................................................. 7 Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033 (2d Cir. 1992) ......................................................................................................... 12, 16 Cargo Partner AG v. Albatrans Inc., 352 F.3d 41 (2d Cir. 2003) ................................................................................................................... 19 Doktor v. Werner Co., 762 F. Supp. 2d 494 (E.D.N.Y. 2011)............................................................................................ 18, 19 Duraco Products, Inc. v. Joy Plastic Enterprises, Ltd., 40 F.3d 1431 (3d Cir. 1994) ................................................................................................................. 12 Fitzgibbons v. City of Oswego No. 5:10-CV-1038, 2011 WL 6218208 (N.D.N.Y. Dec. 13, 2011)..................................................... 18 Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837 (9th Cir. 1987)................................................................................................................ 13 George Burke Co. v. Intermetro Industries Corp., 268 A.D.2d 310 (1st Dep’t 2000)......................................................................................................... 22 Gerffert Co. v. Dean, 41 F. Supp. 3d 201 (E.D.N.Y. 2014).................................................................................................... 15 Hall v. Paramount Pictures Corp., 2002 U.S. Dist. LEXIS 14850 (S.D.N.Y. Aug 14, 2002) .............................................................. 18, 21 Holloway v. King, 361 F. Supp. 2d 351 (S.D.N.Y. 2005), aff’d, 161 Fed. App’x. 122 (2d Cir. 2005) ....................... 22, 23 Imig, Inc. v. Electrolux Home Care Products, Ltd., No. CV 05-0529, 2007 WL 900310 (E.D.N.Y. March 22, 2007)........................................................ 16 Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 3 of 31 PageID #: 1267Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 4 of 32 Page ID #:65 - iii - Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27 (2d Cir. 1995) ..................................................................................................................... 13 Johnson v. Burge, 506 Fed. Appx. 10 (2d Cir. 2012) .......................................................................................................... 1 JSG Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75 (2d Cir. 1990) ..................................................................................................................... 1 Kaufman & Fisher Wish Co. v. F.A.O. Schwarz, 01 Civ. 0301 (GEL), 2001 U.S. Dist. LEXIS 17138 (S.D.N.Y. Oct. 17, 2001) .................................. 12 Lynch v. City of N.Y., 589 F.3d 94 (2d Cir. 2009) ..................................................................................................................... 1 Malaco Leaf, AB v. Promotion in Motion, Inc., 287 F.Supp.2d 355 (S.D.N.Y. 2003) .................................................................................................... 11 Monserrate v. N.Y. State Senate, 599 F.3d 148 (2d Cir. 2010) ................................................................................................................... 1 Ortiz v. Green Bull, Inc., No. 10-CV-3747, 2011 WL 5554522 (E.D.N.Y. Nov. 14, 2011) ........................................................ 19 Polaroid Corp. v. Polarad Elects. Corp., 287 F.2d 492 (2d Cir. 1961) ........................................................................................................... 15, 16 Priestley v. Headminder, Inc., 647 F.3d 497 (2d Cir. 2011) ................................................................................................................. 19 Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010) ..................................................................................................................... 1 Sanyo Elec., Inc. v. Pinros & Gar Corp., 174 A.D.2d 452 (1st Dep’t 1991)................................................................................................... 22, 23 Sengoku Works v. RMC Int'l, 96 F.3d 1217 (9th Cir. 1996)................................................................................................ 5, 6, 7, 9, 10 Tactica Int’l v. Atl. Horizon Int’l, 154 F. Supp.2d 586 (S.D.N.Y. 2001) ..................................................................................................... 5 Technimed SRL v. Kidz-Med, Inc., 763 F. Supp. 2d 395 (S.D.N.Y. 2011) aff’d 462 F. App’x 31 (2d Cir. 2012) ................................ 6, 7, 9 Thompson Medical Co., Inc. v. Pfizer Inc., 753 F.2d 208 (2d Cir. 1985) ..................................................................................................... 12, 15, 16 Thompson v. AmeriFlex, Inc., No. 11 Civ. 5635, 2013 WL 4407066 (S.D.N.Y. Aug. 16, 2013) ................................................. 18, 19 United States v. Peirce, 1995 U.S. Dist. LEXIS 4042 (N.D.N.Y. Feb. 18, 1995) ..................................................................... 18 Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 4 of 31 PageID #: 1268Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 5 of 32 Page ID #:66 - iv - Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000) ....................................................................................................... 4, 11, 12, 13, 15 Winter v. Natural Res. Def. Council, Inc., 129 S.Ct. 365 (2008) .............................................................................................................................. 1 Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101 (2d Cir. 2001) ........................................................................................................... 11, 12 Statutes 17 U.S.C § 204 ............................................................................................................................................ 8 35 U.S.C. §261 ............................................................................................................................................ 8 General Obligations Law §5-701 .............................................................................................................. 22 Lanham Act § 43................................................................................................................................. 11, 12 New York U.C.C. §2-201 ......................................................................................................................... 23 Regulations 2 McCarthy on Trademarks § 16.1 ............................................................................................................. 5 Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 5 of 31 PageID #: 1269Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 6 of 32 Page ID #:67 - 1 - I. ONEIDA HAS NOT PROVEN THAT IT IS ENTITLED TO THE EXTRAORDINARY AND DRASTIC REMEDY OF A PRELIMINARY INJUNCTION. Courts in the Second Circuit have consistently recognized that “[a] preliminary injunction is an extraordinary remedy never awarded as of right.” Monserrate v. N.Y. State Senate, 599 F.3d 148, 154 (2d Cir. 2010) (quoting Winter v. Natural Res. Def. Council, Inc., 129 S.Ct. 365, 376 (2008)); JSG Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75, 80 (2d Cir. 1990). Such relief “is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.” Johnson v. Burge, 506 Fed. Appx. 10, 11 (2d Cir. 2012) (internal quotation omitted). Oneida is not entitled to injunctive relief because it cannot establish (1) irreparable harm and (2) either (a) a likelihood of success on the merits, or (b) sufficiently serious questions going to the merits of its claims to make them fair ground for litigation, plus a balance of the hardships tipping decidedly in favor of the moving party. See Monserrate, 599 F.3d at 154 (citing Lynch v. City of N.Y., 589 F.3d 94, 99 (2d Cir. 2009)). A party may not merely show “the possibility” of irreparable harm, but rather must show there is a likelihood that irreparable harm will result in the absence of the extraordinary remedy of injunctive relief. JSG Trading Corp., 917 F.2d at 79. Further, courts are not to presume irreparable harm but must consider the injury to be suffered and whether the remedies available at law are inadequate to compensate for the injury. Salinger v. Colting, 607 F.3d 68, 80 (2d Cir. 2010). Here, Oneida’s alleged harm that it “has received instructions from customers to either put on hold or completely rescind approximately $1 million in already-placed orders for dinnerware products” (March 14, 2017 Report and Recommendation, ECF Doc. No. 45 at 9) is quantifiable and can be satisfied with money damages. The loss of “goodwill and confusion” alleged by Oneida is merely speculative, especially considering that the evidence demonstrates that there is not likely to be any confusion between Steelite and Oneida Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 6 of 31 PageID #: 1270Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 7 of 32 Page ID #:68 - 2 - products. Oneida has not demonstrated that it will imminently sustain irreparable harm, and certainly has not done so by a “clear showing.” Moreover, Oneida has neither established a likelihood of success on the merits nor raised a sufficiently serious question going to the merits of its claims. Nor has it shown hardships tipping decidedly in its favor. Oneida does not own the trade dress for the products. It also cannot show that the trade dress design is distinctive to Oneida or that it has acquired secondary meaning such that customers consider Oneida to be the sole source of tableware products that include the features Oneida has defined as its allegedly protectable, unregistered trade dress. And the balance of the hardships and public interest weigh heavily in favor of Steelite as the current holder of all registered and contractual intellectual property rights associated with the tableware designs, for which Steelite paid in excess of $10 million. Having purchased certain assets of Tablewerks - and having obtained the intellectual property rights of Royal Porcelain and the right to be Royal Porcelain’s exclusive product distributor in the United States - Steelite is entitled to continue selling the designs. Oneida cannot establish any of the three requisite elements of its trade dress claim-ownership, secondary meaning, or likelihood of confusion-and Oneida therefore has no right to interfere with or misappropriate any of Steelite’s designs. II. ONEIDA OWNS NO RIGHTS TO THE DESIGNS EMBODIED IN THESE TABLWARE PRODUCTS. Many of the facts concerning the designs of the disputed tableware products cannot be disputed. First, Oneida did not commission the designs. Rather, Tablewerks commissioned the designs from Queensberry Hunt (“QH”) and paid an up-front fee as well as quarterly royalties to QH for said designs based on Tablewerks’ sales of the products. Tr. 537:17 - 539:1, 794:4-19. Second, Oneida was not involved in the creation of the relevant designs; QH designed these tableware shapes. Id. The testimony of the principal designer, David Queensberry, the files and records at QH relating to the disputed Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 7 of 31 PageID #: 1271Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 8 of 32 Page ID #:69 - 3 - products , and Oneida’s former employees who were involved with these products that Oneida later resold respectively as “Botticelli” (the “First Tableware Product”) or “Nexus” (the “Second Tableware Product”) all confirm that Oneida had no involvement in the design process of the products. Exhibit T ¶ 9; Exhibit U ¶ 13; Exhibit X ¶¶ 9-10; Tr. 534:1-3, 706:25 - 707:5, 776:10 - 777:11. QH assigned all of its intellectual property rights in the First Tableware Product to Tablewerks in April 2001. Exhibit C. Tablewerks also had two United States design patents issued to it for the First Tableware Product and it has filed copyright applications on the designs for both the First and Second Tableware Product. See Exhibit A; Exhibit B; Exhibit BB; Exhibit DD. As to the Second Tableware Product, QH assigned all of its intellectual property rights to the product’s manufacturer, Royal Porcelain, who in turn assigned all of the intellectual property rights to Tablewerks in August 2008. Exhibit 3; Exhibit D; Tr. 401:4 - 402:2. All of these registered rights have now been assigned by Tablewerks to Steelite Distribution, LLC. Exhibit 5. Royal Porcelain is the manufacturer of both products and its trade name has appeared on all such products since their inception. Tr. 717:3-17. Tablewerks was, and now Steelite is, the exclusive distributor in the United States for foodservice products manufactured by Royal Porcelain. Tr. 383:23- 384:24; Exhibit D; Exhibit V at ¶¶24-25; Exhibit Z at ¶F; Exhibit F; Exhibit JJ; Tr. 413:7-414:18, 571:1- 23. Royal Porcelain and/or Tablewerks were the first entities to sell the products in commerce in the United States. Tr. 405:22 - 406:12. Tablewerks sold the products to Oneida, which paid Tablewerks, not Royal Porcelain, for the products. In contrast to Steelite and Tablewerks, Oneida has no registered intellectual property rights associated with the designs. Oneida has never paid a royalty to QH for the designs. Tr. 788:11-16. Oneida is merely a reseller of the tableware designs created by QH and sold in the United States by Tablewerks. Oneida’s own advertisements identify QH as the creator of the two tableware designs. Tr. Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 8 of 31 PageID #: 1272Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 9 of 32 Page ID #:70 - 4 - 176:9-17. Oneida’s own intellectual property matrix identifies Tablewerks as the owner of the design rights in the products it resold as “Botticelli” and “Nexus”. See Exhibit 2 to the Declaration of Nathaniel T. Browand as Exhibit 2 (Oneida 6/1/2009 email and attachment designating Tablewerks as the design owner for the products Oneida resold under the names “Botticelli” and “Nexus”). Finally, Oneida has produced no survey evidence showing that customers have come to associate the shapes or designs of these tableware products solely with Oneida as the source - to the exclusion of QH, Tablewerks, and Royal Porcelain. The United States Supreme Court has made clear that claims for trade dress relating to a product’s design must be distinguished from word marks, symbol marks or even product packaging or dress. See Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 209-10 (2000). Oneida has not explained how the products’ design or shape - the trade dress relevant here - has come to be associated with Oneida, instead of Queensberry Hunt, Royal Porcelain or Tablewerks, without making reference to its product names. Oneida instead attempts to conflate two separate intellectual property concepts by constantly referring to its brand names or marks, SANT’ ANDREA, BOTTICELLI and/or NEXUS, instead of the actual design shapes. However, Oneida has not pled and is not claiming trademark infringement. Oneida has not and cannot allege that Steelite is using any of Oneida’s name brands or marks. Oneida attempts to emphasize its trademarks to compensate for its lack of ownership in the trade dress it now claims. The only intellectual property right relied upon by Oneida is the trade dress directed to the product designs of the First and Second Tableware Products. Typically, a product design “is intended not to identify the source, but to render the product itself more useful or more appealing.” Samara Brothers, 529 U.S. at 213. Thus, Oneida has a heavy burden to not only prove that it owns the trade dress at issue, but also to show that the design of the First and Second Tableware Products identifies Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 9 of 31 PageID #: 12732 96 SVW-E Document 12-3 il 6 09 10 of 32 Page ID #: 1 - 5 - Oneida as the source of same. Considering that Oneida itself advertises Queensberry Hunt as the designer of these products, and that the industry widely recognizes Royal Porcelain as the manufacturer of them, Oneida’s claim of ownership of the trade dress must fail. III. ONEIDA HAS NO RIGHTS TO THE TRADE DRESS IN THE BOTTICELLI BRANDED PRODUCT BECAUSE IT WAS NOT THE FIRST USER OF THE TRADE DRESS The standard test for ownership of trade dress is priority of use. Tactica Int’l v. Atl. Horizon Int’l, 154 F. Supp.2d 586, 599 (S.D.N.Y. 2001) (citing 2 McCarthy on Trademarks § 16.1). It cannot be disputed that Tablewerks was the first entity to use the trade dress in the United States. Before any of Oneida’s sales, Tablewerks first sold the products to Oneida. In the case of both of the product designs, Tablewerks offered the finished products to Oneida for purchase. The product design was created by QH, paid for and owned by Tablewerks, and these design rights have now been assigned to and acquired by Steelite. Thus, Steelite has priority over Oneida, and for that reason alone, Oneida’s trade dress claim must fail. Sengoku Works v. RMC Int'l, 96 F.3d 1217, 1219 (9th Cir. 1996) (“It is axiomatic in trademark law that the standard test of ownership is priority of use.”). Moreover, unbeknownst to Steelite, Oneida admitted, just prior to the recent hearing before the Court, that Oneida cannot possibly have the first priority of use. Specifically, Oneida has admitted that a product sold by a competitor, Vertex, which was available prior to the First Tableware Product, included the same trade dress claimed by Oneida for the first time in the instant suit. On April 7, 2017, the Friday before the recent hearing began, Oneida sent a letter to Vertex China setting forth Oneida’s view that the trade dress Oneida is claiming in this case is present in at least the Vertex CRYSTAL BAY product. See Steelite’s New Exhibit MM, a letter authored by Oneida and obtained by Steelite after completion of the hearing. This admission by Oneida in its aforementioned letter to Vertex is fatal to its trade dress claim because the Vertex CRYSTAL BAY product was being sold in commerce several years before Oneida began reselling the First Tableware Product. The Vertex CRYSTAL BAY product entered the market at Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 10 of 31 PageID #: 1274Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 11 of 32 Page ID #:72 - 6 - least as early as 1999, more than two years prior to Oneida’s launch of the so-called Botticelli product. Vertex distributed a price sheet to the entire industry in 1999 that listed the Vertex plate (admitted in evidence as Exhibit II, which includes the “CB-16” marking on the back of the plate). See Steelite New Exhibit NN. Thus, Oneida has admitted that Vertex used the alleged trade dress of the so-called Boticelli product before Oneida did - a fact that is fatal to Oneida’s fabricated trade dress claim. See Sengoku Works, 96 F.3d at 1219. Oneida’s trade dress claim should be dismissed for this reason alone. IV. AS THE MANUFACTURER’S EXCLUSIVE LICENSEE, STEELITE HAS SUPERIOR RIGHTS TO ONEIDA Even if Oneida had not made the fatal admission detailed above, it would have been impossible for Oneida to prevail on its trade dress claim based on the standard that governs disputes between distributors and manufacturers. “When disputes arise between a manufacturer and distributor, courts will look first to any agreement between the parties regarding trademark rights.” Technimed SRL v. Kidz-Med, Inc., 763 F. Supp. 2d 395, 403 (S.D.N.Y. 2011) aff’d 462 F. App’x 31 (2d Cir. 2012) (quoting Sengoku Works, 96 F.3d at 1220). In the absence of an agreement between the parties, “the manufacturer is presumed to own the trademark [or trade dress].” Id. It is undisputed that there is no agreement between Oneida and Royal Porcelain concerning the transfer of trade dress rights of the product designs. Exhibit Y ¶¶ 5-6; Exhibit U ¶ 10. By contrast, there is an agreement between Royal Porcelain and Steelite. Pursuant to the Distribution and License Agreement (the “DLA”) between Steelite and Royal Porcelain, Steelite is the exclusive licensee of Royal Porcelain’s trade dress for these two products (among others) in the U.S. Thus, Steelite owns or controls all of the intellectual property rights for the product designs - the patent rights, the copyrights and the trade dress. Accordingly, the presumption of ownership in favor of Royal Porcelain, the manufacturer of these products, must apply. In order to rebut the presumption that Royal Porcelain is the owner of the trade dress, Oneida must show that it is the party that “possesses the goodwill associated with the product, or which party Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 11 of 31 PageID #: 1275Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 12 of 32 Page ID #:73 - 7 - the public believes stands behind the product.” Technimed SRL, 763 F. Supp. 2d at 403. In evaluating this issue, courts consider the following four factors: (1) which party invented and first affixed the mark onto the product; (2) which party’s name appeared with the trademark; (3) which party maintained the quality and uniformity of the product; and (4) with which party the public identified the product and to whom purchasers made complaints. Id. (quoting Sengoku Works, 96 F.3d at 1220). Each of these factors weigh in favor of Royal Porcelain’s ownership of the trade dress, which by assignment is owned by Steelite. V. ONEIDA DID NOT CREATE THE DESIGNS CONSTITUTING ITS CLAIMED TRADE DRESS, QUEENSBERRY HUNT DID, AT TABLEWERKS’ REQUEST. The product designs for the tableware were invented by the designers at QH. Exhibit T, Queensberry Decl. ¶ 9; Exhibit U, Erwin Decl. ¶ 13. Oneida’s suggestion that it “collaborated” with QH is a pure fiction created for this litigation. That suggestion is contradicted by years of Oneida’s own advertising promoting QH as the inventors of these designs, it is refuted by the principal designer himself, David Queensberry, and the files and records at QH relating to these products, and it is further refuted by Oneida’s former employees who were involved with the products that Oneida later resold as “Botticelli” or “Nexus”. Exhibit T, Queensberry Decl. ¶ 9; Exhibit U, Erwin Decl. ¶ 13; Exhibit X, Kuzina Decl. ¶¶ 9-10. Additionally, the evidence demonstrating the inventorship of the product designs is not limited to the testimony submitted in this litigation. There are at least two design patents that have covered the First Tableware Product’s design. As the Supreme Court has recognized, “trade dress is, of course, potentially the subject matter of design patents.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 US 141, 154 (1989). On January 4, 2001, Tablewerks filed an application for a United States patent and a design patent, USD463,955, issued on October 8, 2002. On June 26, 2002, Tablewerks filed a second, related application and a design patent issued to Tablewerks on October 28, 2003 under the patent number USD481,261 (“the ‘261 Patent”). The inventors of the ‘261 patent were listed as the Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 12 of 31 PageID #: 1276Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 13 of 32 Page ID #:74 - 8 - Queensberry Hunt designers. Exhibit U, Erwin Decl. ¶ 16. The inventors assigned the rights in both of the design patents to Tablewerks. Exhibit U, Erwin Decl. ¶ 16. These patent rights have been acquired by Steelite. Exhibit V, Miles Decl. ¶ 7. The ‘261 Patent is still in force and Steelite intends to assert a counterclaim for patent infringement against Oneida and vigorously enforce its rights in this patent given Oneida’s admissions that it has offered to sell, imported and used the design of the First Tableware Product sourced from a manufacturer other than Royal Porcelain. In addition to the design patents, Steelite also owns the ‘151 copyright application covering the design of the First Tableware Product. Exhibit U, Erwin Decl. ¶ 17. All of Tablewerks’ rights in the copyright application have been acquired by Steelite. Exhibit V, Miles Decl. ¶ 7. In exchange for an assignment of the rights to the two product designs, the designers at Queensberry Hunt receive royalty payments based on the manufacture and sales of these products. Exhibit U, Erwin Decl. ¶¶ 18, 20. These payments are now made by Steelite, and not by Oneida. Exhibit T, Queensberry Decl. ¶ 13. Steelite intends to assert a counterclaim for copyright infringement against Oneida and vigorously enforce its copyright protection in the product designs. Patent rights cannot be assigned in the absence of a writing. 35 U.S.C. §261; Advanced Video Techs., LLC v. HTC Corp., 103 F. Supp. 3d 409, 417 (S.D.N.Y. 2015) (“All assignments of interests in a patent … must be in writing.”). Tablewerks assigned its patent rights to Steelite in December 2016. Exhibit E. No writings purport to transfer any patent rights to Oneida. The Copyright Act requires a signed writing to transfer copyright ownership. 17 U.S.C § 204 (a). For the Second Tableware Product, QH originally assigned its design rights to Royal Porcelian, which subsequently assigned the rights to Tablewerks in a Memorandum of Understanding in August 2008. Tablewerks transferred ownership of the copyrights and copyright applications for the First Tableware Product and Second Tableware Product to Steelite in a signed writing pursuant to the December 2016 Patent and Copyright Assignment. Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 13 of 31 PageID #: 1277Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 14 of 32 Page ID #:75 - 9 - Exhibit E. By contrast, there is no writing signed by Tablewerks or Steelite transferring any copyright rights to Oneida. Oneida cannot overcome the presumption that Tablewerks and Royal Porcelain have a better claim of ownership to the trade dress for these products. Steelite has acquired (via contract) the exclusive rights to the trade dress in the United States. Miles Decl. ¶¶ 24-26. Oneida itself advertises the product designs as having been created by Queensberry Hunt. Both product designs are manufactured by Royal Porcelain and distributed with the “Royal Porcelain” name stamped on the back (i.e., a backstamp) of the product. Exhibit X, Kuzina Decl. ¶¶ 14-16; Exhibit W, Keck Decl. ¶ 4. Thus, customers recognize that the source of the product designs is Royal Porcelain. The answer to the question “which party’s name appears along side the product” is unequivocally - Royal Porcelain. Technimed SRL, 763 F. Supp. 2d at 404 (recognizing the importance of this Sengoku Works factor to the ownership of the trade dress). Furthermore, Oneida’s use of its trade name does not make “any difference whatsoever” in a customer’s purchasing decision. Exhibit W, Keck Decl. ¶¶ 4-6. The “Royal Porcelain” mark is affixed to virtually all of its manufactured products thus building a long term and consistent identity as the source of the product. Exhibit W, Keck Decl. ¶¶ 4-6. VI. THE MANUFACTURER, ROYAL PORCELAIN, CONTROLS THE QUALITY OF THE PRODUCTS, NOT ONEIDA, AND CUSTOMERS ASSOCIATE THE PRODUCT DESIGNS WITH QUEENSBERRY HUNT AND ROYAL PORCELAIN In assessing the ownership of the trade dress, the Court should consider which party controls the “quality and uniformity of the product.” Sengoku Works, 96 F.3d at 1220. In the tableware industry, customers look to the manufacturer and not the distributor when assessing the quality of the goods. Exhibit W, Keck Decl. ¶¶ 4-6. Royal Porcelain is known for producing high quality goods. When purchasing Royal Porcelain products, customers value the Royal Porcelain quality and do not associate the distributor of the product with the product itself. Exhibit W, Keck Decl. ¶¶ 4-6. With regard to the products at issue, as manufacturer, Royal Porcelain had complete control of the quality of the products Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 14 of 31 PageID #: 1278Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 15 of 32 Page ID #:76 - 10 - and ensuring that the products conformed to the design specifications that were prepared by Queensberry Hunt in collaboration with Tablewerks. As stated by a witness who has worked at both Oneida and Steelite: “Royal Porcelain’s involvement as the manufacturer of these products is the primary driver of purchasing decisions, and customers recognize Royal Porcelain as the source of such products.” Kuzina Decl. ¶ 17. Customers in the industry have the same view. Exhibit W, Keck Decl. ¶¶ 4-6. These customers look to the manufacturer for product quality, not the distributor. Exhibit W, Keck Decl. ¶¶ 4-6. Customer complaints were made to the dealer that sold the customer the tableware products, and were not made to Oneida. Tr. 408:16-23; 680:22-25. Customer warranty claims were made to the dealer that sold the customer the tableware products - not to Oneida. Tr. 239:4-20. Customers, including the largest distributor of tableware in the United States, focus on “design quality and factory quality when purchasing tableware.” Exhibit W, Keck Decl. ¶ 3. Thus, customers look to Royal Porcelain, and not Oneida, when considering a product’s design and when attributing a particular entity as the source of the product. Customers clearly identified the products at issue with Royal Porcelain. See Sengoku Works, 96 F.3d at 1220 (emphasizing that the party with whom the public identified the products at issue was an important factor in determining ownership of the trademark). Mr. Daniel Hoffman, Oneida’s witness, originally claimed in his declaration that “the BOTTICELLI® and NEXUS TM product designs are synonymous with Oneida.” Exhibit 33. Mr. Hoffman later changed his testimony to state that “the BOTTICELLI® and NEXUSTM product designs are marketed by Oneida.” Tr. 258:2-8. Mr. Hoffman, when subjected to cross-examination, made numerous changes to his testimony set forth in his declaration. In total, Mr. Hoffman changed the meaning of 11 sentences in his declaration. Tr. 253:4 - 264:23. Due to the time of these changes, Magistrate Judge Tomlinson unfortunately was not able to consider Mr. Hoffman’s revised testimony when making her honor’s recommendation, having only seen the prior, misleading version of Mr. Hoffman’s testimony. Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 15 of 31 PageID #: 1279Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 16 of 32 Page ID #:77 - 11 - VII. ONEIDA CANNOT SHOW THAT ITS CLAIMED TRADE DRESS DESIGNS ARE DISTINCTIVE TO ONEIDA AND THAT THE DESIGNS HAVE ACQUIRED SECONDARY MEANING. In an action for infringement of unregistered trade dress under § 43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectable, only upon a showing that it has acquired secondary meaning. Samara Bros., 529 U.S. at 216. A. The Trade Dress Directed to the So-called BOTTICELLI Product is Not Distinctive But Generic and is Not Entitled to Trade Dress Protection As a threshold matter, in order to prevail on a trade dress claim, “[t]he Plaintiff must articulate the specific elements which compose the trade dress.” Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 117 (2d Cir. 2001). The features Oneida identifies as its trade dress are present in a number of other products on the market. Tr. 722:9 - 727:20. Oneida’s claimed trade dress design features are generic, not distinctive. See Exhibit HH; Exhibit LL; Tr. 722:9 - 727:20. “[G]eneric product designs are not entitled to trade dress protection under the Lanham Act.” Malaco Leaf, AB v. Promotion in Motion, Inc., 287 F.Supp.2d 355, 363 (S.D.N.Y. 2003). Oneida cannot prevail on a trade dress claim based on these generic features. Specifically, all of the features described by Oneida as constituting the trade dress exist in multiple products currently on the market, namely the GET MINSKY, Tuxton PACIFICA and Vertex CRYSTAL BAY tableware products. Tr. 722:9 - 727:20; Exhibit Z ¶¶ 4-6; Exhibits L-M, GG, HH, II. Tuxton’s PACIFICA branded product is being offered for sale by the distributor Edward Don & Company (“Don”) which also distributes products for Oneida and Steelite. Exhibit Z ¶10. In Edward Don’s 2017 catalogue, Oneida’s so-called BOTTICELLI products were listed on page 36 and Tuxton’s PACIFICA product was listed on page 53. Exhibit Z ¶ 10; Exhibit P. As noted above, immediately prior to the recent hearing before the Court, Oneida admitted that these competing products include the features of the trade dress Oneida now asserts. On April 7, 2017, Oneida sent letters to at least Vertex Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 16 of 31 PageID #: 1280Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 17 of 32 Page ID #:78 - 12 - and Tuxton setting forth Oneida’s view that its claimed trade dress is present in at least the Vertex CRYSTAL BAY and the Tuxton PACIFICA products. See Steelite’s New Exhibits MM, NN. As explained above, Oneida’s admission on this point, set forth in its letters, is fatal to its trade dress claim because the Vertex CRYSTAL BAY product was being sold in commerce several years before Oneida began reselling the Royal Porcelain product Oneida called BOTTICELLI. B. The Disputed Trade Dress is Directed to a Product Design That is Not Distinctive and Does Not Have Secondary Meaning In Samara Bros., the Supreme Court explained the difference between product design trade dress and product packaging trade dress. Id. at 213. “[T]rade dress based on product design or configuration never is “inherently distinctive,” since “product design almost invariably serves purposes other than source identification.” Samara Bros., 529 U.S. at 213. In order to gain the protection of product design trade dress under Lanham Act § 43(a), therefore, a plaintiff must demonstrate that its trade dress has “acquired” distinctiveness in the form of “secondary meaning.” See Samara Bros., 529 U.S. at 212-13; Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 115 (2d Cir. 2001); Kaufman & Fisher Wish Co. v. F.A.O. Schwarz, 01 Civ. 0301 (GEL), 2001 U.S. Dist. LEXIS 17138, at *14-15 (S.D.N.Y. Oct. 17, 2001). The plaintiff bears a “heavy burden” to prove that its trade dress has acquired secondary meaning. See Thompson Medical Co., Inc. v. Pfizer Inc., 753 F.2d 208, 217 (2d Cir. 1985); 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 815 F.2d 8, 10 (2d Cir. 1987); cf. Duraco Products, Inc. v. Joy Plastic Enterprises, Ltd., 40 F.3d 1431, 1453 (3d Cir. 1994) (in a product design trade dress case, secondary meaning “will generally not be easy to establish”). And, contrary to Oneida’s contention, proof of intentional copying, by itself, does not trigger any presumption of secondary meaning under Second Circuit precedent. See Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1042 (2d Cir. 1992) (“Although imitative intent can help support a finding of secondary Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 17 of 31 PageID #: 1281Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 18 of 32 Page ID #:79 - 13 - meaning, it does not necessarily mandate one[.]” (citations omitted)); see also Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837, 844-845 (9th Cir. 1987); Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 611 (7th Cir. 1986) (Posner, J.). As the Supreme Court stated in Samara Bros., 529 U.S. at 213, “the reality [is] that, almost invariably, even the most unusual of product designs...is intended not to identify the source, but to render the product itself more useful or more appealing.” Id. The Supreme Court cautioned about finding distinctiveness without requiring a showing of distinctiveness or secondary meaning since the producer can ordinarily obtain protection for a design that is inherently source identifying (if any such exists), but that does not yet have secondary meaning, by securing a design patent or a copyright for the design-as, indeed, respondent did for certain elements of the designs in this case. The availability of these other protections greatly reduces any harm to the producer that might ensue from our conclusion that a product design cannot be protected under § 43(a) without a showing of secondary meaning. Id. at 213 (emphasis added). In its opening brief, Oneida relied upon Best Cellars, Inc. v. Grape Finds at Dupont, Inc., 90 F. Supp. 2d 431, 435 (S.D.N.Y. 2000), for the proposition that the First and Second Tableware Products’ trade dress can be inherently distinctive. Oneida Memo. at 20. However, Best Cellars is inapplicable because, as the Supreme Court held in Samara Bros., product designs can never be inherently distinctive. Oneida cannot show secondary meaning because the evidence does not show that the claimed trade dress, the design of the First and Second Tableware Products, is an Oneida design. See Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27, 34 (2d Cir. 1995) (“Secondary meaning suggests that, with time and market exposure, a trade dress may come to identify not only goods, but also the source of the goods.”). Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 18 of 31 PageID #: 1282Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 19 of 32 Page ID #:80 - 14 - Rather, the evidence shows that either Queensberry Hunt or Royal Porcelain, and not Oneida, is recognized as the source of the product design of the First and Second Tableware Products. A customer has testified that “[p]urchasers understand that Royal Porcelain is the source of the [First and Second Tableware] products.” Exhibit W, Keck Decl. ¶ 6. The same customer testified that even though Oneida calls the First and Second Tableware Products “Botticelli” and “Nexus”, respectively, “purchasers associate the products...with the manufacturer, Royal Porcelain, not the distributor, Oneida.” Keck Decl. ¶ 6. A Director of Marketing for Oneida from 2012-2016 has testified that Oneida’s “customers were well aware that Royal Porcelain was the manufacturer or source of many of the tableware products sold by Oneida, including the ‘Botticelli’ products.” Exhibit Y, Wellendorf Decl. ¶ 6. Mr. Wellendorf’s testimony was not directly challenged by Oneida. Thus, there is ample evidence showing that the trade dress of the at-issue tableware product designs identified Royal Porcelain and not Oneida. In addition, Oneida clearly understood that Tablewerks owned the rights to the designs of both of the products at issue. Exhibit 3. Oneida created an “Intellectual Property Matrix” table showing that Tablewerks, not Oneida, was the owner of the so-called Botticelli and Nexus product designs (including the trade dress in the those designs, if any). Id. Upon seeing a product designed similarly to the Botticelli design, Oneida did not seek to enforce any trade dress or other intellectual property rights, but rather gave notice to Tablewerks, understanding that Tablewerks owned design patents in the design. Tr. 554:16 - 555:9; Exhibit TB. Moreover, Oneida has conveniently ignored its own advertising that promotes these designs as Queensberry Hunt designs. Oneida’s evidence of advertising expenditures is not probative of the issue of secondary meaning for the trade dress of the at-issue tableware products, because the advertising expenditures are directed to an entire line of products branded as SANT’ ANDREA and not to the Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 19 of 31 PageID #: 1283Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 20 of 32 Page ID #:81 - 15 - specific product shapes and designs of the disputed products. Almost all of Oneida’s purported “evidence” regarding secondary meaning or distinctiveness is based on the use of Oneida’s trademarks and names - BOTTICELLI, NEXUS and SANT’ ANDREA - which the Supreme Court has cautioned is not relevant in trade dress design analysis. Thus, Oneida’s evidence related to advertising, awards, and sales is relevant to the secondary meaning of the word marks used by Oneida, but not to the distinctiveness of the designs of the First and Second Tableware Products. Finally, Oneida relies upon Steelite’s alleged copying of the Oneida branded products. However, Steelite’s product samples do not include “copies” of the trade dress. See Oneida Brief at 19-20. The Steelite sample products are, in fact, authentic First and Second Tableware Products as designed by Queensberry Hunt and manufactured by Royal Porcelain. Thus, the products to be sold by Steelite are the authentic tableware products to which Steelite owns the intellectual property rights. They are not copies. In the future, if Oneida attempts to replicate Steelite’s protected designs of the tableware products at a factory other than Royal Porcelain, the Oneida products will be unauthorized copies. VIII. THERE IS NO LIKELIHOOD OF CONFUSION FOR SALES OF STEELITE’S PRODUCTS. The Court need not reach the issue of likelihood of confusion because, as explained above, Oneida cannot show that it has priority of use to the trade dress at issue, nor can it show that the designs of the products have acquired secondary meaning. See Samara Bros., 529 U.S. at 210 (“[W]ithout distinctiveness the trade dress would not cause confusion[.]”) (quotations omitted); Thompson Med., 753 F.2d at 218-19 (“Only if the district court rules that [the trademark] has acquired secondary meaning must it comprehensively examine the Polaroid factors to determine whether there exists a likelihood of confusion as to source.”); see also Gerffert Co. v. Dean, 41 F. Supp. 3d 201, 218 (E.D.N.Y. 2014). In the unlikely event that the Court decides to consider a likelihood of confusion as between the products sold by Steelite and Oneida, the Court should not apply a presumption that a likelihood of Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 20 of 31 PageID #: 1284Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 21 of 32 Page ID #:82 - 16 - confusion exists. Oneida’s claims for trade dress infringement require Oneida to show that Steelite engaged in the “bad faith misappropriation of the labors and expenditures of another, likely to cause confusion or to deceive purchasers as to origin of the goods.” Imig, Inc. v. Electrolux Home Care Products, Ltd., No. CV 05-0529, 2007 WL 900310, at *13 (E.D.N.Y. March 22, 2007). As a party seeking injunctive relief, Oneida must also show a likelihood of confusion. Id. The Court should consider eight factors in determining whether there is a likelihood of consumer confusion: “[The] strength of the mark, the degree of similarity between the marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of defendant’s good faith in adopting its own mark, the quality of defendant’s product, and the sophistication of the buyers.” Thompson Medical Co. v. Pfizer, Inc., 753 F.2d 208, 213 (2d Cir. 1985) (quoting Polaroid Corp. v. Polarad Elects. Corp., 287 F.2d 492, 495 (2d Cir. 1961)). A consideration of these factors demonstrates that Oneida cannot make a “clear showing” of a likelihood of confusion. The “Royal Porcelain” and “Steelite” names appear prominently on the proposed packaging of the products and, as a result, customers will know that the goods are being manufactured by Royal Porcelain and supplied by Steelite, not Oneida. Bristol-Myers Squibb Co. v. McNeil-PPC, Inc., 973 F. 2d 1033, 1047 (2d Cir. 1992). There is simply no possibility that these sophisticated customers, who will buy these products through Steelite’s or its dealers’ catalogues in the future, could believe that they were buying an “Oneida product.” Thus, Oneida cannot possibly demonstrate a likelihood of customer confusion as to the source or Oneida’s involvement. Oneida can thus not establish either (a) a likelihood of success on the merits, or (b) sufficiently serious questions going to the merits of its claims to make them fair ground for litigation. Oneida alleges that the Steelite products are copies of the Oneida branded products. However, Steelite’s products are not copies - the Steelite products are originals. As stated above, the Steelite Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 21 of 31 PageID #: 1285Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 22 of 32 Page ID #:83 - 17 - products are made from the original molds at the Royal Porcelain factory from the designs owned by Steelite. Thus, Steelite is not copying and no presumption should apply. Furthermore, customers will not be confused by the Steelite and Oneida products. The Steelite products will be branded with Steelite trademarks and packaging along with the Royal Porcelain backstamp. IX. NEITHER STEELITE NOR TABLEWERKS HAS A CONTRACT WITH ONEIDA AND THERE HAS BEEN NO BREACH. In an ill-fated attempt to convince the Court that it has a chance of succeeding on the merits of its claims against Steelite, Oneida manufactures two (2) equally incredible breach of contract claims, both of which are based on “contracts” purportedly entered into between Oneida and Tablewerks (not Steelite). In fact, one of the “contracts” asserted by Oneida, the so-called “Vendor Agreement,” was never even signed by Tablewerks, and the other, a confidentiality agreement executed by Tablewerks, Oneida, and Royal Porcelain in 2011 (the “Confidentiality Agreement”), pertained to one specific product that was never even manufactured or distributed by Royal Porcelain or Tablewerks, and thus, has nothing at all to do with the instant dispute. Importantly, Oneida’s Complaint expressly limits its contract claim to the Vendor Supplier Acknowledgment Form and the Confidentiality Agreement, so it cannot base its claim on any alleged oral contracts or course of dealing. Complaint, ECF Doc. No. 1, at ¶ 148. A. Steelite was not a party to either of the purported “contracts” Neither of the purported contracts contain substantive provisions entitling Oneida to the extraordinary relief it seeks herein, but even before reaching the substance of those “contracts,” there is a threshold question as to whether or not a contract allegedly entered into by Tablewerks would be binding upon Steelite, a separate entity. Steelite acquired various assets of Tablewerks, but it did not acquire the company in toto, and the general rule under such circumstances is that the purchaser of assets, here Steelite, does not assume the liabilities of the seller (in this case Tablewerks). See Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 22 of 31 PageID #: 1286Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 23 of 32 Page ID #:84 - 18 - Thompson v. AmeriFlex, Inc., No. 11 Civ. 5635, 2013 WL 4407066, at *4 (S.D.N.Y. Aug. 16, 2013) (declaring the general rule that a company which purchases the assets of another is not responsible for the seller’s liabilities). While it is true that a purchaser may be held responsible for the obligations of its predecessor-in-interest under certain circumstances, Oneida glosses over the issue on page 24 of its opening brief, failing entirely to address the numerous factors considered by courts analyzing the successor liability question. For example, Oneida makes no mention of the fact that Tablewerks still exists as an entity, a primary factor considered by courts examining successor liability issues, nor does Oneida address the current financial condition of the entity and whether it is financially capable of answering on its own for any alleged breach of contract. See, e.g., Doktor v. Werner Co., 762 F. Supp. 2d 494, 499 (E.D.N.Y. 2011). The cases cited by Oneida in support of its successor liability “argument” are so clearly inapposite that they merit only brief discussion here. United States v. Peirce, 1995 U.S. Dist. LEXIS 4042 (N.D.N.Y. Feb. 18, 1995), is inapposite because the court in that case addressed successor liability under the standard imposed by CERCLA, “a broad remedial statute that should be construed liberally to give effect to its purposes,” and thus imposes a “regime of broad-ranging liability.” As was noted in Fitzgibbons v. City of Oswego, in the CERCLA context, “the traditional rules of successor liability have been expanded to cover successor corporations not necessarily covered under the traditional theory.” No. 5:10-CV-1038, 2011 WL 6218208, at *7 (N.D.N.Y. Dec. 13, 2011). Meanwhile, in the other case cited by Oneida, the court did not conduct a successor liability analysis but, rather, “assumed for purposes of (the pending) motion that the transaction….was a de facto merger,” thus bringing it within the parameters of successor liability doctrine. Hall v. Paramount Pictures Corp., 2002 U.S. Dist. LEXIS 14850, *24-25 (S.D.N.Y. Aug 14, 2002). Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 23 of 31 PageID #: 1287Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 24 of 32 Page ID #:85 - 19 - Clearly, no such assumption would be appropriate here given the extraordinary relief requested by Oneida. Indeed, as this Court has recognized in the past, “‘continuity of ownership is the essence of a merger,’ and the doctrine of de facto merger cannot apply in its absence.” Ortiz v. Green Bull, Inc., No. 10-CV-3747, 2011 WL 5554522, at *6 (E.D.N.Y. Nov. 14, 2011) (citing Cargo Partner AG v. Albatrans Inc., 352 F.3d 41, at 46 (2d Cir. 2003)) (Spatt, Hon. J.). Here, there is no continuity of ownership between Tablewerks and Steelite, both entities independently owned and operated for decades prior to the Transaction. Indeed, the evidence presented to this Court confirms that following the Transaction, there was no overlap in ownership of these entities. See Tr. 655:18-21. Accordingly, neither the unsigned Vendor Supplier Acknowledgment Form nor the Confidentiality Agreement are binding on Steelite, which only acquired various assets of Tablewerks and did not assume its liabilities. Thompson v. AmeriFlex, Inc., No. 11 Civ. 5635, 2013 WL 4407066, at *4 (S.D.N.Y. Aug. 16, 2013); see also Doktor v. Werner Co., 762 F. Supp. 2d 494, 499 (E.D.N.Y. 2011) (“Although a court should examine all of the relevant factors, ‘continuity of ownership is the essence of a merger,’ and the doctrine of de facto merger cannot apply in its absence.”) (quoting Priestley v. Headminder, Inc., 647 F.3d 497, 505-06 (2d Cir. 2011)). Again, it is undisputed that there is no continuity of ownership between Tablewerks and Steelite. Tr. 655:18-21. Furthermore, following the Transaction, Tablewerks survived as a corporation called North Rock Trading Company. Tr. 525:18-25. Oneida’s successor liability theory therefore has no merit. Because Oneida has failed to show that Steelite is likely to be responsible for Tablewerks’ contractual obligations under traditional successor liability principles, Oneida cannot premise its request for injunctive relief on either of its breach of “contract” claims. B. The Vendor Agreement Was Never Accepted By Tablewerks According to Oneida, sometime in 2007, it sent Tablewerks a generic set of terms and conditions titled “Business Requirements for All Vendors of Oneida, Ltd.,” i.e., the Vendor Agreement. Complaint Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 24 of 31 PageID #: 1288Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 25 of 32 Page ID #:86 - 20 - Exhibit 4. Rick Erwin of Tablewerks does not recall having ever seen or signed the acknowledgement form to the Vendor Agreement, and the copy of such “agreement” produced by Oneida contains an unsigned acknowledgement form. Erwin Decl. ¶ 10. When Oneida first claimed that the Vendor Agreement constituted a “contract” in January of 2017, Mr. Erwin asked Oneida if they could provide a signed copy, and Oneida has not produced one to date. Id. Thus, it is clear that the Vendor Agreement was never even accepted by Tablewerks, let alone Steelite. Notably, the opening paragraph of the cover letter that accompanies the Vendor Agreement provides as follows: Oneida Ltd. is updating its supplier information records and also issuing a notice of compliance criteria, and in order to continue our business relationship we must have the following documents on filed (sic). 1. Supplier Acknowledgment Form confirming the receipt and understanding of the enclosed Terms and Conditions of Purchase…. (emphasis in original) Complaint Exhibit 4. Similarly, the page that immediately precedes the acknowledgement form contains the following request: “PLEASE SIGN AND RETURN THE “VENDOR/SUPPLIER ACKNOWLEDGE-MENT (sic) FORM”…. IF A VENDOR FAILS TO RETURN THESE FORMS THEY WILL NOT CONTINUE DOING ANY BUSINESS WITH ONEIDA LTD .”(emphasis in original) Complaint Exhibit 4. Given the foregoing, Oneida cannot possibly demonstrate that the Vendor Agreement ever amounted to a binding contract against Tablewerks, let alone Steelite. But even if one were to ignore this additional, threshold obstacle to the enforceability of the Vendor Agreement, the fact of the matter is that the substantive provisions of the Vendor Agreement neither (1) require Tablewerks to supply Oneida with product, nor (2) grant Oneida exclusive distribution rights in the subject products, as Oneida suggests in its brief. Section 1 of the “Terms and Conditions of Purchase” included within the so-called Vendor Agreement reads as follows: Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 25 of 31 PageID #: 1289Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 26 of 32 Page ID #:87 - 21 - 1. Acceptance. Unless otherwise provided herein the written acceptance by [Tablewerks] of the purchase order, or the commencement of any work or the performance of any services hereunder, including shipment of all or any portion of the goods covered by the order, shall constitute acceptance by [Tablewerks] of the purchase order and of all of its terms and conditions. Complaint Exhibit 4. Thus, by its very terms, the Vendor Agreement would have applied, if at all, only upon Tablewerks’ acceptance of a purchase order. There is nothing in the Vendor Agreement that requires Tablewerks to accept a purchase order from Oneida, nor is there any fixed duration for the purported “contract”-it simply is not a supply agreement. Accordingly, even if the Vendor Agreement could somehow be enforced against Steelite, Steelite would have no obligation to accept a single purchase order from Oneida. As the Court explained in Hall v. Paramount Pictures Corp., a case curiously cited by Oneida in its brief, “[t]he liability of a successor company is limited to the liability possessed by the predecessor company,” and that liability “cannot be more burdensome than that of the constituent corporation.” Id., 2002 U.S. Dist. LEXIS 14850, at *25-26. Given the foregoing, if Oneida somehow managed to prevail on its claim against Steelite for breach of the Vendor Agreement, it still could not possibly obtain the injunctive relief it seeks under section (c) of its proposed order, in which it incredibly asks the court to enjoin Steelite “from refusing to accept and fulfill any commercially reasonable purchase order Oneida presents for product sourced through Royal Porcelain…,” and such an order could not be enforced against Royal Porcelain in any event. Moreover, based on the terms of the Vendor Agreement, Oneida cannot substantiate the injunctive relief it seeks under section (a) of its proposed order, through which it requests an injunction prohibiting Steelite from selling the at-issue products. In the face of overwhelming evidence of Tablewerks’ and now Steelite’s ownership of the at-issue intellectual property and distribution rights, Oneida has desperately latched onto and taken out of context the first sentence of section 5 of the Vendor Agreement, a provision pertaining to indemnification rights, not exclusive distribution rights. Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 26 of 31 PageID #: 1290Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 27 of 32 Page ID #:88 - 22 - Throughout the course of these proceedings, Oneida has repeatedly ignored the remainder of section 5, in a deliberate attempt to conceal from the Court the overall context. Section 5 provides as follows: Seller agrees that any design supplied by it for the manufacture of goods for Buyer’s account will be for the sole and exclusive use of Buyer and its subsidiaries. If any claim is made against Buyer alleging that any design or good supplied by Seller to Buyer hereunder infringes the rights of any third party, Seller will defend such claim at its own expense, hold Buyer harmless from any claim for damages for such infringement and indemnify Buyer against all actual loss and expense in connection with such infringement. With respect to any such claim Buyer shall (1) promptly notify Seller in writing of the existence of such claim; (2) permit Seller to take full charge of the defense thereof; and (3) cooperate fully with Seller in the defense thereof. Complaint Exhibit 4. Clearly, this standard indemnification provision was not intended to grant Oneida perpetual, exclusive rights in the subject products but, rather, was designed to mitigate the possibility of an infringement claim brought against Oneida by another purchaser/reseller. Moreover, even if Oneida’s tortured interpretation of the first sentence were to be adopted, the provision would only apply during the life of the “contract,” which could not conceivably be viewed as having survived Steelite’s December 13, 2016 letter to Oneida stating that Steelite would not fill future purchase orders. Oneida also speciously argues that paragraph 4 of the Vendor Agreement, which applies to “designs supplied by [Oneida],” prevents Tablewerks and now Steelite from selling the First and Second Tableware Products to parties other than Oneida. However, as explained above, Oneida did not participate in the design of either product, and thus, such designs do not qualify as “designs supplied by Oneida.” Accordingly, paragraph 4 also cannot form the basis of Oneida’s requested injunction. Moreover, under New York law, contracts of indefinite duration, including exclusive distribution contracts, are deemed to be agreements “not to be performed within one year” and are therefore void without a signed writing. General Obligations Law §5-701(a)(1); George Burke Co. v. Intermetro Industries Corp., 268 A.D.2d 310 (1st Dep’t 2000) (exclusive distribution contract); see also Sanyo Elec., Inc. v. Pinros & Gar Corp., 174 A.D.2d 452 (1st Dep’t 1991) (plaintiff claimed right to be defendant’s primary distributor); Holloway v. King, 361 F. Supp. 2d 351, 356-57 (S.D.N.Y. 2005), aff’d, Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 27 of 31 PageID #: 1291Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 28 of 32 Page ID #:89 - 23 - 161 Fed. App’x. 122 (2d Cir. 2005) (right to share of earnings indefinitely). Further, New York U.C.C. §2-201 (1) provides that “a contract for the sale of goods for the price of $500 or more is not enforceable … unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought.” This provision has been applied to distributorship agreements. See Sanyo Elec., 174 A.D.2d at 452. Accordingly, Oneida could not have obtained exclusive distribution rights from Tablewerks. By contrast, Steelite did obtain exclusive distribution rights from Tablewerks. Exhibit JJ. In sum, the Vendor Agreement was never signed by Steelite, an entity that has not been shown to be Tablewerks’ successor, was never signed by Tablewerks, would not have, in any event, required Tablewerks or Steelite to supply Oneida with any product for any period of time, and would not have conveyed to Oneida perpetual, exclusive distribution rights in the subject products. Oneida’s reliance on the Vendor Agreement is outrageous. It is even more outrageous considering that Oneida has been through two (2) bankruptcies since 2007, a circumstance that Oneida has failed altogether to address. Finally, Oneida initially contended that a confidentiality agreement signed in 2011-well after the First and Second Tableware Products were designed and launched-by Tablewerks, Oneida, and Royal Porcelain (the “Confidentiality Agreement”) was somehow breached. Oneida does not explain how the Confidentiality Agreement was breached, or who breached it, probably because the Confidentiality Agreement, by its express terms, applied to a single product development “Project” that has nothing to do with any product at issue in this case. See Complaint Exhibit 5, ¶ 1. As Tablewerks’ counsel has already explained to Oneida via a letter dated January 6, 2017, the Confidentiality Agreement “related only to a ‘Project’ that was never undertaken by Tablewerks involving shapes that were never used by Tablewerks.” The Confidentiality Agreement, quite simply, has nothing to do with any product at issue in this case, and Oneida’s reliance on it is disingenuous, to say the least. In sum, Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 28 of 31 PageID #: 1292Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 29 of 32 Page ID #:90 - 24 - Oneida cannot succeed on the merits of its breach of contract claims, whether based on the Vendor Agreement or the Confidentiality Agreement. X. CONCLUSION For all of the foregoing reasons, Steelite respectfully requests that the Court deny Oneida’s request for injunctive relief in its entirety. Respectfully submitted, STEELITE INTERNATIONAL U.S.A. INC. By: /s/ Howard Shipley Peter G. Siachos NY Bar ID No. 4436168 psiachos@gordonrees.com GORDON & REES LLP One Battery Park Plaza, 28th Floor New York, NY 10004 Phone: (212) 269-5500 Fax: (212) 269-5505 John G. Ebken PA Bar ID No. 91031 jebken@gordonrees.com P. Gavin Eastgate PA Bar ID No. 86061 geastgate@gordonrees.com GORDON & REES LLP 707 Grant Street, Suite 3800 Pittsburgh, PA 15219 Phone: (412) 577-7400 Fax: (412) 347-5461 Howard Shipley D.C. Bar ID No. 460645 hshipley@gordonrees.com GORDON & REES LLP 1300 I Street, N.W., Suite 825 Washington, DC 20005 Phone (202) 399-1009 Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 29 of 31 PageID #: 1293Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 30 of 32 Page ID #:91 - 25 - Fax: (202) 800-2999 Attorneys for Defendant Steelite International U.S.A., Inc. Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 30 of 31 PageID #: 1294Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 31 of 32 Page ID #:92 - 26 - CERTIFICATE OF SERVICE I hereby certify that the foregoing Steelite International U.S.A., Inc.’s Post-Hearing Memorandum of Law was filed electronically on April 28, 2016. Notice of this filing will be sent to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system. s/ Howard Shipley Howard Shipley Case 2:17-cv-00957-ADS-AKT Document 78 Filed 04/28/17 Page 31 of 31 PageID #: 1295Case 2:17-cv-02996-SVW-E Document 12-3 iled 06/09/17 age 32 of 32 Page ID #:93 EXHIBIT 2 Case 2:17-cv-02996-SVW-E Document 12-4 Filed 06/09/17 Page 1 of 10 Page ID #:94 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 1 of 9 Page ID #:8Case 2:17-cv-02996-SVW-E Document 12-4 Filed 06/09/17 Page 2 of 10 Page ID #:95 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 2 of 9 Page ID #:9Case 2:17-cv-02996-SVW-E Document 12-4 Filed 06/09/17 Page 3 of 10 Page ID #:96 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 3 of 9 Page ID #:10Case 2:17-cv-029 6-SVW-E Document 12 4 6 09 4 10 Page ID #:97 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 4 of 9 Page ID #:11Case 2:17-cv-029 6-SVW-E Document 12 4 6 09 5 10 Page ID #:98 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 5 of 9 Page ID #:12Case 2:17-cv-029 6-SVW-E Document 12 4 6 09 6 10 Page ID #:99 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 6 of 9 Page ID #:13Case 2:17-cv-02996-SVW-E Document 12-4 Filed 06/09/17 Page 7 of 10 Page ID #:100 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 7 of 9 Page ID #:14Case 2:17-cv-02996-SVW-E Document 12-4 Filed 06/09/17 Page 8 of 10 Page ID #:101 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 8 of 9 Page ID #:15Case 2:17-cv-02996-SVW-E Document 12-4 Filed 06/09/17 Page 9 of 10 Page ID #:102 Case 2:17-cv-02996-SVW-E Document 1-1 Filed 04/20/17 Page 9 of 9 Page ID #:16Case 2:17-cv-02996-SVW-E Document 12-4 Filed 06/09/17 Page 10 10 Page ID #:103 EXHIBIT 3 Case 2:17-cv-02996-SVW-E Document 12-5 Filed 06/09/17 Page 1 of 3 Page ID #:104 From: Grant, Jeff H. [mailto:jgrant@foxrothschild.com] Sent: Friday, April 21, 2017 6:06 PM To: Nahra-Samantha Cc: Shaeffer, John Subject: RE: Tuxton China, Inc. Ms. Nahra - Attached is a courtesy copy of the complaint filed by Tuxton China, Inc. yesterday. Formal service will be completed upon The Oneida Group, Inc.’s agent for service of process in California once summons issues. Warm Regards, Jeff From: Grant, Jeff H. Sent: Monday, April 17, 2017 1:39 PM To: 'samantha.nahra@theoneidagroup.com' Subject: Tuxton China, Inc. Ms. Nahra‐ I represent Tuxton China, Inc. (“Tuxton”) in connection with the issues raised in your letter to my client dated April 7, 2017. As I have only just received the letter, and as certain of my client’s principals are currently abroad, we will not be able to respond to your letter by the date set forth therein (April 17, 2017). However, we are endeavoring to thoroughly investigate the issues you have raised and will provide you with a substantive response no later than the end of next week. In the meantime, please feel free to contact me should you have any questions or concerns. Warm Regards, Jeff Jeff Grant Counsel Fox Rothschild LLP 1800 Century Park East Suite 300 Los Angeles, CA 90067‐1506 (310) 228‐4483 ‐ direct (310) 556‐9828‐ fax jgrant@foxrothschild.com www.foxrothschild.com Case 2:17-cv-02996-SVW-E Document 12-5 Filed 06/09/17 Page 2 of 3 Page ID #:105 - 2 - This email contains information that may be confidential and/or privileged. If you are not the intended recipient, or the employee or agent authorized to receive for the intended recipient, you may not copy, disclose or use any contents in this email. If you have received this email in error, please immediately notify the sender at Fox Rothschild LLP by replying to this email and delete the original and reply emails. Thank you. <45469141_1_001 - Complaint w-Ex. A-C3.PDF.attachctrl> Case 2:17-cv-02996-SVW-E Document 12-5 Filed 06/09/17 Page 3 of 3 Page ID #:106 EXHIBIT 4 Case 2:17-cv-02996-SVW-E Document 12-6 Filed 06/09/17 Page 1 of 3 Page ID #:107 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ----------------------------------------------------------X THE ONEIDA GROUP, Plaintiff, REPORT AND - against - RECOMMENDATION CV 17-957 (ADS) (AKT) STEELITE INTERNATIONAL, U.S.A., INC., TABLEWERKS, INC., RICHARD ERWIN, STEVEN LEFKOWIZ, and ANTHONY DELOSREYES, Defendants. ----------------------------------------------------------X A. KATHLEEN TOMLINSON, Magistrate Judge: District Judge Arthur Spatt issued an Order [DE 28] referring this Lanham Act case to the undersigned to conduct a hearing on plaintiff’s motion for preliminary injunction, temporary restraining order, and expedited discovery [DE 12] and to report and recommend whether the motion should be granted, and, if so, the relief to be awarded. Judge Spatt signed the Order To Show Cause on February 22, 2017 and set the hearing for February 27, 2017 at 4 p.m. [DE 8]. The Show Cause Order contained a modified temporary restraining order which was to be in effect until the hearing on February 27, 2017. Defendants’ counsel requested some time to file papers in opposition and consented to the imposition of the temporary restraining order until the February 27, 2017 hearing. This Court conducted the hearing on February 27, 2017. Having reviewed the extensive motion papers submitted by both sides, having heard oral argument on the motion, and finding that the circumstances warrant the Court’s maintaining the status quo while it considers the issues raised and renders an expedited decision, the Court respectfully recommends to Judge Case 2:17-cv-00957-ADS-AKT Document 33 Filed 02/28/17 Page 1 of 2 PageID #: 763ase 2:17-cv-02996-SVW E Document 12-6 Filed 06/09/17 Page 2 of 3 age ID #:108 Spatt that the temporary restraining order remain in place until the decision is rendered, on or before March 14, 2017. The Court further recommends that the plaintiffs be required to post security in the amount of $5 million in a form satisfactory to the Court, within 48 hours, for the payment of any costs and damages as may be incurred by any party if it is found that the plaintiff is not entitled to the restraint recommended here. SO ORDERED. Dated: Central Islip, New York February 27, 2017 /s/ A. Kathleen Tomlinson A. KATHLEEN TOMLINSON U.S. Magistrate Judge 2 Case 2:17-cv-00957-ADS-AKT Document 33 Filed 02/28/17 Page 2 of 2 PageID #: 764ase 2:17-cv-02996-SVW E Document 12-6 Filed 06/09/17 Page 3 of 3 age ID #:109 EXHIBIT 5 Case 2:17-cv-02996-SVW-E Document 12-7 Filed 06/09/17 Page 1 of 19 Page ID #:110 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------------X THE ONEIDA GROUP INC., Plaintiff, REPORT AND RECOMMENDATION -against - CV 17-0957 (ADS) (AKT) STEELITE INTERNATIONAL, USA, INC., TABLEWERKS, INC., RICHARD ERWIN, STEVEN LEFKOWITZ and ANTHONY DELOSREYES, Defendants. ------------------------------------------------------------X A. KATHLEEN TOMLINSON, Magistrate Judge: Plaintiff The Oneida Group Inc. (“Plaintiff” or “Oneida”), commenced this action for injunctive relief and damages against Defendants Steelite International, USA, Inc. (“Steelite”), Tablewerks, Inc. (“Tablewerks”), Richard Erwin, Steven Lefkowitz and Anthony Delosreyes (collectively, “Defendants”). Plaintiff asserts claims for (1) trade dress infringement pursuant to Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), (2) unfair competition under New York law, (3) trade secret misappropriation in violation of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836, (4) New York common law claims of misappropriation of trade secrets, (5) Ohio common law claims of misappropriation of trade secrets, (6) breach of contract, and (7) tortious interference with business relationship. Plaintiff has moved for a Temporary Restraining Order and Preliminary Injunction to prevent Steelite from delivering infringing products and also seeks leave to conduct limited discovery on an expedited basis. Presently before the Court is Plaintiff’s motion for a temporary restraining order. On February 23, 2017 Judge Spatt referred the matter to this Court to issue a Report and Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 1 of 18 PageID #: 809ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 2 of 19 age ID #:111 Recommendation. Following a hearing on February 27, 2017, this Court recommended to Judge Spatt on February 28, 2017 that he enter a temporary restraining order maintaining the status quo pending the entry of this decision. Defendants objected to that Order on the grounds that the temporary restraining order which was entered went beyond the evidence presented by the parties. For the reasons set forth below, this Court respectfully recommends to Judge Spatt that the temporary restraining order, limited to the BOTTICELLI and NEXUS patterns, be continued through such time as a decision can be rendered on Plaintiff’s request for a Preliminary Injunction. A hearing on the motion is currently set for April 10, 2017 at 9:30 am. I. BACKGROUND The following information is taken from the allegations in the Complaint and the parties’ submissions on this motion. The facts summarized below and the legal conclusions following them are without prejudice to any subsequent findings made by Judge Spatt following a full preliminary injunction hearing. See Barefoot Contessa Pantry v. Aqua Star, No.15-CV-1092, 2015 WL 845711, at *1 (S.D.N.Y. Feb. 26, 2015). Plaintiff Oneida is a major designer and seller of cutlery and tableware to the consumer and foodservice industries and is the largest supplier of dinnerware to the foodservice industry in North America. Compl. ¶ 11. Oneida offers high quality bright white porcelain dinnerware through its Sant’ Andrea brand. Id., ¶ 18. The Sant’ Andrea brand consists of a number of dinnerware patterns, including the BOTTICELLI and NEXUS patterns. Id. Certain of the dinnerware products sold by Oneida, including the BOTTICELLI and NEXUS patterns, are manufactured by Royal Porcelain Public Co., Ltd. (“Royal Porcelain”), a dinnerware manufacturer located in Thailand. Id., ¶ 13. Although this dinnerware is sourced from Royal 2 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 2 of 18 PageID #: 810ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 3 of 19 age ID #:112 Porcelain, Oneida places its orders for products manufactured by Royal Porcelain with Defendant Tablewerks Inc. (“Tablewerks”), Royal Porcelain’s exclusive North American distributor. See Plaintiff’s Memorandum of Law in Support of Motion for a Temporary Restraining Order, Preliminary Injunction, and Order Granting Leave to Take Expedited Discovery (“Pl.’s Mem.”) [DE 20] at 1. Oneida began offering the BOTTICELLI line in 2001. Compl. ¶ 21. This pattern was developed by renowned designers David Queensberry and Martin Hunt. Compl. ¶ 20. The parties do not agree on whether or not Oneida provided input into the design process. See Declaration of David Queensberry in Opposition to Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“Queensberry Decl.” ) [DE 24], ¶¶ 6-13. Oneida has earned accolades for its BOTTICELLI line from industry publications such as Tabletop Journal. Compl. ¶ 22. Tablewerks holds a patent on the design of the BOTTICELLI pattern because of rights assigned to it by Queensberry. See Declaration of Richard Erwin in Opposition to Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“Erwin Decl.” ) [DE 27], ¶ 16. Oneida began offering the NEXUS line in 2008. Compl. ¶¶ 28-29. Again, there is a dispute with respect to the design of this pattern. Queensberry Decl., ¶¶ 12-14. Oneida has received similar recognition for this pattern. Compl. ¶ 30. Tablewerks also has a patent on the NEXUS pattern. Erwin Decl., ¶ 21. The BOTTICELLI advertising materials offer a three-year limited warranty and claim that all pattern names and designs are the intellectual property of Oneida. Compl., Ex. 2 at 1-2. The NEXUS advertising material offers the same three-year limited warranty, similarly claims proprietary trade dress rights and also claims to be the exclusive distributor of NEXUS 3 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 3 of 18 PageID #: 811ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 4 of 19 age ID #:113 dinnerware in the United States. Compl., Ex. 3 at 35-36. Plaintiff has provided an affidavit from Daniel Hoffman, Director of Food and Beverage Programs, Global Operation at Marriott International, Inc. See Affidavit of Daniel Hoffman in Support of Motion for Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“ Hoffman Aff.” ) [DE 19] , ¶ 3. Hoffman attests to the distinctive nature of the trade dress for both the BOTTICELLI and NEXUS patterns. Hoffman Aff., ¶¶ 11-12. The details of the claimed trade dress are also provided in the Declaration of Paul Gebhardt, Senior Vice for some speech President of Design and Creative Director of Oneida. See Declaration of Paul Gebhardt in Support of Motion for Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“Gebhardt Decl.” ) [DE 18], ¶¶ 16-20, 25-28. Similarly, the Complaint details the precise features of the BOTTICELLI and NEXUS patterns which give rise to Plaintiff’s claim of trade dress infringement. Compl. ¶¶ 23, 31. The Complaint and several affidavits also provide pictures of the BOTTICELLI and NEXUS patterns and advertising materials. Compl. ¶¶ 20, 21, 28; Gebhardt Decl., ¶¶ 16, 25, Ex. 4, 5; see Declaration of Corrie Byron in Support of Motion for Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“Byron Decl.” ) [DE 16], Ex. 1, 2. Other than two pictures depicting dinnerware patterns currently offered by Steelite, which resemble patterns offered by Oneida, no other patterns are discussed by Plaintiff either in the Complaint or in any affidavits or declarations. Accordingly, for purposes of this motion for a temporary restraining order, all “discussions” shall be limited to the BOTTICELLI and NEXUS patterns. In December 2016, Defendant Steelite acquired the assets of Tablewerks and informed Oneida that it would no longer receive dinnerware from Royal Porcelain. Compl., Ex. 1; Pl.’s 4 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 4 of 18 PageID #: 812ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 5 of 19 age ID #:114 Mem., Ex. 1. Following this announcement (and Steelite’s hiring of two of Oneida’s key salespeople), the parties began negotiations to resolve this issue and entered into a “Standstill Agreement” on February 10, 2017. That Standstill Agreement is annexed as Exhibit 1 to the Declaration of Peter G. Siachos, Esq. (“Siachos Decl.”) [DE 6], counsel to Defendant Steelite in this action. The Standstill Agreement stated that “. . . Steelite and Oneida will work in good faith through February 21 toward a potential settlement . . . and will refrain from initiating litigationst during the Standstill Period.” Siachos Decl., Ex. 1. While the Standstill Agreement was still in place, Steelite attended the North American Foodservice Equipment (“NAFEM”) trade show and told customers that it would begin selling the dinnerware in question on March 1, 2017. According to affidavits presented by Plaintiff, Steelite also informed customers that Oneida would no longer be able to provide dinnerware manufactured by Royal Porcelain, specifically the BOTTICELLI and NEXUS patterns. See Declaration of Vincent Del-Cid in Support of Motion for Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“Del-Cid Decl.”) [DE 17], ¶¶ 6-12, Ex. 2-6; Byron Decl., ¶¶ 21-22. This litigation ensued. II. LEGAL STANDARD The standard for obtaining a temporary restraining order is the same as the standard for obtaining a preliminary injunction. See, e.g., EricMany Ltd. v. Agu, No. 16-CV-2777, 2016 U.S. Dist. LEXIS 73016 (E.D.N.Y. June 3, 2016); Oliva v. Brookwood Coram I, LLC, No. 14-CVC- 2513, 2015 WL 3637010, at *1 (E.D.N.Y. 2015); Von Grabe v. Ziff Davis Publishing Co., No. 91 Civ. 6275, 1994 WL 719697, at *1 (S.D.N.Y. 1994). The purpose of a temporary restraining order “‘is not to give the plaintiff the ultimate relief it seeks. It is to prevent irreparable injury so as to preserve the court’s ability to render a meaningful decision on the merits.’” PCS Wireless 5 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 5 of 18 PageID #: 813ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 6 of 19 age ID #:115 LLC v. A to Z Wireless Solutions Inc., 841 F. Supp. 2d 649, 652 (E.D.N.Y. 2012) (quoting WarnerVision Entm't Inc. v. Empire of Carolina, Inc., 101 F.3d 259, 261 (2d Cir. 1996)); see J.P.T. Auto., Inc. v. Toyota Motor Sales, U.S.A., Inc., 659 F. Supp. 2d 350, 363 (E.D.N.Y. 2009) (“The purpose of a preliminary injunction is to prevent hardship and preserve the status quo until final determination of the action.”). Because it “is one of the most drastic tools in the arsenal of judicial remedies,” Hanson Trust PLC v. ML SCM Acquisition, Inc., 781 F.2d 264, 273 (2d Cir. 1986), injunctive relief is “an extraordinary remedy that should not be granted as a routine matter.” JSG Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75, 80 (2d Cir. 1990); see Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008) (“A preliminary injunction is an extraordinary remedy never awarded as of right.”). In order to obtain a temporary restraining order, the movant must show “(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party seeking the preliminary relief.” Citigroup Global Mkts., Inc. v. VCG Special Opportunities Master Fund Ltd., 598 F.3d 30, 35 (2d Cir. 2010) (quoting Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979); accord Almontaser v. N.Y. City Dep't of Educ., 519 F.3d 505, 508 (2d Cir. 2008)). “The party seeking the injunction carries the burden of persuasion to demonstrate, ‘by a clear showing,’ that the necessary elements are satisfied.” Dexter 345 Inc. v. Cuomo, No. 11 Civ. 1319, 2011 WL 1795824, at *1 (S.D.N.Y. May 3, 2011) aff'd, 663 F.3d 59 (2d Cir. 2011) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)); see also Citibank, N.A. v. Cititrust, 756 F.2d 273, 275 (2d Cir. 1985). 6 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 6 of 18 PageID #: 814ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 7 of 19 age ID #:116 III. LEGAL STANDARD A. Irreparable Harm Similar to the issuance of a preliminary injunction, “[t]he most important element in determining whether to grant a TRO is a demonstration by the movant that without the order, the movant is likely to suffer irreparable injury.” Von Grabe v. Ziff Davis Publishing Co., 1994 WL 719697, at *2.; see Rodriguez ex rel. Rodriguez v. DeBuono, 175 F.3d 227, 233-34 (2d Cir. 1999); Mitchell v. Century 21 Rustic Realty, 233 F. Supp. 2d 418, 431 (E.D.N.Y.) aff'd, 45 F. App'x 59 (2d Cir. 2002) (“Proof of irreparable harm is the key to obtaining preliminary injunctive relief.”). “Because of this, ‘the moving party must first demonstrate that such injury is likely before the other requirements for the issuance of an injunction will be considered.’” Dexter 345 Inc., 2011 WL 1795824, at *1 (quoting Rodriguez, 175 F.3d at 234); see Grand River Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60, 66 (2d Cir. 2007). “If the movant fails to make a showing of irreparable harm, the motion for a preliminary injunction must fail.” Id. (citing Rodriguez, 175 F.3d at 234 (“In the absence of a showing of irreparable harm, a motion for a preliminary injunction should be denied.”)). To establish irreparable harm, movants must demonstrate “they will suffer an injury that is neither remote nor speculative, but actual and imminent, and one that cannot be remedied if a court waits until the end of trial to resolve the harm.” Faiveley Transp. V. Wabtec Corp., 559 F.3d 110, 118 ((2d Cir. 2009) (quoting Grand River, 481 F.3d at 66); see, e.g., Jackson Dairy, 596 F.2d at 72. “To constitute ‘irreparable’ harm, an injury must ‘be one incapable of being fully remedied by monetary damages.’” Medgar Evers Houses Assocs., L.P. v. Carro, No. 01-CV- 6107, 2001 WL 1456190, at *4 (E.D.N.Y. Nov. 6, 2001) (quoting Reuters Ltd. v. United Press 7 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 7 of 18 PageID #: 815ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 8 of 19 age ID #:117 Int'l, Inc., 903 F.2d 904, 907 (2d Cir.1990)); Rodriguez, 175 F.3d at 234 (irreparable injury “cannot be remedied by an award of monetary damages”); accord Tucker Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 975 (2d Cir.1989) (“The injury must be one requiring a remedy of more than mere money damages. A monetary loss will not suffice unless the movant provides evidence of damage that cannot be rectified by financial compensation.”). The court must not “presume that the plaintiff will suffer irreparable harm;” rather, “the court must actually consider the injury the plaintiff will suffer if he or she loses on the preliminary injunction but ultimately prevails on the merits, paying particular attention to whether the ‘remedies available at law, such as monetary damages, are inadequate to compensate for that injury.’” Salinger v. Colting, 607 F.3d 68, 80 (2d Cir. 2010) (quoting eBay, Inc. v. MercExchange, 547 U.S. 388, 391 (2006)); see also Vox Amplification, Ltd. v. Meussdorffer, No. CV 13-4922, 2014 WL 558866 at *5 (E.D.N.Y. Feb. 11, 2014) (applying Salinger standard to trademark cases). "Loss of goodwill and injury to reputation are injuries that are difficult to measure in dollars, and thus, these types of injuries are irreparable harm." Coastal Distribution v. Town of Babylon, No. 05 CV 2032, 2006 WL 270252, at *3 (E.D.N.Y. Jan. 31, 2006), "Loss of good will is particularly hard to quantify because monetary damages do not 'redress the loss of a relationship with a client that would produce an indeterminate amount of business in years to come.'" Marks Org., Inc., v. Joles, 784 F.Supp.2d 322 (S.D.N.Y. 2011); see also EricMany Ltd. v. Agu, 2016 U.S. Dist. LEXIS 73016; Christopher Norman Chocolates, Ltd. v. Schokinag Chocolates N. Am., Inc., 270 F. Supp.2d 432, 435-36 (S.D.N.Y. 2003). Plaintiff here has demonstrated a loss of goodwill. According to unrefuted affidavits submitted by Plaintiff, as a result of its inability to fulfill orders and the confusion created by 8 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 8 of 18 PageID #: 816ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 9 of 19 age ID #:118 Steelite’s actions at the NAFEM trade show, Oneida has received instructions from customers to either put on hold or completely rescind approximately $ 1 million in already-placed orders for dinnerware products. Byron Decl., ¶ 22. Oneida has received emails and phone calls from customers asking for clarification of the situation with Steelite. Byron Decl., ¶¶ 17-22. Oneida has been supplier of this dinnerware to the foodservices industry for many years and has expended considerable effort and money to build up this brand. The loss of goodwill and confusion which will be created by allowing Steelite to sell the identical dinnerware, without first determining whether Steelite has the right to do so will be immeasurable. In view of the foregoing analysis, the Court finds Plaintiff has demonstrated that it will suffer irreparable harm if Steelite is allowed to sell the allegedly infringing dinnerware prior to a ruling on the preliminary injunction. B. Sufficiently Serious Questions Regarding the Merits Having satisfied the first prong of the test for a temporary restraining order, the Court next examines whether Plaintiff has demonstrated a substantial likelihood of success on the merits or sufficiently serious questions going to the merits to make them fair grounds for litigation, with the balance of the hardships tipping decidedly in Plaintiff's favor. See D.D. v. New York City Bd. of Educ., 465 F.3d 503, 510 (2d Cir. 2006); Sunward Elecs. v. McDonald, 362 F.3d 17, 24 (2d Cir. 2004).1 To prevail on a Lanham Act claim for trade dress infringement, Plaintiff must show: Plaintiff’s claims of trade dress infringement and unfair competition arise out of the1 same set of facts and need not be addressed separately. Tactica, 154 F. Supp.2d at 597 (no material difference in the law governing Section 43(a) of the Lanham Act and unfair competition). 9 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 9 of 18 PageID #: 817Case 2:17-cv-029 6-SVW-E Document 12-7 Filed 06/09/17 Page 10 9 Page ID #: 19 “first, that the trademark or trade dress is valid and entitled to protection, and second, that defendant's use of the trademark or trade dress is likely to cause consumer confusion as to the origin, affiliation or association, or endorsement of defendant's goods or services.” Barefoot Contessa, 2015 WL 845711, at *3. To be entitled to protection, Plaintiff must also establish that the "unregistered trade dress is 'not functional.'" Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 116 (2d Cir. 2001); see also Traffix Devices v. Mktg. Displays, 532 U.S. 23, 29 (2001) ("[T]rade dress protection may not be claimed for product features that are functional."); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992) ("[E]ligibility for protection under § 43(a) [of the Lanham Act] depends on nonfunctionality."). While Defendants do not concede that the dinnerware pattern is entitled to trade dress protection, much of the focus of the parties has been on which party owns the trade dress, if it can be considered trade dress at all. 1. 1. Ownership Of the Trade Dress The facts of this case do not fit squarely into any of the indicia of ownership, particularly since the manufacturer of the product, Royal Porcelain, is not a party to the action. However, however, taken as a whole, Plaintiff has satisfied its burden of demonstrating sufficiently serious questions going to the merits of Plaintiff’s claim. In general, when a dispute arises between a manufacturer of a product and a distributor of a product, a court fist looks for an agreement between the parties regarding ownership of the mark. Barefoot Contessa, 2015 WL 845711, at *3. Where no agreement is present, there is a presumption that the manufacturer owns the mark; however, that presumption is rebuttable. See Software AG, Inc. v. Consist Software Solutions, Inc., No. 08 Civ. 389, 2008 WL 563449, at *17 (S.D.N.Y. Feb. 21, 2008) , ("Absent a clear manifestation of intent by a supplier [or 10 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 10 of 18 PageID #: 818ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 11 of 19 age ID #:120 manufacturer] to transfer ownership of a trademark to a distributor, the supplier [or manufacturer] remains the rightful owner" of a trademark registration), aff'd, 323 F. App'x 11 (2d Cir. 2009); Tactica Int'l, Inc. v. Atlantic Horizon Int'l, Inc., 154 F. Supp. 2d 586, 600 (S.D.N.Y. 2001). That presumption is rebutted where there is evidence that when the “goods pass through the distributors hands,” the distributor gives the goods the benefit of its reputation and standing in the industry. Tactica, 154 F. Supp. 2d at 600; see also Tecnimed SRL v. Kidz-Med, Inc., 763 F. Supp. 2d 395, 403 (S.D.N.Y. 2011). Plaintiff here has presented evidence that it has marketed, advertised and warrantied the BOTTICELLI and NEXUS dinnerware. Plaintiff has attended trade shows displaying these items, won awards from the industry for these patterns, and made frequent presentations to its clients featuring the products, Compl. ¶¶ 25, 33, all of which “give the goods the benefit of its reputation and standing in the industry.” Thus, Plaintiff has alleged enough to rebut the presumption that Royal Porcelain owns the trade dress. There are five factors to consider determining trade dress superior ownership as between a manufacturer and distributor. First, and the most hotly contested here is “which party invented and first affixed the mark onto the product.” Tactica, 154 F. Supp.2d at 600 The creation of the design of the trade dress is not the proper inquiry, however - the question is who first used it commercially and acquired superior rights to it. See Frederick v. Carson, No. 99 C 7838, 1999 2 WL 1249342, at *2 (N.D. Ill. Dec. 10, 1999); ITC Ltd. v. Punchgini, Inc., 482 F.3d 135, 147 (2d Cir. 2007) ("[S]o long as a person is the first to use a particular mark to identify his goods or The Court recognizes that Steelite, through is acquisition of Tablewerks, holds the2 patent to the design. However, the inquiry does not end there. See Lon Tai Shing Co., LTD. v. Koch & Lowy, No. 90 Civ. 4464, 1990 U.S. Dist. LEXIS 19123, at * 113 (S.D.N.Y. Dec. 14, 1990). 11 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 11 of 18 PageID #: 819ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 12 of 19 age ID #:121 services in a given market, and so long as that owner continues to make use of the mark, he is entitled to prevent others from using the mark to describe their own goods in that market" (internal quotation marks omitted)). While Tablewerks, now Steelite, may hold the patent rights to the dinnerware design, there is no evidence presented that it has ever used the mark in commerce. At all times from the creation of the design to the present, Oneida has been the party which has sold the dinnerware to consumers and the foodservices industry. Thus, this factor weighs in favor of Oneida. Next the Court must consider “which parties name appeared with the trademark” or trade dress in this case. Haggar Int'l Corp. v. United Co. for Food Industry Corp., 906 F. Supp. 2d 96, 112 (S.D.N.Y. 2012). Advertisements may be used to show which parties name appeared with the trade dress. Haggar, 906 F. Supp. 2d at 119. Here the Royal Porcelain stamp appeared on the bottom of the product. However, the Oneida name appears with the pictures of the product in advertisements. Compl., Ex. 2, 3; Gebhardt Decl., Ex. 4, 5; Byron Decl., Ex. 1, 2. Third, the Court must consider which party maintained the quality and uniformity of the product. Defendants have provided evidence that in the dinnerware industry generally, customers look to the manufacturer when assessing the quality of the goods, see Declaration of Allan Keck in Opposition to Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“Keck Decl.” ) [DE 26], ¶¶ 4-6, and that “Royal Porcelain’s involvement as the manufacturer of these products is the primary driver of purchasing decisions.” Declaration of Paul Kuzina in Opposition to Temporary Restraining Order, Preliminary Injunction, and Expedited Discovery Order (“Kuzina Decl.” ) [DE 27], ¶ 17. While these statements may provide support for assertions regarding the quality of the product, they do not 12 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 12 of 18 PageID #: 820ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 13 of 19 age ID #:122 shed light on which party maintained the quality or uniformity of the product. Fourth, the Court must consider “with which party the public identified the product and to whom purchasers made complaints.” Barefoot Contessa, at *12. Neither party has provided anything more than conclusory allegations regarding consumer complaints. For purposes of the issuance of a temporary restraining order, the Court gives greater weight to Plaintiff’s conclusion that customers would voice complaints to Oneida, rather than to Royal Porcelain in Thailand. Neither party has argued that Tablewerks received customer complaints. Finally, “a court may look at which party possesses the goodwill associated with the product, or which party the public believes stands behind the product.” Tactica, 154 F. Supp.2d at 600. Some courts consider which party paid for advertising and promoting the product as indicia of goodwill. Haggar, 906 F. Supp.2d at 113; see also Autotech Techs. Ltd. P'ship v. Automationdirect.com, Inc., No. 05 C 5488, 2007 WL 2388794, at *3 (N.D. Ill. Aug. 17, 2007) (considering “which party paid for advertising and promotion of the trademarked product,” "which party possesses the goodwill associated with the product, or which party the public believes stands behind the product"). Here, based upon the limited evidence presented, it appears that until the NAFEM trade show in February 2017, the only party who had advertised or promoted the BOTTICELLI or NEXUS patterns was Oneida. Thus, this factor weighs in favor of Oneida. Plaintiff has presented evidence sufficient to raise serious questions going to the ownership of the trade dress of the BOTTICELLI and NEXUS dinnerware patterns. 13 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 13 of 18 PageID #: 821ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 14 of 19 age ID #:123 2. Secondary Meaning Having established serious questions going to the merits on the preliminary question of ownership, Plaintiff must also demonstrate that the design of the BOTTICELLI and NEXUS dinnerware patterns is valid trade dress and worthy of protection. Here too, Plaintiff has met that burden at this stage of the litigation.3 “An identifying, unregistered mark is capable of protection if it is either (1) inherently distinctive or (2) has acquired distinctiveness through secondary meaning.” Tactica, 154 F.Supp. 2d at 599. An unregistered mark, or trade dress, includes “the design and appearance of the product as well as that of the container." Jeffrey Milstein, Inc. v. Greger, 58 F.3d 27, 31 (2d Cir. 1995). Where the claim of trade dress is based on the product design, the plaintiff “may prove distinctiveness by showing . . . that ‘in the minds of the public, the primary significance of [the mark] is to identify the source of the product rather than the product itself’ (what is known as ‘acquired distinctiveness’ or ‘secondary meaning’)." Yurman Design, 262 F.3d at 115 (quoting Wal-Mart Stores v. Samara Bros., Inc., 529 U.S. 205, 210-11 (2000)). "Under the rubric of inherent distinctiveness, the focus of the inquiry is whether or not the trade dress of a product serves primarily as an indication of origin, such that consumers will readily rely on it to distinguish the product from those of competing manufacturers." Forschner Grp., Inc. v. Arrow Trading Co., 124 F.3d 402, 407-08 (2d Cir. 1997). "Association of origin reflects the goodwill a manufacturer has built up in its product such that prospective consumers associate this product feature with the producer rather than with the product itself." Forschner Because Steelite seeks to sell the exact dinnerware, produced by the same3 manufacturer, there can be no doubt that consumer confusion will follow. As such, Plaintiff has demonstrated a likelihood of success on the merits with respect to that element of its claim. 14 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 14 of 18 PageID #: 822ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 15 of 19 age ID #:124 Grp., 124 F.3d at 408. Courts consider the following six factors when evaluating whether trade dress has acquired secondary meaning: "(1) advertising expenditures, (2) consumer studies linking the dress to the source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to plagiarize the dress, and (6) length and exclusivity of the [dress]'s use." L. & J.G. Stickley, Inc. v. Canal Dover Furniture Co., 79 F.3d 258, 263 (2d Cir. 1996) (quotations omitted). However, "no single factor is determinative, and every element need not be proved[.]" Id. (quotations omitted). Based upon the evidence presented at this early stage of the litigation, this factor tips in favor of Plaintiff’s claim of secondary meaning. At this point, no consumer studies have been conducted, nor has any evidence been presented regarding attempts to plagiarize the pattern. Oneida has presented evidence of advertising expenditure (Byron Decl., ¶¶ 6-7) (Gebhardht Decl., Ex. 4), unsolicited media coverage (Gebhardt Decl., ¶ 18), sales success (Byron Decl., ¶¶ 10-11), and length and exclusivity of use (Byron Decl., ¶ 6). Defendants attempt to contradict this evidence through the testimony of a single distributor of dinnerware who states that he associates the design of the product with Royal Porcelain. Kuzina Decl., ¶ 17). This is not enough to overcome the weight of the evidence in Plaintiff’s favor. 3. Balance of the Hardships Finally, Plaintiff Oneida has demonstrated that the balance of the hardships tips in its favor. Plaintiff has been the exclusive distributor of the BOTTICELLI pattern for the past 15 years and the NEXUS pattern for the past 8 years. Compl. ¶¶ 13, 21, 28; Pl.’s Mem. at 7, 8. Defendants, on the other hand, have never sold this line of dinnerware directly to the consumer 15 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 15 of 18 PageID #: 823ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 16 of 19 age ID #:125 and, indeed, Steelite only recently acquired its interest in Tablewerks. Compl. ¶¶ 14, 17; Byron Decl., ¶ 16. Among other things, Steelite’s representation to Oneida customers that dinnerware products sold by Oneida under the SANT’ ANDREA® brand “soon would only be available through Steelite going forward and that Oneida would not be able to provide such products once its inventory runs out,” Byron Decl., ¶ 16, directly impacts Oneida’s goodwill. Oneida faces a considerable loss of goodwill from its inability to fulfill outstanding orders and the uncertainty created by the actions of Defendants at recent trade shows. Byron Decl., ¶¶ 17-22. The Court also takes note of an Oneida customer’s email stating that he understood Oneida would no longer be selling SANT’ ANDREA® products because Steelite had purchased Tablewerks. Del-Cid Decl., ¶ 5 and Ex. 1. Another significant customer advised that “We’ve been advised by Steelite that any future production orders for Botticelli must be issued to them.” Byron Decl., ¶ 17 and Ex. 3. Moreover, on January 5, 2017, one of Oneida’s key customers confirmed that Steelite told them Steelite acquired the rights to the designs and distribution of Royal Porcelain products. Id., ¶ 18. Moreover, any harm Defendants face is a result of their own actions. See Barefoot Contessa, 2015 WL 845711, at *8. Defendant Steelite took a risk in acquiring Tablewerks and attempting to cut Oneida out of the process and sell goods directly to consumers on their own. This Report and Recommendation “merely pauses existing production and shipping of infringing products-thereby restoring the parties to the status quo that existed before Defendants began production of the allegedly infringing goods-pending the preliminary injunction hearing” on April 10, 2017. Id., 2015 WL 845711, at *7. 16 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 16 of 18 PageID #: 824ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 17 of 19 age ID #:126 Because I find that Plaintiff has demonstrated irreparable harm along with sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in Oneida’s favor with respect its Lanham Act claim for trade dress infringement, I have not considered Plaintiff’s remaining claims for purposes of the issuance of this temporary restraining order. IV. CONCLUSION Based on the foregoing analysis, I respectfully recommend to Judge Spatt that Plaintiff’s motion for a temporary restraining order pending resolution of Plaintiff’s motion for a Preliminary Injunction, scheduled for April 10, 2017 be GRANTED. V. OBJECTIONS Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72 of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report and Recommendation to file written objections. See also Fed. R. Civ. P. 6(a) and (e). Such objections shall be filed with the Clerk of the Court via ECF. A courtesy copy of any objections filed is to be sent to the Chambers of the Honorable Arthur D. Spatt, and to the undersigned’s Chambers as well. Any requests for an extension of time for filing objections must be directed to Judge Spatt prior to the expiration of the fourteen (14) day period for filing objections. Failure to file objections will result in a waiver of those objections for purposes of appeal. Thomas v. Arn, 474 U.S. 140, 155 (1985); Beverly v. Walker, 118 F.3d 900, 901 (2d Cir. 1997), cert. denied, 522 U.S. 883 (1997); Savoie v. Merchants Bank, 84 F.3d 52, 60 (2d Cir. 1996). 17 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 17 of 18 PageID #: 825ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 18 of 19 age ID #:127 SO ORDERED. Dated: Central Islip, New York March 14, 2017 /s/ A. Kathleen Tomlinson A. KATHLEEN TOMLINSON U.S. Magistrate Judge 18 Case 2:17-cv-00957-ADS-AKT Document 45 Filed 03/14/17 Page 18 of 18 PageID #: 826ase 2:17-cv-02996-SVW E Document 12-7 Filed 06/09/17 Page 19 of 19 age ID #:128 EXHIBIT 6 Case 2:17-cv-02996-SVW-E Document 12-8 Filed 06/09/17 Page 1 of 41 Page ID #:129 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK THE ONEIDA GROUP INC. Plaintiff, - against - STEELITE INTERNATIONAL U.S.A. INC., TABLEWERKS, INC., RICHARD ERWIN, STEVEN LEFKOWITZ, and ANTHONY DELOSREYES Defendants. Civil Action No.: __________ JURY TRIAL DEMANDED VERIFIED COMPLAINT Plaintiff The Oneida Group Inc. (“Oneida”) for its Verified Complaint states, upon personal knowledge as to its own actions and on information and belief as to all other matters, as follows: NATURE OF THE ACTION 1. This is an action for injunctive relief, as well as damages, based on trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a), unfair competition under New York common law, trade secret misappropriation in violation of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836, New York state common law pertaining to misappropriation of trade secrets, Ohio state laws pertaining to misappropriation of trade secrets, Ohio Rev. Code § 1333.61 et seq., breach of contract, and tortious interference with business relations. THE PARTIES 2. Plaintiff Oneida is a Delaware corporation with its principal place of business at 519 N. Pierce Ave, Lancaster, Ohio 43130. Oneida Ltd. is a wholly-owned subsidiary of Oneida and has a place of business in Oneida, New York. Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 1 of 40 PageID #: 1Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 2 of 41 Page ID #:130 3. Defendant Steelite International U.S.A. Inc. (“Steelite”) is a New Jersey corporation having a principal place of business at 154 Keystone Drive, New Castle, Pennsylvania 16105. Steelite maintains a place of business at 1140 Broadway #1201, New York, New York 10001 and conducts business in New York and in this District. 4. Defendant Tablewerks, Inc., also known as North Rock Trading Company, Inc. (“Tablewerks”), is a New York corporation having a principal place of business at 24 Audrey Avenue, Oyster Bay, New York 11771. 5. Defendant Richard Erwin (“Erwin”) is an individual residing at 12 Sound Bay Drive, Lloyd Harbor, New York 11743. 6. Defendant Steven Lefkowitz (“Lefkowitz”) is an individual residing at 6 Taft Drive, Smithtown, New York 11787. 7. Defendant Anthony DeLosReyes (“DeLosReyes”) is an individual residing at 3 Yardley Drive, Dix Hills, New York 11746. JURISDICTION AND VENUE 8. This Court has jurisdiction over this action pursuant to the Lanham Act, 15 U.S.C. § 1051 et seq., the Defend Trade Secrets Act, 18 U.S.C. § 1836(c), and 28 U.S.C. §§ 1331, 1338. This Court has supplemental jurisdiction over the other claims asserted herein, pursuant to 28 U.S.C. § 1367. 9. Defendants are subject to this Court’s personal jurisdiction pursuant to due process and/or the New York Long Arm Statute, due at least to their presence in the State, the substantial business conducted in this forum, directly and/or through intermediaries, including having solicited business in the State of New York, transacted business within the State of New York and attempted to derive financial benefit from residents of the State of New York, including benefits directly related to the causes of action set forth herein, and having placed their 2 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 2 of 40 PageID #: 2Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 3 of 41 Page ID #:131 products and services into the stream of commerce throughout the United States and having been actively engaged in transacting business in New York and in this District. 10. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because each Defendant is subject to personal jurisdiction in this District, and either resides in this District, has regularly conducted business in this District, and/or the events giving rise to this action, or a substantial part thereof, occurred in this District. ONEIDA AND ITS PROMINENCE IN THE INDUSTRY 11. Oneida is one of the world’s largest designers and sellers of stainless steel and silver-plated cutlery and tableware for the consumer and foodservice industries. It is also the largest supplier of dinnerware to the foodservice industry in North America. The company operates in the United States, Canada, Mexico, Latin America, Europe, and Asia marketing and distributing tabletop products, which include flatware, dinnerware, crystal stemware, glassware, and kitchen tools and gadgets. The company originated in the mid-nineteenth century in Oneida, New York. In the 1990’s, Oneida Limited began focusing on design and marketing of its products that are globally sourced. Design, sales, marketing, advertising, procurement, customer service, legal, and operational support are based in various locations, including in Oneida, New York. 12. Oneida is a leading global marketer of tabletop and food preparation products for the consumer and foodservice markets. With a comprehensive line of tabletop and food preparation solutions, Oneida markets products globally under a broad range of well-known consumer brands including Oneida and Anchor Hocking. Oneida operates glass manufacturing plants in the U.S. and sources a variety of proprietary designed tableware products from outside the U.S. 3 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 3 of 40 PageID #: 3Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 4 of 41 Page ID #:132 13. For over twenty (20) years, Oneida has sourced Oneida’s premier dinnerware products from Royal Porcelain Public Co., Ltd. (“Royal Porcelain”), a dinnerware manufacturer in Thailand, through Tablewerks, the purportedly exclusive North American distributor of Royal Porcelain. This extensive business relationship included, among other things, an agreement that Oneida had the exclusive right to sell dinnerware products in North America that Royal Porcelain supplied through Tablewerks, an agreement by Tablewerks and Royal Porcelain not to supply any competitors with designs selected by Oneida, and the provision of substantial sums by Oneida for equipment and tooling to allow Royal Porcelain to make Oneida’s dinnerware products. 14. Unbeknownst to, and without the consent or consultation of, Oneida, Steelite purportedly acquired substantially all of the assets and rights of Tablewerks on December 12, 2016. On December 13, 2016, Steelite’s President and CEO John Miles sent a letter (“Steelite Letter”) (a true and correct copy of which is attached as Exhibit 1) advising Oneida of this acquisition. 15. Thereafter Steelite refused to recognize any contractual relationship between Oneida and Tablewerks. Although the Steelite Letter stated that Steelite “will respect any valid intellectual property owned by” Oneida, Steelite has not kept its commitment. Steelite has recently started offering and selling Oneida’s dinnerware designs without Oneida’s authorization. 16. The Steelite Letter also falsely stated that there was no contractual relationship between Oneida and Tablewerks or Royal Porcelain and that it would fulfill only existing purchase orders for Oneida products sourced from Royal Porcelain. After the date of the Steelite 4 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 4 of 40 PageID #: 4Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 5 of 41 Page ID #:133 Letter, Steelite initially rejected purchase orders submitted by Oneida but has since agreed, based on recent negotiations, to fulfill certain purchase orders submitted by Oneida for a short period. 17. Since the purported acquisition of Tablewerks, Steelite has stepped into the shoes of Tablewerks in material ways such that the acquisition amounts to a merger or consolidation and Steelite is a mere continuation of Tablewerks. On information and belief, Steelite (i) retained all or nearly all of the employees and management of Tablewerks, (ii) provides the same distribution of products that had been supplied through Tablewerks, (iii) has maintained a continuity of assets because it purportedly acquired substantially all assets of Tablewerks, (iv) has continued business operations since the purported acquisition, as evidenced by the continued fulfillment of existing Oneida purchase orders as agreed in the Steelite Letter, and (v) holds itself out as the successor enterprise to Tablewerks for providing products manufactured by Royal Porcelain. ONEIDA’S TRADE DRESS 18. Oneida offers elegant tabletop solutions in an impressive variety of shapes and bodies suitable for luxury- and fine-dining establishments to casual eateries. Oneida’s dinnerware is known for its unequaled design relevance in the marketplace, durability, practicality, and detail. These offerings include brands like SANT’ ANDREA® that include the highest quality bright white porcelain, translucent bone china, or MAXADURA alumina porcelain in a variety of shapes and styles. With a prestigious heritage, distinctive shapes, and exceptional craftsmanship, the elite SANT’ ANDREA® brand, established in 1990, evokes European tradition and unites modern themes with timeless classic design, gracing prestigious fine-dining establishments all over the world. The dinnerware products marketed under the SANT’ ANDREA® brand carry a consistent and inherently distinctive trade dress developed by 5 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 5 of 40 PageID #: 5Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 6 of 41 Page ID #:134 Oneida. Oneida’s portfolio of patterns in the SANT’ ANDREA® brand include the BOTTICELLI®, NEXUS™, TRAPEZE™, SAHARA™, ROYALE™, FUSION™, CIRCA™, CROMWELL™, QUEENSBURY™, MOOD™, IMPRESSIONS™, MONTAGUE™, OTHELLO™, TENOR™, CATO™, SURREY™ dinnerware lines. 19. Oneida owns the trade dress on the products of Oneida’s SANT’ ANDREA® brand because, inter alia, Oneida developed the designs of these products, including Oneida’s BOTTICELLI® and NEXUS™ dinnerware, Oneida’s name appears with the products bearing the trade dress and in the advertisements and promotions of those products, Oneida maintains the quality and uniformity of the products bearing the trade dress, and the public identifies the products as Oneida’s and poses product questions to, and makes product complaints to, Oneida. Oneida’s BOTTICELLI® Dinnerware 20. In the 1990s, Oneida worked with world-renowned designers David Queensberry and Martin Hunt to help Oneida develop distinctive dinnerware for foodservice and institutional settings to invoke European styling and dining, that ultimately resulted in the BOTTICELLI® line, examples of which are depicted below: 6 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 6 of 40 PageID #: 6Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 7 of 41 Page ID #:135 21. Since the introduction of the BOTTICELLI® design and trade dress in 2001, Oneida has expanded the line of BOTTICELLI® dinnerware to provide a comprehensive solution for the foodservice and institutional industry. 22. The BOTTICELLI® design and trade dress has gained nationwide recognition and acclaim. The BOTTICELLI® design and trade dress has been cited for its success in industry publications such as the Tabletop Journal. Oneida has earned several accolades for the BOTTICELLI® design and trade dress, including dinnerware awards in the banquet, catering, and resort industries. For example: • Dinnerware winner of tabletop competition at Hotel Experience Show in New York (2015) • Banquet and Catering First Place: Piazza, Canton, Ohio (2014) • Club and Resort, Honorable Mention: Brookside Country Club, Canton, Ohio (2014) 23. The elements of the BOTTICELLI® trade dress and design, which include the images in paragraph 20 above and Exhibit 2, comprise a combination of features that include: • Patterned organic circle-shaped texturing on the top outer surface of plates, platters, and saucers; 7 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 7 of 40 PageID #: 7Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 8 of 41 Page ID #:136 • Patterned organic circle-shaped texturing on the outer surface of cups, bowls, and mugs; • A steep leaf rim angle on plates and platters; • A smooth flat center well area on plates and saucers differentiated from the patterned top outer surface; • A smooth interior area on bowls and cups differentiated from the patterned outer surface; and • A rim geometry on all products that has a thick portion near the end of the rim and tapers to a rounded edge at the tip of the rim. (collectively, the “BOTTICELLI® Trade Dress”). 24. The BOTTICELLI® Trade Dress is unique, distinctive, and nonfunctional, and it is not necessary for others to use this trade dress to compete in the marketplace. The unique and distinctive look and feel of the BOTTICELLI® Trade Dress identifies and distinguishes the BOTTICELLI® dinnerware from competitors’ products. 25. Oneida has invested millions of dollars in advertising, promoting, and selling BOTTICELLI® dinnerware, and Oneida’s promotion, and sale of dinnerware embodying the BOTTICELLI® Trade Dress has been continuous since its introduction in 2001. Oneida prepares catalogs for its customers, advertises on its website, and attends more than twenty (20) trade shows throughout the United States where it features the BOTTICELLI® lines. In addition, Oneida frequently makes presentations featuring its dinnerware products, including BOTTICELLI®, to its existing clients and to prospective clients. Oneida also advertises the BOTTICELLI® line in select print publications. True and correct copies of representative examples of Oneida’s advertisements reflecting the prominent use of the BOTTICELLI® Trade Dress are attached hereto as Exhibit 2. 26. Oneida’s marketing efforts have been incredibly successful. The commercial foodservice and institutional industry has come to recognize and immediately associate the 8 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 8 of 40 PageID #: 8Case 2:17-cv-02996-SVW-E Docu ent 12-8 Filed 06/09/17 Page 9 of 41 Page ID #:137 BOTTICELLI® Trade Dress with Oneida as a result of the extensive and continuous promotion and sales of dinnerware emphasizing the BOTTICELLI® Trade Dress for more than fifteen years. As a result of these efforts, the BOTTICELLI® Trade Dress has acquired appreciable secondary meaning, which identifies and distinguishes the BOTTICELLI® dinnerware from dinnerware offered by competitors. 27. Oneida’s BOTTICELLI® trade dress for the BOTTICELLI® dinnerware represents highly valuable goodwill owned by Oneida. Oneida’s NEXUS™ Dinnerware 28. In 2007 and 2008, Oneida again worked with world-renowned designers David Queensberry and Martin Hunt to help Oneida develop a distinctive dinnerware line with a unique, arcing decoration adorning a fashion-forward shape for contemporary tabletop arrangements, that resulted in the NEXUS™ line, examples of which are depicted below: 9 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 9 of 40 PageID #: 9Case 2:17-cv-02996-SVW-E 2-8 Filed 06 09/17 Page 10 of 41 Page ID #:138 29. Since the introduction of the NEXUS™ design and trade dress in 2009, Oneida has expanded the line of NEXUS™ dinnerware to provide a comprehensive solution for the foodservice and institutional industry. 30. The NEXUS™ design and trade dress has gained nationwide recognition and acclaim. The NEXUS™ design has been cited for its success in industry publications such as the Tabletop Journal. 10 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 10 of 40 PageID #: 10Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 11 of 41 Page ID #:139 31. The elements of the NEXUS™ trade dress, which include the images in paragraph 28 above and Exhibit 3, comprise a combination of features that include: • A decal comprising decorative concentric circles around the perimeter rim of plates, platters, saucers, and shallow bowls; • A decal comprising decorative concentric circles on the outer surface of cups, deep bowls, and mugs; • A square-shaped inside smooth surface framed by the decal on round plates and saucers; • A trapeze-like arcuate-shaped inside smooth surface framed by the decal on square and rectangular plates, platters, and certain bowls; • The juxtaposition of square and circle shapes within a single piece plates, bowls, and saucers; and • Either the use of a standard footring, or flat foot surface on the bottom of all of the products. (collectively, the “NEXUS™ Trade Dress”). 32. The NEXUS™ Trade Dress is unique, distinctive, and nonfunctional, and it is not necessary for others to use this trade dress to compete in the marketplace. The unique and distinctive look and feel of the NEXUS™ Trade Dress identifies and distinguishes the NEXUS™ dinnerware from competitors’ products. 33. Oneida has invested millions of dollars in advertising, promoting, and selling NEXUS™ dinnerware, and Oneida’s promotion, and sale of dinnerware embodying the NEXUS™ Trade Dress has been continuous since its introduction in 2009. Oneida prepares catalogs for its customers, advertises on its website, and attends more than twenty (20) trade shows throughout the United States where it features the NEXUS™ line. In addition, Oneida frequently makes presentations featuring its dinnerware products, including NEXUS™, to its existing clients and to prospective clients. Oneida also advertises the NEXUS™ line in select print publications. True and correct copies of representative examples of Oneida’s 11 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 11 of 40 PageID #: 11Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 12 of 41 Page ID #:140 advertisements reflecting the prominent use of the NEXUS™ Trade Dress are attached hereto as Exhibit 3. Certain of these advertisements expressly state that the NEXUS™ Trade Dress is Oneida property that will be enforced: The Nexus™ dinnerware configuration constitutes proprietary trade dress. Rights in the trade dress will be enforced against unauthorized simulations. Oneida Ltd. owns the trademark Nexus™ and is the exclusive distributor of the dinnerware in the United States. 34. Oneida’s marketing efforts have been incredibly successful. The commercial foodservice and institutional industry has come to recognize and immediately associate the NEXUS™ Trade Dress with Oneida as a result of the extensive and continuous promotion and sales of dinnerware emphasizing the NEXUS™ Trade Dress for nearly ten years. As a result of these efforts, the NEXUS™ Trade Dress has acquired appreciable secondary meaning, which identifies and distinguishes the NEXUS™ dinnerware from dinnerware offered by competitors. 35. Oneida’s NEXUS™ trade dress for the NEXUS™ dinnerware represents highly valuable goodwill owned by Oneida. ONEIDA’S TRADE SECRETS 36. Through its efforts and investment, Oneida has developed a great deal of valuable trade secret, confidential, and proprietary information regarding the marketing and sale of its products. These trade secrets concern valuable marketing, sales, and strategy information and include, but are not limited to, (1) Oneida’s “where to play and how to win” business strategy that includes information about customer segmentation and product category particularized by sub-category and sub-channels, (2) Oneida’s go-to market strategy for interacting with customers based on proprietary developed customer segmentation and end-user analysis, (3) Oneida’s product margins, costs, rebate programs, other trade spend activities, and proposed changes in those rebate programs and trade spend activities, (4) Oneida’s costs, margins, and expected 12 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 12 of 40 PageID #: 12Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 13 of 41 Page ID #:141 pricing of customer specific designs, and (5) Oneida’s customer sales forecasting and customer- specific account strategy. 37. The above-described trade secrets are extremely valuable to Oneida because they are secret, extremely difficult, costly, and time-consuming to develop, and are only known to a select few people at Oneida, and because such information is not made public and is not easy, or is impossible, to ascertain independently. 38. Oneida has exercised reasonable efforts to preserve the secrecy of the above- described trade secrets and confidential information. Among other such measures, Oneida’s employees and consultants, in consideration for their compensation and receipt of confidential Oneida information, are required by Oneida to sign agreements not to divulge to any unauthorized person, or to use for any unauthorized purpose, any secret, confidential, or private information connected with Oneida’s business. Oneida also requires all third parties, such as vendors and suppliers, to execute non-disclosure and/or confidentiality agreements not to disclose to any unauthorized person or entity, any secret, confidential, or private information connected with Oneida’s business. In addition, Oneida maintains a Global Employee Handbook and Policy Guide (the “Handbook”) that provides requirements for protecting Oneida trade secrets and confidential information. For example, the Handbook states that “No employee shall disclose client information or confidential business information to any third party….” The Handbook prohibits “Unauthorized copying, removal, or misuse of company records, blueprints, materials, products, or confidential information, including photographs” and prohibits “divulg[ing] trade secrets or otherwise confidential information of the company.” Oneida further maintains and follows a formal Records Retention Policy that inter alia requires documents 13 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 13 of 40 PageID #: 13Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 1 of 41 Page ID #:142 containing Oneida trade secrets and confidential information to be properly secured and, when necessary, disposed of in a secure manner to prevent unauthorized disclosure. TABLEWERKS’ RELATIONSHIP WITH ONEIDA 39. Defendant Erwin is the President of Tablewerks and has served as Oneida’s point of contact at Tablewerks for at least twenty (20) years. 40. On April 1, 2007, Tablewerks and Oneida entered into an agreement entitled Business Requirements for All Vendors of Oneida Ltd. (“Vendor Agreement”). The Vendor Agreement expressly limits the ability of Tablewerks to use designs supplied to Oneida. Pertinent portions of Paragraphs 4 and 5 of the Procurement section of the Vendor Agreement (a true and correct copy of which is attached as Exhibit 4), provide as follows: Designs Supplied by Buyer [Oneida]: Seller [Tablewerks] will use designs supplied by Buyer exclusively for the manufacture of goods for Buyer or its subsidiaries and warrants that it will not manufacture, give or sell goods incorporating, or otherwise give or sell said designs to any third party. Buyer retains all rights, title and interest in any and all designs furnished by it hereunder. Designs Supplied by Seller [Tablewerks]: Seller agrees that any design supplied by it for the manufacture of goods for Buyer’s account will be for the sole and exclusive use of Buyer and its Subsidiaries…. 41. None of the parties have terminated the Vendor Agreement, and the Vendor Agreement is valid and in force. 42. On January 17, 2011, Tablewerks, Oneida, and Royal Porcelain entered into a Confidentiality Agreement (“Tablewerks Confidentiality Agreement”) pursuant to which Tablewerks made certain commitments concerning Oneida’s confidential information. Specifically, paragraphs 1-3 and 6 of the Tablewerks Confidentiality Agreement (a true and correct copy of which is attached as Exhibit 5) (emphasis added), provide as follows: 1. CONFIDENTIAL INFORMATION. In the process of quoting and producing an Oneida proprietary dinnerware shape VENDOR (“the Project”), VENDOR 14 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 14 of 40 PageID #: 14Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 15 of 41 Page ID #:143 will receive from Oneida certain information, including but not limited to, technical drawings, prototypes and other proprietary information regarding a new dinnerware shape (jointly “Confidential Information”). Upon each and every disclosure of Confidential Information, VENDOR will have a duty to protect and keep confidential all Confidential Information. Unless otherwise designated by Oneida in advance, Oneida deems all information provided to VENDOR under this agreement confidential. 2. NON-DISCLOSURE. VENDOR agrees (a) not to disclose or reveal Confidential Information to any person other than its officers and employees who are actively and directly participating in the Project or who otherwise need to know the Confidential Information for the purpose of the Project and (b) not to use the Confidential Information for any purpose other than in connection with the Project including but not limited to using the information to produce dinnerware for competitors of Oneida or for its own benefit. All Confidential Information in tangible form, disclosed or created hereunder, shall be returned to Oneida at Oneida's written request. 3. TERMINATION. Termination of this Agreement shall not relieve VENDOR of any confidentiality obligation with respect to Confidential Information disclosed or developed hereunder prior to termination. 6. REMEDIES. In the event of any breach or threatened breach by VENDOR of its obligations hereunder, Oneida shall be deemed to have suffered irreparable harm and shall be entitled to seek and obtain equitable relief in the form of temporary restraining orders and preliminary injunctions to enforce this Agreement. Such remedies shall be in addition to any other remedies available at law or in equity. Furthermore, VENDOR shall be responsible for and shall indemnify Oneida for all costs incurred while enforcing this Agreement, including but not limited to, attorney fees and court costs. In addition to the foregoing, in the event that it can be shown that VENDOR’s breach of its obligations hereunder directly or indirectly cause or contribute to a loss of or decline in sales of Oneida dinnerware product, VENDOR will indemnify Oneida for three (3) times the amount of the resulting loss of Oneida revenue. 43. None of the parties have terminated the Tablewerks Confidentiality Agreement, and the Tablewerks Confidentiality Agreement is valid and in force. 44. Tablewerks continues to owe a contractual duty to Oneida not to disclose or use Oneida’s trade secrets or confidential information without Oneida’s authorization. Tablewerks also owes a contractual duty to Oneida not to oppose Oneida’s present request for injunctive 15 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 15 of 40 PageID #: 15Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 16 of 41 Page ID #:144 relief and expressly agrees to pay all costs and attorneys’ fees for enforcing the Tablewerks Confidentiality Agreement. LEFKOWITZ’S RELATIONSHIP WITH ONEIDA 45. Defendant Lefkowitz acted a sales representative for Oneida for approximately twenty-five (25) years. Over this period of time, Defendant Lefkowitz helped develop and manage Oneida’s business relationship with various foodservice and institutional customers. Defendant Lefkowitz was also paid to co-develop, along with Oneida’s other personnel, sales strategies, launch plans, customer-contact tactics, etc. tailored to the dinnerware market. 46. On May 15, 2014, Defendant Lefkowitz entered into a letter agreement with Oneida (the “Lefkowitz Agreement”) under which Defendant Lefkowitz agreed to serve as an independent sales representative, agreed to noncompetition and nonsolicitation covenants, and agreed not to reveal to any unauthorized person, or to use for his own benefit, any confidential or proprietary information connected with Oneida’s business. Paragraph 5 of the Lefkowitz Agreement (a true and correct copy of which is attached as Exhibit 6) (emphasis added), provides as follows: 5. Restrictive Covenants. (a) Noncompetition. In consideration of the Service Fees, while this Agreement remains in effect, you agree that you will not, directly or indirectly, engage, whether as a proprietor, partner, principal, joint venture participant, employer, agent, employee, consultant, officer, director or investor, alone or in association with any other person, firm, corporation or other entity (other than an owner of less than one percent of the capital stock of a publicly traded entity), in any business or activity that competes with the business conducted by the Company in the geographical area in which it is engaged or will engage in such business during such period. (b) Nonsolicitation. (i) You agree that while this Agreement remains in effect, you will not in any way, directly or indirectly, whether as a proprietor, partner, principal, joint venture participant, employer, agent, employee, consultant, officer, director or 16 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 16 of 40 PageID #: 16Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 17 of 41 Page ID #:145 investor, alone or in association with any other person, firm, corporation or other entity, for purposes of selling, or otherwise soliciting the purchase of, a product or service that competes with any product or service sold by the Company, call upon, solicit, advise or otherwise do, or attempt to do, business with any person or entity who is, or was during your employment, a client or customer of the Company, or take away or interfere or attempt to take away or to interfere with any customer, trade, business, patronage or affair of the Company. Notwithstanding anything contained in this Section 5, Company agrees that you may engage in business activities with clients or customers of the Company so long as the products and/or services offered for sale to such clients or customers do not compete with products or services offered by the Company. (ii) You agree that during the Term you will not in any way, directly or indirectly, whether as a proprietor, partner, principal, joint venture participant, employer, agent, employee, consultant, officer, director or investor, alone or in association with any other person, firm, corporation or other entity, solicit, induce to leave, hire (or attempt to hire) or otherwise interfere (or attempt to interfere) with any person or entity who is at such time, or was during the term of this Agreement, an employee, officer, consultant, representative or agent of the Company. (c) Confidentiality. You agree that at no time during the Term or thereafter will you, except in performance of the Services, directly or indirectly, reveal to any person, entity or other organization or use for your own benefit any information deemed to be confidential or proprietary by the Company relating to the assets, liabilities, employees, goodwill, business or affairs of the Company, including, without limitation, any information concerning past, present or prospective customers, suppliers, manufacturing processes or marketing data, or any other confidential or proprietary information (“Confidential Information”). You further agree that you will not, without the prior written consent of the Company, remove or take from the Company’s premises (or if previously removed or taken, at the Company's request, to promptly return) any written Confidential Information or any copies or extracts thereof. Upon the request and at the expense of the Company, you will promptly make all disclosures, execute all instruments and papers and perform all acts reasonably necessary to vest and confirm in the Company, fully and completely, any and all rights in Confidential Information. *** (d) Return of Company Property. Upon the termination of this Agreement for any reason, you will immediately return all property and material in your possession that belongs or relates to the Company, including all originals and copies of files, writings, reports, memoranda, diaries, notebooks, notes of meetings or presentations, data, computer software and hardware, diskettes, cellular phones, drawings, charts, photographs, slides, patents, or another form of record which contains information belonging to or created or produced by, for or at the direction of the Company, or any employee or agent thereof. 17 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 17 of 40 PageID #: 17Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 18 of 41 Page ID #:146 (e) Rights and Remedies Upon Breach. The parties acknowledge and agree that any breach of the covenants in this Section [5] will cause immediate and irreparable injury, direct or indirect, to the Company and that money damages will not provide adequate remedy. You therefore agree that if you violate any of the restrictions covenants hereunder, the Company will be entitled, among and in addition to any other rights or remedies available under this Agreement or at law or in equity, to temporary and permanent injunctive relief, without bond or other security, to prevent you from committing or continuing a breach of such covenants. If you breach any of your obligations under this Section [5], the Company may, upon written notice to you, terminate its obligations to make any further payments to you as described in Section [4]. 47. During his contractual relationship with Oneida, Defendant Lefkowitz had access to and obtained some or all of at least the trade secrets defined above. 48. Defendant Lefkowitz continues to owe a contractual duties to Oneida, including not to disclose or use Oneida’s trade secrets or confidential information without Oneida’s authorization. Lefkowitz also owes a contractual duty to Oneida not to oppose Oneida’s present request for injunctive relief. 49. On or about January 3, 2017, Defendant Lefkowitz sent a letter to Oneida seeking to terminate his contract and stated that he “will remain with the company for 30 days through the end of business Friday, February 3, 2017 to assist in any transition of my responsibilities.” (A true and correct copy of this letter is attached as Exhibit 7.) 50. On information and belief, Defendant Lefkowitz has accepted employment or entered into a consulting relationship with Steelite and/or Tablewerks. 51. On or about January 4, 2017, Defendant Lefkowitz met with an Oneida employee to return Oneida property but failed to return all property and materials in his possession that belongs to or relates to Oneida. Defendant Lefkowitz claimed to have deleted all Oneida-related property and materials on his computer prior to the meeting. Defendant Lefkowitz refused to let Oneida personnel access the computer to search for Oneida property and materials. Rather, 18 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 18 of 40 PageID #: 18Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 19 of 41 Page ID #:147 Defendant Lefkowitz only provided Oneida with copies of certain files that Defendant Lefkowitz personally selected from his computer. During his meeting with an Oneida employee Defendant Lefkowitz performed certain requested searches on his computer and additional Oneida-related materials were discovered despite his assertions that all Oneida related property and materials had already been deleted and were included in the copies provided to Oneida. Defendant Lefkowitz would not permit the Oneida employee to review the material uncovered by the computer search and instead allegedly deleted all responsive files. FOSTER SULLIVAN’S RELATIONSHIP WITH ONEIDA 52. Foster Sullivan (“Sullivan”) acted a sales representative for Oneida for at least ten (10) years. Over this period of time, Sullivan helped develop and manage Oneida and Oneida’s business relationship with various foodservice and institutional customers. 53. On March 1, 2012, Sullivan entered into an agreement with Oneida (the “Sullivan Agreement”) under which Sullivan agreed to serve as a consulting sales representative and agreed not to reveal to any unauthorized person, or to use for his own benefit, any information deemed confidential or proprietary. Paragraph 5 of the Sullivan Agreement (Exhibit 8), provides as follows: 5. Non-Disclosure of Confidential Information. Consultant agrees that the Confidential Information (defined below) is the exclusive property of Company and shall not be used by Consultant or any of Consultant’s representatives or affiliates except strictly in the performance of Services hereunder. Consultant shall not, misappropriate or disclose or make available any Confidential Information to anyone· at any time during or after the Term or subsequent to the termination of this Agreement for any reason, except as required in the performance of the Consultant’s Services. Upon termination of this Agreement, Consultant shall return all copies of any Confidential Information to Company. For purposes of this Agreement, “Confidential Information” means all proprietary and/or non public information concerning or related to the business, operations, financial condition or prospects, Intellectual Property, Developments, inventions, discoveries, trade secrets, financing sources, strategies, plans, processes, techniques, methods, formulae, ideas and know-how of Company, regardless of the form 19 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 19 of 40 PageID #: 19Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 20 of 41 Page ID #:148 in which such information appears and whether or not such information has been reduced to a tangible form whether or not such information has been marked “Confidential.” 54. During his relationship with Oneida, Sullivan had access to and obtained some or all of at least the trade secrets defined above. 55. Sullivan continues to owe a contractual duty to Oneida not to disclose or use Oneida’s trade secrets or confidential information without Oneida’s authorization. 56. On January 20, 2017, Oneida terminated its relationship with Sullivan. 57. On information and belief, Sullivan has accepted employment or entered into a consulting relationship with Steelite and/or Tablewerks. 58. Sullivan has provided at least Tablewerks and Rick Erwin with Oneida’s confidential, proprietary, and trade secret information. ANTHONY DELOSREYES’ RELATIONSHIP WITH ONEIDA 59. Defendant DeLosReyes has been a sales employee for Oneida for twenty-one (21) years and was most recently vice president of the hotel and gaming division. Over this period of time, Defendant DeLosReyes helped develop and manage Oneida’s business relationship with various customers. 60. On January 23, 1997, Defendant DeLosReyes entered into an Employee Patent and Confidential Information Agreement with Oneida (the “DeLosReyes Agreement”) under which Defendant DeLosReyes agreed not to disclose any information concerning the Company’s trade secrets without written consent. Paragraph D of the DeLosReyes Agreement (a true and correct copy of which is attached as Exhibit 9), provides as follows: D. THAT I WILL NOT DISCLOSE AT ANY TIME (EXCEPT AS MY COMPANY DUTIES MAY REQUIRE) EITHER DURING OR SUBSEQUENT TO MY EMPLOYMENT, ANY INFORMATION, KNOWLEDGE OR DATA OF THE COMPANY I MAY RECEIVE OR DEVELOP DURING THE COURSE OF MY EMPLOYMENT RELATING TO FORMULAS, BUSINESS PROCESSES, METHODS, MACHINES, MANUFACTURERS, 20 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 20 of 40 PageID #: 20Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 21 of 41 Page ID #:149 COMPOSITIONS, INVENTIONS, DESIGNS, DISCOVERIES OR OTHER MATTERS CONCERNING THE COMPANY’S TRADE SECRETS, EXCEPT AS THE COMPANY MAY OTHER WISE CONSENT IN WRITING. 61. During his employment with Oneida, Defendant DeLosReyes had access to and obtained some or all of at least the trade secrets defined above. 62. Defendant DeLosReyes continues to owe a contractual duty to Oneida not to disclose or use Oneida’s trade secrets or confidential information without Oneida’s authorization. 63. Defendant DeLosReyes also received the Handbook, and agreed that he would comply with the policies contained in the Handbook. The Handbook provides in pertinent part: “At no time, while using the company’s Internet access, may you disparage the company or divulge trade secrets or otherwise confidential information of the company.” 64. On or about December 30, 2016, Defendant DeLosReyes sent a letter of resignation to Oneida stating that his last day of employment will be January 13, 2017 and that he has “accepted a job with another company that suits my needs….” (A true and correct copy of this letter is attached hereto as Exhibit 10.) 65. On information and belief, on January 3, 2017, Defendant DeLosReyes connected an external memory drive to his Oneida laptop computer and copied files from his Oneida laptop computer to the external memory drive. 66. On information and belief, Defendant DeLosReyes has accepted employment or a consulting relationship with Steelite and/or Tablewerks. DEFENDANTS’ WRONGFUL CONDUCT 67. On information and belief, each of at least Erwin, Lefkowitz, and DeLosReyes has become associated, formally or otherwise, with Steelite. 21 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 21 of 40 PageID #: 21Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 22 of 41 Page ID #:150 68. Steelite and/or Tablewerks has started offering and selling dinnerware designs from the SANT’ ANDREA® brand, including products bearing Oneida’s BOTTICELLI® Trade Dress and NEXUS™ Trade Dress. In their new roles with Steelite, Lefkowitz and DeLosReyes have started offering and selling Steelite dinnerware products that bear the exact same designs as those from Oneida’s SANT’ ANDREA® brand, including products bearing the BOTTICELLI® Trade Dress and NEXUS™ Trade Dress. 69. On information and belief, Steelite and/or Tablewerks has informed Oneida’s customers that Oneida will not be able to provide SANT’ ANDREA® brand dinnerware products once Oneida runs out of inventory and that such products will only be available through Steelite. 70. Certain key Oneida customers have indicated that that they plan to switch from purchasing dinnerware from Oneida to purchasing dinnerware from Steelite as soon as this month, and have further indicated that they will purchase tableware from whoever has control over products previously manufactured by Royal Porcelain for Oneida. 71. Steelite and/or Tablewerks has also falsely informed certain Oneida customers that Steelite has acquired the rights to the dinnerware designs and the rights to the distribution of products previously manufactured by Royal Porcelain for Oneida. 72. Oneida has the exclusive right to sell dinnerware products that have been supplied by Tablewerks and Royal Porcelain for Oneida. For example, Tablewerks and Erwin agreed that Oneida has global distribution rights to sell the BOTTICELLI® and NEXUS™ dinnerware lines supplied by Royal Porcelain. Steelite does not have the right to sell any dinnerware designs supplied by Tablewerks and manufactured by Royal Porcelain for Oneida. 73. Steelite and Tablewerks have infringed Oneida’s trade dress by marketing, promoting, offering, and selling dinnerware products bearing designs from Oneida’s SANT’ 22 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 22 of 40 PageID #: 22Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 23 of 41 Page ID #:151 ANDREA® brand, including products bearing the BOTTICELLI® Trade Dress and NEXUS™ Trade Dress. 74. In mid-January 2017, Oneida’s business and legal representatives traveled to Youngstown, Ohio for an in-person meeting with Steelite. The parties agreed to a standstill agreement while there were further discussions. In early February, Oneida participated in good faith in a mediation in Pittsburgh, again sending its top business and legal representatives. Exiting the mediation, Oneida was led to believe that the parties were still in good faith negotiations and were on pace to amicably resolve all disputes. Oneida entered another standstill agreement on that basis. 75. Within forty-eight hours of the mediation, on February 9-11, 2017, at the North American Association of Food Equipment Manufacturers (“NAFEM”) trade show in Orlando, Florida, Steelite displayed products identical to Oneida’s SANT’ ANDREA® line of products. 76. On information and belief, at that trade show and elsewhere Steelite told customers that by March 1, 2017, it would deliver the products from Royal Porcelain that Oneida had exclusively sold and that Steelite’s new products would be identical to Oneida’s. 77. At the NAFEM, Steelite displayed and offered dinnerware products bearing the exact same designs of those from Oneida’s SANT’ ANDREA® brand, including products bearing Oneida’s BOTTICELLI® Trade Dress that were manufactured by Royal Porcelain under the name “Belisa.” Steelite’s “Belisa” products are identical to Oneida’s BOTTICELLI® dinnerware and include all of the elements of Oneida’s distinctive BOTTICELLI® Trade Dress. 23 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 23 of 40 PageID #: 23Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 2 of 41 Page ID #:152 Oneida’s BOTTICELLI® Products Steelite’s “Belisa” Products 78. Steelite’s use of Oneida’s intellectual property is clearly calculated to confuse consumers into believing that Oneida has authorized, endorsed, or sponsored Steelite dinnerware products bearing the exact same designs of those from Oneida’s SANT’ ANDREA® brand, including products bearing Oneida’s BOTTICELLI® Trade Dress, or they are affiliated or associated with Oneida, all in violation of Oneida’s intellectual property rights. 79. Steelite’s copying and use of Oneida’s intellectual property in its marketing or advertising, as well as its offering and sale of dinnerware products bearing the exact same designs of those from Oneida’s SANT’ ANDREA® brand, including products bearing Oneida’s BOTTICELLI® Trade Dress, is a clear and deliberate attempt to trade upon Oneida’s valuable 24 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 24 of 40 PageID #: 24Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 25 of 41 Page ID #:153 reputation and goodwill, absent any authorization from Oneida. Indeed, a likelihood of confusion of Steelite’s dinnerware products with Oneida’s SANT’ ANDREA® brand, due to Steelite’s wholesale copying, in bad faith, of Oneida’s intellectual property, can be presumed. 80. A significant proportion of the consuming public is likely to be confused by Steelite’s use of Oneida’s intellectual property in the manner described above and is likely to believe that Steelite’s dinnerware products bearing the exact same designs of those from Oneida’s SANT’ ANDREA® brand derive from Oneida or are associated or affiliated with, and/or endorsed or sponsored by, Oneida. 81. Oneida has not provided, and no Defendant has received, written authorization permitting the disclosure of Oneida trade secrets or confidential information to any other entity. Neither Steelite nor Tablewerks or Erwin has a right to acquire and/or use any Oneida trade secrets or confidential information disclosed without authorization from Oneida. 82. On information and belief, Steelite, Tablewerks, and/or Erwin conspired with and induced one or more of Lefkowitz, DeLosReyes, and/or others to threaten to misappropriate Oneida trade secrets and confidential information in violation of contractual obligations owed to Oneida, and in violation of federal and state laws. For example, in offering and selling Steelite dinnerware products bearing Oneida’s distinctive trade dress to Oneida’s customers, Lefkowitz and DeLosReyes must be disclosing or using Oneida’s trade secrets to benefit Steelite and to injure Oneida. As another example, Sullivan sent an email to Erwin at Tablewerks that contained a link and credentials for accessing a confidential video from Oneida’s CEO that includes Oneida trade secrets and confidential information. In addition, on May 31, 2014, February 29, 2016, and April 21, 2016, Sullivan forwarded confidential Oneida information to 25 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 25 of 40 PageID #: 25Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 26 of 41 Page ID #:154 Rick Erwin of Tablewerks. None of Steelite, Tablewerks, or Erwin sought or obtained Oneida’s permission to receive or use such information. 83. On information and belief, each of the Defendants knowingly acquired, disclosed, and/or used Oneida trade secrets and confidential information to injure Oneida. 84. On information and belief, each of the Defendants threatens to misappropriate Oneida’s trade secrets and confidential information and, due to the nature of the trade secrets, will inevitably disclose and/or use Oneida’s trade secrets and confidential information to injure Oneida. 85. On information and belief, each of the Defendants will inevitably disclose Oneida’s trade secrets and confidential information unless prevented from selling Royal Porcelain products that were previously sold at any time under Oneida’s brands, including but limited to the SANT’ ANDREA® brand and the BOTTICELLI® and NEXUS™ dinnerware lines. 86. As a direct consequence of Defendants’ conduct, Oneida has suffered and will continue to suffer substantial and irreparable harm, including, but not limited to: (i) the loss of customers’ trust and confidence; (ii) the creation of confusion among customers as to Oneida’s connection with, or endorsement or authorization of, Defendants and Steelite’s infringing products; (iii) the loss of customers’ goodwill; (iv) the threatened loss of customers; (v) the actual loss of customers and assets; (vi) injury to reputation; (vii) the disclosure and misappropriation of Oneida trade secrets and confidential information; and (viii) other economic harm to be shown. 87. In addition, Defendants have enriched themselves at Oneida’s expense by advertising and selling products that appropriates and exploits Oneida’s protectable trade dress as 26 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 26 of 40 PageID #: 26Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 27 of 41 Page ID #:155 well as Oneida’s goodwill and reputation. Among the benefits Defendants have gained from this conduct are increased revenues from the sale of their infringing products using the Oneida trade dress, through consumer confusion as to the source of the products or their association or connection with or endorsement of or authorization by Oneida, and increased goodwill. 88. Additionally, if Defendants are not enjoined from using and further misappropriating Oneida’s trade secrets and confidential information to unfairly solicit customers, Oneida will be irreparably harmed. 89. Defendants, either directly or indirectly, threaten to and/or have utilized Oneida trade secrets and confidential information for the purpose of soliciting customers and interfering with their business relations with Oneida. FIRST CAUSE OF ACTION Against Steelite and Tablewerks for Trade Dress Infringement Under the Lanham Act (15 U.S.C. § 1125(a)) 90. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 91. Oneida owns the trade dress for dinnerware designs from Oneida’s SANT’ ANDREA® brand, including Oneida’s BOTTICELLI® Trade Dress and NEXUS™ Trade Dress, which are non-functional, inherently distinctive, and also have acquired substantial secondary meaning in the marketplace by virtue of their use by Oneida in connection with the promotion and sale of goods and services, and have developed valuable goodwill associated therewith. 92. Defendants Steelite and Tablewerks’ infringement and use in commerce of the exact same designs of those from Oneida’s SANT’ ANDREA® brand, including Oneida’s BOTTICELLI® Trade Dress and NEXUS™ Trade Dress has caused or is likely to cause confusion, mistake, or deception as to (i) the affiliation, connection, or association of Oneida 27 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 27 of 40 PageID #: 27Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 28 of 41 Page ID #:156 with Defendants Steelite and Tablewerks and their goods and commercial activities, and/or (ii) the origin, sponsorship, endorsement, or approval of Defendants Steelite and Tablewerks’ goods and commercial activities by Oneida, in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). 93. On information and belief, Defendants Steelite and Tablewerks’ infringement of Oneida’s trade dress associated with Oneida’s SANT’ ANDREA® brand, including Oneida’s BOTTICELLI® Trade Dress and NEXUS™ Trade Dress is willful, deliberate, and in bad faith. 94. Oneida has no adequate remedy at law. Defendants Steelite and Tablewerks’ conduct has caused, and, if not enjoined, will continue to cause immediate and irreparable damage to Oneida’s trade dress rights, business, reputation, and goodwill in a manner that cannot be adequately calculated or compensated in money damages alone. 95. Due to Defendants Steelite and Tablewerks’ violations of the Lanham Act, Oneida is entitled to injunctive relief, actual and compensatory damages in an amount to be determined at trial, disgorgement of profits, attorneys’ fees, costs, and interest. SECOND CAUSE OF ACTION Against Steelite and Tablewerks for Trade Dress Infringement Under New York Common Law 96. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 97. Steelite and Tablewerks’ conduct as alleged above constitutes infringement and misappropriation of the Oneida trade dress for dinnerware designs from Oneida’s SANT’ ANDREA® brand, including Oneida’s BOTTICELLI® Trade Dress and NEXUS™ Trade Dress in violation of Oneida’s rights under common law and in equity. 28 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 28 of 40 PageID #: 28Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 29 of 41 Page ID #:157 98. Upon information and belief, Steelite and Tablewerks’ actions were deliberate, willful, and in conscious disregard of Oneida’s rights. 99. Steelite and Tablewerks’ conduct as alleged above has caused and/or will cause Oneida to suffer injury, for which it has no adequate remedy at law. 100. Oneida is entitled to injunctive relief, actual damages in an amount to be determined at trial, to have such damages trebled, to Steelite and Tablewerks’ profits, to the costs of this action, and to attorneys’ fees. THIRD CAUSE OF ACTION Against Steelite, Tablewerks, Erwin, Lefkowitz, and DeLosReyes for Unfair Competition Under New York Common Law 101. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 102. Defendants Steelite and Tablewerks’ unauthorized use in commerce of Oneida’s trade dress associated with Oneida’s SANT’ ANDREA® brand, including Oneida’s BOTTICELLI® Trade Dress and NEXUS™ Trade Dress is likely to cause confusion as to the source, sponsorship, affiliation, or endorsement of those products. 103. Through their unauthorized use in commerce of Oneida’s trade dress associated with Oneida’s SANT’ ANDREA® brand, including Oneida’s BOTTICELLI® Trade Dress and NEXUS™ Trade Dress, Defendants Steelite and Tablewerks have unfairly misappropriated the significant commercial advantage belonging to Oneida by trading on the business, reputation, and goodwill of Oneida’s trade dress. 104. On information and belief, Defendants Steelite, Tablewerks, Erwin, Lefkowitz, and DeLosReyes have each taken and exploited, or are threatening to exploit, Oneida’s confidential, proprietary, and trade secret information in unfair competition with Oneida. 29 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 29 of 40 PageID #: 29Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 30 of 41 Page ID #:158 105. On information and belief, Defendants Steelite, Tablewerks, and Erwin have also engaged in unfair competition by knowingly and intentionally (i) soliciting multiple high level Oneida sales representatives who possessed Oneida’s confidential, proprietary, and trade secret information (ii) using that information to solicit and divert Oneida’s clients; and (iii) copying Oneida’s trade dress and attempting to pass it off as Steelite’s own designs. 106. Defendants’ conduct has adversely affected the operations of Oneida while, at the same time, permitted Steelite, Tablewerks, and Erwin to immediately supplant Oneida in its market position by offering identical products to identical clients. 107. On information and belief, Defendants’ unfair competition is willful, deliberate, and in bad faith. 108. Oneida has no adequate remedy at law. Defendants’ conduct has caused, and, if not enjoined, will continue to cause immediate and irreparable damage to Oneida’s trade dress rights, business, reputation, and goodwill in a manner that cannot be adequately calculated or compensated in money damages alone. 109. Due to Defendants’ violations of the New York unfair competition common law, Oneida is entitled to injunctive relief to prevent Defendants from engaging in further acts of unfair competition, as well as actual, compensatory, and punitive damages in an amount to be determined at trial, disgorgement of profits, attorneys’ fees, costs, and interest. FOURTH CAUSE OF ACTION Against Steelite, Tablewerks, Erwin, Lefkowitz, and DeLosReyes for Actual or Threatened Misappropriation of Trade Secrets Under the Defend Trade Secrets Act (18 U.S.C. § 1836 et seq.) 110. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 30 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 30 of 40 PageID #: 30Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 31 of 41 Page ID #:159 111. Oneida owns and possesses certain confidential, proprietary, and trade secret information, as alleged above. 112. This confidential, proprietary, and trade secret information relates to products and services used, sold, shipped and ordered in, or intended to be used, sold, shipped, and/or ordered in, interstate or foreign commerce. 113. Oneida has taken reasonable measures to keep such information secret and confidential. 114. This confidential, proprietary, and trade secret information derives independent economic value from not being generally known to, and not being readily ascertainable through proper means by another person who could obtain economic value from the acquisition, disclosure, or use of the information. 115. In violation of Oneida’s rights, Defendants threaten to misappropriate and/or have misappropriated Oneida’s trade secrets and confidential information to injure Oneida. 116. Defendants have failed to return Oneida’s confidential and trade secret information, and attempted to conceal the theft of such information. On information and belief, if Defendants’ conduct is not remedied, and if Defendants are not enjoined, Defendants will acquire, disclose, and/or use for their own benefit and to Oneida’s detriment, Oneida’s trade secret information. 117. As the direct and proximate result of Defendants’ conduct, Oneida has suffered and, if not stopped, will continue to suffer, irreparable injury and significant damages, in an amount to be proven at trial. 31 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 31 of 40 PageID #: 31Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 32 of 41 Page ID #:160 118. Because Oneida’s remedy at law is inadequate, Oneida seeks, in addition to damages, injunctive relief to recover and protect its confidential, proprietary, and trade secret information and other legitimate business interests. 119. Oneida’s business is reliant on its business reputation and its ability to maintain and grow its client base in a competitive market and will suffer irreparable harm absent injunctive relief. 120. Oneida has been damaged by all of the foregoing, and is entitled to its damages, in an amount to be determined at trial, as well as an award of exemplary damages and attorneys’ fees. FIFTH CAUSE OF ACTION Against Steelite, Tablewerks, Erwin, and DeLosReyes for Actual or Threatened Misappropriation of Trade Secrets Under New York law 121. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 122. Oneida owns and possesses certain confidential, proprietary, and trade secret information, as alleged above. 123. This confidential, proprietary, and trade secret information relates to products and services used, sold, shipped and ordered in, or intended to be used, sold, shipped, and/or ordered in, interstate or foreign commerce. 124. Oneida has taken reasonable measures to keep such information secret and confidential. 125. This confidential, proprietary, and trade secret information derives independent economic value from not being generally known to, and not being readily ascertainable through proper means by another person who could obtain economic value from the disclosure or use of the information. 32 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 32 of 40 PageID #: 32Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 33 of 41 Page ID #:161 126. In violation of Oneida’s rights, Defendants Steelite, Tablewerks, and Erwin threaten to misappropriate and/or have misappropriated Oneida’s trade secrets and confidential information and, due to the nature of the trade secrets, will inevitably disclose and/or use Oneida’s trade secrets and confidential information to injure Oneida. 127. Steelite, Tablewerks, and Erwin have failed to return Oneida’s confidential and trade secret information, and attempted to conceal the theft of such information. On information and belief, if Defendants Steelite, Tablewerks, and Erwin’s conduct is not remedied, and if Defendants Steelite, Tablewerks, and Erwin are not enjoined, Defendants Steelite, Tablewerks, and Erwin will acquire, disclose, and/or use for their own benefit and to Oneida’s detriment, Oneida’s trade secret information. 128. As the direct and proximate result of Defendants Steelite, Tablewerks, and Erwin’s conduct, Oneida has suffered and, if not stopped, will continue to suffer, irreparable injury and significant damages, in an amount to be proven at trial. 129. Because Oneida’s remedy at law is inadequate, Oneida seeks, in addition to damages, injunctive relief to recover and protect its confidential, proprietary, and trade secret information and other legitimate business interests. 130. Oneida’s business is reliant on its business reputation and its ability to maintain and grow its client base in a competitive market and will suffer irreparable harm absent injunctive relief. 131. Oneida has been damaged by all of the foregoing, and is entitled to its damages, in an amount to be determined at trial, as well as an award of exemplary damages and attorneys’ fees. 33 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 33 of 40 PageID #: 33Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 3 of 41 Page ID #:162 SIXTH CAUSE OF ACTION Against Lefkowitz for Misappropriation of Trade Secret Under the Ohio Uniform Trade Secrets Act (Ohio Rev. Code § 1333.61 et seq.) 132. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 133. Oneida owns and possesses certain confidential, proprietary, and trade secret information, as alleged above. 134. This confidential, proprietary, and trade secret information relates to products and services used, sold, shipped and ordered in, or intended to be used, sold, shipped, and/or ordered in, interstate or foreign commerce. 135. Oneida has taken reasonable measures to keep such information secret and confidential. 136. This confidential, proprietary, and trade secret information derives independent economic value from not being generally known to, and not being readily ascertainable through proper means by another person who could obtain economic value from the acquisition, disclosure or use of the information. 137. Defendant Lefkowitz threatens to misappropriate and/or has misappropriated Oneida’s trade secrets and confidential information and, due to the nature of the trade secrets, will inevitably disclose and/or use Oneida’s trade secrets and confidential information to injure Oneida. 138. On information and belief, Defendant Lefkowitz has failed to return Oneida’s confidential and trade secret information, and attempted to conceal the theft of such information. On information and belief, if Defendant Lefkowitz’s conduct is not remedied, and if Defendant 34 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 34 of 40 PageID #: 34Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 35 of 41 Page ID #:163 Lefkowitz is not enjoined, Defendant Lefkowitz will acquire, disclose, and/or use for his own benefit and to Oneida’s detriment, Oneida’s trade secret information. 139. As the direct and proximate result of Defendant Lefkowitz’s conduct, Oneida has suffered and, if not stopped, will continue to suffer, irreparable injury and significant damages, in an amount to be proven at trial. 140. Because Oneida’s remedy at law is inadequate, Oneida seeks, in addition to damages, injunctive relief to recover and protect its confidential, proprietary, and trade secret information and other legitimate business interests. 141. Oneida’s business is reliant on its business reputation and its ability to maintain and grow its client base in a competitive market and will suffer irreparable harm absent injunctive relief. 142. Oneida has been damaged by all of the foregoing, and is entitled to its damages, in an amount to be determined at trial, as well as an award of exemplary damages and attorneys’ fees. SEVENTH CAUSE OF ACTION Against Steelite and Tablewerks for Breach of Contract 143. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 144. Oneida’s valid and enforceable contracts with Tablewerks - the Tablewerks Confidentiality Agreement and the Vendor Agreement - expressly preclude Tablewerks from (1) selling Oneida designs supplied from Royal Porcelain to anyone other than Oneida and (2) using, disclosing, or otherwise misappropriating any trade secret or proprietary information belonging to Oneida, both during its relationship with Oneida and afterwards. Oneida has fully performed 35 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 35 of 40 PageID #: 35Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 36 of 41 Page ID #:164 all promises and obligations required of it in accordance with the terms and conditions of these contracts. 145. By virtue of its purported acquisition of substantially all of the assets and rights of Tablewerks on December 12, 2016, Steelite is the successor in interest to Tablewerks’ liabilities, including at least the Vendor Agreement and the Tablewerks Confidentiality Agreement, which are binding on successors in interest. 146. Steelite, as Tablewerks’ successor in interest, has breached at least the Vendor Agreement and the Tablewerks Confidentiality Agreement by, inter alia, (1) offering and selling products previously supplied from Royal Porcelain to Oneida directly to Oneida’s customers and (2) acquiring, using, disclosing, or otherwise misappropriating Oneida’s trade secret and proprietary information without authorization and for the benefit of someone other than Oneida. 147. Tablewerks has breached at least the Vendor Agreement and the Tablewerks Confidentiality Agreement by, inter alia, (1) offering and selling products previously supplied from Royal Porcelain to Oneida directly to Oneida’s customers and (2) acquiring, using, disclosing, or otherwise misappropriating Oneida’s trade secret and proprietary information without authorization and for the benefit of someone other than Oneida. 148. As a direct and proximate result of Steelite and Tablewerks’ breaches of the Tablewerks Confidentiality Agreement and the Vendor Agreement, Oneida has been damaged in an amount in excess of the jurisdictional limits of this Court. EIGHTH CAUSE OF ACTION Against Steelite, Tablewerks, Erwin, Lefkowitz, and DeLosReyes for Tortious Interference with Business Relations 149. Oneida repeats and re-alleges each and every allegation in the foregoing paragraphs as if fully set forth herein. 36 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 36 of 40 PageID #: 36Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 37 of 41 Page ID #:165 150. Defendants had knowledge of the existing business relations between Oneida and its customers. 151. Defendants, directly or indirectly, have sought to interfere with Oneida’s business relations with its customers by entering into the type of acquisition Steelite purportedly made of Tablewerks in view of the long history between Oneida and Tablewerks and/or by making misrepresentations to Oneida’s customers, with the intention of cutting off Oneida’s supply to its customers. 152. On information and belief, Defendants intentionally and willfully interfered with Oneida’s business relations with its customers. 153. The actions of Defendants were done with the unlawful purpose of causing damage to Oneida, without justifiable cause. 154. As a result of the foregoing, Oneida has suffered and will continue to suffer substantial harm and injury in an amount that cannot be adequately compensated by money damages. 155. Injunctive relief is necessary to prevent imminent and irreparable harm. PRAYER FOR RELIEF WHEREFORE, Oneida respectfully requests that the Court enter judgment in its favor and against Defendants as follows: A. Enjoining and restraining Defendants, their officers, agents, servants, employees, successors, and all persons acting in concert with them from the marketing, promoting, offering for sale, selling, and distributing products bearing Oneida’s trade dress associated with Oneida’s SANT’ ANDREA® brand, including Oneida’s BOTTICELLI® Trade Dress or NEXUS™ Trade Dress; 37 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 37 of 40 PageID #: 37Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 38 of 41 Page ID #:166 B. Enjoining and restraining Defendants, their officers, agents, servants, employees, successors, and all persons acting in concert with them from refusing to accept and fulfill any commercially reasonable purchase order Oneida presents for product sourced through Royal Porcelain bearing Oneida’s SANT’ ANDREA® brand; C. Enjoining Defendants, their officers, agents, servants, employees, successors, and all persons acting in concert with them from violating any legal and contractual duties to Oneida, from using any Oneida’s confidential and proprietary information, and order the return of all of Oneida’s property; D. Entering orders and preliminary and permanent injunctions requiring such affirmative acts as are appropriate to protect Oneida’s trade dress, trade secrets, and contractual rights, including but not limited to ordering the return of all of Oneida’s property and providing access to Defendant Lefkowitz’s computer for imaging by Oneida; E. Ordering Defendants to account for and pay to Oneida all gains, profits, and savings derived from their improper conduct; F. Ordering Defendants to pay Oneida the damages sustained by Oneida as a result of Defendants’ unlawful acts, including all damages measured by the value of the benefit obtained by Defendants and treble damages as provided by agreement or law; 38 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 38 of 40 PageID #: 38Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 39 of 41 Page ID #:167 G. Ordering Defendants to pay exemplary and punitive damages in an amount sufficient to punish Defendants and to deter similar conduct in the future; H. Ordering Defendants to pay attorneys’ fees and all other costs Oneida incurred in this action; and I. Awarding such other relief as the Court deems just and equitable. DEMAND FOR JURY TRIAL Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Oneida demands trial by jury in this action of all issues so triable. Dated: February 21, 2017 MILBANK, TWEED, HADLEY & MCCLOY LLP By: /s/ Nathaniel T. Browand Christopher J. Gaspar* Nathaniel T. Browand Ryan Hagglund MILBANK, TWEED, HADLEY & MCCLOY LLP 28 Liberty Street New York, NY 10005 (212) 530-5000 Mark C. Scarsi MILBANK, TWEED, HADLEY & MCCLOY LLP 2029 Century Park East - 33rd Floor Los Angeles, CA 900067 (424) 386-4000 Kristin L. Yohannan* MILBANK, TWEED, HADLEY & MCCLOY LLP 1850 K Street, NW, Suite 1100 Washington, D.C. 20006 (202) 835-7500 Attorneys for Plaintiff The Oneida Group Inc. * Pro hac vice admission to be requested promptly 39 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 39 of 40 PageID #: 39Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 40 of 41 Page ID #:168 Case 2:17-cv-00957 Document 1 Filed 02/20/17 Page 40 of 40 PageID #: 40Case 2:17-cv-02996 SVW-E Document 12-8 Filed 6/09/17 Page 41 of 41 Page ID #:169 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 [PROPOSED] ORDER GRANTING MOTION TO DISMISS UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA TUXTON CHINA, INC., Plaintiff, - against - THE ONEIDA GROUP INC., Defendant. Case No. 2:17-cv-02996-SVW-E [PROPOSED] ORDER GRANTING DEFENDANT THE ONEIDA GROUP INC.’S MOTION TO DISMISS Case 2:17-cv-02996-SVW-E Document 12-9 Filed 06/09/17 Page 1 of 2 Page ID #:170 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 [PROPOSED] ORDER GRANTING MOTION TO DISMISS - 2 - This matter comes before this Court on Defendant The Oneida Group Inc.’s Motion to Dismiss. Having considered the Motion, and good cause appearing therefor, the Court hereby GRANTS the Motion. IT IS SO ORDERED. DATED: THE HONORABLE STEPHEN V. WILSON UNITED STATES DISTRICT JUDGE Case 2:17-cv-02996-SVW-E Document 12-9 Filed 06/09/17 Page 2 of 2 Page ID #:171