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Malletier v. Burlington Coat Factory Warehouse Corp.

United States District Court, S.D. New York
May 24, 2004
No. 04 Civ. 2644 (RMB)(FM) (S.D.N.Y. May. 24, 2004)


No. 04 Civ. 2644 (RMB)(FM).

May 24, 2004


I. Introduction

Plaintiff Louis Vuitton Malletier ("Plaintiff" or "Louis Vuitton") filed this action against Defendants Burlington Coat Factory Warehouse Corporation ("Burlington"), Four Seasons Handbag Company ("Four Seasons") and John Does 1-10, asserting claims of trademark and trade dress infringement, counterfeiting, false designation of origin, unfair competition and trademark dilution, under the Trademark Act of 1946 ("Lanham Act"), 15 U.S.C. § 1114 and 1125(a), statutes of the State of New York and the common law. Complaint at ¶ 1. Plaintiff seeks lost profits, damages, costs, and attorney's fees.

Preliminarily, Plaintiff seeks injunctive relief enjoining Burlington "from using in any way any colorable imitation of any of the Louis Vuitton Trademarks." Complaint at ¶ 111. For the reasons that follow, Plaintiff's Motion for a Preliminary Injunction is denied.

Louis Vuitton does not seek preliminary relief against Four Seasons, a vendor to Burlington, because Four Seasons "has agreed to cease and desist from the sales of handbags which infringe the Louis Vuitton Trademarks." Plaintiff's Memorandum of Law in Support of Temporary Restraining Order and Preliminary Injunction at 11 n. 2.

The Court is not here ruling upon the ultimate merits of either party's claim(s).

II. Background

Louis Vuitton is engaged in the business of designing, manufacturing, importing, advertising, selling and distributing "designer luggage, handbags, travel leather accessories, high fashion apparel and accessories," Complaint at ¶ 7. Louis Vuitton seeks to protect its federally registered Louis Vuitton Toile Monogram Designs ("Toile Designs") and its unregistered Louis Vuitton Monogram Multicolore Murakami Designs ("Multicolore Designs") (collectively, "Louis Vuitton Designs") from the sale of alleged "knockoff" handbags by the Defendants. Id.

Louis Vuitton's Toile Designs consist of eight registered trademarks with the U.S. Patent and Trademark Office ("PTO"), three of which are allegedly "incontestible" under 15 U.S.C. § 1115(b). See also Paco Sport, Ltd. v. Paco Rabanne Parfums, 86 F. Supp.2d 305, 311 (S.D.N.Y. 2000) ("[I]f the registered trademark becomes `incontestible' after five years of continuous use, the presumptions of validity, ownership, and exclusive right to use the trademark become irrebuttable"); Affidavit of Emmanuel Barbault, dated April 6, 2004 ("Barbault Aff.") at ¶¶ 8, 9. The Toile Designs feature "entwined LV initials with three motifs [ i.e.], a curved diamond with a four-point star inset, its negative, and a circle with a four-leafed flower inset." Id. at ¶ 8. The Toile Designs have been used for nearly a century on a variety of Louis Vuitton products, including handbags, apparel and jewelry. Id. at ¶ 10.

Louis Vuitton holds the following PTO Registrations Numbers: 0,297,594 (Int'l Class 18); 1,643,625 (Int'l Class 18); 1,653,663 (Int'l Class 18); 1,770,131 (Int'l Class 25), 2,399,161 (Int'l Class 25); 2,181,753 (Int'l Classes 14, 18, 25); 2,773,107 (Int'l Classes 14, 18, 25). Barbault Aff. at ¶ 9.

In October 2002, Louis Vuitton, through a collaboration between its designer Marc Jacobs and the Japanese artist Takeshi Murakami, introduced four new collections of "multicolored patterns and styles of handbag and accessory designs based upon the [the Toile Designs]." ("Murakami Designs") Id. at ¶ 16. One of the Murakami Designs, the Multicolore Design, is described as a "visionary and avant-garde version of the Toile Monogram." Id. at ¶ 16. The Multicolore Design consists of the "Louis Vuitton Toile Monogram pattern in 33 different colors on either a white or black background including the . . . four-leafed flower inset and the positive and negative of the curved diamond with a four-point star inset." Id. at ¶ 18. All four of the Murakami Designs have been the subject of an extensive advertising campaign, and the Multicolore Design, in particular, has become "extremely popular." Id. at ¶¶ 18, 35, 38. The Murakami Designs are unregistered but include elements of Louis Vuitton's registered trademarks, such as the "four-leafed flower inset."Id. at ¶ 18.

Louis Vuitton sells a line of handbags incorporating the Multicolore Designs ("Louis Vuitton Handbags"). Id. at ¶ 38. The Louis Vuitton Handbags are "handcrafted in France" and are "made of the finest materials and natural cowhide." Id. at ¶ 43. The lining of the Louis Vuitton Handbags "is made of heavy alcantara and the zipper is a sturdy metal zipper." Id. They are high-end items priced between $360 and $3,950 per bag. Id. at ¶ 39 and Exh. Y. The Louis Vuitton Handbags are sold in ninety U.S. Louis Vuitton stores and in "exclusive department and specialty retail stores such as Neiman Marcus, Macy's, Bloomingdale's, Saks Fifth Avenue, and on-line at" Id. at ¶¶ 18, 38. To date, over 47,000 Louis Vuitton Multicolore Handbags have been sold in the U.S. with sales totaling over $25 million. Id. at ¶ 38. The Louis Vuitton Handbags have never been sold in any "off-price retail stores," nor are they sold in Defendant Burlington's stores or on Burlington's website, Affidavit of Claire Larson, dated April 23, 2004 ("Larson Aff.") at ¶¶ 13, 20.

Burlington is a discount department store chain with 341 retail stores in 42 states. Affidavit of Stacey J. Haigney, Esq., dated April 3, 2004 ("Haigney Aff.") at ¶ 3. Burlington also conducts sales online through its website, Id. at ¶ 20. Burlington is engaged in the business of importing, distributing, selling and offering for sale "outerwear, apparel, shoes, accessories for the entire family, baby clothes, furniture, toys, home decor items and gifts" and it is "known for focusing its retail marketing efforts on price-conscious consumers." Id. at ¶ 3; see also Plaintiff's Memorandum of Law in Support of Temporary Restraining Order and Preliminary Injunction ("Pl.'s Mem.") at 2.

On October 10, 2003, Burlington began offering for sale a line of beaded handbags under the name "Pengyuan" ("Pengyuan Handbags") at a price of $29.98 per bag. Larson Aff." at ¶ 19 and Exh. A. Burlington began selling the Pengyuan Handbags on its website on December 31, 2003. Id. at ¶ 20. The Pengyuan Handbags are "[1] beaded on their entire exterior surface; [2] decorated with the letters `NY' standing for `New York;' and [3] also decorated with an assortment of shapes, including circles, diamonds and flowers." Id. at ¶ 6 and Exh. A. The Pengyuan Handbags "feature a diagonal `criss-cross' arrangement of graphic elements on a black, white or copper background" and are "hand-beaded over their entire surface with glossy beads." Id. at ¶¶ 9, 14. Of the 6,744 Pengyuan Handbags purchased by Burlington, an inventory of approximately 5,000 remains, representing a total retail value of $160,000. Id. at ¶ 16; Haigney Aff. at ¶ 17.

When the Pengyuan Handbags were released for sale, the letters "LVTN" were included as "style numbers" on tags attached to the Pengyuan Handbags and the letters were also listed alongside pictures of the Handbags on Burlington's website. Reply Affidavit of Emmanuel Barbault ("Barbault Reply Aff.") at ¶ 5; Plaintiff's Reply Memorandum ("Pl.'s Reply Mem.") at 3; Haigney Aff. at Exh. C-4. Burlington later removed the LVTN letters from the product numbers and Burlington has affirmed to the Court that it no longer uses them. See Transcript of Order to Show Cause Hearing, dated May 6, 2004 ("Hearing Transcript") at 15.

The following colloquy occurred at the May 6 Order to Show Cause Hearing:

"THE COURT: Did I understand you to say, though, no matter what else we do, that the style numbers changed?

MR. WEISBEIN: They did change.
THE COURT: Did change. And you're not going to use the LV style number?

MR. WEISBEIN: We're not using that style number."
Hearing Transcript at 15.

During the course of this dispute, Burlington engaged the services of Walter McCullough, President of Monroe Mendelsohn Research, Inc., a marketing research firm, to conduct a consumer survey to determine if the Pengyuan Handbags were "likely to cause confusion among consumers with ladies' handbags manufactured and sold by Vuitton." Affidavit of Walter McCullough, dated April 22, 2004 ("McCullough Aff.") at ¶ 2 and Exh. A. The ensuing report on the survey ("McCullough Report") concluded that the "[t]otal likely confusion [equaled] [l]ess than 10%" and that this figure constituted "at best, only a negligible level of likely source confusion between [the Pengyuan Handbags] and Louis Vuitton." McCullough Report at 3.

Louis Vuitton disputes the methodology and conclusions reached in the McCullough Report and has offered the testimony of its expert, Robert C. Sorensen, Ph.D., who concluded that "[t]he reported outcome of the Burlington survey is seriously compromised and thus cannot be usefully relied upon in resolving the likelihood of confusion issues in the [instant] case." See Affidavit of Robert C. Sorensen, Ph.D., dated May 4, 2004 ("Sorensen Aff.") at ¶ 9. Both parties have submitted additional "rebuttal affidavits" in support of their respective positions. Louis Vuitton has not submitted any surveys on the issue of confusion.

See Declaration of Walter McCullough in Response to Rebuttal Expert Witness Report of Robert C. Sorensen, Ph.D., dated May 5, 2004; Further Rebuttal Expert Witness of Robert C. Sorensen, Ph.D., dated May 6, 2004; Second Declaration of Walter McCullough in Response to Further Rebuttal Expert Witness Report of Robert C. Sorensen, Ph. D., dated May 6, 2004.

Louis Vuitton filed the Complaint in this action on April 7, 2004, and at the same time sought a preliminary injunction and a temporary restraining order preventing the sale of the Pengyuan Handbags by Burlington. Complaint at ¶ 111. According to Claire Larson, a "Handbag Buyer" employed by Burlington, Burlington stopped selling the Pengyuan Handbags on its website on approximately March 1, 2004 and stopped offering them for sale in its stores on April 9, 2004. Larson Aff. at ¶¶ 21, 22. The Court "so ordered" a Stipulation and Order dated April 16, 2004, temporarily restraining Burlington "from offering for sale, selling, advertising, promoting, importing or distributing those beaded handbags accused in the complaint which bear the product label PENGYUAN, or any handbags having a design pattern substantially similar thereto" pending the Court's ruling on Louis Vuitton's Motion for a Preliminary Injunction. See Stipulation and Order of April 16, 2004 ("Order").

The Court heard helpful oral argument concerning Plaintiff's motion for a preliminary injunction on May 6, 2004. See Hearing Transcript.

III. Legal Standard

To obtain a preliminary injunction, a plaintiff must establish: "(1) the likelihood of irreparable injury in the absence of such an injunction, and (2) either (a) likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation plus a balance of hardships tipping decidedly" in its favor. Federal Express Corp. v. Federal Espresso, Inc., 201 F.3d 168, 173 (2d Cir. 2000);Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1038 (2d Cir. 1992). "In a Lanham Act case a showing of likelihood of confusion establishes both a likelihood of success on the merits and irreparable harm, assuming that the plaintiff has a protectible mark. Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 73 (2d Cir. 1988) (citations omitted); see also Tough Traveler v. Outbound Prods., 60 F.3d 964, 967 (2d Cir. 1995) ("When a plaintiff has shown a high probability of confusion, there is normally a presumption of irreparable harm.").

IV. Analysis

A. Trademark Infringement Claim

Louis Vuitton brings claims of trademark infringement under the Lanham Act, 15 U.S.C. § 1114(1) and 1125(a). Complaint at ¶ 1. Section 1114(1) of the Act prohibits the use in commerce, without consent, of any "registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods," in a way that is likely to cause confusion with Plaintiff's trademarks. 15 U.S.C. § 1114(1)(a). Section 1125(a) of the Lanham Act "similarly prohibits the infringement of [Plaintiff's] unregistered, common law trademarks." Time, Inc. v. Petersen Publ'g Co. L.L.C., 173 F.3d 113, 117 (2d Cir. 1999).

To prevail on a trademark infringement claim under either of these provisions, Plaintiff must demonstrate that "it has a valid mark entitled to protection and that the defendant's use of it is likely to cause confusion." Arrow Fastener Co. v. Stanley Works, 59 F.3d 384, 390 (2d Cir. 1995) (quoting Gruner + Jahr USA Publ'g v. Meredith Corp., 991 F.2d 1072, 1075 (2d Cir. 1993)). The possessor of a valid mark must prove that "numerous ordinary prudent purchasers are likely to be misled or confused as to the source of the product in question because of the entrance in the marketplace of defendant's mark." Petersen Publ'g, 173 F.3d at 117 (quoting Gruner + Jahr, 991 F.2d at 1077). "For a finding of [trademark] infringement a probability of confusion, not a mere possibility, must be found to exist." Gruner + Jahr, 991 F.2d at 1077;Estee Lauder, Inc. v. Gap, Inc., 108 F.3d 1503, 1510 (2d Cir. 1997).

In deciding whether a plaintiff has established likelihood of confusion, courts consider the eight factors elaborated inPolaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961): "(a) the strength of the plaintiff's mark; (b) the degree of similarity between the plaintiff's and the defendant's marks; (c) the proximity of the products; (d) the likelihood that either owner will bridge the gap, using the mark on products closer to the other's area of commerce; (e) the sophistication of the buyers; (f) the quality of the defendant's product; (g) actual confusion; and (h) good or bad faith." TCPIP Holding Co. v. Haar Communications, Inc., 244 F.3d 88, 100 (2d Cir. 2001) (quoting Petersen Publ'g, 173 F.3d at 117); Best Cellars, Inc. v. Grape Finds at Dupont, Inc., 90 F. Supp.2d 431, 453-54 (S.D.N.Y. 2000). "These factors are not always dispositive, see Estee Lauder, 108 F.3d at 1510, and other factors may be added or initial factors abandoned." See Streetwise Maps, Inc. v. VanDam, Inc., 159 F.3d 739, 743 (2d Cir. 1998).

Here, the only Polaroid factor arguably weighing in favor of Louis Vuitton's claim is the strength of Louis Vuitton's marks. Most of the remaining Polaroid factors weigh against a finding that a likelihood of confusion exists between the two marks.

(1) Similarity of the marks

"[T]he courts consider whether the similarity of the marks is likely to cause confusion among potential customers," Arrow Fastener Co., 59 F.3d at 394; Paco Sport, 86 F. Supp.2d at 315, and have held that trademarks should be compared in their entirety, because "juxtaposing fragments of each mark does not demonstrate whether the marks as a whole are confusingly similar." Universal City Studios, Inc. v. Nintendo Co., 746 F.2d 112, 117 (2d Cir. 1984); Paco Sport, 86 F. Supp.2d at 315. Courts appraise the overall impression created by the trademarks, considering the context in which the trademarks appear and "the totality of factors that could cause confusion among prospective purchasers," are examined. Gruner + Jahr, 991 F.2d at 1078; see also Kraft Gen. Foods v. Allied Old English, 831 F. Supp. 123, 130 (S.D.N.Y. 1993) ("Dissection of the mark into its various components is not appropriate, as it is the impression which the mark as a whole creates on the average reasonably prudent buyer and not the parts thereof which is important."). The fact that there are similarities between marks does not necessarily render one of them confusing. See McGregor-Doniger, Inc. v. Drizzle, Inc., 599 F.2d 1126, 1133 (2d Cir. 1979). "Instead, the crucial inquiry is whether the similarity is likely to cause confusion." E.S. Originals, Inc. v. Stride Rite Corp., 656 F. Supp. 484, 488 (S.D.N.Y. 1987).

Louis Vuitton claims, among other things, that the Pengyuan Handbags "are featured in the same black and white versions with the color patterns and design scheme as the Louis Vuitton . . . [t]rademarks . . . in particular, the four-leafed flower inset, the curved diamond with a four-point star inset and negative of the curved diamond with a four-point star inset." Pl.'s Mem. at 8. Louis Vuitton claims that the Pengyuan Handbags "also include the overlapping monogram letters `NY', which are arranged to mimic Louis Vuitton's famous entwined `LV' logo trademark." Id. Louis Vuitton asserts that the Pengyuan Handbags are "nearly indistinguishable from and appear almost identical to the Louis Vuitton . . . Handbags [and the] visual difference is only apparent when the two bags are compared closely and scrutinized side-by-side." Barbault Aff. at ¶ 43. Louis Vuitton also states that it is "clear that the workmanship and quality of the [Pengyuan] Handbags [is] vastly inferior. . . . It would appear that the [Pengyuan] Handbags are made from cheap materials; the lining is made of cheap fabric and the zipper appears to be made of cheap plastic. The body of the bag consists of colored sew-on beads. . . . In contrast, the [Louis Vuitton] Handbags are made of the finest materials and natural cowhide and [are] handcrafted in France. The lining is made of heavy alcantara and the zipper is a sturdy metal zipper." Id.

Burlington claims that "[t]he circle, diamond and flower shapes that appear on the [Pengyuan] Handbags differ dramatically from those that appear on [Louis] Vuitton's products. Because each of the [Pengyuan] handbags is beaded by hand, each individual diamond, circle or flower is irregular and displays unique variations in shape. . . . In contrast, the elements used by [Louis] Vuitton (which are all machine printed onto the fabric) are crisp and absolutely symmetrical, giving a clean-edged, ordered look. Overall, the look and feel of the [Pengyuan] Handbags is quirky, bright and fun — quite different from [Louis] Vuitton bags, which are designed to achieve a look of clean elegance." Defendant Burlington Coat Factory's Memorandum of Law in Opposition to Motion for Preliminary Injunction ("Def.'s Mem.") at 8-9.

The Court concludes upon this application that the Pengyuan Handbags are not similar to the Louis Vuitton Handbags — indeed, they appear very different. Significant differences between the handbags are easily discernible whether one views the handbags side-by-side or from a distance. The Pengyuan Handbags are made from very different materials, i.e., shiny beads and cheaper cloth, and they project a wholly different impression from that of the Louis Vuitton Handbag. See Barbault Aff. at ¶ 43 (noting difference between "cheap" Pengyuan Handbag materials and "finest materials" of Louis Vuitton Handbags); Larson Aff. at ¶ 17 (Pengyuan Handbag design is "irregular" and "quirky and cartoon-like" while Louis Vuitton Handbags are "crisp and absolutely symmetrical, giving a clean-edged ordered look"). It is unlikely that the Pengyuan Handbag would be confused with a Louis Vuitton. See, e.g., Meese, Inc. v. International Leisure Prods., Inc., No. 03 Civ. 8684, 2003 WL 22902594 at *4 (S.D.N.Y. Dec. 9, 2003) (no similarity of marks where "the two products, when visually inspected, appear very different").

(2) Proximity of the products

"In examining this factor, the courts compare all aspects of the products, including price, style, intended use, target clientele, typical distribution channels, and others." Paco Sport, 86 F. Supp.2d at 316. Louis Vuitton argues that there is "relatively close proximity" between the products because they are "identical" products. Pl.'s Mem. at 20. Burlington counters that Louis Vuitton Handbags are not proximate, i.e., they are marketed in exclusive high-end stores at significantly higher prices while the Pengyuan Handbags are sold in Burlington's retail outlets to a "markedly different clientele," namely, "price conscious consumers." Def.'s Mem. at 15-16.

The two styles of handbags are not `proximate' to each other. Among other reasons, Louis Vuitton markets its handbags through exclusive, upscale department and specialty stores to an "A-list" celebrity clientele. Pl.'s Mem. at 7. Burlington, on the other hand, "focuses its retail marketing efforts on price-conscious consumers." Larson Aff. at ¶ 5; see also Paco Sport, 86 F. Supp.2d at 317 ("the analysis of proximity should focus on the specific attributes of the products in question rather than on broad product categories"). Relatedly, the Pengyuan Handbags are significantly cheaper than the Louis Vuitton Handbags, by hundreds or even thousands of dollars. Barbault Aff. at ¶ 40 and Exh. Y (Louis Vuitton Handbags priced at between $360 and $3950 per bag); Larson Aff. at ¶ 19 and Exh. A. (Pengyuan Handbags priced at $29.98 per bag). The two handbags do not compete in the same price/retail arenas. See McGregor-Doniger, 599 F.2d at 1134-35 (upholding finding of "significant" competitive distance between inexpensive golf jackets and expensive fashionable women's coats based on differences in products' "appearance, style, function, fashion appeal, advertising orientation, and price").

(3) Sophistication of the buyers

"[S]ophistication of the buyers [is] analogous to the proximity factor." Cadbury Beverages v. Cott Corp., 73 F.3d 474, 480 (2d Cir. 1996) (citing Vitarroz Corp. v. Borden, Inc., 644 F.2d 960, 967 (2d Cir. 1981)). The sophistication factor "recognizes that the likelihood of confusion between the products at issue depends in part on the sophistication of the relevant purchasers." Arrow Fastener Co., 59 F.3d at 399 (citing W.W.W. Pharmaceutical Co. v. Gillette Co., 984 F.2d 567, 57 (2d Cir. 1993)).

The parties do not devote much argument to sophistication of the buyers. See, e.g., Pl.'s Mem. at 21; Def.'s Mem. at 16. Louis Vuitton argues that "[t]he sophistication of the buyers for products such as these handbags . . . is not so high as to eliminate or lessen the likelihood of confusion. . . . Given that the pattern features on . . . [the Pengyuan] Handbags have a nearly identical appearance to the genuine Louis Vuitton . . . [t]rademarks, it is extremely difficult for consumer to distinguish between the . . . [Pengyuan] Handbags and the legitimate Louis Vuitton handbags in the marketplace before and after sale." Pl.'s Mem. at 21. Burlington argues that Louis Vuitton's claim that its handbags "are popular with renowned . . . celebrities, notables, and A-Listers" undercuts its argument that its customers are unsophisticated, and Burlington further argues that its customers "are price-conscious consumers who do not expect to purchase high-end luxury goods from an off-price retail chain." Def.'s Mem. at 16. Suffice it to say that, in the Court's view, most consumers would be unlikely to confuse the Pengyuan Handbags with the Louis Vuitton Handbags.

(4) Likelihood of bridging the gap

"This Polaroid factor examines the likelihood that the senior user will enter the junior user's market and compete with the junior user (`bridge the gap')." Paco Sport, 86 F. Supp.2d at 318 (citing Streetwise Maps, 159 F.3d at 743). It weighs in the senior user's favor either if bridging the gap is actually probable or if an average consumer perceives it as probable.See Sports Auth., Inc. v. Prime Hospitality Corp., 89 F.3d 955, 963 (2d Cir. 1996); Lois Sportswear, U.S.A., Inc. v. Levi Strauss Co., 799 F.2d 867, 874 (2d Cir. 1986). "The actual probability of bridging the gap is relevant because the trademark law protects to some extent the senior user's interest in being able to expand into a related field in the future." Paco Sport, 86 F. Supp.2d at 318 (citing Hormel Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497, 504 (1996)). If consumers perceive bridging the gap as probable, they are more likely to believe that the junior user's products emanate from the senior user.Lang v. Retirement Living Publ'g Co., 949 F.2d 576, 582 (2d Cir. 1991); McGregor-Doniger, 599 F.2d at 1136 ("Because consumer confusion is the key, the assumptions of the typical consumer, whether or not they match reality, must be taken into account.").

Louis Vuitton does not assert that it intends to enter the discount handbag market or that there is any substantial basis for consumers to conclude that Louis Vuitton has in fact bridged the gap by, for example, introducing a line of discount beaded handbags. Louis Vuitton has not competed in the same market as Burlington. Louis Vuitton sells its products exclusively through high-end departments stores and specialty boutiques, and does not appear ever to have sold its products through a discount retail chain. Barbault Aff. at ¶ 38; Larson Aff. at ¶¶ 13, 20. And, Louis Vuitton has presented no evidence that consumers might reasonably conclude that Louis Vuitton offers beaded, non-leather, bargain-priced handbags in a retail outlet such as Burlington's.

Louis Vuitton argues that "there is no gap to bridge" because the parties already sell the same products ( i.e., handbags) in the same channels of trade. Pl.'s Mem. at 20.

(5) Quality of Defendant's product

"If an infringing product is of inferior quality, the senior user is entitled to protect the good reputation associated with his mark from the possibility of being tarnished by inferior merchandise of the junior user . . ." W.W.W. Pharmaceutical, 984 F.2d at 575 (quoting Scarves by Vera, Inc. v. Todo Imps., Ltd., 544 F.2d 1167, 1172 (2d Cir. 1976)). Differences in quality, however, are "not of significance unless it is otherwise established from the other factors that consumers will associate the two products." Meese, 2003 WL 22902594 at *5.

Louis Vuitton complains that the "cheap" and shoddy quality of the Pengyuan Handbags harm Louis Vuitton's good name and reduces demand for its products. Barbault Aff. at ¶ 43, 45. Louis Vuitton also alleges that the Pengyuan Handbags are "greatly inferior" to its "high quality" handbags. Pl.'s Mem. at 21. Burlington appears to concede that the Pengyuan Handbags are not made of "the same expensive quality" as the Louis Vuitton Handbags, but argues that "in a case such as this where there is a marked difference between non-competing goods, the quality of the products and the markets to which they are directed suggest that the potential for confusion is reduced." Def.'s Mem. at 18.

The obvious differences in product quality between the two handbags, in the Court's view, minimizes the likelihood of confusion in this case. See Plus Prods. v. Plus Discount Foods, Inc., 722 F.2d 999, 1006 (2d Cir. 1983) ("Marked difference between the quality of plaintiff's and defendants' noncompeting goods reduces . . . the likelihood of confusion.").

(6) Bad faith

The issue here is "whether the defendant adopted its mark with the intention of capitalizing on [the] plaintiff's reputation and goodwill and any confusion between his and the senior user's product." Petersen Publ'g, 173 F.3d at 483; Lang, 949 F.2d at 583; Edison Bros. Stores, Inc. v. Cosmair, Inc., 651 F. Supp. 1547, 1560 (S.D.N.Y. 1987). "If the junior user has adopted the mark in bad faith, the equitable balance is tipped significantly in favor of a finding of infringement." Edison Bros., 651 F. Supp. at 1560. "If there is no evidence suggesting the presence of these motives, courts often find that the defendant acted in good faith." Id. (citing Del Labs., Inc. v. Alleghany Pharmacal Corp., 516 F. Supp. 777, 784 (S.D.N.Y. 1981)).

Louis Vuitton alleges that the similarity of the marks in and of itself demonstrates Burlington's bad faith but, at this time, offers no other evidence of bad faith on Burlington's part. Pl.'s Mem. at 19-20. Burlington claims that it acted in good faith because it "never intended to create confusion, because customers have no expectation of buying a [Louis] Vuitton handbag at a [Burlington] store." Def.'s Mem. at 19. Because the marks are dissimilar, bad faith will not be inferred. See Meese, 2003 WL 22902594 at *4 (plaintiff's "repeated insistence that [defendant] slavishly copied its product cannot substitute for the lack of any competent evidence of this fact").

Louis Vuitton also asserts that "this is the fourth time that Burlington has sold infringing handbags in the past nine months." Pl.'s Mem. at 8. At least one of the referenced litigations settled out of court. See Hearing Transcript at 8. On these facts, allegations about products which are not the subject of this action are not persuasive.

(7) Actual confusion

"This factor examines whether the allegedly similar trademarks have actually confused consumers in the marketplace." Paco Sport, 86 F. Supp.2d at 319; see also Centaur Communications, 830 F.2d at 1227. The absence of evidence of consumer confusion may favor the junior user. Paco Sport, 86 F. Supp.2d at 319; Streetwise Maps, 159 F.3d at 745;McGregor-Doniger, 599 F.2d at 1136 ("It is certainly proper for the trial judge to infer from the absence of actual confusion that there was also no likelihood of confusion."). Evidence of actual confusion may consist of anecdotal or survey evidence.See Centaur Communications, 830 F.2d at 1227.

Burlington points to the McCullough Report as "affirmative evidence that confusion is not likely." Def.'s Mem. at 13. The McCullough Report sought to determine if the Pengyuan Handbags were "likely to cause confusion among consumers with ladies' handbags manufactured and sold by Vuitton," McCullough Aff. at ¶ 2, and it concluded that there was less "a 10% . . . level of likely source confusion between [the Pengyuan Handbags] and Louis Vuitton." McCullough Report at 3.

The McCullough Report surveyed "women aged 18 and over in eight geographically dispensed shopping mall facilities" who had purchased women's handbags. McCullough Report at 5. The respondents were asked to examine one of the Pengyuan Handbags without opening it as though the handbag was on display in a store. Id. at 6. The interviewer would then remove the handbag from sight and ask a number of questions, including (1) if the respondent had an opinion about "who puts out this handbag"; (2) whether the respondent thought that the company putting out the handbag was "affiliated or connected with any other brand or company," and if so, which company and why the respondent thought the affiliation existed, and; (3) whether the respondent believed "that the company that puts out this handbag had permission from any other brand or company to put it out." Id. at 6-7.

Louis Vuitton disputes the methodology and conclusions of the McCullough Report and has offered rebuttal testimony of its expert, Robert C. Sorensen, Ph.D. See Sorensen Aff. at ¶¶ 9-26. Dr. Sorensen criticizes numerous aspects of the McCullough Report, including its alleged: "[1] absence of a control survey, [2] flaws in . . . design and methodology, [and] [3] [n]arrow [l]ikelihood of [c]onfusion [d]efinition." Sorensen Aff. at ¶¶ 10, 11, 18. He concludes that the McCullough Report is "seriously compromised and thus cannot be usefully relied upon in resolving the issues in [this] case," and that the "total confusion percentage . . . would be at least 18.6% even under the [McCullough Report's] flawed design." Sorensen Aff. at ¶ 9.

Louis Vuitton also alleges that "[g]iven the short time that defendant Burlington's products apparently have been on the market, plaintiff Louis Vuitton has not yet had the opportunity to document instances of actual confusion." Pl.'s Mem. at 22.

On the record presented, the Court cannot find that there was any pre-sale or post-sale consumer confusion between the two handbags.

(8) Strength of Louis Vuitton's trademark

"The strength of a mark refers to its ability to identify the source of the goods being sold under its aegis." Brennan's, Inc. v. Brennan's Rest., 360 F.3d 125, 130 (2d Cir. 2004) (citingNora Beverages, Inc. v. Perrier Group of Am., Inc., 269 F.3d 114, 123 (2d Cir. 2001)). Louis Vuitton devotes much of its argument to the strength of its protected marks, arguing that some of its trademarks "are registered and certain of the marks are incontestible." Def.'s Mem. at 12. Louis Vuitton further argues that "[t]o the extent that any elements of the Louis Vuitton . . . Handbags are not embraced by these registrations, such trademarks are novel, unique and distinctive," and they have achieved "secondary meaning" in the marketplace. Id.

Burlington argues that Louis Vuitton "places misguided emphasis on the scope of its trademark registrations. They are much narrower than [Louis] Vuitton claims." Def.'s Mem. at 20. Burlington also claims that Louis Vuitton "bases its argument that its marks and trade dress have acquired secondary meaning entirely upon circumstantial evidence of its advertising expenditures, unsolicited media coverage (mostly in fashion press), and sales success. . . . [and that] Vuitton has no `direct' evidence such as survey evidence showing that Vuitton's marks and trade dress are `synonymous in the mind of the public'. . . . There is no proof at all that [Burlington] shoppers know or recognize the Vuitton marks." Id.

Even assuming that Louis Vuitton can demonstrate that its marks are entitled to protection, most of the other Polaroid factors weigh heavily against a finding of likelihood of confusion at this time. See, e.g., E.S. Originals, 656 F. Supp. at 487-88 ("Although the Court concludes from this evidence that [plaintiff's] `ZIPS' mark has acquired a sufficient degree of distinctiveness among consumers to entitle the mark to some protection, the strength of `ZIPS' alone does not bar [defendant] from using the `ZIP `N GO' mark").

B. Trade Dress Infringement Claim

The "[c]oncept of trade dress encompasses the design and appearance of the product together with all the elements making up the overall image that serves to identify the product presented to the consumer." Fun-Damental Too v. Gemmy Indus. Corp., 111 F.3d 993, 999 (2d Cir. 1997); see also Meese, Inc., 2003 WL 22902594 at *2. "To prove trade dress infringement under . . . 15 U.S.C. § 1125(a), a plaintiff must prove three essential elements: 1) that its trade dress is not functional; 2) that its trade dress is either inherently distinctive or has acquired a secondary meaning in the marketplace; and 3) that there is a likelihood of confusion between its trade dress and that of defendant." Meese, Inc., 2003 WL 22902594 at *4-5 (citing Nora Beverages, 269 F.3d at 118-119). The likelihood of confusion "analysis performed for . . . trademark infringement applies equally" to trade dress infringement claims.Aris-Isotoner Gloves, Inc. v. Fownes Bros. Co., 594 F. Supp. 15, 24 (S.D.N.Y. 1983)

The Court's conclusion above that there is no likelihood of confusion also leads to a determination that there is no basis for a preliminary injunction upon Louis Vuitton's trade dress infringement claim. See Meese, Inc., 2003 WL 22902594 at *5 ("[A]n examination of the factors used to assess likelihood of confusion reveals that [plaintiff] has failed to . . . raise a substantial question of [trademark] infringement. . . . therefore, plaintiff has failed to raise a substantial question of trade dress infringement").

C. Unfair Competition Claim

Louis Vuitton's claims for trademark infringement and unfair competition under New York common law, "share many common elements with the Lanham Act claims of false designation of origin and trademark infringement, including proof of actual confusion to recover damages, and proof of a likelihood of confusion for equitable relief." W.W.W. Pharmaceutical, 984 F.2d at 576; see also Horn's, Inc. v. Sanofi Beaute, Inc., 963 F. Supp. 318, 328 (S.D.N.Y. 1997) ("an unfair competition claim under New York common law is the bad faith misappropriation of the labors and expenditures of another, likely to cause confusion or to deceive purchasers as to the origin of goods").

Louis Vuitton has failed to prove likelihood of confusion between its products and the Pengyuan Handbags and has also failed to demonstrate bad faith on Burlington's part. Supra at Part IV.A. See Bristol-Myers Squibb, 973 F.2d at 1048 ("As we have determined with regard to the Lanham Act claim, there is no likelihood of consumer confusion arising from [defendant's] use of the `Tylenol PM' trade dress. Therefore, [plaintiff] is not entitled to relief under its common law unfair competition theory.").

D. New York Dilution Claim

Louis Vuitton also asserts a claim of trademark dilution under New York General Business Law § 360-1 (McKinney Cum. Supp. 2004) ("Section 360-1"). Section 360-1 "provides that a likelihood of . . . dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief . . . notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services." New York Stock Exch., Inc. v. New York, N.Y. Hotel, LLC, 293 F.3d 550, 557 (2d Cir. 2002). Dilution is not possible without "some mental association between . . . [the] marks,"Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1031 (2d Cir. 1989), and the statute protects only "extremely strong marks." Bristol-Myers Squibb, 973 F.2d at 1049. "There are three elements of [a dilution] claim: (1) distinctiveness of the mark, either that the mark is `truly of distinctive quality' or has acquired secondary meaning in the eyes of the public; (2) likelihood of dilution, either as the result of blurring of product identification or the tarnishing of an affirmative association that a mark has come to convey; and (3) predatory intent." W.W.W. Pharmaceutical, 984 F.2d at 576-77 (citing Lobo Enters., Inc. v. Tunnel, Inc., 693 F. Supp. 71, 79 (S.D.N.Y. 1988)).

Louis Vuitton argues that "Burlington's repeated use of confusingly similar, almost exact simulations of the Louis Vuitton Trademarks is clearly designed to `whittle away' the distinctive value of Louis Vuitton's intellectual property." Pl.'s Mem. at 24. Burlington counters that "[Louis] Vuitton's trademarks are not being blurred or tarnished by [the Pengyuan] Handbags. [Burlington] is not using [Louis] Vuitton's `LV' monogram or a modification of it. . . . Also, there is no proof that the criss-cross pattern utilized by [Louis] Vuitton serves a trademark function as an identifier of source or is recognized as a trademark. . . . Thus, there is no possibility they could evoke any kind of negative associations." Def.'s Mem. at 23-24.

The record does not support the elements of a dilution claim. Even if the Court were to accept Louis Vuitton's claim that it possesses "extremely strong marks" as required under Section 360-1, see Bristol-Myers Squibb, 973 F.2d at 1049, Louis Vuitton's marks do not appear to have been subjected to dilution by Burlington through either blurring or tarnishing. As has been noted, the Pengyuan Handbags are very different from Louis Vuitton's products; Louis Vuitton is unlikely to suffer any "negative associations" with the Pengyuan Handbags and the Pengyuan Handbags are unlikely "to evoke unflattering thoughts" about Louis Vuitton's products. Deer Co. v. M.D. Prods., Inc., 41 F.3d 39, 43 (2d Cir. 1994).

"Tarnishment occurs when the senior user's trademark suffers negative associations because of the junior user's market activities." Paco Sport, 86 F. Supp.2d at 329; see also Hormel Foods, 73 F.3d at 507. "Blurring occurs `where the defendant uses . . . the plaintiff's trademark to identify the defendant's goods and services, raising the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff's [products].'" Sports Auth. v. Prime Hospitality Corp., 89 F.3d 955, 966 (2d Cir. 1996) (quoting Deere Co., 41 F.3d at 43). "Traditionally, the likelihood of blurring has been governed by a six-factor test: 1) similarity of the marks, 2) similarity of the products covered, 3) sophistication of the consumers, 4) predatory intent, 5) renown of the senior mark, 6) renown of the junior mark." Id. The Court has already concluded that the marks are not similar and that the level of consumer sophistication does not weigh in Louis Vuitton's favor. Louis Vuitton has also failed to show that there is either direct competition between itself and Burlington or that Louis Vuitton is likely to expand into the area of Burlington's retail market, so the similarity of products weighs against Louis Vuitton. See Mead Data Cent. v. Toyota Motor Sales, U.S.A., 875 F.2d 1026, 1036 (2d Cir. 1989) (Sweet, J., concurring). Louis Vuitton has submitted no persuasive evidence of predatory intent nor has it submitted evidence that the renown of Burlington's marks has caused Louis Vuitton's customers to draw associations with Burlington. See Paco Sport, 86 F. Supp.2d at 329.

Finally, as noted, Louis Vuitton has not demonstrated any predatory intent by Burlington to trade on Louis Vuitton's reputation. See W.W.W. Pharmaceutical, 984 F.2d at 577.

V. Conclusion and Order

For the foregoing reasons, Louis Vuitton's motion for a preliminary injunction is denied and the temporary restraining order issued by the Court on April 16, 2004 is dissolved. The parties are directed to appear at a conference scheduled for June 3, 2004 at 2:00 p.m in Courtroom 706, Thurgood Marshall Courthouse, 40 Centre Street, New York, N.Y. 10007, and to complete a case management plan prior to that time. They are further directed to engage in good faith settlement efforts prior to the conference.

Summaries of

Malletier v. Burlington Coat Factory Warehouse Corp.

United States District Court, S.D. New York
May 24, 2004
No. 04 Civ. 2644 (RMB)(FM) (S.D.N.Y. May. 24, 2004)
Case details for

Malletier v. Burlington Coat Factory Warehouse Corp.

Case Details


Court:United States District Court, S.D. New York

Date published: May 24, 2004


No. 04 Civ. 2644 (RMB)(FM) (S.D.N.Y. May. 24, 2004)

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